Yakima Valley Farm Worker’s Clinic 2010 Board Retreat

Transcript Yakima Valley Farm Worker’s Clinic 2010 Board Retreat

South Carolina Primary Health Care Association October 13, 2012

Community Health Center Board Governance Forum

presented by: Marcie H. Zakheim, Esq Partner of

• • • • • • •

Today’s presentation …

FQHC 101 – History and Core Components of the Health Center Program Board’s Role in General Oversight and Monitoring Board’s Policy-Making Responsibility: Section 330 Authorities Board’s Role in Advocacy Identifying and Addressing Common Pitfalls in the Board Management Relationship Minimizing Risk: Corporate Responsibility and Compliance Board’s Role in Affiliations and Collaborations

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FQHC 101 – History and Core Components of the Health Center Program FQHC 101 – History and Core Components of the Health Center Program

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History of the Health Center Program

•

In the beginning …

1964: Congress passed Title VI of the Economic Opportunity Act • • Created the Office of Economic Opportunity First health center model, combining community resources with Federal funds to establish neighborhood clinics • 1965: First two “neighborhood health center” demonstration projects funded in Boston and Mound Bayou, Mississippi

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History of the Health Center Program

• • •

Authorization of various health center programs …

1975: Title V of the Special Health Revenue Sharing Act • Permanently authorized neighborhood health centers as “community and migrant health centers” 1987: The Stewart B. McKinney Homeless Assistance Act • Authorized Health Care for the Homeless program 1990: The Minority Health Improvement Act • Authorized Public Housing Primary Care program

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History of the Health Center Program And then there was one …

• 1996: The Health Centers Consolidation Act • Consolidated the community, migrant, homeless and public housing primary care programs under one authority – Section 330 of the Public Health Service Act What started as a demonstration project more than 45 years ago – and grew into several programs authorized separately – is now a single program funded at over $2.5 billion (discretionary and mandatory funds), with over 1250 health centers serving more than 20 million persons in over 8100 locations throughout the county

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Core Health Center Requirements

All health centers must meet certain core

•

requirements

Must serve a medically underserved area (MUA) or medically underserved population (MUP) • • Required for Community Health Center (330(e)) grantees Not required for Migrant Health Center (330(g)), Health Care for the Homeless (330(h)), or Public Housing Primary Care (330(i)) grantees – special population programs serve an MUP by definition

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Core Health Center Requirements

• Must provide, or arrange for the provision of, all required services, which include comprehensive primary and preventive health care services, as well as essential ancillary and enabling services • All required services must be available to all health center • patients regardless of ability to pay and across all life stages Services can be provided directly or by established written arrangement (contract or formal referral)

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• •

Core Health Center Requirements

Comprehensive primary and preventive health care services, as well as essential ancillary and enabling services (cont.) • Basic primary care services, diagnostic lab and x-ray, prenatal and post-natal care, well-child care, immunizations, screenings, voluntary family planning, preventive dental services, pharmacy as appropriate • • Enabling services, including outreach, transportation, and translation Referrals to providers of medical services (including specialists when medically indicated) and other health-related services (including substance abuse and mental health services) • • Education regarding the availability and proper use of health services Case management services (counseling referral, and follow-up) and other services designed to assist patients in establishing eligibility for financial assistance programs May provide additional health services that are appropriate to meet the needs of the populations served

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Core Health Center Requirements

• • • Must have a schedule of charges designed to cover reasonable costs of operation and consistent with locally prevailing (community) rates Must have a corresponding schedule of discounts • Adjusted based on ability to pay for all uninsured and underinsured • patients earning annual incomes at or below 200% of the Federal Poverty Level Full discounts or “nominal” charges for uninsured and underinsured patients earning annual incomes at or below 100% of the Federal • Poverty Level No regular discounts for individuals earning annual incomes above 200% of the Federal Poverty Level No patient can be denied services due to an individual’s inability to pay – fees or payments must be reduced / waived to enable the health center to fulfill this requirement

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Core Health Center Requirements

• Must have a community-based governing Board of Directors that is between 9 – 25 members • Majority must be active consumers of the health center’s services, • • • • and as a group must be reasonably representative of the populations served by the health center in terms of demographic factors Non-consumer members must represent the community served and be selected for expertise in areas such as finance and banking, legal community affairs,

etc.

No more than ½ of non-consumer members can earn more than 10% of their annual income from health care industry Health center employees and their immediate family members cannot serve as voting members of the board Must hold regular monthly meetings

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• •

Core Health Center Requirements

Governing Board of Directors must autonomously exercise certain roles and responsibilities, including • Oversight and monitoring (but not management) of health center operation • • Policy-making Advocacy Specific policy-making authorities include • Approving the selection, evaluation and, if necessary, dismissal of the health center CEO • • • Developing, adopting and as necessary revising operational policies Approving the FQHC’s budget, annual project plan, and grant (or re certification) application Measuring and evaluating the health center’s achievements and use knowledge to update mission, goals, objectives, plans • Evaluating itself periodically for efficiency, effectiveness, and compliance with all Section 330-related requirements • Assuring compliance with applicable law, regulation and policy More on this later …

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New Models of Care for Health Centers

• • As the health care system heads towards greater coordination and integration, health centers nationwide are moving into new models of care Patient-Centered Medical Homes (PCMHs) • Personal physicians • • • Whole person orientation Coordinated and integrated care Safe and high-quality care through evidence-informed medicine, appropriate use of health information technology, and continuous quality improvements • • Expanded access to care Payment that recognizes added value from additional components of patient-centered care

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• •

New Models of Care for Health Centers

NCQA Recognition of PCMHs • To qualify, must meet nine elements • Access and Communication • • • • • • • • Patient Tracking and Registry Functions Care Management Patient Self-Management Support Electronic Prescribing Test Tracking Referral Tracking Performance Reporting and Improvement Advanced Electronic Communication • Three Recognition levels: must meet certain elements to qualify for the higher levels HRSA initiatives to assist health centers in becoming PCMHs, including funding

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• •

New Models of Care for Health Centers

Other Affordable Care Act collaborative models • CHC-based teaching/residency programs • Community Transformation Grants, Collaborative Care Networks, Community Health Teams • Medicare and Medicaid Accountable Care Organization (ACO) and Bundled Payment Demonstrations Other collaborative models • Health Center-Controlled Networks • Other

More on collaborations and affiliations later …

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The Board’s Role in General Oversight and Monitoring

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Fiduciary Duties

• Duty of Care • That level of care that an ordinary prudent person would exercise in a like position under like circumstances • With certain exceptions, if a board member acts in accordance with his or her “Duty of Care,” he or she should be protected from personal liability with respect to decision-making

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•

Fiduciary Duties

Examples of how to comply with the “Duty of Care” • Attend meetings • – at a minimum, if you cannot attend in person, you can attend “electronically” provided that All persons involved can hear each other (clear connection) and can participate in discussion (interaction) on an equal basis • Should be used as an “exception” not the rule – electronic attendance should not be a regular substitute for in-person meetings and discussion • Review minutes from previous meeting, approve and, as necessary, revise • • Stay informed and come prepared • Receive and read reports before the meeting • Develop questions in advance Ask questions – but stick to agendas and timelines and respect others • Do not personalize discussion and decision-making

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Fiduciary Duties

• Duty of Loyalty • Undivided allegiance to the organization when making decisions affecting the organization • Conflicts of Interest: should not use, or appear to use, board membership for purposes of private gain for themselves or family/business partners • Confidentiality: should not inappropriately disclose (formally or informally) confidential information about the health center to other persons, without board approval

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Fiduciary Duties

• Safeguarding the Duty of Loyalty • • Bylaws or other written board-approved policy: prohibit

actual or the appearance of

conflicts of interest by board members, employees, consultants and those who furnish goods or services to the health center W ritten “Code of Conduct” • Prohibits all board members, officers, employees, contractors, and agents from violating conflict of interest policies and confidentiality duties • Requires board members to act consistent with the interests of the health center and the decisions of the board • Defines how and when board members can represent the health center, as well as which actions are inappropriate

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Fiduciary Duties

• Duty of Obedience • Observance of, and faithfulness to, the organizational mission • • Understand the mission and how it is achieved by the health center program Always act in a manner consistent with the health center’s mission, goals, and objectives, as well as the decisions of the full board (even if you disagree) • Advance the mission when representing the health center within the community (as authorized) • Amend the mission when necessary

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•

Fiscal Responsibilities

Steward of public (federal, state, local) funds • At every meeting, review monthly financial statements and ensure appropriate expenditures and revenue against the budget • • Approve audit firm and review / accept auditor’s report Review and approve grant applications and other government filings • Review and approve Form 990 • Requires tax-exempt organizations to provide information addressing, among other things, certain practices that the Internal Revenue Service views as promoting good governance • • In most cases, IRS governance-related practices are not legally required for tax-exemption HOWEVER, IRS believes it has authority to set forth “best practices ”

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•

Fiscal Responsibilities

Review and approve Form 990 (cont.) • Specific board actions • Review the Form 990 financial information and narrative statement, with particular focus on governance topics, prior to submission to IRS • Consider whether the health center’s governance practices include the Form 990 areas (do the health center’s practices “measure up” to the IRS “unofficial” standards) • Consider whether the board should modify current (or establish new) policies to “put its best foot forward” on the Form 990 • Consider how practices will be perceived by donors, grantors and regulators who utilize the Form 990 information

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•

Fiscal Responsibilities

Approve appropriate executive compensation consistent with federal tax law and federal cost principles (

i.e.

, reasonableness standards) • In general, health centers (and other tax-exempt organizations) may pay reasonable compensation for services provided • What comparable organizations pay to similarly qualified and experienced persons for comparable services • Board establishes compensation of CEO/ED and approves salary and benefit scales for other employee “categories” (

i.e.

, physicians, nurse practitioners, middle management,

etc.

) • Board does not approve specific compensation for other individual employees • All compensation must be considered, including fringe benefits, insurance, car allowance, incentives,

etc.

• Incentives must promote the tax-exempt purposes of the organization and should be “capped” to ensure overall compensation is “reasonable”

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Fiscal Responsibilities

• Intermediate Sanctions (IRC Section 4958; 26 CFR § 53.4958) • Section 4958 imposes a penalty tax on a disqualified person,

e.g.

, Board member, CEO, CFO, who engages in an excess benefit transaction with an organization exempt under IRC §§ 501(c)(3) or (4) • • Organization managers,

e.g.

, Board members, CEO, CFO, and persons with those duties, are liable for a 10% tax if they knowingly approve an excess benefit transaction Example of an excess benefit transaction – payment of unreasonable executive compensation

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• • •

Fiscal Responsibilities

Presumption of “reasonableness” for tax purposes • Compensation arrangement is approved by the board composed

entirely

of individuals who do not have a conflict of interest with respect to the transaction • Review appropriate salary comparability information prior to establishing executive compensation • Adequately document the basis of the compensation decision within 60 days of the decision and properly report the decision • Can rely on a reasoned,

written

opinion of legal counsel, a CPA, or a valuation expert (after full disclosure of the facts) Reasonableness under federal cost principles • Compensation is an allowable cost to the extent that total compensation paid is reasonable for services rendered If any salary is above the legislative “salary cap”(amount of an individual’s salary charged to grant), must have sufficient program income to cover excess amount

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The Board’s Policy-Making Responsibility: Section 330 Authorities

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Board’s Role in Policy-Making

• What is “governance”?

• Establishing, adopting and periodically updating the health center’s mission and vision • • • Public declaration of guiding principles and values Defines organizational purpose Vision = long range strategic plans • Setting direction, priorities and goals to support and further the mission and vision • Establishing policies that codify the direction, priorities and goals

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Board’s Role in Policy-Making

• The board should develop, establish, review and, as necessary, revise policies that affect the health center organization as a whole • • • Are consistent with the health center’s mission, vision, values, goals and objectives Clarify and communicate the board’s expectations • Provide organizational direction and general course of action Establish a “framework” for current operations and future decision-making • • Ensure uniformity and consistency of action Serve as the underlying bases for procedures

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Board’s Role in Policy-Making

• The board should adopt (but NOT develop) procedures that affect individual operations, departments, employees • Will be developed and implemented by management to guide the day-to-day operations of the health center • • Involve the application of the board-established priorities and policies to operations Serve as “reference” sources so that the board can determine if policies are • • Appropriately implemented and up-to-date Functioning in a satisfactory manner, consistent with mission, goals and objectives

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•

Regulatory Authority for Policy-Making

Approve the selection, evaluation and, if necessary, dismissal of the health center CEO • There must be a direct line of authority between the board and the CEO, who delegates to staff as appropriate • The board should participate in reviewing and approving key actions of the health center, BUT delegate comprehensive day-to-day operational responsibilities to CEO and the management team • Provide direction to, oversee, support and establish effective communication with the CEO • However, should not usurp the CEO’s authority, unnecessarily intervene in day-to-day administration of center, micro-manage or try to do it all

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Regulatory Authority for Policy-Making

• Approve the health center CEO (cont.) • The CEO and management team should • • Allocate and operate within available resources Take necessary operational steps (

i.e.

contracts; approving expenditures) vendor and provider • • • Oversee and monitor effectiveness of daily operations Identify and resolve problems Provide the board with sufficient information necessary for it to perform its responsibilities and, as necessary, request direction and guidance • However, should not substitute their own judgment for that of the board or try to do it all so as not to “bother” the board

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Regulatory Authority for Policy-Making

• • • Develop, adopt, and periodically update health care policies • • • Scope and availability of services Location and hours of service Quality of care audit procedures Conduct operational (annual) and strategic (every 3 – 5 years) planning Develop, adopt, and periodically update personnel policies • • • • Selection and dismissal procedures Salary and benefit scales Employee grievance procedures Equal opportunity practices

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Regulatory Authority for Policy-Making

• Personnel policies (cont.) • While the board hires, evaluates, and, if necessary, dismisses the CEO, and establishes overall personnel policies, it should defer specific staff issues to the CEO • Should not get involved and/or communicate with staff directly, except in “special” defined circumstances (serious issues concerning the CEO; staff assigned to board committees) and only in accordance with established policy and procedure • Should not try to manage staff, or override or reverse management decisions with respect to any aspects of staffing (hiring, evaluating, dismissing, resolving grievances,

etc.

) • The CEO and management team should • • Hire, manage, supervise, evaluate, discipline and dismiss all staff Address grievances and complaints from staff and patients

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Regulatory Authority for Policy-Making

• • • • Develop, adopt, and periodically update policies for financial management practices • System to assure accountability for health center resources (

i.e.

, internal controls to manage risks and monitor reliability and integrity of information; purchasing policies; billing and collection system) • Long-range financial planning (should be tied to long-term strategic plan) Approval of annual project plan, budget and audit Health center’s financial priorities Eligibility for services and payment schedules, including • • Schedule of charges P artial payment / discount schedules (“sliding fee scales”)

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Regulatory Authority for Policy-Making

•

Financial management practices (cont.)

• Must have a schedule of charges designed to cover the reasonable costs of operation and consistent with locally prevailing rates • Must have a corresponding schedule of discounts appropriate for target population • Adjusted based on ability to pay for individuals/families with annual incomes at or below 200 percent of poverty • Full discounts (or, at most, a nominal fee) for individuals/families with annual incomes at or below 100 percent of poverty

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Regulatory Authority for Policy-Making

• • • • Develop policies to evaluate health center activities • • • • • Service utilization patterns Productivity Patient satisfaction Achievement of project objectives Process for hearing/resolving patient grievances (but the board should defer specific patient-related issues to the CEO – the board should not address patient grievances and complaints) Measure and evaluate the health center’s achievements and use knowledge to update mission, goals, objectives, plans Evaluate itself periodically for efficiency, effectiveness, and compliance with all Section 330-related requirements Assure health center compliance with applicable federal, state and local laws, regulations, and policies

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Board Procedures

• • Governing board must hold regular monthly meetings (required under health center regulations) Governing board should (but is not required to) establish appropriate mechanisms to ensure effectiveness of organization and operation • Selection procedures that allow for a self-perpetuating board, including rotation in membership and leadership (officers) • Removal procedures for not acting in the FQHC’s best interests • • Appropriate committees and committee meeting schedules Opportunities for board orientation, training and development (initial and ongoing)

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The Board’s Role in Advocacy

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•

Advocating for the Health Center

Federal, state and local advocacy • Lobbying • – written or oral communication that is an attempt to influence (for or against) specific legislation, including referenda, initiatives, or similar ballot measures Tax law: Health centers

can

lobby, within certain limits • Federal cost principles: federal grant funds

may not

be used for lobbying activities • • Education is not lobbying!

Board should approve and participate in appropriate lobbying activities • Political activity - Health centers • in political process as individuals,

may not

intervene in any election for public office or attempt to influence the outcome of any federal, state or local election Board members can support or to oppose candidates and engage

PROVIDED THAT

they do not act on behalf of the health center

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Advocating for the Health Center

• Representing the health center within and to the community (as authorized) • • • • • Approve and participate in appropriate lobbying activities Serve as the “public relations” arm of the center by reaffirming, promoting, and supporting the health center’s mission and vision to the public and getting input, as necessary Act as the “face” and “voice” of the health center Be involved in fundraising activities Maintain coordination with other board members and CEO • Individual board members should not speak for or act in an official capacity on behalf of the health center unless specifically authorized to do so • Individual board members should not publicly disagree with decisions made or actions taken by the full board and/or management (acting as a “community” advocate, not a “health center” advocate)

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Advocating for the Health Center

• • CEO’s role in representing the health center • Interact with the community, providers, and payors on a daily basis • • Respond to business (and other) opportunities and plan for future events within the community Keep the board informed about what’s going on and, as necessary, request direction and guidance • Be involved in educational and lobbying efforts on federal, state and local levels Together, the board and the CEO should • Work together to develop a clear and consistent message for the community, media, etc.

• Work together to promote the health center

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Identifying and Addressing Common Pitfalls in the Board / Management Relationship

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• • • •

Common Pitfalls for the Board

Acting in a manner inconsistent with the health center’s mission, goals, and objectives • Not putting the health center first • Personalizing discussion and decision-making • Publicly disagreeing with decisions made or actions taken by the full board and/or management (acting as a “community” advocate, not a “health center” advocate) Crossing the line into management: micro-managing and wanting to do it all • Speaking directly with staff regarding daily operation, unless communication falls within “special” circumstances (regardless of who initiates communication) • Managing the staff (hiring, establishing compensation, evaluating, supervising) • Overruling / reversing management decisions • Resolving specific employee or patient grievances Individually acting or speaking on behalf of the health center without specific authorization to do so (even if intentions are good) Conflicts of interest

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Common Pitfalls for Management

• • • Acting in a manner inconsistent with or contrary to the boards’ priorities – doing it “your way” regardless of what board wants Personalizing decision-making and letting ego get in the way Crossing the line into governance • • Not trusting the board to make decisions Not respecting the board and its role as community / patient representatives – not “buying-in” to the “community” in “community health center” • • Trying to do it all so as to not bother the board Substituting his/her judgment for that of the board

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Consequences of Engaging in Common Pitfalls

• • • • • Negative impact on board and management dynamics, resulting in ineffective decision-making Distrust / loss of respect between the board and management Negative impact on management’s relationship with staff • • Distrust / loss of respect between management and staff Inability of management to conduct effective operation and to make and implement decisions Potential liability for the organization (and/or board members) Added costs??

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• • “Tips” to Minimize Pitfalls to Ensure Effective Relationships Provide education and training to board members, management and staff on their proper roles and responsibilities Both the board and the CEO should • • Build trust and respect for one another Recognize their respective roles and limitations, and not “cross the line” or usurp each other’s roles • • • Support and assist each other in exercising responsibilities Keep each other informed – establishing regular, effective two way communication is a “must” Always maintain coordination with one another – work together with one voice and one intention

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Minimizing Risk: Corporate Responsibility & Compliance

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•

High Risk Areas for Health Center Boards

• • • • Section 330-related requirements and expectations regarding the board’s compliance with • Fiduciary duties • Exercising due care in decision-making • • Managing conflicts of interest Maintaining confidentiality Section 330 composition requirements Oversight vs. involvement in daily operations Autonomous exercise of regulatory authorities Avoiding (and addressing) rogue conduct

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Additional High Risk Areas

• • • • Appropriate claims submissions (billing) Employing or contracting with suspended or excluded providers • http://www.oig.hhs.gov/fraud/exclusions/exclusio ns_list.asp

• http://www.epls.gov

Accuracy of grant applications, reports, and other representations Compliance with HHS administrative requirements • Federal procurement policies • Federal equipment and property standards

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Affordable Care Act Reimbursement Opportunities • • • • Creation of $11 billion Community Health Center Trust Fund over the next five years • Expand operational capacity to serve 20 million new patients • • • Enhance medical, oral, and behavioral health services Expand and improve existing facilities and construct new sites FY2013 – Proposed budgets include additional $300 million (from ACA) – unclear how much will be available Expands Medicaid coverage up to 133% of FPL Establishes a new Medicare Prospective Payment System (PPS) for Federally Qualified Health Centers (FQHCs), effective cost reporting periods beginning on or after October 1, 2014 – elimination of Medicare payment cap Requires that FQHCs be paid no less than Medicaid PPS rates by the health insurance exchange plans

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Affordable Care Act Accountability Measures

• • • • • • Mandatory Compliance Programs as a condition of enrollment in Medicare, Medicaid, and CHIP

(more on that later …)

Mandatory return of overpayments within 60 days of identification Higher risk of False Claims liability Increased federal funding of Medicare and Medicaid program integrity enforcement activities Increased OIG enforcement authorities Enhanced penalties for fraudulent conduct

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•

Enhanced Enforcement Activities OIG Work Plan FY 2012 – new reviews

• OIG will review health centers’

compliance with Section 330 requirements

, including • • • Determining the allowability of expenditures Assessing the adequacy of accounting systems Assessing the adequacy of accounting for program income • Determining the ability of health centers to manage federal funds and to operate community health service delivery sites in accordance with federal requirements

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Enhanced Enforcement Activities

•

OIG Work Plan FY 2012 – Continuation of reviews related to Recovery Act funds

• OIG will continue to review • Capacity of Recovery Act grantees to manage and account for federal funds and to operate community health centers in accordance with federal rules • How Recovery Act funds supported the adoption, use and sustainability of electronic health records through health center-controlled networks • General IT security controls for health center systems funded by HRSA’s health IT grants to ensure adequate IT security controls are in place

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HRSA Operational Assessments

• Nineteen Health Center Program Requirements • Legal standards mandated by the health center program authorizing statute – Section 330 of the Public Health Service Act (42 U.S.C. § 254b) – and the implementing regulations at 42 C.F.R. Part 51c (and Part 56 for migrant health center programs) • Grouped into four sections that generally reflect the core components of the health center program • • • • Need Services Management and finance

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HRSA Operational Assessments

• The Health Center Site Visit Guide • HRSA’s main review instrument for auditing a health center’s compliance with Nineteen Health Center Program Requirements (

i.e.

, operational assessment) • Divided into same four sections as the Nineteen Requirements • • Standardized questions designed to be answered with a simple “yes” or “no” to assess a health center’s compliance with one or more of the Nineteen Requirements “Prompting questions” for each of the Nineteen Requirements intended to result in recommendations to improve the health center’s implementation of the requirements • Every health center will have an operational assessment at least once per project period

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What is a Corporate Compliance Program?

• What is a corporate compliance program?

• Internal operational tool • Examines and evaluates the quality and sufficiency of internal controls and operational activities • Promotes self-regulation, identification, correction, reporting and prevention • • Demonstrates commitment to compliance and honest conduct Improves quality, efficiency and effectiveness of health care services and operational activities, while reducing related costs • • May mitigate penalties if non-compliance occurs Limits corporate director liability • Centralized education and communication system regarding health-care-related laws, regulations, policies

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Elements of a Corporate Compliance Program

• Seven core components: step-by-step approach • • Designate a compliance officer/contact Conduct initial (“baseline”) internal monitoring and oversight, and regular audits thereafter • Develop written standards and policies to implement the compliance program and to govern health center operations • Conduct culturally and linguistically competent training and education programs • Develop effective, clear, open lines of communication between compliance and health center personnel, including an open door policy and a strong policy prohibiting retaliation • • Investigate detected problems and develop corrective action Publicize and enforce disciplinary standards

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• Board’s Role in Corporate Compliance Program • • Similar to other oversight activities, the board is responsible for establishing, overseeing, and periodically evaluating the compliance program If you have not yet implemented a compliance program, pass a resolution to establish the compliance program and approve the initial policies that define its framework Adopt key policies and procedures that define the compliance program framework, and review and approve modifications, as necessary

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• Board’s Role in Corporate Compliance Programs • • • • • Board’s role (cont.) Ensure funds budgeted for the compliance program are sufficient and appropriate, considering the health center’s high risks Review the annual compliance work plan and, during the year, monitor progress towards its implementation Receive regular reports from the CEO and (once appointed by the CEO) Compliance Officer about progress in implementing the compliance program and, once implemented, compliance program activities Receive information and reports from the Compliance Officer about investigations of non-compliance (as appropriate) Periodically evaluate the performance and effectiveness of the compliance program

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Additional Words of Advice on Compliance

• • Do: • • Participate in training and education regarding compliance risks Be prepared to be consulted and act aggressively if any material compliance issues are identified • • Review compliance issues in Executive Session Request independent audits of the compliance program Do not: • Succumb to the temptation to be an outlet for employees who want to “end run” the established compliance process • Expect management to report all unsubstantiated allegations (as opposed to substantiated compliance concerns) • Pay lip service to compliance without a true commitment, including a commitment with words, actions, and financial support

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OIG Resources for Boards

• • •

Corporate Responsibility and Corporate Compliance: A Resource for Health Care Boards of Directors

(April 2003)

An Integrated Approach to Corporate Compliance

(July 2004)

Corporate Responsibility and Health Care Quality: A Resource for Health Care Boards of Directors

2007) (Sept. www.oig.hhs.gov/fraud/complianceresources.asp

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The Board’s Role in Affiliations and Collaborations

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Program Requirements

•

Program Requirement #10 Contractual/Affiliation Agreements

• Health center exercises appropriate oversight and authority over all contracted services, including assuring that any sub-recipient(s) meets Health Center program requirements • Legal Authority: Section 330(k)(3)(I)(ii); 42 CFR Part 51c.303(n), (t); Section 1861(aa)(4) and Section 1905(l)(2)(B) of the Social Security Act; and 45 CFR Part 74.1(a) (2)

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Program Requirements

•

Program Requirement #1 – Collaborative Relationships

:

• Health center makes effort to establish and maintain collaborative relationships with other health care providers, including other health centers, in the service area of the center • The health center secures letter(s) of support from existing Federally Qualified Health Center(s) in the service area or provides an explanation for why such letter(s) of support cannot be obtained • Legal Authority: Section 330(k)(3)(B) of the PHS Act

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HRSA Affiliation Policies

•

HRSA Affiliation Policy Information Notice (“PIN”) #97-27:

Affiliation Agreements of Community and Migrant Health Centers

• Purpose: to protect the autonomy and integrity of health center project by limiting third party involvement in the structure,

governance

and operation of health center

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HRSA Affiliation Policies

•

PIN #98-24:

Amendment to #97-27

• HRSA prefers that health centers directly employ CFO, CMO, and core staff of primary care providers • HRSA may grant a “good cause” exception • Programmatic benefit (

e.g.

, improved or increased access, expertise, quality, capital) • Sufficient accountability for operation and direction of grant-approved project and the expenditure of grant funds

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HRSA Affiliation Policies

•

PAL #2011-02:

Health Center Collaboration

• In all collaborations, health centers must • Maintain oversight over all in-scope sites and services, including ensuring that all patients have access to the full range of services • Assure that all in-scope services (whether provided directly or by contract) are available regardless of ability to pay • Comply with all Section 330 statutory and regulatory requirements and, as applicable, HHS administrative regulations including requirements regarding • • Provision of and payment for services provided by contract Procurement of goods and services

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Board’s Role in Evaluating Affiliations

• • Because the board plays a vital role in setting the priorities and policy direction for the health center, effective corporate governance requires the board to play a key role in evaluating and approving the health center’s collaborations with local partners As the “eyes,” “ears” and “voice” of the community, the health center board should review a proposed collaboration to determine • • Is it consistent with the health center’s mission and strategic goals?

Is it consistent with the health center’s responsibilities towards its patients and the community overall?

• Is it financially and legally feasible?

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•

Board’s Role in Evaluating Affiliations

Consistent with Duty of Obedience, the board must determine whether a proposed collaboration furthers the mission • Will it benefit the health center’s patients and the community overall? • Will the arrangement preserve or enhance • Patient access?

• • • Service continuity?

Fair payment?

Patient freedom of choice?

• • Is the arrangement culturally and linguistically appropriate?

• Is the collaboration partner willing to take all health center patients upon referral, regardless of ability to pay, payor source, or insurance status?

Will the collaboration contribute to the health center’s survival or growth?

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Board’s Role in Evaluating Affiliations

Consistent with general fiduciary duties, the board should ensure that the proposed collaboration does not compromise • Responsibility as good stewards of federal / public funds • Accountability to the community and patient populations served • Compliance with applicable laws, regulations and policies Examples: • Do the proposed terms adversely impact the current patients served or the existing scope of services provided?

• Does the financial analysis support, at worst, a break-even budget?

• Does the arrangement avoid conflicts of interest and violations of law related to the integrity of the health care system or improper financial interests/benefits?

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Board’s Role in Evaluating Affiliations

Consistent with oversight duties, the board should be involved in assessing the feasibility of the proposed collaboration, based on information provided by the health center’s management team regarding • The results of each party’s due diligence review • • The financial analysis Whether the terms and conditions permit the health center to • Retain sufficient flexibility to collaborate with other providers • Maintain compliance with all applicable statutory, regulatory and policy requirements (including HRSA affiliation policies) • Whether the health center needs to secure regulatory approvals prior to execution and implementation Ultimately, the board should retain authority to approve significant collaboration arrangements

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Potential Partners

• • • • • • • • • • • • Hospitals and Health Systems Residency programs Hospitalists (either employed by hospital or separate community group) Public health departments Community-based group practices (

e.g.

, OB/Gyn groups) Rural health clinics Behavioral health providers (community mental health centers, private practice behavioral health providers) Oral health providers (private dental practices / dentists, dental schools) Ryan White providers / Title X clinics School-based health care providers Other FQHCs (grantees and look-alikes) Other safety net providers

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Potential Structural Options

Formal referral arrangements (including co-located referrals) Lease of personnel / services Transfer (acquisition) of primary care clinics or establishment of new sites • Limited services sites • • Emergency room care coordination Residency program collaboration • • • • Establishing new organizations • Accountable care organizations • Networks - practice management, managed care negotiations, multi-purpose Management services organizations Provider sponsored organization Prepaid health plans Health maintenance organizations

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Marcie H. Zakheim, Esq [email protected]

Feldesman Tucker Leifer Fidell LLP 1129 20 th Street N.W. – Suite 400 Washington, D.C. 20036 www.ftlf.com

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