November 27, 2013
The Medical Board of California issued a statement last week that it did not author a letter apparently coming from its Discipline Coordination Unit warning physicians to immediately "cease and desist " from conducting any daily deal marketing arrangements with sites such as Groupon, Living Social and Amazon. A number of California physicians have called the medical board stating that they have received these letters dated November 6, 2013, on the medical board’s masthead.
These letters are fraudulent and were not generated by the medical board. When the medical board receives any complaint regarding a physician—including the use of daily deal marketing or internet-based coupon sites—the complaints are evaluated on a case-by-case basis to determine whether there is a violation of the law.
Physicians should, however, use caution when using such sites. While each deal varies, typically the physician agrees to give the coupon company a percentage of the revenue obtained from patients using the coupon (reports suggest as high as 50 percent) in return for the marketing company's promotion of the practice through various types of coupons or "daily deals."
Even if patients using such coupons are cash-paying and non-insured, the activity raises significant legal issues for physicians. Accordingly, physicians should act with extreme caution in this area, after obtaining the advice of an attorney experienced in health care fraud and abuse laws.
For more information, see CMA On-Call document #0104, "Practice Promotion through Third Party Coupons." On-Call documents are available free to members in CMA's online health law library at Health Law Library. Nonmembers can purchase documents for $2/page.
If you receive a cease and desist letter and wish to verify its authenticity, please contact the medical board at (916) 263-2528.