1. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Health Center - Hospital Affiliations Presented by Jacqueline C. Leifer, Esq. Senior Partner Feldesman Tucker Leifer Fidell LLP

2. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Core Requirements for FQHCs Public or private non-profit, charitable, tax-exempt organization that receives funding (directly or as a subrecipient) under Section 330 of the Public Health Service Act; OR Is determined by DHHS to meet requirements to receive funding without actually receiving a grant (i.e., an FQHC “lookalike”) Public or private non-profit, charitable, tax-exempt organization that receives funding (directly or as a subrecipient) under Section 330 of the Public Health Service Act; OR Is determined by DHHS to meet requirements to receive funding without actually receiving a grant (i.e., an FQHC “lookalike”)

3. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com FQHCs must serve a medically underserved area (MUA) or medically underserved population (MUP) designated by DHHS FQHCs must serve a medically underserved area (MUA) or medically underserved population (MUP) designated by DHHS Core Requirements for FQHCs

4. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Must provide either directly or through contract or established arrangement: Must provide either directly or through contract or established arrangement: –All required primary and preventive services (including essential ancillary and enabling services) –Supplementary services including referrals to other providers –Case management services including eligibility assistance –Enabling services including outreach, transportation and translation –Education regarding the availability and proper use of health services –Additional health services as appropriate Core Requirements for FQHCs

5. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Must provide services to all residents of the service area regardless of ability to pay Must provide services to all residents of the service area regardless of ability to pay Must have a schedule of charges designed to cover the reasonable costs of operation and consistent with locally prevailing rates 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 adjusted based on ability to pay for persons below 200% of poverty (full discounts for persons at or below 100% of poverty) Must have a corresponding schedule of discounts adjusted based on ability to pay for persons below 200% of poverty (full discounts for persons at or below 100% of poverty) No discounts to third party payors No discounts to third party payors Core Requirements for FQHCs

6. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Must be governed by a community-based Board of Directors Must be governed by a community-based Board of Directors –Must have between 9 and 25 members –Majority (at least 51%) must be active consumers of health center services –Consumer Board members must reasonably represent the patient population served in terms of demographic factors such as race, ethnicity and gender Core Requirements for FQHCs

7. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com –Non-consumer Board members must be representative of the community served and be selected for expertise in areas such as finance and banking, legal community affairs, etc. –No more than one half of the non-consumer members can derive more than 10 percent of their income from the health care industry –If funded under more than one section 330 program, must demonstrate appropriate representation from each of the populations served by the health center Core Requirements for FQHCs

8. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Governing Board must autonomously exercise authorities regarding (among other things) Governing Board must autonomously exercise authorities regarding (among other things) –Establishment of operating and service policies (hours, services, personnel, financial management) –Approval of annual budget and project plan –Strategic and operational planning –Selection, evaluation and dismissal of Executive Director/Chief Executive Officer Core Requirements for FQHCs

9. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com CEO must be directly employed by the health center CEO must be directly employed by the health center –Preferred that management team and core staff are directly employed, subject to good cause exceptions Must have a direct line authority from the Board to the CEO who is responsible for hiring, supervision and termination of staff Must have a direct line authority from the Board to the CEO who is responsible for hiring, supervision and termination of staff Must have effective administrative and clinical leadership, systems and procedures Must have effective administrative and clinical leadership, systems and procedures Core Requirements for FQHCs

10. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Must employ a core staff of clinical staff that is multi-disciplinary, and culturally and linguistically competent Must employ a core staff of clinical staff that is multi-disciplinary, and culturally and linguistically competent Expected to establish appropriate linkages and collaborative arrangements with other community providers: referrals, admitting privileges, after-hours coverage, integrated delivery systems Expected to establish appropriate linkages and collaborative arrangements with other community providers: referrals, admitting privileges, after-hours coverage, integrated delivery systems Must have ongoing quality improvement programs Must have ongoing quality improvement programs Core Requirements for FQHCs

11. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Must have a financial system that accurately reflects the financial performance of the organization and assures viability and competitiveness Must have a financial system that accurately reflects the financial performance of the organization and assures viability and competitiveness Must maximize non-Federal revenue (Medicaid, Medicare, third party, patients, etc.) Must maximize non-Federal revenue (Medicaid, Medicare, third party, patients, etc.) Must arrange for an annual independent audit Must arrange for an annual independent audit Core Requirements for FQHCs

12. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Program Requirements: Compliance with 45 CFR Part 74 Section 330 grantees must comply with the requirements and standards set forth in 45 CFR Part 74 (or Part 92, for public entities) regarding Section 330 grantees must comply with the requirements and standards set forth in 45 CFR Part 74 (or Part 92, for public entities) regarding –Procurement of goods and services utilizing Federal funds (in whole or in part) –Acquisition, management and disposition of property and equipment, acquired or improved with Federal funds (in whole or in part)

13. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com FQHC Benefits Section 330 grantees only Section 330 grantees only –Access to Federal grants to support the costs of otherwise uncompensated comprehensive primary and preventive health care and "enabling services" delivered to medically underserved populations at sites within the Section 330 approved scope of project –Access to Federal grants to support the costs of planning/developing practice management or managed care networks/plans, as well as operating costs for networks/plans owned and/or controlled by Section 330–funded health centers

14. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Section 330 grantees only Section 330 grantees only –Access to Federal loan guarantees of the principal and interest on loans made by non- Federal lenders for the costs of developing and operating managed care and practice management networks or plans, which are majority owned and/or controlled by Section 330-supported health centers –Access to grant support/loan guarantees for capital improvements FQHC Benefits

15. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com FQHC Benefits Section 330 grantees only Section 330 grantees only –Access to Federal Tort Claims Act ("FTCA") coverage, in lieu of purchasing malpractice insurance –Safe Harbor under the Federal anti- kickback statute for certain arrangements with other providers or suppliers of goods, services, donations, loans, etc., which benefit the medically underserved population served by the FQHC

16. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com FQHC Benefits Section 330 grantees and FQHC lookalikes Section 330 grantees and FQHC lookalikes –Access to favorable drug pricing under Section 340B of the Public Health Service Act –Access to reimbursement under the Prospective Payment System (“PPS”) or other state- approved alternative payment methodology (which is predicated on a cost-based reimbursement methodology) for Medicaid services and cost-based reimbursement for services provided under Medicare; “wraparounds” for difference between Medicaid managed care capitation and PPS

17. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com FQHC Benefits Section 330 grantees and FQHC lookalikes Section 330 grantees and FQHC lookalikes –Absent an alternative approved by the Centers for Medicare and Medicaid Services (“CMS”), right to have State Medicaid agencies outstation Medicaid eligibility workers on FQHC site (or right to contract with Medicaid for FQHC staff to carry out eligibility activities) –Reimbursement by Medicare for "first dollar" of services rendered to Medicare beneficiaries, i.e., deductible is waived

18. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com FQHC Benefits Section 330 grantees and FQHC lookalikes Section 330 grantees and FQHC lookalikes –Safe harbor under the Federal anti-kickback statute for waiver of co-payments to the extent a patient’s income is below 200% of Federal poverty guidelines –Access to providers through the National Health Service Corps if the health center's service area is designated a Health Professional Shortage Area (“HPSA”) –Access to the Federal Vaccine For Children program and eligibility to participate in the Pfizer Sharing the Care Program

19. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Range of Opportunities Referral agreement Referral agreement Co-location agreement Co-location agreement Lease of clinical personnel, administrative support staff, space and equipment, and/or management / administrative services contracts Lease of clinical personnel, administrative support staff, space and equipment, and/or management / administrative services contracts Community Benefit Grant Community Benefit Grant ER diversion programs ER diversion programs Collaborative agreements with residency programs Collaborative agreements with residency programs

20. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com General terms and conditions for all formal affiliation agreements General terms and conditions for all formal affiliation agreements –Scope of services and service provision –Professional qualifications, licensure, certification, eligibility to participate in Federal programs, etc –Non-exclusivity –Exercise of professional medical judgment –Patient freedom of choice –Confidentiality (patient and business information) –Insurance; indemnification –Records and reports –Term, termination and remedies Affiliation Agreements

21. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Referral Relationship Health center agrees to refer patients to hospital Health center agrees to refer patients to hospital Hospital maintains separate financial system from health center and bills and collects from patients and third party payors for services it renders Hospital maintains separate financial system from health center and bills and collects from patients and third party payors for services it renders Hospital agrees to: Hospital agrees to: –Furnish services to the health center’s patients regardless of ability to pay (subject to capacity limitations) –Provide services consistent with, at a minimum, the prevailing standards of care –Provide assurances regarding professional qualifications, licensure, eligibility to participate in Federal programs –Refer patients back to the health center for clinically appropriate care

22. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Key terms for formal referral agreements: Key terms for formal referral agreements: –Manner by which referral will be made and managed –Responsibility of the rendering provider to bill and collect payment –Liability for services provided –Non-exclusivity –Terms specific to referrals from health center to hospital: Hospital agrees to accept all health center patients, regardless of ability to pay (subject to capacity limitations) Hospital agrees to accept all health center patients, regardless of ability to pay (subject to capacity limitations) Hospital agrees to refer patients back to health center for clinically appropriate care Hospital agrees to refer patients back to health center for clinically appropriate care Sharing of medical notes / records / feedback regarding diagnosis and treatment to assist follow-up care by health center Sharing of medical notes / records / feedback regarding diagnosis and treatment to assist follow-up care by health center DO NOT GUARANTEE REFERRALS!! Referral Agreements

23. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Similar to referral relationship, but Similar to referral relationship, but –One entity is physically located in and provides services to its own patients at the other entity’s facility Circuit Riding Circuit Riding –Co-location on a sporadic or as-needed basis, rather than full-time. Must ensure that the patient can distinguish between the health center and the hospital (i.e., separate signage, entrances, etc.) Must ensure that the patient can distinguish between the health center and the hospital (i.e., separate signage, entrances, etc.) Co-location Agreement

24. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Key terms for formal co-location agreements: Key terms for formal co-location agreements: –Same as for referral agreements –Lease of space / equipment –Terms related to other shared resources –Right to request removal of any health care professional who fails to meet qualifications or who provides sub-standard care –HIPAA security and other confidentiality provisions for protection of patients’ privacy –Confidentiality commitments regarding each provider’s proprietary information –Non-exclusivity DO NOT GUARANTEE REFERRALS!! Co-location Agreement

25. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Scenarios: Scenarios: –Hospital offers inpatient and outpatient services; hospital leases health center services / capacity OR –Health center offers its scope of services; health center leases hospital clinician / administrative staff services / capacity Lease of Clinical and/or Administrative Services

26. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Health center lease of services from hospital – –Health center leases the capacity of hospital physician(s) and/or other clinical professionals and support personnel to provide services at the health center site – –Health center is responsible for billing and collecting from third parties / patients and retains all revenue secured for services provided by contracted personnel – –Health center pays a set fee (assessed at fair market value) to hospital for leased services Lease of Clinical and/or Administrative Services

27. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Health center lease of services from hospital – –Contracted clinicians provide services in accordance with the health center ’ s Section 330 grant and applicable health care and personnel policies, procedures and standards (e.g., clinical guidelines, productivity and QA standards, standards of conduct, record-keeping) – –Contracted clinicians must meet the health center ’ s professional standards and qualifications, including credentialing and privileging Lease of Clinical and/or Administrative Services

28. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Health center lease of services from hospital – –Health center CEO (with the CMO) maintains ultimate authority for monitoring / evaluating the performance of contracted clinicians and whether they are compliant with the health center ’ s policies, procedures, standards and qualifications – –Health center retains the right to terminate the contract or to request / require removal, suspension and/or replacement of any contracted clinician who lacks qualifications, is non-compliant with policies and procedures, provides sub-standard care or otherwise performs unsatisfactorily Lease of Clinical and/or Administrative Services

29. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Hospital lease of services from health center – –Hospital leases the capacity of health center physician(s) and/or other clinical professionals and support personnel to provide services at the hospital –Hospital is responsible for billing and collecting from third parties / patients and retains all revenue secured for services provided by contracted personnel – –Hospital pays a set fee (assessed at fair market value) to health center for leased services – –Contracted clinicians provide services in accordance with the hospital ’ s applicable health care and personnel policies, procedures and standards Lease of Clinical and/or Administrative Services

30. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Hospital lease of services from health center – –Contracted clinicians must meet the hospital ’ s professional standards and qualifications, including credentialing and privileging – –Hospital maintains ultimate authority for monitoring / evaluating the performance of contracted clinicians and whether they are compliant with the hospital ’ s policies, procedures, standards and qualifications – –Hospital retains the right to terminate the contract or to request / require removal, suspension and/or replacement of any contracted clinician who fails to meet qualifications, is non-compliant with policies and procedures, performs unsatisfactorily or provides sub-standard care Lease of Clinical and/or Administrative Services

31. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Key terms for lease of services agreements: Key terms for lease of services agreements: –Financial responsibilities Billing and collection from third party payors / patients, and retention of revenue Billing and collection from third party payors / patients, and retention of revenue Fee for leased capacity Fee for leased capacity –Liability coverage for services rendered and general liability coverage –Preparation of medical records consistent with leasing entity’s standards and ownership of medical records Lease of Clinical and/or Administrative Services

32. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Key terms for lease of services agreements: Key terms for lease of services agreements: –Responsibilities for oversight of leased clinicians Monitoring and evaluation of leased clinicians / other staff Monitoring and evaluation of leased clinicians / other staff Satisfaction of leasing entity’s professional standards and qualifications, including credentialing and privileging Satisfaction of leasing entity’s professional standards and qualifications, including credentialing and privileging Termination of the lease or ability to request / require removal, suspension and/or replacement of any leased professional who fails to meet qualifications, is non- compliant, provides sub-standard care or otherwise performs unsatisfactorily Termination of the lease or ability to request / require removal, suspension and/or replacement of any leased professional who fails to meet qualifications, is non- compliant, provides sub-standard care or otherwise performs unsatisfactorily Lease of Clinical and/or Administrative Services

33. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Specific terms applicable to clinicians / staff leased to health centers: Specific terms applicable to clinicians / staff leased to health centers: –Provide services in accordance with health center’s Section 330 grant and applicable rules and policies –Furnish services consistent with health center’s internal policies, procedures, standards and protocols Clinical guidelines Clinical guidelines Productivity and quality assurance standards Productivity and quality assurance standards Standards of conduct Standards of conduct –Develop, maintain and furnish programmatic and financial reports and records pertaining to the contracted services (to the extent required by the health center for purposes of monitoring and oversight) Lease of Clinical and/or Administrative Services

34. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Specific terms applicable to clinicians / staff leased to health center: Specific terms applicable to clinicians / staff leased to health center: –Health center provides a fair, arms-length negotiated payment to contractor (not a pass- through of its enhanced reimbursement) –Provisions specified in procurement rules – 45 CFR Part 74 Termination for breach Termination for breach Government access to records Government access to records Compliance with certain Federal laws Compliance with certain Federal laws Lease of Clinical and/or Administrative Services

35. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Defrays a portion of the costs of providing otherwise uncompensated care to the health center’s patients Defrays a portion of the costs of providing otherwise uncompensated care to the health center’s patients –“ Bona fide” charitable donation to assist the community –Furthers the charitable missions of the parties –Presents a minimal risk of abuse of Federal health care programs –Does not limit or restrict patient’s freedom of choice or the provider’s professional judgment –Terms are narrowly tailored Community Benefit Grant

36. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com The arrangement contains safeguards to protect against prohibited referrals or generation of other business –Fixed amount –Funds do not include discounts, rebates or reductions in charges –Only restriction is to expend funds for uncompensated care –Ancillary agreements consistent with applicable safe harbors NOTE: See OIG Advisory Opinion 01-9 (favorable opinion re: a hospital’s award of community benefit grant to a health center that acquired the hospital’s ambulatory care site) Community Benefit Grant

37. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Safe Harbor for Section 330 Grantees Health Center Safe Harbor under Federal Anti- Kickback statute: final OIG rule issued October 4, 2007 [42 C.F.R. 1001.952(w)] Health Center Safe Harbor under Federal Anti- Kickback statute: final OIG rule issued October 4, 2007 [42 C.F.R. 1001.952(w)] –Purpose: protect from prosecution under the federal anti- kickback law –Certain arrangements between health center grantees and providers/suppliers of goods, items, services, donations and loans That contribute to the health center’s ability to maintain or increase the availability, or enhance the quality, of services provided That contribute to the health center’s ability to maintain or increase the availability, or enhance the quality, of services provided To the health center’s medically underserved patients To the health center’s medically underserved patients NOTE: See OIG Advisory 01-9 (favorable opinion re: a hospital’s award of community benefit grant to a health center that acquired the hospital’s ambulatory care site) NOTE: See OIG Advisory 01-9 (favorable opinion re: a hospital’s award of community benefit grant to a health center that acquired the hospital’s ambulatory care site)

38. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com ER Diversion Grant Program The Deficit Reduction Act of 2006 authorizes grants to States to establish “alternate non- emergency services providers” who can furnish alternatives to providing non- emergency care in the emergency room The Deficit Reduction Act of 2006 authorizes grants to States to establish “alternate non- emergency services providers” who can furnish alternatives to providing non- emergency care in the emergency room –On April 15, 2008, $50 million in grants was awarded through a competitive process to twenty (20) State Medicaid agencies for a two- year period to help pay for non-emergency services.

39. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com ER Diversion Programs CMS guidance pertaining to ER Diversion grants: overall impact on the health center CMS guidance pertaining to ER Diversion grants: overall impact on the health center –Provides opportunity for initiating or increasing collaborative activities that recognize the health center as appropriate alternate non-emergency services providers –Establishes legal principle that, after an appropriate EMTALA screening and non- emergency determination, the patient can choose whether to receive care from the hospital or from an alternative provider

40. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Health center acquires / assumes operator status for existing hospital primary care clinic sites on or near hospital campus to provide alternate non-emergency services Health center and hospital partner around the development of new sites located on or near hospital campus Health center establishes limited service clinic at convenient location(s) during hours ER is busiest Hospital refers patients who present with non-urgent conditions to Health center’s site(s), possibly with transportation linkage Hospital refers patients who present with non-emergent / urgent conditions to health center’s site(s), possibly with transportation linkage Health center places personnel in hospital for purposes of intake, registration, making appointments for patients who present with non-emergent / urgent conditions Potential Models for ER Diversion

41. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com ER Diversion Programs  Under all potential models, must address - Whether patients are referred to the health center in lieu of treatment of non-emergency condition OR only for follow-up appointment - Separation of EMTALA screening personnel from ER treating clinicians - Documentation of patient choice - Referral protocols - Collaboration between providers and other staff of hospital and of the health center - Development, maintenance and sharing of medical records   If converting existing hospital site to health center site, transition issues   Determination of ongoing financial support   Infrastructure

42. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Collaborative Agreements with Residency Programs Residency Program maintains control over, and responsibility for, the costs of teaching activities performed at the health center Residency Program maintains control over, and responsibility for, the costs of teaching activities performed at the health center – –Classroom teaching, orientation programs, curriculum development, resident recruitment and evaluation, and program administration Health center maintains responsibility and authority over activities related to direct patient care services Health center maintains responsibility and authority over activities related to direct patient care services –Scope, location, hours of service, quality assurance, management, oversight of clinical care delivery, billing and collections

43. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com  Residency Program recipient retains general responsibility for salaries and benefits (including malpractice insurance) of Residency Program faculty and residents and other GME costs but health center pays for clinical time of faculty for which it bills (need to implement systems that prevent “double billing” of Medicare / Medicaid and Federal grants)  Residency Program recipient responsible for all costs related to time spent by clinicians / residents, etc. in teaching activities Collaborative Agreements with Residency Programs

44. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com PREPARING TO INTEGRATE

45. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Planning Process: Joint Steering Committee A Joint Steering Committee, composed of representatives from both the hospital and health center, will be convened to: – –Assess the feasibility of, and coordinate, the planning activities required to achieve the proposed affiliations – –Make recommendations to hospital and health center management with regard to the affiliations The Joint Steering Committee’s decisions are subject to final approval by the hospital and health center Boards

46. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Planning Process: Task Force Charges Establish charges, membership and deadlines for task forces Establish charges, membership and deadlines for task forces –Clinical –Finance –Operations / Human Resources / Facility / IT

47. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com LEGAL CONSIDERATIONS

48. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com BPHC Affiliation Policies Policy Information Notice (“PIN”) #97-27: Affiliation Agreements of Community and Migrant Health Centers Policy Information Notice (“PIN”) #97-27: Affiliation Agreements of Community and Migrant Health Centers –Only applies to health centers receiving funds under the community health center (Section 330(e) and migrant health center (Section 330 (g) programs –An “affiliation” is any arrangement with another entity or entities (contract, joint venture, corporate integration) that affects a health center’s compliance with Federal grant requirements pertaining to health center integrity and autonomy

49. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Requirements of PIN #97-27 Requirements of PIN #97-27 –Areas of critical concern: Corporate structure Corporate structure Governance Governance Management and finance Management and finance Health services/clinical operations Health services/clinical operations Corporate Structure Corporate Structure –No parent / subsidiary or similar structures (e.g., Sole Member) unless the health center retains all Board selection and composition requirements and authorities, and structure is specifically approved by BPHC BPHC Affiliation Policies

50. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Governance Governance –Under all affiliation arrangements, Board must remain compliant with all Section 330-related selection and composition requirements Size Size Consumer majority Consumer majority Limit on health care industry representation Limit on health care industry representation Demographic composition Demographic composition Appropriate expertise of non-consumer members Appropriate expertise of non-consumer members Conflict of interest standards Conflict of interest standards BPHC Affiliation Policies

51. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com BPHC Affiliation Policies Governance Governance –No other party may: Select (1) the majority of the health center Board members; (2) the majority of the non- consumer members; (3) the Board Chairperson; or (4) the majority of members of Executive Committee Select (1) the majority of the health center Board members; (2) the majority of the non- consumer members; (3) the Board Chairperson; or (4) the majority of members of Executive Committee Preclude the selection, or require the dismissal, of Board members not appointed by that party Preclude the selection, or require the dismissal, of Board members not appointed by that party

52. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Governance Governance –Under all affiliation arrangements, Board must retain all authorities required by law or regulation Preparing and approving the health center’s overall plan, including its strategic and operational plans Preparing and approving the health center’s overall plan, including its strategic and operational plans Preparing and approving the health center’s annual budget Preparing and approving the health center’s annual budget Establishing and adopting personnel, financial management, and health care policies and procedures Establishing and adopting personnel, financial management, and health care policies and procedures BPHC Affiliation Policies

53. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Governance Governance –Authorities Evaluating the health center’s activities Evaluating the health center’s activities Establishing and maintaining collaborative relationships with other health care providers and social agencies in the relevant service area Establishing and maintaining collaborative relationships with other health care providers and social agencies in the relevant service area Maintaining a commitment to provide services to the medically underserved population(s) served by the health center Maintaining a commitment to provide services to the medically underserved population(s) served by the health center BPHC Affiliation Policies

54. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Governance Governance –No other party may, with respect to such authorities: Have overriding approval authority Have overriding approval authority Have veto authority (through “super- majority” requirement or other means) Have veto authority (through “super- majority” requirement or other means) Have “dual majority” authority Have “dual majority” authority BPHC Affiliation Policies

55. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Management and Finance: No other party can Management and Finance: No other party can –Select or dismiss the health center’s Executive Director / CEO (no exceptions) –Select or dismiss the health center’s CFO or CMO (subject to good cause exception) Health Services/Clinical Operations: No other party can Health Services/Clinical Operations: No other party can –Hire or dismiss the majority of the health center’s full- time primary care providers (subject to good cause exception) –Control the health center’s relationships with other entities unless there is no impact on compliance with statutory and/or regulatory requirements BPHC Affiliation Policies

56. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com PIN #98-24: Amendment to #97-27 PIN #98-24: Amendment to #97-27 –BPHC states a preference that health centers directly employ CFO, CMO, and majority of full- time primary care providers –BPHC may grant a “good cause” exception based on: Demonstration of programmatic benefit Demonstration of programmatic benefit Maintenance of sufficient accountability for operation and direction of grant-approved project and expenditure of grant funds Maintenance of sufficient accountability for operation and direction of grant-approved project and expenditure of grant funds BPHC Affiliation Policies

57. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Programmatic Benefit Programmatic Benefit –Continued or improved access –Improved expertise –Increased capital –Maintained or improved quality of care BPHC Affiliation Policies

58. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Accountability criteria Accountability criteria –Reservation of sufficient rights and control to maintain overall responsibility –Justification for the performance of the work by a third party –Establishment of appropriate systems/processes to assure satisfactory performance in accordance with Section 330 –Execution of a written agreement that complies with DHHS administrative requirements BPHC Affiliation Policies

59. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Review Process Review Process –As part of the Review Process, either in conjunction with a grant application or under an independent submission (for a new affiliation established in the interim between applications), the health center may need to submit an “Affiliation Checklist” and related documents that demonstrate compliance with accountability requirements BPHC Affiliation Policies

60. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Changes in Scope of Project PIN #2008-01: Scope of Project Policy PIN #2008-01: Scope of Project Policy –All FQHCs must request and obtain prior approval from BPHC to implement significant changes in the federally-approved scope of project Add or delete services Add or delete services Increase, decrease or relocate service sites Increase, decrease or relocate service sites –Examples of changes that do not require prior approval Adding a service to a site already within scope as long as the service is already provided in scope at another site Adding a service to a site already within scope as long as the service is already provided in scope at another site Changing type of providers furnishing an in-scope service Changing type of providers furnishing an in-scope service Changing hours of operation of in-scope site Changing hours of operation of in-scope site

61. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com In general, a request to change the approved scope of project will be approved if it In general, a request to change the approved scope of project will be approved if it –Does not require any additional 330 funding –Does not shift resources from the current target population –Furthers the FQHC’s mission by increasing / maintaining access and quality of care –Is consistent with Section 330 and Program Expectations –Provides credentialing / privileging of providers Changes in Scope of Project

62. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com In general, a request to change the approved scope of project will be approved if it In general, a request to change the approved scope of project will be approved if it –Does not eliminate or reduce access to a required services –Does not result in diminution of the level or quality of services provided to current target population –As applicable, continues to serve an MUA/MUP –Board minutes document approval by the FQHC’s board –Does not significantly affect the current operation of another FQHC located in same or adjacent service area Changes in Scope of Project

63. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Additional considerations for new services Additional considerations for new services –All required services must be provided within the approved scope of project Either directly or through established written purchase agreement or referral arrangement (see next slide for special rules for referral arrangements) Either directly or through established written purchase agreement or referral arrangement (see next slide for special rules for referral arrangements) Regardless of how they are furnished, all in-scope services must be Regardless of how they are furnished, all in-scope services must be –Readily available and reasonably accessible to all patients equally regardless of ability to pay –Offered on a sliding fee / discount schedule –Can provided non-required services in-scope or out-of-scope Changes in Scope of Project

64. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Additional considerations for new sites Additional considerations for new sites –To include a new site, the following conditions must be met: Face-to-face encounters between the FQHC’s patient and provider are generated; Face-to-face encounters between the FQHC’s patient and provider are generated; Provider exercises independent professional judgment in furnishing services; Provider exercises independent professional judgment in furnishing services; Services are provided directly or on behalf of the FQHC, whose board retains control and authority over the services; and Services are provided directly or on behalf of the FQHC, whose board retains control and authority over the services; and Services are provided on a regularly scheduled basis. Services are provided on a regularly scheduled basis. –Contracted sites – why use them … Patients cannot access the FQHC’s facility Patients cannot access the FQHC’s facility Provider’s facility has specialized equipment (dental offices) Provider’s facility has specialized equipment (dental offices) Ensure continuity of care (behavioral health facilities) Ensure continuity of care (behavioral health facilities) Space considerations Space considerations Changes in Scope of Project

65. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Format and Timing for Change in Scope Request Format and Timing for Change in Scope Request –All requests must be prepared as described in the PIN 2008-01 and must be electronically through the Electronic Hand Book (EHB) separate from the continuation grant application –Should submit at least 60 days prior to implementation date – BPHC expects to approve within 30 days of submission but could take longer –Effective date of an approved change No earlier than the date that BPHC receives a complete request No earlier than the date that BPHC receives a complete request No later than 120 days from NGA No later than 120 days from NGA No retroactive coverage for changes that are implemented prior to receipt of the request No retroactive coverage for changes that are implemented prior to receipt of the request Changes in Scope of Project

66. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Other Legal Considerations Other Section 330-related laws, regulations, expectations and policies Other Section 330-related laws, regulations, expectations and policies –PIN # 98-23: Program Expectations –Other PINs and Program Assistance Letters (PALs) –45 CFR Part 74 (or Part 92): Procurement and property standards (incorporating OMB Circulars A-110 and A-122) –Public Health Service (“PHS”) policies –Notice of Grant Award (“NGA”) and special terms and conditions –FTCA coverage –Section 340B discount drug pricing

67. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Medicaid and Medicare Medicaid and Medicare Tax considerations Tax considerations Fraud and abuse (anti-kickback, false claims) Fraud and abuse (anti-kickback, false claims) Physician self-referral (Stark) Physician self-referral (Stark) Antitrust Antitrust State laws and regulations State laws and regulations Other Legal Considerations

68. Copyright © Feldesman Tucker Leifer Fidell LLP 2009 www.ftlf.com Questions? Jacqueline C. Leifer, Esq. jleifer@ftlf.com Feldesman Tucker Leifer Fidell LLP 2001 L Street, NW – 2nd Floor Washington, DC 20036 (202) 466-8960 www.ftlf.com