Is Groupon legal for doctors?

Groupon and other similar social sites, like Living Social and CoupTessa, are all the rage now.  But is it legal for doctors and dentists to advertise their services on these websites?

Groupon is a deal-of-the-day website that features discounted gift certificates usable at local or national companies.  If a certain number of people sign up for the offer, then the deal becomes available to all; if the predetermined minimum is not met, no one gets the deal that day. It is said that this reduces risk for retailers, who can treat the coupons as quantity discounts as well as sales promotion tools. Groupon makes money by keeping approximately half the money the customer pays for the coupon.

Some doctors see Groupon as just another marketing opportunity and offer discounts on elective or cosmetic procedures like liposuction and veneers. Others have rejected it as an unprofitable. Still others view advertisement on social sites that require customers to prepay for services as borderline unethical, citing concerns that there is additional pressure for patients to go through with a procedure when they are having second thoughts.

So is it thumbs-up or thumbs-down for Groupon?

While there is no definitive answer to that question, the rumblings emerging from medical societies and healthcare lawyers that have looked at the issue lean towards thumbs-down.

According to Sun Sentinel,”because the websites keep as much as half of the patient’s payment … the online discounts could be interpreted as the practitioners splitting their fees” which is a no-no under many state laws or regulations prohibiting the “corporate practice of medicine.”  Furthermore, Groupon’s fee can also be construed as “paying kickbacks to find new patients,” which is a serious offense under federal and most state laws.

Medicare, American Medical Association, and other medical trade groups have not yet taken a position on this issue. Two medical boards in Oregon, however, banned dentists and chiropractors from giving Groupon-style discounts. Also, the Palm Beach County Medical Society has recently warned members about Groupon advertising “because the issue is still in doubt,” reported Sun Sentinel.

While the domestic reaction to social coupons for healthcare services has been somewhat modest, across the Atlantic at least one medical society, the British Association of Aesthetic Plastic Surgeons, has strongly condemned the practice of marketing of serious medical procedures such as breast augmentation and nose jobs on discount websites. The Association’s former President, Adam Searle, expressed his disapproval, in part, as follows:

This trivialisation and commoditization of medical procedures is appalling. It seems to have come down to the level of loyalty cards, money-off vouchers, and even competition prizes. This belittling of the seriousness of undertaking a medical procedure degrades not only our specialty but also the medical profession as a whole.

Another former president of the British Association of Aesthetic Plastic Surgeons also stated, in part, as follows:

Selling surgical procedures without patients being first assessed for suitability is highly unethical and goes against every guideline and recommendation from the General Medical Council and the surgical associations.

For now, however, since the jury is still out, caveat venditor.

Deniza Gertsberg is an attorney who represents healthcare providers in compliance-related matters in New York and New Jersey. 

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  • http://www.facebook.com/paul.c.weiss Paul Weiss

    I am opposed to fee splitting and kickbacks.

    However, I do not see how using Groupon is much different than other forms of advertising. Advertising is a gamble. A marketing professional once told me that for every dollar I spend on advertising, I should get two back in return for placing the ad. So…by that logic, for advertising to be worthwhile, I should roughly pay half the fees collected to whoever publishes/broadcasts my ad…or comparable to what Groupon charges. Certainly, discounts are offered to patients via Groupon…but they are also offered to insurance companies in return for participation in their plans.

    “Selling surgical procedures without patients being first assessed for
    suitability is highly unethical and goes against every guideline and
    recommendation from the General Medical Council and the surgical
    associations.”

    If a patient proves to be unsuitable  for surgery, a refund should be arranged.

    I am without dental insurance. I recently purchased a Groupon for a dental exam, x-rays and cleaning. I received excellent service at a low price. I returned to this dentist for a filling, and plan to continue using his service. Continues to provide me an “uninsured discount”.

    I see Groupon as a way to reach out to those who are underserved. I am glad to see that Medicare hasn’t taken a position against its use, and hope it stays that way.

  • http://www.facebook.com/profile.php?id=762893788 Dave Miller

    First off, let’s be straight: this is not just a form of advertising, it’s pre-selling goods and services at an ad hoc group discount, plain and simple. The issue of “pre-selling” surgical procedures (even cosmetic ones) is extremely troubling. The decision to undergo a surgical procedure ought be based on a discussion between the patient and their doctor, not based on the whim of a “weekly special” or a Groupon. Indeed, this goes to the heart of the issue with fee-splitting and kickbacks. There must be no additional financial incentive to perform the procedure other than than the agreed medical necessity (or at least appropriateness) as determined by the patient and doctor.

    As far as Mr. Weiss’ relationship with his dentist, lest we forget, dentists are unencumbered by Medicare/Medicaid and, as such, able to offer “uninsured discounts” and the like (which doctors are prohibited from doing by federal law). Also, notice that the Groupon-in-question was for an annual exam, not a root canal. A Groupon for an annual physical to your physician *might* be an ethical move (although I suspect not) but still seems suspiciously like kickbacks for providing new patients.

    At the heart of much of medical ethics is the protected and special nature of the doctor/patient relationship. This is why the separation of the doctor and the apothecary or the doctor and the laboratory is so critical: the doctor must be prescribing medicines and ordering labs out of medical necessity, with no hint of financial incentive. As such, this is a very different sort of thing than ordering movie tickets or going out to eat. Medical care is not to be taken lightly and not to be treated as just another commodity (hence much of the problem with government-run medicine, but that’s another kettle of fish). That is why this issue of Groupons is not so cut-and-dried as it might seem.

    Just my $.02 worth ($.05 CAD).

  • Anonymous

    I have seen these discussions come up before, but no one has mentioned yet that while groupon might seem like it is a kickback in letter, it is not truly one in SPIRIT.  To my understanding, the law is there because a patient wants to be reassured that when a physician recommends a specialist, or when a friend recommends a physician or dentist, the person making the referral is making it out of trust and respect for the physician or specialist, not because there is a financial incentive to do so.  Everyone knows that groupon is not making a recommendation; it is simply an efficient way to get a message to many subscribers all at once.  The marketing cost associated with groupon just happens to be based on the number of packages sold.  Perhaps this needs to be changed so that it adheres to the letter of the law, but I do not believe it is unethical as it stands currently.

    I do agree with Paul Weiss that there should be a mechanism for a refund if the patient is not an appropriate candidate for the procedure or surgery.

  • Anonymous

    I would suggest that interested readers take a look at a blog post of
    mine on this subject:

    David Harlow on daily deal websites (HealthBlawg) –
    http://bit.ly/qcRypt

    One further thought on the daily deal fee-splitting issue: If the site were to set a cap on its fee then perhaps state boards of registration would be satisfied that the fee were not an impermissible split of a professional fee.