Doctors Q & A
Employing Creative and Effective Practice Marketing Techniques without Violating the Law
Q. I am a new pediatrician struggling to grow my practice. I recently retained a local marketing firm and they have encouraged me to promote my practice by:
- Sending thank you letters containing small tokens of my appreciation (e.g., gift certificates to a local restaurant) to physicians who refer patients to my practice;
- Giving new patients a free subscription to Highlights® magazine;
- Sending existing patients a birthday card containing a two dollar bill or silver dollar; and
- Obtaining a patient mailing list from a colleague who is nearing retirement.
I love these ideas, but are there any legal issues I should consider?
A. Yes, as you are selecting the optimal marketing strategy, there are important legal issues you should consider. In this increasingly competitive health care environment, it is crucial to think 'outside the box,' however, you want to make certain that this thinking is not also 'outside the law.'
There are a host of state statutes, federal statutes, federal rules and professional guidelines that could govern your marketing activities. However, the most relevant statutes are the: Medicare and Medicaid Anti-Kickback Statute (42 U.S.C. 1320a-7b); Beneficiary Inducement Statute (42 U.S.C. 1320a-7a); and Health Insurance Portability and Accountability Act of 1996 or "HIPAA" (42 U.S.C. 1320D, et seq.).
Medicare and Medicaid Anti-Kickback Statute
Your first marketing idea implicates the Anti-Kickback Statute, which makes it a felony to give or accept any remuneration to or from a third-party with the intention of inducing a person to refer a patient for the furnishing of patient care to be paid by Medicare or Medicaid. Your mailing of a thank you letter is a great idea and it does not violate the law. However, if you include a gift certificate or anything else of value, you are violating the Anti-Kickback Statute, which can result in civil and criminal penalties. In short, make certain that your "thank you" cannot be quantified in monetary terms.
Beneficiary Inducement Statute
Your second and third marketing ideas implicate and violate the Beneficiary Inducement Statute. This law prohibits a physician from providing any remuneration to patients that is likely to induce them to utilize his patient care services if such services are reimbursed by Medicare or Medicaid. "Remuneration" includes cash and anything of value; however, the Office of Inspector General ("OIG") has exempted non-cash and non-cash equivalent gifts of "nominal value" so long as they are valued at $10 or less per gift and do not exceed $50 in the aggregate, per year.
If the Highlights® magazine subscription costs more than $10, you should find a different gift. Perhaps, as an alternative, you could give your patients a copy of the current issue of Highlights® each time they visit your office.
As to the third marketing idea, the Beneficiary Inducement Statute prohibits giving any cash or cash-equivalent item (e.g., gift certificate) to patients regardless of whether they are a new or existing patient. If you want to send your patients a birthday card and a small gift, consider giving them a bookmark, low-cost children's music CD or the like. Such a gift will serve your marketing purposes without placing you in legal jeopardy.
HIPAA
HIPAA places restrictions on the use of protected health information for marketing purposes. Therefore, the use of your colleague's patient list likely violates HIPAA. Instead, consider asking your marketing firm to provide you with a list of new residents in your community. Obtaining a list from someone other than your colleague (or another "covered entity") will help you ensure that your successful marketing campaign is not marred by a HIPAA violation.
Stephen A. Snyder, Esq.
Vice President/General Counsel
Disclaimer: The information contained within the MTBC® Legal Corner is provided for general educational and informational purposes only and should not be construed as legal advice. The author of the Legal Corner does not represent the Web site user or the individual submitting a particular question. Please seek the advice of legal counsel to address any specific questions you may have regarding your particular facts or circumstances