Can You Sell Groupons for Healthcare Services?

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Selling Groupons for healthcare services could implicate several laws. We explore a few of the relevant ones.

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You can find Groupons for almost anything these days — from spa services to mini-golf. But some Groupon offerings might surprise you. For example, you’ll find Groupons for dentistry, prescription medications, vitamin injections, telemedicine visits, and more.

How does Groupon work? The company connects users to businesses by offering deals, or “Groupons,” for items and services. Users can shop online for the Groupons, which they can redeem at the business that offers the special deal. Healthcare practices might see Groupon as a way to get their name out and drum up business for a particular service. 

But is this legal? Can you sell Groupons for healthcare services? The short answer: it can be problematic. 

Selling Groupons for healthcare services could implicate several laws. It all depends on who you are, where you practice, and what type of services you provide. We explore a few of the relevant laws here.

Fee-splitting Laws.

Fee-splitting laws in states such as Illinois make it illegal for physicians to share a percentage of their medical professional fees with anyone other than fellow physicians with whom they practice. Thus, physicians considering using Groupon to advertise their services should beware.

When a patient purchases a healthcare service on Groupon’s website, Groupon collects the payment. The platform then charges a service fee for each sale, up to 50% of the purchase price for the service. The website keeps half of the payment and remits the other half to the provider when the patient redeems the voucher. In this way, Groupon’s payment structure could implicate physician fee-splitting laws.

Referral Laws.

Many states put limits on referrals. Meanwhile, the federal Stark Law also prohibits physicians from referring patients to receive “designated health services” at entities where the physician or an immediate family member has a financial relationship. How does this pertain to Groupon?

Again, healthcare practices use Groupon to advertise their services and, in exchange, split the profit with Groupon for each sale. Even if there’s no fee-splitting issue in your state, this practice could be viewed as payment for a referral, as practices pay Groupon to be advertised and then receive a portion of the profits. 

With Groupon’s popularity, some states have taken measures to control how healthcare providers use such platforms. For example, California allows physicians to promote their services through third-party advertisers without implicating referral laws “when the third-party advertiser does not itself recommend, endorse, or otherwise select a licensee.” In addition, under California’s rules, the fee paid must be “reasonable,” and the offer must include certain disclaimers.

It can be challenging to understand the contours of state laws and where exceptions exist. Furthermore, federal laws could also come into play, depending on the services and the payor.

The Federal Anti-Kickback Statute.

Groupons for certain healthcare services could also run afoul of the federal Anti-Kickback Statute. The Anti-Kickback Statute (AKS) is a criminal statute that prohibits the exchange (or offer to exchange), of anything of value, in an effort to induce (or reward) the referral of business reimbursable by federal health care programs. 

This essentially means that you, as a healthcare practice, cannot offer rewards to patients who will use products or obtain services for which a Federal healthcare program (Medicare or Medicaid) will pay. Thus, Groupons that offer “deals” or lower rates to patients who schedule a service through Groupon could qualify as one such reward. 

The Department of Health and Human Services Office of the Inspector General (OIG) has previously weighed in on the issue of coupons for healthcare services and AKS. In the case they examined, the proposed coupon program’s fee for offering coupons was based on a set-rate subscription service model, not sales volume. Further, the coupon users did not pay anything upfront to print or download the coupons. In the resulting guidance opinion, OIG did not penalize the arrangement. 

OIG’s opinions are non-binding, meaning they only apply to the parties involved. So even if you want to provide coupons using a similar model, you should proceed with caution. Moreover, a different coupon model could receive more intense scrutiny. 

Anti-Kickback penalties can be high. Therefore, always take the AKS seriously and carefully examine any incentives, discounts, or rewards you offer to patients.

Conduct, Ethics, and Business Issues.

Healthcare professionals often have a duty to evaluate their patients and determine the appropriateness of a service before it is confirmed. Thus, selling particular services without first evaluating a patient’s eligibility could be considered “unprofessional conduct” and could implicate ethical issues. Evaluation is delayed in the Groupon model, raising concerns about professional duty and your state’s regulations.  

What happens if the patient buys a service but, upon evaluation, you don’t believe they’d be a good candidate for it? For example, say a patient purchases a Groupon for vitamin injections at your medical spa. They attempt to redeem the purchased Groupon at an appointment. However, their medical history raises concerns about whether they can safely receive the injections for which they’ve already paid. 

Had the patient come in for a consultation, you could have discovered this complication in advance. But on Groupon, the patient can pay for a specific service before ever setting foot in the practice or speaking to any staff. By accepting payment, the healthcare professional could be viewed as agreeing to provide that specific service. 

To get around these issues, the fine print of some Groupons may specify “consultation required” and “if you are ineligible, a refund will be provided.” Even so, it could create some tricky business situations for your practice.

Get Legal Support.

Overall, selling Groupons for healthcare services may be problematic at best and illegal at worst. However, if your goal is to boost your business using an advertising or incentive program, there may be other options. A healthcare lawyer can help you understand what’s permitted, what’s not, and what options might be best for your practice.

For guidance on advertising or any other legal issues in any of the states where we have licensed attorneys, schedule a time to talk to us. Our healthcare-focused law firm offers free consultations to help you determine 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.

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