i!lsms SPECIALIZED MEDICAL SEltVlCES ~NEW POLICY AND PROCEDURE 0 REVISION DATE: CODE OF CONDUCT POLICY Specialized Medical Services, Inc. ("SMS") has adopted a comprehensive "Corporate Compliance Program" that includes a "Code of Conduct." Together, these documents establish principles and rules. governing ethics and compliance that individuals and entities that conduct business with SMS must abide by in the conduct of their daily business affairs with SMS. Individuals and entities that conduct business with SMS must ensure that their behavior and activity is consistent with applicable federal, state and local laws, rules, regulations and other directives of governments, departments and agencies (collectively, "Jaws"), the Corporate Compliance Program, the Code of Conduct, and any other policies and procedures adopted by SMS. PURPOSE The purpose of the Code of Conduct is to provide board members, corporate officers, employees, vendors, suppliers, independent contractors and other agents of SMS with principles of business ethics and compliance rules that they are required to abide by to ensure that they conduct business in compliance with applicable laws. SCOPE This policy and procedure applies to SMS and its board members, corporate officers, employees, vendors, suppliers, independent contractors and other agents of SMS. PROCEDURE Upon the initial adoption and implementation of the Corporate Compliance Program, an individual or entity's initial employment or engagement with SMS, and again on June 1 of every year, each individual or entity will receive a copy of the Code of Conduct and is required to execute an acknowledgement certifying receipt. SMS will maintain copies of acknowledgements in its official files. SMS will also disseminate the Code of Conduct via other distribution channels throughout the year so that it becomes part of the fabric of the company's corporate culture.
~SMS SPECIALIZED MEDICAL SeRVICES Policy and Procedure Amendments SMS shall amend this policy and procedure as necessary to comply with changes in applicable laws and/or to comport with changes in SMS's operations. SMS shall make, document and implement any amendments in accordance with the policy and procedure entitled "Corporate Compliance Program Amendments." 2
i!sms SPECIALIZED M 'EDICAL SERVICES CODE OF CONDUCT Introduction Specialized Medical Services, Inc. ("SMS") is the nation's leading provider of medical oxygen, durable medical equipment and clinical respiratory services for the long-term care industry. For more than 25 years, SMS has set the industry standard for service, value and patient care. SMS is dedicated to improving clinical outcomes for our patients and is committed to complying with applicable laws as we fulfill our responsibilities to our patients and the facilities we serve. SMS has adopted a Code of Conduct to demonstrate the company's ethical attitude and its system wide emphasis on compliance with applicable laws. This Code of Conduct sets forth five essential components, including Respecting and Complying with Laws, Behaving with Integrity, Performing with Excellence, Reporting Violations and Disciplinary Actions, each of which is discussed below. SMS intends to have the Code of Conduct and any other policies and procedures adopted by SMS become part ofthe fabric of the company's operations. SMS's Code of Conduct is part of the company's Corporate Compliance Program, which is intended to provide a central coordinating mechanism for furnishing and disseminating information and guidance on applicable federal and state statutes, regulations, and federal, state and private health care program requirements. SMS recognizes, in accordance with guidance issued by the U.S. Department of Health and Human Services, Office of the Inspector General, that a sincere effort by SMS to comply with applicable laws may significantly reduce the risk of unlawful or improper conduct. The Board of Directors of SMS, along with the Compliance Officer and Corporate Compliance Committee, oversees the development and implementation of the compliance effort at SMS and has adopted the Code of Conduct and Corporate Compliance Program by passing a formal resolution. In furtherance of our commitment to comply with applicable laws and conduct our business with the highest integrity, SMS requires that the company and its board members, corporate officers, employees, vendors, suppliers, independent contractors and other agents of SMS ensure that activities conducted on behalf of SMS not only meet applicable legal standards, but also comport with the Code of Conduct and any other policies and procedures adopted by SMS. Respecting and Complying with Laws General Compliance SMS is committed to complying with applicable laws in each of the jurisdictions in which it operates. SMS and individuals and entities that conduct business with SMS shall comply with applicable laws, this Code of Conduct and any other policies and procedures adopted by SMS. Individuals and entities who conduct business with SMS shall refrain from participating in any illegal conduct in any way. 3
~SMS SPECIALIZED MtDlCAL SERVICES New and current shareholders, board members, corporate officers, employees, vendors, suppliers, independent contractors and other agents have an obligation to notify the Compliance Officer at SMS immediately upon receipt of any information indicating that any such individual or entity has been charged with a crime related to health care or is facing a proposed debarment, exclusion or other ineligibility for participation in any federal health care program. As tlus Code of Conduct is implemented, the good faith commitment to compliance with applicable laws should cascade down through the board and corporate officers to employees, suppliers, vendors, independent contractors and other agents with which SMS conducts business. Unfair A dpautages A l'e Pr()fr ihited Our commitment to compliance means that neither SMS, nor any employees, vendors, suppliers and independent contractors of SMS, shall engage in any business practice intended to unlawfully obtain favorable treatment or business from any government entity, facility, physician, other health care provider, patient, vendor, or any other party in a position to provide such treatment or business. Neither SMS, nor any employees, vendors, suppliers and independent contractors of SMS, shall participate in any agreement or understanding with a competitor of the organization to illegally fix prices, agree to labor costs, allocate markets or engage in group boycotts. In addition, unless a legal exception applies, no individual or entity that conducts business with SMS may solicit, receive, pay or offer to pay any remuneration of any kind in exchange for referring or for recommending the referral of any individual to SMS or its affiliates for services. The Code of Conduct is also especially critical as an internal quality assurance control in the reimbursement and payment areas, where claims and billing operations are often the source of fraud and abuse, and therefore, historically have been the focus of government regulation, scrutiny, prosecution and sanctions. In accordance with applicable laws, participating in any false billing of patients, facilities, government entities, private pay sources or other party is strictly prohibited. Patient Confidentiality Is Paramount SMS recognizes that patients rely on us to protect their confidential information from unlawful disclosure. As such, individuals and entities SMS conducts business with shall comply with applicable laws and policies and procedures of SMS governing patient privacy and confidentiality. No individual or entity shall disclose confidential medical or personal information pertaining to patients served by SMS unless such disclosure complies with applicable laws and the policies and procedures adopted by SMS. Governmental Requests Must Be Taken Seriously If SMS receives a request for information from a governmental agency, the person who receives the request shall inform the Compliance Officer, an executive officer of SMS, any member of the Corporate Compliance Committee or any member of the Board of Directors of SMS, unless such 4
i!sms SPECIAliZED MEDICAL SERVICES duty conflicts with applicable laws. No individual or entity that conducts business with SMS shall destroy or alter any information or documents in anticipation of, or in response to, a request for documents by any applicable government agency or from a court of competent jurisdiction. Behaving with Integrity No individual or entity who conducts business with SMS shall obtain any improper personal benefit by virtue of their employment or contract with SMS. Parties who conduct business with SMS shall comply with our policy regarding the receipt, acceptance, offering or giving of gifts in connection with the party's role or status as an employee or contractor of the organization. Under no circumstances shall SMS and its affiliates solicit gifts from referral sources. In addition, SMS shall not offer gifts to, or receive gifts from, any person or entity to whom it refers patients for health care services, nor shall SMS offer gifts to or receive gifts from any person or entity that refers patients to SMS or its affiliates, except in accordance with the policy adopted by the Corporate Compliance Committee concerning the giving and receipt of gifts and business courtesies. Parties who are employed by or conduct business with SMS shall disclose to SMS any financial interest, ownership interest, or any other relationship they (or a member of their immediate family) have with the organization's patients, customers, vendors or competitors. Performing with Excellence At SMS, excellence in the performance of duties is critical so that SMS may maintain its strong reputation in the industry and the communities in which we serve. Individuals and entities SMS conducts business with shall perform their duties and responsibilities to the best of their ability and in good faith, keeping in mind SMS' s high standards. In addition, individuals employed by or who conduct business with SMS shall participate in scheduled educational sessions regarding their duties and responsibilities, as well as compliance with applicable laws, the Code of Conduct and any other policies and procedures adopted by SMS. Reporting Violations Individuals or entities that conduct business with SMS shall promptly report violations or suspected violations of applicable law, this Code of Conduct, or any other policy or procedure adopted by SMS to the following: Any executive officer of SMS; Any supervisor; The Compliance Officer; Any member of the Corporate Compliance Committee; The Human Resources Department of SMS; 5
i!lsms SPECIALIZEU MEDICAl SERVICES Any member of the Board of Directors of SMS; or If you do not feel comfortable approaching any of these individuals or Human Resources, you can communicate your concerns using the SMS Employee Help Line. The SMS Employee Help Line is a phone and web-based reporting system that is managed by an outside company. This is a way to communicate your concerns anonymously.. The SMS Employee Help Line can be accessed at: Website: https://secure.ethicspoint.com/domain/media/en/gui/18092/index.html; or Toll-Free Phone: 888-261-1689 SMS will use reasonable efforts to protect the confidentiality of the reporting individual unless SMS determines, in good faith, that maintaining such confidentiality is not possible under the circumstances. SMS will neither retaliate against nor discipline anyone who reports a perceived or actual violation in good faith. However, any individual or entity that intentionally makes a false accusation with the purpose of harming or retaliating against another person may be subject to discipline. Disciplinary Actions Individuals and entities that conduct business with SMS agree to do so in compliance with applicable laws, this Code of Conduct and any other policies and procedures adopted by SMS. Failure to abide by applicable standards and/or compliance policies and procedures may lead to significant and severe disciplinary action depending on the nature and scope of the individual failure. Questions Anyone who conducts business with SMS who is unsure of the meaning or application of any applicable law, the Corporate Compliance Program, the Code of Conduct or the interpretation of any policy or procedure may seek guidance from the Compliance Officer, any executive officer, any member of the Board of Directors or any supervisor at SMS. 6