Business Practices, Advertising, Fee Splitting, and Referral Restrictions
What this domain covers
This domain tests advertising, fee arrangements, and referral restrictions. The exam asks whether a business practice is truthful, whether it improperly rewards a referral source, and whether the patient's prescription is released.
Core rules
- Advertising. Advertising must be truthful and not misleading. Prohibited practices include false or unsubstantiated superiority claims, guaranteed outcomes, misleading "free" offers with hidden conditions, and use of another provider's name without permission. Stating a license is proper; claiming specialty board certification requires actual certification.
- Fee splitting. Paying or receiving a fee for a referral is generally prohibited unless an exception applies. Percentage-of-revenue arrangements with referral sources are risky and often unlawful. Lease arrangements and management fees must reflect fair market value for actual services, not patient volume.
- Referral restrictions. An optometrist should refer based on patient need, not on a financial incentive. Ownership interest in an optical dispensary or referral facility must not be used to mislead patients.
- Prescription release. Patients are entitled to their eyeglass and contact lens prescriptions. An optometrist may not condition release on purchasing eyewear or contact lenses from that office.
- Billing. Bills must accurately reflect the service provided, the provider, and the location. Upcoding and unbundling are fraudulent.
Worked example
An optometrist agrees to pay a primary care clinic $25 for every patient referred for a diabetic eye examination. The arrangement is a per-referral payment and is not protected merely because it is called a "marketing fee." If the clinic instead rents space at fair market value and the optometrist pays only rent, that is analyzed differently. The label does not control; the substance does.
Traps that cost marks
- Treating a "professional courtesy" discount as automatically lawful when it is tied to referrals.
- Advertising "20/20 guaranteed" or a "free exam" that requires purchase.
- Refusing to release a contact lens prescription until lenses are bought.
- Assuming a lease with a percentage-of-gross clause is always valid.
- Using a false or misleading title such as "board certified" without certification.