Health Center Board Member May Training Dave Brown

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Presentation to annual community health Center board member training.

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Health Center Board Member May Training Dave Brown

  1. 1. Health Center Board Member Training May 15, 2009 Mt. Pleasant, MI Presented by David L. Brown
  2. 2. AGENDA <ul><li>Why we have a Board? </li></ul><ul><li>What is a Board supposed to do? </li></ul><ul><li>Safeguard the assets of the Center. </li></ul><ul><li>Legal Obligations of Health Center Board Members </li></ul>
  3. 3. Why Have a Board?
  4. 4. <ul><li>To Govern </li></ul><ul><ul><li>Provide leadership </li></ul></ul><ul><ul><li>Guide the center in doing what it was intended to do </li></ul></ul><ul><ul><li>Requires and understanding of mission, ensuring programs and services fulfill its mission </li></ul></ul><ul><ul><li>Requires providing a vision – a direction for the organization </li></ul></ul><ul><ul><li>The board governs the present and plans for the future in a way that preserves the mission </li></ul></ul>
  5. 5. <ul><li>To Link to the Community </li></ul><ul><ul><li>Serve as the voice of the community </li></ul></ul><ul><ul><li>Represents the community and its needs to the center. </li></ul></ul><ul><ul><li>The center was established to meet a specific need – to provide primary care services to the community’s medically underserved and vulnerable residents. </li></ul></ul><ul><ul><ul><li>It’s the boards role to represent the community in assuring the center maintains the proper management and staff necessary to provide the scope of services needed for the community </li></ul></ul></ul><ul><ul><li>The board is required to promote the center and its mission to the community </li></ul></ul>
  6. 6. <ul><li>It’s Required </li></ul><ul><ul><li>Incorporated and granted tax-exempt status by the State and Federal Government to fulfill a need </li></ul></ul><ul><ul><li>A non-profit business has rules regarding how its managed </li></ul></ul><ul><ul><ul><li>One of those is it must establish and maintain a board to make sure it operates and does what it was set up to do </li></ul></ul></ul><ul><ul><li>Required by grant and Federal Requirements </li></ul></ul>
  7. 7. What is a Board Supposed to do?
  8. 8. Define and preserve the mission of the organization <ul><li>Everyone, including each board member, center staff, executive director and the community should understand why the center exists and what it hopes to accomplish </li></ul><ul><li>It is the board’s job to continually clarify the mission of the center. </li></ul><ul><li>Board should also understand of the goals and objectives based upon the mission statement of the center </li></ul><ul><li>Mission should be well crafted and relevant </li></ul><ul><li>If this done making policy will be easier </li></ul>
  9. 9. Make Policy <ul><li>Policies should ensure uniformity and consistency of action throughout the organization </li></ul><ul><li>Policies should be consistent with the mission, goals and objectives of the center, other policies and applicable laws and regulations </li></ul><ul><li>Why and when the board sets policy </li></ul><ul><ul><li>To initiate action to accomplish the mission </li></ul></ul><ul><ul><li>Response to a changing need in the community </li></ul></ul><ul><ul><li>Response from a funding agency </li></ul></ul>
  10. 10. <ul><li>Never make financial and programmatic decisions independently of each other! </li></ul><ul><li>Boards must constantly: </li></ul><ul><ul><li>Reassess priorities </li></ul></ul><ul><ul><li>Interpret and evaluate it’s policies </li></ul></ul><ul><ul><li>Change, discard or create new policies </li></ul></ul><ul><ul><li>This in order to meet the changing needs of: </li></ul></ul><ul><ul><ul><li>The Community </li></ul></ul></ul><ul><ul><ul><li>Health Center </li></ul></ul></ul><ul><ul><ul><li>Funding Sources </li></ul></ul></ul>
  11. 11. <ul><li>Governing Boards of Health Centers typically have policies within one of 4 categories: </li></ul><ul><ul><ul><li>Operations </li></ul></ul></ul><ul><ul><ul><li>Personnel </li></ul></ul></ul><ul><ul><ul><li>Finances </li></ul></ul></ul><ul><ul><ul><li>Quality Assurance </li></ul></ul></ul>
  12. 12. 1. Operations <ul><li>The board is responsible for the efficient, effective operation of the center </li></ul><ul><li>Board should establish policies that: </li></ul><ul><ul><li>Address the process of selecting, reviewing and dismissing the executive director </li></ul></ul><ul><ul><li>Provide effective organizational structure </li></ul></ul><ul><ul><li>Determine scope, location, and availability of services </li></ul></ul><ul><ul><li>Establish process for handling and solving patient grievances </li></ul></ul><ul><ul><li>Ensure the center is in compliance with all Federal, State and local laws and regulations that are applicable </li></ul></ul>
  13. 13. 2. Personnel <ul><li>These policies will guide the executive director in developing a sound program that includes: </li></ul><ul><ul><li>Selection and dismissal procedures </li></ul></ul><ul><ul><li>Employee compensation, including salary scales and benefit packages </li></ul></ul><ul><ul><li>Position descriptions and classifications </li></ul></ul><ul><ul><li>Performance review and evaluations </li></ul></ul><ul><ul><li>Employee grievance procedures </li></ul></ul><ul><ul><li>Equal opportunity practices </li></ul></ul>
  14. 14. 3. Finance <ul><li>The board should establish policies that ensure proper administration of funds and record accurately the centers financial activities </li></ul><ul><li>The board should: </li></ul><ul><ul><li>Establish financial priorities </li></ul></ul><ul><ul><li>Long range financial planning </li></ul></ul><ul><ul><li>Review and approve the annual budget and annual audit </li></ul></ul>
  15. 15. <ul><li>Board should also ensure the creation of: </li></ul><ul><ul><li>Internal control procedures </li></ul></ul><ul><ul><li>Purchasing policies and standards </li></ul></ul><ul><ul><li>Protocols for determining eligibility for services, including criteria for sliding fee schedule </li></ul></ul><ul><ul><li>A billing and collection system that: </li></ul></ul><ul><ul><ul><li>Establishes charges based on local prevailing charges and cost to the center </li></ul></ul></ul><ul><ul><ul><li>Sliding fee adjustment based on ability to pay and family size </li></ul></ul></ul><ul><ul><ul><li>Bills and collections for third party payers </li></ul></ul></ul><ul><ul><ul><li>Procedures for accounts receivables </li></ul></ul></ul><ul><ul><ul><li>Procedures for writing off bad debts </li></ul></ul></ul>
  16. 16. 4. Quality Assurance <ul><li>The board is obligated to make sure the executive director and staff make continuing efforts to maintain and improve quality of care that the center provides </li></ul><ul><li>Board should make sure that: </li></ul><ul><ul><li>Director hires a competent, qualified Medical Director who will supervise other clinical staff </li></ul></ul><ul><ul><li>Generally accepted principles of quality health care are developed and followed </li></ul></ul><ul><ul><li>Internal QA program provides for the periodic review of the center’s performance in meeting the needs of the community </li></ul></ul>
  17. 17. <ul><li>Once policies are approved implementation must be reviewed and approved by the board as well </li></ul><ul><li>Board is responsible for making sure the director implements the approved policies </li></ul><ul><ul><li>Once implement the board must support the ED and staff in their efforts </li></ul></ul><ul><li>Board has the role of making policy ED and staff have the job of implementing </li></ul><ul><ul><li>It is important the board accept the ideas of the policy from ED and staff as they have first hand knowledge in day to day operations </li></ul></ul>
  18. 18. Safeguard the assets of the center.
  19. 19. <ul><li>The board has placed in a position of trust by the community and funding sources to protect the center’s assets and make sure the center’s income is managed properly and the mission is preserved </li></ul><ul><li>Board is FIDUCIARY responsible for the management of the center </li></ul>
  20. 20. Bylaws <ul><li>Detailed rules about how the organization will be governed </li></ul><ul><li>They Should address: </li></ul><ul><ul><li>Mission </li></ul></ul><ul><ul><li>Membership </li></ul></ul><ul><ul><ul><li>Size </li></ul></ul></ul><ul><ul><ul><li>Composition </li></ul></ul></ul><ul><ul><ul><li>Responsibilities </li></ul></ul></ul><ul><ul><ul><li>Terms of office </li></ul></ul></ul><ul><ul><ul><li>Selection/dismissal process </li></ul></ul></ul>
  21. 21. <ul><li>Committees </li></ul><ul><ul><li>Standing </li></ul></ul><ul><ul><li>Ad-hoc </li></ul></ul><ul><ul><li>Membership </li></ul></ul><ul><ul><li>Responsibility </li></ul></ul><ul><li>Meeting schedule </li></ul><ul><li>Officers </li></ul><ul><ul><li>Selection </li></ul></ul><ul><ul><li>Terms of officers </li></ul></ul><ul><ul><li>Selection/removal process </li></ul></ul><ul><li>Minutes </li></ul><ul><ul><li>Recording </li></ul></ul><ul><ul><li>Storage </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><li>Conflict of interest </li></ul><ul><li>Executive session </li></ul><ul><li>Dissolution </li></ul><ul><li>Indemnity </li></ul><ul><li>Acceptable meeting venue </li></ul><ul><li>Quorum </li></ul>
  22. 22. Center Finances <ul><li>The boards job is to: </li></ul><ul><ul><li>Make policies that clearly define </li></ul></ul><ul><ul><ul><li>Sources of revenue and categories of expeditures </li></ul></ul></ul><ul><ul><ul><li>Process for adjusting to meet the actual financial situtation as the year progresses </li></ul></ul></ul><ul><li>Leaves the details to management (as long as decisions are within board approved policy) </li></ul><ul><li>Monitor the status of income and expenditures against budget </li></ul><ul><li>Compare the actual financial condition of the center against policies set by the board </li></ul><ul><li>Plan for needed revenue sources and plan and budget for capital improvement </li></ul>
  23. 23. The Budget <ul><li>Board must review and approve the annual budget (usually prepared by the Ed and staff) </li></ul><ul><ul><li>Approval of the budget is one of the most important decisions the board will make as it sets in motion the programs, personnel and fiscal decisions. </li></ul></ul><ul><li>Should think of the budget as the center’s business plan </li></ul><ul><li>Compare the actual to budget on a regular basis </li></ul><ul><li>If monitored monthly will help identify problems as they occur </li></ul>
  24. 24. <ul><li>Since the board is responsible for the center’s finances they should assure that at least one member has financial expertise. </li></ul><ul><li>The board can only truly monitor the performance of the budget if they understand the financial statements </li></ul><ul><li>Financials should be understandable, accurate and timely </li></ul>
  25. 25. <ul><li>Board should review monthly </li></ul><ul><ul><li>Fiscal status reports </li></ul></ul><ul><ul><li>Comparison of budget to actual </li></ul></ul><ul><ul><li>Balance sheet </li></ul></ul><ul><ul><li>Forecast of future income and expenditures </li></ul></ul><ul><ul><li>Encounters </li></ul></ul><ul><ul><ul><li>Against budget </li></ul></ul></ul><ul><ul><ul><li>By payer </li></ul></ul></ul><ul><li>Finance committee should review reports before presentation to full board </li></ul>
  26. 26. Other Important questions to be addressed monthly: <ul><li>Are productivity goals being met? </li></ul><ul><li>Are revenues being collected? </li></ul><ul><li>Is the organization making enough money to meet expenses? </li></ul><ul><li>Are expenditures within budgeting “limits”? </li></ul><ul><li>Are there any cash flow problems? </li></ul><ul><li>Are bills paid promptly? </li></ul><ul><li>Are the accounts payable increasing? </li></ul>
  27. 27. Important questions to addressed quarterly or semi-annually: <ul><li>Are patient utilization goals being met? </li></ul><ul><li>What is the profile of the client population? Demographic, socio-economic, cultural? </li></ul><ul><li>Have these profiles changed? If so why? What are the implications for reassessment of the service mix? </li></ul><ul><li>Have the operations been cost effective for the past six months? </li></ul><ul><li>Are there some program areas that consistently generate revenues and some program areas that run a deficit? </li></ul><ul><li>Are standards for operational performance being met and reviewed by the Board? </li></ul><ul><li>What additional information is needed from administration for follow-up or to develop new programs and/or services? </li></ul>
  28. 28. <ul><li>The Audit </li></ul><ul><ul><li>Must be conducted by independent accountig firm or CPA </li></ul></ul><ul><ul><li>Be in accordance with GAAP and other Federal requirements </li></ul></ul><ul><ul><li>Firm should be changed every 3 years or at least rebid. </li></ul></ul><ul><ul><ul><li>If the same firm is retained person within the firm conducting audit should be changed </li></ul></ul></ul><ul><ul><li>ED/CFO should meet with auditor before audit begins </li></ul></ul><ul><ul><li>All board members should receive a copy of final audit </li></ul></ul><ul><ul><li>Must be approved by the board </li></ul></ul>
  29. 29. <ul><li>Board should watch carefully for increased cost in certain areas </li></ul><ul><ul><li>Personnel (staff salaries and benefits) </li></ul></ul><ul><ul><li>Contractual services </li></ul></ul><ul><ul><li>Miscellaneous expense account spending </li></ul></ul><ul><ul><li>Past due bills </li></ul></ul><ul><li>If a board member sees expenditures (actual) are greater than the budget it is their responsibility to ask WH Y? </li></ul>
  30. 30. Select, Evaluate, and support the CEO The Board hires the CEO to manage the day to day operations. The Board is responsible for making sure the CEO fulfills the requirements of this position.
  31. 31. Monitor and Evaluate the Center and Board <ul><li>Center: </li></ul><ul><ul><li>The best way to see if the Center is succeeding is to see how it measures up to its mission. </li></ul></ul><ul><li>Board </li></ul><ul><ul><li>Have a written policy to do annually. </li></ul></ul><ul><ul><li>Focus on the strengths and weaknesses. </li></ul></ul><ul><ul><li>Look at: </li></ul></ul><ul><ul><ul><li>How well the Board meets its responsibilities. </li></ul></ul></ul><ul><ul><ul><li>Board’s interaction with CEO. </li></ul></ul></ul><ul><ul><ul><li>Board Member’s interaction with each other. </li></ul></ul></ul>
  32. 32. Plan for the long range future of the Center: Strategic planning deals with long term objectives and programs for accomplishing them. The future is defined as 3 to 5 years.
  33. 33. Legal Obligations of Health Center Board Members
  34. 34. Health Center Board Members, have certain fundamental legal obligations as board members. These obligations are imposed by law for the fact an individual serves on the board.
  35. 35. Board Members should be familiar with these basic legal obligations. Board members can be personally liable if those obligations are not met
  36. 36. Health center boards operate in a complex legal environment. Some things are unique to those who seek Section 330 funding of the Public Health Service Act or qualify as a FQHC.
  37. 37. Legal difficulties faced by Board Members – and the threat of personal liability – can be traced to the board’s failure to fulfill one or more of these basic duties.
  38. 38. Board members can request and rely on consultants (including staff and outside consultants) for advice and information, and delegate tasks ( but not their fiduciary obligations as board members
  39. 39. Board members must carry out certain functions required by federal regulations. <ul><li>These include, among others: </li></ul><ul><ul><li>Approving the selection/dismissal of CEO </li></ul></ul><ul><ul><li>Establish personnel policies and procedures </li></ul></ul><ul><ul><li>Adopt health care policies for financial management and practices. </li></ul></ul><ul><ul><li>See 42 CFR 304(d) and PIN 98-23 </li></ul></ul>
  40. 40. Disclaimer – legal information is not legal advice. For legal advice consult organization’s legal counsel
  41. 41. The Bureau in PIN 98-23 requires centers to have a conflict of interest policy. This should cover both board and staff.
  42. 42. A conflict of interest policy should include issues such as: <ul><li>Disclosure of business and personal relationships that create an actual or potential conflict. </li></ul><ul><li>Extent to which a board member can participate in board decisions where the member has a personal or financial interest. </li></ul><ul><li>Policy regarding board member to provide services to the center. </li></ul><ul><li>Board member expense reimbursement policies. </li></ul><ul><li>Policy regarding acceptance of gifts and gratuities. </li></ul><ul><li>Policy regarding personal political activities of board members. </li></ul><ul><li>Statement of consequences for violating the conflict policy . </li></ul>
  43. 43. Avoiding Personal Liability A board member who neglects his or her duties as a board member can be personally liable for the harm to the center that results from their neglect
  44. 44. Some ways to eliminate or reduce the risk: <ul><li>Diligently fulfill obligations of office </li></ul><ul><li>Study information on issues brought before the board. </li></ul><ul><li>Voice your views on the issues </li></ul><ul><li>If opposed to an board action, make sure vote is recorded in the minutes. </li></ul><ul><li>Do your job to the best of your ability. </li></ul>
  45. 45. Claims against individual board members are not common. Even the most diligent attention to your duties do not guarantee a lawsuit will not be filed
  46. 46. Make sure the center is properly protected. Some ways to do this: <ul><li>Make sure bylaws have the broadest indemnification clause allowed by state law. </li></ul><ul><li>Have Directors and Officers insurance. </li></ul><ul><li>FTCA deemed for malpractice exposures. </li></ul><ul><li>Some state law’s provide legal immunity for volunteers, such as board members for non-profit organization. </li></ul>
  47. 47. Corporate Compliance Program Federal regulations require a health center’s board of directors to ensure that the center is operated in compliance with all federal, state, and local laws and regulations.
  48. 48. Establishing a corporate compliance program can demonstrate the board has fulfilled their “Duty of Care”. The program assures that an adequate system of internal control exists to ensure compliance with appropriate legal standards.
  49. 49. Key Components of a compliance program are: <ul><li>Designate a compliance officer. </li></ul><ul><li>Conduct initial internal audits and evaluations looking for possible compliance problems. </li></ul><ul><li>Develop policies and procedures to implement the program. </li></ul><ul><li>Train both staff and board on issues </li></ul><ul><li>Develop clear lines of communication between compliance personnel and staff and management. </li></ul><ul><li>Investigate identified compliance issues and develop corrective actions. </li></ul><ul><li>Develop and implement disciplinary standards so that all personnel understand the consequences of non-compliant behavior. </li></ul>
  50. 50. The proper role of the board is to establish the corporate compliance program, budget sufficient funds necessary to carry out required activities, and act aggressively to correct any problems identified by management team.
  51. 51. The board should resist any temptation to serve as an outlet for employees who want to “end run” the compliance process by taking their individual grievances directly to the board
  52. 52. QUESTIONS????

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