Healthcare is one of the most heavily regulated industries in the country.
Every action related to healthcare involves some type of written contract—whether between doctors and patients, suppliers and hospitals, nurses and doctors, and so on.
As a supplier or manufacturer, you deal with contracts between all parties in one form or another.
Understanding the intricacies of contract law in healthcare is key to avoiding massive problems and keeping healthy relationships.
What Types of Laws Impact Healthcare Equipment and Technology Contracts?
Regulations impact everything from pricing and expirations down to locations and usage.
Stark Law
On the surface, Stark Law seems easy to avoid. Stark Law prevents conflicts of interests, prohibiting physician self-referral anywhere the physician might have a financial interest.
Different clauses fall under Stark Law as well, such as the Anti-Kickback Statute.
Dig deeper and you’ll find Stark Law covers a wide range of scenarios—including some relating to equipment and leasing.
HIPAA
HIPAA contracts and regulations protect patient information. Years ago, HIPAA was the last of worries for most equipment suppliers and manufacturers. The explosion in digital records and smart equipment, however, has changed the game.
Certificate of Need
Certificate of Need laws require a hospital or physician office to prove there’s a legitimate market need before expanding, building, or even acquiring new equipment like beds in some cases.
CoN laws vary widely by state. Meanwhile, some states don’t even have CoN laws on the books. Although tempting to assume the burden falls on your buyer to establish need, it’s smart to familiarize yourself with the laws in states you operate.
What You Need to Know About Contract Law in Healthcare for Equipment and Facilities
41% of people already don’t trust brands to remain truthful. The stakes are especially high in industries like healthcare supplies and equipment where trust is literally a matter of life or death.
Physician and hospital reputations also depend on your knowledge of regulations and contract law in healthcare. Look at the auto industry: The Takata airbag recall sent shockwaves through every major manufacturer’s reputation.
Similar mishaps with healthcare equipment or supplies happen all the time.
Keep the following essentials in mind to protect yourself and build trustworthy relationships with your partners.
1. Outsourcing Your Contracts Could Earn You a Violation
When you outsource your contracts, you’re also outsourcing compliance. Keeping your contract work in-house ensures transparency. You’ll always have control over the details.
2. Automatic Renewals Can Work Against You
Some types of contracts require renegotiations or inspections. In these cases, auto-renewing your contracts could put you in violation of Stark Laws or other compliance regulations.
3. Unsecure Technology Puts You at Risk
Equipment with smart software that integrates patient records poses a huge risk with data breaches. Make sure to review how HIPAA applies to your technology and which contracts in healthcare to work out with physicians and hospitals in terms of responsibility and data sharing.
4. Certain Technology Requires Licensing Fees
Commercial licensing violations are extremely costly. Depending on the copyright law, both suppliers and physicians could be responsible for paying licensing fees or royalties.
5. Innovative Equipment Might Require a Certificate of Need
Hospitals have huge legal teams to manage CoN laws. Doctors at small practices, however, rely on your knowledge to make smart decisions. Set yourself apart from competitors by doing the research yourself and helping buyers navigate the local regulations.
6. Marketing Matters
Influencer marketing might be tempting, but tread carefully. Healthcare influencers like physicians could create a huge conflict of interest and violation of Stark Law, although currently a legal gray area.
Likewise, how you market your products, the language you use, and the conditions you treat all require careful configuration. The FTC cracks down on false claims and subtle marketing language in healthcare all the time. You don’t want to put your contracts in healthcare at risk from a simple marketing mishap.
7. What About Repairs?
As a healthcare supplier or manufacturer, you deal with high-value contracts. Losing a contract for a hospital system, for example, could be a disaster.
Imagine a hospital assumes repairs are covered for a year and a $20,000 piece of equipment breaks down. Not negotiating contract terms for things like repairs and maintenance could ruin that relationship forever.
8. Comprehensive Writing is Key
When legal issues arise—no matter the entities involved—you don’t want anything left to interpretation.
If there’s any uncertainty in terms of pricing, relationships, shipping, or maintenance, always assume it could be used against you. For example, who holds the burden of risk if a physician harms someone while using your equipment?
You need a team of writers and law professionals on your side to draft proper contract law in healthcare.
Enhance Your Sales and Marketing with Comprehensive Content
Useful and relevant content shows your audience that you’ve done your research and you understand their biggest concerns. In an industry like healthcare supplies, building authority is key to earning trust.
Doctors and hospitals are busy. Don’t wait for them to research your organization’s history and expertise. Show them right away with high-quality thought leadership content in your industry.
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