Industry strengthens Code of Ethics

By Melissa Young, JD

Changes are coming; some may be evident already

The Advanced Medical Technology Association (AdvaMed)—the trade association for manufacturers of medical devices, diagnostic products, and health information systems—revised its Code of Ethics on Interactions with Health Care Professionals in December 2008. Although the revised code does not go into effect until July 1, 2009, Annual Meeting attendees who visit the Technical Exhibits in Halls A-C of the Sands EXPO Center may find that some companies have already begun to implement the revisions.

AdvaMed member companies have been strongly encouraged to adopt the revised Code (although this is voluntary, not mandatory) and to implement an internal program to efficiently establish and maintain compliance with the revised Code.

Defining “healthcare professionals”

In the revised Code, the definition of healthcare professionals (HCPs) has been clarified to include interactions with anyone “involved in the provision of healthcare services and/or items to patients.” This expands the definition beyond physicians and other healthcare practitioners and brings the revised Code in closer alignment with federal Anti-Kickback Statutes. Thus, the revised AdvaMed Code applies to interactions with any individual or organization that purchases, orders, or recommends items or services reimbursable under Medicare and other federal healthcare programs.

Limitations on gifts

A major revision to the AdvaMed Code is the limitation on gifts to HCPs. The current Code allows modest gifts to HCPs, provided that the gifts benefit patients, serve a genuine educational purpose, or are branded promotional items of minimal value related to the HCP’s work or for the benefit of patients.

Companies that adopt the revised AdvaMed Code, however, may no longer provide branded noneducational and/or promotional gifts to HCPs after July 1, 2009, even if the gifts are of minimal value, related to the HCP’s work, and for the benefit of patients. Some examples of the prohibited gifts include branded mugs, pens, highlighters, notepads, or other items with the company’s name, logo, or product logo.

Under the revised Code, companies may still provide items that benefit patients or serve a genuine educational purpose, provided that the value is less than $100 (excluding textbooks or anatomic models used for educational purposes, which may exceed $100 in value).

In addition, the revised AdvaMed Code includes new standards for providing physicians with products at no cost for “evaluation and demonstration” purposes. The revised Code distinguishes between evaluation products (typically used in patient care) and demonstration products (typically single-use items or models used to promote patient awareness).

Under the revised Code, member companies can provide HCPs with sufficient supplies of evaluation products to assess the product and decide whether to use, purchase, or order in the future. Further, if the product is for multiple-use or is capital equipment, the revised Code allows the HCP to retain the product for a reasonable amount of time, with the terms to be set out in advance of the evaluation. Unless the HCP testing the product purchases or leases it, the title (ownership of the product) must remain in the name of the providing company.

Information support

The revised AdvaMed Code also allows member companies to provide accurate and objective information on coverage, reimbursement, and health economics to HCPs. Under the revised Code, companies may work directly with patients, HCPs, and third party representatives to obtain coverage for the company’s medical device. These activities include providing assistance with coding and billing information, training on payor policies, and procedures for obtaining prior authorization.

Member companies are cautioned against any activity that would be considered unlawful inducement to purchase, order, or use the technology, including any efforts to relieve the HCP of the administrative expense of filing insurance claims.

Additional revisions

Other revisions to the AdvaMed Code include the following:

“Modest meals” can be provided for HCPs (if certain requirements are met).

Consulting or royalty arrangements should be committed to writing, reflect fair market value compensation, and ensure that the HCP’s selection is based on his or her qualifications.

Research grants are permitted, if based on factors other than past or anticipated business between companies and any grant recipients; and grant awards should be handled independently of company sales and marketing divisions.

Charitable donations are permitted for bona fide charitable missions or organizations if certain requirements are met.

Support for educational, scientific, and policy-making conferences sponsored by third parties is allowed if certain requirements are met.

Find out more

Christopher L. White—executive vice president, general counsel, and secretary of AdvaMed—will be a participant in an AAOS Symposium on Developments in the Evolving Orthopaedic Surgeon-Industry Relationship on Friday, Feb. 27, at 10:30 a.m. in the Venetian Ballroom. Tony Rankin, MD, AAOS president, will moderate the session. Joining Dr. Rankin and Mr. White will be Stuart L. Weinstein, MD, past president of the AAOS; healthcare compliance attorney Kathleen (Katie) McDermott, and Assistant U.S. Attorney for the District of Nevada, Crane M. Pomerantz, federal healthcare prosecutor.

For additional information on AdvaMed’s revised Code of Ethics, visit the AdvaMed Web site,

Melissa Young, JD, is assistant general counsel for the AAOS. She can be reached at