Model Code of Conduct for Laboratory Sales and Marketing

Along with billing and coding, sales and marketing operations are the most common source of kickback, false billing, and other fraud and abuse enforcement actions against medical labs. The key to reducing liability risk is to educate your sales and marketing employees of the compliance implications of their practices and develop clear and strict policies, procedures, and guidelines to follow when carrying out their duties. While there should also be policies for specific aspects and arrangements, such as gifts, free supplies, discounts, etc., the starting point is to establish a general code of conduct setting out broad parameters and ground rules for compliance. Here’s a template you can tailor for your own lab’s use according to your individual staffing, business, and other facilities and arrangements. 

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Rules of Conduct for Sales and Marketing

All ABC Laboratories sales and marketing personnel are expected to perform their duties with honesty and integrity and strict regard for ethics and legal requirements. That obligation includes adherence to the following rules of conduct:

1. ALWAYS TELL THE TRUTH

In the sales and marketing context, telling the truth goes beyond simply providing an accurate description of the lab tests and services being provided and offered. It involves not concealing or seeking to conceal any problems related to those tests and services. That means clearly explaining what a test can and cannot do and never exaggerating, misleading, or misrepresenting the capabilities of a test or the benefits of a service.

2. STAY ON LABEL

When selling or marketing a test or kit that has been approved by the U.S. Food and Drug Administration, only sell or market in conformance with the label statements about the product. If a laboratory-developed test is being performed, make certain that all involved understand the rules and regulations related to performing and billing that test and never sell or market such a test for a use or purpose that is not substantiated through the results of a properly performed study or that is not based on information provided in an objective journal published by a third party.

3. DISCLOSE PROBLEMS WITH A TEST

Disclose any problems with a particular test or service as soon as the problems are substantiated. If the problem appears to have legal consequences, ABC Laboratories should engage knowledgeable counsel and disclose information based on the advice of that counsel. However, you should not use counsel review or any other circumstance as an excuse to delay or avoid disclosure. Most importantly, if a laboratory test is not performing properly, stop selling the test and seek to ensure that the test is not used or billed for unless and until the problem is adequately addressed. If the problem persists, ABC Laboratories must ensure that it continues to communicate the status of the test as appropriate.

4. DON’T BUY OR PAY FOR REFERRALS

Paying for or offering to pay for referrals of lab tests provided to beneficiaries of Medicare, Medicaid, and other federal health programs is a felony. It is also against the law in many states, even when the payor is a private insurer. Liability can attach even if you don’t actually offer or pay money for the referral. Providing or offering anything else of value, including gifts, favors, free items or services, etc., for a referral is also illegal. Furthermore, you must not pay or offer to pay anyone else to arrange or recommend referrals to the laboratory.

5. DON’T EMPHASIZE HOW MUCH A PHYSICIAN CAN EARN FOR USING OUR LAB

Recognize that from a legal perspective, there’s a big difference between discussing how much money physicians can save the healthcare system via the effective and efficient use of laboratory services and how much money physicians can earn as a result of ordering lab services from ABC Laboratories or any other particular lab. The rule of thumb is to refrain from overemphasizing economic benefits to physicians to whom you are seeking to sell or market. This is particularly important when discussing special pricing or discounts with physicians or other referral sources.

6. DON’T SEEK TO STEER ORDERS OF LAB TESTS

Recognize and be careful to avoid the risk of seeking to influence or steer the tests physicians order via the use of requisition forms, test directories, panel and profile offerings, and online test ordering software. Such materials must disclose the tests that are included in those offerings, while making it clear that physicians can order individual tests from the offering without ordering the other tests and how to do so.