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CosmeticSurg Blog

Dr. Rodriguez discusses Plastic Surgery, Medicine, and Stem Cell Research

Groupon Daily Deals for Botox – Violation of State Regulations?

Nearly everyone has heard of Groupon, the coupon site for daily deals. If you are on the receiving end as a consumer, it can be a great way to get some great deals. For over a year we have been seeing other plastic surgeons and dermatologists sell Botox® at huge discounts. Not wanting to be outdone by our competitors, we decided to explore our options for selling facial injectables such as Botox, Restylane, Juvederm and Sculptra via Groupon.

groupon botox couponOur biggest dilemma about using the popular daily deal service was a legal one, rather than what price we could negotiate with Groupon. Our question was “Is it legal for our medical practice to give a percentage of the sales to Groupon based on the number of injectable procedures we sell?

If you are scratching your head, you may not be aware that many states have anti-kickback and ‘fee splitting’ rules for doctors. These rules forbid medical doctors from giving a payment to anyone for a referral. In other words, awarding a commission to an advertiser based on the income generated or number of patients treated is illegal.

We first broached the question to one of our patients, who happens to be a well respected attorney here in Maryland. His short answer was that Groupon likely violates Maryland State laws on fee splitting. Having gotten his response, we next put in a phone call to the American Society of Plastic Surgeons (the ASPS) to hear their formal position on Groupon.

They pointed the way to a recent article about the use of Groupon for cosmetic services published in the June 2011 issue of Plastic Surgery News, the trade publication for plastic surgeons.

In summary, the ASPS article was written by the plastic surgeon who heads the ASPS Ethics Committee and a lawyer. They concluded that Groupon likely violates the laws for physicians in many states. In particular, they considered the use of Groupon to be in violation of laws in California, Florida, Illinois, and New York State. Lots of specific details were given about the regulations in these particular states. The State of Maryland was not discussed, but we are certain that the laws here are very similar, which means that kickbacks can not be given for referrals of patients.

According to the ASPS, the use of Groupon to promote cosmetic surgery procedures likely to be illegal in many states.

If that wasn’t enough to scare us away from using Groupon, the authors of the article also shed some light on how Groupon management is approaching the issue of the legality of doctors using their services to promote cosmetic services. Groupon has acknowledged that there may be issues with particular states and their licensing authorities, “Groupon advised [the ASPS] through its counsel that it has not independently done a legal analysis and assessment as to whether the Groupon program violates federal or state laws regarding flee splitting, kickbacks, and referral fees.”

Furthermore, the article stated that Groupon does not consider it their obligation to determine whether services are legal or not. According to ASPS, “Groupon is taking a ‘buyer beware’ position and assumes no responsibility for determining whether the program raises legal implications for the service providers (doctors).”

Haven’t done an assessment yet? Don’t consider it their obligation to determine legality? Has Groupon taken a new position since the writing of this article? Certainly an acknowledgement that including cosmetic services such as Botox injections within their daily deal offerings is illegal in many states would rain on the Groupon IPO parade. Halloween may be over, but for Groupon investors, this is a scary thing!

CosmeticSurg Staff Writer
©Cosmeticsurg.net (permission to copy article or part of article provided this notice is included and proper attribution is given, including a link to the original source URL)

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12 Comments

  • wrote
    May 11, 2014 at 10:08 pm

    Something to think about….

  • wrote
    February 24, 2013 at 12:10 pm

    Roberto:
    The person in my office who deals with these matters is Leeza.
    You can contact her at leeza@cosmeticsurg.net

  • wrote
    February 9, 2013 at 9:24 pm

    Groupons model falls under state laws that govern medical professionals. Due to the way the relationship is structured it would most likely be considered fee splitting. I’m the founder and created of the worlds first designed to be. Medical professionals will be able to post offers for surgical and non surgical elective cosmetic procedures. Our fee structure is nothing like Groupon and is designed to be very attractive for the medical community to participate in. We will be launching the site in the US soon. I’m sure you will hear about it…..if your interested in more information contact me makeoveragents@gmail.com

    Note: I’m a well respected expert with 12 years industry related experience.

  • wrote
    February 14, 2012 at 10:35 am

    Interesting Article! I know several colleagues who have been approached by Groupon to offer “deals” such as these.

    In this economy it can be tempting to offer these types of promotions/coupons however, I think the always fun and effective “Botox event” or promotions such as that is more ethical than selling “coupons” for Botox. If injected incorrectly the repercussions can be less than ideal.

  • wrote
    February 10, 2012 at 9:50 am

    hi Mishi,
    Go to your State “Board of Physicians’ website. In any state there should be a tab for ‘Laws and Regulations’. Also, if there is a search box, input botox or injectables. Also look for your state’s definition of ‘medical procedure’. Some states define injectables as ‘medical procedures’ and others do not. There are stricter regulations for injectables if they are classified as medical procedures.

    Good luck–Let us know what you find out for your state!

  • wrote
    February 9, 2012 at 7:42 pm

    Hello,

    I have a question regarding the state regulations for cosmetic injection certification; specifically, certification of an RN to administer Botox, Juvederm, etc. Some states require a doctor to be present at the facility, while other states simply require a physician to be in the same state. Do you know where I can find concrete information on this matter?
    Thank you kindly for your help!

  • wrote
    January 8, 2012 at 4:26 pm

    Thanks!

  • wrote
    January 8, 2012 at 4:25 pm

    Dr. Tarbet:
    Our son works at Google so we were also familiar with a new Google product, “Google offers”, but we opted not use it because of these issues. So yes, we liked the idea, but now we understand the unethical aspects better. Commoditization is also a danger, and the problem is not so much the decrease in price but the legislative backlash should a patient be harmed by an unscrupulous practitioner.

  • wrote
    January 7, 2012 at 12:31 am

    Great blog, by the way.

  • wrote
    January 7, 2012 at 12:31 am

    We’ would definitely concur on the reservations of using groupon as you listed. Thanks for highlighting.

    However, did you feel it was decent marketing vehicle? We’ve thought about it, but because of similar concerns and also the commoditizing of our services, we opted not to. Nevertheless, we appreciate you writing about it with such candor. Cheers.

  • wrote
    December 19, 2011 at 11:30 am

    Of course the idea of a service like Groupon is appealing to get new clients in the door, but we must make sure we are abiding by state laws first. Make sure you are in the clear before you agree to let your practice be a part of a similar deal.

  • wrote
    November 20, 2011 at 2:07 pm

    This is a very interesting artice..I was looking at cosmeticsurg.net looking for info on surgery…I am currently seeing a derm who I found out abt on groupon…when I had my consult at their office, it was a very hard sell…this Dr. also offers a $50 refferal bonus to everyone I send to him…I found this a bit unethical and the article confirms my suspicions…Really, my 19 yr old sister came with me to the consult and the Dr. was trying to sell her Dysport for “age prevention” and Juvederm for lip enhancement when she never expressed interest in having anything done…and my $50 referral bonus…

2 Trackbacks

  1. [...] Groupon Daily Deals for Botox – Violation of State Regulations? [...]

  2. [...] It’s pretty clear Florida statute specifically prohibits facilities from splitting fees and / or paying commissions on volumes generated “piece meal” from an online site like ours (or any of the other online medical deal sites – to include Groupon when they offer health related deals – see this link for the back story – more info here). [...]