Know the laws before using social couponing as a means for dental marketing

Today, the consumer is always looking for, and sometimes even expecting, a good deal when it comes to purchasing products and services. This mindset has helped to fuel the growth of companies such as Groupon (social coupons) and LivingSocial (social commerce).

Currently, Groupon totes over 50 million subscribers with close to half of those being in North America, while LivingSocial has a total user base of nearly 46 million with 34 million of those in the United States. 

The combination of the current economic strains and the size of the user base that these two companies have amassed has driven many dentists to at least consider using Groupon and/or LivingSocial and 1-800-DENTIST as a means of attracting new patients. Unlike other professions for which social coupons may be utilized without fear of violating legal or ethical rules and regulations, it is vitally important for our dental and medical professionals to consider state and federal law when looking at this, or any kind of promotional program.

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Dental offices throughout the country have signed up with companies like Groupon and LivingSocial to offer discounted procedures including orthodontic treatment, teeth whitening, teeth cleaning and radiography with the hopes that these patients will stay and need additional treatment.

According to the American Dental Association’s legal division, though, depending on the state in which the dental service is offered, this discounting/promotional program might raise legal issues.

In many states, there are regulations that prohibit or restrict what may be given to a third-party as a means of soliciting patients. So, in this case, the third-party (Groupon, LivingSocial, 1-800-DENTIST, etc.) is receiving revenue based on the patient who visited due to the marketing from their services or on the procedure performed.

On a national level, the federal anti-kickback statute regulates federal health care programs, including Medicare and Medicaid. The statute generally prohibits dentists from offering or paying money in exchange for a referral. Dentists found in violation of the federal law could be, at the least, excluded from federal healthcare programs and possibly subject to fines or even imprisonment.

The Medicare and Medicaid Patient Protection Act of 1987, as amended, 42 U.S.C. §1320a-7b (the "Anti-kickback Statute"), provides for criminal penalties for certain acts impacting Medicare and state healthcare (e.g., Medicaid) reimbursable services. Section 1320a-7b(b) provides in part whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe or rebate (directly or indirectly, overtly or covertly, in cash or in kind - (A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under [Medicare] or a State health care program shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.

On a state level, censure and reprimand, suspension or revocation of a doctor’s license and or fines, at the least, are all on the table as potential repercussions.

Some have felt that simply calling the discount "advertising" is shielding them from a potential problem, but they still may find themselves in violation of the law as many states have regulations that restrict the method of advertising discounts on dental services.

Beyond that, dentists must also look to be sure they're not violating third-party payer contracts  for the fee that they're submitting and whether the payer requires that the fee  reflect any rebates, co-pay, or reduction in the fee paid. Many third-party payers will require the reported fee paid be the actual, net (discounted), fee paid by the patient.

In reality, online discounting and the legality of it in medicine has been a topic of debate for awhile now. So far, only two regulatory boards in Oregon have acted on dentists and chiropractors using social discounting methods. Even so, national, state and local associations alike, including the ADA, have warned members about the potential ramifications of using these services as the legality question is still unresolved.

The bottom line is that, with few exceptions, licensed health professionals are forbidden from paying or giving anything of value to someone (websites included) for providing a referral. Why is this so? The rationale is that paying for referrals can corrupt the objective medical/dental decision of whether a patient needs and will benefit from some treatment.

While it is always important to look for new avenues to generate new patients, care and diligence should be used so to be sure that local, state and national laws are properly observed. We still feel that the best marketing source is your current patient base and the best-spent dollar on marketing is that which is spent within. While cutting edge technology and new marketing tactics may be enticing, the ramifications of losing your license or spending time in jail should certainly be considered.  

You should consult your individual state laws and rules to ensure that you are in compliance when designing a dental office advertising campaign. Without a valid dental license, the number of new patients coming into your practice simply does not matter.

Stuart Auerbach, DDS,? lives in Pembroke Pines, Fla. and is a partner in Professional Transitions. Professional Transitions is a full-service firm providing comprehensive transition services for dentists from graduation to retirement. Its central focus is to assist clients in realizing lifetime personal, professional and financial goals in win-win-win-win (seller-buyer-staff-patient) structured transitions.  Stuart has been associated with Professional Transitions, Inc. and sister company ADS Florida, LLC since 1994. He is a graduate of the University of Maryland Baltimore College of Dental Surgery, and practiced general dentistry for 18 years. Stuart has been a speaker at study clubs and dental society programs and has written for local, regional and national publications. Stuart can be reached at stuart@professionaltransitions.com or by calling 888.229.5764.

References: The Henry J. Kaiser Family Foundation, statehealthfacts.org