BOARD GOVERNANCE AUDIT AND COMPLIANCE COMMITTEE MEETING · BOARD GOVERNANCE AUDIT AND COMPLIANCE...

BOARD GOVERNANCE AUDIT AND COMPLIANCE COMMITTEE MEETING * Thursday, January 02, 2014 5:30 p.m. (Buffet for Committee members & invited guests) Administration Office 6:00 p.m. 1st Floor Conference Room 456 E. Grand Avenue, Escondido, CA 92025 ∗

Time Page Target CALL TO ORDER ...................................................................................................................... …………. …….. 6:00 Public Comments ................................................................................................................. ............... 5 .......... 6:05

5 minutes allowed per speaker with a cumulative total of 15 minutes per group. For further details & policy, see Request for Public Comment notices available in meeting room.

Information Item(s) ............... 4 …..... 6:09 1. * Approval: Minutes – Thursday, October 3, 2013 (ADD A-Pp2-11 ) .................................. ............... 5 …...2 6:14 2. Review/Approve Monthly Standing Agenda Items(ADD C-Pp12-139)…………………….

a) *Review/Approve: Board Handbook – SI from November 2013…………………… b) *Review/Approve: Committee Self-Assessment – SI from December 2013……… c) *Review/Approve: GAC Charter and Committee Policies – SI for January ……… d) *Review/Approve: Palomar Health bylaws – SI for January ……………………… e) *Review/Approve: GAC Board member position description – SI for January…… f) *Review/Approve: 2014 GAC Committee Standing Agenda items – SI for

January…………………………………………………………………………………… 3. *Review/Approval: Governance Policies (ADD D-Pp142-157) ............................................

a) CEO Evaluation Policy …………………………………………………………………. b) Affects of Absenteeism Policy #20317………………………………………………... c) Annual Adoption of Statement of Investment Policy #27092……………………….. d) Cost of Board Packet Policy #21792………………………………………………….. e) PPH Credit Cards Policy #21807 ……………………………………………………… f) Solicitation and Distribution of Literature on PPH Property Policy #21788……….. g) Physician Owned Medical Device (POD) Company Arrangements Policy #44692

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4. Review: Compliance and Ethics Summary (ADD E-Pp158-164) ........................................ a) Compliance and Ethics Summary for November 2013……………………………… b) Compliance and Ethics Summary for December 2013……………………………… c) Compliance and Ethics Summary for January 2014…………………………………

5. Review: Compliance Hotline Summary (ADD F-Pp165-176) ..............................................

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8:00 ADJOURNMENT ....................................................................................................................... ................. .......... 8:00

Board Governance Audit and Compliance Committee Members Linda Greer, R.N., Chair Michael Covert, CEO Richard Engel, M.D. Bruce Krider, Director Janine Sarti, Chief Legal Officer Lachlan Macleay, M.D. Steve Yerxa, Director Bob Hemker, CFO Paul Neustein, M.D. Jeff Griffith, 1st Alternate Tom Boyle, District Audit Officer Elly Garner

Mark Neu, Corporate Compliance Officer

NOTE: If you have a disability, please notify us by calling 858-675-5465 72 hours prior to the event so that we may provide reasonable accommodations

∗ Asterisks indicate anticipated action. Action is not limited to those designated items.

October 03, 2013 Governance, Audit and Compliance Board Meeting Minutes Page 1 of 10

Palomar Health GOVERNANCE, AUDIT & COMPLIANCE

BOARD COMMITTEE MEETING 456 E. Grand Ave.

1st Floor Conference Room October 3, 2013

AGENDA ITEM/ PRESENTER

DISCUSSION CONCLUSIONS/ACTION

CALL TO ORDER

6:00 P.M by Director Greer. Present: Chairperson Greer, Director Yerxa and Director Griffith Also attending: Michael Covert, Tom Boyle, Mark Neu, Elly Garner, Lachlan Macleay, Johnson Aderohunmu, Kristy Larkin, Ruhina Livingstone, Krystle Morrow

NOTICE OF MEETING

Notice of Meeting was posted consistent with legal requirements.

PUBLIC COMMENTS

There were no members of the public present.

APPROVAL OF MINUTES • September 5,

2013

MOTION: Motion by Director Krider, second by Director Yerxa and carried forward to approve the minutes of the Governance Audit and Compliance meeting held on September 5, 2013 All in favor. None Opposed

Outside Counsel Introduction

Mr. Stanger presented himself and the Holland & Hart frim

• Kim C. Stanger, Chair of Holland & Hart

o 20+ years experience




o Best Lawyers® in America, Healthcare (2010-2014) o Best Lawyers® Lawyer of the Year, Healthcare (2014) o Mountain States Super Lawyer, Healthcare (2013) o American Health Lawyers Association o American Bar Association, Health Law o Regulatory o Transactional o Governance o Administrative Agency Defense

• Holland & Hart has o 167 attorneys named as Best Lawyers ® in America in 2014 o 11 attorneys named as Lawyers of the Year in their

practices and markets by Best Lawyers ® in 2014 o 82 Holland & Hart attorneys and 35 of the firm’s practice

areas (by market) are recognized by Chambers USA 2013 • Kim and Holland & Hart have represented Palomar Health for 5

years with o Regulatory and transactional matters o Fraud and abuse laws, e.g., Stark, Anti-Kickback, Civil

Monetary Penalties Laws, etc. o HIPAA o EMTALA o Physician contracts and relations o Acquisitions o Administrative actions

State Legislative Bills Potentially affecting Palomar Health 2013

Ms. Garner presented State Legislatives Bills that potentially will affect Palomar Health in 2013. She discussed the following bills and will keep the Governance, Audit and Compliance posted on any updates.

• SB 239 (Hernandez/Steinberg) o Hospital Fee o Distinct Part Skilled Nursing Facilities o Medi-Cal Payment Restoration o Awaiting action by the Governor

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB239&search_keywords=




• Scope of Practice o SB 493 (Hernandez) – Pharmacists o Awaiting Action by the Governor

• Congressional Support for Districts o California 1115 Medicaid Waiver o Designated Public Hospitals (UC hospitals & county

hospitals) o Non-Designated Public Hospitals (District hospitals &

community hospitals) o “Dear Colleague” Letter

Federal Deficit Reduction Act of 2005 – Fraud and Retaliation Policy #50832

MOTION: Motion by Director Yerxa, second by Director Krider carried forward to approve the submission of Federal Deficit Reduction Act of 2005 – Fraud and Retaliation Policy #50832 to the full Board of Directors for approval All in favor. None opposed.

Revision of Policies #21794

MOTION: Motion by Director Krider, second by Director Yerxa carried forward to approve the submission of Revision of Policies #21794 to the full Board of Directors for approval All in favor. None opposed.

Compliance and Ethics Reports

Mr. Neu discussed the Compliance Hotline and CEC agenda items as follows:

PEPPER Q1 FY 13 for Pomerado, Follow up






o Review template developed for Case Management and Coding review. Coding review complete and no issues identified; Case Management review pending.

PEPPER Q2 FY 13

o Case Management and Coding to review a sample of each category of outlier cases to ensure medical necessity and coding are appropriate.

Compliance Work Plan Quarterly Review • OIG Work Plan – On time for a 11/30/13 completion

o Work Plan 1 - Same Day Readmissions (OIG) - In progress

o Work Plan 2 – Claims for Replacement of Medical Devices (OIG)- In progress

o Work Plan 3 – Home Health face-to-face encounters review (OIG) - Complete

o Work Plan 4 – SNF Questionable Billing Patterns During Non-Part A Nursing Home Stays Review (OIG) - Complete

o Work Plan 5 – Hotline Education - Complete o Work Plan 6 – Most Ethical Company - Modified

• Public Contract Responsibility – On time for a 12/31/13

completion o Focus areas: Supply Chain, Information Technology,

Facilities Planning and Development o Completion of Written Materials planned for completion by

December 31, 2013

• Data Security – Encryption – On time completion of 12/31/13 pending

o Implement laptop encryption solution.

• Information Privacy – Breach – Completion delayed pending funding

o District Wide Risk Assessment for Privacy and Information




Security approved in budget for Meaningful Use/HITECH/Omnibus readiness.

• Create process for Observation patients and decrease length

of stay of Observation patients o Goal is to Improve appropriate admission status of

Observation patients and decrease length of stay of Observation patients. Ortho unit pilot in progress. Completion pending

Medi-Cal DRG Update

• January 1, 2014 Medi-Cal will pay PH using the APR-DRG methodology rather than per diem rate

• The impact of this is o TARS:

Only initial TAR needed for most MCAL (excludes MCAL Restricted, which needs daily)

Moms & healthy babies – No TAR o Administrative Days: New level of admin day o Separate claims for Mom & Baby – this will elevate the

manual combining of claims on the back end o Coding – Will impact reimbursement o Present on Admission Indicator- reduced rate for HACs

and erroneous surgeries o Rehab Claims: Paid by new per diem rate (currently being

developed) Action List for ROC – TARS, Coding, Claims, CDM

Culture of Ethics, Follow up

• Tour de Poway is taking place on Sunday October 6th o There will be Arch and Palomar employees out at the Arch

station • Movember starting on November 1st through November 30th • Blood Drive on November 22nd




Recent Enforcement • Tuomey Healthcare System (SC) to pay $276.8 million for

Stark, False Claims Act Violations 9/30/13 o $39.3 million in Stark penalties; o $237.5 million in False Claims Act fines; o 21,730 Medicare claims that were tainted by illegal

compensation arrangements; o Dr. Michael Drakeford filed his whistle-blower lawsuit in

2005 after he declined to enter into one of the agreements that the hospital was offering;

o 19 Agreements agreed to pay each physician: an annual base salary that fluctuated based on

Tuomey’s net cash; “productivity bonus” equal to 80 percent of the net

collections; an incentive bonus that could total up to 7 percent of

the productivity bonus. Each contract had a 10 year term, including a 12 yr

non-compete o Sparked based on a projected $9.6 million loss stemming

from the development of a competing ASC. • Second Highest Chiropractic Medicare Biller in California

Biller Pleads Guilty to Health Care Fraud (9/25/13) o A San Fernando Valley chiropractor, who was the second

highest Medicare biller in California for chiropractic services, pled guilty to healthcare fraud

o Between 2005 and 2012, Houshang Pavehzadeh aka “Danny Paveh” (41), owner of Sylmar Physician Medical Group, Inc. – a storefront chiropractic clinic located in a strip mall – defrauded Medicare by billing for patients he never treated.

o The eleven count indictment alleges that Pavehzadeh submitted over $1.7 million in false and fraudulent claims to Medicare and was paid a little over $1 million on these claims.

o As part of his guilty plea, Pavehzadeh admitted that, in an




effort to conceal his fraud from Medicare auditors, he staged an early-morning car-jacking outside his office and falsely reported to the Los Angeles Police Department that his patient files had been stolen.

• A story close to home… o Department manager o Hospital Administration o Hotline (3x’s) o City Hall o California Department of Public Health o Office of Civil Rights o Minimum Necessary – PHI should not be used or

disclosed when it is not necessary to satisfy a particular purpose or carry out a function

Compliance Hotline

• Total number of reports for July 01 – September 30, 2013 o Total number of reports for Q1 – 22 o Total number of reports for Q2 – 11 o Total number of reports for Q3 – 20

• Reports by Source o 1 report by Email o 11 reports by Hotline o 8 reports by Web Submission

• Reports by Priority o 0 reports for A priority o 5 reports for B priority o 8 reports for C priority

• Reports by Allegation Class o 7 in the Employee Relations class o 2 in the Environmental, Health, and Safety class o 1 in the Financial Concerns class o 7 in the Misuse or Misappropriation of Assets class o 3 in the Other class

• Reports by Allegation Type




o 2 fall into the Conflict of Interest Personal type o 2 fall into the Unfair Employment Practices type o 3 fall into the Inappropriate Practices type o 2 fall into the Environment, Health, and Safety type o 1 fall into the Accounting and Auditing Practices type o 1 fall into the Customer Relations type o 5 fall into the Disclosure of Confidential Information type o 1 fall into the Misuse of Resources type o 3 fall into the Other type

Internal Audit Activity Update

Mr. Boyle discussed the Audit Activities as follows Internal Audit Activities: • Tom talked about the 2013 Audit Plan and the changes from the

original Plan. o Outpatient reports and controls replaced by Foundation

analysis & recovery o Construction/renovation replaced by Year-end audit

assistance for Deloitte o Audit Awareness and Leadership Training replaced by

Physician-owned distributor (POD) review o Expense Reimbursement - Scope expanded to Home

Depot, fuel, telecom expenses • Ongoing Monitoring :- Analytic tests performed at least monthly

o Accounts Payable :- Identifies duplicate invoices, duplicate vendors, terminated employee-vendors

o OIG Excluded Provider Test :- Monthly test to identify possible staff, physicians or vendors designated as excluded providers

o Unclaimed Refunds:- Identify and report monthly unclaimed patient refunds for Finance for disposition

o Midnight Census :- Generates a daily report of census by financial class for use by Finance and for Performance Excellence

o Employee Vs. Vendor :- Compares vendor database to employee database to identify suspicious accounts or




activity o Audit Awareness and Leadership Training replaced by

Physician-owned distributor (POD) review • Completed Audit Projects:-

o Palomar Health Foundation o Year-End Inventory – Supplies o Year-End Inventory – Capital Assets o Physician-Owned Distributors (POD) o Medical Staff Credentialing o Expense Reimbursement

• Activities in progress o Ongoing Monitoring

Accounts Payable Excluded Provider Test Daily Census Unclaimed Refunds Payments to Physicians

o Other Audit Activities Payments to physicians – 3rd quarter Follow up on Expense Reimbursement solutions Risk Assessment Survey and interview management staff Translate input to GRC format Post-review SNF closure

Pending Projects

Pending Projects were discussed as follows

• CEO Evaluation – draft policy will be discussed at the next HR committee

• Board Member Liability Insurance Coverage

ROUNDTABLE • N/A




DATE/TIME & LOCATION OF NEXT MEETING

The next meeting will be on November 11, 2013 at 5:30pm in the Pomerado Conference room E.

ADJOURNMENT

The meeting was adjourned at 7:33p.m

Director Greer moved to adjourn.

SIGNATURES

Committee Director

Secretary to

Committee

_________________________ Linda Greer R.N ________________________ Krystle Morrow

Board of Directors

PALOMAR HEALTH

BOARD MEMBER HANDBOOK POLICIES/GUIDELINES

AND

ORIENTATION INFORMATION

TABLE OF CONTENTS

Section

Section 1

Section 2

Section 3

Section 4

Section 5

Section 6

Section 7

Section 8

Section 9

Section 10

Section 11

Section 12

Section 13

Section 14

Section 15

Document Title

California’s Health Care Districts

Board of Directors, Calendar of Events

Amended and Restated Bylaws of Palomar Health

Board Members Position Description

Board Member Benefits at a Glance

Organizational Chart

District Map

Palomar Health Foundation Board Members and Bylaws

A Guide to the Ralph M. Brown Act

Summary of the Public Records Act

Healthcare Acronyms

Compensation of Board Members Policy

Conflict of Interest Code Policy

Governance Policy

Media Relations Policy

Section 1

California’s Health

Care Districts

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Section 2

Board of Directors,

Calendar of Events

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Section 3

Amended and Restated

Bylaws of Palomar

Health

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Section 4

Board Members

Position Description

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PALOMAR HEALTH BOARD

GOVERNANCE, AUDIT AND COMPLIANCE COMMITTEE

Board Member Position Description

Audit and Compliance Function:

It is the responsibility of the Board Member to insure that appropriate review mechanisms and management

of the District’s assets and resources are in place, that the organization complies with all applicable local,

state and federal regulations, and to oversee the audit and financial stewardship of Palomar Health.

Responsibilities:

1. Approve the annual program and scope of all audits to be performed by the District Audit Officer.

2. Routinely review the system of internal controls for the organization and its subsidiaries.

3. Recommend a qualified audit firm to complete independent financial audits of the system and review

reports, management letters and recommendations from the firm to assure compliance with

recognized audit principles and standards throughout Palomar Health.

4. Participate in special investigations for the Board as may be assigned.

5. Regularly review reports from the District Audit Officer and the CEO and where appropriate make

recommendations on system controls and improvements that could insure effective stewardship of

the organization.

6. Keep up with trends in the field of health care audit and compliance to help educate other Board

members on the latest trends in the industry.

7. Ensure the effectiveness of Palomar Health Compliance efforts.

8. Complete other duties as may be assigned by the Chairman.

9. Interest and willingness to commit the time and energy necessary to meet committee responsibilities

and meeting requirements.

Governance Function:

It is the responsibility of the Board member to help insure the effective and efficient management of the

governmental processes of the Board.

Responsibilities:

1. Complete an annual review of the Board's by-laws and policies and make recommendations for

changes that enhance the functioning of the District Board.

2. Provide guidance to the CEO in the development of education and orientation programs that enhance

member understanding of Board stewardships, health care, issues and management of the system.

3. Assist in development and completion of an annual Board self-assessment and make

recommendations to enhance governance of the organization by its members.

4. Review and make recommendations to the Board on pending or existing state and federal legislation

that could affect the direction of the District and Board member responsibilities.

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5. Annually review the boundaries of the District to insure compliance with its charter in the

completion of health care stewardship responsibilities.



in meeting requirements.

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STRATEGIC AND FACILITIES PLANNING COMMITTEE


Strategic Planning Function:

It is the responsibility of the Board Member to ensure that the mission and vision of the Board are

implemented in an effective and meaningful manner through the establishment and implementation of plans

and programs that enhance the well-being of the citizens of the District.

Responsibilities:

1. To review and make recommendations to the Board regarding the District's short and long range

plans and strategic collaborative relationships.

2. Review and approve physician development plans and. oversee the implementation of physician

recruitment and retention programs on an annual basis.

3. Monitor completion of annual goals in order to ensure their effective completion on behalf of the

system.

4. Recommend educational programs and enhance Board members understanding of trends in the local,

State and National health care arena and issues affecting the system.

5. Review the development of new programs and system initiatives to ensure their direction is in

accordance with the mission and vision of the organization and support the strategic plans of the

District.

6. Perform other duties as may be assigned by the Committee Chair.



Facilities Planning Function:

It is the responsibility of the Board Member to provide oversight for the development, expansion,

modernization and replacement of the Health System facilities and grounds in order to promote the physical

life of the assets belonging to the District; and to insure the safety and well being of those working in and

being served in the facilities and on the grounds.

Responsibilities:

1. To insure that a long-term facility plan is developed and updated regularly.

2. To provide oversight regarding the maintenance of facilities and grounds and implementation of

improvement projects.

3. To insure that the District is in compliance with governmental agency and accreditation

requirements with respect to earthquake and disaster preparedness, fire and safety codes,

environmental standards and physical security needs, etc.

4. Provide guidance in the selection of architects, and general construction vendors.

5. To advise the Finance Committee with respect to the need of adequate projects funding.

6. Complete other duties as may be assigned by the Chair of the Committee.

7. Interest and willingness to commit the time and energy to provide input to the committee

membership.

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Section 5

Board Member Benefits

at a Glance

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Section 6

Organizational Chart

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Section 7

District Map

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Section 8

Palomar Health

Foundation Board

Members and Bylaws

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Section 9

A Guide to the Ralph

M. Brown Act

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Section 10

Summary of the Public

Records Act

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Section 11

Healthcare Acronyms

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Section 12

Compensation of Board

Members Policy

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Section 13

Conflict of Interest

Code Policy

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Section 14

Governance Policy

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Section 15

Media Relations Policy

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PALOMAR HEALTH GOVERNANCE, AUDIT AND COMPLIANCE COMMITTEE CHARTER

Audit and Compliance Function

A. Purpose

The Audit and Compliance function of the Governance, Audit, and Compliance Committee (“Committee”) will assist the Board in the following items. Provide oversight for:

• The integrity of Palomar Health's financial statements. • Palomar Health’s compliance with legal and regulatory requirements. • The selection, performance, qualifications and independence of external auditors. • The performance of Palomar Health’s internal audit and compliance functions.

The Committee will strive to improve and promote Palomar Health’s internal audit and compliance policies. The Committee will foster open communication among external and internal auditors, compliance, finance, senior Administration, and the Board. The Committee may obtain assistance from outside accounting, legal, or other consultants to resolve issues the Committee believes necessary to protect the organization. The Corporate Compliance Officer may also access outside legal counsel for certain sensitive compliance issues, with prior approval of the Chief Legal Officer or the Board Chair. It is expected these situations will occur in limited circumstances. Palomar Health will provide funds to pay for the consultants. The Committee Chair shall regularly report to, and review with the Board, any issues that arise with respect to the quality, operations, and integrity of Palomar Health’s internal audit and compliance functions.

B. Committee Membership

1. Composition. The Committee shall be composed of three Board members. The Board Chairman will appoint Committee members and the Chair of the Committee. The District Audit Officer, Corporate Compliance Officer, Chief Legal Officer, Chief Executive Officer and a representative from each medical staff will be committee members without vote. Each member shall be knowledgeable in healthcare regulations or must become knowledgeable within a reasonable period of time after appointment to the Committee. Members are not required to be engaged in the compliance profession and, consequently, some members may not have expertise in regulatory matters; however, the Corporate Compliance Officer will provide ongoing training to establish the required level of expertise.

2. Frequency of Meetings. The Committee will meet at least once during each fiscal quarter, or more frequently as circumstances dictate and as necessary to fulfill its responsibilities. At the conclusion of each Committee meeting, the Chief Legal Officer, the District Audit Officer, and the Corporate Compliance Officer may each meet individually with the Committee, without Administration present, to discuss any issues or concerns.

The Committee will also meet annually with the District Audit Officer, the Corporate Compliance Officer, external auditors, and Administration to discuss the annual Audit and Compliance Plans, and audited financial statements.

3. Duties and Responsibilities. The Committee shall have the following responsibilities: 1. Maintain meeting minutes. 2. Annually review its charter and any Committee policies and recommend any changes to the

Board or Governance Committee. 3. Meet regularly with the Board which may include closed sessions. 4. Review and discuss with Administration and the District Audit Officer Palomar Health’s annual

financial statements, all internal quality control reports and any relevant reports provided by external auditors.

5. Recommend appointment of the external auditors, and forward to the full Board for approval.

Oversee the work performed by the Internal Audit and Compliance departments for the purpose of preparing or issuing an audit or compliance report. Approve the overall audit scope and ensure audits are conducted in an efficient and cost-effective manner. Oversee the resolution of any issues between Administration and the District Audit Officer, the Corporate Compliance Officer and Chief Legal Officer.

6. At least annually, obtain and review a report by the external auditors. The report shall include:

a. the external auditors' internal quality control procedures;

b. material issues arising out of the audit firm’s most recent internal quality-control review, peer review, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more external audits carried out by the firm, and any steps taken to deal with any such issues.

7. Receive periodic reports on the audit plan and the compliance plan’s current policies and

procedures, any changes to the compliance plan, the reasons behind the changes, and make recommendations to the Board.

8. Review and pre-approve both audit and non-audit services to be provided by the external

auditors in accordance with the pre-approval policies and procedures. For services not requiring pre-approval under such policies and procedures, Administration shall inform the Committee of the nature of the project and the related fees with respect to such services provided by the external auditors.

9. Review the integrity of Palomar Health’s financial reporting processes and the internal control

structure. 10. Review with Administration and external auditors, major issues regarding accounting principles

and financial statement presentations, including any significant changes in Palomar Health’s selection or application of accounting principles, major issues as to the adequacy of Palomar

Health’s internal controls and any special audit steps adopted in light of material control deficiencies.

11. Review analyses prepared by Administration and external auditors, describing significant

financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements.

12. Review with Administration the effect of regulatory and accounting initiatives, as well as off-

balance sheet structures, on the financial statements of Palomar Health. 13. Review with Administration and the Corporate Compliance Officer, Chief Legal Officer and the

District Audit Officer any correspondence from or with regulatory agencies, any employee complaints or any published reports that raise material issues regarding Palomar Health’s financial statements, financial reporting process, internal audit controls, accounting policies, or compliance with laws, rules, or regulations.

14. Establish procedures for the receipt, retention, tracking, and treatment of complaints received by

Palomar Health regarding regulatory, accounting, internal accounting controls or auditing matters. The Committee shall also establish procedures for the confidential and anonymous submission by employees regarding questionable matters.

15. Consider the rotation of the lead audit partner and reviewing partner for Palomar Health’s

independent audit firm every five (5) years.

16. Commission periodic audits, as the Committee deems necessary, to monitor the implementation and integrity of the compliance plan.

17. Perform an annual self-assessment regarding the Committee's purpose, duties and responsibilities

outlined herein. 18. Direct special investigations for the Board. 19. Keep current on changes in the laws and regulations affecting the Committee. 20. Perform any other activities consistent with this Charter, Palomar Health’s Bylaws and

governing law, to fulfill its responsibilities and duties. 21. The District Audit Officer will make quarterly reports to the Committee regarding the percent of

implemented audit recommendations, areas where the audit functions can reduce costs, avoid risks, and enhance revenue.

22. Periodically review Palomar Health’s ethics and compliance training program to determine the

scope and effectiveness of the program and assess the return on its investment. 23. Periodically review the compliance plan’s procedures for the receipt, retention, and treatment of

complaints to ensure the procedures require actions that are responsive, corrective, and confidential.

24. Periodically review, along with the Corporate Compliance Officer, or seek credible reports on

specific risk exposures, the steps taken to monitor and mitigate exposure, and the compliance plan’s ability to identify such exposures.

25. Periodically review, or seek credible reports on, the effectiveness of Palomar Health’s Compliance Plan and how Administration measures the plan’s effectiveness.

26. Review, in conjunction with the District Audit Officer and Corporate Compliance Officer, any

known significant disputes between Administration and Palomar Health’s internal or external auditors concerning matters of regulatory and corporate compliance, as well as Administration’s responses to those disputes.

27. Monitor any audits or examinations by governmental or other regulatory agencies as applicable. 28. Perform any other actions consistent with this Charter, Bylaws, or as the Board deems necessary. 29. The following are the responsibility of the Board Members of the Committee:

a.) Review the appointment, proposed termination, and replacement of the Chief Legal Officer, the Corporate Compliance Officer, and the District Audit Officer. Meet periodically with the Corporate Compliance Officer, District Audit Officer and Chief Legal Officer to discuss responsibilities of Palomar Health’s internal audit and compliance functions and any issues the Corporate Compliance Officer, Chief Legal Officer and the District Audit Officer believe warrant Committee attention.

b.) Discuss with the Corporate Compliance Officer, Chief Legal Officer and the District Audit

Officer any significant material reports to Administration prepared by the Corporate Compliance Officer, Chief Legal Officer and the District Audit Officer and any responses from Administration.

30. The performance appraisals for those positions will be prepared by the CEO and provided to the

Board Members of the Committee for discussion and input. The CEO and the Committee Chair will meet to discuss the performance appraisals. The Board Members of the Committee will receive a copy of the employee’s written response to the performance appraisal. The Board Members of the Committee will also receive a copy of any other documentation regarding the employee’s performance. The employee has the right at any time to access the Board Members of the Committee or the full Board pertaining to issues. At no time will any retribution or retaliation be tolerated against the employee for challenging an employment action or reporting an issue to the Board.

4. Outsourcing of Certain Investigations.

The Committee may utilize an independent investigator to review certain situations which may

impair the objectivity of audit or compliance staff. This outsourcing will occur after the Chief Legal Officer consults with the Committee and Board, and the Board directs the Chief Legal Officer to hire an outside investigator. The following are examples of situations where the investigation may be outsourced. These situations are examples only and are not meant to limit the circumstances where an independent investigator may be used.

1. Irregularities in travel and entertainment expenses incurred by Board and senior leadership. On an annual basis, the Internal Audit Officer will meet with the Audit and Compliance Committee, and certify to the Committee that all travel expenses of the Board, CEO, and the Executive Management Team were appropriate. 2. Allegations against senior leadership, including, but not limited to, inappropriate conduct, fraud, sexual harassment, and misappropriation of funds.

3. Independent review of key decisions where Palomar Health does not have sufficient staff to conduct the review, or where there may be a conflict of interest with current staff. 4. Audit of governance activities/processes.

5. Scope of Authority. The Board delegates to the Committee its power and authority to perform the duties and

responsibilities under this Charter. The Committee may carry out any other responsibilities and duties delegated to it by the Board. In accordance with the OIG, the responsibility of this committee is to exercise reasonable oversight.

Management of Palomar Health’s Audit and Compliance Plan will be under the direction of the

CEO. Administration is responsible for the preparation, presentation and integrity of Palomar Health’s financial statements as well as Palomar Health’s financial reporting process, accounting policies and procedures, internal accounting controls and disclosure controls and procedures.

The independent auditor is responsible for conducting an annual audit of Palomar Health’s

financial statements, and expressing an opinion as to the conformity of such annual financial statements with generally accepted accounting principles.

The Corporate Compliance Officer is responsible for conducting an annual evaluation of Palomar

Health’s Compliance Plan, and expressing an opinion as to the conformity of the plan with regulatory requirements.

It is not the responsibility of the Committee to plan or conduct audits or to determine that Palomar

Health’s audit program, compliance plan, financial statements and disclosures are complete and accurate and in accordance with generally accepted guidelines, applicable laws, rules and regulations. Each member of the Committee shall be entitled to rely on the integrity of those persons within Palomar Health and of the professionals and experts from which the Committee receives information and, absent actual knowledge to the contrary, the accuracy of the financial and other information provided to the Committee by such persons, professionals or experts.

6. Reporting Relationships.

The Chief Legal Officer and the District Audit Officer shall have dual reporting relationships to

both the CEO and the Board. The Compliance Officer shall report to the Chief Legal Officer.

Governance Function

1. Purpose and Responsibilities.

The Committee will: i.) make recommendations regarding pending and existing federal, state and local legislation which, in the Committee's opinion, may impact the District; ii.) make an annual, comprehensive review of the District bylaws, policies and procedures and receive reports regarding same, and elicit recommendations on such issues from management; iii.) review any initiation of legislation by the District; iv.) review such other issues associated with the District and/or Board governance and its effectiveness, including but not limited to Board member orientation and continuing education; v.) make recommendations regarding the annual self-assessment of the Board; and vi.) perform such other duties as may be assigned by the Board.

2. Membership and Meetings.

The Committee will consist of not more than three (3) members of the Board and an alternate, each of whom shall be appointed by the Board to serve until the next annual meeting of the Board. The alternate shall attend and enjoy voting rights only in the absence of a voting committee member. The Committee will meet in person as often as it determines is necessary or appropriate to carry out its responsibilities, but no less than twice a year. The Chairperson of the Committee, in consultation with the other Committee members, will determine the frequency and length of the meetings and will set agendas consistent with this Charter. In the absence of the Chairperson, the majority of the members of the Committee present at a meeting shall appoint a member to preside at the meeting. The President and Chief Executive Officer, the Chief Legal Officer, and the Chief Marketing and Communication Officer shall be nonvoting members of the committee. The Committee will keep written minutes of its meetings which shall be recorded and filed with the books and records of the District and will report its actions and recommendations to the Board after each Committee meeting and as the Board may further request. A majority of the members of the Committee will constitute a quorum to transact business. The Committee may take action without a meeting by unanimous written consent of its members. The Committee may adopt such other rules and regulations for calling and holding its meetings and for the transaction of business at such meetings as are necessary or desirable and not inconsistent with the provisions of the Board bylaws or this Charter.

3. Authority and Responsibilities.

In furtherance of the Committee's purpose, and in addition to any other responsibilities that may be properly assigned by the Board, the Committee will have the following authorities and responsibilities:

1. Review periodically and make recommendations regarding pending and existing federal, state and local legislation which, in the committee's opinion, may impact the District;

2. Make an annual, comprehensive review of the District bylaws, policies and procedures and receive reports regarding same, and elicit recommendations on such issues from management;

3. Review any initiation of legislation initiated by the District;

4. Review such other issues associated with the District and/or Board governance and its effectiveness, including but not limited to Board member orientation and continuing education;

5. The Committee will perform such other activities consistent with this Charter, the District's Bylaws, governing law, the rules and regulations of the State of California and such other requirements applicable to the District as the Committee or the Board deem necessary or appropriate.

6. The Committee will advise the Board on the appropriate structure and operations of all committees of the Board, including committee member qualifications.

7. The Committee will monitor developments, trends and best practices in corporate governance, and propose such actions to the full Board.

8. The Committee will monitor developments, trends and best practices in corporate governance, and propose such actions to the full Board.

9. The Committee will develop, implement, review and monitor an orientation program for new directors as well as a continuing education program for the existing directors.

10. The Committee will develop, implement, review and monitor an orientation program for new directors as well as a continuing education program for the existing directors.

11. The Committee will oversee, as it deems appropriate, an evaluation process of the Board and each of the Board Committees as well as an annual self-performance evaluation, and present its findings to the Board.

4. Governing Documents. The Committee will annually review this charter, and will recommend any changes and or

amendments to the Board, as the Committee deems appropriate, including changes necessary to satisfy any applicable legal or regulatory requirements. Any amendments to this charter will require the approval of a majority of the Board of the District.

*Placeholder*

Palomar Health Bylaws please see Board

Handbook Section 3


GOVERNANCE, AUDIT AND COMPLIANCE COMMITTEE


Audit and Compliance Function:

It is the responsibility of the Board Member to insure that appropriate review mechanisms and management

of the District’s assets and resources are in place, that the organization complies with all applicable local,

state and federal regulations, and to oversee the audit and financial stewardship of Palomar Health.

Responsibilities:

1. Approve the annual program and scope of all audits to be performed by the District Audit Officer.

2. Routinely review the system of internal controls for the organization and its subsidiaries.

3. Recommend a qualified audit firm to complete independent financial audits of the system and review

reports, management letters and recommendations from the firm to assure compliance with

recognized audit principles and standards throughout Palomar Health.

4. Participate in special investigations for the Board as may be assigned.

5. Regularly review reports from the District Audit Officer and the CEO and where appropriate make

recommendations on system controls and improvements that could insure effective stewardship of

the organization.

6. Keep up with trends in the field of health care audit and compliance to help educate other Board

members on the latest trends in the industry.

7. Ensure the effectiveness of Palomar Health Compliance efforts.



and meeting requirements.

Governance Function:

It is the responsibility of the Board member to help insure the effective and efficient management of the

governmental processes of the Board.

Responsibilities:

1. Complete an annual review of the Board's by-laws and policies and make recommendations for

changes that enhance the functioning of the District Board.

2. Provide guidance to the CEO in the development of education and orientation programs that enhance

member understanding of Board stewardships, health care, issues and management of the system.

3. Assist in development and completion of an annual Board self-assessment and make

recommendations to enhance governance of the organization by its members.

4. Review and make recommendations to the Board on pending or existing state and federal legislation

that could affect the direction of the District and Board member responsibilities.

5. Annually review the boundaries of the District to insure compliance with its charter in the

completion of health care stewardship responsibilities.




Board Governance, Audit, and Compliance Committee Calendar 2014 Standing Agenda Items

January - Review GAC Charter and Committee policies (if applicable). - Review Palomar Health bylaws. - Review GAC Committee job description. - Approve 2014 GAC Committee Standing Agenda Items. - Approve 2014 Palomar Health Internal Audit Plan. - Compliance and Ethics Committee report. - Compliance hotline report. February - Review Compliance and Ethics Committee Report. - Review Compliance hotline report. - Compliance Plan policy. - Board of Directors education topics. - Review proposals for external audit engagement. - Compliance and Ethics Committee report. March - Review external audit engagements. - Review of Internal Audit activities. - Board of Directors self-evaluation. - Compliance and Ethics Committee report. - Conflict of interest. April - Compliance and Ethics Committee Report. - Compliance and Ethics training program. - Compliance hotline report. - Board of Directors position description. May - Compliance and Ethics Committee report. - Review of Internal Audit activities. - Palomar Health medical staff bylaws. June - Compliance and Ethics Committee Report. - Report of District Audit Officer's and Compliance Officer's independence. - Annual evaluation of Compliance Plan. - Review District boundaries to insure compliance with its charter.

July - Review of Internal Audit activities. - Media Relations policy and procedure. - Compliance and Ethics Committee reports. - Compliance hotline report. August - Compliance and Ethics Committee reports. September - Review of Internal Audit activities. - Board committee charters. - Compliance and Ethics Committee report. October - Compliance hotline report. - Compliance and Ethics Committee report. - Review of financial statements and external auditor's report. - Review Internal Audit review of travel expenses. November - Compliance and Ethics Committee report. - Review of Internal Audit activities. - Board Manual. December - Committee self-assessment. - Compliance and Ethics Committee report. - Review internal customer satisfaction survey.

Approval: CEO Compensation & Evaluation Policy

COMMITTEE RECOMMENDATION: Motion: x

Individual Action:

Information:

Required Time:

TO: Governance, Audit and Compliance Committee MEETING DATE: Thursday January 2, 2014 FROM: Brenda Turner, Chief Human Resources Officer. BACKGROUND: The Board, through the Governance and Audit Committee, requested a policy be developed that would include the framework for evaluating and compensating the CEO. The Governance and Audit Committee requested this be reviewed and discussed by the Board HR Committee. A policy was created and subsequently approved by the HR Board Committee on November 20, 2013. BUDGET IMPACT: STAFF RECOMMENDATION: COMMITTEE QUESTIONS:

DRAFT

CEO EVALUATION AND COMPENSATION

PURPOSE:

To provide a framework and process for evaluating CEO performance and determining

compensation that is consistent with Palomar Health’s mission and is reasonable

compared with fair market value in the industry.

DEFINITIONS:

1. Compensation Committee: The Chair of the Board will select three individuals to

serve as the Compensation Committee. The Committee will be responsible for

evaluating the CEO’s compensation and benefits, making recommendations to the

Board for adjustments.

TEXT/STANDARDS OF PRACTICE:

1. CEO Evaluation

a. Annually the Board will evaluate the CEO’s performance against established

target goals.

b. The Board will meet with the CEO to discuss the status of the established

goals and provide any additional feedback.

c. Goals/expectations for the upcoming year will be formed and agreed with the

CEO at this time. The goals will be derived from expectations in financial

performance, strategic planning/growth, patient satisfaction, employee

engagement, medical staff relations, quality of care, community impact,

overall leadership and board relations. Additional goals/expectations may be

determined on an annual basis by the Board.

2. CEO Compensation

a. In order to attract and retain a highly qualified CEO to carry out the mission

of the organization, the Board will select a Board Compensation Committee to

review the CEO’s compensation annually.

b. Annual incentive bonuses may be utilized as part of the CEO’s total

compensation.

c. The Compensation Committee will rely on information from comparable

organizations. This information may be obtained through a third party

compensation consultant of the committee’s choice.

d. The CEO benefit package will also be reviewed every two (2) years. The

same third-party consultant used for compensation recommendations may be

utilized to identify a market competitive benefit package.

e. Recommendations of the Compensation Committee will be presented to the

full Board for approval.

f. Any action of the Board that results in an amendment or revision of the CEO’s

contract will be done at this time.

Policy Affects of AbsenteeismBoard Absenteeism

20617 Official (Rev: 3)

Source: Board of Directors

Applies to Facilities:

Applies to Departments:

I. PURPOSE:

Recognizing that the PPH Palomar Health Bylaws provide that an act of the majority of the board members present at a meeting (with a quorum present) is deemed to be an act of the board.

II. DEFINITIONS:

None.

III. TEXT / STANDARDS OF PRACTICE:

A. As indicated in Roberts Rules of Order New Revised a vote is to be determined by a simple majority vote. If there are abstentions on a vote, the non-abstaining members of the Board must constitute a quorum of the whole board (four members or more) for the transaction of business. Except as otherwise provided by law or PPH Palomar Health Bylaws, the act of the majority of the non-abstaining Board members voting will be the majority vote

B. If there is not a quorum of non-abstaining members of the Board to constitute a quorum of the whole board, abstaining members will be selected to vote on the issue by the drawing of straws.

C. Board members are encouraged to express an opinion vote whenever possible. D. This policy will be reviewed and updated as required or at least every three years.

IV. ADDENDUM:

V. DOCUMENT / PUBLICATION HISTORY:

Original Document Date: 4/95 Reviewed: 2/99; 1/05; 12/07 Revision Number: 1 Dated: 1/20/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Rivera, Chairman

VI. CROSS REFERENCE DOCUMENTS:

Prior to 2005, this policy was Board Policy 10-114

V. PUBLICATION HISTORY:

Revision Number

Effective Date

Document Owner at Publication Version Notes

3 (this version)

12/30/2007 Janine Sarti, Chief Legal Officer Reviewed and approved by Board 12/17/07. No changes Added at review: No material change made to text of document. Updated signatures to current signers.

https://www.lucidoc.com/cgi/doc-gw.pl?ref=pphealth:20617$3

Added at review: Reveiwed and approved 12.2010. [This document revision was generated to track review signatures and does not contain any changes from the previous revision.] [Reviewed on 1/9/2012 by Nicole Adelberg: Set next review date to 12/1/2013]

2 (Changes)

12/30/2007 Ofer Barlev, Legal Associate Reviewed and approved by Board 12/17/07. No changes Added at review: No material change made to text of document. Updated signatures to current signers.

1 (Changes)

12/30/2007 James Neal, Director of Corporate Integrity

Reviewed and approved by Board 12/17/07. No changes

0 (Changes)


Original Document Date: 4/95 Reviewed: 2/99; 1/05 Revision Number: 1 Dated: 1/20/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Rivera, Chairman

VI.

Authorized Signer(s): ( 01/09/2012 ) Janine Sarti, General Counsel VI. REFERENCES:

Reference Type Title Notes Source Documents Prior to 2005, this policy was Board Policy

10-114

Paper copies of this document may not be current and should not be relied on for official purposes. The current version is in Lucidoc at .




https://www.lucidoc.com/cgi/doc-gw.pl?ref=pphealth:20617$2&ref2=pphealth:20617$3








Policy ANNUAL ADOPTION OF STATEMENT OF INVESTMENT





I. PURPOSE:

A. This Statement of Investment Policy sets forth the investment guidelines for all Palomar Health ("PH ") investments purchased after March 1, 1996. The purpose of this policy is to ensure that PH's funds are prudently invested according to the Board of Director's objectives to preserve capital, provide necessary liquidity and to achieve a market-average rate of return through economic cycles.

B. PH may invest any portion of surplus funds of its Treasury that is not required for the immediate needs of PH ("Investable Funds"), subject to the requirements of the California Government Code and this policy. If the provisions of the Government Code are or become more restrictive than those contained herein, such provisions shall govern, and are deemed incorporated into this policy upon taking effect.

C. Government Code Section 53600 et seq., authorizes local agencies to make investments in specified vehicles with money in a sinking fund of, or surplus money in, its treasury not required for the immediate needs of the agency.

D. Palomar Health is a "local agency" subject to the provision of Government Code Section 53600 et seq., which recommends that the Palomar Health Board of Directors annually adopt a statement of its investment policy, and to consider any delegation of authority to make investments on its behalf of the Chief Financial Officer.

E. The Board of Directors of Palomar Health now desires to formally adopt this statement of investment policy, and to re-delegate to the Chief Financial Officer responsibility for all decisions regarding the sale or purchase of individual investments on behalf of PH.

II. DEFINITIONS:

A. Safety of Principal. Safety of principal is the foremost objective of PH. The safety and risk associated with an investment refers to the potential loss of principal, interest or a combination of these amounts. Each investment transaction shall seek to ensure that capital losses are avoided, whether from institutional default, broker-dealer default, or erosion of market value of securities. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.

B. Liquidity. Liquidity is the second most important objective of PH. Liquidity refers to the ability to "cash in" at any moment in time with a minimal chance of losing some portion of principal or interest. Liquidity is an important investment quality especially when the need for unexpected funds occasionally occurs. The investment portfolio shall remain sufficiently liquid to enable PH to meet all operating requirements that might be reasonably anticipated.

C. Yield. Yield is the potential dollar earnings an investment can provide; it is sometimes described as the rate of return. Within the limits of safety and liquidity, PH shall strive toward portfolio growth that exceeds the rate of inflation in order to preserve capital.


A. Delegation Of Authority To Chief Financial Officer; Procedures To Implement Investment Policy 1. Delegation of authority to Chief Financial Officer: The Palomar Health Chief Financial Officer

is delegated responsibility for all decisions regarding the sale or purchase of individual investments on behalf of PH. This delegation shall be reviewed annually by the Board through the Finance Committee. Any re-delegation shall be recorded in the minutes of these meeting. No person may engage in an investment transaction except as provided under the terms of this policy and any other procedures established by the Chief Financial Officer. The Chief Financial Officer shall be responsible for all actions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.

B. This policy will be reviewed and updated as required or at least every year. C. Document History:

1. Original Document Date: 7/14/95; Revision Number: 1 Dated: 6/06 2. Prior to 2006, this Policy was Board Policy 10-513

IV. ADDENDUM:


Revision Number

Effective Date


4 (this version)

09/10/2012 Bob Hemker, Chief Financial Officer Corrections based on name change for the District; approved at September 10, 2012, Board meeting

3 (Changes)

09/12/2011 Bob Hemker, Chief Financial Officer Annual review for Board of Directors - deletion of Section F under Purpose - redundancy with Section E; Signatory changed to current Board Chair T.E. Kleiter; Effective date of Board Governance Committee approval for previous revision was actually October 19, 2010 - final signature in Lucidoc makes it appear to have been approved in 2011

2 (Changes)

07/13/2011 Bob Hemker, Chief Financial Officer Clarification of language

1 (Changes)

02/11/2008 Bob Hemker, Chief Financial Officer Effective date of Board approval of this revision (2/11/08) was incorrectly entered as 11/14/07. [Reviewed on 9/1/2009 by Bob Hemker: Extended review to 9/1/2010]

0 (Changes)


Updated by the board review

VI.














Authorized Signer(s): ( 05/23/2013 ) Bob Hemker, Chief Financial Officer ( 05/24/2013 ) Janine Sarti, Chief Legal Officer ( 05/24/2013 ) Ted Kleiter, Chairman, Board of Directors

VI. REFERENCES:

Reference Type Title Notes Paper copies of this document may not be current and should not be relied on for official purposes. The

current version is in Lucidoc at . https://www.lucidoc.com/cgi/doc-gw.pl?ref=pphealth:27092$4


Policy Cost of Board Packets





I. PURPOSE:

Palomar Pomerado Health may charge for the costs of notices of public Board meetings. Pursuant to Cal. Gov. Code. Sec. 54945.4, costs eligible for reimbursement shall only include the actual cost to post a single agenda for any one meeting.

II. DEFINITIONS:


A. Palomar Pomerado Health shall provide notice of board meeting at no cost to residents and members of the press who request such notice in writing.

B. The information packet which accompanies the board and/or committee agendas shall be provided free of charge to members of the board, staff and medical staff leaders. Members of the public and the press who so request in writing may be provided with Board information packets, subject to Section D below and any applicable laws and regulations, though such requesting parties may be charged reproduction and postage costs, payable in advance on an annual basis.

C. All requests for notice shall be honored for a period of one year. D. Notwithstanding the foregoing, in the event the Board deems that certain portions of a Board

information packet and/or committee meeting agenda should not be disclosed to the public or the news media pursuant to applicable laws and regulations, included but not limited to the Public Records Act, the Board shall remove information from materials.

E. This policy will be reviewed and updated as required or at least every three years.

DOCUMENT / PUBLICATION HISTORY:

Original Document Date: 11/14/85 Reviewed: 1/93; 1/99; 2/02; 9/05 Revision Number: 1 Dated: 9/20/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Revera, Chairman

CROSS REFERENCE DOCUMENTS:


IV. ADDENDUM:


Revision Number

Effective Date


2 (this version)

09/20/2005 Ofer Barlev, Legal Associate Original Document Date: 11/14/85 Reviewed: 1/93; 1/99; 2/02; 9/05


Revision Number: 1 Dated: 9/20/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Revera, Chairman Added at review: No material change made to text of document. Updated signatures to current signers. [This document revision was generated to track review signatures and does not contain any changes from the previous revision.] [Reviewed on 1/6/2010 by Ofer Barlev: Extended review to 1/5/2013] [Revision on 2-26-10 by Ofer Barlev: Incorporating February Governance Committee Edits]

1 (Changes)


Original Document Date: 11/14/85 Reviewed: 1/93; 1/99; 2/02; 9/05 Revision Number: 1 Dated: 9/20/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Revera, Chairman

VI.

Authorized Signer(s): ( 03/01/2010 ) Janine Sarti, General Counsel ( 09/01/2010 ) Bruce G Krider, Board Chairman, PPH Board

VI. REFERENCES:

Reference Type Title Notes Source Documents undefined







https://www.lucidoc.com/cgi/undefined


Policy PPHPalomar Health Credit Cards





I. PURPOSE:

To establish policy for obtaining financial accommodations from a bank, pursuant to the use of a number of Credit Cards by the officers and agents of PPHPalomar Health and to ensure District credit cards are not extended without the authorization of the board.

II. DEFINITIONS:


A. PPHPalomar Health officers and agents may use Credit Cards for and in connection with PPHPalomar Health business. This includes travel arrangements for both trustees and District employees. All PPH Palomar Health officers and agents issued a credit card will sign a statement that it is understood that the credit card is strictly for ending connection with PPH Palomar Health business (Attachment 1)

B. Credit Cards will be issued in the name(s) of officers or agents designated to Bank by PPHPalomar Health and that all indebtedness incurred through the use of such Credit Cards be charged directly to PPHPalomar Health. The bank will not extend such accommodations by issuing Credit Cards unless PPHPalomar Health agrees in writing to assume sole responsibility and to pay the Bank for all indebtedness incurred by use of these Credit Cards, whether such use of indebtedness was authorized or unauthorized by PPHPalomar Health.

C. In the case of deletions of authorization of designated officers or agents, PHHPalomar Health shall be liable for the use of such Credit Cards until said Credit Cards are returned to Bank or Bank is notified of the loss or theft of said Credit Cards.

D. The Bank is authorized to act upon this policy until written notice of its revocation is delivered to Bank, and that the authority hereby granted shall apply with equal force and effect to the successors in office of the officers named.

E. To allow the operation and maintenance of a District courier and transportation service, a gasoline credit card shall be issued. These cards are the overall responsibility of the designated PPHPalomar Health officers overseeing courier and transportation services

F. This policy will be reviewed and updated as required or at least every three years.

IV. ADDENDUM:


Original Document Date: 2/94 Reviewed: 4/95; 1/99; 6/05; 11/06 Revision Number: 1 Dated: 6/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Rivera, Chairman


Prior to 2005 this policy was Board Policy 10-503

Attachment 1

Date: ____________

I _____________________________________________________ have received a Palomar Pomerado Health credit card and understand that I am to use this credit card for District business only. Any charges placed on this credit card that are not for District business will be a violation of PPHPalomar Health policy, and I will reimburse the district immediately for any charges that are not in support of District business.

_________________________________________

Signature


Revision Number

Effective Date


4 (this version)

01/07/2010 Janine Sarti, Chief Legal Officer Review date updated.

3 (Changes)

01/07/2010 Ofer Barlev, Legal Associate updating history only. Approved as is 9-09.mlg No material changes made to text. Only adjusted signature field to update signers.

2 (Changes)


Board review and update

1 (Changes)


Original Document Date: 2/94 Reviewed: 4/95; 1/99; 6/05 Revision Number: 1 Dated: 6/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Rivera, Chairman

VI.

Authorized Signer(s): ( 02/27/2012 ) Janine Sarti, General Counsel ( 02/27/2012 ) Ted Kleiter, Chairman, Board of Directors

VI. REFERENCES:

Reference Type Title Notes Source Documents Prior to 2005 this policy was Board Policy

10-503














Policy Solicitation and Distribution of Literature on PPHPalomar

Health Property 21788 Official (Rev: 2)




I. PURPOSE:

In keeping with the District's mission to provide quality, cost-effective health care, and consistent with California statute, solicitation and other activities that have the potential to be disruptive, to interfere with patient care or to create political influence are not allowed on PPH Palomar Health premises.

II. DEFINITIONS:

1. For purposes of this policy, the term solicit shall include all types of communication, political campaigns or contributions,1 fund-raising, distribution of literature and other materials and activities which are inconsistent with the District's mission.

2. The term patient care area is inclusive and includes all locations in which patients receive care or therapy, patient consultation or patient meeting rooms or all corridors in those areas.


A. Except as provided in such an employee relations resolution, no person, patient, employee, officer or member of the medical staff may solicit or distribute literature on PPHPalomar Health property for any purpose at any time.

B. Persons not employed by PPH may not solicit or distribute literature or goods on hospital property at any time for any purpose.

C. Persons employed by PPH may not solicit during working time2 for any purpose. Employees are specifically precluded from soliciting at any time for any purpose in patient care areas such as patient rooms, operating rooms or in any location where patients receive treatment or therapy or in any area that could potentially cause a disruption of health care operations or a disturbance to patients. The term patient care area is inclusive and includes all locations in which patients receive care or therapy, patient consultation or patient meeting rooms or all corridors in those areas.

D. The Board of Directors may adopt an employee relations resolution to describe the circumstances under which employee organization officers and representatives may have access to District employees and District property.3

E. This policy will be reviewed and updated as required or at least every three years.

___________________

1Political fund-raising, campaigns or contributions are addressed in Policy Gov-27.

2 Working time includes the working time of both the employee doing the soliciting or distributing, and the employee to whom the soliciting or distributing is

directed. Working time does not include break periods or meal periods.

IV. ADDENDUM:


Original Document Date: 12/11/78 Reviewed: 1/93; 2/02

https://www.lucidoc.com/cgi/doc-gw.pl?ref=pphealth:21788$2/frame/DOCBODY#sdfootnote1sym



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Revision Number: 1 Dated: 7/30/84 2 Dated: 12/89 3 Dated: 4/95 4 Dated: 12/98 5 Dated: 2/11/02 6 Dated: 2/4/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Revera, Chairman




Revision Number

Effective Date


2 (this version)

02/24/2010 Ofer Barlev, Legal Associate Original Document Date: 12/11/78 Reviewed: 1/93; 2/02 Revision Number: 1 Dated: 7/30/84 2 Dated: 12/89 3 Dated: 4/95 4 Dated: 12/98 5 Dated: 2/11/02 6 Dated: 2/4/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Revera, Chairman Added at review: No material change made to text of document. Updated signatures to current signers. [This document revision was generated to track review signatures and does not contain any changes from the previous revision.] [Reviewed on 1/6/2010 by Ofer Barlev: Extended review to 1/5/2013] [Edited on 2-24-10 by Ofer Barlev after Governance Committee Comments]

1 (Changes)


Original Document Date: 12/11/78 Reviewed: 1/93; 2/02 Revision Number: 1 Dated: 7/30/84 2 Dated: 12/89 3 Dated: 4/95





4 Dated: 12/98 5 Dated: 2/11/02 6 Dated: 2/4/05 Document Owner: Michael Covert Authorized Promulgating Officers: Marcelo R. Revera, Chairman

VI.

Authorized Signer(s): ( 09/01/2010 ) Bruce G Krider, Board Chairman, PPH Board ( 09/03/2010 ) Janine Sarti, General Counsel

VI. REFERENCES:

Reference Type Title Notes Source Documents Prior to 2005, this policy was Board Policy

10-409




Policy Physician Owned Medical Device (POD) Company

Arrangements 44692 Official (Rev: 1)


Applies to Facilities: All Palomar Health Facilities

Applies to Departments: All Departments

I. PURPOSE:

A. Business interests involving physician ownership of medical device companies and distributorships must be in keeping with any state and federal regulations regarding the subject. .

II. DEFINITIONS:

A. POD - Physician Owned Device Companies .


A. The following requirements must be followed when considering such a relationship with Palomar Health: 1. Agreements with Physician Owned Device Companies ("POD") must be reviewed by

the Finance Committee prior to entering into the agreement, and all such agreements must be in writing, must contain commercially reasonable terms comparable to those offered by other vendors and no more favorable to the POD, and must be signed by the parties before the performance of the agreement begins.

2. Pricing for the products sold under the agreement must be competitive, consistent with fair market value and meet Palomar Health's construct pricing. However, if there are extenuating circumstances where it can be clinically demonstrated that a higher priced product would be beneficial to patient care, Palomar Health will consider that prior to entering into the agreement. Palomar Health will document the clinical basis for why it would be in the best interest of patient care to accept a higher priced product; provided, however, that under no circumstances will Palomar Health purchase products from a POD at prices that are not fair market value.

3. The quality of any product sold under the agreement must be at least the same or similar to other comparable products sold by similar vendors, and shall in all circumstances be FDA approved.

4. Palomar Health will not purchase products from any POD that coerces or attempts to coerce Palomar Health to purchase its products, e.g., by stating or implying that its physician investors' future referrals are contingent on Palomar Health purchasing products from the POD or purchasing a certain minimum level of products from the POD.

5. Prior to entering into any agreement with a POD, an authorized representative of the POD will be required to sign an officer's certificate in substantially the form attached hereto as Attachment A.

6. In the event any state or federal law or regulation is passed regarding PODs, Palomar Health will research the law and its contractual arrangement to ensure Palomar Health is not at any legal risk for continuing with the agreement. If it is determined that the relationship violates any law or regulation, Palomar Health will immediately terminate its relationship. Any agreement must contain language that allows Palomar Health the opportunity to terminate the agreement immediately upon changes in the law.

IV. ADDENDUM:

A. Use Physician Owned Medical Device Company Arrangement Officer Certificate as template.


Revision Number

Effective Date


1 (this version)

07/02/2012 Janine Sarti, Chief Legal Officer To reflect Palomar Health name change

0 (Changes)

10/10/2011 Janine Sarti, Chief Legal Officer Policy approved at September Governance Committee meeting. Approved at October Board meeting.

VI.

Authorized Signer(s): ( 07/02/2012 ) Ted Kleiter, Chairman, Board of Directors VI. REFERENCES:

Reference Type Title Notes Referenced Documents Physician Owned Medical Device

Company Arrangement Officer Certificate



https://www.lucidoc.com/cgi/doc-gw.pl?ref=pphealth:48272








1109322.2

Physician Owned Medical Device Company Arrangement Officer’s Certificate

[Enter Name o f POD Here] OFFICER'S

CERTIFICATE

_______________ , 20___

I, _________________ , in my capacity as ___________________ of [Enter Name o f POD Here] (the "Company"), on behalf of the Company and in order to ensure compliance with 42 U.S.C. § 1395nn and its implementing regulations at 42 C.F.R. § 411 et seq. ("Stark"), as well as California Business and Professions Code §§ 650.01 and 650.02, and California Labor Code §§ 139.3 and 139.31 (collectively "PORA"), and in accordance with the definitions contained in Stark and PORA, hereby certify to Palomar Health, in connection with the sale of certain medical devices (the "Products") by the Company to Palomar Health, that the following statements are true, correct and complete as of the date set forth above.

1. I am the duly appointed, qualified, and acting ______________________ of the Company. I am actively involved in the business and operations of the Company, and I am generally familiar with all the Company's business affairs.

2. The Company has, or will acquire, all licenses, permits, authorizations, and approvals that are necessary for the conduct of its business.

3. There is no proceeding in progress or threatened against, relating to or affecting the Company which might be expected to have a materially adverse effect on its business or its ability to sell the Products to Palomar Health.

4. The Company employs its own personnel, has its own contracts with vendors, and manages its own inventory.

5. The Company does not and shall not bill any patient or third party payer for the Products.

6. The Products are of high quality and FDA approved.

7. The Company shall and does not enter into any consignment arrangement with any of its vendors with respect to the Products, instead, any relationship between the Company and its vendors shall only consist of true sales.

8. The Company is adequately capitalized by its physician and other owners, and investments made by physician owners are not and shall not be nominal. The Company has not and shall not alter the size of investment offered to physician investors based on the expected or actual volume of devices used by such physician investor. No investment in the Company has been or shall be financed or guaranteed by any other investor or the Company.

9. The return on investment received by each investor in the Company is directly proportionate to such investor's ownership interest, without regard to the volume of devices used by such investor.

1109322.2

10. The Company does not have the right to repurchase any investor's interest for failing to use the Company's Products (or failing to use any particular volume of such Products).

11. Each physician investor in the Company does and shall provide to every patient that the physician investor refers to Palomar Health a disclosure statement that informs the patient of the physician investor's interest in the Company, and that informs the patient of his or her right to obtain medical devices from other suppliers.

12. The undersigned has personally performed all investigations, examined all records and documents, and made all inquiries reasonably necessary or appropriate to obtain sufficient actual knowledge to support the statements made in this Officer's Certificate.

13. The undersigned understands the above statements made herein and that Palomar Health receiving this Officer's Certificate will be relying significantly on the completeness and accuracy of such statements in Palomar Health's efforts to comply with applicable health care laws and regulations. The undersigned is not aware of any facts, rumors or other information that might lead the undersigned to believe that any of the above statements are misleading, incomplete, inaccurate or subject to change.

__________________________________________

[Enter name of POD above]

By: _______________________________________

Its: _______________________________________

Compliance and Ethics Committee Activity Report November 7, 2013

Two-Midnight Rule follow up • CMS Sub-regulatory guidelines were issued on September 05, 2013 that established

key requirements pertaining to Physician Order & Certification for inpatient admission and payment o 42CFR Part 424, Subpart B and 42 CFR 412.3

• Timeline o August 2: Final Inpatient PPS Issued o September 5: Details on Physician Certification Released o October 1 – March 31: Medicare conducting probe audits o April 1, 2014: Post-payment audits resume

• What is CMS looking for

o Inpatient Order o 2-Midnight Benchmark o Physician Certification

Authentication of Order Reason for Inpatient Services Estimated Length of Stay Plan for Post-Discharge Care

Q2 AND Q3 PEPPER

PEPPER Distribution Schedule

Q3 LCD Compliance assurance

• We are wrapping up with Q2 and Q3 will begin attestation • An email will go out for the owners of LCD’s that have changed

2014 Compliance Training • Intent for the 2014 safety test content

Culture of Ethics – Community Return Reporting • What are we doing to benefit the improvement of our communities? • We are looking to keep track of these things that are already happening • There is a form that Elly will be sending out that captures all of the information and details • Elly will be meeting with all directors to go over the details and to familiarize herself with staff

Recent Enforcement • Omnicare settles for $120 million 10/28/13

http://www.lexology.com/library/detail.aspx?g=e4f7f8fc-587e-44e1-9128-86674efd6368&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+Federal+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2013-11-01&utm_term

http://www.lexology.com/library/detail.aspx?g=e4f7f8fc-587e-44e1-9128-86674efd6368&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+Federal+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2013-11-01&utm_term

o Omnicare disclosed in a SEC filing that the Company would pay $120 million plus attorneys’ fees to settle allegations that it engaged in an impermissible “swapping” arrangement under the Anti-Kickback Statute.

o The settlement involves a long-standing qui tam case, o Allegation that Omnicare, a pharmacy provider, gave nursing homes “per diem pricing”

and “prompt payment” discounts on pharmaceutical drugs provided to Medicare Part A patients in exchange for referrals of Medicare Part D patients.

o Additionally, the suit alleged that Omnicare violated Ohio’s “Most Favored Customer” pricing law by providing pricing to nursing home’s Medicare Part A patient beneficiaries below its Medicaid prices for the same drugs.

o According to Omnicare’s filing, the Company will not admit guilt in the settlement. Because Omnicare’s disclosure was based on an “agreement in principle” with the relator, no further details are available at this time.

• October 31, 2013; U.S. Department of Justice o Owner of Texas-based Ambulance Service Convicted of Health Care Fraud

• October 30, 2013; U.S. Department of Justice o Former Veterans Affairs Psychiatrist Pleads Guilty to Medicare Fraud

• October 30, 2013; U.S. Attorney; Western District of Oklahoma o Owner of St. Anthony Hospital Agrees to Pay $475,000 to Settle Civil Claims of

Improper Billing for Inpatient Services That Should Have Been Outpatient • October 30, 2013; U.S. Attorney; Southern District of New York

o Thirteen Members Of Pharmacy Burglary Ring Charged With Stealing And Distributing Millions Of Dollars' Worth Of Prescription-Controlled Substances And Hundreds Of Thousands Of Dollars In Cash

• October 30, 2013; U.S. Attorney; Western District of Oklahoma o Oklahoma City Psychiatrist to Serve 30 Months in Federal Prison and Pay $20,000 Fine

for Health Care Fraud • October 29, 2013; U.S. Attorney; Southern District of Illinois

o Centralia Man Pleads Guilty To Health Care Fraud • October 29, 2013; U.S. Department of Justice

o Illinois Man Arrested for Alleged Role in $12 Million Health Care Fraud Scheme • October 28, 2013; U.S. Attorney; Eastern District of Virginia

o Alleged Hacker Charged in Virginia with Breaching Multiple Government Agency Computers

• October 28, 2013; U.S. Attorney; Northern District of Georgia o Medical Business Owner Pleads Guilty to Medicaid Fraud

• October 29, 2013; U.S. Department of Justice o Owners and Supervisor of Ambulance Transportation Company Plead Guilty In Los

Angeles For Role in Ambulance Fraud Scheme • October 25, 2013; U.S. Attorney; Northern District of Indiana

o Hoosier EMS Employee Pleads Guilty to Health Care Fraud • October 24, 2103; U.S. Attorney; District of Connecticut

o Guilford Podiatrist Sentenced To 30 Months in Federal Prison for Defrauding Medicare

http://ir.omnicare.com/phoenix.zhtml?c=65516&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTkxODQyNDMmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc=

http://www.justice.gov/opa/pr/2013/October/13-crm-1162.html


http://www.justice.gov/usao/okw/news/2013/2013_10_30_2.html

http://www.justice.gov/usao/okw/news/2013/2013_10_30_2.html

http://www.justice.gov/usao/nys/pressreleases/October13/PharmacyBurglariesPR.php



http://www.justice.gov/usao/okw/news/2013/2013_10_30.html

http://www.justice.gov/usao/okw/news/2013/2013_10_30.html

http://www.justice.gov/usao/ils/News/2013/Oct/10292013_Mays%20Press%20Release.html


http://www.justice.gov/usao/vae/news/2013/10/20131028lovenr.html

http://www.justice.gov/usao/vae/news/2013/10/20131028lovenr.html

http://www.justice.gov/usao/gan/press/2013/10-28-13.html



http://www.justice.gov/usao/inn/press_release/documents/2013/Oct_13/oct%2025%2013%20sb%20selman%20et%20al.htm

http://www.justice.gov/usao/ct/Press2013/20131024-3.html

• October 24, 2013; U.S. Attorney; Northern District of Texas o Physician Sentenced to 48 Months in Federal Prison for Role in Health Care Fraud

Conspiracy • October 24, 2013; U.S. Department of Justice

o Two Plead Guilty To Money Laundering Conspiracy in $10.5 Million Medicare Fraud Scheme

• October 24, 2013; U.S. Department of Justice o Former Owner of Salt Lake City Medical Equipment Supply Company Indicted and

Three Company Employees Plead Guilty for Roles in Medicare Fraud Scheme • October 24, 2013; U.S. Attorney; District of New Jersey

o Internist Sentenced To Six Months in Prison, Plus Home Confinement, For Taking Cash Kickbacks for Patient Referrals

• October 23, 2013; U.S. Attorney; District of South Dakota o Colorado Man Indicted For Failure to Pay Child Support

• October 23, 2013; U.S. Attorney; Southern District of Texas o McAllen Area Ambulance Company Owner and Former Biller Indicted on Multiple

Health Care Crimes • October 23, 2013; U.S. Department of Justice, Florida

o Administrator and Employee of Two Miami Home Health Companies Sentenced for Role in $74 Million Health Care Fraud Scheme

• October 23, 2013; U.S. Attorney; Northern District of Illinois o Owner, Executives and Physicians at Closed Sacred Heart Hospital Indicted in Alleged

Medicare Referral Kickback Conspiracy • October 23, 2013; U.S. Attorney; Eastern District of Pennsylvania

o Doctor Sentenced For Kickback Scheme Involving a Philadelphia Hospice • October 22, 2013; U.S. Attorney; Western District of Virginia

o Dublin Doctor Sentenced on Drug Diversion Charges • October 22, 2013; U.S. Attorneys; District of Kansas and Eastern District of Louisiana

o Mail-Order Diabetic Supply Company and Its Owners Resolve Allegations of Civil and Criminal Fraud

• October 22, 2013; U.S. Attorney; Western District of New York o Man Who Posed As Wellsville Doctor Sentenced For Health Care Fraud

• October 21, 2013; U.S. Attorney; Southern District of Texas o Sugar Land Physician Sentenced to Federal Prison for Diagnostic Testing Scam

• October 21, 2013; U.S. Attorney; Eastern District of Michigan o Kmart Corporation to Pay U.S. More Than $2.5 Million to Settle False Claims Act

Allegations for Partially Filled Prescriptions • October 21, 2013; U.S. Attorney; Western District of Kentucky

o Nelson County Drug Store Owner Sentenced To 27 Months for Health Care Fraud and Wire Fraud

• October 18, 2013; U.S. Attorney; Middle District of Florida o Disbarred Attorney and Her Ex-Husband Sentenced To Prison for Stealing $2.8 Million

from Clients in Medicaid Planning Fraud Scheme

http://www.justice.gov/usao/txn/PressRelease/2013/OCT2013/oct24Daniel_Leong_sent.html

http://www.justice.gov/usao/txn/PressRelease/2013/OCT2013/oct24Daniel_Leong_sent.html





http://www.justice.gov/usao/nj/Press/files/Siripurapu,%20Padma%20Sentencing%20News%20Release.html

http://www.justice.gov/usao/nj/Press/files/Siripurapu,%20Padma%20Sentencing%20News%20Release.html

http://www.justice.gov/usao/sd/pressreleases/SF-2013-10-23-Romero.html

http://www.justice.gov/usao/txs/1News/Releases/2013%20October/131023%20-%20Gonzalez%20and%20Escamilla.html

http://www.justice.gov/usao/txs/1News/Releases/2013%20October/131023%20-%20Gonzalez%20and%20Escamilla.html



http://www.justice.gov/usao/iln/pr/chicago/2013/pr1023_02.html

http://www.justice.gov/usao/iln/pr/chicago/2013/pr1023_02.html

http://www.justice.gov/usao/pae/News/2013/October/goldman_release.htm

http://www.justice.gov/usao/vaw/news/2013/cheek_22oct2013.html

http://www.justice.gov/usao/ks/PressReleases/2013/Oct2013/Oct22d.html

http://www.justice.gov/usao/ks/PressReleases/2013/Oct2013/Oct22d.html

http://www.justice.gov/usao/nyw/press/press_releases/2013/oct/Fitzgerald.html

http://www.justice.gov/usao/txs/1News/Releases/2013%20October/131021%20-%20Gibson.html

http://www.fbi.gov/detroit/press-releases/2013/kmart-corporation-to-pay-u.s.-more-than-2.5-million-to-settle-false-claims-act-allegations-for-partially-filled-prescriptions

http://www.fbi.gov/detroit/press-releases/2013/kmart-corporation-to-pay-u.s.-more-than-2.5-million-to-settle-false-claims-act-allegations-for-partially-filled-prescriptions

http://www.justice.gov/usao/kyw/news/2013/20131021-03.html

http://www.justice.gov/usao/kyw/news/2013/20131021-03.html

http://www.justice.gov/usao/flm/press/2013/oct/20131018_Littlefields.html

http://www.justice.gov/usao/flm/press/2013/oct/20131018_Littlefields.html

• October 18, 2013; U.S. Department of Justice o Operators of Michigan Adult Day Care Centers Convicted in $3.2 Million Medicare

Fraud Scheme • October 18, 2013; U.S. Attorney; District of Connecticut

o Greenwich Doctor Pays $300,000 to Settle Allegations under The False Claims Act • October 18, 2013; U.S. Attorney; District of Kansas

o Indictment: Wichita Chiropractor Defrauded Health Insurers • October 17, 2013; U.S. Attorney; Southern District of Illinois

o Cahokia Woman Pleads Guilty To Health Care Fraud • October 17, 2013; U.S. Department of Justice

o Boston Scientific and Subsidiaries to pay $30 Million for Guidant's Sale of Defective Heart Devices for Use in Medicare Patients

• October 17, 2013; U.S. Department of Justice o Former Los Angeles-area Pastor Sentenced for Role in $11 Million Medicare Fraud

Scheme • October 17, 2013; U.S. Attorney; Eastern District of Pennsylvania

o Hospice Owner Convicted in Multi-Million Dollar Health Care Fraud • October 17, 2013; U.S. Attorney; District of Rhode Island

o Former R.I Doctor to Pay $1.2 Million for Fraudulent Billings to Medicare and Medicaid • October 17, 2013; U.S. Attorney; Northern District of Texas

o Father and Son Convicted on Conspiracy and Health Care Fraud Charges • October 14, 2013; U.S. Attorney; Southern District of Texas

o Corpus Christi Doctor Charged With Health Care Fraud in Probe Conducted by State and Federal Officials

• October 2, 2013; Ohio Attorney General o Former Pharmacist Pleads Guilty to Health Care Fraud, Drug Adulteration Charges

• California PHI Breach Affects 729,000 o AHMC Healthcare Inc. in Alhambra, Calif., is notifying about 729,000 patients across its

six hospitals after two unencrypted laptop computers were stolen in a burglary at an administrative office.

o The theft occurred on October 12 in a video-monitored office on a campus that is gated and patrolled by security, according to the organization. The theft was discovered on October 14.

o About 10 percent of affected patients with Medicare coverage had Social Security numbers on the laptops as the SSN is part of the Medicare ID number, according to a spokesperson. Other compromised information included patient names, insurance numbers, diagnosis and procedure codes, and insurance/patient payment details.

o AHMC Healthcare has contracted with a third-party auditing company to perform a security risk assessment and will expedite a policy of encrypting all laptops.



http://www.justice.gov/usao/ct/Press2013/20131018-1.html

http://www.justice.gov/usao/ks/PressReleases/2013/Oct2013/Oct18b.html

http://www.justice.gov/usao/ils/News/2013/Oct/10172013_Tabbs%20Press%20Release.html

http://www.justice.gov/opa/pr/2013/October/13-civ-1107.html

http://www.justice.gov/opa/pr/2013/October/13-civ-1107.html



http://www.justice.gov/usao/pae/News/2013/October/kolodesh_release.htm

http://www.justice.gov/usao/ri/news/2013/oct2013/kahn.html

http://www.justice.gov/usao/txn/PressRelease/2013/OCT2013/oct17StJohn_conv.html

https://www.oag.state.tx.us/oagnews/release.php?id=4552

https://www.oag.state.tx.us/oagnews/release.php?id=4552

http://www.ohioattorneygeneral.gov/Media/News-Releases/October-2013/Former-Pharmacist-Pleads-Guilty-to-Health-Care-Fra

http://www.healthdatamanagement.com/news/huge-california-protected-health-information-breach-hipaa-46791-1.html

1 | P a g e

Compliance and Ethics Committee Activity Report December 5, 2013

Compliance Assurance project Part 1 - Licenses and Location -– Reconcile billing location to license. Map with all physical locations where Palomar does business created. Map includes district boundaries. Obtained 6 months’ worth of charges for district (5,480 line excel doc) Conclusion - no issues identified. – Charges matched locations/services provided were in compliance with hospital licenses/all hospital/clinical and business licenses obtained. Part 2 – License Management - Leadership drive contained clinical and business licenses saved in various locations/sometimes saved in wrong folder /often duplicated

Background – 1. Decentralized possession and renewal created ownership and accountability yet at the

same time a single point of failure Assessment – 1. No policy and procedure in place to ensure renewal/accountability 2. No redundancy/safeguards 3. No central location – universal accessibility Recommendation - 1. Ownership remains decentralized 2. Policy and procedure created in order to ensure electronic copy deposited into

centralized location (C-360, etc.)

OIG Strategic Plan 2014‒2018 • Fight Fraud, Waste, and Abuse (data analysis and risk assessments, increased education) • Promote Quality, Safety, and Value (review adverse events, ensure appropriate

marketplace rates) • Secure the Future (continue to review for improper payments, coordinated care) • Advance Excellence and Innovation (Medicare billing patterns)

OIG provides independent and objective oversight of more than 300 HHS programs, which represent 24 cents of every Federal dollar spent. Enforcement efforts returned more than $7 for every $1 invested

Dashboards – CEC compliance monitoring and reporting by exception for 2014 on:

• Revenue Cycle • Privacy / Security • Audit • Quality • Case Management

Culture of Ethics - Steering committee includes HR, Wellness, Compliance, Organizational Development, Nursing. Initial agenda items include:

• Policy development

2 | P a g e

• Event selection criteria / process • Interdepartmental collaboration • Employee champion • No solicitation

Recent Enforcement Nursing Home Operator to Pay $48 Million to Resolve Allegations Those Six California Facilities Billed for Unnecessary Therapy (Mission Viejo, CA) The Ensign Group Inc., a skilled nursing provider that operates nursing homes across the western U.S. has agreed to pay $48 million to resolve allegations that it knowingly submitted to Medicare false claims for medically unnecessary rehabilitation therapy services

• Between January 1, 1999, and August 31, 2011, six Ensign skilled nursing facilities allegedly submitted false claims to the government for physical, occupational and speech therapy services provided to Medicare beneficiaries that were not medically necessary.

• The government further alleged that Ensign created a corporate culture that improperly incentivized therapists to increase the amount of therapy to meet planned targets for Medicare revenue, which were set without regard to patients’ individual therapy needs and could only be achieved by billing at the highest reimbursement levels.

• The allegations settled today arose from lawsuits filed by two former Ensign therapists under the qui tam provisions of the False Claims Act.

Vantage Oncology LLC to Pay More Than $2.08 Million for False Medicare Claims for Radiation Oncology Services (Illinois) The government alleged that Vantage: double billed and overbilled Medicare for certain procedures, billed for services that lacked supporting documentation, and improperly billed for radiation treatment provided to patients without proper physician supervision. This settlement resolves a lawsuit filed by former Vantage employee Suleiman Refaei under the qui tam, or whistleblower, provisions of the False Claims Act. Refaei will receive $354,450. A recent court decision ruling that a HIPAA-covered entity was not liable for losing a hard drive containing patients' protected health information. A California appeals court ruled that the Board of Regents at the University of California was not accountable for data disclosure when they lost the hard drive containing PHI of more than 16,000 patients -- including the lawsuit plaintiff, Melinda Platter -- as officials could not confirm that patient data was actually accessed. There's one important detail to remember, however: The hard drive was encrypted. The court decision was also made under a California state law, the Confidentiality of Medical Information Act, not federal HIPAA.

http://www.justice.gov/opa/pr/2013/November/12-civ-1235.html





http://www.healthcareitnews.com/news/court-breach-ruling-sparks-HIPAA-patient-privacy-talk



*Placeholder*

January Compliance and Ethics Committee

summary to be provided at time of

meeting

COMPLIANCE HOTLINE LINE

Report to Palomar Health

Governance Audit and Compliance Committee

Thursday January 2nd, 2014

Hotline Procedure Flowchart

Contd.

Standard Ethics and Compliance Allegations Allegation Class Allegation Definition

Diversity, Equal Opportunity and Respect in the Workplace

Discrimination Statements or actions based on age, race, color, national origin, sexual orientation, gender, disability or religion that are the basis for employment, promotion or compensation decisions.


Harassment - Sexual Statements or actions expressing unwelcome sexual advances, requests for sexual favors, unsolicited physical contact or propositions, unwelcome flirtations, or offensive verbal or visual expressions or physical conduct of a sexual nature.


Harassment - Workplace

Persistent statements, conduct or actions that are uninvited, degrading, offensive, humiliating or intimidating and create an unpleasant or hostile environment.


Retaliation or Retribution

Statements or actions discharging, demoting, suspending, threatening, harassing or discriminating against an employee because of any lawful act taken by such employee in connection with reporting a violation of law or policy, filing a complaint, or assisting with an investigation or proceeding.

Employee Relations Conflict of Interest - Personal

Any personal interest, any business or professional activity or relationship, prior or current employment, or any obligation that may interfere with the ability to objectively perform job duties and responsibilities or impair independence and objectivity.

Allegation Class Allegation Definition

Employee Relations Inappropriate Behavior Statements or actions that are not harassing in nature, but are believed to be unsuitable for the workplace.

Employee Relations Unfair Employment Practices

Employment decisions, practices or disciplinary actions that are believed to be unfair regardless of whether they are the result of job performance, changes in business needs or other business related decisions.

Environmental, Health and Safety

Environment, Health and Safety

Conduct, actions, policies or practices that either violate local, provincial or federal environmental, health or safety laws or regulations or may cause or result in potentially hazardous conditions that impact the environment or the health or safety of employees, customers or others.

Environmental, Health and Safety

Threats and Physical Violence

Statements or actions that threaten acts of violence or the presence of weapons, firearms, ammunition, explosives or incendiary devices in the workplace, on work premises or in work vehicles.

Financial Concerns Accounting and Auditing Practices

Statements or actions that violate or conflict with either internal policies, procedures, or practices or government regulations related to the detailed reporting of the financial state or transactions of an organization or the examination, verification, or correction of its financial accounts.

Financial Concerns Conflict of Interest - Financial

Any financial interest, any business or professional activity, prior or current employment, or any obligation that may interfere with the ability to objectively perform job duties and responsibilities or impair independence and objectivity.

Standard Ethics and Compliance Allegations


Financial Concerns Gifts, Bribes and Kickbacks

Payments, payments in kind, gifts, bribes, extensions of credit or benefits extended to or received by customers, employees, suppliers, vendors, competitors, directors, officers, auditors, government employees, government officials or agencies, or other parties that are unlawful, improper, or designed to influence business decisions or political processes.

Financial Concerns Trading on Inside Information

The purchase or sale of stock or other securities based on non-public and material information obtained during the course of employment or providing such information to another person who purchases or sells stock or other securities based upon that Information.

Misuse or Misappropriation of Assets or Information

Customer Relations Statements or actions that are negatively impacting or interfering with customers, customer relationships or customer agreements.


Disclosure of Confidential Information

The unauthorized or illegal disclosure, copying, duplication, misuse or release of confidential or personal data including but not limited to employment, financial, medical and health, customer lists, contracts, business plans, personnel records or other property marked or generally regarded as confidential or trade secrets


Misuse of Resources The improper, unauthorized or unlicensed use of property or resources for non business related reasons or purposes including improper use of systems and timekeeping.




Theft. The unauthorized removal or taking of supplies, equipment, furniture, fixtures, products, cash, merchandise or other tangible property.

Policy and Process Integrity

Trading on Inside Information

Discussions or agreements with competitors about prices or credit terms, submission of bids or offers, allocation of markets or customers, restrictions on production, distribution or boycotts of suppliers or customers that would result in monopolization or anticompetitive markets.


Espionage or Sabotage Actions that result in the gathering, receipt or acceptance of non-public confidential information or trade secrets about competitors to gain a competitive advantage or the deliberate destruction, disruption or damage to a competitor's equipment or property for competitive advantage or gain.


Falsification or Destruction of Information

Statements or actions that encourage or result in unlawful, untimely, false or intentional misrepresentation, concealment or destruction of information in order to deceive or mislead.

Other Request Request for guidance, interpretation, or other information regarding matters of law, regulations, or policies.

Other Other Statements actions or policies that concern the caller but are not currently resulting in harm, injury or corporate liability and cannot be included in any other category


Total Number of Reports – October 1, 2013 – December 31, 2013

22

11

20

13

0

5

10

15

20

25

Q1 Q2 Q3 Q4

Report by Source – October 1, 2013 – December 31, 2013

0

2

4

6

8

10

E-Mail Hotline Telephone WebSubmission

1

8

1

3

Report by Priority - October 1, 2013 – December 31, 2013

6

3

7

5

16

8

13

8

0

2

4

6

8

10

12

14

16

18

Q1 Q2 Q3 Q4

ABC

Report by Allegations Class – October 1, 2013 – December 31, 2013

0

2

4

6

8

EmployeeRelations

Misuse orMisappropriation

of Assets

Other Policy and ProcessIntegrity

4

6

2 1

Report by Allegation Type – October 1, 2013 – December 31, 2013

Employee Relations

Misuse or Misappropriation of Assets

Other


0 1 2 3

Falsification or Destruction…

Guidance Request

Customer Relations

Disclosure of Confidential…

Misuse of Resources

Inappropriate Behavior

Unfair Employment Practices

1

2

3

2

1

3

1

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