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201 Cards in this Set

  • Front
  • Back
  • 3rd side (hint)
What are the responsibilities to being in private practice
stay in business for your patients
provide patient centric services
take good care of your employees
invest wisely
watch out for the potholes
make a profit
Market Economy
prices are set by supply and demand
value of information goods and services is determined by free trade
Economic Cycle
Periods of expansion and contractions
booms and recession
2 consecutive quarters of negative GDP
last between 6-16 months
economic indicators
gross domestic product
national debt
other indicators
the value of all goods and services produced in a given country in a given period of time
generally figured by using either income or expenditures (income most common)
changes in GDP up or down effect the stock market
bad economy (low gdp) means ower profits for companies and lower stock prices
negative gdp growth is a factor in recession
national debt
total amount of debt the federal government has on its books
high national debt
-high taxes, reduced benefits
-interest rates/inflation
-weak dollar
Where to get money for the business
-business defensive assets
-private savings funds
-loan sharks
-credit card loans
-hearing aid manufacturer loans
rate at which the general level of prices for goods and services is rising and subsequently purchasing power is falling
-measure of the average change over time in the price paid by urban households for a set of consume goods and services
other economic indicators
gas prices
retail sales growth
pending home sales
Reasons small businesses fail
lack of experience
insufficient capital
poor location
poor inventory management
over investment in fixed assets
poor credit arrangements
personal use of business funds
unexpected growth
low sales
Why have formal business plans
set specific objectives for managers
share strategies, actions and specifics with spouse, partner, or sig others
deal with displacement
decide need to lease a new space
hire new people
need new assets
share and explain your objectives with your management team
select business alliances
deal with professionals
selling your business
valuation of the business
creating a new business
seeking investment
seeking lenders
growing your existing business
Impact of Flexner Report and Medical Professionalization
-Med education standardized
-physicians became professionals
-emergence of 3rd party payment
-employment based group insurance
-outcomes improving
Hill-Burton act
-build/expand hospitals
-expansion of employment-based coverage
-improved outcomes
-retrospective reimbursement - care delivered then provider bills
-provider determination of prices
-provider automonomy in service selection
-price increases continue
-medicare and medicaid
-rapid growth of provider sector
-increased bredth of services
-rapid escalation of costs and prices
-early HMO movement
-commitment ot cost containment by market forces (competition)
-prospective payment by medicare
-discount plans
-PPOs, EPOs, etc
-medicare set what it would pay for given services
-beginning of managed care
-provider response: dislike
-patient reaction: prefer providers make decisions, not insurance company
Payer-based managed care
„ Externally Proctored Care
„ Extension of Utilization Review
„ Concurrent Review
„ Guidelines
„ Emphasis on Costs/Prices
Provider-based Managed Care
„ Peer-proctored Care
„ Concurrent Review
„ Outlier Analysis and Variation
RR d ti eduction
„ Emphasis on Costs/Prices
„ Payment for Population
„ Payment for Outcomes/Health Status
„ Measurement at Group Level
„ Transfer of Risk to Providers
„ Rand Health Insurance Experiment
„ How does cost-sharing or membership in an HMO
affect use of health care services compared to free
„ How How does cost does cost-sharing sharing affect appropriateness of affect appropriateness of
care received?
„What are the consequences for health?
„ People will respond to changes in out-of-pocket
„We know relatively little about the impact of
Health savings accounts
„ High-deductible health plans
„ Consumer-directed health plans
„ Choice: Medicare Part D and Florida Medicaid Reform
„ Emphasis on information
„ Rewarding healthy behaviors
„ Private health insurance and Medicaid
Coding Systems
 Current Procedural Terminology (CPT)
 Example: 92557 (Comprehensive audiometry)
 International Classification of Diseases (ICD-9-CM)
 3, 4 or 5 digit codes to describe diseases/diagnoses
 Example: 389.15 (SNHL, unilateral)
 Healthcare Common Procedure Coding System
 Hearing aids, dispensing fees, supplies
 Bundling vs unbundling/itemization
 Example: V5160 (dispensing fee, binaural)
CPT codes
Owned by the American Medical Association
five-digit codes, descriptions, and other data only are copyright 2007 by
the American Medical Association (AMA). All Rights Reserved. No fee
schedules, basic units, relative values or related listings are included in
is a trademark of the American Medical Association.
 AMA determines codes (CPT Editorial Panel
or the CPT HCPAC)
 AMA AMA determines the valuation (Relative Value determines the valuation (Relative Value
Services Update Committee-RUC or the RUC
 CMS accepts or adjusts recommended values
Payments are determined by resource costs
needed to provide them
 Physician Physician work (time skill physical/mental effort work (time, skill, physical/mental effort,
 52% of total relative value (RVU)
 Practice expense (staff, rent, expenses)
 44% of the total RVU
 Professional liability (malpractice)
 4% of the total RVU
 -22 Unusual Procedural Services
 Utilized when procedure is greater
than that typ y q ypically required
 Someone else performed the procedure, you are
doing the interpretation AND writing the report
TC: Technical Component
You only performed the test
 Interpreted by another provider such as an ENT,
 Procedure is partially reduced or eliminated
-59 Distinct procedural service
 -76 Procedure was performed more than one
time time on the same date of service on the same date of service
 Ototoxicity monitoring
 Glycerol or urea test
 Many commercial payors base their
reimbursement fees on the MPFS
 Need Need physician referral for a medically physician referral for a medically
necessary reason (until we obtain direct
 Upon direct access, medical necessity is still
required in order to bill Medicare
Medical Necessity:
 Recommendations must be based on medical
necessity, especially for Medicare:
 NN i t ew signs or symptoms
 Changes in condition based on diagnosis or patient
 Occurrence of unrelated treatment that can affect hearing
and/or balance (chemotherapy)
 Document status resulting from related treatment (e.g.,
ear surgery, medication for OME)
 May be included in the Local Coverage Determination (LCD)
Medicare Eligibility
 65 years or older
 Some who are on disability (SSI and SSID)
 Currently Currently a 2 year wait from date of disability to a 2 year wait from date of disability to
Medicare coverage
 Blind
 Those with End Stage Renal Disease
Medicare Categories:
 Part A
 Inpatient hospital
 Audiologic Audiologic services are cov services are covered ered when billed by hospital when billed by hospital
 Those on disability may only be on this part of
 Hospice
 Nursing Care
 Home Health Care
Medicare Part B:
 Outpatient Hospital Services
 Most audiologic billed services
 ENT offices
 Private Practice
 Other
 Ambulatory Surgery Services
 Home Health
 Lab
Medicare Part C
 PPO’s and HMO’s that have the “extra’s”:
 Annual audiologic assessments
 Hearing Hearing aid benefit aid benefit
 Vision benefits
Medicare Part D
 Drug benefit where applicable
 Joint federal/state agencies
 May be fee-for-service, HMOs, etc.
 Coverage Coverage and reimbursement varies from and reimbursement varies from
state to state
 Income based
 Children’s Health Insurance Program
 Allows for coverage up until age 19
 Hearing aids are covered for children, not
necessarily adults
ICD-9 Description
 Three to five digit code
 5 digit code is the most specific and
 Avoid those that end in “0”
 ICD-9 is for disease
 “Normal” is not a disease
 Code by signs, symptoms, the
reason the patient presented
 Patient’s acknowledgement their fiscal
responsibility for fees not paid by their
insurance insurance company company
 Have patient sign before providing services
 Time of education
 Itemize CPT codes to be performed
 Original retained in chart, copy to patient
 Not the same as an ABN
 Completed Completed on Medicare recipients on Medicare recipients
 May be used if patient does not have a
referral and desires services
 If Medicare, will need voluntary ABN as it will
be non-covered without the referral
 A chart is a legal document
 Can be subpoenaed
 Provides continuity of care between health care
proff i l essionals
 Third party payor requirement
 Quality Assessment/Peer Review
 Need to explain and interpret audiogram
 Don’t assume anyone other than an audiologist
understands what it means
 Six elements
 History
 Include Include chief complaints chief complaints
 What did you do?
 Findings?
 Recommendations?
 Original signature
 Date of evaluation
 May need to include date of dictation
At – Will
Under an at-will employment relationship, an employee may
be terminated for any reason or no reason barring any
violation of the law. This relationship is for an indefinite term.
Employers by their actions, policy manuals, procedures
or words can change an “at-will” employee
relationship to a “just cause” relationship.
Just Cause
Employment for a definite term of years will establish a “just
cause” employment relationship requiring the employer to
have “good cause” to terminate the employee. This
relationship is the opposite of an “at-will” employment
Non – Compete
– Must be reasonable –courts will generally use industry standards or
measure the term based on how long it may take to replace an
employee or for a company to reestablish relationships with
– Rarely will the courts uphold terms beyond a year absent
extraordinary circumstances although two and five year terms have
been upheld
– Businesses have compensated former employees during the term
of the non-compete to strengthen the duration of the non-compete
– Limits the ability of an employee to work for a competitor
for a set period of time after leaving employment
– Often require that an employee refrain from calling on or
soliciting business from the customers of the employer
or seeking to hire away employees of the former
Psychological Contract
An unwritten expectation between
employees and employers regarding the
nature of their work relationship that is, to
some degree, based upon past experiences
of both parties.
• Individuals need to feel that they have control
and perceived rights within the company.
• Strengthened by a cause in which the employee
strongly believes.
Title VII – Civil Rights Act - 1964
• Prohibits employment discrimination on the basis of race, color, sex,
religion, and national origin. Also prohibits harassment based on race,
sex or other unlawful criteria. This includes sexual harassment.
• A majority of states have enacted Fair Employment Practice statutes
that parallel or exceeds the federal statute. Some states include height,
weight, marital status, sexual orientation, and pregnancy.
Types of Compensation
• Straight Straight Salary Salary
• Variable Pay
• Skill Based
Straight Salary
Employee obtains the same amount of salary
each month for the work provided if the clinic is
active or slow.
Variable Pay
Provides incentives for employees by allowing them
to share the profit that is generated by their
increased contributions to the productivity of the
Profit Sharing
• Group Incentives
• Recognition for achievement or creativity
• Team Incentives
Skills Based Pay
• Encourage skill development
• Reward learning
• Increase individual productivity
• Encourage more flexible staffing
Empowering Employees
1. Demonstrate that you value people
2. Share your leadership vision
3. Share goals and direction
4. Trust people – especially employees
5. Provide information for decision making
6. Delegate authority, not just more work
7. Provide frequent feedback
8. Solve problems, don’t blame people
9. Listen, Learn, and ask questions to provide guidance
10. Reward employees and reward them for empowered
A PP Manual can serve any or all of the
– Defines the terms of and conditions of employment
– Introduces new employees to the practices and
procedures of the company
procedures of the company
– Announce, reiterate, modify, or clarify policies
– Promotes uniformity and consistency in applying
policies and procedures
– Defines benefits clearly
– Allows for written disclaimers
– If well written and thought out, an Employee
Handbook will be invaluable in defending against
employment lawsuits.
The Baby Boomers
ƒ Will seek hearing care sooner
ƒ Internet Information: Well-informed about their
ƒ Will seek health care practitioners directly
ƒ Accepting of non-physician providers
ƒ Looking for advanced degrees/specialty
ƒ Abruptly critical of perceived quality of care
ƒ Critical of environment where services are
ƒ Low tensile strength regarding practice loyalty
ƒ Front office staff must be cordial and attentive
ƒ Intolerant of too much after-purchase
ƒ Sensitive to service costs despite
insurance coverage
ƒ Require wide scheduling opportunities
ƒ Nights
ƒ Weekends
ƒ Location convenience is important
The Patient Centric Practice
ƒ Considers the view through the patient’s lens
ƒ Exceed patient expectations at every visit
ƒ Patients are partners
ƒ Promises are kept, Patients are informed
ƒ Fix errors fast: solutions take only one staff
ƒ Professionals & Staff should be well-wrapped
ƒ Demeanor is everything
ƒ Respect and courtesy must flow freely and
ƒ Satisfaction must be guaranteed
ƒ Consider the “Re’s”: Repair, Replace,
Refund, Refer, Reward, Resolve
ƒ Office environment must be immaculate and
ƒ Spend time, listen to all in the room
ƒ Patient centric training must be an ongoing
ƒ Patients are the core of P&Ps
ƒ Practice wraps around the patient, not vice
Practical Steps to Improve PatientClinician Communication
ƒ Assess What the Patient Already Knows
ƒ Assess What the Patient Wants Knows
ƒ Be Empathic
ƒ Slow Down
ƒ Keep It Simple
ƒ Tell the Truth
ƒ Be Hopeful
ƒ Watch the Patient’s Body and Face
ƒ Be Prepared for a Reaction
Purpose of buying groups
• Consolidation of purchasing
– Influence upon manufacturers
– Influence on Clinicians
– Influence on:
• Patients
• Distributional outlets
• Other
• Economics of Scale
– “buy more, get a lower price”
– Oth
Who are these Buying Groups?
• Largest
– Sonus
– HearUSA
• Company-owned or controlled
– Beltone
– Audibel, Audigy
• Others
– EPIC, AudNet, Hearing Planet, etc
How Do These Groups Work?
• Goal
– Profit
– Market control
• Advertised Benefits to Clinicians
– Consolidation of purchases
• (Middle man, distributor methods)
• Better pricing to customers
– Ancillary services
• Marketing-advertising help
• Office support
Potential Group Shortfalls
• Some groups CANNOT always provide:
– “best cost”
– Appropriate marketing and advertising
– Complete objectivity
• Advice, price, patient issues, etc.
– Bias-free information
– “arms length” isolation from ethical issues
– Greater margin for clinic success
Sole Proprietorship
• Definition
− Practitioner has no partners or
− 2/3 of the businesses in The United States
• The Owner is the Business
• Most Audiology practices
• Debts to the owner, Profits to the owner
• SP is ideally suited for small informal

Sole Proprietorship
Ease of establishment
• Lack of regulations governing this
• Revenue is only taxed once as personal
• May establish tax-exempt retirement plans
Sole Proprietorship
• Opportunity to raise capital
limited to personal Net worth
• Sole Proprietorship dies with the owner
• Personal responsibility of the owner for
malpractice, financial and tax obligations
• Unlimited Personal Responsibility
of Owner
− Business Bills
− Taxes
− Malpractice
− Employees
• Liable for Their Own Acts
• Liable for the Acts of Their Employees
• Definition
− Money is pooled by 2 or more individuals to
establish, run and maintain a business.
• Relationship is drawn up by an attorney
− In absence of legal agreement, defined by
Uniform Partnership Act (UPA)
− Equal Ownership
Same benefits, rights and responsibilities
as sole proprietorship
− Liability is now spread over the partners
− Still no shelter for debts or malpractice or
• “Know Thy Partner”
• Shelter for personal responsibility
− Business Expenses
− Malpractice
− Employee malpractice or embezzlement
• Many different types of corporations
• Definition
− A corporation is a distinct legal resident of
the state and is a totally distinct entity from
its owners.
− Owners are known as Stockholders
• Individuals that purchase shares
• Managed by a Board of Directors
• Disadvantages of C-Corporation
− Double Taxation
• Once on your Salary – Whatever your tax
• Once on the Corporation – Usually 35%
• Goal is to not make profit in the corporation
• Allowed since 1950s, income
treated like a Partnership
• Has all of the legal, financial, and
malpractice sheltering characteristics of a
regular corporation except that the profits
are not taxed
• Not as flexible as a Limited Liability
Professional Corporation (PC)
• Reserved for Dentists, Physicians, other
• Allowed to expose them to more personal
liability than regular or S-Corps
• Business component has limited liability
• Professional can still be sued for
malpractice, even if they are an employee
Limited Liability Corporation (LLC)
• Similar to S-Corp, but much less regulation
• Lots of flexibility
Documents filed are Articles of Organization
Reasons to Perform a
„ Financial Planning
‡ Estate Planning
‡ Insurance Coverage
„ Partnership Agreements
„ Practice Benchmark
„ Buy/Sell Agreements
What is Goodwill?
In other words this is the prospect of future business
based on the reputation of the company
Valuation Methods
„ Emotional Evaluation - Value based on what the owner
“feels” their business is worth.
„ Economic Evaluation - Value of tangible assets based
on fair market value or the expected future return those
assets will bring
„ Experience Evaluation - Value based the sale of similar
types of practices in the marketplace.
Mechanics of the Valuation
„ Non Disclosure Agreement
„ Clinic Due Diligence
„ Financial Due Diligence
„ “Normalize” income/expenses
„ Assign a multiple
„ Offer is made
Clinic Due Diligence
9 Review inventory and equipment list
9 Review accounts receivable aging and reimbursement history
9 Interview employees that will stay with the business
9 Review current premise lease. Make sure lease is assignable to
new ownership.
9 Review past marketing
9 Review referral sources & contract status
9 Review 100 random patient files
9 Try to get accurate count of active patient files
Financial Due Diligence
„ Analyze 3 years of financial data including the most
current period. Partial year financials will need to
be annualized
„ Analyze tax returns as well as financial statements
„ Determine whether the practice uses the “cash” or
“accrual” accounting method
“Normalizing” the Income
Normalizing the income statement is the act of
adjusting the expenses to reflect the true cost of
running the practice, thus determining an adjusted
EBITDA profit, on which a multiple can be applied.
Assigning a Multiple
9 Multiples attempt to account for the “goodwill” of the practice.
The higher the multiple the higher the “goodwill” is perceived to
9 On average, multiples range from 1x - 5x earnings
9 Multiples are factored with the EBITDA profit that was obtained
to find the “value” of a practice
Multiples can based on many things:
„ Length of time practice has been around
„ Amount of production by the owner
„ Higher % of Private Pay
„ Newer Equipment
„ Amount of active patient files
The Offer
„ Most offers will not be 100% cash
„ Do not be offended by the first offer
„ Prepare a counteroffer. Use your own,
independent appraisal to even the playing field.
„ Resist offers with stock or “earn out” clauses
unless you plan on staying with the new
Seller Checklist
„ Mindset - establish a clear understanding for the
reasons the practice is being sold
„ Independent appraisal 1 year prior to sale date
„ Have organized the items a potential buyer will
want to review
„ Develop tax strategy with your lawyer and
„ Be honest with your staff
„ Do not stay with practice after transition period
Buyer Checklist
„ Mindset
„ Ask for or have an independent appraisal
„ Do in-depth clinic and financial due
„ Develop alternative financing sources
other than a bank.
Balance Sheet
• Presents
– Assets
– Liabilities
– Owners or
Stockholders Equity
• Assets – left side
• Liabilities – right side
Assets= Liabilities +
Owners Equity
• Current Assets
– Accounts Receivable
– Merchandise Inventory
– Total Current Assets
• Plant and Equipment
– Equipment
– Accumulated
• Total Assets
• Current Liabilities
– Short Term Debt
– Accounts Payable
– Other Accrued Liabilities
– Total Current Liabilities
• Long Term Debt
– Total Liabilities
• Owners Equity
• Total Liabilities &
Owners Equity
Income Statement
• Net Sales
– Sales Less Returns
and Discounts
• Cost of Goods Sold
– Supplier costs for
• Earmolds
• ALDs etc
• Net Profit
• Selling and General
• Income from
Operations (EBIT)
• Interest Expense
• Income before Taxes
• Income Taxes
• Net Income
Statement of Cash Flows
• Cash Flows from
• Cash Flows from
• Cash Flows from
• Cash Flows from
Operating Activities
– Depreciation Expense
– Accounts Receivable
– Increase in
– Increase in Liabilities
– Net Cash from
Statement of Cash Flows (cont'd)
• Cash Flows from
investing activities
– Cash Paid for
• Cash flows from
Financing Activities
– Cash received from
issues of long term
– Cash from sale of
Common Stock
– Net Cash from
financing Activities
• Net Cash increase
for the year
• By themselves are of little
• Two types
– Cross sectional – Comparison to
Industry Standard
–Time Series – Comparison of same
practice to different points in time.
• Comparisons of Statements
– Month to Month
– Year to Year
• Looks at two points in time to
compare practice performance
Ratio Analysis of Statements
• Ratio Analysis – Tracked by
Spreadsheets to demonstrate trends
and the health of a practice
• Use of Ratio Analysis
– Management
– Supplier Credit
– Bank Loans
• Ratio Analysis can be to demonstrate
– Liquidity
– Activity
– Debt and Profitability
• Primarily Conducted on
– Balance Sheet
– Income Statement
Balance Sheet
Ratio Analysis
• Ratio Analysis of Balance Sheets
– Liquidity Ratios measure the short term
ability of practice to pay bills
– Activity Ratios measure the efficiency of
the practice in turning assets into cash
– Debt or Leverage Ratios measure the
overall solvency of the practice
Balance Sheet
Liquidity Ratio Analysis
• Current Ratio
– a calculation of how many times the
practice’s current assets cover its current
liabilities and if the practice has sufficient
resources to meet those liabilities.
• Can the practice pay its bills?
Current Ratio Calculation
Current Ratio =
Current Assets/
Current Liabilities
• If less than 1
– Business cannot pay its bills
– May have difficulty staying in business
• If 2 or more
– Business can pay bills with money left over
– Healthy Business
• Includes Prepaid expenses
– Insurance
– Inventory
• Most clinics do not have inventory
Quick Ratio Calculation
• Also called the Acid Test Ratio
– Figures without prepaid expenses
– Insurance & Inventory
Quick Ratio =
Cash + Marketable Securities+
Accounts Receivable divided by Current Liabilities
Defense Interval Measure
• DIM - measures the time span that the practice
can operate without any external cash flow or
how long the practice can operate if there is no
• Allows Manager to project the amount of
emergency cash needed (DA or Defensive Assets)
to keep business going if business drops off.
• To figure the DIM you must know the
Projected Daily Operating Expenses (PDOE)
• PDOE = How much it costs to keep the practice
open each day
Defense Interval Measure = Defensive Assets divided by Projected Daily Operating Expenses
Balance Sheet
Activity Ratio Analysis
• Allows manager to know how
efficiently assets are turned into cash
– Accounts Receivable Turnover Ratio
– Inventory Turnover Ratio
– Total Assets Turnover Ratio
Accounts Receivable Turnover Ratio
• Many times the Accounts receivable is turned into
cash each year
– Need to know the average AR Balance
– Take balance at end of last year + balance at end of
current year / 2
Accounts Receivable Turnover Ratio= Net Sales divided by Average Accounts Receivable

• The higher this calculation the better
• Example 5.3 = AR is turned into cash 5.3 times
per year or every 2.26 months
• Or every 68.8 days
Inventory Turnover Ratio
• Similar to Accounts Receivable Turnover Ratio
• Many times the Inventory is turned into cash
each year
– Need to know the Average Inventory
– Take inventory at end of last year + Inventory at end of
current year / 2
Inventory Turnover= Cost of Goods Sold divided by Average Inventory

Example: If ratio is 5.9 then inventory will turn
almost 6 times per year, almost every two months
Information assists in planning for stock orders
Total Assets Turnover Ratio
• How efficiently assets are turned into
• The TAT ratio looks at the sales for goods
and services and divides by the total
assets to arrive at how many times the
practices assets turnover per year.
Total Asset Turnover= Sales divided by Total Assets

• How efficiently assets are turned into cash
• The higher the better, suggesting that the
assets are used efficiently to generate cash
Balance Sheet
Debt/Leverage Ratio Analysis
• Two ratios, beneficial in providing the practice
manager with information as to how much practice
debt is relative to its assets:
– Debt to Assets (DA) Ratio
– Times Interest Earned (TIE)
• These ratios give indications whether the practice
has the capability to support more debt
– for adding equipment
– opening another location, or other activities.
Debt to Assets Ratio
• Presents the liability the practice has for every
dollar of assets
– provides the creditors with information about the ability
of the practice to withstand losses without impairing the
interest of the creditors.
– Frequently used for loans by banks
Debt to Assets Ratio = Total Liabilities divided by Total Assets

• The lower the better, suggesting that the practice
is less depending upon borrowing.
• A higher DA Ratio indicates that if business is bad
for a time that it could cause problems
Times Interest Earned Ratio
• TIE is an indication of how many times the
practice earns the amount of interest charged
on the money that it has borrowed.
• TIE is computed by taking the earnings before
interest and taxes and dividing it by the
Times Interest Earned Ratio
Times Interest Earned Ratio= Earnings Before interest and Taxes (EBIT) divided by Interest Charges
• Freeman (2002) indicates that this ratio should be between
3 and 5 for Audiology Practices
• Indicates that earnings are 3 to 5 times greater than the
interest charges, if less than 1 cannot pay interest
Income Statement
• Most routine analysis are conducted on
the Balance Sheet
• Ratios that may tell the most about a
practice are the profitability ratios that
are conducted on the income statement.
• Profitability ratios are clues as to how well the
practice has performed:
– Adequacy of net income
– Rate of return on Assets
– Profit margin as a percentage of sales.
• Routine Ratios conducted are:
– Profit Margin On Sales (PMOS)
– Asset Turnover (AT) Ratio (discussed under Balance Sheet)
Profit Margin On Sales (PMOS)
• Profit Margin On Sales presents the profit margin
achieved after all of the expenses are subtracted
and how much of every dollar of sales are profit

• If calculation yields $0.20, then 20 cents of every
dollar collected is profit.
Profit Margin On Sales= Net Profit divided by Sales
Tracking and
The Ratios
• Easily conducted with spreadsheets
• Can demonstrate issues that need
• Why there are problems in the
• Have accountants present ratios to you
• They can track problems
• Give insights as to changes that need to be
made to stay profitable
• It is the wise audiologists that knows these
ratios and what they mean
• Fixed (sunk) Costs
costs you have to pay whether you are in
business or not
Variabl ble Costs (( bl separable, escapabl ble, avoidd bl )
allll your costs
that will go away if you stop the activity
Short Run
period in which at least one cost is fixed
– Lease obligations, equipment, insurance:
Long Run
period in which all costs can be varied
– You own it all (for better or worse!) – no fixed costs
Two Big Economic
• All firms want to maximize profits and
minimize costs
• Firms with negative profits will keep
producing so long as they lose LESS by
producing than by not producing
Marketing is...
Everything associated with identifying
the particular wants and needs of a
target market of customers, and then
going going about satisfying those about satisfying those
customers better than the
Luxury Market
` Patients are sophisticated
` Like one-to-one attention
` What do they need?
` What do they value?
` What appeals to them?
Appeal to your Audience
` Know what the product or service
can do for your patient and then
sell that.
◦ “Don’t talk about your grass seed,
talk about my lawn.” ~ Nagen, 2002
Outrageous Customer Services
` Random
` Unexpected
` Out of proportion to the circumstance
` Highly personal
Database Management
` Internal marketing to your patients
` Contact at least 4 times per year
` Customer behavior is a much stronger
p y p predictor of your future relationship
with a patient than demographic
information ever will be.
The Art of War in Audiology is governed
by Five Predictors of Success
1. Clarity of Purpose
2. Business Climate
3. Information
4. Leadership
5. Execution
Excellent reputation
Loyal customers
Market leader
Small business
Profit margin too low
Expand to new, larger location
Buy local competitor to increase revenues
Sell business and start new career
Losing too many employees
New competitor
Online retailers
Bad team member
Sales Methods
• Traditional “High Pressure” Techniques
• Negotiation
• Thought Process Selling
• Need Based Selling
High Pressure “Closing” Approaches
∗ The “Snooker” Close
∗ The “Embarrassment” Close
∗ The “Bride” Close
∗ The Bride Close
∗ The “New Decision” Close
∗ The “Gloomy Gus” Close
Lessons From the High Pressure Techniques
1. Some of these types of closures are
intuitive and reasonable.
2. Some are a natural progression of a sales
3. Others are offensive and unprofessional
and reminiscent of door-to door sales
4. Many traditional closing
“procedures” may increase the
chances of a sale with low cost products.
5. With expensive products or
services, many of these
techniques reduce the chances of
making a sale.
Rules for Negotiating
1. Listen to the customer’s argument.
2. Focus on best interests of Patient and clinic.
3. Search for reasonable solutions.
Sales based on Thought Process
Cognition Thinking
Divergent Thinking
Convergent Thinking
Cognition Thinking
Allows the patient to
understand the
situation presented to
What? How Much?
Where? When? Why?
Divergent Thinking
Assists the person to
explore the options and
How about? We Could?
What If? Lets consider?
Convergent Thinking
The process of selecting
the best solution.
We should?
The logical choice?
Its obvious.
Passive Order Taker
Assumes the customers know their own
Customers resent attempts to influence
• Customers prefer courteous and passive
sales people
Active Order Getter
• Sales-Oriented Approach
• Customer-Oriented Approach
Social Definition
Societal process by which individuals and
groups obtain what they need and want
Kotler, 2002
groups obtain what they need and want
– Creating
– Offering
– Exchanging products and services of value
Managerial Definition
The “art of selling products”
Kotler, 2002
• To know and understand the customer so
well that that you know what product or
service fits them
Operational Definition
A process of planning and executing the
Oblinger, 2006
conception pricing, promotion, and
distribution of ideas, goods, and services to
create exchanges that satisfy individual and
organizational goals.
Target Markets and
The identification and profiling of
distinct groups of buyers according to:
• Geographic
• Demographics
• Psychographic
• Behavioral
Multi-Attribute Segmentation
• Putting many of these factors together to
identify a specific group
• Targeted to specific traits, age, household income, etc.
• Example: all over 60 that ride motorcycles,
income over 60,000 per year, reside in their
own home in a particular zip code.
Product Offering
Any Offering That Can
Satisfy a Need or a Want
Goods • Places
• Services
• Experiences
• Events
• Persons
Kotler, 2002
• Information
• Properties
• Organizations
• Ideas
• Product offering from a known identity
• Bernafon, Oticon, Siemens, Resound, etc.
• Audiology Associates, Hearing Center, Hear
• Doctor of Audiology
Brand Competition
All Competitors Like YOU! In the same Market
• All Au.D. Branded Individuals.
• All Au.D. From Sonus, etc.
• Otolaryngologists that Dispense
Industry Competition
• All Competitors that Sell Amplification
– Independent MA Audiologists
– Independent Ph.D, Ed.D., Sc.D, Audiologists
– Audiologists that work for physicians
– Otolaryngologists
– Dispensers
Form Competition
• All in the Same Business
– Independent MA Audiologists
– Independent Ph.D., Ed.D., Sc.D., Audiologists
– Audiologists that work for physicians
– Physicians
– Dispensers
– Internet sales
– Door to door sales
Generic Competition
• All Products that cost the same
– Cars
– Cruises
– Vacation
– Funds for grandchildren’s college.
– Etc
Marketing Mix – 4 Ps
„ Product
„ Price
„ Promotion
„ Place
„ Product = Customer Solution
„ Price = Customer Cost
„ Promotion = Communication
„ Place = Convenience
SWOT Analysis
Strengths, Weaknesses, Opportunities, Threats
• Introspective-Extropective Review of the Market
• To Identify of Practice’s Target Audience
• Involves a Qualitative and Qualititative Review
• Success of SWOT analysis is the amount and
accuracy of the Data as its basis.
• Threats and Opportunities Considered
• Strengths and Weaknesses Considered
• Software assists in the Process
Threat Analysis
• Practice’s philosophy or mission?
• The practice product (both goods and services)
features, benefits or quality?
• The competitive advantage of the practice?
(Is there a competitive advantage?)
• How the services are conducted, patient and
referral source satisfaction.
• Practice pricing structures? Are the goods
and services of this practice priced much
higher or lower than the competition?
• Target market's awareness of your
practice and its services?
Opportunities Analysis
• Quality/effectiveness of past promotions and other
marketing efforts
• Pricing in the practice compared to others for the value obtained.
• The practice’s geographical or convenient service
Strengths and Weaknesses Analysis
• Internal Factors Important to the Management of
the Treats and Opportunities
• Those conducting the SWOT are often very close
to the information and impartiality is difficult
• Develops a Plan of Attack for the Threats and
The practice’s operational leadership, how the
practice effectively operates in the community.
• The financial strength of the practice to combat the threats and take advantage of the opportunities observed
• Practices physical capabilities, large enough facility,
equipment, etc.
• Responsiveness of workforce in the practice, enough
people, motivated etc.
Baby Boomers
• Baby boom after WWII
• Before WWII were less than 2 Million births per year
• Between 1946 & 1964 – 3.2 to 4 Million births per year
Describes the largest generation people
ever born in developed countries.
Baby boomers
• Global Economies
• Internet Access
• Birth Control – Have Children or not?
Baby Boomers
• Most Jobs do not guarantee Retirement
• Healthcare – Most diseases controlled….
• Old is how you feel – Average of 14 years younger
• Retirement – Quit one job …move to another
• 40+ % Stay Together
• Over 50% Divorce
• Some Remarry, Stay
• Some Divorce again…again
• Some do not Remarry
• Some never Marry
Baby boomers
• Jobs are not for life…
• 5-6 year average on the job
• Some leave jobs go back to
• Others simply work for themselves
• Very few will retire from the
first job
• Some may retire from their
• Some go back to school,
get a different job
• Some have retired early
• Some will never retire
Non-Linear Lifestyles
of Baby Boomers
• There are no predictable events, Baby Boomer life is
extremely diverse and unpredictable.
• Difficult to predict market segments by age alone.
Distinctive Traits
of Baby Boomers
• Personal Gratification
• Work Ethic
• Control
• Optimism
• Will Not Accept “Normal”
Key Drivers for
Baby Boomers
• Health and Wellness
• Social Networking
• Desire for New Experiences
• Individualism
• Convenience
• Live for Today
• Self Improvement
• Working Retirement
• Value for Money
• Savvy & Information Hungary
• Ethics & Environmentalism
Baby boomers
Effect on Your Business
Will seek hearing care sooner
• Internet Information: Well-Informed
• Will seek health care practitioners directly
• Accepting of non-physician providers
• Looking for advanced
degrees/specialty certification
Abruptly critical of perceived quality of
• Critical of environment where services
are delivered
• Low tensile strength regarding practice loyalty
• Front office staff must be cordial and attentive
• Intolerant of too much after-purchase attention
• Sensitive to service costs despite insurance
• Require wide scheduling opportunities
– Nights
– Weekends
• Location convenience is important
10 Rules for Marketing
to Baby Boomers
Rule 1: Treat Everyone Equally
Rule 2: Use Emotionally Meaningful
Concepts, Words and Images
Rule 3: Be Positive
Rule 4: More Information is Better
Rule 5: Tell a Story
Rule 6: Understand Changing Values
Rule 7: Make it Relevant to ME!
Rule 8: Play in the Gray
Rule 9: Use Life Stage…Not Age
Rule 10: Learn Baby Learn
Fraud and abuse are encompassed by
“the big three”:
| The Antikickback Statute;
| The Stark Self-Referral Prohibitions; and
| The False Claims Act
The Antikickback Statute
The Antikickback Statute’s primary focus is
payment for referrals. The Antikickback
statute prohibits any knowing and willful
conduct involving:
| the solicitation, receipt, offer, or payment of
any kind of remuneration;
| in return for referring an individual for services
or recommending or arranging the purchase,
lease, or ordering of any item;
| that may be wholly or partly paid by a federal
health care program.
The Stark Self-Referral Prohibitions
The Stark laws focus on prohibiting physician referrals of
patients to entities in which the provider has a financial
interest. If the physician or immediate family member
| has a financial relationship with an entity, then:
| the physician may not make a referral to the entity to
furnish designated health services for which payment
otherwise may be made by a federal health program;
| the entity may not present a claim to a federal health
program, or bill any individual, third party payor, or
other entity for the service.
Designated health care services laundry list:
clinical laboratories services;
physical therapy services;
occupational therapy services;
radiological services;
radiation therapy treatment;
durable medical equipment and supplies;
parenteral and enteral nutrition and equipment;
prosthetics, orthotics, and supplies;
home health services;
outpatient prescription drugs; and
inpatient and outpatient hospital services.
The Law:
The False Claims Act
The False Claims Act prohibits submission of false claims
and fraudulent billing:
| under any federal health care program;
| for any item or services;
| provided by a person who:
z knowingly and willfully has made any false
statement or representation in application for
payment including claims for uncovered services;
z has furnished services or supplies that are
determined to be substantially in excess of those
needed or is so lacking as to be worthless.
Qui Tam Actions
“Qui tam pro domino rege quam pro se ipso in hace parte
| Also known as the “whistleblower’s statute.”
| Allows for private individuals with knowledge of fraud and
abuse violations to report it to the government.
| If recovery is made against provider, person who brought
information to government gets a 10-30% cut of the
False Claims Act – The Criminal Side
| Fines of up to $25,000 per violation;
| Imprisonment of up to 5 years; and
| The “death penalty”: exclusion from federal and state
health care programs.
False Claims Act – The Civil Side
| Fines of up to $5,000-10,000 for each fraudulent claim;
| A penalty assessment of three times the amount of
damage sustained by the federal government; and
| Other penalties imposed by the Medicare and Medicaid
Note: Being convicted under criminal FCA does not
preclude prosecution and conviction under civil FCA!
Antikickback Statute – The Criminal Side
| Fines of up to $25,000 per violation;
| Imprisonment of up to 5 years; and
| The “death penalty”: exclusion from federal and state
health care programs.
Antikickback Statute– The Civil Side
| Fines of up to $50,000 per violation;
| A penalty assessment of three times the amount of
damage sustained by the federal government; and
| Other penalties imposed by the Medicare and Medicaid
Note: Being convicted under criminal Antikickback
Statute does not preclude prosecution and
conviction under civil Antikickback Statute!
Stark Laws-Kind of a break: Only Civil Sanctions
| Fines of up to $15,000-100,000 per violation;
| Denial of payment for any services in violation of the law;
| Refunds by the provider made by the government for such
More Laws You Could Learn About the Hard Way:
Providers have been prosecuted under federal:
| conspiracy laws;
| false statements laws;
| general false claims laws;
| mail and wire fraud laws;
| money laundering laws; and
| racketeering laws.
| But don’t forget all those state law equivalents!
Rule 4c
| “Individuals should not participate in professional
activities that constitute a conflict of interest.”
| “Conflict of interest” is comprised of “all endeavors
related to the practice of audiology in which
professional advice, actions, or judgments may be
compromised or appear to be compromised by
financial or other professional factors.
Potential Problems:
Patient Perceptions
| Short term: patients may not have actual
knowledge at present, so common
scenarios may be okay, but…
| Long term: once information is publicized,
a trust and confidence issue arises!
Potential Problems:
Provider Perceptions
| Media discovery will provide poor public
| Federal government will quickly become
| States will join the bandwagon and become
„ Torts are civil (as opposed to criminal) wrongs
committed by one party against another’s
person, property, or interest.
„ They are a function of state law, but each state
is generally similar.
„ If the party who sues, the plaintiff, wins,
he/she can generally get compensatory
damages – cashola!
The Two Major Torts of Concern in Audiology:
„ Malpractice; and
„ Lack of Informed Consent.
The Negligence Rule
„ Malpractice and lack of informed consent
claims based on the rule of negligence.
„ Negligence rule requires plaintiff to show by
preponderance of the evidence:
…a pre-existing duty;
…a breach of that duty;
…that caused;
„ Providers are obligated to render that level of
care and skill to patients that a member of the
profession in good standing would provide
under similar clinical circumstances.
„ If ya do less than this, it’s malpractice!
Pre-Existing Duty:
„ Pre-existing duty: easy – audiologist with a
relationship with a patient has to provide
nonnegligent care!
Breach of Duty:
„ Breach of Duty: harder – audiologist must be shown
through expert testimony that he or she has not met
the level of care defined by the profession.
„ Problems for the defendant here:
… “Expert” doesn’t necessarily have to be an audiologist!
… The hired gun problem – can always find someone who’ll
say anything ya want!
„ Causation: harder again – audiologist must be
shown through expert testimony breach of duty
caused the patient’s injury.
„ Problems for the defendant here:
…Such a breach only needs to be one or a plausible
cause of the patient’s injury!
…The hired gun problem again!
„ Damages: easy – any injury to the patient!
Res Ipsa Loquitur:
„ “The thing speaks for itself”.
„ Shifts the burden of proof from plaintiff to
„ Defendant negligence is presumed and
defendant must rebut this presumption in order
to prevail – you must prove your innocence!
When Can Plaintiff Use It?
„ When the injury sustained by plaintiff was of a kind
that does not ordinarily occur in the absence of
negligence – no expert testimony necessary[!!];
„ The injury was caused by an agency or
instrumentality in the defendant’s exclusive control;
„ The injury was not due to any voluntary action or
contribution on the plaintiff’s part.
Minority Practice Doctrine
„ If there are alternative and accepted standards of care
other than the majority standard, the “minority
practice doctrine” applies.
„ Defendant provider who follows minority practice is
entitled to be assessed on the tenets of this practice.
„ If defendant adhered to the tenets of the minority
practice, he or she has not breached his or her duty to
the patient.
Workers’ Compensation Exams
„ Workers’ comp and other nontherapeutic examinations are
generally considered done for the employer or insurance
„ These exams thus generally do not establish a patient-provider
relationship, so there is no duty toward the patient!
„ BUT: some courts have held that if the exam unearths facts
that would assist the patient if disclosed, you have a duty to let
the patient know what’s up.
„ And don’t offer any advice or treatment – if ya do, you’ve
established a patient-provider relationship!
Failure to Refer
„ Failing to refer a patient to a specialist when a
provider lacks expertise to appropriately treat
the patient may create liability!
„ So even if you don’t treat the patient, you may
still be held liable for malpractice if you don’t
direct the patient to the “appropriate” provider!
Informed Consent
„ Informed consent is the process by which providers
communicate and discuss material risks and benefits
of each diagnostic and treatment alternative,
including doing nothing, in terms which the patient
can understand.
„ Two general forms: patient-centered and providercentered.
„ If ya don’t get it, you’re on the hook for liability,
even if the care is medically appropriate and patient
didn’t suffer injury from the treatment
„ Implied Consent: theoretically, no need to get
oral or written consent, if by reasonable
inference, patient's action indicates he/she
„ Ineffective Consent: consent may not be
deemed effective if provider “coerces”
patient into consenting, or patient mistaken in
his or her understanding and provider knew
or should have known.
Pre-Existing Duty:
„ Pre-existing duty: easy – audiologist with a
relationship with a patient has a duty to obtain
informed consent from patient!
„ What’s your duty? The different standards:
… Patient-centered standard: duty to obtain consent based on
what information reasonable patient would want; or
… Provider-centered standard: duty to obtain consent based on
what information reasonable provider would give.
… In both situations, all “material” info must be provided,
including results of doing nothing!
The Specifics: Informed Consent
„ Breach of Duty: harder – audiologist must be
shown to have not met the duty using patient
or provider standard.
„ Problems for the defendant here:
…No expert testimony necessary for patient-centered
…The hired gun problem again for provider-centered
„ Causation: hard but not as bad as malpractice –
audiologist’s not obtaining informed consent must be
shown to have caused the patient’s injury.
„ Problems for the defendant here:
… Patient can simply say he/she relied on provider’s limited
or nondisclosure of material information when deciding to
go forward [or not] with treatment to fulfill this part of the
“Therapeutic Privilege”
„ Legal doctrine that indicates if disclosure of
particular information would be significantly
detrimental to patient’s physical or mental well
being, medical provider allowed not to
disclose it.
„ Dangerous ground!
„ Need to carefully and closely document
reasons and rationales for nondisclosure!
“Consent Waiver”
„ Patient may validly waive his or her right to be
informed as to diagnosis and treatment consent.
„ Another area of dangerous ground!
„ Always preferable to get informed consent.
„ If patient insists on waiver, it should be noted in
detail in the patient's records and witnessed!
„ Note also that waiver does not waive the patient’s
right to change his or her mind!
“Emergencies”: Part I – Adults
„ Definition: when patient is unconscious or
lacks capacity and needs immediate medical
attention due to the threat of irreparable harm.
„ “The Rule”: adults generally deemed to
consent to diagnosis and treatment during
“Emergencies”: Part II – Kids
„ Generally like adults; but should get consent
from mom or dad if there’s any question
whether there is a “true” emergency!
„ This is particularly true if the harm isn’t
“immediate” or “irreparable”!
Conforming to all legal
Conforming to personal or religious
What is an Ethical Business?
• Profitable
• Sound business principles
• Good management and workforce
• Quality goods or services—value based
• Customers who “believe” & trust
• Some degree of altruism
– On the behalf of the customer
– Not disregarding the company
Integrity & Honesty
•Looking at things from a customer
•The golden rule
•Customer Perceptions
What Makes a “Bad”
•Violation of above principles
•Silly managers
•Bad products
•Lousy services
•No profits
•No trust from customers
•Customer Perceptions
Add Healthcare to Business
•What does a health care business
– Public Trust
– Public Responsibility
•What does the health car business get
in return?
– Respect, honor, etc.
– Ability to govern itself
Requirements in Health Care
•Obligations—in descending order
1. To the patient
2. Society in general
3. Other health professionals
4. Self
1. Trust of society
2. Self regulation
Obligations—To the Patient
•Up-to-date knowledge and skills
– Outcomes and expectations
– Adequate equipment
•When to call in others
•Limits of scope of practice
•No conflict of interest
– Apparent
– Implied
•Patient interest above all else
– Altruism
– Even profit
•Conflict of Interest
– AAA Code of Ethics, Rule 4C
•Compromised judgment
•Appearance of conflic
Obligations—To Society in
• Obligations go beyond patient to include
– Family
•Within adherence to HIPAA
– Communications that are
•Within scope of practice
• Necessary for the advancement of patient health or
• Implications
– Advertising
– Other promotional activities
Obligations—To Other Health
•Communication with others
– Physicians
– Audiologists
•Promotion of audiology in appropriate
•Participation in the science of all
related health fields
•Field that is open and available for
inspection by others
Obligations—To Self
•Relative to profits
– Never at patient expense
– Always justifiable
•Participation in the field
– Reading research and applying
– Using appropriate tests procedures,
•Upholding the professional image
•Trust of society
•Self regulation
•Level of income
•What does YOUR Code of Ethics say?
Rule 2F-Maintain Professional
•Rule 4-Provide only services in the best
interest of those served
– Rule 4C-Conflict of Interest
– Rule 4D-Supervision compensation
•Rule 8C-You shall be the police
The Anti-Kickback
• Primary focus: payment for referrals
• The Statute prohibits any knowing and
willful conduct involving
– The solicitation, solicitation, receipt, offer receipt, offer or or payment payment
of any kind of remuneration;
– In return for referring an individual for
services or recommending or arranging the
purchase, lease, or ordering of any item;
– That may be wholly or partly paid by a
federal health care program
• Audiologists are increasingly being paid a
percentage of sales for medical
equipment such as hearing aids
• Under Under the law audiologists in these the law, audiologists in these
arrangements are know as “sales
• Federal government doesn’t like sales
agents in medical environments
• Some relevant suspect characteristics of
sales agent arrangements:
– Compensation based on percentage of sales
– Direct contact between sales agent and
physician in position or order items or
services, services, and and
– Direct contact between sales agent and
health program beneficiaries
Violation of AKB?
• If audiologists are being paid a percentage
of sales (hearing aids), and
• If they have direct contact with physician
making ( g the referrals (i.e. contract in the
physician’s office), and
• Have direct contact with health program
beneficiaries, then
• High risk for Anti-Kickback Statute
What does AKB mean for:
– Audiologists who dispense and are employed
by a physician?
– Audiologists Audiologists employed by a employed by a “chain chain” of of clinics clinics
that primarily sell hearing aids?
– Audiologists who purchase from a single
manufacturer and receive discounts
dependent upon number of sales?
– Cooperative advertising?
The Law: The False Claims Act
• Prohibits submission of false claims and
fraudulent billing
– Under any federal health care program;
– For any item or service;
– Provided by a person who:
• Knowingly and willfully has made any false statement or
representation in application for payment including claims
for uncovered services, or;
• Has furnished services or supplies that are determined to
be substantially in excess of those needed or is so lacking
as to be worthless.
• Audiologists billing states for Medicaid
– How does one bill for therapy related to the
hearing hearing aid? aid?
– How does the audiologist provide an exact
and true copy of the cost of a prosthesis?
– If the audiologist bills for a procedure that is
no longer covered by the state agency, or
– If one bills for tests that will not be covered
The Law: The Stark Self-Referral
• Focus: prohibiting physician referrals of patients
to entities in which the provider has a financial
interest. If the physician or immediate family
– Has Has a financial interest then a financial interest, then
– The physician may not refer to the entity to furnish
designated health services for which payment
otherwise may be made by a federal health
program; and
– The entity may not present a claim to a federal
health program, or bill any individual, third party
payer, or other entity for the service
• Does not apply to a physician if the terms of
payment are “set in advance”.
– No one seems to know exactly what this means
• Personal services arrangements
– What about “sales agents” with physicians who have
partial or full ownership of the corporation?
– What about contracts between physicians and
audiologists in which the physician has some interest
and gets compensation based in some manner on
Fines Associated with the Statutes
– Range from $25K (criminal) up to $50K (civil)
– Per violation
– Excluded from federal programs for life
• False False Claims Act Claims Act
– Criminal-up to $25K, plus prison, plus exclusion
– Civil-$5K to10K, plus penalty of 3x damages, per
• Stark Laws
– Civil-$15K to $100K per violation
– Plus reimbursement the government
• A violation can occur in both the civil and
the criminal arena—for the same offense
• Other state and federal laws may also
The Law: HIPAA– the Health
Insurance Portability and
Accountability Act
• Focus: maintaining privacy of patient-identifiable
healthcare information (PHI)
– Prohibits Prohibits use or disclosure use or disclosure of of PHI without patient PHI without patient
– Prohibits sales of patient lists without authorization
– Allows for marketing discussion of products and
services if done face-to-face, in communication of
treatment options that involve relevant products or
services, or in communications involving products or
services of only nominal value
Audiology Issue re: HIPAA
• What is the interpretation if an audiologist were
to sell a patient list to a buyer, marketing firm,
manufacturer, etc.?
– Does purpose matter?
– Does Does buyer matter? buyer matter?
• Fines:
– $25K per violation
– Criminal penalties up to $250,000 per violation
– Up to 10 years in jail
• Advice: Seek legal counsel
Principle 1
PRINCIPLE 1: Members shall provide
professional services and conduct
research with honesty and compassion,
and and shall respect the dignity worth and shall respect the dignity, worth, and
rights of those served.
– Rule la: Individuals shall not limit the delivery
of professional services on any basis that is
unjustifiable or irrelevant to the need for the
potential benefit from such services
Principle 2
PRINCIPLE 2: Members shall maintain high
standards of professional competence in
rendering services.
– Rule Rule 2f: 2f: Individuals Individuals shall maintain shall maintain
professional competence, including
participation in continuing education.
Principle 4
PRINCIPLE 4: Members shall provide only
services and products that are in the best
interest of those served.
– Rule 4a: Individuals shall not exploit persons in the
delivery of professional services.
– RR l 4b ule 4b: II di id l h ll t h f i t ndividuals shall not charge for services not
– Rule 4c: Individuals shall not participate in activities
that constitute a conflict of professional interest.
– Rule 4d: Individuals using investigational procedures
with patients, or prospectively collecting research
data, shall first obtain full informed consent from the
patient or guardian
Principle 5
PRINCIPLE 5: Members shall provide
accurate information about the nature and
management of communicative disorders
and and about the services and products about the services and products
– Rule 5e: Individuals shall maintain
documentation of professional services
Principle 6
PRINCIPLE 6: Members shall comply with the
ethical standards of the Academy with regard to
public statements or publication.
– Rule 6a: Individuals shall not misrepresent their
educational degrees, training, credentials, or
competence competence Only degrees earned from regionally . Only degrees earned from regionally
accredited institutions in which training was obtained
in audiology, or a directly related discipline, may be
used in public statements concerning professional
– Rule 6b: Individuals' public statements about
professional services, products, or research results
shall not contain representations or claims that are
false, misleading, or deceptive.
Principle 8
PRINCIPLE 8: Members shall uphold the dignity of the
profession and freely accept the Academy's self-imposed
– Rule 8a: Individuals shall not violate these Principles and Rules,
nor attempt to circumvent them.
– Rule Rule 8b: 8b: Individuals Individuals shall not engage shall not engage in dishonesty or illegal in dishonesty or illegal
conduct that adversely reflects on the profession.
– Rule 8c: Individuals shall inform the Ethical Practice Board when
there are reasons to believe that a member of the Academy may
have violated the Code of Ethics.
– Rule 8d: Individuals shall cooperate with the Ethical Practice
Board in any matter related to the Code of Ethics