Alabama Medicaid Dental Clinic Stirs Controversy

Laird Harrison

April 28, 2011

April 28, 2011 — A rapidly growing nonprofit dental practice that specializes in pediatric Medicaid patients has stirred controversy in Alabama, including a Federal Trade Commission (FTC) investigation, legal conflict with the Alabama Dental Association, a canceled residency program, and now a battle in the state legislature.

Yesterday, the Alabama House of Representatives approved a bill that would put the clinic, Sarrell Dental Center, more clearly under the supervision of the Alabama Board of Dental Examiners. The bill now goes to the state Senate.

Despite the conflict, it is difficult to find anyone who will publicly criticize Sarrell Dental Center, and some experts on disadvantaged dental patients are holding it up as a model of excellent care.

"Our opinion is that they are not a Medicaid mill," Frank Catalanotto, DMD, chair of community dentistry at the University of Florida, Gainesville, and a board member of Oral Health America, told Medscape Medical News. "They are doing very, very sound business practices."

The clinic started up in 2005 after some Alabama dentists banded together to try helping children in the state whose families could not afford dental care, Chief Executive Officer Jeffrey Parker told Medscape Medical News. He said 60% of Alabama children whose healthcare is paid for by Medicaid did not see a dentist in the past year.

Parker, a retired businessman who led divisions of Sara Lee and Foster Farms food companies, was inspired to bring his business acumen to the project, and Sarrell quickly became the biggest dental practice in the state, with 11 fixed offices, 1 mobile office, and revenues of $10.4 million in 2010 — up from $7 million the year before.

Parker said the clinic, a nonprofit, voluntarily gave away $400,000 in dental care to patients in 2010. It has remained viable by keeping chairs full — it has only a 2% no-show rate, he said.

The secret? Sarrell schedules carefully and works to keep patients happy, said Parker. Sarrell will never turn away a patient, even if they are late or do not have an appointment. "If they make it here, somehow, somewhere, even if we have to stay late, we see them," he said. And if Sarrell breaks an appointment, it pays the patient $20.

Dentists right out of school, who get starting salaries of about $135,000 a year at Sarrell, are banging on the door to be hired, said Parker. "I'm turning down about 2 dentists a week seeking employment."

Unlike some Medicaid specialty practices, Sarrell encourages caregivers to sit in the operatory, he added. "We have never had a complaint from a consumer," he said.

Unfair Competition?

However, the clinic has attracted the animosity of some in the Alabama Dental Association (ALDA), Parker said. He referred to a meeting he said took place in January 2010 among ALDA delegates who complained that Sarrell was competing unfairly because it pays low rent, does not pay income tax, and gets its supplies at a discount. ALDA declined to comment for this article (read the transcript of the meeting).

Members of the association spoke of recruiting patients to file complaints against Sarrell, Parker said.

Then, in April 2010, the University of Alabama cancelled a program that had supplied dental students to one of the clinic's offices. No one had filed a complaint about the residency program with the state dental board, but Parker said that ALDA pressured the school through its alumni. In May 2010, Sarrell sued ALDA, alleging restraint of trade.

FTC spokesman Mitch Katz confirmed that the agency is investigating ALDA's actions with respect to Sarrell, but said he could not provide any details.

Conflict has continued through April of this year, with the board asking the state legislature to give it jurisdiction over nonprofit dental clinics, including Sarrell. "The board has been aware over the past few years that the number of dental clinics that are 501(c)(3) [nonprofit] entities is exploding," Tom Willis, the board's executive director, told Medscape Medical News.

The nonprofits were operating illegally because state law allows only dentists to own dental practices, rather than corporations. "We tried to open a dialogue with them to bring them under regulation," Willis said.

However, the board could not get the nonprofits to sign on to any legislation, and Sarrell drafted its own law that would have "exempted" nonprofits from the state's dental practice act. After more debate, Sarrell agreed to change the language, and Willis and Parker say they have both agreed to the new bill, which says nonprofits can own dental practices, but the nonprofits will be regulated by the board.

Parker added that none of these conflicts will knock the chain of clinics off its growth trajectory, with 100,000 patient visits projected for this year — up from 79,000 in 2010. "We know our model works," he said.