Physician Advertising
The increasingly competitive health care industry has led many practitioners to advertise their professional services in print, television and other media. This article outlines the legal requirements applicable to physician advertising and the solicitation of patients in New York State.
Generally speaking, it is not unlawful to advertise physician services and solicit patients. However, New York practitioners must ensure that advertisements and solicitations comply with requirements set forth in the New York Education Law, which prohibits advertising or soliciting that is “not in the public interest.” Section 6530(27) of the New York Education Law does not specifically define what constitutes advertising that is not in the public interest. Instead, the law sets forth a non-exclusive list of examples of prohibited forms of advertising, as follows:
1. Advertising or soliciting that is false, fraudulent, deceptive, misleading, sensational or flamboyant;
2. Advertising or soliciting that represents intimidation or undue pressure;
3. Advertising or soliciting that uses testimonials;
4. Advertising or soliciting that guarantees service;
5. Advertising or soliciting that makes any claim relating to professional services or products or the cost or price for such services or products which cannot be substantiated by the professional;
6. Advertising or soliciting that includes claims of professional superiority which cannot be substantiated by the professional; or
7. Advertising or soliciting that offers bonuses or inducements in any form other than a discount or reduction in an established fee or price for a professional service or product.
In addition, the statute prohibits the use of demonstrations, dramatizations or other portrayals of professional practice in advertising on radio or television.
The statute includes a “safe harbor” provision for advertising. Section 6530(b) of the Education Law provides that advertising will be “deemed [an] appropriate means of informing the public of the availability of professional services” if:
1. The advertising does not violate any of the seven prohibited forms of advertising set forth above; and
2. The advertising consists of fixed prices or a stated range of prices for specified routine professional services in a newspaper, periodical or professional directory or on radio or television. Such advertising must disclose if there is an additional charge for related services which are an integral part of the overall service being provided by the practitioner, and must indicate the period of time for which the advertised prices are in effect.
Another provision in the statute that practitioners should be aware
of involves record-keeping requirements. Practitioners who advertise are
required to retain an exact copy of each advertisement, transcript, audio-tape
or videotape (as applicable) for a period of one (1) year after the
advertisement was last published or broadcast. Copies of the advertisement must
be provided to the New York State Department of Health upon request.
Finally, the statute prohibits practitioners from compensating or giving
anything of value to representatives of the press, radio, television or other
communications media in exchange for professional publicity in a news item.
It should be noted that the statute has not yet been amended to address the advertising of professional services over the Internet. However, it seems reasonable to expect that the same prohibitions applicable to print, radio and television advertising would also apply to website advertising. Practitioners who have questions regarding physician advertising requirements should consult with counsel for guidance in complying with the requirements.
MRI “Site Selection” Legislation
Practitioners who operate or are in the process of establishing free-standing magnetic resonance imaging (MRI) facilities should note that the New York State legislature is considering legislation that would impose site selection requirements on MRI facilities.
Senate Bill 608, sponsored by Senator Carl Kruger (representing the 27th District in Kings County) would amend the New York Public Health Law to create a mechanism for the siting of MRI facilities. The stated purpose of the bill is “to ensure that as many regions are serviced [by MRI facilities] as possible, and to assist in health care cost containment by attempting to discourage duplicative services.” In the stated justification section of the bill, it is noted that there is a proliferation of MRI facilities in certain areas of the state and that the legislation will provide the New York State Health Department with a “planning tool” to ensure access to MRI facilities in as many areas of New York State as possible.
The proposed legislation would require a person or entity wishing to establish an MRI facility (a “sponsoring agency”) to provide written notice regarding the proposed facility to the local health department of the municipality in which the facility is proposed to be located. The notice would contain the following information: (i) specific site address, (ii) the specific MRI technology to be used at the facility, (iii) an estimate of the number of patients who will use the MRI facility on an annual basis, and (iv) published data regarding MRI facilities to be obtained from a state-wide MRI facility registry established by the legislation.
Under the proposed legislation, the affected municipality will have twenty days from receipt of the notice to approve the selected location or suggest one or more alternative locations that could accommodate the proposed MRI facility. Significantly, the affected municipality also has the power to object to the establishment of the facility on the grounds that the facility would otherwise result in an “over-concentration” of MRI facilities within the municipality or region.
In the event that there is a dispute regarding the site location or the municipality determines that the proposed facility would result in an over-concentration of MRI facilities, the sponsoring agency may challenge the decision of the municipality in a proceeding before the State Commissioner of Health. Decisions of the Commissioner of Health would be subject to judicial review in an Article 78 proceeding.
The second aspect of the proposed legislation involves the establishment of a uniform state-wide registry of MRI facilities, which would be accessible to the public and include information on each MRI facility located in New York State, including location and type of facility, the identity of the sponsoring agency and the number of patients utilizing the facility each year.
At the present time, the proposed legislation has been referred to the Senate Committee on Health. It is not clear whether there is sufficient support in the Legislature to pass the bill or whether it would be supported by Governor Pataki. Practitioners who would be affected by the passage of this legislation should monitor its status and may wish to contact their legislative representatives to comment on the legislation.
Banking Services for Your Health Care Practice
It's important for every business to find a bank (and a banker) that will contribute to the success of your business. As your health care practice changes, you may need to reconsider your banking options, an undertaking best accomplished before you experience a need for a major expansion or consolidation.
Banks can provide a number of services to help your practice operate including establishing a basic checking account; providing special loan programs; providing qualification advice; assisting with cash management; offering investment opportunities; and assisting you with finding financial information on your industry.
Although there are laws and regulations that govern their activities, not all financial institutions are the same. Each bank offers a wide range of products and services, usually targeted to a specific segment of the business community.
Selecting the right bank for your business starts with determining what criteria is most important to you: proximity, pricing, number of branches, fees, ATM accessibility, direct deposit options, loan rates, interest rates or account analysis. One important criterion for selecting a bank is experience; you want to be sure that your bank has experience in serving businesses of your type and size. This is an area where we have been able to offer assistance to our health care practices. There is no charge for the service, and we are more than happy to share our resources.
Hurwitz & Fine, P.C. has an extensive Commercial Finance department that has handled thousands of commercial real estate and non-real estate loans with banks across Western New York and we are very familiar with the bankers in our community. Feel free to contact Chris Hurley or Laura Monte (849-8900) on any commercial banking matter and they can offer you a number of excellent contacts within the banking community that would be best suited to meet your business needs.
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