1. 1 COMMUNITY GOVERNANCE

2. 2 Community-based governance is the feature that makes health centers distinctive and is one of their strongest attributes.

3. 3 We will discuss: Role of Boards Role of Boards Governance Requirements for FQHCs (funded and look-alike) Governance Requirements for FQHCs (funded and look-alike) Use of Board Committees Use of Board Committees Particular issues in establishing and nurturing community-based governance Particular issues in establishing and nurturing community-based governance Legal issues affecting board operations and liability Legal issues affecting board operations and liability

4. 4 Roles and Responsibilities: The Board of Directors is the principal policy-making body of the health center. It is autonomous, bound only by its legal responsibilities under its charter and bylaws and its contractual obligations to government agencies and other funding sources. An extremely important obligation is accomplish the objective of the health center.

5. 5 As a policy making body the Board must: distinguish its policy-making authority and responsibility from that of the health center executive director and staff. distinguish its policy-making authority and responsibility from that of the health center executive director and staff. The executive director and staff implement and execute the policies and procedures set by the Board. The executive director and staff implement and execute the policies and procedures set by the Board. Delegates the day-to-day operational responsibilities to the Director. Delegates the day-to-day operational responsibilities to the Director.

6. 6 As a policy making body the Board must: Observe, question and monitor the operational functions of the center. Observe, question and monitor the operational functions of the center. REFRAIN from direct participation in these functions. REFRAIN from direct participation in these functions.

7. 7 Basic responsibilities of a board include: Human Resources Human Resources Finance Finance Planning Planning Operations Operations Evaluation Evaluation Legal Legal

8. 8 Human Resources: The Board establishes policies and procedures including: The Board establishes policies and procedures including: Selection and dismissal policies Selection and dismissal policies Salary and fringe benefit schedules and programs Salary and fringe benefit schedules and programs Employee grievance policies Employee grievance policies Equal opportunity practices Equal opportunity practices Hires and evaluates the performance of the executive director Hires and evaluates the performance of the executive director

9. 9 Finance: The Board adopts policies for: The Board adopts policies for: Financial management practices including a system to assure accountability of assets. Financial management practices including a system to assure accountability of assets. Approve the annual budget Approve the annual budget Select the independent auditor Select the independent auditor Accepts audits Accepts audits Approves payment and eligibility for services including sliding fee Approves payment and eligibility for services including sliding fee

10. 10 Planning: Engages in strategic planning to ensure the center is prepared to succeed in changing health care environment. Engages in strategic planning to ensure the center is prepared to succeed in changing health care environment. Continues to address identified community health needs. Continues to address identified community health needs. Pursue organization goals and mission through the center’s operations. Pursue organization goals and mission through the center’s operations. Approves the center’s purpose, mission and roles. Approves the center’s purpose, mission and roles.

11. 11 Operations: Adopts operational policies including: Adopts operational policies including: Scope and availability of services Scope and availability of services Locations Locations Hours of services Hours of services Quality-of-care audit assessment Quality-of-care audit assessment Improvement programs and policies Improvement programs and policies

12. 12 Evaluation: The Board evaluates health center activities including: The Board evaluates health center activities including: Quality of patient care services Quality of patient care services Service utilization patterns Service utilization patterns Productivity of providers Productivity of providers Patient satisfaction Patient satisfaction achievement of project objectives achievement of project objectives Board itself Board itself Develops a process for hearing and resolving patient grievances Develops a process for hearing and resolving patient grievances

13. 13 Legal: The board must ensure that the center is operated in compliance with applicable federal, state, local laws and regulations. The board must ensure that the center is operated in compliance with applicable federal, state, local laws and regulations. The board must protect the corporation from unnecessary liabilities. The board must protect the corporation from unnecessary liabilities. Assure compliance with DHHS/OIG Corporate Compliance Guidelines. Assure compliance with DHHS/OIG Corporate Compliance Guidelines.

14. 14 Composition: The number of board members must be specified in the bylaws. The number of board members must be specified in the bylaws. Size should relate to complexity of the organization and the diversity of the community served. Size should relate to complexity of the organization and the diversity of the community served. Regulations require to have between 9 and 25 who are representative of the populations served. Regulations require to have between 9 and 25 who are representative of the populations served.

15. 15 The FQHC Board must meet the following: A majority of the board members must use the center as their regular source of primary care. A majority of the board members must use the center as their regular source of primary care. No more than ½ of the non-user members can derive more than 10% of the annual income from the health care industry. No more than ½ of the non-user members can derive more than 10% of the annual income from the health care industry. Remaining members must be representative of the community served. Remaining members must be representative of the community served.

16. 16 Board members should have expertise in: Community affairs Community affairs Local government Local government Legal affairs Legal affairs Marketing Marketing Finance Finance Other relevant fields to the functioning center Other relevant fields to the functioning center

17. 17 The Board should reasonably represent the patient population served in terms of demographic factors such as race, ethnicity and gender. The Board should reasonably represent the patient population served in terms of demographic factors such as race, ethnicity and gender. Health center funded under more than one Section 330 program must demonstrate appropriate representation from the populations being served. Health center funded under more than one Section 330 program must demonstrate appropriate representation from the populations being served.

18. 18 No board member may be an employee of the health center, or the spouse, child, parent, brother or sister of a health center employee by blood or marriage. No board member may be an employee of the health center, or the spouse, child, parent, brother or sister of a health center employee by blood or marriage. Governance requirements for FQHCs are located in the Federal Regulations, Program expectations and Governance Implementation guide. Governance requirements for FQHCs are located in the Federal Regulations, Program expectations and Governance Implementation guide.

19. 19 Board Committees Committees allow for a more detailed analysis of topics such as budgets, evaluations or program analysis before they are addressed by the full board. If by-laws permit, committees may include non-board members, such as people with specialized expertise.

20. 20 Some of the most common board committees are as follows:

21. 21 Executive Empowered to act for the full board in matters that require immediate action or do not involve major questions of policy or funding. Empowered to act for the full board in matters that require immediate action or do not involve major questions of policy or funding. Also coordinating committee that organizes the board’s work and the activities of the other committees. Also coordinating committee that organizes the board’s work and the activities of the other committees.

22. 22 Finance Takes preliminary action on budgets and financial matters. Takes preliminary action on budgets and financial matters. Reviews financial reports and audits. Reviews financial reports and audits. Makes recommendations regarding financial procedures and controls. Makes recommendations regarding financial procedures and controls.

23. 23 Human Resources Reviews and recommends personnel policies and salary and fringe benefit programs. Reviews and recommends personnel policies and salary and fringe benefit programs. Handles employee grievances (If the board involvement becomes necessary and the by-laws provide for such involvement) Handles employee grievances (If the board involvement becomes necessary and the by-laws provide for such involvement)

24. 24 Quality Assurance Reviews and recommends risk management policies, protocols and policies governing the provision of patient services. Reviews and recommends risk management policies, protocols and policies governing the provision of patient services. Reviews the quality assurance plan developed by staff and assessments and audits performed by staff. Reviews the quality assurance plan developed by staff and assessments and audits performed by staff. Reviews and recommends the clinical privileges of the center provider staff. Reviews and recommends the clinical privileges of the center provider staff.

25. 25 Strategic Planning They should on a regular basis, review market and internal information to understand trends and potential activities that should be undertaken. They should on a regular basis, review market and internal information to understand trends and potential activities that should be undertaken. Assure that implementation of the activities occurs. Assure that implementation of the activities occurs.

26. 26 Development/Fundraising Oversees planning and coordination fundraising efforts. Oversees planning and coordination fundraising efforts.

27. 27 Marketing/Public Relations Particularly important for organizations that must “sell” themselves. Particularly important for organizations that must “sell” themselves. Assist in development of a plan and review of the activities of the implementation. Assist in development of a plan and review of the activities of the implementation.

28. 28 Education Recommends policies relating to staff training and (continuing professional) education both internal and external. Recommends policies relating to staff training and (continuing professional) education both internal and external. Sponsor of conferences or other educational programs or board training. Sponsor of conferences or other educational programs or board training. Often combined with Human Resources. Often combined with Human Resources.

29. 29 Nominating Identifies Identifies Screens Screens Recommends prospective board members Recommends prospective board members Also frequently charged with reviewing and recommending changes to the by- laws. Also frequently charged with reviewing and recommending changes to the by- laws.

30. 30 These are general standing committees, they exist in and ongoing basis. Centers are not required to have all of these committees. Ad Hoc committees may be established as need for a special purpose.

31. 31 Board Development

32. 32 Effective community governance requires nurturing. Effective community governance requires nurturing. ALL board members-even those who are knowledgeable about health care need training on how to work together. ALL board members-even those who are knowledgeable about health care need training on how to work together. Non-professionals may need to develop their understanding of health care and technical issues. Non-professionals may need to develop their understanding of health care and technical issues. Everyone must understand the roles and responsibilities of a board member Everyone must understand the roles and responsibilities of a board member

33. 33 Legal Issues

34. 34 New Board members often want to know if they are legally liable for the health center’s activities. New Board members often want to know if they are legally liable for the health center’s activities. State corporation law governs legal liability. State corporation law governs legal liability. Most states require that a board member perform his/her duties “in good faith” with the best interests of the not-for-profit corporation in mind with “such care as an ordinarily prudent person in a like position would use under similar circumstances. Most states require that a board member perform his/her duties “in good faith” with the best interests of the not-for-profit corporation in mind with “such care as an ordinarily prudent person in a like position would use under similar circumstances.

35. 35 Liabilities Board members cannot be personally liable for business or financial decisions if these decisions are informed and do not constitute a conflict of interest. Board members cannot be personally liable for business or financial decisions if these decisions are informed and do not constitute a conflict of interest. They can be liable for the consequences of decisions if they neglect their responsibilities as board members such as They can be liable for the consequences of decisions if they neglect their responsibilities as board members such as Failing to attend meetings Failing to attend meetings Failing to review financial documents Failing to review financial documents Fail to make reasonable inquires prior to action being taken Fail to make reasonable inquires prior to action being taken Can be personally liable in matters involving conflict of interest or violations of local, state, or federal criminal laws Can be personally liable in matters involving conflict of interest or violations of local, state, or federal criminal laws

36. 36 Health Center Mission Board members are responsible for making sure that the organization carries out its mission as outlined in the articles of incorporation and bylaws and to state and federal funding sources. Board members are responsible for making sure that the organization carries out its mission as outlined in the articles of incorporation and bylaws and to state and federal funding sources.

37. 37 Employee Benefits and Compensation Members are responsible for ensuring that the organization complies with local, state, and federal laws and regulations. Members are responsible for ensuring that the organization complies with local, state, and federal laws and regulations. Pay particular attention to compliance with the federal tax laws and federal laws regarding employee benefits and pensions as statutes can impose personal liability for violations. Pay particular attention to compliance with the federal tax laws and federal laws regarding employee benefits and pensions as statutes can impose personal liability for violations.

38. 38 Corporate Compliance The Board plays an integral role in developing and implementing the Corporate Compliance program. The Board plays an integral role in developing and implementing the Corporate Compliance program. Adopting a resolution documenting the commitment to the compliance and a decision to adopt a formal program is an excellent starting point. Adopting a resolution documenting the commitment to the compliance and a decision to adopt a formal program is an excellent starting point. On an ongoing basis the Board must monitor the implementation and the operation of the compliance program to ensure its effectiveness. On an ongoing basis the Board must monitor the implementation and the operation of the compliance program to ensure its effectiveness.

39. 39 The Federal Volunteer Protection Act of 1997 grants immunity from personal liability to those who volunteer for non profit organizations. The Federal Volunteer Protection Act of 1997 grants immunity from personal liability to those who volunteer for non profit organizations. The law does not allow punitive damages to be awarded against a volunteer unless harm was caused by willful or criminal misconduct, or a conscious, flagrant indifference to the rights and/or safety of the claimant. The law does not allow punitive damages to be awarded against a volunteer unless harm was caused by willful or criminal misconduct, or a conscious, flagrant indifference to the rights and/or safety of the claimant.

40. 40 Not-for-profit organizations usually indemnify their board members against losses incurred as a result of serving as a board member. Not-for-profit organizations usually indemnify their board members against losses incurred as a result of serving as a board member. Because legal cost can pose a substantial financial burden on the organization, non- profits purchase Directors and Officers insurance for their board members. Because legal cost can pose a substantial financial burden on the organization, non- profits purchase Directors and Officers insurance for their board members. Legal counsel should be asked to advise regarding applicable state immunity statutes that may offer some protection. Legal counsel should be asked to advise regarding applicable state immunity statutes that may offer some protection.