Policy AD-102 Conflicts of Interest 2023-04-25

Purpose

The purpose of this policy is to provide safeguards to prevent agents of Westside Family Healthcare (Westside) from using their position for purposes that are, or give the appearance of being, motivated by a desire for private financial gain for themselves or those with whom they have family, business, or other ties.  

Additionally, this policy serves to meet compliance requirements contained in Chapter 13: Conflict of Interest of the HRSA Health Center Program Compliance Manual, as well as the conflict of interest standard in the Leadership chapter of The Joint Commission’s Comprehensive Accreditation Manual for Ambulatory Care (CAMAC).  As Westside is a federal grantee, these standards for managing conflicts of interest are also necessary to comply with aspects of the federal Uniform Administrative Requirements.

Policy

Westside recognizes the importance of identifying, monitoring, and managing individual conflicts of interest, whether real or apparent.  All chief officers, directors, employees, contractors, Board members, and Board committee members and other agents of Westside have a personal responsibility to be familiar with and comply with their responsibilities with regard to identifying and reporting conflicts of interest, as contained in this AD-102 policy and detailed in the procedures below.  Westside leadership shall also identify and manage potential organizational conflicts of interest.  This includes reviews of its relationships with other care providers, educational institutions, manufacturers, and payers to determine whether conflicts of interest exist and whether they are within law and regulation.

Agents of Westside, including but not limited to chief officers, directors, employees, contractors, Board members, and Board committee members, must strive to make decisions fairly and objectively and always act in the best interests of Westside, without regard to any personal pecuniary benefit or any benefit to a third-party, and with undivided allegiance.  This includes but is not limited to any conflict of interest involving licensed independent practitioners (LIPs) and/or staff that affects or has the potential to affect the safety or quality of care, treatment, or services.

No chief officers, directors, employees, contractors, Board members, Board committee members, or other agents of Westside shall participate in Westside’s selection, award, or administration of any contract or grant, paid in whole or in part with Federal funds, if they have a real or apparent conflict of interest (as defined below).  Written disclosure of real or apparent conflicts of interest must be provided by agents of Westside, as detailed in the procedures below.  

Agents of the health center may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts.

Disciplinary action is applied for violations of Westside’s conflict of interest standards by its agents.

This policy is intended to supplement but not replace any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations and to healthcare organizations.

Scope

This policy applies to chief officers, directors, employees, contractors, Board members, Board committee members, and other agents of Westside.

Definitions

Board Member(s) – One or more members of the Board of Directors of Westside.

Board Chair – the Chair of the Board of Directors of Westside.

Agent – An agent of Westside Family Healthcare includes, but is not limited to, a governing board member, a board committee member, a chief officer, a director, an employee, or a contractor acting on behalf of Westside (including consultants).

Interest – An individual has an “Interest” if they have, directly, or indirectly through a family member or business partner:

• A business relationship (e.g., an actual or forthcoming contractual or employment arrangement) with: (1) Westside; (2) an entity with which Westside has entered (or is negotiating to enter) a transaction or arrangement; or (3) an entity that is a competitor or potential competitor of Westside;
• A financial relationship (e.g., a controlling or material ownership, or investment interest, employment relationship or other relationship that a reasonable person would deem significant) with or a tangible personal benefit from: (1) an entity with which Westside has entered (or is negotiating to enter) a transaction or arrangement; or (2) an entity that is a competitor or potential competitor of Westside;
• A fiduciary relationship (e.g., Board member or trustee) with: (1) an entity with which Westside has entered (or is negotiating to enter) a transaction or arrangement; (2) an entity that is a competitor or potential competitor of Westside; or
• A personal relationship with an individual who has a business, financial or fiduciary relationship as defined above.  A personal relationship means a relationship based on family, business partnership, friendship, or romance.

Conflict of Interest– A conflict of interest arises when the employee, officer, or agent (including but not limited to any member of the governing board or a board committee), any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. (HRSA definition, 45 CFR 75.327(c)1)

A conflict of interest arises whenever the interest of an affiliated individual/agent competes with or has the potential to compete with the best interests of Westside.  A conflict of interest is presumed to exist if an affiliated individual/agent with an interest participates in any way in the transaction or arrangement in which they have such interest.

Organizational Conflict of Interest – Organizational conflicts of interest mean that because of relationships with a parent company, affiliate, or subsidiary organization, the health center is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization. (HRSA definition, 45 CFR 75.327(c)(2).)

Procedures

1. Annual Statement
   1. Board members, chief officers, and directors are required to sign the Annual Confidentiality, Conflicts of Interest, and Exclusions Statement, in which they acknowledge that they have read this AD-102 Conflicts of Interest policy and understand and will comply with the expectations contained herein.
2. Disclosure of Conflicts of Interest
   1. All Westside Board members, chief officers, licensed independent practitioners, and directors are required to complete and sign the Annual Affiliation Disclosures Form annually.
      1. This Form provides for the declaration of affiliations in order to identify whether any “dualities of interest” exist based on a “material financial interest” in businesses or organizations under the specified circumstances.  Both terms are defined therein.
         1. The existence of a duality of interest does not necessarily mean that a conflict of interest exists or that the affiliation would unduly influence the person with respect to their fiduciary duties toward Westside.
      2. Submitted Annual Affiliation Disclosures Forms and stated Dualities of Interest are reviewed for potential conflicts of interest as follows:
         1. Licensed Independent Practitioners (LIPs) – collected by the Provider Relations manager and reviewed by the CMO, consulting with the CEO and/or Corporate Compliance Officer as needed.
         2. Board members, Chief Officers, and Directors – collected by the Water St. Office Manager/Executive Assistant and reviewed by the CEO and/or the Corporate Compliance Officer.
   2. Westside requires that all employees, contractors, Board committee members, and Board Members be aware that they must disclose in writing all identified business and family relationships that might potentially create a conflict of interest under this policy.
   3. Employees must disclose to their supervisors and their supervisors must disclose to the responsible chief officer, in writing, the specifics of any plans of any employee to accept supplemental outside employment so that Westside may determine whether such outside employment has the potential for conflicting with the interests of Westside.
      1. Specific requirements for LIPs are contained in policy HR-120 Provider Moonlighting.
   4. If a chief officer, director, employee, contractor, Board member, Board committee member, or other agent of Westside believes that they or a member of their immediate family or partner has a financial interest in a federally funded contract of Westside, they must immediately disclose this in writing to the CEO and copy the Corporate Compliance Officer.
      1. Disclosure by Board Members and Board committee members must also be made to the Board Chair (and if it is the Board Chair who has such a financial interest, they must make disclosure to the Board Vice Chair).
3. Board of Directors Membership
   1. No Board Member shall be a Westside employee or an immediate family member of a Westside employee.
   2. The Chief Executive Officer may serve only as a non-voting, ex-officio member of Westside’s Board of Directors.

Compensation to Board Members

• 1. Within the limits of available funds, Westside may reimburse Board Members for reasonable expenses actually incurred by reason of their participation in Board activities, e.g., travel expenses, meals, and incidentals.
  2. Westside does not compensate Board Members for services rendered in the ordinary course of service as Board Members.
  3. If a Board Member who is not an officer is uniquely qualified to perform professional services for Westside, Westside may consider contracting with that Board Member for such professional services, provided that the affected Board Member does not participate or vote on their selection, the contract is in all respects “arms’ length,” consistent with the OMB Circular A-122 cost principles if federal funds will be used, and the Board determines that it is in the best interests of Westside to contract with that Board Member.

Private Financial Gain

• 1. No employee, contractor, Board committee member, or Board Member may participate in the selection, award, or administration of a contract in which federal funds are used, in which they or their immediate family or partner has a financial interest, or with whom they are negotiating or have any arrangement concerning prospective employment.
  2. If an employee, contractor, Board committee member, or Board Member believes that they, a member of their immediate family, or partner has a financial interest in a federally-funded contract of Westside, they must immediately disclose this in writing to the CEO.  Disclosure by Board Members must also be made to the Board Chair (and if it is the Board Chair who has such a financial interest, they must make disclosure to the Board Vice Chair).
  3. No Board Member may vote on any matter which may directly or indirectly result in financial gain to that member, or which may conflict with that member’s obligations to another organization’s Board of Directors or to their own employer.
  4. If a Board Member has first disclosed a conflict or potential conflict of interest with respect to a matter that may directly or indirectly result in financial gain to that member or conflict with that Board Member’s obligations to another organization’s board of directors or to their own employer, and abstains from voting in that regard, they may participate in discussions relating to that matter.

Gifts/Gratuities

• 1. Offering or accepting personal gifts may influence an individual's decisions and thus may constitute a conflict of interest.
  2. Employees, contractors, Board committee members, and Board members of Westside will accept no monetary or in-kind gifts for their own personal use when offered in return for any services rendered or to be rendered to or on behalf of Westside.
     1. Westside reserves the exclusive right to bill and receive payment of all fees for services provided by employees. Any fees or other compensation received by employees for services performed will be considered the property of Westside and shall be transferred over to Westside immediately.
  3. In the event that a gift is offered, the employee, contractor, Board committee member, or Board Member shall advise the donor that all monetary or in-kind gifts must be made to and for the use of Westside in the form of a standard donation through External Affairs.
  4. This section shall not be construed to prohibit acceptance of food and refreshments of nominal value or infrequent occasions in the ordinary course of a luncheon or dinner meeting or other meeting or acceptance of unsolicited advertising or promotional material such as pens, pencils, note pad, calendars, and other items of minor monetary value.

Procurement and Competitive Standards

• 1. Westside conducts all procurement transactions in a manner to provide, to the maximum extent practicable, open, and free competition.
     1. Westside is sensitive to, and seeks to avoid, organizational conflicts of interest or non-competitive practices among contractors.
     2. Contractors who want to bid for a contract with Westside are prohibited from drafting the contract’s specifications, requests for proposals, and the like.
     3. Awards are made to the bidder whose bid is responsive to the solicitation and most advantageous to Westside, price and other factors considered.
  2. Westside always retains the right to determine with respect to any particular procurement that sole source procurement is justified, based on standards that meet federal requirements, when applicable.  
  3. Westside’s Procurement policy, as well as the Purchasing section of Westside’s Finance Policy Manual address procurement procedures in more detail.
  4. In cases where a real or apparent conflict of interest is identified, Westside’s procurement and other relevant records document adherence to this AD-102 policy. 

Bribery

• 1. Westside will immediately dismiss any employee, remove any Board Member or Board committee member, and terminate the contract of any contractor found to have offered or accepted a bribe to secure funding from Westside.

Political Activities

• 1. No federal grant or related funds may be used to support the costs, if any are incurred, of lobbying activities prohibited by OMB Circular A-122, Department of Health and Human Services (DHHS) rules implementing the Byrd Amendment and DHHS appropriations riders.

Nepotism

• 1. Westside will not hire any job applicant who is an immediate relative or who resides at the same address of an employee of Westside if, in the position being applied for:
     1. the applicant will supervise, or be supervised by, that employee;
     2. that employee is in the chain of command for supervision of the position that applicant is seeking; or
     3. the applicant is a relative or household member of an Officer of Westside.
  2. Every applicant for employment with Westside must disclose any and all past, present, and potential future family and business relationships with employees and Board Members of Westside.
     1. “Immediate family” is defined as father, mother, sister, brother, spouse, civil union partner, child, grandparents, grandchildren, domestic partners, or in-laws of the same degree as immediate family.
     2. Employees who have past, present, or potentially future family or someone residing at the same address applying for employment at Westside must also disclose all family and business relationships to the applicant prior to hire.

Referrals

• 1. Westside physicians are not permitted to make a referral for certain designated health services payable by Medicare or Medicaid to an entity in which the physician (or an immediate family member) has an ownership/investment interest or with which they a compensation arrangement, unless a legal exception applies.
     1. The designated health services are: clinical laboratory services; physical therapy services; occupational therapy services; outpatient speech-language pathology services; radiology and certain other imaging services; radiation therapy services and supplies; durable medical equipment and supplies; parenteral and enteral nutrients, equipment, and supplies; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services.

Violations

• 1. Violations of Westside’s standards of conduct must be reported promptly to the CEO.
     1. If the CEO has violated the standards, notice must be given to the Board Chair.
  2. Employees who violate these standards may, depending on the severity of the violation, be subject to oral admonishment, written reprimand, reassignment, demotion, suspension, or separation, in addition to legal penalties which might apply.
  3. Board Members or Board committee members who violate these standards may, depending on the severity of the violation, be subject to oral admonishment or removal from the Board or Board committee.

Availability of Policy

• 1. A copy of this policy and related procedures and information about the relationship between care, treatment, or services and financial incentives will be made available upon request to all patients, and to those individuals who work in the organization, including staff and licensed independent practitioners (LIPs).

Training

• 1. To ensure awareness and understanding, employees, students, volunteers, and contractors and other relevant agents are trained at the beginning of their employment or association with Westside, and then annually thereafter, on this AD-102 Conflicts of Interest policy and their duties with regard to maintaining confidentiality.

References

1. HRSA Health Center Program Compliance Manual, August 2018
   1. Chapter 13: Conflict of Interest
   2. Section 330(a)(1) and 330(k)(3)(D) of the PHS Act; 42 CFR 51c.113 and 42 CFR 56.114; and 45 CFR 75.327

Uniform Administrative Requirements

• 1. 2 CFR §200.318(c)
  2. 45 CFR §75.327(c)  

The Joint Commission, Comprehensive Accreditation Manual for Ambulatory Care (CAMAC), January 1, 2023.

• 1. Standard LD.04.02.01 – The leaders address any conflict of interest involving licensed independent practitioners and/or staff that affects or has the potential to affect the safety or quality of care, treatment, or services.
     1. All Elements – 2,3,4, and 5.