10.1.1: Referral Fees and Fee Splitting

Payment by or to a licensee solely for the referral of a patient is unethical and, in most instances, is inconsistent with state law. A licensee may not accept payment of any kind, in any form, from any source, such as a pharmaceutical company or pharmacist, an optical company, or the manufacturer of medical appliances and devices, for prescribing or referring a patient to said source. In each case, the payment violates the requirement to deal honestly with patients and colleagues. The patient relies upon the advice of the licensee on matters of referral. All referrals and prescriptions must be based on the skill and quality of the licensee to whom the patient has been referred or the quality and efficacy of the drug or product prescribed.

It is unethical for licensees to offer financial incentives or other valuable considerations to patients in exchange for recruitment of other patients. Such incentives can distort the information that patients provide to potential patients, thus distorting the expectations of potential patients and compromising the trust that is the foundation of the licensee-patient relationship. Furthermore, referral fees are prohibited by state law pursuant to N.C. Gen. Stat. § 90-401. Violation of this law may result in disciplinary action by the Board.

Except in instances permitted by law (N.C. Gen. Stat. § 55B-14(c)), it is the position of the Board that a licensee cannot share revenue on a percentage basis with a non-licensee. To do so is fee splitting and is grounds for disciplinary action.

Voucher Advertising

It is the Board’s position that, so long as certain conditions are followed, advertising involving the utilization of vouchers does not constitute unethical fee-splitting or a prohibited solicitation or referral fee under North Carolina law. Those conditions include: (1) ensuring that the negotiated fee between the voucher advertising company and the licensee represents reasonable compensation for the cost of advertising; and (2) incorporating the following terms and conditions in a clear and conspicuous manner in all advertisements:

1. A description of the discounted price in comparison to the actual cost of services;
2. A disclosure that all patients may not be eligible for the advertised medical service and that decisions about medical care should not be made in haste. Determinations regarding the medical indications for individual patients will be made on an individual basis by applying accepted and prevailing standards of medical practice; and
3. A disclosure to prospective patients that, if it is later decided that the patient is not a candidate for the previously purchased medical service, the patient’s purchase price will be refunded in its entirety. If the patient does not claim the service, then the patient’s purchase price must still be refunded in its entirety. In the event that the voucher advertising company does not refund the purchase price in its entirety, it will be the sole obligation of the licensee to refund the entire purchase price.