Clinic’s Ownership: Tax Questions

No doubt I have asked this question before.  But I am going to ask it again. 
Since FORBA’s Small Smiles clinics are registered with the Secretary of State’s office as being owned by random dentists I have a few questions:

1.  Does the individual dentist file a tax return on those clinics?  If not, YIKES!
2. Does the individual dentist file a tangible property tax return and pay property tax on all that equipment?  If not, YIKES!
3.  When the dentist in question quits , gets fired or leaves FORBA’s employment, and FORBA is forced to register someone else as owner, how is this “sale” explained?   I’m thinking some major tax revenue is being missed here. 
4.  Why am I the only person asking these questions?
If Dr. Katie (Helen Petersen) does NOT own all those clinics in Indiana, what does Dr. Katie own?  What about Dr. Jodi Kuhn in Kentucky?  What about Dr. Ken Knott in Alabama?  (yes, Dr. Knott is still listed as owner in Alabama, or at least he was on December 31, 2009, because he signed (or someone signed) the annual report. What about Dr. William Nash? 
5.  I wonder if Dr. Ken Knott knows they still have him owning those clinics? 
If any of these dentist have not filed tax returns on the income from these clinics, I’d say there might be a problem.
How would this all be explained in an IRS audit?

Who knows, maybe all those tax forms are sent to Corporate Headquarters in downtown Nashville and someone down there files the tax returns and signs the name of the poor innocent dentists. 

Dr. Robert Andrus Does NOT Really Own Any Small Smiles Clinics In The Sense They Want To Project

This article had been reprinted here before but I felt it was worth reprinting it again along with the link to the original article.

Click here for original.

Anyway, it's important because it's talking about the Small Smiles opening in Roanoke, VA and how it's owned by Robert Andrus and FORBA only manages it for him.

Well, that simply isn't true. Robert Andrus works (or should I say worked, he's no longer with them according to recent reports). On an document that was sent to me listing all employees at FORBA, their phone numbers, email address and their job title Robert Andrus is listed as Senior VP West Region.

In fact he and Kenneth (Ken) Knott, SVP Central Region are listed as being owners as several Small Smiles clinics, especially in states where dental clinics have to be doctor owned. (I guess being doctor owned is subjective as to what percent of ownership isn't it, 1% or 100%?)

If you check phone books of various cities where Small Smiles is located you will see Dr. Robert (Bob) Andrus' name listed on several of them as being the owner and providing services to clients. He is (was) nothing more than a FORBA employee, it's just that simple.

Small Smiles defies traditional system - Low-income children haven't been welcome at most dental practices in the region, at least not without tight restrictions

Dentists suffer with a toothache of sorts over treating patients on government programs. The reimbursement is low, and the hassle is often high. Dentists prefer patients with private insurance or cash, on whom a stable, profitable practice can be built.

But a new Roanoke dental clinic has turned the standard business model on its head.

Four dentists courting the business of low-income children in Western Virginia have opened a practice at Crossroads Mall. Small Smiles caters to children age 20 and younger enrolled in any of the state's health insurance programs: Medicaid, FAMIS and FAMIS Plus. Low-income means people at or below 200 percent of the poverty level, which is $40,000 for a family of four.

It has drawn a huge response, with 2,100 patients booked for appointments before it opened July 31, drawn only by TV commercials and a postcard mailing.

"I think it's going to be successful," said dentist David Jones, who closed his private Roanoke practice to work at Small Smiles. There's so much work, "we could probably keep another clinic like this one afloat."

If the niche sounds unusual, it is: Low-income children haven't been welcome at most dental practices across the region -- at least not without restrictions that close access to new patients when the dentist feels he or she can no longer afford to treat any more.

But last year, Virginia lawmakers intervened. They increased reimbursement for dentists who treat Medicaid-insured children and chopped away red tape for both patient and dentist. Attention was directed at reducing missed appointments; people on Medicaid and related programs miss up to 50 percent of scheduled dental appointments.

National companies that cater to those on government programs have been setting up shop in Virginia. The Small Smiles group, from Pueblo, Colo., has opened 46 practices across the country, including in Roanoke and Richmond. A similar enterprise, Kool Smiles, based in Decatur, Ga., has 17 sites nationwide, including four in Virginia, its Web site said.

"We have a business model that works because this is all we do five days a week, 12 months of the year," said Todd Cruse, speaking for Small Smiles in Roanoke. "We typically average somewhere around 72 to 75 patients a day."

Cruse is chief development officer at FORBA LLC, a dental practice management company in Pueblo, Colorado.

FORBA manages the Roanoke practice for its owner, Colorado dentist Robert Andrus.

Terry Dickinson, executive director of the Virginia Dental Association, was wary when he first heard that a for-proft, corporate dental practice focused on the poor was preparing to operate in Richmond this past spring.

It appeared to be a low-margin business dependent on moving a high volume of patients through, Dickinson said. Might Small Smiles be a "mill" providing the least acceptable care, Dickinson wondered.

So he met with Small Smiles officials. "We made it clear if they chose to come into the state that we would have our eyes on their operation," Dickinson said. Company officials pledged to give quality care and invited state dental industry leaders to drop by unannounced.

Now that the Richmond practice has been up and running for several months, Dickinson is satisfied that Small Smiles is meeting the needs of Virginians, he said, adding there haven't been any patient complaints to his association.

"We are very pleased with what they're doing," Dickinson said.

Dr. Kenneth Knott: Owner or Front Man?

Recently I checked out a Small Smiles yellow page ad in a city to be named later.

They ad read in part:

Care Provided by OH Licensed General Dentists
-Dr. Kenneth E. Knott & Dr. Robert Andrus, Owners

I just don't believe that is true.

They do not provide the care as it would lead you to believe and they don't 'own' the clinic either. Neither of these dentists have touched a mouth full of teeth in years.

Dr. Kenneth Knott is listed as FORBA's Senior Vice President-Central Region according to their internal employee list.

Dr. Knott has licenses in Kentucky, Ohio, Nebraska, New Hampshire, Oklahoma, South Carolina, Virginia and others. Dr. Robert Andrus is licensed in all these states as well.

So is being a 'senior vp for FORBA really mean, you go from state to state in your region, take some tests if any, hopefully pass them, apply for and obtain licenses so that we can hang them in the rogue clinics. So I guess that makes one a "professional licenses obtainer", right?