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Use Caution with Patient Referral, Loyalty Programs

June 21, 2019 3108

There are many advertising options for dental practices to use as a way to keep current patients and bring new patients in. One way dentists can do this is through a patient loyalty program where patients earn “points” in exchange for gift cards or other rewards for keeping appointments, brushing and flossing regularly, etc. Dentists participating in such a program must make sure they are staying within the guidelines of the law and CDA ethical standards, however.

The CDA Judicial Council reminds dentists that problems arise in a patient loyalty program when points are earned and prizes are given for patient referrals. Under the California Business and Professions Code Section 650, dentists cannot offer or accept anything of value as compensation or inducement for the referral of a patient.

When dentists offer loyalty programs to their patients, or work with a company that helps them with their marketing and runs a program like this on their behalf, they should know that it is OK to offer prizes for things such as good brushing habits or making all of their appointments on time. But when dentists include a third party into the equation that is benefitting financially for referrals, it goes against Section 650 and dentists could be in violation.

Dentists can still use social couponing companies if the advertiser does not recommend, endorse or select the dentist, and the fee paid to the advertiser is commensurate with the advertising service provided. The prohibition against fee splitting is not applicable to marketing via group advertising or referral services that do not base their fees on the number of referrals or amount of professional fees paid by the patient to the dentist.

With the loyalty programs and social couponing issues discussed above, dentists should be aware that, similar to the prohibition in Section 650, CDA Code of Ethics Section 11 and the related Advisory Opinion 11.A.1. also prohibit split-fees in advertising and marketing services.

‘Daily deal’ website recommendations

Dentists interested in advertising free cleanings, whitenings, etc. to patients should be mindful of California Code of Regulations Section 1051, which covers advertising discounts and truth in advertising details. CDA recommends that dentists using “daily deal” websites make sure the ads are not false or misleading in any material respect (see Section 6 of the CDA Code of Ethics). The ad should contain all of the information patients would need to properly evaluate the deal and make an informed choice about the provider and the service.

From a legal standpoint, members should watch for several red flags, including:

  • Ads must not be intended or likely to create false or unjustified expectations of favorable results.
  • Ads may not make a scientific claim that cannot be substantiated by reliable, peer-reviewed, published scientific studies.
  • Dentists may not offer gifts, discounts or anything of value as compensation or inducement for patient referrals (but it is acceptable to provide something to the actual new patient).
  • Dentists may not advertise that they will perform any procedure “painlessly.”
  • Claims of professional superiority are not lawful.
  • Price advertisements must be accurate and precise, without the use of phrases such as “as low as,” “and up,” or similar words or phrases.
  • Ads relating to fees must fully disclose all services customarily included as part of the advertised service, as well as any additional services not part of the procedure but for which the patient will be charged, together with the fees for such services.
  • An advertisement of a discount must:
    1. List the dollar amount of the non-discounted fee for the service;
    2. List either the dollar amount of the discount fee or the percentage of the discount for the specific service;
    3. Inform the public of the length of time, if any, the discount will be honored (i.e. expiration date);
    4. List verifiable fees pursuant to Section 651 of the Code (See the two bullets above.); and
    5. Identify specific groups who qualify for the discount or any other terms and conditions or restrictions for qualifying for the discount.

For more information, review the CDA Code of Ethics.