Living Social and Groupon, a Guest Post by Adam Alban, Ph.D., J.D.

Recently, on the Division 42  listserv, which I moderate, there was a thread about Living Social and Groupon. I referenced my former post on this issue and posed the question as to whether others believed this constituted “fee-splitting” as prohibited by our ethics code. My colleague Adam Alban, Ph.D., J.D. responded, and I thought his ideas about this were worth sharing.

Be sure to read the other great articles on Dr. Alban’s website, and if you’re in San Francisco, you won’t want to miss him presenting on Saturday, May 19th on Law, Ethics, and Charts: Every Therapist’s ‘Dirty Little Secret’. 9:30am – 12:30pm.

Dr. Alban’s post is below:

I’d like to preface this comment by saying that I do not have an opinion about whether promotions such as Living Social, Groupon, etc., are appropriate or constitute impermissible fee splitting when used by psychologists.  I do, however, think that it’s useful to think about these things as the marketplace changes and as psychologists such as ourselves feel the need to be more enterprising.

Here’s the text of 6.07- “Referrals and Fees: When psychologists pay, receive payment from, or divide fees with another professional, other than in an employer- employee relationship, the payment to each is based on the services provided (clinical, consultative, administrative, or other) and is not based on the referral itself.”

It seems to me that it’s important to remember the main purpose of 6.07, which is to make sure that referrals are made based upon clinical indications and not upon a fee.  This provision of the Ethics Code is in place to maintain the integrity of the treatment.  It’s also helpful, I think, to keep in mind that 6.07 does not prohibit fee sharing; its function is to ensure that any fee distribution is based upon services rendered.

Here’s how I would approach an arrangement like Living Social or Groupon:

1.) Determine who is making the referral:  Are patients self-referred based upon a mass email?  Or, is the website targeting individuals based upon other data?  Who decides whether the patients purchase the offer and/or visit the psychologist?  IMPORTANT: If patients decide to purchase a “deal,” is he/she aware that the psychologist’s participation in the deal is a promotion?

2.) Determine, to a reasonable extent, whether/how the partnering business maintains patient data.  Under many circumstances, the mere fact that a patient is seeing a psychologist is confidential.  However, patients who willingly choose to disclose that fact to a third party may do so of their own free will.  It’s not the psychologist’s dilemma if a patient breaches some elements of confidentiality.  But if the partnering business requires that the *psychologist* continues to provide patient data after the initial contact, the patients may need to be made aware of this in order to provide consent for this data transaction.  Patients can disclose private information on their own, or they can consent to the release of their private information.  (It’s certainly possible that many psychologists would reasonably believe that the potential intrusions disrupt the frame to such an extent that the treatment becomes irrevocably warped, but IMHO that is a theoretical judgment and not an ethical decision, per se.)  HIPAA Covered Entities may, under some circumstances, need to enter into Business Associate agreements with partner businesses if the information sharing is required (by contract) to continue.

3.) Something else to consider is whether partner businesses such as Groupon or Living Social are more like advertisers or more like business partners? Or, are they some altogether different form of business?   Recall that 6.07 provides examples of “clinical, consultative, administrative, or other” as services that are permissible bases for fee division. Is advertising an “other?” Are these types of promotions an “other?”

4.) A very real and practical concern (less an ethical concern) is that the response to these daily deal sites can be overwhelming. Be prepared for an avalanche of calls.

You can read more of Dr. Alban’s thoughts on this on his own blog. If you’re interested in hearing more from him, also know that he facilitates a monthly Law & Ethics discussion night for San Francisco Psychological Association.

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