Voucher Advertising, like Groupon, Permissible by the IDFPR, Not Fee Splitting

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May 9, 2013
Moses Suarez
SmithAmundsen Health Care Alert

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On April 10, 2013, the Illinois Department of Financial and Professional Regulation issued a position statement which determined that voucher advertising, such as those provided by Groupon, does not violate the Fee Splitting Prohibition under the Illinois Medical Practice Act. The Medical Practice Act states that a physician, “may not directly or indirectly divide, share, or split any professional fee or other form of compensation for professional services with anyone in exchange for a referral or otherwise.” 225 ILCS 60/22.2. Similar fee splitting prohibitions apply to most other health-related professional licensing acts. Per the IDFPR, voucher advertising does not constitute unethical fee splitting or a prohibited solicitation or referral fee under Illinois law if:

1.  The negotiated fee between the voucher advertising company and the licensee represents reasonable compensation for the cost of advertising; and

2. All advertisements incorporate the following terms and conditions in a clear and conspicuous manner:

- A description of the discounted price in comparison to the actual cost of services;

- A disclosure that all patients may not be eligible for the advertised healthcare service and that decisions about healthcare should not be made in haste. Determinations regarding the medical indications for individual patients will be made on an individual basis by applying accepted and prevailing standards of medical practice; and

- A disclosure to prospective patients that, if it is later decided that the patient is not a candidate for the previously purchased healthcare service, the patient’s purchase price will be refunded in its entirety. If the patient does not claim the service, then the patient’s purchase price must still be refunded in its entirety. In the event that the voucher advertising company does not refund the purchase price in its entirety, it will be the sole obligation of the licensee to refund the entire purchase price.

The recent position by the IDFPR concludes that a physician or other health-related professional may use voucher advertising services, such as Groupon, without violating Illinois law even where the contract with Groupon requires fees to be paid directly to Groupon. The IDFPR’s position on voucher advertising does not speak to federal law regulations prohibiting fee splitting.