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Such a Deal! How Social Couponing Could Lead to Fines, Loss of License or Imprisonment.

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 fueled the growth of companies such as Groupon (social coupons) and LivingSocial (social commerce). Currently, Groupon alone totals 50 million+ subscribers, with about half of those in North America, while LivingSocial has a total user base of about 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 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 other kind of promotional program.

Groupon
Groupon features a “daily deal” and promises a company a minimum number of customers. This minimum number of customers is used as leverage for the business to offer deals that are not available anywhere else. It is noted that Groupon has saved consumers more than $300 million since 2008.

LivingSocial
LivingSocial features “LivingSocial Deals” which allow people and their friends to save significantly at local businesses and events through the design of “total experiences that bring an adventurous, loyal new following to local businesses.”

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

What Legal Issues, Specifically?
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, etc.) is receiving revenue based on the procedure performed on the patient who visited due to the marketing from their service.

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, at the least, be excluded from federal health care programs, but further may be subject to fines or even imprisonment. On a state level, censure and reprimand, suspension or revocation of a doctor’s license, and/or fines 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 they’re submitting and check to see whether the payer requires that the fee reflect any rebates, co-pay, or reduction. Many third-party payers will require the reported fee 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 some time 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 and Palm Beach Medical Society, have warned members about the potential ramifications of using these services, as the legality question is still unresolved.

What About Florida?
The Anti-Kickback Law applies to all Florida health care providers and any provider of health care services, and the following laws are used to regulate the issues of fee splitting and kickbacks: The Florida Patient Self-Referral Act of 1992 (Fla. Stat §456.053), which is analogous to the Stark laws; Patient Brokering Act (Fla. Stat §817.505); Anti-Kickback (Fla. Stat §456.054); and Fee-Splitting (Fla. Stat §458.331).

The bottom line is that licensed health professionals, with few exceptions, 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 to ensure 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 marketing dollar is that spent within that base. 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. Without a valid dental license, the number of new patients coming into your practice simply does not matter.

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