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CEBJA issues advisory opinion on split fees in marketing

September 17, 2012

The ADA Council on Ethics, Bylaws and Judicial Affairs has issued an advisory opinion on split fees in advertising and marketing services, such as Groupon and Living Social, among other online coupon deals.

The opinion, approved by the council at its March meeting, was prompted by numerous inquiries to the ADA by member dentists. Some social couponing companies collect fees from patients or prospective patients for the offered professional service and retain a defined percentage of that fee as payment for the marketing provided to the business.

The opinion is as follows:

Split fees in advertising and marketing services: The prohibition against a dentist’s accepting or tendering rebates or split fees applies to business dealings between dentists and any third party, not just other dentists. Thus, a dentist who pays for advertising or marketing services by sharing a specified portion of the professional fees collected from prospective or actual patients with the vendor providing the advertising or marketing services is engaged in fee splitting. The prohibition against fee splitting is also applicable to the marketing of dental treatments or procedures via “social coupons” if the business arrangement between the dentist and the concern providing the marketing services for that treatment or those procedures allows the issuing company to collect the fee from the prospective patient, retain a defined percentage or portion of the revenue collected as payment for the coupon marketing service provided to the dentist and remit to the dentist the remainder of the amount collected.

Dentists should also be aware that the laws or regulations in their jurisdictions may contain provisions that impact the division of revenue collected from prospective patients between a dentist and a third party to pay for advertising or marketing services.