Dental Practice Fees: Are Social Discount Coupons an Asset or a Liability for Your Practice?

Discounting your dental practice fees for a Groupon or LivingSocial coupon promotion may seem like a smart way to attract new patients, but your decision could have serious drawbacks if you inadvertently violate legal or ethical rules and regulations governing your profession.

Today’s consumers are always looking for—and sometimes even expecting—a good deal when it comes to purchasing products and services, whether it’s a shoe sale or a discount on dental services. This mindset has fueled the growth of companies such as Groupon (social coupons) and LivingSocial (social commerce). Currently, Groupon reaches 50 million+ subscribers, with about half of those in North America, while LivingSocial has a total user base of about 46-million, with 34-million of those in the United States.

The combination of the current economic strains and the size of the user base by Groupon and LivingSocial have motivated many dentists to at least consider using one of them as a means of attracting new patients with discounted dental practice fees.

Unlike other professions for which social coupons may be utilized without fear of violating legal or ethical rules and regulations, it is vitally important for our dental and medical professionals to consider state and federal law when looking at this or any other kind of promotional program to discount their dental practice fees.

How Social Couponing Works for Discounting Dental Practice Fees

• Groupon: Features a “daily deal” and promises a company a minimum number of customers. This promise is used as leverage for the business to offer deals that are not available anywhere else. It is noted that Groupon has saved consumers more than $300 million since 2008.

• LivingSocial: Features “LivingSocial Deals” which allow people and their friends to save significantly at local businesses and events through the design of “total experiences that bring an adventurous and loyal new following to local businesses.”

Dental offices throughout the country have signed up with companies like Groupon and LivingSocial to offer discounted procedures including orthodontic treatment, teeth whitening, teeth cleaning and radiography with the hopes that these patients will stay and need additional treatment. However, according to the American Dental Association’s legal division, this discounting/promotional program might raise legal issues, depending on the state in which the dental service is offered.

The Legal Issues of Discounting Dental Practice Fees

In many states, there are regulations that prohibit or restrict what may be given to a third party as a means of soliciting patients. So, in this case, the third party (Groupon, LivingSocial, etc.) is receiving revenue based on the procedure performed on the patient who visited due to the marketing from their service.

On a national level, the federal anti-kickback statute regulates federal healthcare programs, including Medicare and Medicaid. The statute generally prohibits dentists from offering or paying money in exchange for a referral. Dentists found in violation of the federal law could, at the very least, be excluded from federal healthcare programs, but further may be subject to fines or even imprisonment. On a state level, censure and reprimand, suspension or revocation of a doctor’s license, and/or fines are all on the table as potential repercussions.

Some have felt that simply calling the discount “advertising” is shielding them from a potential problem, but they still may find themselves in violation of the law, as many states have regulations that restrict the method of advertising discounts on dental practice fees.

Beyond that, dentists must also look to be sure they’re not violating third-party payer contracts for the fee they’re submitting and check to see whether the payer requires the fee to reflect any rebates, co-pay, or reduction. Many third-party payers will require the reported fee be the actual, net (discounted) fee paid by the patient.

Online discounting of dental procedures and its legality in the medical profession has been a topic of debate for some time. So far, only two regulatory boards in Oregon have acted on dentists and chiropractors who have used social discounting methods. Even so, national, state and local associations alike, including the ADA and Palm Beach Medical Society, have warned members about the potential ramifications of using these services, as the legality question is still unresolved.

Florida’s Position on Dental Practice Fees

The Anti-Kickback Law applies to all Florida healthcare providers and any provider of healthcare services, and the following laws are used to regulate the issues of fee splitting and kickbacks: The Florida Patient Self-Referral Act of 1992 (Fla. Stat §456.053), which is similar to the Stark laws; Patient Brokering Act (Fla. Stat §817.505); Anti-Kickback (Fla. Stat §456.054); and Fee-Splitting (Fla. Stat §458.331).

The bottom line is that licensed health professionals, with few exceptions, are forbidden from paying or giving anything of value to someone (websites included) for providing a referral. Why is this so? The rationale is that paying for referrals can corrupt the objective, unbiased medical/dental decision of whether a patient needs and will benefit from some treatment.

While it is always important to look for new avenues to generate new patients, care and diligence should be used to ensure that local, state and national laws are properly observed. We still feel that the best marketing source is your current patient base, and the best-spent marketing dollar is what is spent within that base.

While cutting-edge technology and new marketing tactics may be enticing, the ramifications of losing your license or spending time in jail should certainly be considered. Without a valid dental license, the number of new patients coming into your practice simply does not matter.

Henry Schein Professional Practice Transitions, Inc. is a national leader in dental practice transitions. A subsidiary of Henry Schein, Inc. they provide expert guidance for dental practice management and fees, selling and buying dental practices, assessing partnership and associateship opportunities, and performing dental practice appraisals and valuations.