Could You Be Illegally Inducing Patients Without Even Knowing It?



:dropcap_open:A:dropcap_close:s I drove to an appointment in the neighborhood the other day, while stopped at a traffic light I noticed a marquee across the street on the corner advertising chiropractic care. The sign blared:  “$49 First Visit, for Chiropractic, Acupuncture, or Massage”.  I cringed and made a mental note to drop my business card off at that office on a future visit. It’s not the first time I’ve seen such an offer on a street sign, or newspaper ad, or even on Facebook. I chalk it up to the widely mistaken belief that it must be OK because everyone is doing it. Nothing could be further from the truth.

In certain states, there are written rules of conduct about advertising. They spell out what you can and can’t do. Some chiropractors must not list themselves as physicians, while, in other states, there are rules about offers that you make. In fact, one state requires that any offer you make must allow the patient to change his/her mind within 72 hours, not unlike buying a car! Yet, all of the state level rules and regulations do not take into account an even more important rule. That is the complex set of Federal prohibitions against certain kinds of marketing that supersede every state rule when it comes to federally insured patients, like Medicare.

The Office of Inspector General (OIG) published a Special Advisory Bulletin (SAB) on August 29, 2002, entitled Offering Gifts and Other Inducements to Beneficiaries. This type of publication is essentially a fraud alert. It signals a clear enforcement priority against improper marketing and patient inducements. The patient inducement prohibition under federal law states:  “Any person…that offers or transfers remuneration to any individual eligible for benefits under [Medicare or Medicaid] that such person knows or should know is likely to influence such individual to order or receive from a particular provider, practitioner or supplier any item or service for which payment may be made, in whole or in part, under [Medicare or Medicaid]…shall be subject to…a civil money penalty of not more than $10,000 for each item or service…and damages of not more than three times the total amount of remuneration offered, paid, solicited or received.”

Blah, blah, blah. “What does it all mean, Basil?” as Austin Powers would say. Several important terms must be defined in order to understand the parameters of this prohibition. The term “remuneration” is defined in the statute as follows: “…the waiver of co-insurance and deductible amounts (or any part thereof), and transfers of items or services for free or for other than fair market value.” Accordingly, free X-rays, free examinations and any gift certificates for free or other valuable services offered or given to Medicare, Medicaid or other beneficiaries of federal programs violate this exclusion.

Now, take our friend with the street corner marquee; clearly he was offering valuable services for less than fair market value. We all know that a typical first visit in a chiropractic office is far more than $49.  So taking this a step further, one must ask if this is afforded to all potential patients. Does this offer apply to anyone, including federally insured patients? What if the patient has insurance? Will you bill only $49 to that carrier?

:dropcap_open:The OIG also establishes what they call “bright line guidance” concerning the nominal gift exception.:quoteleft_close:

The OIG also establishes what they call “bright line guidance” concerning the nominal gift exception. Free items or services that have retail value of no more than $10 individually, and no more than $50 in the aggregate annually per patient, are an exception. For example, a new patient gift bag, that all new patients receive, that includes a tube of BioFreeze, or a branded coffee cup, wouldn’t likely be seen as a violation of this rule.

Other state-level rules have to be taken into consideration, of course but, remember, just because your state has laid out rules for marketing, don’t forget to include these federal rules, too.  Marketing is important to your practice, but compliance with federal and state laws is clearly more important than a successful marketing program that ignores the law and places your practice at risk for severe sanctions.

Here are some items to consider:

1)  Social media has changed the doctor-patient relationship. “Friending” our patients and communicating with them online about special offers, discounts or, worse, their condition, can lead to trouble. Recently a Colorado doctor who happens to be a friend on Facebook offered $15 adjustments for any friend who may have strained him/her self shoveling after a recent snowstorm. Such inducements are a serious violation, and should be avoided.

2) Offering a pre-acceptance interview, or other such procedure for ALL patients, helps you to avoid the violation of “Free Consultations”. If your compliance procedure outlines the fact that you offer pre-acceptance interviews to ALL new patients, then it is less likely to be seen as an inducement when you offer a meeting with the doctor to determine whether the patient is a good candidate for chiropractic care. At an appointed time, the billable section of the visit begins only if the patient okays moving forward at that time.  For more information on pre-acceptance interviews, check the Resources and Archives section of for a fact sheet and scripting.

3) If you prefer to use more of a capped or maximum fee for your uninsured, under-insured, or partially insured (like Medicare) patients, check out a Discount Medical Plan Organization (DMPO) like ChiroHealthUSA or others. Offering discounts only to a covered group, like members of a DMPO, helps you avoid the snare of inducement. Just like offering special pricing to a group of covered individuals like BCBS members, offering your discounts to DMPO members helps you clear the hazard of inducement beautifully.

Just because everyone does it doesn’t mean you should. While we all have our own risk tolerance, there are many reasons not to follow the pack.  Higher new patient numbers should not come at the cost of potential fines, sanctions or even your license.


Kathy Mills Chang is a Certified Medical Compliance Specialist (MCS-P) and, since 1983, has been providing chiropractors with hands-on training, advice and tools to improve the financial performance of their practices. A well-known and sought-after speaker, Kathy has served in national and state level chiropractic organizations, sits on diverse boards and advisory councils related to the profession, and is frequently invited to address chiropractors in important conferences and seminars around the country. In 2007, KMC University was created to streamline, develop and offer a broader range of chiropractic solutions in the areas of coding, insurance, patient financial procedures, Medicare and compliance. She can be reached at 888-659-8777 or [email protected]

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