MITA Code of Ethics
To assist the community of medical imaging equipment and therapy system suppliers, and healthcare providers who purchase and use medical equipment in developing legal compliance programs under federal Medicare law, MITA has developed a Code of Ethics supplemented by responses to Frequently Asked Questions.
"MITA Code of Ethics on Interactions with Healthcare Providers"
Frequently Asked Questions Regarding MITA's Code Of Ethics On Interactions With Health Care Providers
This page is designed to address some anticipated questions that persons may have about the practical application of the Code of Ethics adopted by the NEMA Medical Division, effective January 1, 2005, whose Members include the Manufacturers of medical imaging and treatment equipment in North America. The application of the principles articulated in the Code of Ethics might be very fact specific and each Company should consult appropriate personnel familiar with the Code of Ethics within their Company for advice.
Goal and Scope of MITA Code
Q. Should Manufacturers provide copies of this Code to Health Care Providers?
A. Yes. Manufacturers are strongly encouraged to provide this Code to Health Care Providers and to participate in educational efforts to help them to understand the ethical and legal requirements and limitations facing Manufacturers.
Q. What should Manufacturers do if a Health Care Provider asks the Manufacturer to engage in activities prohibited by the Code?
A. Manufacturers are encouraged to educate Health Care Providers about the Code as the primary and preferred method to address efforts by Health Care Providers to encourage Manufacturers to participate in banned behaviors. In appropriate circumstances, Manufacturers may also choose to involve their own legal counsel, legal counsel for the Health Care Provider or the authorities.
Q. What should Manufacturers do to assure internal compliance with this Code?
A. Manufacturers should consider adopting adequate compliance programs to assure conformity with applicable laws and regulations, and this Code. This compliance program could involve executive management, legal, and accounting personnel in the following activities: (i) educating Manufacturer personnel about their obligations under applicable laws and regulations; (ii) setting procedures to approve the types of funding, payments, expenses, grants, gifts, donations, compensation, or activities discussed in the Code; (iii) conducting due diligence with respect to the activities discussed in the Code; and (iv) monitoring and auditing the types of funding, payments, expenses, grants, gifts, donations, compensation, or activities discussed in the Code for compliance with law and regulations.
Q. What is meant by “modest,” as used in this Code?
A. As used in the Code, "modest" means middle-tier, in the sense that the food, travel expense, or hospitality is neither the most expensive nor the least expensive as measured against the local community standard. When the term “modest” is used, Manufacturers are always free to choose an even lower cost food, travel expense or hospitality option.
Q. Is a group purchasing organization (GPO) a Health Care Provider within the meaning of the Code?
A. Yes. Health Care Providers include persons or entities that purchase, lease, recommend, use, arrange for the purchase or lease of medical technology products. A GPO meets this definition.
Q. When a Health Care Provider seeks to trade in its existing equipment in connection with purchasing new medical equipment, can the parties value the trade-in equipment above fair market value for determining the net price of the equipment?
A. No. The valuation of used equipment above its fair market value could be considered illegal remuneration under Medicare law anti-kickback rules. There are sources of information available to Members and Health Care Providers to help establish fair market value for used equipment, and Members should turn to those sources and document that they used a credible source for the determination of fair market value.
Manufacturer Sponsored Product Training and Education
Q. If a Manufacturer is training a group of Health Care Providers on the use of portable medical equipment and/or software, is it appropriate to provide the "hands-on" training in a hotel or other meeting facility, other than a clinical facility?
A. Yes, so long as the facility used is conducive to the training purpose.
Manufacturer Support for Third Party Educational Conferences
Q. What is meant by “third party,” as in “Third Party Educational Conference?”
A. A third party is an individual or entity that is neither a Manufacturer nor a Health Care Provider.
Q. May a Manufacturer provide financial support to a bona fide educational program sponsored by a Health Care Provider?
A. Yes, if the educational program is accredited for continuing medical education credits or if it is sponsored by the Health Care Provider’s charitable foundation, then the Manufacturer may treat the educational program as a Third Party Educational program.
Q. If a Manufacturer provides one hundred percent of the funds for an educational program being put on by a Third Party, and that Third Party controls how the funds are spent, does this still qualify as Third Party Educational program or does this then become a Manufacturer-sponsored Educational program?
A. This remains a Third Party Educational Program, so long as the Manufacturer does not control the content of the program or the manner in which the Third Party spends the funds.
Q. Is it appropriate for a Manufacturer to provide a speaker for an educational program sponsored by a Health Care Provider, if the Health Care Provider requests the Manufacturer to do so?
A. Yes.
Q. A professional society or trade organization sponsors an educational conference, trade show, or annual meeting, and provides to Manufacturers guest badges to send to Health Care Providers to attend the conference? Is it appropriate for a Manufacturer to distribute the guest badges to Health Care Providers? A. No. This would constitute a grant or other remuneration to a Health Care Provider. It is appropriate only for Members to provide support directly to the conference sponsor.
Q. Is it appropriate to pay an exhibit fee for the privilege of displaying product information at an educational conference sponsored by a Health Care Provider? A. Yes, but only if the exhibit fee reflects the reasonable rental space valuation. Exhibit fees should not reflect a premium for access to the Health Care Provider.
Sales and Promotional Meetings
Q. As part of a Sales or Promotional meeting, may a Manufacturer take the Health Care Provider golfing or to a professional sporting activity that is conducive to the thorough exchange of information about the Manufacturer’s products and services, at the Manufacturer’s expense?
A. No. Even if these activities are conducive to the thorough exchange of information about the Manufacturer’s products and services, they are viewed as improper inducements by relevant governmental authorities.
Q. As part of a Sales or Promotional meeting, may a Manufacturer take the Health Care Provider to a recreational activity that is conducive to the thorough exchange of information about the Manufacturer’s products and services, such as a driving trip to a vineyard or to the coast, at the Manufacturer’s expense?
A. No. Even if these activities are conducive to the thorough exchange of information about the Manufacturer’s products and services, they are viewed as improper inducements by the relevant governmental authorities.
Q. As part of a Sales or Promotional meeting, may a Manufacturer take the Health Care Provider to the theatre or to a concert?
A. No, because these activities are not conducive to the thorough exchange of information about the Manufacturer’s products and services.
Arrangements With Consultants
Q. May a Manufacturer enter a Consulting arrangement with a Health Care Provider as part of a Sales Transaction?
A. So long as the consulting relationship is bona fide, in that it meets the requirements of Section V, it may be entered as a separate agreement contemporaneously with a sales agreement.
Gifts
Q. May a Manufacturer fund an endowed chair at a Health Care Provider that is also an educational institution?
A. No. Funding an endowed chair to a Health Care Provider is the same as providing an unrestricted cash gift to the Health Care Provider. Typically, the Health Care Provider can use these funds for any purpose, including the payment of salaries, the purchase of medical equipment for the department being endowed, or to otherwise defray departmental operating expenses. The endowed chair would not meet the standard for an appropriate gift to a Health Care Provider. Under the Code’s standards for "Charitable Donations," the funds would be going to a Health Care Provider as opposed to a charitable organization and would not be used for a charitable purpose.
Q. A conference sponsor requests that manufacturers donate raffle prizes that will be won by Health Care Providers attending the conference. Is this considered a gift?
A. Yes, it would be considered a gift. Gifts must benefit patients or serve a genuine educational function and, with the exception of medical textbooks or anatomical models, should have a fair market value of less than $100.00.
Charitable Donations
Q. May a Manufacturer make a charitable contribution to a Healthcare Provider’s golfing event or gala party, when the proceeds earned from the event or party will be used for the general funding of the recipient Health Care Provider?
A. No.
Q. May a Manufacturer sponsor a Health Care Provider’s golfing event or gala party, when the proceeds earned from the event or party will be used for charitable purposes?
A. No.
Q. May a Manufacturer contribute to or sponsor a golfing event or gala party given by a charitable foundation connected to a Health Care Provider, when the proceeds earned from the event or party will be used for charitable purposes?
A. Yes, so long as: (a) the charitable foundation is truly a separate charitable organization independent of the Health Care Provider; (b) the charitable purpose will not likely result in the purchase of the Manufacturer’s products or services (e.g., Manufacturers should not fund a gala designed to purchase medical equipment for the Health Care Provider or to build a facility to house medical equipment for the Health Care Provider; and (c) the donation is not made to induce the Health Care Provider to purchase, lease, recommend, or use the Manufacturers’ products or services.
Q. How should a Manufacturer determine whether the proceeds will be used for a charitable purpose?
A. The Manufacturer should conduct due diligence into the proposed charity to determine whether the funds will be used for a bona fide charitable purpose (such as indigent patient care or patient education) as opposed to being used for general operating expenses of the Health Care Provider such as salaries, capital improvements and equipment purchases.
Q. How should a Manufacturer determine whether a charitable organization connected to a Health Care Provider is truly a separate charitable organization independent of the Health Care Provider?
A. The Manufacturer should conduct due diligence into the charitable organization to determine whether or not is incorporated as a separate 501(c)(3) corporation and to determine whether its board and management are independent of the Health Care Provider.
Q. What are the due diligence requirements when a hospital’s foundation sponsors a golf tournament and a vendor is requested to sponsor the event?
A. First, the decision to contribute should be made by a committee who is outside of the vendor’s sales/marketing group. The vendor should receive a solicitation letter that sets forth the purpose of the event and makes clear it is a general solicitation (not limited to vendors), and finally the vendor should receive written confirmation of the foundation’s 501(c)(3) status (such as a confirming letter from the IRS).
Q. What is the role of Sales personnel with regard to a Manufacturer’s charitable giving to a foundation connected to a Health Care Provider?
A. Sales may be a source of information about the foundation’s charitable events or requests and it may refer the foundation’s charitable requests to others within the Manufacturer, but that referral should be the end of Sales personnel involvement in the Manufacturer’s charitable giving. The Manufacturer’s personnel who make decisions on charitable giving should be entirely independent of sales and marketing staff, and the Sales organization/member must not attempt to influence decision-making with respect to the charitable request.
Q. May a Manufacturer donate charitable money to a Health Care Provider that links the charitable funding to a past purchase, but the Health Care Provider later resubmits its request without the linkage?
A. No. This is entirely improper and the passage of time will not cure the impropriety.
Q. What is meant by “rare instances” as that phrase is used in Section VIII of the Code with respect to charitable donations?
A. “Rare instances” means only under extraordinary circumstances and should be no more than 1% of the Manufacturer’s charitable giving to Health Care Providers.
Research Grants
Q. Certain terminology is commonly used with respect to requests for research grants. What are the differences between a “Research and Development Grant” (also known as an “R&D Grant”) and a “Research and Development Agreement Project (also known as an “ R&D Agreement Project?”)
A. An R&D Grant is generally non-restricted money to be used at the Healthcare Provider’s discretion. There are no well-defined objectives or deliverables and no expectation on the Manufacturer’s part of learning or other benefits with regard to their product improvement.
An R&D Agreement Project is funding that is restricted to specific goals, objectives, milestones and deliverables. Money is paid for work that is performed.
Q. Are R&D Grants and R&D Agreement Projects both permitted under the Code?
A. No. Only R&D Agreement Projects are permitted under the Code.
Q. What is the role of a Manufacturer’s Sales personnel with regard to research and development relationships between Health Care Providers and Manufacturers?
A. Sales may be a source of information about the Health Care Provider and it may refer the Health Care Provider’s request for an R&D grant to others within the Manufacturer. However, the Sales organization/member must not attempt to influence decision-making with respect to the research and development relationship and cannot actually make decisions on selection of research and development projects or funding.
Q. Why does the Code prohibit research funding that is linked to or contingent on “past” sales of Manufacturers products or services to the Healthcare Provider?
A. Research funding should not be used to influence a Health Care Provider’s decision-making with respect to a purchase of equipment from a Manufacturer, whether or not the research funding and sales transactions take place concurrently.
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