Referral commission and cut practice: what the rules say Why a doctor may not take a cut from a lab, a pharmacy or a hospital, and what a clean referral looks like.

A doctor in India may not take money, gifts or any other benefit for referring a patient to a lab, scan centre, pharmacy, hospital or another doctor, and may not pay for patients sent to them. Regulation 6.4 of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 bars it, and the NMC's Guidelines on Ethical Advertising and Public Communication of 6 Oct 2026 extend the bar to referral fees, lead-generation fees and agencies paid per patient. A breach can be professional misconduct, which the state medical council deals with.

What does regulation 6.4 say?

6.4.1 A physician shall not give, solicit, or receive nor shall he offer to give solicit or receive, any gift, gratuity, commission or bonus in consideration of or return for the referring, recommending or procuring of any patient for medical, surgical or other treatment. A physician shall not directly or indirectly, participate in or be a party to act of division, transference, assignment, subordination, rebating, splitting or refunding of any fee for medical, surgical or other treatment.

Regulation 6.4.2 says these provisions "shall apply with equal force to the referring, recommending or procuring by a physician or any person, specimen or material for diagnostic purposes or other study / work". The last sentence is the exception: "Nothing in this section, however, shall prohibit payment of salaries by a qualified physician to other duly qualified person rendering medical care under his supervision." Regulation 7.19 adds that a physician "shall not use touts or agents for procuring patients".

The rule runs both ways. Taking a cut from a lab is barred, and so is paying a general practitioner or an agent to send patients to your clinic.

What did the NMC's 2026 guidelines add?

• Section 8.1(vii): no doctor shall, directly or indirectly, "offer, pay, solicit, receive or participate in any commission, rebate, bonus, gift, gratuity, referral fee, lead-generation fee or other consideration" connected with the referral, recommendation or procurement of patients, specimens or materials for diagnosis, treatment, surgery or other medical services.
• Section 8.1(viii): advertising agencies, digital marketing agencies, influencers or online platforms shall not be engaged in a way "that results in payment or consideration being linked to the procurement or referral of individual patients".
• Section 8.1(x): referral benefits are among the inducements barred where they encourage unnecessary consultation, tests or treatment.
• Section 8.1(xi): a doctor or clinic may not use a third party to do indirectly what it is prohibited from doing directly.

Which everyday arrangements count as a commission?

The label on the payment does not decide the question. If the money or benefit would stop when the referrals stop, it is in return for the referrals.

What do patients' rights say about referrals?

The Charter of Patients' Rights approved by the National Council for Clinical Establishments includes the right to choose the source for medicines or tests (right xv): "No patient is forced to buy medications from hospital pharmacy", and if a patient wants tests done outside, "that may be accepted and facilitated". Right (xx) is the right to proper referral and transfer "free from perverse commercial influences". Where the Charter applies under your state's clinical establishment rules, a referral steered to the lab that pays you breaks it as well.

What does a clean referral look like?

1. Write why the patient is being referred, what you found, what you want the other doctor or lab to do, and how urgent it is.
2. Name the test by what it is, not by a lab's package name, so any accredited lab can do it.
3. If you suggest a lab or a specialist, say why (distance, a test only they do, the patient's insurance network) and tell the patient they may go elsewhere.
4. Take nothing back: no share of the bill, no gifts, no free services, no "marketing support".
5. Keep a copy of the referral letter with the patient's record.
6. Pay any agency a fixed fee for its work, never per patient or per lead.

Our free referral letter format has the fields laid out. A shared waiting room or a lab collection point inside the clinic is a different question from a commission; if one is proposed, write down what each side pays for and check that nothing in it moves with the number of patients or samples.

What happens to a doctor who takes a cut?

For breaches of the 2026 guidelines, section 10.1 lists graded action by the state medical council: a warning and mandatory ethics training for a first violation, censure and a monetary penalty for a second, suspension of registration for 3 to 6 months for a third, suspension for 6 to 12 months for serious violations (the section names "inducement for patients" among them), and removal from the register for 1 to 3 years for repeated violations. Section 10.2 requires a show-cause notice and a chance to explain first. A clinic as an establishment is dealt with under the clinical establishment law of its state (Explanation to section 10.1).

This post covers the national conduct rules. Some states have discussed separate laws on cut practice; we could not fetch an official text of any such Act or Bill for this post, so check with your state medical council whether one applies to you.