Gifting for Referrals
It is often said that your best advertising tool is the patient you already have. When satisfied patients are asked if they know of a good dentist, they will tell friends or family members about you and your practice. With this knowledge, it only seems logical to reward a patient for a referral. However, providing a gift in exchange for a referral may not be legal. Furthermore, offering discounts on your services through advertising websites, such as Groupon or Living Social, may also be prohibited by your state.
When trying to grow a dental practice, offering patients, staff members, or others a gift in exchange for referrals may seem like a good solution. These gifts may be in the form of a cash reward, a discount on dental care, a retail item, a gift card, or entry in a drawing. However, you should always review the federal and state laws and state board restrictions that govern your practice, and review the dental plan contracts you participate with before initiating this type of marketing plan.
The federal anti-kickback statute (AKS) specifically prohibits dentists from “pay(ing) any remuneration” in exchange for referrals for patients covered by a federal health program. This may indicate that practices that accept Medicaid, Medicare, and other federally funded plans (including military dependents) are restricted from offering gifts in exchange for referrals. It is important to understand and comply with the AKS. Violation of this law may result in criminal charges, fines, and even imprisonment.
State laws vary in their restriction of referral gifts. Some states only allow dentists to give items of an insignificant value (e.g., $25 or less) to patients. Other states prohibit providing any gift, no matter how small, to anyone, including staff. Furthermore, there are some states that view referral gifts as fee splitting.
Another advertising technique frequently categorized as fee splitting is the use of websites like Groupon or Living Social to promote the practice. These websites promote your dental services at discounted rates and the dentist splits the revenue collected from the promotion with the website. Federal law may prohibit the use of Groupon under its AKS. This action may be considered fee splitting, which may be prohibited by state law.
Advertising a discount on dental services in general is restricted by many states. These state mandated restrictions may require various disclosures or dictate the wording or details of the promotion. Furthermore, the state legislation may dictate the manner in which the patient is charged and the discount applied. Copay forgiveness is prohibited by all states, most PPO contracts, and the ADA Code of Ethics.
Therefore, offering dental services at a discount via Groupon may violate three state provisions: restrictions on referral gifts, restrictions on discounts, and fee splitting legislation.
It is important to review the contracted plan’s provisions that relate to advertising and promotional efforts. The contract may dictate the proper way to report the discounted fee. Furthermore, the contract may contain a clause requiring that all covered patients receive the same discounted fee.
Be careful with advertising and promotional decisions. Offering gifts for referrals or providing discounted dental services may not be allowed in your state. Remember, always review federal or state regulations and all contracts in which you are a part and consult with your healthcare attorney. Also, check with your state board and state dental society to ensure your compliance with any existing regulations.