What to do when your medical education and communication company goes under
Grant Seeker, the partnership director for the Pure Education Foundation, an Accreditation Council for CME-accredited provider, manages the organization's many joint sponsorships, including a new partnership with Capitalist Clinical Communications. When C3 fails to respond to the Foundation staff's requests forinvitations for an upcoming activity, Seeker makes multiple attempts to contact C3, even calling and e-mailing all the individuals he can identify from the company's Web site. He gets the feeling that something is terribly wrong when no one responds to any of his messages.
Grant Seeker contacts members of his professional listserv to ask if they have any updated information about C3 and is horrified to learn that the company is rumored to have closed its doors. He reaches for the jumbo bottle of Tums as he reviews the financials for the project with C3, and feels even worse when he realizes that the grant payment (100 percent paid by the supporter upon approval of the grant request) was sent to C3, but they have yet to pay the Foundation's invoice. He downs another antacid — and contemplates updating his résumé — as he prepares to deliver the bad news to the Foundation's executive director.
Is this really happening in CME?
Control the Cash Flow
Overstreet: This is truly an unfortunate and disturbing situation, and one that is based on a true story. The economic crisis in our country has reached our professional community. That, in combination with the evolving regulatory climate, is leading some providers to close their doors and others to switch to promotional work.
What should the Foundation do now?
Overstreet: Underguidelines, the provider is responsible for the use of funds, regardless of who gets the check. In addition to talking with his financial and legal advisers, Grant Seeker has no choice but to let the supporter know about this situation. It would be wise for him to have a carefully planned explanation and action plan before initiating a call with the supporter.
Parochka: If I were in Grant Seeker's position, I would revise my policies and procedures to require that the Foundation receive all funds directly from the commercial supporter, and change my Letter of Agreement so that only the provider, not the joint sponsor, is signing it. Accredited providers need to be in control of both administrative and educational policies and procedures.
How can stakeholders prevent this from happening to them?
Overstreet: This case illustrates the importance of all partners and collaborators understanding each other's capabilities and having the “rules of engagement” documented. Payment terms, as well as roles and responsibilities, should be clearly delineated in a partnership agreement before any work begins.
Parochka: Accredited providers also could create joint-sponsor manuals to address the issues outlined in this case study and to make clear to potential educational partners that there are established protocols that need to be followed. Providers need to protect themselves against lost revenues by establishing policies that prevent operating in the red.
Overstreet: This case also has an important lesson for commercial supporters: To mitigate financial risk, grant disbursements could be made upon the provider's attainment of milestones and demonstration of progress with planning and executing the activity. These terms should be agreed upon in conjunction with executing the Letter of Agreement.
Karen Overstreet, EdD, RPh, FACME, CCMEP, is president, Indicia Medical Education LLC, North Wales, Pa. Reach her at Karen.Overstreet@indiciaed.com.
Jacqueline Parochka, EdD, FACME, is president and CEO, Excellence in Continuing Education Ltd., Gurnee, Ill.; and partner, PTR Educational Consultants. Reach her at JacquelineParochka@comcast.net.