Our expert presenter today is Doug Lewis, JD, PhD, AUD, MBA, and owner and president of Excalibur Business Consultants, LLC. Doug serves as general counsel and compliance officer for several related organizations, and he is also a faculty member for nine universities, teaching a wide variety of subject matter encompassing areas such as law and ethics, business, health care, clinical and administrative practice, science, nutrition, sociology, and biopsychology, and medicine. Doug practices law and maintains professional licensure in clinical audiology, insurance, securities analysis, and nursing home administration. Please note this presentation highlights recognized principles commonly found in the legal arena, but in no way connotes nor should be considered as legal advice. It is recommended you consult your legal counsel for specific advice regarding legal matters that may be pertinent to you. No relationship exists that represents a potential conflict of interest or special business relationship between the International Hearing Society and Doug Lewis or Excalibur Business Consultants, LLC, nor any of its principals or employees. So we are super excited to have Doug as our presenter today, but before we get started, we always have a few housekeeping items to go through. Please note that we are recording today's presentation so that we may offer it on demand through the IHS website in the future. This webinar is available for one continuing education credit through the International Hearing Society. You can find out more about receiving continuing education credit at our website at IHSinfo.org. Click on the webinar banner on the homepage or choose webinars from the professional development menu on the left side of the page. There you'll find the CE quiz and information on how to submit it to IHS for credit. Also on the webinar page at the IHS site, you'll find slides from this presentation to help you gather the information you'll need for the CE quiz. If you haven't already downloaded it, feel free to do so now. The PDF is on our website presently on the webinar page. Tomorrow, you will receive an email with a link to a survey on this webinar. We hope that this brief and your feedback will help us create valuable content for you moving forward. So now we're going to go through the agenda items. Today we will be covering the following topics along with the Q&A within a 60-minute presentation. You'll learn to identify essential elements that all contracts must have to be valid. You'll learn three relevant laws that, if violated, can have dramatic civil and or criminal implications. And you'll discover the four prevailing ethical theories and be able to describe them. At the end, we'll move on to a Q&A session. You can send us a question for Doug at any time by entering your question in the question box on your webinar dashboard, usually located to the right of your webinar screen. We'll take as many as we can in the time we have available. Now I'm going to turn it over to Doug, who will guide you through today's presentation. Doug? Thank you, Fran, very much. This is always exciting for me. Hopefully it will be the same for you. We're going to take a little different turn on ethics. We're going to cover some basic things with ethics. We've got some case studies to go through. And then at the end, I'm going to dovetail this into contracts, which is really an evolving area that we need to look at. We all deal with contracts on a day-to-day basis. And it's kind of an area that we're seeing an awful lot of litigation now in our business world. As we get into that, though, let's kind of look and just refresh some of our memories on what comprises ethics. There's some buzzwords out there that are very common and synonymous to ethics, as I call related terms. The first one is the M word, morals, morality-based behavior. This is what is ingrained, what we truly believe in, what our foundation is. Another possible word, the V word, values or personal values. It's not only taking what we have ingrained, but then basically creating some sense of value to it, that it really means something. Beliefs. This is actually the framework where we actually believe and we integrate this into everyday life. Now, it's unfortunately too bad we all know there's people in all facets of life, not only here in the healthcare profession, but others, who don't seem to want to play by the rules. And it's very important that we kind of lead by example through our morals, our values, and our beliefs. Customs. This is taking to the next level, that we basically integrate it, that it basically becomes second nature and routine. It's certainly with that routine, it must become a habit. Basically, this again should be second nature ethics. We shouldn't even have to think about whether something's ethical or not. How we conduct ourselves. It's one thing to say, do as I say, but we don't want that attitude of not as I do. And we've all known people and entities in our lives that have done just that. And finally, the most important, it should become a way of life. It should become so second nature that we shouldn't even have to think about that. Unfortunately, that is not the case, but just because others don't do it doesn't mean that we should not do it either. Ethics basically comes from the Greek word ethos, which basically means a custom or use of character. And you're going to see this prevailing theme as we go through this. Some of these very same words. It reflects norms. So in other words, as we go down this list, we're kind of taking it from the quality aspect to the quantity aspect. We are now creating norms and expectations that guide human conduct and behavior. It's a system of morals, standards, or values. Pay attention to the word system. We are actually basically creating an official framework for this. It's a set of principles of right conduct that takes the system in place. We're actually making it quantifiable. And what's interesting as you continue down this list, we're kind of going from a very nebulous, fluffy, not stuffy ethics to a very formal, almost rigid type mindset as we know as the law. Here we go. Rules or standards governing conduct. Taking that fluffy ethics and creating teeth. And what I mean by that is the ability to sanction improper behavior. It's a system of conduct developed to guide the practice of a specific discipline. So now we're taking that expected behavior with teeth, and we're systematizing it to a particular field of endeavor, such as hearing health care. And finally, a system of code of morals for a particular person, religion, group, profession. In other words, we're making it uniform across the field for all members of said field. Who determines ethical behavior? Well, really, the real answer is any reasonable person. And this includes not only the professional, but also the following list. Our colleagues, our peers. We all know the guy or the gal down the street who doesn't operate in the same framework as us. But that doesn't give them an excuse. If we expect good behavior, we should expect others to do so as well. Certainly boards, our state licensing boards, our professional organizations. As we go a little forward, we're going to talk more a little bit about codes of ethics and codes of conduct. Well, when we take it into a systematized area, such as state licensing boards or professional organizations, they have the ability to put teeth into this and to sanction, including the loss of your ability to practice. In other words, ways of making a living. Certainly our patients are reasonable people. We always have our outliers. The patients in general basically expect certain things from us, expect certain professional practices from us. We're getting into an area now with third-party payers. And this is going to kind of dovetail into the contracts a little later on. A lot of contracts now are putting what are called morals or ethics clauses in them. In other words, they have the ability to rescind the contract if there is a perceived backup issue. Basically what's happening is that the third-party payers are putting it into their formalized contracts and basically making you accountable for them. Referral sources. Obviously referral sources. You don't want to be referring to someone who's very poor or does not hold the same ethical parameters. Consumers. Consumers definitely are important for that. They're going to be the referral sources and just the consumers in general. And a lot of times the overall consuming public are the ones that can kind of make or break us. And then the last part, the government, the QIOs, and accountable care organizations. Basically what's happening here, QIOs, these are government set-up organizations that are going to be monitoring quality. And accountable care organizations. Basically these are, again, government private entities. So as we go through contracts, it's going to set up a system that we are actually being monitored for following contracts or not following contracts. So what are the consequences? Certainly loss of professional respect by not only our boards but by others. And this is very important. We don't want to be looked at as the pariah. Possible sanctions including revocation of membership, such as IHS. Very important issue. Loss of professional autonomy. In other words, the board says, off with your license. Remember, our license are merely rented from the state. The state can give it, the state can take it away. And potential criminal and civil penalties. And here we go. We're traversing into the legal area as well. Laws and regulations that apply to ethics. And most of our laws have emanated from ethics. State licensing laws without question. HIPAA. There's the alphabet soup, HIPAA, ARA, HITECH. These are all electronic and other communication transmission of important patient information. False Claims Act, the FCA. This one should raise the fur on the back of your neck. Basically what's happening here, if you submit a false claim for improper or worthless service to the government, they can come after you. And this is, again, nothing to blow off. This is very serious stuff. These are federal laws. Corollary to that is the Anti-Kickback Statute, which has both federal and state implications. In other words, accepting above and beyond remunerations for activities, for referrals and other things. We have to look at this. We'll get a little more into it here shortly. And finally, Stark Law. Now, that primarily deals with positions. But any of you that have relationships with positions, whether it's family or business relationships, if they get implicated in Stark, it can trickle down to our side or our level as well. So we could actually get through that safety net or drag net, get implicated by Stark. State licensing law. Let's take a brief gander at this. Obviously the reason for existence is that they regulate the practice of hearing health care services within a given state. The primary purpose is to protect consumers. And how do they protect consumers? If you have aberrant or improper providers where there's a question of ethics, they have the ability to ascertain and make determinations those ethics aren't good. And what is the sanction? Possible loss of licensure. Furthermore, they determine the scope of practice. There's so many people that put things out there that basically infer or come out directly and say I can do certain things that are clearly not in the scope of practice. I certainly would not go out there and tell them I practice medicine. I am not a physician. We need to be careful in our area as well not to be extolling things that we really are not. Certainly state licensure laws set entry-level requirements. And, again, this is going to vary based upon the jurisdiction. Ignorance of the law is no excuse. Some jurisdictions may be tougher than others, but we still have to know the law. And, again, most of them will require certain CEUs to maintain that licensure. We talked a little bit about HIPAA here briefly. Basically the key words there are confidentiality and security. We want to keep things private so people don't get to it. And then how we keep it, security. This is not a HIPAA seminar. There are plenty of them out there. But at the same time, they're very important to follow these parameters. These can get us in a whole lot of trouble. And, ironically, where did HIPAA emanate? From perceived ethical violations of violating confidentiality and security. Again, it's going to require how patients are notified of how information is going to be used. And, more importantly, it does apply to the electronic or cyber world, not just paper. So we've got any electronically or paper-stored records and any transmissions. That includes faxes, telephone, email, voicemail, Internet, and now even text messaging. Or we could have an entire seminar on the pros and cons of texting people records because of potentially the ability to hack into that. This is one I referred to before. This is the False Claims Act. And what it is, it's submitting false claims to federally funded programs for reimbursement. We'll cover those here in a minute. But here's the one that raises the red flag. There is no intent to deceive required. In other words, could even an innocent mistake trigger a false claim? Yes. And the penalties are pretty harsh, even for innocents. Two types of false claims that the government have gone for. The first one's been around for a while. It's worthless service. Basically what you have been doled at and trying to get reimbursed for is basically considered worthless. So hearing aids that don't work, hearing aids that don't do what they're supposed to do. If you promise certain things and hearing aids don't put out, so to speak, that could be considered worthless service, or certainly billing more than what you paid, those kind of things. The other one's an evolving area. It's called implicit certification. And where I worry about this one is hopefully none of us are doing that, but those out there that are using equipment that is either substandard, in other words, not calibrated. So if I am sending results off for payment, okay, and the results were obtained that are improper because my system was not calibrated or kept up to date, that could be considered a false claim. And that's one that's kind of a no-brainer. If your system's ready, it needs to be calibrated. Pay the money and get them calibrated. The anti-kickback statute is a sister law of this and basically says it's a criminal offense, in other words, a felony, a felony being to imprison for over a year to accept any remunerations for inducing referrals of a product or service that are covered by federally funded programs. This is the key. Many of our third parties, as we get into managed care, in other words, are also adopting a similar philosophy with the anti-kickback statute. Furthermore, most states now have their own that dovetail off the federal law. And the last line there is important. This has been less than two years. In the past, the government had the burden of proof to show that you were accepting kickbacks. Not anymore. There's no longer measured by intent. If they can show it, even if it was accident or basically ignorance, there's no excuse. So what is remuneration that could kick this into play? And this is kicker. Everybody thinks it has to be money, and that is far from the truth. What is valuable to you? Anything of perceived value. It could be money, trips, products, financing, marketing, you name it. Potentially this list is limitless. So we have to be very careful with that. And basically we need to kind of think before we do. And it doesn't have to be money, like I said. Other intangible or in-kind contributions could potentially, and that's the key word, potentially trigger scrutiny. So who are the federally funded programs? Well, Medicare, without question. Many dispensers obviously don't take Medicare, but if you're in multidisciplinary practices, which we see a lot of, audiologists can bill for Medicare. So even if you're the owner and the audiologist works under you or vice versa, there could be implications there. Medicaid. Now this one sometimes surprises people. Medicaid is a state program. But it is also federally funded by matching funds. So basically when anything that's federally funded or matching funds must follow federal law. So it triggers all of this. TRICARE CHAMPUS, in other words active military, federally funded. And again, we're seeing the VA more and more starting to outsource things. So this is not something out of the realm of impossibility for many providers. Some vocational rehab. And again, vocational rehab is generally run by the state. Many times there are matching funds. Without question, the VA undeniably is federally funded. Some HMOs, and you're seeing this many times with Medicare Choice Programs and some of the others. They are federally funded or federally supported. So therefore, you have to follow federal law. And the private insurances. And the old adage that we're seeing now, as Medicare goes, so goes everybody else. Within six months to a year, Medicare comes out with something, many of the privates do the same. So again, don't kind of get misconstrued into that area. The other thing is, is many of the privates are now doing third party administration for Medicaid and some of the other programs. So what is Stark Law? Stark Law basically prohibits physicians and their immediate families from referring patients to designated health care services that they have a financial interest in. So by marriage, their kids, something there. Now there are a few exceptions known as safe harbors. But again, the government looks at this and says, hey, you've got to know the safe harbor. It's your burden. You say, well, I'm not married to a physician. I don't have a physician in the family, and so on. Do you work with a physician? Do you have a rental arrangement with them? Are they renting space off you? Are you renting space off of them? These could potentially, and I'm not guaranteed, but potentially could trigger stark implications if a physician gets in trouble. It could filter down to you, depending upon the subject. We need to look at, and this gets into the contract areas, as far as misrepresentation. What is misrepresentation? I want you to focus on these words very carefully here. They're words or conduct by one person to another amounting to assertion and not according to a fact. In other words, you're asserting, you're saying something, you're extolling the virtues of a certain product, which is simply not true. A false statement of substance or material fact with the intent to deceive or mislead. Those two words there at the end are real important, deceive or mislead. This hearing aid will allow you to hear anything you want. Really? This hearing aid will eliminate all background noise. Really? In other words, are we not presenting an oral contract? Very likely that could be inferred. Therefore, that could be misrepresentation. And ironically, misrepresentation is a tort. It's an actionable offense. We can take it to the next level, fraud, which can be civil or criminal. And the difference between civil and criminal, civil can be incarceration up to one year or a fine. Criminal is greater than one year and or a fine or both. Look at the words. We talk about misrepresentation, look at fraud. It's an intentional deception or misrepresentation. There we go. Made by a person with the knowledge that it could result in some unauthorized benefit to himself or herself or somebody else that's involved. So in other words, look at the words. Aren't they the same? Well, here we take it to the next level. Anything that state determines to be fraud or federal triggers fraud. We've just ratcheted it up a notch. And finally, false representations of words or conduct that basically result in false allegations of concealment with the intent to deceive. So it's very easy to fall on the dark side real quickly. Types of fraud. Well, actual fraud basically catch means that if you can, it's right on its face, it's deliberate, it's intentional, it's willful. What we often see is constructive fraud. And this is where it gets very curious. It's an act or omission, contrary to a legal equitable duty, which we call virtual fraud. Kind of it looks like a duck and acts like a duck and quacks like a duck, guess what the government's gonna call it? A duck. We have to be very careful. We're on their frame of reference when we deal with this. Now look at the five unnecessary elements of fraud. Look at the number one, misrepresentation. So we took that civil claim and we are already one fifth of the way to a serious criminal offense. It's not enough that we misrepresent and said the extolled virtues that aren't there. Did we have knowledge of it? Well, you're the practitioner. Did you have knowledge of it? Was there an attempt to obtain reliance? Well, the patient is in your office. Isn't there obvious an attempt to obtain reliance? Was it reasonable for the patient to rely on you? Well, you're the licensed credential and you've got certifications. I think that's fairly easy to figure out. You've got, as I call it, wallpaper on your wall showing that you're competent. I think it's reasonable to rely. Then the easy one's damage. I've been damaged. I've been wronged in some way. Now let's look at the corollary of fraud. It's a little bit different than what we think abuse. This is not physical abuse or elder abuse or anything like that. We're looking at the financial area. Practices that are inconsistent with sound fiscal practices result in some sort of unnecessary cost or unnecessary reimbursement for items that are either unnecessary or substandard or fail to meet the standard of care. In other words, it can be repeated mistake. I do other seminars. There's a famous coding issue or repeated coding issue created an abuse situation. It was ignorance. There was no intent, okay? But because it was a repeated mistake, it led to a very large fine. These are some of the issues that we have to worry about as practitioners and at least be cognizant of. And I see this fairly routinely and it kind of worries me. We've got to be very careful not to do this. Falsification of medical clearances. We just can't wait till the doctor gets there, gets the approval. We're falsifying test results or authorizations for service. Sometimes you're under the gun by the patient saying, you know, my insurance runs out tomorrow and things, don't falsify things. No medical clearance. Now with direct access with audiologists through Medicare, that could change in the near future where they will not. Audiologists will not require a script from a physician to do testing. Again, falsification of paperwork, practicing outside the scope of your practice as defined by your license. Altering dates of service. Once again, that poor hapless patient needs something tomorrow and you're trying to backdate things. As much as you might want to help the patient, do not backdate. Upcoding. Hey, we can get paid more for something. Let's just code it this way. Nice try. Let's just say, I hope you look good wearing orange if you do that. Misrepresenting or embellishing known product capabilities. Remember this hearing aid? We'll let you hear what you want. Oh yeah, the remote becomes good. You can turn on your microwave and your TV and your car. I know that sounds silly, but we're probably not out of the realm someday where some of this could occur. But if it isn't occurring, don't embellish it. What I want to do is take a few minutes and go over some basic case studies. And kind of think about this as you're going through. Is there an ethics issue? Is there a legal issue? Or perhaps both? You have a trainee. They've not yet earned their credential. Okay, but yet the owner says, hey, here's some business cards. I'm going to call you a credentialed candidate. Even have a lab coat that says candidate. Or worse yet, the term intern. We all know what intern means. Is that good or bad? What do you think? Is there problems ethically, legally, or otherwise? Well, one of the answers to this, don't use the word candidate. It is way too nebulous. We're not running for political office here. A candidate means nothing. If you're going to use a credential, only use it if it's been earned. I don't care if you're going to graduate tomorrow. You haven't earned it, don't use it. There's potential misrepresentation and or fraud there. So be careful with that. Here's another one. You dispense hearing aids. You took a business class. And one way to control your cost of goods sold is to join a buying group. So you secure the low prices for the buying group. Your invoices are appropriate as far as what you paid. What do you think? Fair, unfair, legal, ethical? Now, AAAs come out and to their credit, they basically came out and flat out said joining a buying group is not a problem by itself. And most other organizations at least informally agree. It is acceptable to negotiate lower prices. You're a better business person. But just make sure if you're going to be sending any of that for federal payment, remember all those offshoots of who may be federal, make sure that the invoice is the correct price and not some MSRP or whatever there. Any discounts that you get, make sure they're reflected properly. Here's another scenario. You have an offer to go on a trip to Europe or anywhere else in the world based upon your income. Based upon your hearing aid units. You've always considered your patients. You've always felt you're above and beyond. It doesn't influence your clinical judgment. You've met whatever requirements the manufacturer says for the trip. What do you do? This is an age old issue here. Just because you did something in the past does not guarantee it's going to be okay now. The other thing is the manufacturers are not held up to the same standards. They're not practitioners. So a lot of these other laws we're talking about don't necessarily apply to them. It could be illegal, certainly possibly unethical, but definitely potentially illegal if you've got a third party that has federal funds involved. Nothing wrong with negotiating the best price and costs, okay, but don't accept these other perks from the vendors. Easiest way to do this, if you really want to be totally above board and totally transparent is you can pay for your own trip. Simple as that. Here's another one. You have limited funding. You're in an area of underserved need. And many of us do have outside clinics that are in areas of underserved areas. You've got a buying group, you've negotiated the best unit price, and now they want to deposit in some sort of an account for you for purchase of equipment, CEUs, supplies, whatnot. Fairly common practice. We just need to kind of think about this. We need to be cognizant of our laws, especially our state laws regarding anti-kickback statute. This has really raped and pillaged the pharmaceutical industry with the pharmacy reps. There's so many things they can't do anymore and so many things doctors can't do. We have to be careful. I think it could be a matter of time where they start kind of putting a hammer down on us. So we need to be very careful as far as looking at this. Easiest way is don't tie benefits to some sort of quota or some sort of unit sales. Nothing wrong with negotiating the best prices. That's fine. You can certainly pay for your own CEUs and other things like that. One thing at the bottom, and I'm seeing a little more of this, I've done this in the past in hospitals, is that you set up an endowment fund. If they want to give you money or something for CEUs, then you open it up to the organization. Anybody within the organization can apply for it. Make some sort of criterion and just keep a paper trail. I've done that and that has passed in us during the past. Here's another one. You get, again, hearing aids from the manufacturer. You pay the discounted price. It reflects the single unit cost. You offer a business fund and set aside 5% of the way that you can withdraw to use for marketing or new software or whatnot. Negotiate the best price. That's certainly the easiest way to do it. And make sure it accurately reflects the screw price. One thing that you want to do, make sure you put this into new ancillary business practices that I, you know, that's kind of harsh. One thing I have seen is that you can request an OIG opinion. That's the Office of Inspector General. Now, they cost about $250 and you can hypothesize something and create it. What they'll do is they will look at that and say, no, it's flat out illegal. Or they may say, okay, it's okay. Or, hey, you know, because you're doing it for an underserved area or a greater community good, while it looks illegal or improper, we're gonna let you do it and we've given you their blessing. Now, just because one person down the street gets that OIG opinion doesn't give a license to everybody else. They are individualized. Lobby to create a safe harbor. Now, that's gonna be probably more on a much greater organizational or association type thing. That takes a lot of money and that's really not easy for any individual to do. You've got to agree to your credential. You enter practice. The manufacturer of the bond group offers you the finance, the purchase, the practice, and you get your purchase 80% of the hearing aids from them. You make monthly payments, interest on the loan, and you keep it in the billboard. Okay or not. This is, again, fairly common practice. One way, if you really want to keep transparency is get your financing from a private group, a bank or whatnot. That kind of eliminates any potential conflicts. Never tie quotas to the benefit past, present, or future. Easier said than done, but you need to be very careful with this. Do not accept third-party reimbursement, such as Medicare. Well, here's the problem. Most dispensers can't get Medicare and audiologists can't opt out of it, at least at this point. So that may not be really a viable option for most at this point. And again, with managed care coming around the corner, regardless of the political climate, it's common. We're going to see some capping of things. So you need to really look at those contracts very closely as to what you can and can't do. Bottom line, your due diligence. This is very important. Investigate Medicare, Medicaid, and all third-party payers. Make your decisions to participate or not based upon the pros and cons. Look at the demographics of your population. I mean, what's the greater good you're gonna be able to help should you do something based upon that? Look at the covered benefits. They're gonna be all over the board. Some organizations will cover a fair amount. Some won't cover any. Certainly reimbursement's gonna be important whether you enter into some sort of a contract. Billing and staffing requirements are often forgotten. It may sound great. You may be getting a nice amount of money, but you forget, no, now you gotta hire a billing staff or you gotta outsource it. And sometimes you gotta kind of look at what the cost-benefit is. Certainly the potential liabilities. We'll get into contracts here very shortly. There's liability if you violate a contract. And you have to look at, again, where the cost-benefit of that. Without question of marketing considerations, are you gonna be able to get help or you're out on your own on that? The state is very important. If anything, look at your state practice laws. They may be different from state to state. Again, ignorance is no excuse. The other thing is some of us have practices in multiple states. You may have to modify things based upon the state that you're in. And certainly the ethical and legal consequences. Laws change, ethics change. And just because many of us started practicing years ago, things change by the moment. What happened last year or even last month may not necessarily be true now. Healthcare's the number two regulated entity basically entity in the United States behind nuclear regulatory. It is changing by the moment. So these financial relationships change all the time. What was done yesterday may not fly today or tomorrow. Just because someone offers something to you doesn't always mean it's legal or ethical. Again, you are the one that abides by various codes of ethics, not necessarily the manufacturer. So again, the implications are many times far greater for you than them. And again, certain groups could qualify for a safe harbor, but that may be very narrow. And just because one gets it doesn't mean you get it. So in the remaining time, I'm gonna change quick focus here because we have just a few minutes left. I wanna kind of cover contracts and how the ethics apply to that. First of all, we have to know what a contract is. The definition, this is just a Black's Law definition, an agreement between two or more entities or individuals creating a legal obligation to do or not to do something. And those last few words surprise people. You can contract not to do something. One of the things that we see a huge increase in non-competition clauses or restrictive covenants saying, guess what? You leave, you can't compete with us. They are valid if they're written correctly. Contract elements, and you must have all four of these to have a valid contract. The first one is called mutual assent. In other words, it's offer and acceptance. Has to be a valid offer, has to be a viable acceptance. There has to be consideration with something of value for the parties. If one party's not getting value or cannot be ascertained as value, then the contract fails. The parties have to be of capacity. Many times this means mental capacity or legal capacity. And we'll talk a little bit about that in a minute. And that's the one that kind of worries me just with the type of patients that we're seeing now and then just an older population. And finally, the contract has to be for legal purposes. Putting a contract out with your cousin Vinny to put a hit on somebody is not a valid contract. Mutual assent, basically a fancy name for meeting in the minds. Basically, it's a valid offer by one party and a viable acceptance from the other party. With no additional conditions or expectations that are not already in the contract. If you premise it on other things, that actually would wipe that out and would basically create a counter offer. So that basically, that contract is in. Bargain for legal detriment is what consideration is. In other words, just an exchange of value, both parties desire to take place. You're dispensing the hearing aid, they're paying you. There's consideration going both ways. Capacity, understanding the nature of one's bounty, and again, possessing the capacity to enter into the contract and fully understand the ramifications. Once again, if you had a patient in your office, and there's questions about their lucidity, you need to kind of think twice about this, or do they really have the capacity, is it fleeting? It's just really more than anything else, the number one thing that I worry most about with many of the population that we deal with. Do they understand what they're really getting into? Do they even have the legal capacity? In other words, are they their own power of attorney? We could talk about a whole seminar just on that one alone. Is the contract for a legal purpose? In other words, we're not illegally securing their agreement. In other words, we're not coercing them, undue influence, and again, this also leads into the capacity aspect. If they can't understand it, and we're attempting to coerce it, that contract is void, it's illegal. I like to call these the W's as we're finishing up here. Who, what, where, when, why, how much, what kind of, and warranties and representations. A contract must have these. If they don't have them, it can fail. There's enough there to cause failure. In finishing up here, there's different types of contracts. We're going to have bilateral contracts, both parties. Void and voidable is interesting. The younger they are, you've got to be careful. If you've got, dispensing hearing aids to minors, you have to be real careful. If you do not secure some sort of a cosign or a guarantor, that actually could be voidable at the minor's expense, or at the minor's request. It could be a year down the road, they say, I want to give the hearing aid back, you're past the warranty and whatnot. Be real careful with this, because I know there are some people that are dispensing to minors if the state allows it. There are certain express or implied contractual elements, and certain parts can be cut out if they're illegal. That's what's called joint versus several. Contracts of adhesion are forcible contracts. Certain things are forced, and actually, you know, they don't return it within a certain period of time. You know, you bought it, you buy it, basically, that is a contract of adhesion. There are opt-out clauses, basically, hey, you know, we want to terminate a contract. You need to look at those real closely, and so far, when you can, 60 days before the end of the contract, or 60 days any time, they're totally different things. An evergreen contract is one that automatically renews. This is kind of the one exception to the rules for silence. Generally doesn't accept a contract, except if it's an evergreen contract. Integration clauses. What is in the contract, what is stated there, is all there is. Nothing can be added. Jurisdictional issues. Certainly, if you have problems or complaints with your manufacturer, if you look at your contracts, they're almost certainly litigated on their home turf, so you have to be prepared for that. Waivers. We do medical waivers. Basically saying, you don't need to follow up with certain individuals. We have to look and see if there's waivers in our contract. Restrictive covenants. We talked a little bit about that before, non-compete clauses, increasing as we get more practitioners in the field and more competency, you're going to see more and more of these things. And they're not illegal on their face. Now, they can be broken if they're written illegally, but for the most part, they are illegal. And nondisclosures. In other words, many times you are asked to do something or be involved in something, you must sign a nondisclosure saying you will not put that out there for public consumption. And as we're finishing up here, force majeure. Act of God. You send the hearing aid off to the factory and somehow it's destroyed in transit. Who's responsible? Act of God. The mailbox rule is an interesting one. When does the contract become legal? In today's world, with electronic transactions, the mailbox rule can be immediate. In other words, you've accepted it, even if you attempt to reject it later. Can you assign or delegate things? And again, many times they'll say you can't assign this. You see more and more of this with warranties, hearing aids on eBay, so on, lost hearing aids that suddenly reappear. Most places will have no assignment, no delegation. Someone else just can't take it and assume the warranty. For cause, not for cause, many contracts are getting to this. If you have something, you can terminate the contract either for cause or maybe at any time for any reason. And then the final one on that, a time to cure. Many contract violations are accidental, they occur. In most cases, there's language saying, look, if you can cure this within ten days, let's bygones be bygones. We don't want to terminate the contract. So that's an example of a time to cure. And here are my references. And I will entertain any questions. I know this is a very fast and down and dirty idea. But the bottom line is that as we are in our ethical, or in doing contracts on a virtually daily basis, please follow the basic rules of ethics. We want to make it fair and equitable for all. We want it a win-win. Any time that's a win-loss for people, you're just going to potentially trigger ethical dissent and possible violations. And that's when we get ourselves in trouble with some of the state and federal authorities. And I will turn it back to IHS. I'll be glad to answer any questions you might have. Thank you. Thanks, Doug. Okay, everyone, we have roughly 15 minutes for questions. And if you have not already asked your question, you can certainly do so by entering your question in the question box on your webinar dashboard. And Doug, we had a lot of questions on number 10 on the CE quiz that I don't think you had time to address. But if you could go through it with everyone. And so everyone out there, if you were intending on submitting the CE quiz, we're about to give you number 10. So listen closely. So in the quiz, you asked about ethical theory and the best adjectives to describe these four different ethical theories. So the first one we have listed is deontology. Could you talk a little bit about that? Yeah, I was wondering where that slide went, honestly. What deontology? I was looking at that, hmm, where did that go? Deontology basically means duty. You have a sense of duty. Everybody has different ethical frameworks, and one of the ethical theories is deontology. Why do you do what you do? Is it your duty? Do you do it because it's a fair thing? Is there justice in what you're doing? You have a duty or a legal obligation. That's deontology. The second one, as I recollect, is what's called teleology or utilitarianism. And basically, this is maximizing the benefit by minimizing harm. We can take it to the next level. Those of you who watch TV, most of your reality shows are frameworked on a teleology type thing, such as Survivor Island and some of the others, Big Brother and some of the others. Basically, you're doing what's best for you, in a sense. You're trying to minimize the harm, but the downside is if somebody potentially could be thrown under the bus to serve the greater good. That's teleology. Virtue ethics really goes back to one of those early slides. Basically, virtue means integrity, doing the right thing for the right reason at the right time. And finally, human nature ethics. What human nature means is that you do it because it feels good. Now, many times, that kind of gets perversed a little bit. We think of the MTV hedonism piece, because the word hedonism means doing it because you feel good. But many of us are in the field because, not only for the other things, but because we like to feel good, we like to help people. You could argue that you're operating from a human nature ethics standpoint. If you do any volunteering, there's a great example of human nature ethics. Okay, great. Thank you. I hope everybody got that. If you didn't, we are recording this, so it will be on the recording later. But we are going to move on to some other questions now. So, Doug, if a practitioner offers free services for many clients, what if the patient insists on giving you something, regardless of the fact that the practitioner might not typically charge for that service? Is that okay? That is a great example. One thing that you should do, if you don't already have, is a basic employee handbook. And it doesn't have to be 5,000 pages. Most organizations are relatively small. But in that handbook, or in this policy, you should have a gifts policy. And again, basically what you need to define is what is an acceptable gift. Mrs. Smith comes in and brings brownies in. Okay, do you have to go to some federal register to make sure that, oh, no, these brownies may have a $20 value and I can't accept it? Well, no, that's absurd. But what you want to do is make sure, if there is a gift, it is reasonable. And the best way, and you can have your people write this down, so it's called D-minimis, D-E-M-I-N-I-M-I-S, minimis. Basically, it means viewed in the eyes of the beholder. What you determine is minimal is minimal. The other thing is with that gifts policy, if it's something like brownies, consumables, just make sure that everybody has an opportunity to engage in. Someone's just not grabbing them and taking them home themselves. This is what becomes a problem and actually can trigger some ethical issues internally within the company. And that's generally one of the first things, as silly as it sounds, that's going to cause a whistleblower situation is because someone felt they were wrong or they weren't able to partake in the gift, so to speak. Thank you, Doug. So we have a question from Barb. And Barb is asking, if she's setting up a service center inside a pharmacy, must she have a, or must I do a HIPAA contract? And she's got service centers twice per month. Must she offer a HIPAA contract? A HIPAA contract? That's what she writes. Barb, I'm not sure if you meet the... Let me, I can try that in two ways. She should be, if she has an arrangement in a third party, there should be a contract there for fair market value. Just setting up shop for free is a problem, or at least it could become a problem. If it's fair market value based upon time per hour, based upon square foot, something like that, that's fair. There's nothing wrong with that. The one other thing is, is if she's seeing anybody there, and as a patient, if they don't have their notice of privacy practice assigned, and I know we're jumping into HIPAA a little bit, you've got to be careful and make sure that any records or any transactions there are separate from the pharmacy and that everybody knows it's indeed a separate entity. Otherwise, you can potentially create some minefields there based upon being in that, are they really a separate entity? Are they part of the pharmacy? There's all sorts of goofy liability that can occur. Thank you, Doug. For Barb or anybody else, if you have more questions on HIPAA, we do have two great HIPAA webinars up on our website in a recording format, so feel free to take a look at those and I'm sure it'll answer a lot of additional questions about HIPAA. Doug, we have a question from Charles. He wants to know, or he says, most manufacturers offer volume discounts on purchases or rebates based on meeting volume levels. Is this legal or illegal? Well, the question is, there's no illegality of it for volume discounts. The key thing is that if you are getting any kind of third-party reimbursement that has a federal component, you basically must show, pass on the discounts to the third-party entity for reimbursement. So if you're getting $500 off a hearing aid based upon the contract and you dispense that to a patient and now you bill a third-party entity that has a federal component, you must show that the payment actually submitted was with minus the $500 and not some sort of MSRP or regular pricing. That's where a lot of people get themselves into trouble. Okay, great. Jerry wants to know if there is a place to get a legally written non-compete without going to a lawyer. Well, most lawyers will tell you no for obvious reasons. They've got an interest in it. Many times your state can do things. You can go to some of the prefabbed ones out there on the Internet. I know LegalZoom.com does some others. But you really want to be careful. They will have it many times based upon a state-type thing. However, you need to read the fine print on that. If you would get something from them or one of these other providers that do that, you want to make sure if they're absolving liability and saying, sorry, Charlie, you're on your own. Here's your $69. Pay us. Many times they're going to disclaim responsibility if there's a litigation. They're certainly not going to come litigate on your behalf. You can always, in some cases, there are some things even at the state levels where they might have some of these state bar associations may have standard form non-competes. But the thing is, the one thing I want to be aware of is that every non-compete is looked based upon the merit. And again, we could do an entire seminar on non-competes. But they look at geography, they look at the time constraints, how long it's going to last, what's the competency of the individual, did they get their training with you. So they're going to look at those things on a case-by-case basis. There are certainly templates out there, but you really need to make sure and clarify based upon your state. And I don't want to delve off too much, Brandon, to this, but many states, for example, will put a maximum of two years on there. But I've seen others that go a year. It really is based upon the situation at hand. Well, that's good advice, Doug. Paul wants to know, can a family member sign the contract of the 60-day return for a full refund because parents cannot sign? First question I'm going to say is, does the family member have a durable power of attorney? Are they the power of attorney for this individual? If it's a spouse situation, basically, it gets a little tricky. Technically, there's nothing saying they can't, especially if there's a fiduciary relationship such as a spouse. You've got a legally recognized relationship there. You're going to be documenting in your chart as to why the person had to sign it. So later on, you don't have a situation where an adult child comes back and says, this person didn't have the authority and so on and so forth. In other words, CYA, we all know what that means, cover your assets in this case. That's tricky. But if it's a fiduciary relationship such as a husband and wife, generally, that's acceptable. And certainly, if there's a power of attorney or a legal guardian, that would be acceptable. They just need to sign as to who their relationship with the individual was. Thanks, Doug. We only have time for maybe one or two more questions. Doug, when a manufacturer warranty dates are different than the dates listed on the contract, which is more ethical to follow? Well, I guess I have to ask a few other questions, Fran. Did the person get it through the dispenser or the manufacturer? We're seeing more and more with crazy internet sales and some of the other things that so many of us aren't real thrilled with. If it's a direct relationship with the contract, with the manufacturer, the manufacturer reigns. The thing is that in most cases, in the majority of cases, the contract with the individual, with the vendor, well, that's real tricky. Generally, who's the relationship with? Most would argue that the patient and the vendor, the practitioner, is the one that's going to supersede. Now, there's as many exceptions to that rule as there are acceptances of that. I wish I could give a more, I'd have to have a little more information on specifics on that to really give you a global answer on that. Thanks, Doug. Well, everyone, we are about to wrap up the webinar. I really want to thank Doug for an excellent presentation today and for answering so many questions. Thank you, everyone, for joining us today on the IHS webinar, Ethics and Contractual Analysis for the Hearing Healthcare Professional. If you'd like to get in contact with Doug, you can email him directly at dlewis at xcaliburconsultant.com. For more information about receiving a continuing education credit for this webinar, please visit the IHS website at ihsinfo.org, click on that webinar banner, or find more info on the webinar tab under Professional Development. IHS members do receive a substantial discount on CE credit, so if you're not already an IHS member, you will find out more information at ihsinfo.org. And please do keep an eye out for that feedback survey you'll receive tomorrow via email. We ask that you take a moment to answer a few brief questions about the quality of today's presentation. So thank you again, everyone, for being with us today, and we will see you all at the next IHS webinar.

webinar

Doug Lewis

ethics

contractual analysis

hearing healthcare professional

valid contract

deontology

teleology

virtue ethics