DEPARTMENT: Materials Management
PAGE: 1 of 8
APPROVED: December 18, 2000
EFFECTIVE DATE: December 18, 2000
POLICY DESCRIPTION: Vendor Relations
REPLACES POLICY DATED: May 1, 2000
RETIRED:
REFERENCE NUMBER: MM.002
SCOPE: All Company affiliated facilities, including but not limited to, hospitals, ambulatory
surgery centers, home health agencies, physician practices and all Corporate Departments, Groups
and Divisions and HealthTrust Purchasing Group, and particularly the following Departments and
individuals:
Materials Management
Education and Training
Pharmacy
Reimbursement
Controllers
PURPOSE:
1. To articulate the Company’s expectations of vendors in their interactions with the Company and
its colleagues.
2. To establish parameters for seeking and accepting funds from vendors for conferences,
educational programs and other events.
3. To make clear that, other than as permitted herein, the Company does not wish to place extracontractual demands on vendors.
POLICY:
1. The Company expects vendors to respect the Company’s Code of Conduct and policies and
procedures. It also encourages vendors to commit in contracts with the Company and any of its
affiliates to adhere to the provisions of the Company’s Code of Conduct and policies and
procedures which address vendor interaction with Company colleagues and facilities.
2. The Company will accept vendor funding for certain events (e.g., educational events, charitable
events, trade shows and conferences) only as outlined below, provided that the vendor’s funding
and/or participation is not inappropriately offered by the vendor or solicited by the Company.
3. In no event is any request for, or acceptance of, a vendor contribution to be connected in any
manner, implied or express, with the conduct of business with the vendor (i.e., receiving funds
from a particular vendor does not equate to an incentive or implied obligation to purchase goods
or services from that entity, except as is allowed by the Discount Safe Harbor Regulations;
likewise, refusal by a particular vendor to provide funds will not result in a refusal to purchase
goods or services from the particular entity). Except for rebates and administrative fees received
in accordance with Company policy, no payments, in whatever form, are to be received from a
vendor that are contingent or based upon the Company purchasing services, supplies or
equipment from such vendor.
4. Any exceptions to this policy must be approved in writing by the facility’s Division President and
the Senior Vice President for Ethics, Compliance and Corporate Responsibility.
DEFINITION:
12/2000
DEPARTMENT: Materials Management
PAGE: 2 of 8
APPROVED: December 18, 2000
EFFECTIVE DATE: December 18, 2000
POLICY DESCRIPTION: Vendor Relations
REPLACES POLICY DATED: May 1, 2000
RETIRED:
REFERENCE NUMBER: MM.002
For purposes of this policy, “vendor” is defined as an entity doing or seeking to do business with
HealthTrust Purchasing Group (HPG), the Company, or any of its affiliated facilities.
For purposes of this policy, “colleague” is defined as any employee of the Company or any of its
affiliates.
PROCEDURE:
A. Expectations of Vendors
1. The Company expects its vendors to be familiar with our Code of Conduct and policies and
procedures which relate to our colleagues’ interaction with vendors and other business
associates, including but not limited to our Business Courtesies Policy, EC.005,
Entertainment Policy, EC.006, and Vendor-Promotional Training Policy, EC.007, and to
abide by those standards and policies.
a. The Company provides vendors with a brochure which sets forth HPG’s and the
Company’s commitment to high ethical standards. The document also includes reference
to the relevant policies and their website addresses.
b. The HPG’s website, located at http://www.healthtrustpg.com contains additional
information for vendors regarding the Company’s commitment to ethical business
practices and its expectations of vendors with respect to their business practices.
2. The Company encourages its vendors to have an ethics and compliance program, a code of
conduct, or other evidence of their commitment to ethical business practices.
B. Permissible Arrangements for Vendor Funding of Events
Unless approved in writing by the Division President and the Senior Vice President for Ethics,
Compliance and Corporate Responsibility, the following are the only permissible arrangements
for vendor funding of events provided such events comply with Company policies, including the
following: Non-Employed Physician Education Expenses, LL.010 and Providing Free and/or
Discounted Training and Equipment to Referral Sources, LL.011. The fair market determination
made pursuant to LL.010 and LL.011 should take into consideration the value of like training or
equipment offered by other entities. The fair market value determination should not be reduced
by vendor funding.
1. Company-Sponsored Educational Programs.
12/2000
DEPARTMENT: Materials Management
PAGE: 3 of 8
APPROVED: December 18, 2000
EFFECTIVE DATE: December 18, 2000
POLICY DESCRIPTION: Vendor Relations
REPLACES POLICY DATED: May 1, 2000
RETIRED:
REFERENCE NUMBER: MM.002
a. A Company-affiliated facility, including a Corporate Department, may accept funds from
vendors for educational events pursuant to an educational grant (“restricted” or
“unrestricted”) which has been contracted for and included in a national or local
agreement with the vendor regarding the products or services that the vendor is to
provide. The facility may not accept an educational grant unless the dollar value of the
related supply purchases it makes from the vendor exceed the amount of the grant. The
educational event must be in accordance with accrediting body standards (whether or not
the particular program is accredited for continuing education (CE) credit) and must be
related to the product or service provided by the vendor. Accrediting body standards can
be found for the Accreditation Council for Continuing Medical Education (AACME) at
www.accme.org/sec_acc_f1.html; for the American Nurses Credentialing Center (ANCC)
at www.nursingworld.org/ancc/provider/provider.pdf; and for the American Council on
Pharmaceutical Education (ACPE) at www.acpe-accredit.org/frameset_AppProv.htm.
Other accrediting bodies may have similar guidelines which must be followed if
accreditation is sought from such organizations.
i. When HPG negotiates a contract that includes an educational grant, the contract
language must specify that the program be related to the vendor’s products or
services.
ii. To obtain funding for an event through an educational grant, a facility must first
check HPG’s Koala site for the list of vendors who have educational grants, then
check with the local representative of the vendor to see if funds are available and if
the vendor is interested in using the funds for the identified purpose.
iii. Before using funds pursuant to an educational grant in a national agreement, a
vendor must determine that the funds are available.
iv. During regular program reviews, vendors will provide HPG staff with a summary of
account activity relating to funding of educational programs.
v. HPG’s Koala site will include a list of vendors whose national agreements provide
funding for an educational grant. The Materials Management/HPG site is located
under “Departments Online” on the Koala homepage.
b. However, if:
i.
All funds under any educational grant by any particular vendor have been
expended;
ii.
The national agreement with such vendor does not include an educational
grant; or
iii.
There is no national agreement with such vendor,
a facility may accept funding from such vendor provided that:
12/2000
DEPARTMENT: Materials Management
PAGE: 4 of 8
APPROVED: December 18, 2000
EFFECTIVE DATE: December 18, 2000
POLICY DESCRIPTION: Vendor Relations
REPLACES POLICY DATED: May 1, 2000
RETIRED:
REFERENCE NUMBER: MM.002
i.
the educational event is in accordance with accrediting body standards
(whether or not the particular program is accredited for CE credits);
ii.
the program is related to the services or products the vendor provides;
iii.
the vendor is given promotional credit for having contributed to the cost of
such event; and
iv.
the funds do not exceed the cost of supplies purchased from that vendor.
Accrediting standards can be found for the Accreditation Council for Continuing Medical
Education (AACME) at www.accme.org/sec_acc_f1.html; for the American Nurses
Credentialing Center (ANCC) at www.nursingworld.org/ancc/provider/provider.pdf; and
for the American Council on Pharmaceutical Education (ACPE) at www.acpeaccredit.org/frameset_AppProv.htm. Other accrediting bodies may have similar
guidelines which must be followed if accreditation is sought from such organizations.
c. Examples of appropriate use of educational grant funds for an educational event include:
 A hospital plans to present an educational program on management of diabetes for the
medical staff. An insulin pump vendor offers to fund the program in part. The
Company has a contract with the vendor that includes an educational grant and funds
are still available under the grant. The hospital plans the educational program in
accordance with accrediting body standards, and the funding is received from the
vendor pursuant to the provisions in the grant contract. The hospital uses and
maintains the appropriate documentation and the vendor is given promotional credit
for having contributed to the cost of such event.
 A hospital plans to develop a video tape on advances in cardiovascular medicine for
physicians. A stent vendor offers to fund the program in part. The Company has a
contract with the vendor but it does not include an educational grant. The videotape is
developed in accordance with accrediting body standards and the hospital uses and
maintains the appropriate documentation and the vendor is given promotional credit
for having contributed to the cost of such video tape.
2. Joint Educational Program with or without contract funding. A facility may co-sponsor an
event outside the provisions of an existing purchasing agreement (if any), such as a conference,
seminar or educational program, with a vendor subject to the relevant accrediting body standards
where both the facility and the vendor:
a.
b.
c.
12/2000
Benefit from the event;
Are jointly contributing financially or in kind (e.g., contribute space, food or other
services) to the sponsorship of the event;
Have input into the invitation list;
DEPARTMENT: Materials Management
PAGE: 5 of 8
APPROVED: December 18, 2000
EFFECTIVE DATE: December 18, 2000
d.
e.
POLICY DESCRIPTION: Vendor Relations
REPLACES POLICY DATED: May 1, 2000
RETIRED:
REFERENCE NUMBER: MM.002
Are listed as co-sponsors of the event; and
Arrange that payments by the vendor for certain aspects of the program (e.g., speaker fees
or food) are made directly to the individual/entity to be paid.
An example of such an educational program includes a lunchtime program on a particular
medical topic with CE credit for attendees where the vendor pays the speaker’s fee and the
facility provides the space and food. The program brochure includes both the facility and the
vendor as sponsors, and both have an opportunity to invite guests to the program.
3. Trade Shows, Conferences and Company Meetings. A facility or Corporate Department may
permit vendors to participate in events the facility or Corporate Department sponsors, such as
trade shows, conferences for Company colleagues or Company meetings provided that the
vendors receive something of commensurate value in exchange for their contributions.
a. Except as provided herein, vendors may not be required or permitted to subsidize facility
or Corporate Department meeting or conference activities. Vendors may purchase exhibit
opportunities at an event the facility or Corporate Department is sponsoring provided that
the facility charges all vendors a like amount for like opportunities. The facility or
Corporate Department may use the money from the sale of exhibit opportunities to offset
costs of any portion of the meeting.
b. A vendor may provide materials or samples to be distributed at the facility-sponsored
event provided it is clear that the materials or samples were supplied by the vendor and
provided that if given to a Company colleague the value does not exceed the $50 gift
limit.
An example of an appropriate way to permit vendors to participate in a Company meeting,
conference or a trade show is: The Company is arranging a meeting of colleagues from
several Company-affiliated facilities. The colleague organizing the event for the Company
sends a letter to vendors offering booth space at the meeting. The rate that the Company
quotes the vendors is the same for all vendors for like space. The Company may use any
amounts that exceed the costs of the exhibit space to offset costs of the meeting.
4. Charitable Functions. From time to time, Company-affiliated facilities are asked by charitable
organizations to contribute to their organization or participate in a fundraising event of their
organization, including asking or encouraging others outside the Company to participate in the
charitable function.
An individual who has chief executive authority for a component of the Company (e.g., the CEO
of a hospital, a Group President, the Corporate CEO) must approve the use of Company resources
to support a charitable organization. Such support includes encouraging company colleagues as
12/2000
DEPARTMENT: Materials Management
PAGE: 6 of 8
APPROVED: December 18, 2000
EFFECTIVE DATE: December 18, 2000
POLICY DESCRIPTION: Vendor Relations
REPLACES POLICY DATED: May 1, 2000
RETIRED:
REFERENCE NUMBER: MM.002
well as others outside the Company to participate in a charitable organization’s fundraising
efforts. If the chief executive of the relevant component approves supporting a charitable
organization including encouraging others outside the facility to become involved, the
individual(s) designated by the chief executive of the relevant component to seek others’ support
must send written invitations to participate to a diverse audience, comprised of vendors and nonvendors (e.g., community businesses). The written invitation must include a statement that any
failure or refusal to contribute will not affect the recipient’s business relationship with the
Company. Any funds a vendor or other non-Company entity chooses to provide the charitable
organization must be provided directly from the vendor to the charitable organization (i.e., not
through a Company-affiliated facility or Company colleague).
Examples of the proper way to address fundraising by charitable organizations includes:


The local chapter of the American Heart Association is having its annual fundraising dinner.
A Company hospital is invited to purchase 10 tickets (i.e., a table) at the dinner and is
encouraged to invite other companies in the community to do the same. The hospital
purchases the 10 tickets and distributes them to hospital colleagues. An individual authorized
by the CEO sends a letter to vendors and other businesses in the community encouraging
them to support the American Heart Association dinner and provides the recipients with a
contact number at the Association if they are interested in being involved.
A department director at a Company hospital is a member of the Board of Directors of the
local council of the Girl Scouts of America and wants to solicit contributions in its annual
fundraising drive. The department director would like to use Company letterhead and a
limited amount of administrative support to send a letter to community businesses seeking
support for the Girls Scouts’ fundraiser. The department director is granted approval by the
hospital CEO to use the facility’s letterhead and a limited amount of facility administrative
support to do so.
C. Documentation Requirements
A Company-affiliated facility accepting funds from a vendor for an educational event must utilize
the Request for Educational Grant from a Vendor form (see Attachment) to request the funding
from the vendor. The completed form must have the proper approvals and must be maintained
with the other supporting documentation for the event kept at the facility.
D. Business Courtesies from Vendors
1. Vendor-Sponsored Entertainment. Consistent with the limits in the Company’s
Entertainment Policy, EC.006, a vendor may provide to Company colleagues entertainment
12/2000
DEPARTMENT: Materials Management
PAGE: 7 of 8
APPROVED: December 18, 2000
EFFECTIVE DATE: December 18, 2000
POLICY DESCRIPTION: Vendor Relations
REPLACES POLICY DATED: May 1, 2000
RETIRED:
REFERENCE NUMBER: MM.002
that does not exceed $100 in value per event at an infrequent rate (generally meaning it does
not exceed 4 times per year).
2. Gifts. Consistent with the Company Code of Conduct and Business Courtesies Policy,
EC.005, a vendor may provide to Company colleagues gifts that do not exceed a total of $50
in any one year.
3. Vendor Promotional Training. Consistent with the Company’s Vendor Promotional
Training Policy, EC.007, vendors may provide training regarding new products or services it
wishes to promote and associated travel, meal and entertainment costs provided the
recipient’s supervisor and the facility Ethics and Compliance Officer determine that the
substantive portions of such event outweigh any entertainment portions.
E. Accounting Requirements for Vendor-Sponsored Events
The Medicare rules do not provide adequate guidance regarding the specific treatment of funds
provided by a vendor for educational programs for national contracts. Accordingly, the Company
has adopted the most conservative approach and treats such funds as discounts. For individual
facilities receiving vendor funds for educational programs, the amount received must be offset
against the cost of supplies purchased from the applicable vendor by the particular facility. Since
the funds are provided by the vendors only to the extent the facilities conduct educational
programs related to the vendor’s products, those facilities that take advantage of these funds will,
in effect, receive a higher percentage discount on the products they purchased from the vendor.
If the educational program is sponsored by the corporate office (or similar corporate subsidiary
providing management or support services) and is regional or national in scope, the amount
received by the corporate office (or similar corporate subsidiary) will be allocated to all facilities
with other rebates received from that vendor and will be similarly offset against the cost of
supplies purchased from the applicable vendor. As stated previously, the subject matter
addressed in the educational program funded in whole or part by a vendor must relate to the
product it provides to the facility.
The facility must keep the funds obtained for specific purposes segregated in separate general
ledger accounts to maintain adequate control of the receipt and use of the funds. All transactions
should be supported by adequate documentation. Supporting documentation for withdrawals and
expenditures should document the proper approvals and should also clearly document that the
funds were used for the purpose intended.
12/2000
DEPARTMENT: Materials Management
PAGE: 8 of 8
APPROVED: December 18, 2000
EFFECTIVE DATE: December 18, 2000
POLICY DESCRIPTION: Vendor Relations
REPLACES POLICY DATED: May 1, 2000
RETIRED:
REFERENCE NUMBER: MM.002
Those activities that are not related to patient care, as defined by Medicare, should be segregated
in separate accounts to facilitate proper exclusion for Medicare cost reporting purposes. The
following are some examples of activities which are not allowable for Medicare reporting
purposes: charitable events and fund raising activities, health fairs, community education,
educational events for non-employees, alcoholic beverages, gifts and entertainment. The facility
should consult the appropriate Reimbursement Department representative regarding specific
items. Expenses that are not allowable for Medicare reporting purposes will be excluded from
cost reported to Medicare even if funds were received from vendors under this policy relating to
these activities. For Medicare reporting purposes, the funds received will be used to reduce the
cost of supplies purchased from the vendor, the same as discounts and rebates.
All assets, liabilities, revenues (i.e., grant money) and expenses must be properly segregated and
reflected in the accounting records of the facility. Revenues received for activities covered by this
policy should not be used as a reduction of expense, but reflected in “other revenue –
rebates/educational grants.”
REFERENCES:
Company Code of Conduct, November 1, 2000
Business Courtesies Policy, EC.005
Entertainment Policy, EC.006
Vendor Promotional Training Policy, EC.007
Physician Access to the Internet within Company Facilities Policy, EC.013
Non-Employed Physician Education Expenses Policy, LL.010
Providing Free and/or Discounted Training and Equipment to Referral Sources Policy, LL.011
12/2000
REQUEST FOR EDUCATIONAL GRANT
FROM A VENDOR
Instructions:
1. This form is to be used to request funding from a vendor pursuant to the Company’s Vendor Relations
Policy, MM.002.
2. The requestor is to fill out the form, get the approval of his/her department head and the Facility Ethics
and Compliance Officer, and forward the form and attachments to the vendor for approval.
3. Requests may not be made for multiple years of funding
4. The completed form must be maintained at the facility with other supporting documentation for the
particular event.
FACILITY INFORMATION
Facility Legal Name:
Tax ID #:
Department:
Contact person (with address/phone number and e-mail address):
VENDOR INFORMATION
Vendor:
Contract Number (if applicable):
Contract Date (if applicable):
Contracted Products (if applicable):
Vendor contact person (with address/phone number and e-mail address):
Funding specified in the contract (if applicable):
PROGRAM/EVENT INFORMATION
Title/Subject matter:
Description of Program:
Attachment to MM.002
Purpose/Benefit:
Amount of funding requested:
Other resources to be provided by or paid for by Vendor:
(Attach a detailed description of the Program and attach a budget for the entire program with specific
information regarding how the vendor funding will be used.)
NOTICE: Any funding received must be reported as “other revenue – rebates/educational
grants” received from a Vendor. Coordination with your Division Reimbursement
Director is required to ensure such funds are properly reflected in the Medicare cost report
as a discount against the cost of the products purchased from that vendor.
APPROVALS
Facility Approval:
Vendor Approval:
Name: __________________________
Department Head
By: _______________________
Date: ___________________________
Name: _____________________
Name: __________________________
Ethics and Compliance Officer
Title: ______________________
Date: ______________________
Date: ___________________________
Retain at least one copy of signed form in facility files and provide one to the vendor representative.
2
Attachment to MM.002