Percentage Rent, Referral Bonuses, and a "Free" Exam Advertisement
Dr. Hannah Nguyen leases 600 square feet inside ClearView Optical, a non-licensed retail business. The proposed lease sets base rent at $1,200 per month plus 9% of her gross professional fees; the optical shop owner says this is "standard" and will also send every customer to her for a "free eye exam." The advertisement says "FREE Eye Exam" in large type, with small print: "$59 technology fee required." ClearView also offers Dr. Nguyen a $25 bonus for each patient she refers for premium lenses. Dr. Nguyen is not an employee of ClearView, but the owner controls the waiting room and website. She worries the arrangement may violate Oregon law but needs the location. She asks whether percentage rent, the free-exam ad, and the referral bonus are permissible.
1. Evaluate the lease and referral bonus under Oregon fee-splitting and professional-conduct rules.
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Oregon prohibits splitting professional fees with unlicensed persons and paying or receiving inducements for referrals. A lease whose rent is a percentage of gross professional fees can function as a fee split or an unlawful inducement, and the Board may treat it as unprofessional conduct. The safest structure is fixed, fair-market-value rent supported by an appraisal or comparable leases, with separate entrances, signage, billing, and staff. The $25 bonus for each premium lens referral is even more clearly a per-patient inducement and should be rejected.
Dr. Nguyen should not accept compensation tied to referrals or to the volume or value of professional services. Even if the optical shop calls the arrangement "standard," that does not make it lawful. She should negotiate a fixed lease or move. The analysis depends on the actual financial terms and control over patient care, not on the label the parties use.
2. Is the "free eye exam" advertisement lawful? What must change?
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Advertising must be truthful and not misleading. "FREE Eye Exam" in large type, with a mandatory $59 technology fee in small print, is deceptive unless the fee is clearly and conspicuously disclosed and truly optional. A better advertisement would say "$59 exam including technology fee" or "No-cost medical eye exam; $59 technology fee applies." The ad should identify the licensed optometrist and must not imply that the unlicensed optical shop is practicing optometry.
Dr. Nguyen should keep copies of ads and substantiation. Board rules on advertising and unprofessional conduct apply, and a misleading ad can be a separate violation even if the clinical care is good. She should also review the website content because the owner controls it; she remains responsible for professional claims made about her services.
3. What records or written agreements should Dr. Nguyen keep to show compliance?
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She should keep the written lease, fair-market-value documentation, separate accounting records, copies of advertisements, and a log of any referrals. Professional services should be billed separately from optical sales. If ClearView controls the website, she should approve professional content in writing and retain that approval. Patient complaints about the arrangement should be documented.
These records help show that rent is not a disguised fee split and that advertising claims are accurate. A written agreement should also address patient records, privacy, and control of clinical space. If the owner insists on percentage rent or per-referral bonuses, Dr. Nguyen should seek legal advice before signing; the Board will look at substance over form.