Every company wants to find the perfect marketing strategy—and many are testing out new gambits each and every day to try to lock down their piece of the market. But sometimes new, untested marketing strategies can take a turn for the worse, and the organization can catch some flak. But in health care, bad marketing can do a lot more than give your brand a bad rap, because some strategies are not only totally out of bounds—they’re completely illegal. It’s crucial that healthcare marketers know what can get them into legal trouble (beyond the Stark Law basics). Marketers have to dodge, duck, dip, and dive around a handful of laws and restrictions to keep themselves within the bounds of the law.

Before I continue, I would just like to clarify that I am not a lawyer—let alone one who specializes in health care—and I strongly recommend seeking out legal counsel in addition to avoiding the pitfalls mentioned in this article.

The State of Rehab Therapy in 2018 - Regular BannerThe State of Rehab Therapy in 2018 - Small Banner

1. Referral Incentive Programs

Let’s start with the most commonly cited piece of marketing-related healthcare law: Stark Law. Established in 1989, the Stark Law (or the Ethics in Patient Referrals Act) prevents physicians from referring patients who are receiving specific Medicare-covered services to any organization with which the physician has financial ties. And just to clarify, financial ties is a pretty broad term; this law firm describes them as “any direct or indirect ownership or investment interest by the referring physician, as well as any financial interests held by any of the physician’s immediate family members.” Needless to say, if you’re offering referral incentives to encourage physicians to send patients your way, you’re not just toeing the line—you’re completely crossing it.

Not only can a referral incentive program violate Stark Law, but it can—and is likely to—also violate the Anti-Kickback Statute (AKS). The AKS covers a lot more ground than Stark Law; it forbids healthcare providers from using rewards to generate referrals from any source. So, if you run a marketing campaign where you offer patients gift cards, provide discounted evaluations in return for referrals, or take other providers out to eat when they send you referrals, you’re violating the AKS.

Avoidance Maneuver

The government doggedly enforces the Anti-Kickback Statute and Stark Law, so your best bet is to give referral incentive programs a wide, wide berth. Stick to sharing outcomes data and NPS® scores with physicians, instead. Physicians worth their salt want to know how well you navigate your patients along the path to recovery—not how well you can throw together a dinner.

Regardless of your intent, if you’re giving gifts to referral sources (though again, it’s probably in your best interest not to), never, ever give them a cash gift, and ensure that any non-referral related gifts you do give are “nominal in value” (i.e., less than $15), “and tied to educational/business sessions.”

2. Verbal (or No) Consent to Use Patient Info for Marketing

Using patient information in any of your marketing without first obtaining written consent is a big, flagrant no-no. Patient information protection laws (e.g., HIPAA and HITECH) are very strict, and non-compliance will get your clinic into some very hot water. And no, verbal consent isn’t interchangeable with written consent. You need written documentation on file at all times to prove that your patient authorized the use of his or her image and information to promote your clinic—and that includes testimonials.

Avoidance Maneuver

All you need to do to avoid HIPAA hot water is obtain written consent from your testimonial prospects—but you can’t have them sign any old consent form. You need to cover all your bases with a legally ironclad testimonial authorization form. If you don’t have the time to create a document that fully protects you from HIPAA or HITECH violations, check out this testimonial release form that we made. Make sure you have patients sign it before you use any of their information in your marketing, and scan a copy to store on your computer—just in case.

3. Discounted or Free Services

Offering discounted or free services is a great way to generate some word-of-mouth buzz, but without the proper precautions in place, it’s a surefire way to violate the Anti-Kickback Statute and trigger some costly penalties—sometimes up to $100,000 per violation. Before you set up an injury clinic or a free gait analysis event, take a moment to do some research, because you need to tread very carefully.

Avoidance Maneuver

This gets a little tricky, because there are certain scenarios when it’s fine to offer patients free or discounted services—like if you, in good faith, determine that your patient is in dire financial straits. However, these situations are few and far in between, and they’re not something you can ever advertise. Seriously, do not advertise that you’re offering free or discounted services. And for the most part, you’ll want to avoid discounting the prices of your services altogether.

That said, according to law firm Holland & Hart,  you can offer (and advertise) free screenings to the public if you satisfy the following requirements:

1. The screening must be nominal in value (i.e., be worth less than $15).
2. The screening must promote access to care, and be abuse-averse.

In other words, the items or services must “improve a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid,” and must not “interfere with, or skew, clinical decision making.” Additionally, the free screenings must not be overused, and they must not raise “patient safety or quality-of-care concerns.”

3. The screening must be a specific kind of preventive service.

You can offer some preventive care services, including “some prenatal services, a postnatal well-baby visit, or specific clinical services described in the current U.S. Preventive Services Task Force’s Guide to Clinical Preventive Services, provided that such services are not tied (directly or indirectly) to the provision of other services reimbursed in whole or in part by Medicare or an applicable State health care program.”

All of that said, you can still offer free screenings that don’t fit within those three parameters if, and only if, you meet all of the following criteria:

  • “The free screening was not conditioned on the use of any other goods or services from the hospital;
  • The patient receiving the screening was not directed to any particular provider;
  • The hospital did not offer the patient any special discounts on follow-up services; and
  • If the screening was abnormal, the patient was advised to see their own health care professional.”

So long as you follow those four bullet points, you should be in the clear. But keep in mind that providers are likely to incur penalties if they “use the program as a way to generate and/or steer Medicare and Medicaid beneficiaries to their own facility or program.” So avoid pressuring the people at your free screenings to come to your clinic.

4. Third-Party Referral Generation Rewards

Healthcare marketing can be absolutely exhausting, and not everyone is up for the challenge. Many clinics find it in their best interest to outsource their marketing—or, at the very least, to ask someone else to handle referrals. Unfortunately, third-party referral generation is another rickety bridge that you have to maneuver carefully to avoid a hammering of legal penalties.

Avoidance Maneuver

Pay your independently contracted marketer a flat rate—regardless of how many referrals he or she draws in. Yep, it’s as easy as that! Here’s what iAHHC Home Care Law has to say about it: “The services safe harbor, upon which an agency would rely to structure an arrangement with an outside marketer, requires that the contractor be paid a fair market value for services provided. The term fair market value expressly excludes payments that consider volume or value of referrals generated… OIG has noted for many years that, at a minimum, paying a marketing entity a percentage of revenue or other compensation related to volume or value of referrals is ‘at least a technical violation’ of the AKS.”

5. False Advertising

Have you ever seen an advertisement for a product, only to find that when you went and bought it, it looked and worked totally differently than the ad implied? Your answer should be “100% no,” because product or service misrepresentation is actually illegal at both the federal and state level. You can violate more than a handful of laws with false or deceptive advertising, and in a litany of ways. According to Holland & Hart, your advertising is in the red if it’s:

  • “Misrepresenting or omitting material facts.
  • Creating unjustified expectations of favorable results, including the use of photos, models or guaranteed results.
  • Promoting items that are not necessary or medically indicated.
  • Representing that an incurable condition may be cured.
  • Abusing or exploiting the trust of a patient.
  • Making a false or misleading statement concerning the person's skill or efficacy of the treatment.
  • Representing superior skill if not supported by reliable data.
  • Making a scientific claim that cannot be supported by reliable data.
  • Representing himself or herself as a specialist or certified if that is not the case.
  • Misrepresenting fees or charges.
  • Advertising in any other unethical or unprofessional manner.”

Avoidance Maneuver

Be honest in your marketing! There’s nothing wrong with talking up your clinic, but you should never lie to or deceive patients—and never misrepresent your services.


Remember, this is not an exhaustive list, and you should always sync up with an attorney if you find yourself in a legal jam. Good luck, and happy marketing!

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