The actual clinic sale of goods at a profit was decided in favor of doctors by a King County Superior Court in a case handled by the author entitled Coulson vs. Selecky. The Department did not appeal that ruling.
In a later case interpreting the state anti-rebate law (with respect to the sale of fen-phen for profit) Wright v. Jeckle, 158 Wn. 2d. 375, (Oct 2006), the Washington Supreme Court held that the law prohibits licensed practitioners from paying anything of value in return for a referral and receiving anything of value in return for referring patients. The law does not prohibit a patient from paying a physician for providing care nor from profiting from the care. The Court found that the law prohibits “unearned” profit such as ”when a licensed health care professional is paid an unearned profit by another person who was permitted to furnish/sell something to a patient that had been prescribed by the professional.” (Wright at 381). The Supreme Court ruled that RCW 19.68.010 was a kickback statute, and not an anti-profit statute. Hence, under that ruling a chiropractor selling pillows, orthotics, nutritional supplements, and similar products could sell at a profit.
FAQ: May a DC sell healthcare related products through a multi-level organization.
Probably Not. The problem for sales of products through a multi-level arrangement is the case of Wright v. Jeckle 158 Wn. 2d. 375, (Oct 2006), where the Court pronounced “unearned” profit such as ”when a licensed health care professional is paid an unearned profit by another person who was permitted to furnish/sell something to a patient that had been prescribed by the professional.” (Wright at 381). Now as a son of a former commissioned salesman, I appreciate salesmen believe they “earn” every dime of their commission. However, healthcare providers are held to a different standard because of the rebating and kickback implications from referrals. While the author is unaware of any doctor being charged with unprofessional conduct for selling product through a multi-level organization, we believe the practice of doing so is fraught with a currently unknown amount of risk.