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Wednesday, October 26, 2016

Marketing Practices - Ethical and Unethical

If you were a marketing or advertising specialist, agency or representative, you might walk into a real estate company and offer to give them folders for free for six months.

These attractive, professional looking folders might make it easier for their clients to hold all the many forms given them when visiting a real estate office, like listing agreements and contracts, etc.

Then, after they readily and happily accept your gracious promise of this gift, you could then began calling contractors like electricians, carpenters, decorators, furniture stores, plumbers and so on and began selling advertising space on the inside pockets and back cover of these folders. Innovative? Yes, and very ingenious to say the least.

The real estate agency is happy to accept your thousands of free folders for their use in better organizing the paperwork they are required to give out to clients. The contractors and other vendors are very happy when they began receiving calls from new homeowners asking for their services because the new homeowners saw their name on the folders.

And you, as the marketing genius made a nice income selling all that advertising space. Now all you have to do is use a portion of that money to purchase and deliver the folders with all the ads laid out on them. This is a marketing win-win situation for everybody involved. However, what if the industry was a different one? Say the medical industry?

What if you went into a doctors office and promised to provide him or her with a six month supply of folders for free to hand out to their patients to hold medical forms like HIPPA forms, receipts, etc.? Then what if you called specialists like cardiologist, oncologists, podiatrists, chiropractors, etc and offered them exclusive space for a price on these folders?

There are a couple of things in place called laws that might prohibit your ability to do this same thing with medical doctors. These are called the Anti-Kickback Statue and the Stark law. It is against the law for doctors to pay for referrals. It is against the law for doctors to sell referrals.

Even though you are a third party marketing agency, the doctor receiving the free materials in exchange for promoting a specific specialist may be in violation and the doctor paying for the exclusive space on the folder that is going into a specific doctors office may be in violation.

Here's the part of the Stark law and Anti-Kickback Statue that might apply taken from the American Medical Association's website: Paying For Referrals Illegal 

At the federal level, the anti-kickback statute and the Stark law heavily regulate physician referrals.
The anti-kickback statute explicitly states that it is a felony to solicit, receive, offer or pay anything of value, directly or indirectly, overtly or covertly, in cash or in kind, in return for referring patients or services for which payment is made by a federal health care program, such as Medicare or Medicaid.
The law punishes both sides of the deal, the referring and referred physicians. While the statute applies nominally to federal health care programs (thus patients or services not covered by these federal programs are outside the purview of the statute), the Stark law and/or state law may nevertheless prohibit the arrangement.
Under Stark, a physician may not refer Medicare or Medicaid patients for designated health services to an entity with which the referring physician (or his or her immediate family member) has a financial relationship, subject to some exceptions. 

The key policy supporting the widespread prohibition of referral agreements and fee splitting is the notion that it creates a conflict of interest for the physician. As the AMA's Code of Ethics states, a referral from a physician should be the product of the patient's needs and the referred physician's reputation, training and skill -- not the basis of an economic arrangement that could undermine patient trust.
Even the appearance of impropriety can compromise the patient's trust for both physicians involved and ultimately can undermine the public's confidence in the medical profession.
So, even though this is a brilliant idea for real estate agencies, it is unethical and likely illegal for medical clinics. 

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