may 22-24, 2011 richland, wa
DESCRIPTION
AWPHD A Retreat for CEOs and Administrators Only “Leading Wisely, Living Well” Current Legal Hot Topics for Public Hospital Districts. May 22-24, 2011 Richland, WA. Introduction. First part of presentation will focus on current state and federal legal issues affecting public hospital districts - PowerPoint PPT PresentationTRANSCRIPT
Bradley J. Berg206.447.8970 | [email protected]
AWPHD A Retreat for CEOs and Administrators Only
“Leading Wisely, Living Well”
Current Legal Hot Topics forPublic Hospital Districts
May 22-24, 2011
Richland, WA
2Collaborations and Partnerships – Opportunities, Limits and Barriers
Introduction
First part of presentation will focus on current
state and federal legal issues affecting public
hospital districts
Second part of presentation will provide an
update on collaborations and affiliations
involving public hospital districts
3Collaborations and Partnerships – Opportunities, Limits and Barriers
State Legislative Changes
SB 5116 authorizes PHDs to engage in fundraising directly
or indirectly through separate foundations
SB 5117 revises the definition of “rural public hospital
district” to increase the population threshold from 30,000 to
50,000
EHB 1730 authorizes boards to delegate to management to
enter into bond purchase contracts
EHB 1669 exempts flood control districts from property tax
limitations in counties with population greater than 750,000
4Collaborations and Partnerships – Opportunities, Limits and Barriers
State Legislative Changes
SHB 1899 revises the public records act to delete the $5 per
day minimum threshold for penalties
A number of bills relating to the open public meetings act
and the public records act were introduced and the focus on
transparency is likely to continue in the next legislative
session
SHB 1315 authorizes nursing homes to employ physicians
5Collaborations and Partnerships – Opportunities, Limits and Barriers
State Regulatory Issues
New PDC policy interpretation applying the Telford court decision
to limitation on use of public resources in election campaigns
Recent B&O tax court decision regarding “pass-through”
payments
Eligibility of EMTs to participate in state retirement system
(LEOFF)
Court decisions challenging peer review/quality assurance
protections
State auditor focus on marketing/promotion expenditures and
public bidding and prevailing wage compliance
6Collaborations and Partnerships – Opportunities, Limits and Barriers
Federal Regulatory Issues
Federal tax treatment of commissioner compensation and
benefits
DEA registration fee exemption for PHDs and physicians
employed by PHDs
Extension of withholding obligation to certain payments
made by governmental entities
Credentialing/privileging of physicians providing
telemedicine services
7Collaborations and Partnerships – Opportunities, Limits and Barriers
Federal Regulatory Issues
Change in physician signature requirement on lab
requisitions
Change in physician supervision requirements for hospital
outpatient therapeutic services
CAH eligibility for Section 340B drug discount program
PHDs and ACOs
8Collaborations and Partnerships – Opportunities, Limits and Barriers
Factors Motivating Collaborations
Reductions in payment and changes in payor mix
Reduction in demand
Increase in expenses
Inadequate supply of physicians and other trained personnel
Lack of capital for replacing/upgrading facilities and technology (including electronic medical record systems)
Health care reform encourages integration (Accountable Care Organizations, medical homes, bundled payments, payments for quality outcomes)
Increase in competition
9Collaborations and Partnerships – Opportunities, Limits and Barriers
Potential Responses
Do nothing
Get out of the health care business entirely
Substantially change or reduce the scope of services
Consider one or more collaboration options
10Collaborations and Partnerships – Opportunities, Limits and Barriers
Key Evaluation Criteria—does the collaboration:
Maintain the hospital’s mission?
Maintain and expand services?
Improve quality?
Increase revenue and/or reduce costs?
Increase access to capital?
Increase access to specialized technology and personnel?
Reduce competitive threats?
11Collaborations and Partnerships – Opportunities, Limits and Barriers
Potential Collaborators
Public hospital districts
Other public health care providers
Nonprofit/for profit hospitals
Physicians
Community Health Clinics
Local governments
Payors
Others?
12Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Options
Contracts for specific services or involving specific service
lines
Joint venture agreements
Transfer of assets through lease or sale
Merger/Consolidation
Dissolution
13Collaborations and Partnerships – Opportunities, Limits and Barriers
Key Variables in Collaboration Models
Who owns the assets?
Who is responsible for funding capital?
Who has the right to receive revenue and who has
responsibility for liabilities and expenses?
Who owns the licenses and provider agreements?
Who employs the staff?
Who is responsible for governance and management?
14Collaborations and Partnerships – Opportunities, Limits and Barriers
Do PHDs Have the Legal Authority to Collaborate?
PHD Boards have broad statutory authority to decide
- What services are provided
- How services are provided
- Who services are provided to
- Where services are provided
15Collaborations and Partnerships – Opportunities, Limits and Barriers
PHD Statute Provides Additional Authority for Rural PHDs
Rural PHD is defined as a PHD whose boundaries do not
include a city with a population > 50,000
Authorizes
Allocation of health services among PHDs
Joint purchasing of equipment and technology
Joint contracting with payors
Other cooperative arrangements
16Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving Public Hospitals
Joint payor contacting
Cooperative agreements such as
Rural Health Care Quality Network
and Western Washington Rural
Healthcare Collaborative
Service line joint ventures and
agreements
Hospital management agreements
Physician employment
17Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Snohomish County PHD No. 2
Swedish Health Services:
PHD agreed to lease all of its
health care facilities to
Swedish Health Services.
Swedish will operate the
hospital under its license.
The PHD is exploring other
activities beyond operating a
hospital.
18Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
University of Washington/
King County PHD No. 1 (Valley Medical Center)
The agreement creates a new board composed of the
district commissioners, representatives of UW and
community members to oversee the operation of
Valley Medical Center.
19Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
San Juan County PHD No. 1/Peace Health:
PHD closing its ambulatory care clinic and
contracting with PeaceHealth to construct a new
critical care hospital which will be owned, licensed
and operated by PeaceHealth, and a new EMS facility
which will be owned and operated by the District
20Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Point Roberts PHD/Interfaith Community Health Center
Mason County PHD No. 2/ Harrison Medical Center
Grant County PHD No. 7/Wenatchee Valley Clinic
Grant County PHD No. 5/Mattawa Community Medical Clinic
Skagit PHD No. 1/Skagit Valley Medical Center
Skagit PHD No. 1/Snohomish PHD No. 3 Smokey Point Clinic
King County PHD No. 4/PeaceHealth
Skagit PHD No. 1/Skagit PHD No. 304
21Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Clallam County PHD No. 1, Clallam County PHD No. 2 and
Jefferson County PHD No. 2:
The districts distributed a request for information to
tertiary medical centers and systems in September
2010 requesting proposals to provide support
services to the three districts including EMR and
tertiary services. The districts have selected
Swedish Health Services.
22Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Snohomish County PHD No. 1:
The district distributed a request for proposals to the
major health care systems in Washington in
February 2011 requesting proposals to enter into a
strategic partnership with the district.
23Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving Public Hospitals
University of Washington/Northwest Hospital
University of Washington/Harborview Medical Center
Pacific Hospital and Preservation Development
Authority/Pacific Medical Centers
24Collaborations and Partnerships – Opportunities, Limits and Barriers
Public Hospital District Issues
1. Constitutional limitations
-- prohibition against gift of public funds or property
-- prohibition against lending public funds or public credit
-- prohibition against owning stock in any private company
-- requirement that public funds be used for public purposes
25Collaborations and Partnerships – Opportunities, Limits and Barriers
Public Hospital District Issues
2. Statutory limitations Relating to:
-- Appointment of a superintendent
-- Sale of real and personal property
-- Lease of real property
-- Open public meetings
-- Public records
-- Public bid
-- Prevailing wages
-- Conflicts of interest
26Collaborations and Partnerships – Opportunities, Limits and Barriers
Restrictions Relating to Outstanding Bonds
1. Bond Covenants
-- Restrictions on transfers of property
Unlimited tax general obligation bonds
Limited tax general obligation bonds
Revenue bonds
-- Restrictions on issuance of additional debt
27Collaborations and Partnerships – Opportunities, Limits and Barriers
Restrictions Relating to Outstanding Bonds
2. Federal Tax Law Limitations
-- Restrictions on change in
use of property financed with the
proceeds of tax-exempt bonds
-- Restrictions on
management agreements or
services
agreements relating to the use of
property financed with the
proceeds of tax-exempt bonds
28Collaborations and Partnerships – Opportunities, Limits and Barriers
Government Approvals
1. Certificate of Need
2. Special Approval for sales to for profit entities
3. Licensing
4. State Auditor
5. CMS
6. Antitrust
29Collaborations and Partnerships – Opportunities, Limits and Barriers
Other Legal Issues
1. Labor Issues
-- Multiple unions
-- Jurisdiction of National Labor Relations Board
versus Public Employees Relations Commission
-- Compensation and benefits structures
-- Reductions in work force
-- Other?
30Collaborations and Partnerships – Opportunities, Limits and Barriers
Other Legal Issues
2. Medicare Reimbursement
-- Billing under a single provider
-- Other?
3. State Tax Issues
-- Business and occupation tax and requirements for
social welfare organizations
-- Property tax exemptions
31Collaborations and Partnerships – Opportunities, Limits and Barriers
Other Legal Issues
4. Restrictions on assignment of existing contracts
including significant payers
5. Other?
32Collaborations and Partnerships – Opportunities, Limits and Barriers
33Collaborations and Partnerships – Opportunities, Limits and Barriers 33
Contact Information
Brad Berg
Telephone: 206-447-8970
Email: [email protected]
Foster Pepper PLLC
1111 Third Avenue, Suite 3400
Seattle, WA 98101
www.foster.com