How to Endorse a Product or Service Without Breaking the Rules
What happens when referrals or endorsements that help patients also happen to benefit you?
Providers are often in a position to recommend other professionals, services, and products to their patients. Many providers also offer incentives to colleagues to participate in business opportunities or other endeavors. While these referrals may seem harmless, they can easily run afoul of the Federal Trade Commission’s (FTC’s) guidelines.
So what happens when referrals that help patients can also benefit you? Scenarios include:
- You recommend that a patient take nutritional supplements. You encourage them to purchase ABC Nutritionals, which you happen to sell in your clinic. You also earn a small commission on your sales. Nonetheless, you genuinely believe ABC Nutritionals to be of higher quality than similar products available to your patient.
- You took a business course last year. Thanks to what you’ve learned, your clinic has grown beyond your expectations. The school that offered the course will give you a $50 gift card for each person who signs up and lists you as the source of the referral. You share it with your friends via email, telling them how much it helped you.
- You rent space in a yoga studio where you see physical therapy patients. After completing rehab, many patients ask you about workout regimens. The yoga studio has offered you a commission on any patients who purchase memberships. You maintain a membership yourself and think your patients would benefit from their gentle programs.
Honesty and clarity are crucial.
Many companies offer commissions on referrals for a reason: when someone you trust recommends a product or service, you have more enthusiasm about purchasing it. However, this enthusiasm would likely diminish if you knew the referrer was receiving compensation for the referral. Thus, the FTC created an Endorsement Guide to promote honest and non-misleading endorsements.
When you endorse something, it’s crucial to be as upfront as possible. It’s easy to accidentally deceive a patient about the relative benefits of items you sell in your clinic. Say, for example, you purchase foam rollers for $20 and sell them for $30. Rather than purchasing a foam roller at Target, your patient assumes yours is of a medical grade and is the “best” for them. As a result, they buy it from you.
Were you transparent about how that sale benefited both you and the patient? In-clinic product offerings can improve compliance through convenience, control the quality of therapeutic products, and sometimes facilitate insurance reimbursement. But if your patient feels deceived (when they see the exact same foam roller at Target, for example), you may harm the patient-provider relationship and your reputation.
Social media endorsements are still endorsements.
The FTC’s Endorsement Guide also pertains to social media. While “promoted” posts are sometimes identified as such on social media, an endorsement on Instagram may be merely tagged “#ad” without additional attribution. Moreover, not all users or bloggers are being paid to promote an item. As such, the only way to identify paid promotion is through honesty and transparency.
These rules apply whether you receive large or small or one-time vs. ongoing compensation in exchange for your endorsement and referrals. The FTC’s rules apply any time that, when you refer a product, you also receive something in return. But what if you receive an incentive that has no cash value? According to the FTC, “Even an incentive with no financial value might affect the credibility of an endorsement and would need to be disclosed.”
Common no-value incentives include the opportunity to try a product (such as a pricey new medical device) for a period of time before returning it to the manufacturer or an opportunity to appear in a marketing campaign for your trade organization — even if you’re unpaid, it would give you the benefit of broadened name recognition and reputational strength.
Practical tips for making endorsements.
The FTC guidelines remind you that your endorsements should always reflect your experience with the product. You cannot discuss your experience with something that you’ve never tried. And if you tried something and thought it was awful, don’t say it was great.
It’s challenging to know exactly what you should disclose and what isn’t necessary. However, a good rule of thumb is to put yourself in your patient’s shoes. For example, if you knew the person encouraging you to purchase a great new pain-relieving gel would receive a percentage of the purchase price, would that influence your decision to buy it? If so, then your patients deserve the information.
A few tips for how to make endorsement disclosures:
- A hyperlink simply titled “disclaimer” or “legal info” after an endorsement on your social media page or blog, linking the reader to a page of your website describing the endorsement details is insufficient to meet the FTC’s requirements.
- Tweets that endorse a product or service are likely sufficient to meet the FTC’s requirements if they include either “sponsored,” “promoted,” “promotion,” or “paid ad.” Starting the tweet with “Ad:” or “#ad” is also likely sufficient.
- Your endorsement disclosure should be clear and conspicuous. Don’t use a tiny or hard-to-read font. Don’t make the font the same color as the background. If it’s being read during a video or audio recording, make your reading speed and word choices easy to understand.
- Always place the disclosure near your endorsement.
- Don’t try to distract your reader/listener from the existence of your endorsement disclosure.
- Make the disclosure in the same language as the endorsement.
Practical tips for the healthcare provider:
- On social media, be sure to include the recommended language every time you endorse the product or service.
- If recommending a product to your patients, consider creating a written form explaining the benefit you’ll receive and obtaining your patients’ signatures when they receive the product. This creates proof that you informed them of any incentives.
- Be extremely careful when taking or giving benefits for referrals to other providers, services, or products. As a healthcare provider, you’re subject to numerous anti-kickback and anti-referral laws that carry heavy penalties. Federal and state laws forbid such benefits within healthcare, even if you inform patients of the relationship.
Get Legal Support.
For specific, personalized guidance about how to stay compliant while endorsing products and services, you can speak to an experienced healthcare lawyer. If you’re in one of the states where Jackson LLP has licensed attorneys, reach out to us to learn how we can help. We offer free consultations to find out if we’re a good fit.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.