North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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REPLY TO: Thomas J. Ziko

Education Section

Tele: (919) 716-6920

FAX: (919) 716-6764

January 8, 2002

M. Jackson Nichols Allen & Pinnex, P.A.

P.O. Drawer 1270 Raleigh, North Carolina 27602

Re: Advisory Opinion; Fitting and Selling of Hearing Aids in UNC Speech and Hearing Clinics; N.C.G.S. §§ 116-1(b); 66-58 (“Umstead Act”)

Dear Jack:

On behalf of the North Carolina State Hearing Aid Dealers and Fitters Board (NCHADFB), you have written to request an Attorney General’s opinion regarding the application of G.S. § 66-58 (“Umstead Act”) to the fitting and sale of hearing aids through hearing and speech pathology clinics operated by the University of North Carolina (UNC) in conjunction with speech, hearing and communication disorders degree programs offered at its constituent institutions. You have also specifically questioned the propriety of the UNC Greensboro (UNCG) Speech and Hearing Center advertising reduced prices for hearing tests.

The Umstead Act generally prohibits the State of North Carolina or any agency thereof from rendering services or selling goods ordinarily and customarily rendered by private enterprise. In re Appeal of University of North Carolina, 300 N.C. 563, 268 S.E.2d 472 (1980). The Umstead Act is a criminal statute; persons who violate or participate in violations of the Act are guilty of a Class I misdemeanor. G.S. §66-58(e). Well established rules of statutory construction require criminal statutes to be strictly construed so as not to extend their scope to activities and transactions that the General Assembly did not intend to subject to criminal punishment. See, Vogel v. Reed Supply Co., 277 N.C. 119, 131, 177 S.E.2d 273, 281-81 (1970)(holding that G.S. § 87-1, which makes it a misdemeanor to engage in general contractor activities without a license, must be strictly construed); see also, Elliott v. North Carolina Psychology Bd., 348 N.C. 230, 498 S.E.2d 616 (1998 ) (holding that Jack Nichols January 8, 2002 Page 2

statutes restricting the right to engage in a lawful occupation to a special class of persons must be strictly construed). Consequently, while recognizing that the General Assembly intended the Umstead Act to prevent State agencies from competing with private sector enterprises, this Office has consistently stated that the Umstead Act does not prohibit state agencies and state employees from performing their legitimate functions. For example, in a formal opinion published in March of 1986, this Office stated:

[A] careful reading of the statute and its numerous exceptions reveals that the Act is intended to proscribe those activities of government which are not incidental to the legitimate function of the agency involved, but rather intrude upon those areas which have traditionally been associated with private enterprise. In re University of North Carolina, 300 N.C. 563, 268 S.E.2d 472 [(1980)]. Under the Constitution, Article IX, §§ 8 and 9, and the statutes, N.C.G.S. §§ 116-1 and 11, education is in fact the “business” of the University of North Carolina and its constituent institutions. Where . . . the activities involved are, in fact, themselves legitimate functions of the governmental agency, the Act has no application.

55 N.C.A.G.101. We continue to adhere to that longstanding position.

UNC offers courses in hearing habilitation and rehabilitation in its accredited Audiology Masters degree programs in the UNCG Department of Communication Sciences and Disorders, the UNC-Chapel Hill (UNC-CH) Division of Speech and Hearing Sciences and the East Carolina University (ECU) Department of Communication Sciences and Disorders. Consistent with their desire to provide their students with the best professional training, all of those programs maintain hearing and speech clinics wherein graduate student clinicians, working under the supervision of properly licensed faculty, provide health services to the public.

Training in hearing aid evaluations, selection, fitting, orientation, sale and repair is an integral part of the education of audiology students enrolled in UNC Audiology Masters Degree programs. Audiology graduate students must complete 80 clinical hours in the area of hearing aids to meet the requirements for a Certificate of Clinical Competence in Audiology (CCC-A) from the American Speech Language and Hearing Association (ASHA), the national audiologist accrediting body. The NCHADFB itself requires audiology graduate students to have 250 hours of supervised activity fitting and selling hearing aids in order to qualify for NCHADFB licensure. N.C.G.S. §93D-(c).

Jack Nichols January 8, 2002 Page 3

In order to provide graduate student clinicians with the training necessary for ASHA certification or licensure and to prepare them for NCHADFB licensure, the UNC clinics offer hearing aid evaluation and fitting along with many other diagnostic and therapeutic language, speech and hearing services. The graduate students participate in hearing evaluation and fitting practices only as allowed for and as outlined by the NCHADFB and under direct supervision of audiology faculty who are licensed by the NCHADFB. For example, at UNCG students are not allowed to make ear impressions or place hearing aids in patient’s ears. Those services are performed only by properly licensed supervisors. Moreover, a NCHADFB licensed faculty member is always the responsible dealer or fitter listed on the “statement of sale” required under G.S. § 93D-7.

UNC is specifically authorized to pursue its educational mission through “public service, which contributes to the solution of societal problems and enriches the quality of life in the State.” N.C.G.S. § 116-1(b). In light of the fact that training in hearing aid fitting is an integral part of the education students in the UNC Audiology Masters programs at UNCG, UNC-CH and ECU, it is our opinion that the fitting and sale of hearing aids to clients of the clinics operated in conjunction with those programs does not violate the Umstead Act.

We also do not believe the pricing policies at UNCG violate the Umstead Act. Insofar as the services offered at the UNCG Speech and Hearing Center are provided in substantial part by graduate students in the Audiology Masters degree training program, the cost of diagnostic services is less than that of private practitioners. However, every two years, the clinical faculty meet on the issue of fees and conduct a market survey with the other training institutions across the state to assure that the fees for diagnostic and therapeutic services are comparable with other clinics operating in other North Carolina training programs. In the past two years, UNCG has offered discounts on the cost of hearing tests and hearing aid batteries only; the hearing aids themselves have always been sold at prices comparable to those offered by other audiologists practicing in the area.

In summary, it is our opinion that the hearing aid fitting services provided in UNC clinics by graduate students in the UNC Audiology Master Degree programs are an integral part of their professional education and training. Consequently, the constituent institutions of Jack Nichols January 8, 2002 Page 4

UNC are not violating the Umstead Act by operating clinics in which their graduate students provide hearing aid evaluation and fitting services to the public.

Very truly yours,

Grayson G. Kelley Senior Deputy Attorney General

Thomas J. Ziko Special Deputy Attorney General

Laura E. Crumpler Assistant Attorney General
cc: Leslie Winner
Lucien Capone Susan H. Ehringhaus Ben Irons