Alabama Passes Nonprofit Dental Clinic Law

Laird Harrison

June 10, 2011

June 10, 2011 — A nonprofit dental clinic in Alabama said it will drop its lawsuit against the state's dental association in the wake of legislation that clarifies the clinic's legal status.

"The passage of our bill is a huge victory for the children of Alabama and Sarrell Dental," Sarrell Dental Center Chief Executive Officer Jeffrey Parker said in a written statement. Gov. Robert Bentley signed the bill into law yesterday, a week after it passed in the state Senate without opposition. The bill was inspired by the rapid growth of Sarrell Dental, a nonprofit chain of clinics that specializes in children whose healthcare is paid for by Medicaid.

Some dentists in the state had complained that Sarrell was competing unfairly because it pays low rent, does not pay income tax, and gets its supplies at a discount. Parker argued that the clinic was caring for children who would not have gotten care otherwise, because so few dentists in Alabama are willing to treat Medicaid patients.

Tom Willis, the executive director of the Board of Dental Examiners, said the board wanted a law giving it power to regulate nonprofit clinics because state law allows only dentists, not corporations, to own dental practices.

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. In the end, Sarrell and the board both agreed to compromise legislation that says nonprofits can own dental practices, but the dental practices will be regulated by the board.

"I think that it was a good compromise that both sides can now be at ease and get back to their separate missions," Willis told Medscape Medical News in an email.

In April 2010, the University of Alabama cancelled a program that had supplied dental students to one of Sarrell's offices. No one had filed a complaint about the residency program with the State Board, but Sarrell's Parker told Medscape Medical News that the Alabama Dental Association pressured the school through its alumni. In May 2010, Sarrell sued the association, alleging restraint of trade. The conflict also inspired an investigation by the US Federal Trade Commission.

Parker said he had informed the Federal Trade Commission that Sarrell was satisfied "with the new situation that has been created" by the legislation.

"Over the past 17 months, the actions of a small group of dentists tarnished the good name of Alabama dentistry and the [University of Alabama School of Dentistry]," Parker said. "It is our hope ending this litigation is seen as a goodwill gesture to begin the healing process for all."

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