January 21, 2014
In the last couple of weeks, I have been asked a few times about patient referral programs. There seems to be a lot of confusion as to how it can be done ethically. I have been asked if a dentist can promote new patient referrals by offering current patients such things as gift cards or account credits for each new patient they refer.
So, how can we ethically reward our patients for their kind referrals?
Let’s look at how our ADA Principles of Ethics and Code of Professional Conduct addresses it. Section 5.F.4. REFERRAL SERVICES speaks to this topic:
“A dentist is allowed to pay for any advertising permitted by the Code, but is generally not permitted to make payments to another person or entity for the referral of a patient for professional services.”
In addition, Section 4.E. REBATES AND SPLIT FEES notes,
“Dentists shall not accept or tender ’rebates’ or ’split fees.’”
A split fee occurs when you offer to return a portion of the fee you collect to the referral source. A rebate is essentially the same thing. A discount on future fees, credit on their account, or cash back to the referring party would also apply.
There are also the following Washington state laws that deal with rebates and split fees:
RCW 19.68.010: It shall be unlawful for any person, firm, corporation or association…. to pay, or offer to pay … to any person licensed by the state of Washington to engage in the practice of …dentistry, …and it shall be unlawful for such person to request, receive or allow, directly or indirectly, a rebate, refund, commission, unearned discount or profit by means of a credit or other valuable consideration in connection with the referral of patients to any person, firm, corporation or association…. Any person violating this section is guilty of a misdemeanor.
RCW 19.68.020: The acceptance directly or indirectly by any person so licensed of any rebate, refund, commission, unearned discount, or profit by means of a credit or other valuable consideration whether in the form of money or otherwise, as compensation for referring patients to any person, firm, corporation or association as set forth in RCW 19.68.030, constitutes unprofessional conduct.
RCW 19.68.030: The license of any person so licensed may be revoked or suspended if he or she has directly or indirectly requested, received, or participated in the division, transference, assignment, rebate, splitting, or refunding of a fee for, or has directly or indirectly requested, received, or profited by means of a credit or other valuable consideration as a commission, discount, or gratuity in connection with the furnishing of medical, surgical, or dental care…
Now that we have the legal and ethical guidance for how to proceed, it should be noted that there is no ethical prohibition on rewarding a patient for a referral. A thank-you note with a nominal gift card would not, in itself, violate our Code. However, problems could arise if you were to offer a reward or credit up front to anyone who refers a new patient. An example would be a sign in your office or on your Facebook site offering $100 for each new patient that people send your way. Another example might be a contest with a trip to Hawaii for the person who refers the most new patients. The difference between these examples and the simple thank-you is that the thank-you is a spontaneous gesture, not contingent on the referral; whereas, the others involve an upfront offer with the intent to exchange patient referrals for a reward. From a legal perspective, a thank-you gift of a large amount might be construed as a rebate; so, consultation with your legal advisor would be prudent if you have any concerns.
For more in-depth information on questions like this, I welcome you to attend our Ethics Panel at the Pacific Northwest Dental Conference in Bellevue, June 13, 2014, and be a part of the discussion. If you have any questions that you would like addressed in that venue or in this column, please email them to firstname.lastname@example.org.