ADVOCATE HEALTH CARE GUIDELINES FOR VENDOR RELATIONS

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1 ADVOCATE HEALTH CARE GUIDELINES FOR VENDOR RELATIONS PURPOSE: To provide guidelines for ethical conduct to all Advocate Health Care associates and physicians, as well as individuals and organizations who provide goods, services, or tangible support to Advocate Health Care. RATIONALE: A clearly articulated mission, a set of defined values, and an overarching philosophy guide Advocate Health Care. We are committed to moral consistency and its fundamental demand that our internal and external relationships unambiguously respect the character of our mission, the substance of our philosophy, and the specific content of our values. We believe that the integrity of our faith-based enterprise rests upon our willingness and ability to conduct our affairs accordingly and to insist that those who would associate with us acknowledge and incorporate our preferred ethical standards in their dealings with us. Accordingly, these guidelines lay out a set of internal expectations and provide specific directions for those who wish to work with us in the fulfillment of our mission. SCOPE: These guidelines are meant to be comprehensive in scope. They apply to all Advocate Health Care directors and officers, management, physicians and associated staff, volunteers, consultants, and any other agents as well as third party vendors and their agents.

2 GENERAL GUIDELINES FOR ADVOCATE ASSOCIATES: 1. Advocate Health Care promotes ethical behavior by informing associates of these Guidelines upon employment and by reinforcing awareness through regular reminders. 2. The management team of Advocate Health Care ensures compliance with these Guidelines and, if necessary, exercises disciplinary action in the event of improper conduct. 3. These Guidelines assume compliance with Advocate Health Care s Code of Business Conduct Policy ( ), with special though not exclusive reference to kickbacks, personal loans, collusion, bribes, conflicts of interest, special consideration, or other improper conduct. 4. Advocate Health Care personnel and vendors who have an actual or perceived conflict of interest shall not enter into negotiations resulting in purchases. A conflict of interest exists whenever an individual personally can gain, directly or indirectly, from the outcomes of a business transaction. 5. Potential Conflicts of Interest are to be reported to the Vice President, Internal Audit and Compliance Officer, or to the system vice president responsible for contracting and purchasing the involved goods or services, who will assist in selecting an alternative associate or group to facilitate the business transaction (see Advocate Conflict of Interest Policy [ ]). To avoid conflicts of interest, staff involved in contracting and purchasing shall provide guidance, promote vendor competition, encourage vendor diversity, and support other contracting/purchasing programs and policies that will result in contractual compliance. All departments are to seek the involvement of designated system contracting staff in the establishment of specifications, user requirements, negotiations, selection, and purchase of all supplies and equipment. 6. Advocate Health Care s proprietary information shall be disclosed solely on a need-to-know basis to prevent unfair competitive advantage and/or other consequences detrimental to Advocate Health Care. All associates are ethically obligated to protect certain confidential and proprietary business information. 2

3 7. Association with vendors or their representatives at modest luncheons or dinners is appropriate if actual work is done with the vendor during the meal, such events are infrequent, and they are pre-approved by the associate s supervisor. Travel to business organization meetings may be acceptable if the specific business reason for the occasion was approved prior to the event by the appropriate site President/Chief Executive or system Vice President, and the associate is free of any obligation to the vendor. In such instances, associates should pay for their own travel and entertainment expenses and be reimbursed by Advocate Health Care in accordance with the Advocate Health Care Travel and Business Related Expenses Policy ( ). 8. Site visits to vendor headquarters or showcase sites in order to gain firsthand knowledge about a vendor and its products and services are an acceptable business practice. The President/Chief Executive of the affected site or the appropriate system Vice President must be fully informed about the visit, its purpose, and intended benefit to Advocate, and must approve the visit in advance. Operating units scheduling site visits shall arrange for appropriate system contracting representatives to attend or be closely associated with any project. Vendors may not pay for Advocate associates travel or lodging expenses or any other expenses, except modest business meals associated with such site visits. Associates should pay for their own travel and entertainment expenses and be reimbursed by Advocate Health Care in accordance with the Advocate Health Care Travel and Business Related Expenses Policy( ). 9. Associates may not accept vendors gifts, favors, services, entertainment (e.g., sporting events) or other items of value greater than $250. An associate must return any gift received from a vendor that exceeds the value of $250. Vendor promotional items of relatively little value, i.e., hats, pencils, pens, etc. may be accepted. Applicable reporting requirements under the Code of Business Conduct policy ( ) should also be met. (All Advocate Health Care sponsored activities and events are excluded from the foregoing limitations and reporting requirements.) 10. Vendors should be advised of the opportunity to make charitable donations to Advocate Health Care through the Advocate Charitable Foundation in lieu of gifts to associates. 3

4 SPECIFIC GUIDELINES FOR THOSE ENGAGED IN CONTRACTING/PURCHASING FOR ADVOCATE: 1. Those who contract and purchase goods and services on behalf of Advocate Health Care occupy special positions of responsibility and trust. They have a particular responsibility to avoid conflicts of interest and demonstrate respect for the vendors and service providers with whom they work. They should: a) Give first consideration to the mission of Advocate Health Care. b) Strive to achieve maximum benefit from available resources in purchasing equipment, supplies, or services. c) Obtain the most suitable product and/or service at the lowest overall cost considering vendor performance, contracts, discounts, delivery schedules, compliance, standardization, and other applicable factors. d) Have discretion to reveal Advocate s purchasing data to a vendor, but not to reveal another vendor s pricing quote. e) Conduct professional transactions in a way that complies with applicable legal requirements and ethical standards while achieving equitable outcomes for all parties. f) Negotiate reasonable and mutually agreeable resolution of a dispute with a vendor, and/or be willing to submit a major dispute to the Vice President of Supply Chain Management, the Vice President of Construction, or the Senior Vice President of Information Systems, and/or to the Advocate General Counsel. 2. In addition, because of the special sensitivity of their activities, Advocate associates who work in Supply Chain Management should refrain from accepting vendors offers of gifts, favors, services, or entertainment (e.g., sporting events). However, gifts of nominal value (less than $100 per instance, at a rate of no more than two times annually from all sources combined) such as fruit baskets and candy given during holidays may be accepted provided they are shared with the recipient s entire staff. An associate in Supply Chain Management must return any gift received from a vendor that exceeds the nominal value of $100. Vendor promotional items of relatively little value, i.e., hats, pencils, pens, etc. may be accepted. Applicable reporting requirements under the Advocate Code of Business Conduct Policy ( ) should also be met. (All Advocate Health Care sponsored activities and events are excluded from the foregoing limitations and reporting requirements.) 4

5 SPECIFIC GUIDELINES FOR THOSE WHO REPRESENT ADVOCATE IN PHILANTHROPIC ACTIVITIES: Advocate Charitable Foundation associates and others engaged in Advocate s philanthropic activities work to maximize gift income and assure the continuation and growth of philanthropic support. They have a particular responsibility to avoid the reality or suggestion of quid pro quo arrangements in their contacts with those who may be vendors as well as benefactors. They should: 1. Avoid making philanthropic contacts with vendors sales representatives, or contact a sales representative only as a source of information about which person or department to approach. 2. Avoid any suggestion that doing business with Advocate is contingent on the promise or delivery of a charitable gift to the Foundation or another Advocate entity. 3. Demonstrate respect for corporate donors as partners by making coordinated approaches for gifts whenever possible, thus minimizing the number of discrete requests to the same donor. 5

6 SPECIFIC GUIDELINES FOR THOSE WHO REPRESENT ADVOCATE IN MEDICAL EDUCATION (CME or GME): Advocate associates and physicians who arrange and carry out the activities of medical education promote excellence in patient care and support physicians in maintaining and enhancing their skills. They have a particular responsibility to maintain the integrity of educational content and avoid undue influence by those who provide commercial support for educational activities. They should: 1. Have discretion to seek and/or accept commercial support for educational programs so long as the support provided conforms to all applicable standards of accrediting and licensing bodies and professional organizations, and to any additional standards that Advocate may adopt for the oversight of medical education. 2. Ensure that commercial interests do not compromise the integrity of educational content, e.g., by exercising control or undue influence over the choice of program topics, speakers, or venues. 3. Give preference to forms of external support that permit maximum flexibility in programming (e.g., block grants). 4. Recognize commercial support openly, both to disclose the existence of such support and to express appreciation to Advocate s educational partners. 5. Avoid forms of acknowledgement that wrongly suggest commercial control over aspects of the educational program itself, or tend to portray the program as a preliminary event to a sales or marketing effort. 6. Be free to accept meals and refreshments as legitimate forms of external support when provided in conformity with ethical guidelines established by accrediting and licensing bodies and professional organizations. 6

7 SPECIFIC GUIDELINES FOR THOSE WHO SUPPORT OR ENGAGE IN RESEARCH WITHIN ADVOCATE: Advocate associates and physicians who participate in the research enterprise seek to increase medical knowledge in the service of patients well-being and to enhance Advocate s reputation for clinical excellence. They have a particular responsibility to assure that human research subjects are adequately protected and to avoid conflicts of interest. They should: 1. Conduct all research in conformity with the Guidelines for the Conduct of Research within Advocate Health Care, especially provisions concerning scientific misconduct. 2. Assess possible participation in any post-marketing (Phase IV) study to ensure that the project would be legitimate research rather than a form of product marketing (see Advocate s Ethics Advisory: Phase IV Research ). 3. Consult Advocate s Institutional Review Board (IRB) when there is any doubt whether a project is human subject research requiring IRB approval or is another endeavor that does not qualify as human subject research. 7

8 ADVOCATE GUIDELINES FOR VENDORS: Advocate Health Care requires all vendors to adhere to Advocate s Code of Business Conduct as described in these Guidelines. Advocate Health Care strives to exercise the highest standards of conduct in dealing with vendors and expects its vendors to use these same high standards when conducting business with Advocate. Advocate Health Care reserves the right to revise its Code of Business Conduct and these Guidelines from time to time in its usual course of business. 1. All contracts and dealings between Advocate Health Care and its vendors shall be conducted in a manner that avoids the violation of any applicable laws, rules, or regulations, and the appearance of impropriety. 2. Selection of medical supply, equipment, drug, and food vendors is the principal responsibility of the Supply Chain Management Department. Construction vendors are selected by the Construction Department. Information systems and telecommunications vendors are selected by the Information Systems Department. Vendors will be selected by criteria that focus upon, but are not limited to, such factors as financial responsibility, organizational integrity, quality of product and/or services, technical competence, customer satisfaction, and proximity of location to Advocate Health Care. 3. Supply vendors will not request that an Advocate associate, other than an authorized member of the Supply Chain Management, Construction, or Information Systems Departments, sign any agreement or contract. Any purchased service agreement should be signed by the appropriate system vice president or site president/chief executive. Agreements or contracts that are signed by an unauthorized agent will not be enforced. 4. Vendors are responsible for obtaining and maintaining any and all licenses, permits, and certificates as required by all applicable federal, state, and local laws, rules, and regulations. 5. Vendors may not give anything of significant value to any Advocate Health Care associate, nor may any Advocate associate accept anything of value from vendors or potential vendors. In particular, Advocate associates who work in Supply Chain Management may receive gifts of no more than a nominal value of $100, and they may accept no more than two such gifts annually from all sources combined. All other associates, including managers, are subject to the limitations and reporting requirements set forth in the Advocate Code of Business Conduct Policy ( ). 6. Vendors will not exhibit any supplies, equipment, or pharmaceuticals to Advocate or its staff in public areas without written approval by the Materials Management or Pharmacy departments of the applicable facilities. Pharmaceutical samples are to be dispensed to physicians only. Vendors who sponsor educational programs may 8

9 exhibit in conjunction with those programs, with approval from and within parameters established by the office or group overseeing the program. 7. Vendor representatives may not engage in patient care activities. They must follow all established site guidelines for contact with patients, physicians, and staff members in patient care relationships. 8. In line with Advocate Health Care s support of affirmative action and minority programs in vendor selection, all vendors will afford minority and women-owned businesses equal access to, and proactive consideration for, contracting opportunities. 9. Advocate Health Care will pay a vendor only the negotiated and accurate price of a product or service. Vendors shall accurately price all products sold to Advocate Health Care. 10. Vendors shall conduct regular business reviews with Advocate to assure timely resolution of invoice discrepancies. Advocate Health Care will not pay vendors any late charges unless explicitly and contractually defined, and will not accept invoices for payment beyond one year after goods or services have been received. 11. Vendors who do not comply with Advocate Health Care s Code of Business Conduct in their dealings with Advocate Health Care will jeopardize their opportunity to conduct business with Advocate. 12. Vendors will use or disclose all patient and/or business information received from or on behalf of Advocate in compliance with all applicable federal, state and local laws, rules, and regulations, and the terms and conditions of all purchase and/or service contracts with Advocate Health Care. 13. Except for construction projects, vendors will observe the general hours of operation at each facility unless prior arrangements are made with the facility s Materials Management Department. 14. Upon each visit, vendors other than those involved in construction projects are required to check in through the Materials Management Department, Facilities Department, or Information Systems/Telecommunications Department at the applicable facility and wear the name badge given by Advocate to identify themselves while at the facility. After completing a visit, the vendor must return to the Materials Management Department to return the name badge and sign out. 15. The Advocate Charitable Foundation, Advocate medical education programs (or other educational programs), or Advocate sites may approach vendors with requests for charitable gifts or program support. Vendors may also initiate contact with the Advocate Charitable Foundation or educational programs for the purpose of offering charitable gifts or program support. While such support is welcome, a vendor s participation or non-participation in philanthropy or program support will not 9

10 influence Advocate s purchasing or contracting decisions. Vendors who wish to offer charitable support for the first time are encouraged to contact the Advocate Charitable Foundation. 16. It is the responsibility of vendors who sponsor funded research, including postmarketing (Phase IV) studies, to assure the essential integrity of research design. Sponsors should ensure that prospective investigators seek and obtain approval of all studies from the Advocate Institutional Review Board. 17. Vendors sponsoring research share with investigators a responsibility to anticipate potential conflicts of interest and should act to avoid or minimize such conflicts. 10

11 RESOURCES: 1. General The Supply Chain Management, Construction, and Information Systems Departments, as well as the Advocate Health Care Business Conduct Committee and site Business Conduct Committees, are resources that should be contacted with questions or to discuss any matter that needs further clarification. The Advocate Health Care Chief Ethics Officer, Chief Legal Officer, Chief Academic Officer, and Chief Development Officer are also available for consultation. 2. Education and Research A. Continuing Education, including CME Accreditation Council for Continuing Medical Education Provides continuing medical education credits for the AMA Physician s Recognition Award. Illinois Nurses Association (INA) Continuing Education Approver Unit American Nurses Credentialing Center s Commission on Accreditation. INA applications require disclosure of all financial arrangements and conflict of interest. INA/ANCC Commission on Accreditation refers only to its nursing continuing education activities and does not imply approval or endorsement of any commercial products. Illinois Council of Health-System Pharmacists The Illinois Council of Health-System Pharmacists is approved by the American Council on Pharmaceutical Education and requires conflict of interest statements and disclosure of relationships with vendors. The Association of Professional Chaplains The Association of Professional Chaplains requires complete detail regarding speakers, funding sources and detail of the content. Illinois Department of Regulation for Social Workers The Illinois Department of Regulation for Social Workers requires complete detail on the activity, disclosure of speakers, funding sources and content. 11

12 Other Other professional organizations accreditation standards are implemented when a professional group requests continuing education credits for an event. B. Graduate Medical Education In graduate medical education, the following codes of conduct from the American Medical Association provide guidance: Codes of Conduct Professional Conduct Principles of Medical Ethics, June 2001 Policy E-4.03 Billing for Housestaff and Student Services Policy E-8.03 Conflicts of Interest: Guidelines The American Council on Graduate Medical Education s Core Curriculum Project includes Ethics: Ethical Issues that Affect GME and Medical Practice. C. Research Beyond the Institutional Review Board s activities, at Advocate each application is reviewed by the Sponsored Programs Manager in Finance for conflict of interest and vendor support. The Legal Services Department reviews for regulatory compliance. Internal Audit manages the file on researcher disclosures for compliance as part of Business Conduct. Please Note: Advocate Health Care and its primary subsidiary corporations, Advocate Health and Hospitals Corporation and Advocate North Side Health Network, are not-for-profit Illinois corporations and federal tax-exempt entities. These corporations are exempt from Illinois sales and use taxes. Advocate Health Care Network also has other subsidiaries that are for-profit Illinois corporations, subject to sales and use tax. Proof of sales and use tax exemption may be obtained through the Supply Chain Management, Construction, or Information Systems Department. Other legal issues related to the tax status of these corporations are addressed in the Advocate Code of Business Conduct. Advocate Health Care will report all discounts, rebates, etc. in compliance with all applicable federal and state laws, rules, and regulations. 12

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