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Dental Groupons, incentives

Possible state, federal legal issues as well as ethical ones

They appear in millions of email inboxes every day.

Half off Italian cuisine. Pay $10 and get $30 worth of spa services. Even discounted trips are available. Groupon, Living Social, Google Offers, Buy With Me: the number of companies offering discounted food, drinks and activities continues to grow.

The deals are typically pretty simple and self-explanatory. But when the offer is for dental services, it becomes a little trickier.

Some dental offices have signed up with companies like Groupon, a multimillion dollar corporation headquartered in Chicago that offers deals in 45 countries, to offer discounted teeth whitening, X-rays or teeth cleaning. But depending on the state in which the dental service is offered, it might raise legal issues, according to the American Dental Association’s legal division.

“In today’s economy, the consumer is always looking for, and sometimes even expecting, a good deal when it comes to purchasing products and services. It is no wonder then that many dentists have at least considered utilizing social coupons, such as Groupon, as a means of attracting new patients,” said Amy Chase, ADA associate general counsel. “However, unlike other professions for which social coupons may be utilized without fear of violating legal or ethical rules and regulations, those in the dental profession must consider the application of professional conduct laws at both the state and federal level before proceeding.”

The ADA legal department wrote a memorandum, which is posted on the Dental Practice Hub at www.ada.org/members/6502.aspx, detailing concerns about dentists offering referral gifts and Groupon-like discounts and providing examples from various state laws on the issue. Offering these types of incentives could violate state or federal laws, legal said.

Many states have regulations that prohibit or restrict the awarding of gifts as a means of soliciting patients or prohibit fee splitting between dentists and a third party. When a dentist offers a service through Groupon, the revenue generated from the promotion is split between the provider and the company.

The federal anti-kickback statute generally prohibits dentists from offering or paying money to encourage a person to refer a patient that may be eligible for services under a federal health care program, including Medicare or Medicaid, according to the memorandum.

A dentist who violates state regulations could face censure and reprimand, fines, suspension or license revocation. Dentists who violate federal law could be charged with a felony and subject to fines, imprisonment and exclusion from federal health care programs.

Advertising discounts may also raise concerns, according to legal. Many states have regulations that restrict the method of advertising discounts in connection with dental services.

Dentists who utilize Groupon-like services should ensure that they are not violating their contracts with third-party payers. These contracts sometimes contain provisions requiring that fees submitted to the insurer reflect any rebates or reductions in the fees (or co-pays).

Offering such discounts may also violate certain ADA ethical rules, including the one prohibiting dentists from giving rebates and splitting fees, according to the ADA legal division. The ADA Council on Ethics, Bylaws and Judicial Affairs is currently considering this issue.

“While a determination as to whether any of these practices are illegal or unethical has not yet been made, there is clearly a risk in each such instance,” Ms. Chase said. “Dentists are therefore strongly advised to consult a local attorney familiar with such issues prior to offering and awarding social coupons to new patients.”