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Board sufficiently justified treatment and referral regulations of non-licensed clinic owners

Regulations that imposed new restrictions on non-dentist dental clinic owners were adequately justified by the board, an appellate court in New Mexico held March 13, dismissing a challenge of the amendments to the state dental code.

(Pacific Dental Services, Inc. v. New Mexico Board of Dental Health Care).

In January 2017, a committee of the New Mexico Board of Dental Health Care gathered to discuss and vote on the regulatory changes at issue in the suit. One change required non-dentist owners of dental clinics to adhere to the same record-keeping requirements as licensed dentists, who are required to maintain patient records for six years after ceasing practice.

A second change stated that no person without a dental license could have control over a dental licensee’s treatment decisions, including decisions on where to send referrals or laboratory services.

A third would prevent dental clinic owners, whether licensed or not, from requiring a licensed employee to issue a referral or choose a laboratory based on contractual obligations, if the licensed employee believed another referral or laboratory would be more beneficial to a patient.

Over the objections of Pacific Dental Services, which argued that the proposed rules were redundant in light of already-existing rules and improperly targeted non-dentist owners, the board adopted all three rules at its next regular meeting. Pacific Dental challenged the regulations in court, re-stating its earlier objections and arguing that the board had failed to provide an adequate statement of reasons for passing the amendments.

The Court of Appeals of New Mexico disagreed, finding that the motivations for the passage of the changes had been sufficiently expressed by the board.

Although neither the committee assessing the proposed changes nor the full board had real, substantive discussions about the purpose of the new amendments, members of the board had made comments at the initial public meeting to discuss the proposed regulations, and those comments provided sufficient information about the board’s motives.

Before the review committee, board members provided anecdotes of records that were inadequately kept despite existing requirements and stressed that any seeming redundancies would help the affected owners be more aware of their responsibilities and ensure that no gaps existed in the requirements. Members also related incidents in which non-dentist-owned practices pressured licensed dentists into performing extra procedures to increase profits.

Pacific Dental complained that the board had never formally issued any findings or explicitly adopted the reasonings of the board members’ statements, but the court noted that the board is not required to expressly enunciate its findings of fact as long as it informs the public and the review committee of its reasoning.

The board members had informed the public during their comments, pointing to several concerns with non-dentist-owned practices that the rules were intended to remedy.

Although Pacific Dental Services argued that the board members’ publicly-stated concerns were just “conjecture” and thus insufficient as support for the new rules, the court countered by noting that all of the public commenters, including the board members, were local licensed dental professionals, and many of the comments were based on firsthand knowledge of local dental issues.

“The roots of Plaintiff’s argument appear to be that the Board should have given credence to Plaintiff’s opinions and not those of the other commenters,” wrote Judge Linda Vanzi. “However, we will not reweigh the evidence, nor substitute our judgment for that of the board.”