Five Potential Legal Risks Associated with Groupon

With the explosion of social media and online marketing, members of the dental community “must” be aware of the risks associated with the new marketing. While dental practices have successfully utilized the services of Groupon to attract new patients, there are growing concerns regarding this type of marketing. The American Dental Association has recently published its opinion on the Groupon issue. Before a dentist participates in a Groupon marketing campaign, they must be aware of potential ramifications.

1: Fee-Splitting
A dentist utilizing Groupon to offer discounts to new and current patients will split a portion of the revenue generated from the promotion with Groupon. Many states have regulations that prohibit fee splitting between a dentist and a third party. A violation of the state regulations could result in the dentist facing censure and reprimand, fines, suspension, and even license revocation.

2: Federal Anti-Kickback Statute
The federal anti-kickback statute, 42 U.S.C. § 1320a-7b(b) generally prohibits a dentist from offering or paying remuneration to induce a person to refer a patient that may be eligible for services under a federal health care program, including Medicare or Medicaid. A dentist violating federal law could be charged with a felony and subject to fines, imprisonment, and exclusion from federal health care programs.

3: Most Favored Nations Clause
The terms of a dentist’s contract with third party payors [insurance carriers] may pose problems with the offer and award of Groupon’s discounts to patients. Many insurance contracts provide that the dentist must provide the insurer with the best price that the dentist charges for a particular service (a “most favored nations” clause). Providing a discounted rate to Groupon customers may breach the most favored nation provision in an insurance contract. As a result, the dentist may be required to offer the same discount to the insurer’s patients.

4: ADA Ethical Rules
According to the American Dental Association Principles of Ethics and Code of Professional Conduct Section 4.E. Rebates and Split Fees, dentists “shall not accept or tender ‘rebates’ or ‘split fees’”.

5: Dental Boards
Most dental boards provide that a dentist “shall not give rebates or split fees with a referral source”.

Before a dentist enters in to or starts any type of marketing campaign (or social media campaign), they should seek legal advice as to the application of state and federal laws, the most favored nations clause, ADA Ethical rules and Dental Board rules. While the marketing of any dental practice is important, an ill-advised marketing campaign could result in a dentist being censured, reprimanded, fined, suspended, and lose their license.