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Ober|Kaler Health Law Alert - Fall/Winter 2004




In this Issue

From the Chair

Guide to Terms

Welcome

Ober|Kaler in Print

Hospitals
Hospital Discounts to Uninsured Patients

OIG Activity
OIG Advisory Opinions

OIG Alert: Added Charges for Covered Services

CMS Developments
Unsolicited/Voluntary Medicare Refund Requirements

CMS Accepts Electronic Comments

Pharma
CMP Rule, Guidance Set Gauge for Drug Card Sponsors

Medco Settlement Excludes FCA Claim Citing Compliance Plan Deficiencies

Nonphysician Practitioners
Hospital "Credentialing" of Nonphysician Employees

Compliance
The Evolution of Risk Management to Corporate Compliance and Beyond

OIG Updates Hospital Compliance Program Guidance

AdvaMed Code Curtails Lavish Spending

Reimbursement
CMS Proposes Changes to Reimbursement Appeal Rules

Revised Policies Affect Direct Deposit Medicare Funds

New Changes to Medicare Medical Education Rules

FY 2005 Wage Index: Where Are You Now?

Self-Referral
CMS Sets Criteria for Specialty Hospital Moratorium

EMTALA
New EMTALA Guidance

EMTALA Compliance - Practical Considerations

FCA
First Circuit: Rule 9(b) Applies to FCA Actions

Standard for Dismissal Misapplied in Qui Tam Case

Government Required to Exhaust Administrative Remedies in Non-FCA Case

Litigation/ADR
University of Washington PATH Settlement is Largest Yet

Fraud Statute Unconstitutional

Tax
Beyond Saber Rattling: Congress Threatens Aggressive Regulation of Nonprofits

Business
Consider Broker-Dealer Compliance in Stock and Securities Sales

 

AdvaMed Code Curtails Lavish Spending

Julie E. Kass
410-347-7314
jekass@ober.com

The Advanced Medical Technology Association (AdvaMed) released a Code of Ethics on Interactions with Health Care Professionals that became effective on January 1, 2004. The stated purpose of the Code is to facilitate ethical interactions between the Members of AdvaMed (Members) and those who purchase, lease, recommend, or use the Members' products (Health Care Professionals). The Code is a guide for the Members who produce nearly 90 percent of the health care technology products utilized in the United States. The Code was developed as a means of self-regulation tailored specifically to technology manufacturers after Pharmaceutical Research and Manufacturers of America (PhRMA) developed its own Code and the OIG issued a general set of guidelines.

Overview
The theme of the Code is that Members should pay only for reasonable, modest, and necessary expenses that are incidental to the education or training of Health Care Professionals. Due to the vagueness and possibility for abuse of the word, modest is specifically defined as moderate or low in value. In accordance with this general principle, the Code can be broken into several main sections relating to separate interactions which are likely to occur between Members and Health Care Professionals.

Training and Education
When providing product training and education, Members are permitted to provide meals and receptions that are "modest in value and subordinate in time and focus to the educational or training purpose of the meeting." In addition, Members may pay for the reasonable travel and lodging costs of the attending Health Care Professionals. However, it is not permissible for Members to pay for any expenses such as meals, hospitality, or travel incurred by guests of the Health Care Professionals or anyone else who does not have a bona fide professional interest in the information. These guidelines are also applicable to sales and promotional meetings, although travel should be provided only if such travel is necessary to conduct the meeting.

Educational Conferences
There are four main ways in which a Member may offer financial support for educational conferences: (1) direct grants to the conference sponsor to reduce general costs; (2) sponsorship to allow attendance by Health Care Professionals in training; (3) grants to cover the costs of the expenses of the conference faculty members; and (4) general funding for meals and hospitality, provided they are modest in value and subordinate in time and focus to the purpose of the conference. Any type of financial support is permissible only when the conference is dedicated to providing objective scientific and educational activities and the training sponsor, not the Member, selects the attending Health Care Professionals.

Consulting
Another common interaction between Members and Health Care Professionals derives from the need for consulting services. The Code sets forth clear guidelines regarding the hiring and payment of consultants. Consulting is appropriate only when there is a genuine need and specific purpose for the services, and the selection of the consultant should be based on experience and qualifications, not on volume or value of business. Additionally, all consulting agreements should be written and the compensation must be consistent with the fair market value for the services. The guidelines regarding hospitality costs and expenses of the consultants are substantially similar to the other guidelines in that the costs must be reasonable and modest.

Gifts
The giving of gifts has traditionally been a problematic ethical area and the Code deals very strictly with gifts for Health Care Professionals or their staff. Only occasional, infrequent, modest gifts are permissible if they are related to the Health Care Professional's work or are for the benefit of the patients. Except for gifts of medical textbooks or anatomical models, the value of any gift must be less than $100. Branded promotional items of minimal value are also allowed to be given occasionally. Under the requirement that gifts be related to health care work or for the benefit of the patients, items such as pens which could be used to perform work are still acceptable but golf balls or t-shirts would not be allowed.

Other
Further sections of the Code deal with additional ethical questions that may arise in the general course of business between Members and Health Care Professionals. One of these provisions states that information regarding Medicare billing may be supplied to the Health Care Professionals provided that it is not supplied to unlawfully induce the purchase, use, or recommendation of the Member's products. Grants and other charitable donations are also permitted provided they are made to genuine charitable organizations or, in rare circumstances, to an individual engaged in a charitable mission such as disaster relief. However, all donations must be documented and cannot be used to induce Health Care Professionals to turn to the Member for products.

Comparison to the PhRMA Code
The Code is almost identical to that developed by PhRMA, however it is very slightly tailored to more accurately reflect the practices and needs of the medical technology industry. For example, the AdvaMed Code deals specifically with ethical practices regarding training sessions, as training is more likely to be necessary when the products involved are medical devices - as opposed to pharmaceuticals. Despite this difference, the similarities between the two Codes are striking. Of particular interest are the provisions in both Codes which limit any gifts to those which are under $100 and are related to work or patient care. In addition, with regard to consulting services, both regulations require a written contract and a legitimate need for the services. s

The text of the AdvaMed Code of Ethics is available through AdvaMed's website at www.advamed.org.

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