Attention ADA Member:

ADA has received several member queries regarding the potential for legal liability for audiologists who participate in promotional incentive programs whereby they purchase hearing aids from a hearing aid manufacturer or distributor in exchange for monetary compensation in the form of paid conference registration fees.

Given both the significance and time-sensitive nature of this issue for ADA members, ADA sought a legal review on this issue. ADA’s attorney has reviewed sales promotions offering audiologists paid conference registrations in exchange for hearing aid purchases that have been publicized recently in public forums and offers the following general guidance:

1. Federal law defines “remuneration” as anything of value given in return for referrals. Accepting the value of a conference registration from a hearing aid manufacturer or distributor would qualify as remuneration in the form of a monetary incentive.
2. Therefore, hearing aids purchased in exchange for a conference registration are essentially tainted under the Federal Anti-Kickback Statute (AKS).
   1. An audiologist would be at risk for prosecution under the False Claims Act for violating the AKS if they purchase the hearing aids required for the incentive, participate in the incentive (accept the free conference registration, underwritten by the manufacturer or distributor in exchange for the hearing aid purchase), and then dispense one of those hearing aids to a patient who was reimbursed, in whole or in part, by Medicare or Medicaid.
   2. Additionally, some State laws extend AKS concepts to private payors.
   3. Finally, private payor contracts may also incorporate AKS concepts and prohibit such arrangements.

Thus, submitting a claim for the fitting of the hearing aids purchased under this promotional scheme to any health care benefit could trigger liability. Audiologists who participate in such a promotion would need to be certain not to dispense the tainted hearing aids to Medicare/Medicaid patients, or to any other patient whose benefit plan contractually prohibits activity mirroring AKS prohibitions. While tracking which hearing aids are dispensed to which patients is certainly possible, it could be incredibly difficult to track, and even one mistake could be costly.

3. Even in self-pay scenarios, there are additional ethical implications of participating in such promotions. The audiologist would need to ensure that their clinical judgment is not influenced by their business need to accept the promotion or fit the hearing aids purchased through the promotion.
4. Some states have Sunshine Laws or other similar disclosure laws that require healthcare professionals to report any benefits they receive from manufacturers. Audiologists accepting the promotion should check their state law to determine whether it has such requirements, and if so, must make arrangements to report properly.

The Bottom Line: Promotions that offer monetary incentives, such as paid conference fees, in exchange for hearing aid purchases pose significant risks for civil and criminal liability for audiologists. Audiologists should contact their attorney for advice related to their specific situation before proceeding.

4875-8774-4107, v.1

Disclaimer: The previous information is for general informational purposes only. It does not, and is not intended to, constitute legal advice or create an attorney-client relationship between the reader and the contributor. Readers should contact their attorney to obtain advice with respect to any particular legal matter.