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Member Information

Prime Source GPO Membership Application Agreement

Membership Agreement Content

As evidenced by, and effective upon, by reading and agreeing this Prime Source GPO Membership Application, the member identified on this application (the “Member”) hereby agrees to abide by the terms of this GPO Membership Application with Prime Source National Corporation d/b/a Prime Source GPO (“PSG”) and the PSG GPO terms and conditions (“GPO Terms and Conditions”) on behalf of itself and its subsidiaries and affiliates, if any, identified in this membership application (“Participating Facilities”). Collectively, the Prime Source GPO Membership Application and Prime Source GPO Terms and Conditions are referred to as this “Agreement.”

  • Participation in GPO Program. PSG is a group purchasing organization (“GPO”) that provides group purchasing programs through which Member and Participating Facilities may purchase certain products and services (“Covered Products and Services”) from participating vendors (“Vendors”) with whom PSG contracts (“Vendor Contracts”). Member hereby engages PSG to act as its Primary GPO (as such term is defined in the GPO Terms and Conditions) and is hereby granted access to Vendor Contracts, pursuant to which Member and/or Participating Facilities may purchase Covered Products and Services available thereunder for use by Member and Participating Facilities. Member represents and warrants that all Covered Products and Services purchased, licensed, or leased by Member and/or Participating Facilities under Vendor Contracts will be for their own use in the provision of services by Member and/or Participating Facilities, and not for resale or distribution to third parties other than in the course of furnishing facility-related services.
  • Vendor Contracts. Member hereby authorizes PSG, as its GPO agent, to: (i) negotiate the terms of, enter into,cancel, or modify any Vendor Contracts as it deems necessary, advisable, or appropriate; (ii) receive from Vendors data relating to purchases of Covered Products and Services under Vendor Contracts by Member and Participating Facilities; and (iii) collect certain rebates and utilize good faith efforts to collect rebates payable on Member’s and Participating Facilities’ purchases through Vendor Contracts. Member acknowledges that Vendors shall have final right of approval over Member’s and each Participating Facility’s participation under Vendor Contracts. Member hereby agrees to be bound to any and all letters of commitment, letters of participation, or any other similar document executed by Member and intended to evidence Member’s and Participating Facilities’ intended participation in a Vendor Contract. Member agrees that PSG is acting as a negotiator and will neither take title to, nor be obligated to pay for, any products and/or services whatsoever by virtue of this Agreement or any order placed or purchases made by Member or any Participating Facilities. Member (and not PSG) shall be solely responsible for compliance with Vendor Contract terms and conditions and Member shall be solely liable for all purchases and orders made pursuant to any Vendor Contracts. The provisions of this Section shall survive termination or expiration of this Agreement.
  • Compliance with Laws. Member and Participating Facilities shall comply with all applicable federal, state, and local laws and regulations (“Applicable Laws”).
  • GPO Fees. PSG hereby informs Member and Member acknowledges that, for administrative and other services provided by PSG, PSG will receive payment of fees from Vendors from which Member and Participating Facilities purchase Covered Goods and Services (“GPO Fees”) of three percent (3%) or less of the purchase prices of the Covered Goods and Services provided by those Vendors to Member and Participating Facilities. In the event that a Vendor Contract involves GPO Fees payable to PSG that exceed three percent (3%) of the purchase price of Covered Goods or Services purchased by Member and Participating Facilities, PSG will, on the PSG “Fees Disclosure” document located on its website at www.primesourcegpo.com and incorporated herein by reference, specify the amount (or, if not known, the maximum amount) that PSG will be paid by such Vendor for such purchases. PSG shall disclose in writing to Member at least annually, and to the Secretary of Health and Human Services upon request, the amount of GPO Fees received from each Vendor with respect to purchases made by or on behalf of Member and Participating Facilities in accordance with the federal Anti-Kickback Statute regulations applicable to GPOs (42 C.F.R. § 1001.952(j)).
  • Term and Termination. This Agreement will remain in effect commencing on the date signed by the Member until terminated pursuant to the terms of this Agreement. In the event of a breach of any provision of this Agreement by Member or any Participating Facility, PSG shall notify Member in writing of the specific nature of the breach and if Member or the breaching Participating Facility does not cure the breach within thirty (30) days of receiving such notice, PSG may immediately terminate this Agreement. Either party may terminate this Agreement without cause or penalty upon written notice to the other party. Upon termination of this Agreement for any reason whatsoever, PSG shall have no further obligations under this Agreement to Member or Participating Facilities (except as noted herein), and this Agreement shall be null and void and without any force or effect. Termination shall not preclude PSG from pursuing any and all remedies available to it at law or equity.
  • General. This Agreement may only be amended by a written agreement bearing handwritten signatures of authorized agents of each of the parties and expressing an intent to be bound by the terms of such an amendment, except that the GPO Terms and Conditions may be modified in accordance with its terms. A facsimile or scanned copy of a handwritten signature shall be sufficient for purposes of this Agreement. This Agreement, including all exhibits referenced herein, constitutes the entire understanding and agreement between the parties concerning the subject matter hereof, and supersedes all prior negotiations, agreements and understandings between the parties, whether oral or in writing, concerning the subject matter hereof. The terms on any exhibits, attachments, quotations, proposals, or pre-printed form documents between PSG and Member shall have no effect and the terms of this Agreement shall control. In the event of a conflict between the terms of this GPO Participation Agreement and the GPO Terms and Conditions, the GPO Terms and Conditions shall control and govern. Any waiver of a breach of any provision(s) of this Agreement shall not be deemed effective unless in writing and signed by the party against whom enforcement of the waiver is sought. Member shall not assign, subcontract, delegate or otherwise transfer this Agreement or any of its rights or obligations hereunder, without PSG’s prior written consent. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. If any part of this Agreement shall be determined to be invalid, illegal or unenforceable by any valid act of Congress or act of any state legislature or by any regulation duly promulgated by the United States or a state acting in accordance with the law, or declared null and void by any court of competent jurisdiction, then such part shall be reformed, if possible, to conform to the law and, in any event, the remaining parts of this Agreement shall be fully effective and operative insofar as reasonably possible
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Terms & Conditions

1. Introduction. Prime Source National Corporation d/b/a Prime Source GPO (“PSG”) is a group purchasing organization (“GPO”). PSG provides group purchasing programs through which each of its members, who have signed PSG Membership Applications evidencing their agreement to PSG’s GPO Membership Agreement and these GPO Terms and Conditions (“Members”) on behalf of themselves and their subsidiaries and affiliates, if any (“Participating Facilities”), and their Participating Facilities may purchase certain products and services (“Covered Products and Services”) from participating vendors (“Vendors”) with whom PSG contracts (“Vendor Contracts”). Collectively, each Member’s PSG Membership Application, GPO Membership Agreement and these GPO Terms and Conditions shall be referred to as this “Agreement.” By executing a PSG Membership Application, Member hereby agrees to the terms and conditions set forth in this Agreement and engages PSG to act as its Primary GPO (as such term is defined below) and is hereby granted access to Vendor Contracts, pursuant to which Member and/or Participating Facilities will purchase Covered Products and Services available thereunder for use by Member and Participating Facilities. In the event of a conflict between these GPO Terms and Conditions and a Member’s GPO Membership Agreement, these GPO Terms and Conditions shall control and govern.

2. Modification of GPO Terms and Conditions. PSG may modify the GPO Terms and Conditions at any time, and such modifications shall be effective immediately upon posting the GPO Terms and Conditions, as modified, on PSG’s website. PSG encourages Members and Participating Facilities to review the GPO Terms and Conditions each time they use PSG’s website so that they are aware of any modifications to the GPO Terms and Conditions. Each time a Member and/or its Participating Facilities login, access or use PSG’s website, it constitutes a binding agreement and a reaffirmation of that Member’s acceptance, and acceptance on behalf of its Participating Facilities, of the GPO Terms and Conditions in effect at the time of such access or use.

3. Primary GPO. As used in this Agreement, the term “Primary GPO” means the GPO that the Member and its Participating Facilities will utilize before any other GPO for the purchase of all Covered Products and Services offered under Vendor Contracts, provided such Covered Products and Services are being offered at prices equal to or better than the prices of the same products and services then being offered to the Member and Participating Facilities by any other GPO, after taking into account any rebates (including Vendor Rebates) or other discount arrangements that lower the net acquisition costs of such products and services to the Member and Participating Facilities.

4. Changes to Member and Participating Facilities. Each Member shall provide written notice to PSG of any change pertaining to the following within ten (10) days of such change: (i) total number of facilities that the Member owns and/or operates; (ii) total number of Participating Facilities; (iii) ownership of the Member or Participating Facilities; (iv) wholesale distributors used by the Member or Participating Facilities; (v) contact information for the Member or Participating Facilities; (vi) physical locations of the Member or Participating Facilities; and (vii) licenses held by the Member or Participating Facilities.

5. Vendor Contracts and Liability. Members and Participating Facilities are third party beneficiaries of the Vendor Contracts. Each Member acknowledges, recognizes and, with respect to Vendor Contracts, agrees to enforce the fact that Member and PSG are separate legal entities, and none of the liabilities of the Member and/or Participating Facilities arising under a Vendor Contract shall be treated as a joint liability of PSG or any of its affiliates. Each Member agrees that the Vendor Contracts provide terms and conditions that apply to the purchase of Covered Products and Services between the Vendors and Members and/or Participating Facilities. Accordingly, each Member shall look solely to the particular Vendor and not to PSG for any issue relating to the Covered Products and Services or the Vendor Contract including, but not limited to, payment disputes, exchanges, returns, and refunds. Nothing in this Agreement shall create any liability on the part of PSG for the Covered Products and Services furnished by a Vendor under a Vendor Contract. Similarly, nothing in this Agreement shall create any liability on the part of one Member for the Covered Products and Services furnished by a Vendor under a Vendor Contract to another Member. Each Member understands that each Vendor may have the right to seek a remedy for breach (which may include nonpayment of amounts due and owing) directly against a Member and/or Participating Facility, as applicable. The remedy for breach may include termination of access to discounted pricing or termination of the Member, as applicable, from the list of PSG Members entitled to access the respective Vendor Contract(s). Any material breach of this Agreement, a Vendor Contract or other liabilities caused by a Member and/or its Participating Facilities shall be borne exclusively by that Member. The provisions of this Section shall survive termination or expiration of this Agreement.

6. Representations, Warranties, and Covenants of Members. Each Member, on behalf of itself and its Participating Facilities, hereby represents, warrants, and covenants to PSG that the all of following are and will continue to be true and accurate during the term of this Agreement:

  • a. The Member and its Participating Facilities will (i) comply with all terms of this Agreement; (ii) comply with all terms of Vendor Contracts as if parties thereto; and (iii) if requested by PSG or any Vendor, execute separate agreements or acknowledgements evidencing the Member’s and its Participating Facilities’ agreement to comply with the terms of the relevant Vendor Contract(s).
  • b. All Covered Products and Services purchased, licensed, or leased by the Member and/or its Participating Facilities under Vendor Contracts will be for their own use in the provision of services by the Member and/or Participating Facilities, and not for resale or distribution to third parties other than in the course of furnishing facility-related services.
  • c. The Member has full power and authority to (i) enter into this Agreement on behalf of itself and its Participating Facilities and (ii) carry out the transactions contemplated hereby. The Member, by all requisite action (whether corporate or otherwise), has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. No other proceeding, corporate or otherwise, on the part of the Member is necessary to authorize this Agreement, which, when executed, will constitute the valid and binding agreement of the Member and Participating Facilities, enforceable in accordance with its terms.
  • d. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or breach of (i) the certificate of incorporation or bylaws or other organizational documents of the Member or its Participating Facilities; (ii) any provision of any contract or other instrument to which the Member or its Participating Facilities is a party or by which Member, its businesses, assets, or properties may be affected or secured; (iii) any order, writ, injunction or decree applicable to the Member or any of its Participating Facilities; or (iv) any applicable federal, state, and local laws and regulations (“Applicable Laws”).
  • e. The Member requires no consent, order, declaration, authorization, or approval from any government or other third party, domestic or foreign, in connection with its execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.
  • f. Member shall notify PSG immediately upon the Member becoming aware that any of the foregoing representations and warranties may be inaccurate or may become incorrect.

7.Hold Harmless. Each Member and Participating Facilities shall defend, indemnify, and hold harmless PSG and its respective affiliates, agents, officers, directors, and employees from and against any and all damages, losses, claims, causes of actions, costs, and expenses, including reasonable attorneys’ fees (collectively, “Losses”) suffered or incurred by the Member, Participating Facilities, or PSG resulting from, or in any way connected with, the Member’s and/or Participating Facilities’ acts, omissions, negligence, willful misconduct, breach of this Agreement, violation of any Applicable Law, engaging in unlawful or known, prohibited acts of reselling products purchased under any Vendor Contract, purchases and use of Covered Products and Services, and/or any breach of any agreement or relationship with any third party. The provisions of this Section shall survive the termination or expiration of this Agreement.

8. Remedies. Each Member hereby agrees that the covenants contained in this Agreement are reasonable and necessary covenants for the protection of PSG and its business under the circumstances. PSG and each Member hereby agrees that any breach or threatened breach by the Member and/or its Participating Facilities of the covenants contained in this Agreement would irreparably injure PSG and to the extent that there is no adequate remedy at law for any such breach or threatened breach and, accordingly, that PSG, in addition to pursuing any other remedies it may have at law or in equity, may obtain injunctive relief in any court, foreign or domestic, having the capacity to grant such relief, to restrain any such breach or threatened breach by the Member and/or Participating Facilities and to enforce the provisions of this Agreement.

9. DISCLAIMER; RELEASE; LIMITATION OF LIABILITY. PSG DOES NOT MAKE, AND EXPRESSLY DISCLAIMS, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED, AS TO ANY COVERED PRODUCTS AND SERVICES. EACH MEMBER AND ITS PARTICIPATING FACILITIES HEREBY EXPRESSLY RELEASE PSG FROM ANY AND ALL LIABILITY OR ALLEGED BREACH OF WARRANTY IN CONNECTION WITH ANY COVERED PRODUCTS AND SERVICES AND VENDOR CONTRACTS. IN NO EVENT WILL PSG HAVE ANY LIABILITY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT THE MEMBERS OR THEIR PARTICIPATING FACILITIES HAVE BEEN ADVISED OF THE POSSIBILITY OF THESE DAMAGES. THESE LIMITATIONS WILL APPLY NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. IN NO EVENT WILL PSG HAVE ANY LIABILITY IN CONNECTION WITH A MEMBER’S OR PARTICIPATING FACILITY’S DECISION TO TERMINATE OR CURTAIL PURCHASES UNDER ANY VENDOR CONTRACTS OR PURCHASING ARRANGEMENTS THAT MAY FROM TIME TO TIME EXIST BETWEEN THE MEMBER AND/OR ITS PARTICIPATING FACILITIES AND A VENDOR(S). THIS APPLIES WHETHER THE VENDOR CONTRACT OR PURCHASING ARRANGEMENT IS EITHER: (I) DIRECTLY BETWEEN THE VENDOR AND THE MEMBER AND/OR ITS PARTICIPATING FACILITIES, (II) THROUGH A PURCHASING AGENT OR GPO, OR (III) THROUGH A VENDOR CONTRACT. EXCEPT IN THE EVENT OF INTENTIONAL MISCONDUCT OR VIOLATION OF LAW, IN NO EVENT WILL PSG’S AGGREGATE LIABILITY ARISING UNDER THIS AGREEMENT EXCEED $100,000. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE TERMINATION OR EXPIRATION OF THIS AGREEMENT.

10. Discounts and Rebates. Each Member and its Participating Facilities shall comply with the discount reporting requirements (including, but not limited to, price reductions, rebates, and receipt of free items) required by Applicable Laws. A copy of the Discount Safe Harbor to the federal Anti-Kickback Statute, set forth at 42 C.F.R. § 1001.952(h), is attached hereto as Exhibit A to provide Members and their Participating Facilities with notice of their reporting obligations pursuant to the federal Anti-Kickback Statute. PSG shall make reasonable efforts to verify all rebates received by PSG from Vendors (“Vendor Rebates”) pertaining to Member and Participating Facilities. In the event that PSG receives any verified Vendor Rebates on behalf of a Member or its Participating Facilities, PSG will remit to the Member such Vendor Rebates in accordance with PSG’s policies and procedures. Each Member shall be responsible for notifying its Participating Facilities of any such Vendor Rebates and remitting any such Vendor Rebates to its Participating Facilities. Such Vendor Rebates shall comply with all Applicable Laws, and each Member acknowledges and agrees that PSG shall incur no liability resulting from any Vendor Rebate arrangement between (i) the Member and any Vendor or (ii) any Participating Facility and any Vendor. This Section shall survive expiration or termination of this Agreement.

11. Compliance with Laws. Member and Participating Facilities shall comply with all Applicable Laws relating to their performance under this Agreement. The parties in good faith believe that this Agreement fully complies with the provisions of 42 U.S.C. 1320a-7b (the federal “Anti-Kickback Statute”). Each Member shall, and shall cause its Participating Facilities to, comply with the reporting requirements of 42 C.F.R. §1001.952(h), regarding “safe harbor” protection for discounts under the Anti-Kickback Statute when it receives any discount or rebate pursuant to a Vendor Contract.

12. Access to Books and Records. To the extent that Section 952 of the Omnibus Reconciliation Act of 1980 (the “Act”) and the regulations promulgated thereunder are applicable to this Agreement with respect to a Member and/or its Participating Facilities, such Member or PSG, as applicable, and their related organizations, if any, performing any of the duties pursuant to this Agreement valued at Ten Thousand Dollars ($10,000) or more in any twelve (12) month period shall, until four (4) years after the furnishing of services pursuant to this Agreement, comply with requests by the Comptroller General, the Secretary of the Department of Health and Human Services, and their duly authorized representatives for access (in accordance with Section 952 of the Act) to any contract or agreement between the Member and PSG, any Vendor Contract in which the Member and/or its Participating Facilities participates, and the books, documents and records of the Member and its related organizations, if any, which are necessary to verify the cost of the products and services provided.

13. Exclusion from Federal Health Care Programs. Each Member represents that neither it nor any of its Participating Facilities have been or are about to be excluded from participation in the federal Medicare or Medicaid program, Maternal and Child Health Services Block Grant, Block Grants for States for Social Services, or State Children’s Health Insurance Program (collectively, “Federal Health Care Programs”). Each Member agrees to notify PSG within five (5) business days of the Member’s or any of its Participating Facility’s receipt of notice of intent to exclude or actual notice of exclusion from any Federal Health Care Program. The listing of a Member or any Participating Facility on the Office of Inspector General’s (“OIG”) exclusion list or OIG’s website for excluded individuals/entities shall constitute “exclusion” from a Federal Health Care Program for purposes of this Section. In the event that a Member or Participating Facility is excluded from any Federal Health Care Program, PSG may immediately terminate this Agreement upon notice to the Member in PSG’s sole discretion. If a Member or any Participating Facility is excluded from any Federal Health Care Program and fails to notify PSG within five (5) business days of receipt of final notice of exclusion by the Member or any Participating Facility, then the Member agrees to indemnify PSG for any sanctions, penalties, or fines incurred under the federal Civil Monetary Penalty Law (Section 1128A of the Social Security Act), and Accounting Act of 1996 or under any federal law, as a result of PSG entering into this Agreement, to the extent that such penalties or fines result directly from the Member’s failure to notify PSG of such exclusion.

14. Confidentiality. As used in this Agreement, the term “Confidential Information” shall include the terms of this Agreement and its exhibits, and all information, documents and instruments (including, without limitation, all information regarding the pricing, rebates, discounts, shipping terms, and other terms and conditions of Vendor Contracts) delivered or otherwise provided to Member, Participating Facilities, and/or any of their agents, directors, officers or employees, as well as all information relating to quantities of Covered Products and Services purchased by Member and/or Participating Facilities. Member agrees that throughout the term of this Agreement and thereafter, Member shall make, and shall cause Participating Facilities to make, every effort to maintain Confidential Information in strict confidence, and may disclose such Confidential Information only on a “need to know” basis to Participating Facilities’ or its own duly authorized officers, directors, representatives, consultants, accountants, attorneys, and agents. Member shall return any Confidential Information to PSG upon request and upon termination of this Agreement. Member agrees that it and Participating Facilities shall not, without prior written consent of PSG, use in advertising, publicity, or otherwise the name of PSG, or any trade name, trademark, trade device, logo, or simulation thereof owned by PSG. This Section shall survive termination or expiration of this Agreement.

15. Choice of Law and Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to its conflict of laws provisions. Each Member and Participating Facility irrevocably agrees that any claim brought by it in any way arising out of this Agreement must be brought solely and exclusively in state or federal courts located in or nearest to Spring Valley, New York and each party irrevocably accepts and submits to the sole and exclusive jurisdiction of each of the aforesaid courts in personam, generally and unconditionally with respect to any action, suit, or proceeding brought by it or against it by the other party.

16. Notices. Any notice, demand, request, waiver, or other communication under this Agreement shall be in writing (including facsimile or similar writing) and shall be deemed to have been duly given (i) on the date of service if personally served, (ii) on the third day after mailing if mailed to the party to whom service is to be given by first class mail, registered, return receipt requested, postage prepaid, or (iii) on the date sent if sent by facsimile or email to the Member at its address specified on its PSG Membership Application and to PSG at the following addresses (or at such other address for PSG as shall be specified by like notice): Prime Source National Corporation, 1 Hillcrest Center Drive, Suite 223, Spring Valley, NY 10977, Attn: CEO, Facsimile (845) 405-4600, email: info@primesourcegpo.com.

These GPO Terms and Conditions were last updated on 10/01/2017.

EXHIBIT A

NOTIFICATION OF OBLIGATIONS TO REPORT DISCOUNTS

Anti-Kickback Statute Discount Safe Harbor

42 C.F.R. §1001.952(h) Discounts. As used in section 1128B of the Act, “remuneration” does not include a discount, as defined in paragraph (h)(5) of this section, on an item or service for which payment may be made in whole or in part under Medicare, Medicaid, or other Federal health care programs for a buyer as long as the buyer complies with the applicable standards of paragraph (h)(1) of this section; a seller as long as the seller complies with the applicable standards of paragraph (h)(2) of this section; and an offeror of a discount who is not a seller under paragraph (h)(2) of this section so long as such offeror complies with the applicable standards of paragraph (h)(3) of this section.

  • (1) With respect to the following three categories of buyers, the buyer must comply with all of the applicable standards within one of the three following categories–
    • (i) If the buyer is an entity which is a health maintenance organization (HMO) or a competitive medical plan (CMP) acting in accordance with a risk contract under section 1876(g) or 1903(m) of the Act, or under another State health care program, it need not report the discount except as otherwise may be required under the risk contract.
    • (ii) If the buyer is an entity which reports its costs on a cost report required by the Department or a State health care program, it must comply with all of the following four standards–
      • (A) The discount must be earned based on purchases of that same good or service bought within a single fiscal year of the buyer;
      • (B) The buyer must claim the benefit of the discount in the fiscal year in which the discount is earned or the following year;
      • (C) The buyer must fully and accurately report the discount in the applicable cost report; and
      • (D) The buyer must provide, upon request by the Secretary or a State agency, information provided by the seller as specified in paragraph (h)(2)(ii) of this section, or information provided by the offeror as specified in paragraph (h)(3)(ii) of this section.
    • (iii) If the buyer is an individual or entity in whose name a claim or request for payment is submitted for the discounted item or service and payment may be made, in whole or in part, under Medicare, Medicaid, or other Federal health care programs (not including individuals or entities defined as buyers in paragraph (h)(1)(i) or (h)(1)(ii) of this section), the buyer must comply with both of the following standards–
      • (A) The discount must be made at the time of the sale of the good or service or the terms of the rebate must be fixed and disclosed in writing to the buyer at the time of the initial sale of the good or service; and
      • (B) The buyer (if submitting the claim) must provide, upon request by the Secretary or a State agency, information provided by the seller as specified in paragraph (h)(2)(iii)(B) of this section, or information provided by the offeror as specified in paragraph (h)(3)(iii)(A) of this section.
  • (2) The seller is an individual or entity that supplies an item or service for which payment may be made, in whole or in part, under Medicare, Medicaid or other Federal health care programs to the buyer and who permits a discount to be taken off the buyer’s purchase price. The seller must comply with all of the applicable standards within one of the following three categories–
    • (i) If the buyer is an entity which is an HMO or a CMP acting in accordance with a risk contract under section 1876(g) or 1903(m) of the Act, or under another State health care program, the seller need not report the discount to the buyer for purposes of this provision.
    • (ii) If the buyer is an entity that reports its costs on a cost report required by the Department or a State agency, the seller must comply with either of the following two standards–
      • (A) Where a discount is required to be reported to Medicare or a State health care program under paragraph (h)(1) of this section, the seller must fully and accurately report such discount on the invoice, coupon or statement submitted to the buyer; inform the buyer in a manner that is reasonably calculated to give notice to the buyer of its obligations to report such discount and to provide information upon request under paragraph (h)(1) of this section; and refrain from doing anything that would impede the buyer from meeting its obligations under this paragraph; or
      • (B) Where the value of the discount is not known at the time of sale, the seller must fully and accurately report the existence of a discount program on the invoice, coupon or statement submitted to the buyer; inform the buyer in a manner reasonably calculated to give notice to the buyer of its obligations to report such discount and to provide information upon request under paragraph (h)(1) of this section; when the value of the discount becomes known, provide the buyer with documentation of the calculation of the discount identifying the specific goods or services purchased to which the discount will be applied; and refrain from doing anything which would impede the buyer from meeting its obligations under this paragraph.
    • (iii) If the buyer is an individual or entity not included in paragraph (h)(2)(i) or (h)(2)(ii) of this section, the seller must comply with either of the following two standards–
      • (A) Where the seller submits a claim or request for payment on behalf of the buyer and the item or service is separately claimed, the seller must provide, upon request by the Secretary or a State agency, information provided by the offeror as specified in paragraph (h)(3)(iii)(A) of this section; or
      • (B) Where the buyer submits a claim, the seller must fully and accurately report such discount on the invoice, coupon or statement submitted to the buyer; inform the buyer in a manner reasonably calculated to give notice to the buyer of its obligations to report such discount and to provide information upon request under paragraph (h)(1) of this section; and refrain from doing anything that would impede the buyer from meeting its obligations under this paragraph.
  • (3) The offeror of a discount is an individual or entity who is not a seller under paragraph (h)(2) of this section, but promotes the purchase of an item or service by a buyer under paragraph (h)(1) of this section at a reduced price for which payment may be made, in whole or in part, under Medicare, Medicaid, or other Federal health care programs. The offeror must comply with all of the applicable standards within the following three categories–
    • (i) If the buyer is an entity which is an HMO or a CMP acting in accordance with a risk contract under section 1876(g) or 1903(m) of the Act, or under another State health care program, the offeror need not report the discount to the buyer for purposes of this provision.
    • (ii) If the buyer is an entity that reports its costs on a cost report required by the Department or a State agency, the offeror must comply with the following two standards–
      • (A) The offeror must inform the buyer in a manner reasonably calculated to give notice to the buyer of its obligations to report such a discount and to provide information upon request under paragraph (h)(1) of this section; and
      • (B) The offeror of the discount must refrain from doing anything that would impede the buyer’s ability to meet its obligations under this paragraph.
    • (iii) If the buyer is an individual or entity in whose name a request for payment is submitted for the discounted item or service and payment may be made, in whole or in part, under Medicare, Medicaid or other Federal health care programs (not including individuals or entities defined as buyers in paragraph (h)(1)(i) or (h)(1)(ii) of this section), the offeror must comply with the following two standards–
      • (A) The offeror must inform the individual or entity submitting the claim or request for payment in a manner reasonably calculated to give notice to the individual or entity of its obligations to report such a discount and to provide information upon request under paragraphs (h)(1) and (h)(2) of this section; and
      • (B) The offeror of the discount must refrain from doing anything that would impede the buyer’s or seller’s ability to meet its obligations under this paragraph.
  • (4) For purposes of this paragraph, a rebate is any discount the terms of which are fixed and disclosed in writing to the buyer at the time of the initial purchase to which the discount applies, but which is not given at the time of sale.
  • (5) For purposes of this paragraph, the term discount means a reduction in the amount a buyer (who buys either directly or through a wholesaler or a group purchasing organization) is charged for an item or service based on an arms-length transaction. The term discount does not include–
    • (i) Cash payment or cash equivalents (except that rebates as defined in paragraph (h)(4) of this section may be in the form of a check);
    • (ii) Supplying one good or service without charge or at a reduced charge to induce the purchase of a different good or service, unless the goods and services are reimbursed by the same Federal health care program using the same methodology and the reduced charge is fully disclosed to the Federal health care program and accurately reflected where appropriate, and as appropriate, to the reimbursement methodology;
    • (iii) A reduction in price applicable to one payer but not to Medicare, Medicaid or other Federal health care programs;
    • (iv) A routine reduction or waiver of any coinsurance or deductible amount owed by a program beneficiary;
    • (v) Warranties;
    • (vi) Services provided in accordance with a personal or management services contract; or
    • (vii) Other remuneration, in cash or in kind, not explicitly described in paragraph (h)(5) of this section.