Dentist May Be Prohibited From Using Deal of the Day Websites

We all know that attracting new patients is extremely important for the survival of any dental practice. However, before deciding to invest in a new way to promote your practice, it is important to keep in mind that federal and state law may prohibit dentists from taking advantage of certain innovations in advertising and social media.

Take the case of the “daily deal” or “deal of the day” promotions. Daily deal websites like Groupon, Woot!, and Livingsocial.com partner with local businesses to market products and services at a substantial  discount in an effort to create an influx of new customers. Sounds like a great idea for a dental practice, right? Well, the problem is with how these daily deal websites make their money. In a typical arrangement, the website receives a percentage (often 50%) of the revenue from the service being purchased by the consumer. While this sounds harmless enough, it actually raises a host of potential ethical and legal problems for dentists.

For starters, many states have anti-fee splitting regulations that prohibit a dentist from sharing a fee for service with a third party. This is true in Georgia where the Board of Dentistry Rule 150-8-.02 states that “A dentist shall not give rebates or split fees with a referral source.” Arguably, a deal of the day website qualifies as a referral source. Black’s Law Dictionary defines “referral” as “[t]he act or instance of sending or directing to another for information, service, consideration, or decision.” Thus, when a patient purchases dental services through one of these websites, the transaction may violate Rule 150-8.02 because the website directs the patient to the dentist and the dentist splits the fee with the website. Dentists who violate these rules may be subject to disciplinary action, such as a fine, reprimand, suspension or revocation of license.

Still worse, dentists who accept Medicare or Medicaid patients and contract with a deal of the day website may be subject to criminal prosecution. Under the federal anti-kickback statute (42 U.S.C.S. § 1320a-7b(b)(1)), it is a felony to knowingly and willfully solicit or receive any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind in return for referrals or purchases, leases, or orders of any goods or services under federal health-care programs. According to the ADA Legal Division, “it is possible that a dentist who accepts Medicare or Medicaid patients may be found to have violated the [anti-kickback statute ]  even if the payment for services at issue is not in fact made by a Medicare or Medicaid patient or out of Medicare or Medicaid Funds.” In short, dentists who accept Medicare and Medicaid and partner with a deal of the day website may be subject to criminal prosecution for violation of the anti-kickback statute.

Deal of the day websites may be an attractive way for dentists to bring in new patients; however, the potential legal problems caused by these sites outweigh their benefits. Before agreeing to partner with a deal of the day website or similar promotion, you should consult with legal counsel.