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California Law on OD-Optician Relations

One of the most common questions I receive is, "I'm an optician and I'd like to have an optometrist do eye exams in my office. Can I do that?" While there are many variations on the question, this basic theme comes up regularly. Since the 1950's California, however, has had broad laws which limit the relationships that can lawfully exist between an optometrist and a licensed optician. An answer to the question therefore starts with the primary law to be addressed: California Business and Professions Code § 655. That law says this:

(a) No person licensed under Chapter 7 (commencing with Section 3000) of this division may have any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, with any person licensed under Chapter 5.5 (commencing with Section 2550) of this division.

(b) No person licensed under Chapter 5.5 (commencing with Section 2550) of this division may have any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit sharing arrangement in any form directly or indirectly with any person licensed under Chapter 7 (commencing with Section 3000) of this division.

(c) No person licensed under Chapter 7 (commencing with Section 3000) of this division may have any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed, or otherwise with any person who is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, or dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products.

Any violation of this section constitutes a misdemeanor as to such person licensed under Chapter 7 (commencing with Section 3000) of this division and as to any and all persons, whether or not so licensed under this division, who participate with such licensed person in a violation of any provision of this section.


Chapter 7 is the licensing of optometrists. Chapter 5.5 is the licensing of opticians. So, rephrasing (a) and (b), it says no optometrist can have any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, with a licensed optician (RDO, RSLD, or RCLD), or the other way around.

Importantly, however, as explained in more detail below, the Court of Appeals has held that the list of precluded or illegal relationships in section 655 is not exclusive, but simply a set of examples, and that there are other relationships which may be illegal if they violate any of the policies underlying the cases and statutes discussed below.

Background: Optician Law in California

In California opticians are regulated by the California Medical Board. In a law that is, at best, somewhat confusing, it is important to first understand exactly what an optician is in California. There are three related registrations related to opticians, registered spectacle lens dispensers, registered contact lens dispensers, and registered dispensing opticians (RDO). The confusion arises from the fact that an RDO is NOT an optician, whereas the other two are. An RDO is the business which employs the registered lens dispensers. Thus, whereas only individuals can be spectacle or contact lens dispensers, and they must pass an examination to become registered, an RDO need not pass any examination and can be a corporation or an individual. But, for the RDO to actually dispense anything, it must do so through a registered spectacle or contact lens dispenser.

Registered Spectacle Lens Dispenser (RSLD)

A registered spectacle lens dispenser is an individual that is registered with the Medical Board after having passed the registry examination of the American Board of Opticianry. A registered spectacle lens dispenser is authorized to fit and adjust spectacle lenses at any place of business holding a certificate of registration as a Registered Dispensing Optician provided that the certificate of the registered spectacle lens dispenser is displayed in a conspicuous place at the place of business where he or she is fitting and adjusting.

Registered Contact Lens Dispenser (RCLD)

A registered contact lens dispenser is an individual that is registered with the Medical Board after having passed the contact lens registry examination of the National Committee of Contact Lens Examiners. A registered contact lens dispenser is authorized to fit and adjust contact lenses, including plano contact lenses. Upon satisfactory completion of the fitting of contact lenses, but in no event more than 60 days after receipt of the prescription, the registered contact lens dispenser must direct the patient to return to the prescribing physician and surgeon or optometrist for an evaluation.

Registered Dispensing Optician (RDO)

Individuals, corporations, and firms engaged in the business of filling prescriptions of physicians or optometrists for prescription lenses and kindred products, and, as incidental to the filling of those prescriptions, doing any or all of the following acts, either singly or in combination with others, taking facial measurements, fitting and adjusting those lenses and fitting and adjusting spectacle frames, are known as dispensing opticians. 

That, in a nutshell, is the licensing scheme for opticians in California. The owner/operator of an optical business must obtain an RDO license. But the actual licensed dispensing individual is a RSLD and/or RCLD. Often the same person will be the RDO (or will own the RDO) and be the spectacle lens dispenser. 



California has fairly strict laws which govern the relationships between opticians, optometrists and ophthalmologists, and which restrict the corporate control of professional services.

In addition to section 655 above, three other sections of the Business and Professions Code, §§ 650, 654 and 2556, are relevant. Section 650 deals with referrals and makes it illegal to pay any form of consideration for a referral. It also provides that consideration for services other than referrals can be paid if "based on a percentage of gross revenue or similar type of contractual arrangement" ... "if the consideration is commensurate with the value of the services furnished or with the fair rental value of any premises or equipment leased or provided by the recipient to the payer."

Section 654 makes it illegal for a medical provider to "refer" patients to any optician with whom it has any "membership, proprietary interest or co-ownership in any form." This is basically the MD-optician provision similar to the OD-optician section 655. It is important to note the differences between this section, and section 655 which applies to optician-optometrist relationships. Section 654, applicable to medical providers, does not, by its terms, prohibit landlord-tenant relationships, and applies only to entities to which the medical provider "refers" patients. Section 655, applicable to optometrists, is much broader and specifically prohibits landlord-tenant relationships and applies to any optician-optometrist relationship (thus, an optometrist could not lease space to an optician even if that space were located in another city 100's of miles away). It is unclear whether or not the list in section 654 is exclusive or not, and what, if any, significance there is to the fact that some of the relationships precluded by section 655 are not listed in section 654.

Finally, section 2556 makes it illegal for an optician to "advertise the furnishing of, or to furnish, the services of ... an optometrist, or a physician and surgeon" or "to directly or indirectly employ or maintain on or near the premises used for optical dispensing, ... an optometrist, a physician and surgeon, or a practitioner of any other profession for the purpose of any examination or treatment of the eyes."

These statutes have been examined and interpreted under various factual scenarios. The principle cases relevant here are Drucker v. State Board of Medical Examiners (1956) 143 Cal.App.2d 702, Steinsmith v. Medical Board (2000) 85 Cal.App.4th 458, Moore v. Orthodontic Centers of America (2002) 2002 WL 32351 (unpublished) and the California Supreme Court case of Painless Parker v. Board of Dental Exam (1932) 216 Cal. 285.

Drucker v. State Board of Medical Examiners

In Drucker the question was, did Drucker, an optician, furnish, employ or maintain an optometrist or physician in violation of section 2556. The Medical Board found that he did, and revoked his license. The trial court reversed the Medical Board and ordered the Board to reinstate his medical license, and the Court of Appeals affirmed that decision.

The court in Drucker examined closely the meaning of the terms "furnish," "employ" and "maintain." Distinguishing first "furnishing" from "referring," the court said "a reasonable interpretation of the word 'furnish' would be that one was providing those services either gratuitously or for a fee, but that fee was its to keep, and not someone else's." Specifically, the Court concluded that the doctor being adjacent to the optician, and the optician's scheduling of appointments for the doctor, was not "furnishing" the doctor's services, because the money for the services did not go to the optician, it went to and was kept by the doctor.

Considering next the term "employ," the Court found that employing was equivalent to hiring, e.g., a request and agreement to perform services for compensation, and that it necessarily involved the elements of control "of the details and method of performing the work." The Court found that Drucker did not exercise control over the doctors, who "were not performing the business of defendants but were carrying on their own business of optometry under a reciprocal arrangement with the defendants for the mutual financial benefit of both parties." Again, this turned, in part, on the fact that all income accrued to the doctors.

With respect to "maintain," the Court found that, because the doctors subleased the space, paid fair rent, and had separate entrances from the optician, even though water, gas and electricity were provided by the optician pursuant to the lease, it could not be concluded that the optician "maintained" the doctors.

Painless Parker v. Board of Dental Examiners

Painless Parker was a dentist. The Dental Board charged him with aiding and abetting the unlicensed practice of dentistry, namely, aiding and abetting the practice of dentistry by his own corporation. The Supreme Court upheld the Board's five year suspension of his license.


Painless Parker formed two corporations, Painless Parker Dentist, and Associated Dental Supply Company. None of the Directors of Associated Dental Supply were dentists. Painless Parker Dentist leased its offices and equipment from Associated Dental Supply and purchased all of its dental supplies from it. All money collected from the dental practices (i.e. from the actual practice of dentistry) were remitted to Associated Dental Supply, which, in turn, paid all rentals, salaries of the dentists and operating expenses of Painless Parker Dentist. The surplus, if any, belonged to Associated Dental Supply.

Painless Parker claimed a distinction between the practice of dentistry, and "the purely business side of the practice." In response, the Supreme Court stated, "we are not prepared to hold with the contention that a corporation or an unlicensed person may not be prevented from managing, conducting or controlling what petitioner terms the 'business side' of the practice of dentistry. The law does not assume to divide the practice of dentistry into such departments." The court went on and concluded that BOTH Painless Parker Dentist and Associated Dental Supply were the employers of Painless Parker, the dentist, and that this was illegal because neither was authorized to practice dentistry.

The Court never squarely addressed the propriety, one way or the other, of Associated Dental Supply's role. The case, however, is often cited for the proposition that there is no distinction in the practice of a health care profession between the health care services and the "business side" of the profession. In other words, under the law of Painless Parker, undertaking to control the business side of a health care practice is tantamount to practicing the profession. Thus, one must be a licensed dentist, whether seeing patients or managing the dentist's business. In subsequent cases this rule has been extended to other professions, including medicine and chiropractic.

Steinsmith v. Medical Board

Steinsmith, a physician, was cited and fined by the medical board for working at a medical clinic that was owned, in part, by non-physicians. In effect, Steinsmith was charged with aiding and abetting the unlicensed practice of medicine by the clinic. (The clinic was, in fact, licensed because Aquino, a physician, represented to the Board that he alone owned it and on that representation, a license was given to the clinic. In fact, he did not own it alone, and thus the clinic could not be licensed since it was, in part, owned by a non-physician. Thus, the Board deemed the license void.) The principle argument made by Steinsmith was that the non-physician owners "did not practice medicine because they merely owned the Clinic and administered its business affairs." Citing Painless Parker, the Court rejected the argument. Thus, the significance of Steinsmith is that it extended the concepts set forth in Painless Parker to a medical practice.

Moore v. Orthodontic Centers of America

Moore, in an unpublished, yet still instructive, appellate opinion, presents a somewhat different situation. In Moore the issue was the enforceability of a business service contract between Moore and his orthodontic (dental) corporation on one hand, and the "business service provider," the Orthodontic Centers of America ("OCA"), on the other.

The court analyzed and found several provisions of the contract between the parties to be illegal and thus unenforceable because "they provided OCA with impermissible control over aspects of Dr. Moore's orthodontic practice." The Court analyzed the particular terms of the contract to determine if they constituted providing advice, which is permissible, or control of the business, which is not.

The agreement at issue provided that OCA would provide business and financial services to the practice for 20 years, and Dr. Moore agreed to work only at OCA centers during that time. Moore subleased the space from OCA and conducted his practice there. The Agreement "identifies OCA's numerous services, including providing office equipment and furnishings, personnel services, marketing, patient scheduling, inventory and supplies, information services, and legal services." But, in a carefully drafted effort to comply with the law banning an unlicensed entity from managing a dental practice, in each of these paragraphs the agreement makes clear OCA's role is "merely to provide advice and consultation to Dr. Moore, and Dr. Moore retains ultimate discretion whether to accept this advice and maintains ultimate control over these aspects of the practice."

The Court found that these provisions were "consistent with California law because they reflect OCA's right to provide expert advice rather than to manage or control the business office."

But, there were other provisions of the Agreement which did not merely advise, but controlled aspects of the business. One such provision required Dr. Moore to provide a "full-time orthodontic practice." Another required Dr. Moore to work only at the one location. And another required that the office be open at least Monday through Thursday, 9:00 a.m. through 6:30 p.m. The Court found these provisions illegal and unenforceable. "[A]n orthodontist may not delegate decisions regarding working schedules and office hours to an unlicensed entity."


In addition to the forgoing code sections and cases, there are several cases which provide further guidance and interpretation of section 655. But, key among them, is the 1983 case of California Assn. of Dispensing Opticians v. Pearle Vision Center, Inc. (1983) 143 Cal.App.3d 419 ("CADO"). In this case the Court of Appeals construed the above code sections, in combination with prior case law, to make illegal the exercise of control by lay persons over medical professionals, including optometrists. The issue in CADO was whether or not a particular franchise agreement between Pearle and its optometrists was illegal. The Association, joined by the Board of Optometry, sought to enjoin Pearle from using or enforcing its franchise agreement, claiming it constituted illegal control by a non-optometrist over the practice of optometry. The Court thus confronted and construed the applicable code sections above and reached the following conclusions:

California has a strong long-standing public policy against permitting lay persons to practice any of the medical arts or to exercise control over decisions made by healing art practitioners. Id at 427.

* * * * *

Sections 3070, 3103 prohibit corporate employment of optometrists. Section 655 prohibits a host of affiliations between optometrists and others. These statutes clearly establish the legislative intent to prevent lay control of optometrists. This legislative policy is further implemented by section 1514 of title 16 of the California Administrative Code, which regulates leases by optometrists from mercantile establishments. The latter regulation requires every phase of an optometrist's practice be under his or her exclusive control.... Id at 428.

* * * * *

Section 655 is the basic legislative declaration against control by nonoptometrists over any facet of the practice of optometry.

The fact that section 655 enumerates some forbidden relationships does not preclude, under the exclusio unus rule, a finding the statute also applies to other unacceptable relationships between optometrists and optical suppliers. The wording of the statute itself rules out this limiting doctrine for it includes the more inclusive terms such as "in any form directly or indirectly" and "or otherwise" before each subsection. Thus the statute by its own context indicates the relationships listed in the statute are meant to be examples rather than an exhaustive listing of all those prohibited relationships. Id at 429.

In CADO, the court found that Pearle's franchise agreement was illegal because it purported to exercise control over the optometrists in a number of delineated areas. In so holding, the court stated,

The rules against such practice should not be circumvented by technical agreements concerning the manner optometrists are engaged, designated or compensated by the franchisor. The confidential health care relationship requires the professional's undivided responsibility and freedom from commercial exploitation. Id. at 434.

Looking closely at the terms of the franchise agreement in question there, the court identified the following factors as evidence of an illegal degree of control:

  • Pearle must approve the site of the office;

  • Pearle must approve all leasehold improvements; furnishings, fixtures, inventory and supplies if they are obtained from anyone but Pearle;
  • Doctors must use Pearle's "system" for operating the practice;

  • Doctors must use Pearle's design specifications for the office;
  • Doctors are subject to periodic audits by Pearle and substantial penalties can be assessed if the audit is unfavorable to the doctor;

  • The doctor must stock Pearle's approved frame inventory and related optical goods;

  • Pearle financed the franchises and doctors had to pay a franchise fee;

No one factor was determinative, but the sum of them directed the court to the conclusion that Pearle exercised substantial control over the optometry practice and the relationship thus created between Pearle and the franchisee optometrist was thus illegal.

These code sections, and their interpretation in CADO, govern the law and analysis of Optometry - Optician relationships in California.