Transcript AWPHD A Retreat for CEOs and Administrators Only “Leading

AWPHD
A Retreat for CEOs and
Administrators Only
“Leading Wisely, Living Well”
The Heathman Lodge
Vancouver, WA
May 19-21, 2010
Bradley J. Berg
206.447.8970 | [email protected]
PHD Collaboration Models
 Merger/Consolidation
 Sale
 Lease
 Management Agreement
 Joint Venture Agreement
-- Joint Operating Agreement
-- Interlocal Agreement
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Key Variables in Collaboration Models
 Who owns the assets?
 Who is responsible for funding capital?
 Who has the right to receive revenue and who has
responsibility for liabilities and expenses?
 Who owns the licenses and provider agreements?
 Who employs the staff?
 Who is responsible for governance and management?
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Public Hospital District Issues
1. Statutory authority
2. Constitutional limitations
-- prohibition against gift of public funds or property
-- prohibition against lending public funds or public credit
-- prohibition against owning stock in any private company
-- requirement that public funds be used for public purposes
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Public Hospital District Issues
3. Statutory limitations

Requirement that public hospital districts appoint a
superintendent and that the superintendent be the "chief
administrative officer of the public district hospital and …
have control of administrative functions of the district."

Requirement that any sale of real property be preceded by
three appraisals and a public hearing and that the property
not be sold for a price less than 90% of the average of the
three appraisals.
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Public Hospital District Issues

Requirement that any lease of real property be preceded
by a resolution adopted by the commissioners finding
that the property "presently is not required for public
hospital district purposes. . . ."

Requirement that any meetings be held in compliance
with the provisions of the Open Public Meetings Act.

Requirement that any records be made available to the
public pursuant to the Public Records Act.
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Public Hospital District Issues

Prohibition against any public officer having any
beneficial interest in any contract that they approve or
supervise.

Requirement that any construction projects paid for with
public money be publicly bid and that the construction
workers be paid prevailing wages.
Leading Wisely, Living Well
Public Hospital District Issues
4. Common Law Limitations

Prohibition against a public officer simultaneously
holding a public office and an incompatible private office.

Other?
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Restrictions Relating to Outstanding Bonds
1. Bond Covenants
-- Restrictions on transfers of property
 Unlimited tax general obligation bonds
 Limited tax general obligation bonds
 Revenue bonds
-- Restrictions on issuance of additional debt
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Restrictions Relating to Outstanding Bonds
2. Federal Tax Law Limitations
-- Restrictions on change in use of property financed
with the proceeds of tax-exempt bonds
-- Restrictions on management agreements or services
agreements relating to the use of property financed
with the proceeds of tax-exempt bonds
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Government Approvals
1. Certificate of Need
2. Antitrust
-- Hart-Scott-Rodino filing
-- U.S. Department of Justice
-- Federal Trade Commission
-- State Attorney General
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Government Approvals
3. State Auditor
4. Washington State Department of Health
5. CMS
6. Other?
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Other Legal Issues
1. Labor Issues
-- Multiple unions
-- Jurisdiction of National Labor Relations Board
versus Public Employees Relations Commission
-- Compensation and benefits structures
-- Reductions in work force
-- Other?
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Other Legal Issues
2. Medicare Reimbursement
-- Billing under a single provider
-- Other?
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Other Legal Issues
3. Federal tax limitations relating to Section 501(c)(3)
organizations
4. State Tax Issues
-- Business and occupation tax and requirements for
social welfare organizations
-- Property tax exemptions
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Other Legal Issues
5. Restrictions on assignment of existing contracts
including significant payers
6. Other?
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Collaboration Examples Involving Public Hospitals
Mason County PHD No. 2/Harrison Medical Center
 New PHD formed for the purpose of collecting
taxes and contracting with Harrison to own
and operate an urgent care clinic within the
District
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Collaboration Examples Involving Public Hospitals
San Juan County PHD No. 1/Peace Health
 PHD closing its ambulatory care clinic and
contracting with PeaceHealth to construct a new
critical care hospital, which will be owned and
operated by PeaceHealth, and a new EMS facility,
which will be owned and operated by the District
Leading Wisely, Living Well
Collaboration Examples Involving Public Hospitals
Grant County PHD No. 5/Mattawa Community Medical Clinic
 PHD contracts with a separate nonprofit
corporation to operate a Federally Qualified Health
Center Look-A-Like in the PHD’s facilities
Leading Wisely, Living Well
Collaboration Examples Involving Public Hospitals
Snohomish County PHD No. 2/Swedish Health Services
 PHD agrees to lease all of its health care facilities
to Swedish Health Services. Swedish will operate
the hospital under its license. The PHD is
exploring other functions beyond operating a
hospital.
Leading Wisely, Living Well
Collaboration Examples Involving Public Hospitals
University of Washington/Northwest Hospital
 UW has become the sole corporate member of
the nonprofit corporation that owns and
operates Northwest Hospital and has been
granted certain reserved powers including the
power to appoint the board of directors of the
corporation.
Leading Wisely, Living Well
Collaboration Examples Involving Public Hospitals
 Other examples
 King County PHD No. 4/PeaceHealth
 University of Washington/Harborview
 Pacific Hospital and Preservation Development
Authority/Pacific Medical Centers
Leading Wisely, Living Well
New Financing Options for Public Hospital Districts
 FHA 242 Program — HB 2510
 USDA Financing
 State LOCAL Program
 Build America Bonds (currently expires 12/31/2010)
 Increase in bank qualification from $10 M to $30 M
(currently expires 12/31/2010)
Leading Wisely, Living Well
Litigation Challenging Hospital’s Right to Employ Physicians
 Columbia Physical Therapy v. Benton Franklin
Orthopedic Associates
 Witham v. Clallam County PHD No. 2 and Olympic
Hospitalist Physicians
Leading Wisely, Living Well
Health Care Reform Changes
New requirements applicable to 501(c)(3) hospitals
 Must conduct a health-needs assessment every three
years
 Must adopt and make widely available a financial
assistance policy
 Must limit charges for those eligible for financial
assistance policy to lowest amount charged to those
who have insurance
 Must limit billing and collection practices
Leading Wisely, Living Well
Health Care Reform Changes
Fraud and abuse law changes
 Amends anti-kickback statute to relax specific intent
requirement and to clarify that violation results in false
claim
 Liberalizes the qui tam law
 Requires expansion of RAC audits to Medicaid by
12/31/2010
 Requires the establishment of a disclosure protocol for
violations of the Stark Law and permits settlements
Leading Wisely, Living Well
Health Care Reform Changes
 Requires overpayments to be refunded within 60 days to
avoid a false claim
 Requires all fee for service claims for services provided after
1/1/2010 within one year of the date of service
 Requires physicians who own who operate imaging services
in their offices to inform patients in writing from an outside
source. Providers must also be accredited by 1/1/2012
Leading Wisely, Living Well
Health Care Reform Changes
 Expands 340B drug program eligibility to critical
access hospitals (participating rural hospitals report
average monthly savings of $19,700 on total outpatient
drugs in 2006)
Leading Wisely, Living Well
Contact Information
Brad Berg
Telephone: 206-447-8970
Email: [email protected]
Foster Pepper PLLC
1111 Third Avenue, Suite 3400
Seattle, WA 98101
www.foster.com
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