Marketing in Healthcare: It Ain’t What It Used to Be

By: Jeff Cohen

Healthcare professionals and businesses are routinely barraged with people who claim to be able to generate business for them.  The business of healthcare is like none other in its abhorrence of anything that even smells like payment for patient referrals, so professionals and businesses alike have to be extremely cautious and well advised in crafting marketing and related business-enhancing relationships.

The key here is to realize that, while the laws haven’t changed, what regulators are doing with them has!  The environment of healthcare marketing has never been more treacherous than it is today.  So what’s changed?  How about:

  1. Commission based marketing and sales involving federal or state payers, even those that arguably comply with the personal services arrangement and management contract safe harbor, are detested by federal regulators;
  2. The regulators will look to pierce any enterprise, including those consisting of multiple tax ID entities, in hopes of making the case that commercial based marketing payments were in exchange for even one drop of federal/state payer money;
  3. Both health insurers and large providers (e.g. labs, pharmacies) work hand in hand with federal regulators to pursue suspicious activity, the result of which is to support the large provider; and
  4. Targets of enforcement activity who have obtained good legal advice often pay just to put an end to the enforcement because there’s a risk of losing and “winning” can feel like losing when one considers the enormous defense costs.

Even if the cost to the entire healthcare system with multiple providers is the same as fewer, larger providers, the pressure on healthcare marketing arrangements is very heavy.  And for that reason, healthcare providers and marketers alike will have to comply not only with the law but the ever more aggressive prosecutorial intent as well.

At the end of the day, arrangements between healthcare organizations and marketers will survive only if:

  1. They obtain healthcare legal advice at the “design” stage;
  2. They know, follow and monitor strict compliance with applicable healthcare law;
  3. They “live” on the very low end of the risk spectrum;
  4. They are aware of current prosecutorial activity and design their compliance models with that in mind (instead of relying on belief in their ability to defend a model or aspect);
  5. Periodically document compliance with their own compliance based rules and regs; and
  6. Keep their eyes and ears open and reassess their compliance plans every year to incorporate new enforcement trends.

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