Hiring Marketing Help: How to Avoid Missteps That Endanger Your Practice

While marketing professionals can help you grow your practice, they may not know the special rules of the road for healthcare. Learn the guardrails you’ll need to establish to keep your marketer from inadvertently breaking the law.

A group of people sitting at a table with a laptop and marketing diagrams

Launching a new healthcare practice can feel overwhelming. Becoming a business owner comes with many new responsibilities, including promoting your brand. But you went to school to help patients, and you don’t have training in marketing. Where do you start?

Hiring a marketing professional can be a smart move. But before jumping into a relationship with a marketer, remember that healthcare is one of the most regulated industries with unique consumer protections. To market your practice successfully and lawfully, your marketing professional must understand and adhere to numerous healthcare-specific regulations.

Let’s look at a few issues that should cross your mind when hiring a marketing professional for your practice.

Marketing Compensation

One of the first things to consider when hiring a marketing practitioner is how to compensate them. One common metric for evaluating success is the number of new patients they bring into a practice. So, on its face, it might make sense to propose compensating them on a “per referral” basis. But beware of this approach. Depending on your business activities, it could be illegal. 

Anti-Kickback Statute

The Anti-Kickback Statute (AKS) prohibits soliciting or paying for referrals. In other words, paying someone to provide referrals (i.e., new patients) for your practice can run afoul of federal law. Violating AKS can result in heavy fines or even criminal liability, so ensuring your compensation is compliant is vital. 

AKS does contain specific “safe harbors,” or compensation methods that don’t violate the statute, so there are avenues by which marketing professionals can get paid, but it gets complicated. A healthcare attorney can help you determine if safe harbors apply to your situation. But generally, the safest payment arrangements are those in which the marketing person earns a salary or hourly wage.

Eliminating Kickbacks in Recovery Act

If you’re operating a laboratory, you’ll also want to consider the Eliminating Kickbacks in Recovery Act (EKRA). EKRA applies to ALL clinical labs. It’s similar to AKS in that it seeks to prohibit payments for referrals to a laboratory. But EKRA goes even further than AKS and has fewer exceptions.

EKRA is not something to take lightly. Labs who violate EKRA can be penalized with hefty fines, imprisonment, or both (depending on the severity of the violation). 

Because marketing involves attempts to bring patients to a lab, marketing contracts for laboratories must comply with EKRA. It is crucial that you review your marketing setup for any potential violations.

State Laws

Federal laws aren’t the only constraints to consider when it comes to compliance. You’ll also need to determine whether your state places any limits on marketing compensation. A healthcare attorney can help you understand the nuances between state and federal laws.

See our related article:  Self-Referrals and Kickbacks: Navigating Federal and State Healthcare Laws.

Many restrictions on marketing compensation exist, but that doesn’t mean you’re out of options. Compensation that is not based on commission is typically acceptable, including:

  • Salaried compensation
  • Hourly compensation
  • Monthly flat-fee compensation
  • Non-monetary benefits (health insurance, paid time off, retirement planning, and other benefits)

Employee or Independent Contractor Status

Whether to hire a marketing practitioner as an employee (sometimes referred to as a “W2” worker because of the tax forms used to report employee compensation) or an independent contractor (also called a “1099” worker) should reflect the goals you have for your marketer and your state’s laws. In turn, the application of federal safe harbors can depend on whether there’s an employment or independent contractor relationship in place. Before drawing up any contracts, define your goals and speak to an attorney about the best option for your practice.

Promotional Content

Overall, there’s plenty to consider regarding your public-facing content. You’ll want to ensure your marketer understands the laws for marketing materials in your profession. What’s allowed? What isn’t?

More than likely, your state practice act limits you from advertising in a way that is untruthful, unfair, misleading, or makes false promises. For instance, many states prohibit guarantees that a given procedure will be successful.

Additionally, your marketer will need a firm grasp of HIPAA and must understand that, generally, patients’ identifying information must not appear in advertisements. Similarly, there are limitations on how you can use reviews and testimonials provided by patients. Furthermore,  you must be cautious when responding to reviews to avoid violating HIPAA. 

Marketing Strategies

Once hired, your marketing practitioner will likely present many ideas for drawing patients into the practice. However, some of their proposed tactics could create liability for your practice. For example, you may be tempted to offer patients free gift cards, prizes, and referral bonuses as a thank-you for bringing business into the practice. But these seemingly trivial gifts can implicate many of the same laws discussed above (and others). Before giving away free products or services, evaluate the details of the marketing campaign and identify the risks that may arise.

See our related article: New Patient Incentives: When a Small Gift Card Brings Big Legal Trouble.

If you invest in marketing services for your practice, consider hiring a professional with experience in the healthcare sector and familiarity with the laws that bind you as a licensed provider. If your marketing professional hasn’t previously worked in healthcare, you’ll need to understand the laws yourself and impose guardrails. Talking to a healthcare attorney can help you fill in the gaps and avoid legal pitfalls in your marketing.

Get Legal Support

The healthcare attorneys at Jackson LLP can provide guidance on compensation strategies and review your marketing materials for compliance with state and federal laws. If you operate in one of the states where we have licensed attorneys, schedule a free consultation to find out if we’re a good fit for your needs. 

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. This blog should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.

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