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Social Networking Advertising-Marketing and the Medical Practice – Coupons and Daily Deals

Overview 

Certain social networking advertising platforms such as Groupon or Living Social provide the opportunity for their subscribers to purchase and take advantage of coupons or deals offered by a variety of businesses. As medical professionals engage online with patients and prospective patients, a logical question is whether and to what extent medical professionals may use these social networking platforms to offer coupons or deals to patients. This wiki outlines issues to consider when a medical practice wishes to offer coupons or deals through social networking and highlights controlling authority or emerging guidance. Please add to this body of knowledge as you learn or uncover new issues related to social networking coupons or other online advertising and marketing as it applies to medical practice, particularly guidance documents issued by licensing boards or professional societies.

 

How do social networking coupon sites work?  

Social networking coupon sites are online platforms to advertise goods or services. The social networking coupon company provides links to local deals for goods and services to consumers willing to subscribe to the site. Consumers typically sign up by providing their email address and zip code. Deals typically provide a percentage discount off of the value of products or services, but the deal is only available if a predetermined number of people purchase the deal. The deals may also have limitations as to time frames and other parameters set by the business offering the discount. The coupon site business model also assumes consumers will spread the word about a deal, as well as the business offering the deal, through other social networking platforms. The coupon site and their business clients split the revenue received from the deals that consumers purchase. Visit the merchant facing areas of social networking coupon sites to further understand a company’s deal terms and conditions.

Medical professionals who are considering social networking coupons as part of their marketing strategy should also consider legal and professional standards that might limit how and when social networking coupons can be used as the medical professional remains responsible for compliance with all laws and rules that apply to their practice. An initial consideration for medical professionals is determining the type of medical service to be advertised and offered at a discount on a social networking site. Is it an out- of pocket, elective procedure or an insurance-covered procedure? Whether to use a social networking coupon offer may vary depending on the type of service being offered. Many social networking deals in the health care field are for services that are elective and typically not covered by insurance.

 

Issues and Relevant Authority 

Advertising

There are both legal and professional standards that apply to physician and medical professional advertising. Physicians and other medical professionals must take care that advertising does not exaggerate a professional’s qualifications or competency or guarantee or exaggerate the potential outcomes of a procedures. For examples see:

American Medical Association Ethical Opinions 5.02, Advertising and Publicity; 8.062, Sale of Non-Health-Related Goods from Physicians’ Offices; and 8.063, Sale of Health-Related Products from Physicians’ Offices

Ohio Revised Code 4731.22(B)(5) that prohibits making false, fraudulent, deceptive or misleading statements in advertising for patients including statements that create false or unjustified expectations of favorable results.

Risk Management

Medical practices should consider whether the coupon or deal relates to a medical service or procedure that requires pre-screening for suitability. Online deals are typically offered to all who are willing to purchase the deal. If pre-screening of a patient for a particular procedure is warranted, that should be stated as part of the “fine print” of a deal and the practice should negotiate such restrictions into the deal. Practices should also determine how they will manage prospective patients for whom the procedure/offer is not appropriate.

State Licensing Statutes and Rules

Many state statutes that regulate the license of medical professionals include provisions related to advertising (see above examples) as well as fee splitting and referrals (see examples below). Some state regulatory boards have also issued specific guidance related to the use of coupon sites. For examples see:

Ohio Revised Code 4731.22(B)(17) that prohibits engaging in the division of fees for referral of patients, or the receiving of a thing of value in return for a specific referral of a patient to utilize a particular service or business

But see State Medical Board of Ohio, Practice Guidance Statement: “Physician Participation in Deal of the Day Offers,” Grand Rounds – Your Report Newsletter, May 2012 at www.med.ohio.gov. The Board considers the percentage of a coupon purchase price that is retained by the coupon vendor as an advertising fee rather than the splitting of fees for a referral.

Oregon Board of Chiropractic Examiners, Updated OBCE Statement re: Groupon and Fee Splitting, July 21, 2011 at www.orgeon.gov/OBCE (stating that the current Groupon program violates the Board’s fee splitting rule, Oregon Administrative Rule 811-035-0015 (24))

Oregon Board of Dentistry, Oregon Administrative Rule 818-012-0020 (3) and (4) stating that a licensee engages in unprofessional conduct if the licensee offers or accepts rebates, splits fees, or commissions for services rendered to a patient to or from any person other than a partner, employee, or employer.

For a discussion of the use of Groupon by plastic surgeons and state laws that may apply, see “State law may dictate plastic surgeons’ ability to use Groupon,” Amy Wandel, MD, ASPS Ethics Committee chair, and Mike Reed, JD, Plastic Surgery News, June 2011

“Legal Issues In Marketing A Dental Practice: Referral Gifts And Groupon Discounts,” American Dental Association Legal Division, October 2011 discusses referral gifts, fee splitting, federal anti-kickback statute, discount advertising, insurance contracts and professional ethics.

Federal Anti-Kickback Concerns

The federal Anti-kickback statute prohibits the transfer of anything of value to induce the referral of federal health care program business. See Anti-Kickback wiki at www.healthlawyers.org/hlresources

The definition of “remuneration” under the civil monetary penalty provisions of the Social Security Act related to prohibiting inducements to beneficiaries prohibits “transfers of items or services for free or for other than fair market value.” Section 1128A [42 U.S.C. 1320a-7a] (i)(6). Notably, the Accountable Care Act amended this definition to include an exception for retailer rewards. Retailer rewards are not “remuneration” under the statute’s civil monetary penalty provisions if: (1) the items or services consist of coupons, rebates, or other rewards from a retailer; (2) the items or services are offered or transferred on equal terms available to the general public, regardless of health insurance status; and (3) the offer or transfer of the items or services is not tied to the provision of other items or services reimbursed in whole or in part by the Medicare or Medicaid programs. Section 1128A [42 U.S.C. 1320a-7a] (i)(6)(G). A social networking coupon might be acceptable for some services to Medicare or Medicaid beneficiaries if the offer can meet all of these criteria as an exception to the definition of remuneration. See OIG Advisory Opinion No. 12-05 discussing this exception in the context of out-of-pocket costs paid by Federal health care program beneficiaries as counting toward gasoline discount rewards offered by a supermarket/pharmacy loyalty card program.

The federal AKS is not a concern if the services to which a coupon or daily deal applies is not a service covered by a government program.

Third-Party Contracts

Medical practices should review third party payer or other contracts to determine how the contract might affect the use of a social networking coupon or deal offer. For example, a social networking coupon deal might implicate a most favored nation clause in a payer contract that would require that practice to give all patients subscribed under that contract the same discount.

Other Professional Standards and Guidelines

Separate from legal authority and professional standards governing medical practices and medical professionals, non-medical professional standards and guidance may assist in determining best practices to apply in a medical setting. For examples see:

American Bar Association, Model Rules of Professional Conduct, Rule 5.4 (fee splitting)

North Carolina State Bar, 2011 Formal Ethics Opinion 10, October 21, 2011 at www.ncbar.com

South Carolina Bar, Ethics Advisory Opinion 11-05, at www.scbar.org

New York State Bar Association, Committee on Professional Ethics, Opinion 897 (12/13/11) at www.nysba.org

Acknowledgements 

AHLA thanks Nancy P. Gillette (Ohio State Medical Association, Hilliard, OH) for drafting the original version of this article on behalf of the Physician Organizations Practice Group