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Online Discount Deals: Are They a Good Marketing Idea
Reprinted by the permission of the Georgia Dental Association from the December 2011 GDA Action
Many of us have heard of or even used discount
sales sites such as Groupon to purchase
reduced rate goods and services such as dinner at a
new restaurant, a haircut, or clothing. Health care
is the latest industry to take part in this marketing
phenomenon with professionals offering discounts
on cosmetic medical procedures, chiropractic care,
acupuncture, and eye exams. Some dentists are even
getting in on this advertising opportunity by offering
discounts for services like cleanings, whitening, and
x-rays. In fact, in 2010, Groupon reported that
15% of the “daily deals” the company offered
were for health care services.
Before a dentist considers jumping on board with
this hot marketing trend, however, there are serious
legal issues to consider. Because the healthcare
industry, including dentistry, is heavily regulated and
often subject to contractual restrictions by insurance
companies, a dentist must make a decision about
whether to discount his or her services through
Groupon, LivingSocial, or other similar services only
after careful consideration.
The American Dental Association (ADA) recently
issued a legal memorandum on the use of certain
marketing techniques, including fee splitting and
Groupon-type services, to raise awareness about
some potential legal pitfalls. To ensure members who
are considering using Groupon or other similar types
of marketing services have the latest information,
some of the legal considerations mentioned in the
memorandum can be obtained in the “Regulations,
Laws and Guidelines” section of the LDA website at
www.ladental.org.
How Do These Discount Selling Sites Work
Before delving into some of the legal issues, a
dentist may first wonder what these discount selling
sites are all about, and how they work. Many are
similar to the perhaps most well known, Groupon.
Groupon is a Chicago-based company that sends
e-blasts about discount offers to people who sign up
for daily notifications. Businesses that opt to become
featured on Groupon or other similar sites do so
with the hope that they will gain patronage, raise
awareness of their services, and ultimately create
loyal, repeat customers.
The most popular Groupon discount option
appears to be 50% off deals from retailers and
service providers of all kinds, sold via email directly
to consumers. For example, a $100 dental service
would be offered for $50 to Groupon and gets a
certificate to redeem at the featured dental office.
Groupon keeps 50% of the revenue ($25 in this
case), and remits $25 to the dental office. So, the
customer gets a $100 dental service for $50. The
dentist or other retailer is effectively discounting their
product or service by 75%. The consumer gets 50%
and Groupon takes 25%.
Potential Pitfall One: Could This Be
Considered Fee Splitting
Louisiana Revised Statute 37:776 prohibits fee
splitting, although it does not forbid licensed dentists
from practicing in a partnership or professional
corporation and sharing professional fees, nor does
it forbid a licensed dentist from employing another
licensed dentist. Any acceptance, sharing or division
of dental fees by a dentist under suspension or
revocation shall be sufficient cause for the State Board
of Dentistry to withhold the reinstatement of his/
her dental license until the Board determines he/she
has been fully rehabilitated. For more information,
contact the Louisiana State Board of Dentistry at
(504) 568-8574 or www.lsbd.org.
Potential Pitfall Two: Federal Anti-Kickback
Statute
A dentist who receives payment from a federal
health program such as Medicaid and Medicare
must tread with extreme caution before jumping
on the Groupon-type marketing bandwagon. The
22 LDA Journal