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Commission Guidelines

Naturopathic Doctor (ND) Guidelines for Rebates, Commissions, & Compensation

This document is intended to clarify the naturopathic doctor's (ND's) professional relationship with a supplement retailer.

The Healing Arts provisions of Business and Professions Code, Business and Professions Code Section 650 prohibits a licensee (ND) from accepting any "rebate, refund, commission, preference, patronage dividend, discount, or other consideration...as...compensation or inducement for referring patients."

Although the plain language of the statute speaks to patient referrals, in 2001, the Attorney General's Office interpreted this language to apply broadly to licentiates. The Attorney General was asked to evaluate a proposal under which licensees would participate in a marketing plan where the licensee would promote naturopathic products and refer patients to a company's web site in exchange for a commission fee. The Attorney General found that this arrangement would violate Section 650.

Example Situation: A supplement manufacturer supplies supplements to a store only because an ND is giving classes at the store. The store suggests that it would like to compensate the ND a percentage of sales due to their professional association with the supplement manufacturer which allows the store to sell supplements it would otherwise not be allowed to sell.

Although there are some differences between the commission arrangement described above and the arrangement described in the Attorney General's Opinion, there are also similarities. An arrangement in which a licensee recommends certain naturopathic products to shoppers could constitute a referral – especially as those shoppers would likely rely on your judgment as an ND. Similarly, receiving a commission for products recommend by an ND could constitute an unlawful financial interest. Conviction of a crime involving fiscal dishonesty may result in suspension or revocation of a license to practice naturopathic medicine (Division 40, Title 16, California Code of Regulations, §4256)