Summary of HPSI's Code of Business Conduct

HPSI is committed to conducting its business in accordance with the highest standards of business ethics as well as with all applicable laws and regulations. 

Fair Dealing

HPSI depends on its reputation for service and integrity.  The way we deal with our members and vendors molds our reputation, builds long-term trust and ultimately determines our success.  Accordingly, we always endeavor to deal fairly with members and vendors and to never take unfair advantage of others through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice.  We also diligently strive to comply with laws and policies that regulate the manner in which we do business. 

Fraud and Abuse Laws

The federal Anti-Kickback statute prohibits the offer, payment, solicitation or receipt of any remuneration to induce the purchase, arranging for or recommending of any item or service, payable in whole or in part by a federal or state health care program. Certain practices are specifically excepted from the prohibitions of the Anti-Kickback Statute including the payment of administrative fees to a Group Purchasing Organization ("the GPO safe harbor provision").  The following guidelines and procedures constitute the essential elements of HPSI’s compliance program. 

  • HPSI will have a written agreement with each member that authorizes HPSI to act as purchasing agent to negotiate contracts with vendors to furnish goods or services.
  • HPSI will not accept vendor paid group purchasing administrative fees (“Administrative Fees”) in excess of 3% of the dollar volume of purchases made by or on behalf of each member.
  • HPSI will not accept any “up-front” Administrative Fees, sign-on bonuses or similar fee paid by vendors upon the execution of an agreement with HPSI or otherwise prior to purchases by members.
  • Notwithstanding the foregoing, HPSI may accept amounts voluntary paid by vendors to sponsor or participate in HPSI trade shows, training meetings and product promotions.  A vendor’s participation (or non-participation) in such shows, meetings and promotions shall have no bearing upon HPSI’s contracting decisions.
  • HPSI will disclose to each member on a monthly basis the amount of Administrative Fees collected as a result of such member’s purchases through the program.

In addition to the foregoing, HPSI will promote contracting arrangements that achieve both a higher quality of care and competitive pricing.  Such guidelines include the following:

  • HPSI will adhere to contracting procedures that inform potential vendors of the process for seeking and obtaining contracts with HPSI and provide interested vendors the opportunity to submit contract proposals.
  • HPSI will allow its members to directly communicate with and access all products and services provided by all participating vendors.
  • HPSI will notify prospective vendors in advance of the amount of Administrative Fees.
  • HPSI will not engage in private label programs, meaning that it will not enter into any arrangements with vendors in which it sells a vendor’s products under HPSI’s own label.
  • HPSI will not “bundle” products across different vendors, meaning that it will not require members to purchase a menu of multi-vendor group of products in order to have access to the best pricing on any one or more of the products in such group.
  • Absent extraordinary circumstances in which members would materially benefit from the existence of a longer term contract, HPSI will not negotiate vendor contracts that have terms of over three years.
  • HPSI will promptly respond to any questions of grievances regarding its contracting policies.  Questions or grievances should be addressed to HPSI’s chief compliance officer, James B. Whitesides, and sent to the following address:  1 Ada, Suite 150, Irvine, California 92618.

Conflicts of Interest

In order to maintain the highest degree of integrity in the conduct of HPSI’s business, to adhere to high ethical standards, and to maintain independent judgment, HPSI employees are expected to avoid any activity or personal interest that creates or appears to create an actual or potential conflict between their interests and the interests of HPSI.  Although it is impossible to list every conceivable conflict, following are some common examples that illustrate actual or apparent conflicts of interest that HPSI employees are expected to avoid:   

  • HPSI employees may not accept any benefits from HPSI that have not been duly authorized and approved pursuant to HPSI policy and procedure, including any HPSI loans or guarantees of personal obligations.
  • HPSI employees and their immediate family members may not have an ownership interest in any other enterprise if that interest compromises or appears to compromise an employee’s loyalty to HPSI.
  • Without the prior written approval from the Chief Compliance Officer, HPSI employees may not participate in a joint venture, partnership or other business arrangement with HPSI.
  • HPSI employees may not be simultaneously employed (including self-employment or work performed in a consulting capacity), with a competitor of HPSI. 
  • Without prior written approval from the Chief Compliance Officer, HPSI employees may not be a customer of, or be employed (including in any consulting capacity) by, serve as a director of, participate in a joint venture, partnership or other business arrangement with, or represent a customer of HPSI.
  • Similarly, without prior written approval from the Chief Compliance Officer, HPSI employees may not be a vendor to, be employed by (including in any consulting capacity), serve as a director of, participate in a joint venture, partnership or other business arrangement with, or represent a vendor to HPSI. Nor may an HPSI Employee accept money or benefits of any kind as compensation or payment for any advice or services they may provide to a customer, vendor, or anyone else in connection with its business with HPSI.

In addition to the foregoing, whenever HPSI employees are involved in making business decisions on behalf HPSI, their decisions should always be based on uncompromised objectivity of judgment. HPSI employees interacting with any person who has business dealings with HPSI (including suppliers, members, competitors, contractors and consultants) must conduct such activities in the best interest of HPSI, using consistent and unbiased standards including but not limited to the following: 

  • HPSI employees may not accept any gifts, entertainment or gratuities that could influence or be perceived to influence their business decisions on behalf of HPSI, or be in a position to derive any direct or indirect benefit or interest from a party having business dealings with HPSI.
  • HPSI employees may never request or ask for gifts, entertainment or any other business courtesies from health care members or vendors doing business with HPSI.  Moreover, if HPSI employees ever receive gifts, entertainment or gratuities from a health care member or vendor with whom HPSI has business dealings, they are expected to disclose that information to the Chief Compliance Officer.  In some instances, the HPSI may require such employees to excuse themselves from any negotiations or decisions having to do with that vendor.
  • Notwithstanding the foregoing, unsolicited gifts and business courtesies, including meals and entertainment, are permissible if they are customary and commonly accepted business courtesies; not excessive in value; and given and accepted without an express or implied understanding that an HPSI employee is in any way obligated by their acceptance of the gift.
  • HPSI employees may never accept gifts of cash or cash equivalents (including gift certificates, securities, below-market loans, etc.) in any amount. Any such gifts must be returned promptly to the donor.
  • In providing a gift, meals, entertainment or other accommodation in connection with HPSI business, HPSI employees must do so in a manner that is in good taste and without excessive expense. Business meals and entertainment should be infrequent and consistent with accepted business practice, and should be for the sole purpose of furthering a business relationship.
  • Giving or receiving any payment or gift in the nature of a bribe or kickback is absolutely prohibited.
  • If invited to attend an educational workshop, seminar, training program, sales meeting or promotional activity or event sponsored by a vendor, health care member or health care association, HPSI employees may not accept vendor, health care member or association funding for associated travel and lodging expenses.