Social media advertising continues to be a widely discussed topic in the dental and medical community with many providers wondering whether to Groupon or not to Groupon. Are companies like Groupon and LivingSocial adjusting to special concerns from the healthcare community?
There are many legal and ethical questions that healthcare professionals need to address before participating in this new form of advertisement which we addressed in greater detail in our prior articles. In general, these questions include whether the arrangements entered into by the doctor with the social media advertiser constitute offering rebates, splitting fees, or offering other inducements for patient referral. If federal healthcare programs are involved, additional questions regarding the possibility of a provider paying kickbacks need to also be addressed. These concerns stem from the structure of the typical business model of a groupon-type advertiser where the advertiser keeps a percentage of the money a customer pays when the customer signs up for a deal.
In response to some of the concerns raised by the healthcare industry, Groupon and LivingSocial may be showing a willingness to alter their business arrangements to address the fee-splitting/rebate offering issues. The two companies apparently provided revised contracts to the Oregon Board of Dentistry (OBD) and asked for the Board’s comments.
The OBD, while not commenting on individual contracts said that it approves of “a model which includes an agreement between the practitioner and Groupon that all fees paid by the customer will be passed through to the practitioner and the practitioner will pay an advertising fee directly to Groupon.” Structured this way, the arrangements does not appear to violate the Oregon’s rule prohibiting the splitting of fees, says the OBD.
The Board has previously warned its members that it has “become aware of different companies soliciting Oregon licensees to enter into contracts for marketing and promotion services between the licensee and the company to promote voucher systems for potential patients,” and that this arrangement may violate the Oregon’s unprofessional conduct rules.
Every contract, however, has to be evaluated individually and there may be additional ethical and legal concerns with social media advertisement that should be addressed before a dentist or a doctor jumps on the bandwagon of this new form of advertisement.
If you have questions regarding social media advertising for doctors or dentists or require other legal assistance, please contact us.