Stop and Think Before Using Groupon to Promote Physician Services

The internet has vastly improved our ability to find great bargains.  Many people subscribe to sites like Groupon, Living Social, and others that offer discount goods and services. Over the past several years, there has been a notable rise in the number of promotions related to cosmetic services and products.

Is this a good thing for health care providers?

Before a physician or other health care provider decides to offer a Groupon special, you must consider the federal and state rules and regulations governing physician practices, marketing and referrals.  Internet deals are NO exception to the rules.

It is important to think about the following when entertaining the thought of online marketing: 

  • Fee-splitting: Fee-splitting laws vary by state, but most states do not allow licensed physicians to divide physician revenue in exchange for referrals. Physician revenue is typically revenue from services that can only be sold by a licensed physician. Most social media sites charge a percentage of the income generated on each “deal” that is sold. The sites may accept the payment from the patient rather than the physician, but the fee still represents a portion of the fee that the physician would have generated for his or her “professional” service.
  • Anti-Kickback Statute: The federal Anti-Kickback statute prohibits the payment of remuneration, or “kickbacks”, in exchange for referrals.  This includes both direct and indirect remuneration. 

Most of the services sold on Groupon are not covered by Medicare, so the Anti-Kickback statute would not apply in such instances.  Still, many states have similar statutes that apply to situations where other insurance or out-of-pocket payments are involved.  Nebraska does not have an Anti-Kickback statute that mirrors the federal statute.

Currently, there is no formal AMA opinion, case law, or other guidance on these issues.  The use of social media sites for promoting one’s practice may be a great tool in an era of technology, but proceed with caution and make sure to comply with all applicable laws before launching any web-based discounts.

© 2011 Parsonage Vandenack Williams LLC

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