Groupon Is Fee-splitting. The ADA chimes in.

Back in January, I wrote an article on the blog about Groupon.  Among the many issues I discussed was the rather thorny issue of fee-splitting.  There are state and federal laws against fee-splitting in healthcare.

I just became aware of an ADA (American Dental Association) missive about this very issue with Groupon.  It was published in November of last year.  http://www.ada.org/news/6576.aspx   Read it for yourself!

Excerpts from the article include these ominous passages:

  • 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.
  • 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.
  • Dentists are therefore strongly advised to consult a local attorney familiar with such issues prior to offering and awarding social coupons to new patients.

Tread carefully, Dental Warriors.  Is it worth the risk?  When the state or federal government gets a bug up their asses, they can make your life MISERABLE… even retroactively for PAST “transgressions.”

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9 Responses to Groupon Is Fee-splitting. The ADA chimes in.

  1. Bob says:

    Well said, Mike. I couldn’t agree more.

  2. Tim Tishler, DDS says:

    I agree Mike. Thanks for writing this.

  3. Derek Stokes says:

    Absolutely! You do not want to get in bed with the Feds, they have all the power and the cards are heavily stacked in their favor, just ask Dr. Shelbourne.

  4. BIZ LAW DDS says:

    Just a quick update on the dentists and Groupon controversy. The ADA recently issued an advisory opinion stating that advertising on Groupon, using their standard contract, is unethical. Groupon and Living Social have, however, agreed to use a different contract in Oregon (after some discussions with the Oregon Board), and the Oregon Board recently sent a letter to both Groupon and Living Social stating that a dentist could sign the new contract without violating Oregon law. To learn more about these developments, visit http://www.bizlawdds.com.

    • The Dental Warrior says:

      Very interesting! I’m curious… what is different in the contract? The definition of fee-splitting is fairly simple… black / white.

      Thanks for your comment!

  5. In the standard Groupon contract, the customer pays a fee to Groupon and then Groupon pays a share of the fee to the dentist. In the Oregon contract, all the fees are paid to the dentist, and the dentist pays an advertising fee to Groupon.

    • The Dental Warrior says:

      That still sounds like fee-splitting to me, unless it’s a flat fee (regardless of the number of patients referred). Is the “advertising fee” a flat fee or a percentage of collections? Is the fee contingent upon the number of patients referred?

  6. Yes, it is a flat fee. Unfortunately, the contract was not published on the Oregon board’s website, so there is little publicly available information on exactly how the flat fee is determined.

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