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COMMUNITY GOVERNANCECOMMUNITY GOVERNANCE

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Community-based governance is Community-based governance is the feature that makes health the feature that makes health

centers distinctive and is one of centers distinctive and is one of their strongest attributes. their strongest attributes.

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We will discuss:We will discuss:

Role of BoardsRole of Boards Governance Requirements for FQHCs Governance Requirements for FQHCs

(funded and look-alike)(funded and look-alike) Use of Board CommitteesUse of Board Committees Particular issues in establishing and Particular issues in establishing and

nurturing community-based nurturing community-based governancegovernance

Legal issues affecting board operations Legal issues affecting board operations and liabilityand liability

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Roles and Roles and Responsibilities:Responsibilities:

The Board of Directors is the principal The Board of Directors is the principal policy-making body of the health policy-making body of the health

center. It is autonomous, bound only center. It is autonomous, bound only by its legal responsibilities under its by its legal responsibilities under its

charter and bylaws and its charter and bylaws and its contractual obligations to contractual obligations to

government agencies and other government agencies and other funding sources. An extremely funding sources. An extremely

important obligation is accomplish important obligation is accomplish the objective of the health center. the objective of the health center.

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As a policy making body the Board As a policy making body the Board must:must:

distinguish its policy-making distinguish its policy-making authority and responsibility from that authority and responsibility from that of the health center executive of the health center executive director and staff. director and staff.

The executive director and staff The executive director and staff implement and execute the policies implement and execute the policies and procedures set by the Board. and procedures set by the Board.

Delegates the day-to-day operational Delegates the day-to-day operational responsibilities to the Director. responsibilities to the Director.

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As a policy making body the Board As a policy making body the Board must:must:

Observe, question and monitor the Observe, question and monitor the operational functions of the center.operational functions of the center.

REFRAIN from direct participation in REFRAIN from direct participation in these functions.these functions.

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Basic responsibilities of a board Basic responsibilities of a board include:include:

Human ResourcesHuman Resources FinanceFinance PlanningPlanning OperationsOperations EvaluationEvaluation LegalLegal

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Human Resources:Human Resources:

The Board establishes policies and The Board establishes policies and procedures including: procedures including: Selection and dismissal policiesSelection and dismissal policies Salary and fringe benefit schedules and Salary and fringe benefit schedules and

programsprograms Employee grievance policiesEmployee grievance policies Equal opportunity practicesEqual opportunity practices

Hires and evaluates the performance Hires and evaluates the performance of the executive directorof the executive director

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Finance:Finance:

The Board adopts policies for:The Board adopts policies for: Financial management practices including Financial management practices including

a system to assure accountability of a system to assure accountability of assets.assets.

Approve the annual budgetApprove the annual budget Select the independent auditorSelect the independent auditor Accepts auditsAccepts audits Approves payment and eligibility for Approves payment and eligibility for

services including sliding feeservices including sliding fee

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Planning:Planning:

Engages in strategic planning to Engages in strategic planning to ensure the center is prepared to ensure the center is prepared to succeed in changing health care succeed in changing health care environment.environment.

Continues to address identified Continues to address identified community health needs.community health needs.

Pursue organization goals and mission Pursue organization goals and mission through the center’s operations.through the center’s operations.

Approves the center’s purpose, Approves the center’s purpose, mission and roles.mission and roles.

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Operations:Operations:

Adopts operational policies including:Adopts operational policies including: Scope and availability of servicesScope and availability of services LocationsLocations Hours of servicesHours of services Quality-of-care audit assessment Quality-of-care audit assessment Improvement programs and policiesImprovement programs and policies

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Evaluation:Evaluation:

The Board evaluates health center The Board evaluates health center activities including:activities including: Quality of patient care servicesQuality of patient care services Service utilization patternsService utilization patterns Productivity of providersProductivity of providers Patient satisfactionPatient satisfaction achievement of project objectivesachievement of project objectives Board itselfBoard itself

Develops a process for hearing and Develops a process for hearing and resolving patient grievances resolving patient grievances

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Legal:Legal:

The board must ensure that the The board must ensure that the center is operated in compliance with center is operated in compliance with applicable federal, state, local laws applicable federal, state, local laws and regulations.and regulations.

The board must protect the The board must protect the corporation from unnecessary corporation from unnecessary liabilities.liabilities.

Assure compliance with DHHS/OIG Assure compliance with DHHS/OIG Corporate Compliance Guidelines.Corporate Compliance Guidelines.

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Composition:Composition:

The number of board members must The number of board members must be specified in the bylaws.be specified in the bylaws.

Size should relate to complexity of Size should relate to complexity of the organization and the diversity of the organization and the diversity of the community served.the community served.

Regulations require to have between Regulations require to have between 9 and 25 who are representative of 9 and 25 who are representative of the populations served.the populations served.

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The FQHC Board must meet the The FQHC Board must meet the following:following:

A majority of the board members must A majority of the board members must use the center as their regular source of use the center as their regular source of primary care.primary care.

No more than ½ of the non-user No more than ½ of the non-user members can derive more than 10% of members can derive more than 10% of the annual income from the health care the annual income from the health care industry.industry.

Remaining members must be Remaining members must be representative of the community served.representative of the community served.

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Board members should have Board members should have expertise in:expertise in:

Community affairsCommunity affairs Local governmentLocal government Legal affairsLegal affairs MarketingMarketing FinanceFinance Other relevant fields to the Other relevant fields to the

functioning centerfunctioning center

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The Board should reasonably represent The Board should reasonably represent the patient population served in terms the patient population served in terms of demographic factors such as race, of demographic factors such as race, ethnicity and gender.ethnicity and gender.

Health center funded under more than Health center funded under more than one Section 330 program must one Section 330 program must demonstrate appropriate demonstrate appropriate representation from the populations representation from the populations being served.being served.

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No board member may be an No board member may be an employee of the health center, or the employee of the health center, or the spouse, child, parent, brother or sister spouse, child, parent, brother or sister of a health center employee by blood of a health center employee by blood or marriage.or marriage.

Governance requirements for FQHCs Governance requirements for FQHCs are located in the Federal Regulations, are located in the Federal Regulations, Program expectations and Program expectations and Governance Implementation guide.Governance Implementation guide.

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Board CommitteesBoard CommitteesCommittees allow for a more Committees allow for a more

detailed analysis of topics such as detailed analysis of topics such as budgets, evaluations or program budgets, evaluations or program

analysis before they are addressed analysis before they are addressed by the full board.by the full board.

If by-laws permit, committees may If by-laws permit, committees may include non-board members, such include non-board members, such

as people with specialized as people with specialized expertise.expertise.

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

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ExecutiveExecutive

Empowered to act for the full board Empowered to act for the full board in matters that require immediate in matters that require immediate action or do not involve major action or do not involve major questions of policy or funding.questions of policy or funding.

Also coordinating committee that Also coordinating committee that organizes the board’s work and the organizes the board’s work and the activities of the other committees.activities of the other committees.

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FinanceFinance

Takes preliminary action on budgets Takes preliminary action on budgets and financial matters.and financial matters.

Reviews financial reports and audits.Reviews financial reports and audits. Makes recommendations regarding Makes recommendations regarding

financial procedures and controls.financial procedures and controls.

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Human ResourcesHuman Resources

Reviews and recommends personnel Reviews and recommends personnel policies and salary and fringe benefit policies and salary and fringe benefit programs.programs.

Handles employee grievances (If the Handles employee grievances (If the board involvement becomes board involvement becomes necessary and the by-laws provide necessary and the by-laws provide for such involvement)for such involvement)

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Quality AssuranceQuality Assurance

Reviews and recommends risk Reviews and recommends risk management policies, protocols and management policies, protocols and policies governing the provision of policies governing the provision of patient services.patient services.

Reviews the quality assurance plan Reviews the quality assurance plan developed by staff and assessments developed by staff and assessments and audits performed by staff.and audits performed by staff.

Reviews and recommends the clinical Reviews and recommends the clinical privileges of the center provider privileges of the center provider staff.staff.

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Strategic PlanningStrategic Planning

They should on a regular basis, They should on a regular basis, review market and internal review market and internal information to understand trends and information to understand trends and potential activities that should be potential activities that should be undertaken.undertaken.

Assure that implementation of the Assure that implementation of the activities occurs.activities occurs.

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Development/FundraisingDevelopment/Fundraising

Oversees planning and coordination Oversees planning and coordination fundraising efforts.fundraising efforts.

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Marketing/Public RelationsMarketing/Public Relations

Particularly important for Particularly important for organizations that must “sell” organizations that must “sell” themselves.themselves.

Assist in development of a plan and Assist in development of a plan and review of the activities of the review of the activities of the implementation. implementation.

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EducationEducation

Recommends policies relating to staff Recommends policies relating to staff training and (continuing professional) training and (continuing professional) education both internal and external.education both internal and external.

Sponsor of conferences or other Sponsor of conferences or other educational programs or board educational programs or board training.training.

Often combined with Human Often combined with Human Resources.Resources.

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NominatingNominating

IdentifiesIdentifies ScreensScreens Recommends prospective board Recommends prospective board

membersmembers Also frequently charged with Also frequently charged with

reviewing and recommending reviewing and recommending changes to the by-laws.changes to the by-laws.

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These are general These are general standing standing committees, they exist in and committees, they exist in and

ongoing basis. Centers are not ongoing basis. Centers are not required to have all of these required to have all of these

committees. Ad Hoc committees committees. Ad Hoc committees may be established as need for a may be established as need for a

special purpose.special purpose.

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Board DevelopmentBoard Development

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Effective community governance Effective community governance requires nurturing.requires nurturing.

ALL board members-even those who ALL board members-even those who are knowledgeable about health care are knowledgeable about health care need training on how to work together.need training on how to work together.

Non-professionals may need to develop Non-professionals may need to develop their understanding of health care and their understanding of health care and technical issues.technical issues.

Everyone must understand the roles Everyone must understand the roles and responsibilities of a board memberand responsibilities of a board member

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Legal IssuesLegal Issues

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New Board members often want to New Board members often want to know if they are legally liable for the know if they are legally liable for the health center’s activities.health center’s activities.

State corporation law governs legal State corporation law governs legal liability.liability.

Most states require that a board Most states require that a board member perform his/her duties “in member perform his/her duties “in good faith” with the best interests of good faith” with the best interests of the not-for-profit corporation in mind the not-for-profit corporation in mind with “such care as an ordinarily with “such care as an ordinarily prudent person in a like position would prudent person in a like position would use under similar circumstances. use under similar circumstances.

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LiabilitiesLiabilities Board members cannot be personally Board members cannot be personally

liable for business or financial decisions if liable for business or financial decisions if these decisions are informed and do not these decisions are informed and do not constitute a conflict of interest.constitute a conflict of interest.

They They cancan be liable for the consequences of be liable for the consequences of decisions if they neglect their decisions if they neglect their responsibilities as board members such asresponsibilities as board members such as Failing to attend meetingsFailing to attend meetings Failing to review financial documentsFailing to review financial documents Fail to make reasonable inquires prior to action Fail to make reasonable inquires prior to action

being takenbeing taken Can be personally liable in matters involving Can be personally liable in matters involving

conflict of interest or violations of local, state, conflict of interest or violations of local, state, or federal criminal lawsor federal criminal laws

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Health Center MissionHealth Center Mission

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

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Employee Benefits and Employee Benefits and CompensationCompensation

Members are responsible for ensuring Members are responsible for ensuring that the organization complies with that the organization complies with local, state, and federal laws and local, state, and federal laws and regulations.regulations.

Pay particular attention to compliance Pay particular attention to compliance with the federal tax laws and federal with the federal tax laws and federal laws regarding employee benefits laws regarding employee benefits and pensions as statutes can impose and pensions as statutes can impose personal liability for violations.personal liability for violations.

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Corporate ComplianceCorporate Compliance

The Board plays an integral role in The Board plays an integral role in developing and implementing the developing and implementing the Corporate Compliance program.Corporate Compliance program.

Adopting a resolution documenting the Adopting a resolution documenting the commitment to the compliance and a commitment to the compliance and a decision to adopt a formal program is an decision to adopt a formal program is an excellent starting point.excellent starting point.

On an ongoing basis the Board must On an ongoing basis the Board must monitor the implementation and the monitor the implementation and the operation of the compliance program to operation of the compliance program to ensure its effectiveness.ensure its effectiveness.

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The Federal Volunteer Protection Act of The Federal Volunteer Protection Act of 1997 grants immunity from personal 1997 grants immunity from personal liability to those who volunteer for non liability to those who volunteer for non profit organizations.profit organizations.

The law does not allow punitive The law does not allow punitive damages to be awarded against a damages to be awarded against a volunteer unless harm was caused by volunteer unless harm was caused by willful or criminal misconduct, or a willful or criminal misconduct, or a conscious, flagrant indifference to the conscious, flagrant indifference to the rights and/or safety of the claimant. rights and/or safety of the claimant.

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Not-for-profit organizations usually Not-for-profit organizations usually indemnify their board members against indemnify their board members against losses incurred as a result of serving as losses incurred as a result of serving as a board member.a board member.

Because legal cost can pose a Because legal cost can pose a substantial financial burden on the substantial financial burden on the organization, non-profits purchase organization, non-profits purchase Directors and Officers insurance for their Directors and Officers insurance for their board members.board members.

Legal counsel should be asked to advise Legal counsel should be asked to advise regarding applicable state immunity regarding applicable state immunity statutes that may offer some protection.statutes that may offer some protection.