Minutes Maricopa County Special Health Care District Board of Directors Meeting Maricopa Medical Center Auditoriums 1 and 2 November 28, 2012 1:00 p.m. Present: Susan Gerard, Chair, District 3 Alice Lara, Vice Chair, District 5 Bil Bruno, Director, District 1 Donald Rumer-Rivera, Director, District 2 arrived at 1:49 p.m. Elbert Bicknell, Director, District 4 Others Present: Betsey Bayless, MIHS, President & Chief Executive Officer Bill Vanaskie, MIHS, Chief Operating Officer Michael Ayres, MIHS, Chief Financial Officer Warren Whitney, MIHS, Chief External Affairs Officer Susan Doria, MIHS, Vice President of Strategic Planning arrived at 2:52 p.m. Sherry Stotler, MIHS, Chief Nursing Officer David Wisinger, M.D., MIHS, Chief of Staff Louis B. Gorman, District Counsel Bill Sims, Sims Murray, Ltd, Outside Counsel Guest Presenters: Rocky Armfield, MIHS, Director of Risk Management Dan Hobohm, M.D., MIHS, Vice President of Quality & Patient Outcomes Recorded by: Melanie Talbot, MIHS, Executive Director of Board Operations Call to Order Chairman Gerard called the meeting to order at 1:10 p.m. Roll Call Ms. Talbot called roll. Following roll call, it was noted that four of the five voting members of the Maricopa County were present, which represents a quorum. Director Rumer-Rivera arrived after roll call. Pledge of Allegiance The Pledge of Allegiance was led by Vice Chairman Lara. Call to the Public Chairman Gerard called for public comment. There were no comments.
General Session Presentation, Discussion and Action: 1. iprotean Online Course Finance: An Introduction to Finance iprotean is an online resource for hospital board trustee education, and provides online courses in four categories: governance, finance, quality, and mission/strategic. 2. Discuss, Review and Possible Action on Hiring a Consultant to Staff the Maricopa County Special Health Care District Bond Advisory Committee; Approve Persons to Serve on Bond Advisory Committee; Appoint Chairman and Vice Chairman of Committee Chairman Gerard and Ms. Bayless were working through the list of persons for possible appointment. All of the people on the list had been contacted for willingness to serve. Because the committee is small, each person who serves must wear multiple hats in order to represent as many stakeholders as possible. Ms. Bayless added that the people on the list were well-known community leaders. Chairman Gerard felt it was most appropriate for the Board to vote on the entire list as opposed to voting on each individual person. Director Bruno asked if potential conflicts of interests were taken into consideration. Chairman Gerard said it was and both she and Ms. Bayless had in fact received rejections for that reason. Director Rumer-Rivera noticed the list had multiple persons from District Medical Group Board of Directors and questioned why. Chairman Gerard said the individuals who happened to be on the District Medical Group Board of Directors were chosen for their other service to the community. For example, Mr. Ted Williams is the President and CEO of the Arizona Behavioral Health Corp. and the Arizona Foundation for Behavioral Health. He was the former Associate County Manager for Maricopa County and the former Director of Arizona Department of Health Services. Ms. Phyllis Biedess was the former Director of AHCCCS, and the former Director of ALTCS. She was also the former President and CEO of Samaritan health plan and of Arizona Physicians IPA. Ms. Bayless said it was a transitional period with the composition of the Board changing next week. The bond advisory committee membership has been discussed and under consideration for quite some time. She hopes that the committee could be up and running by January 2013. Director Bicknell moved to approve the list of 16 persons to serve as members of the Maricopa Integrated Health System Bond Advisory Committee. Vice Chairman Lara seconded. Ms. Talbot pointed out that the committee charter was to have sixteen members including one non-voting member from the District Board. Ms. Bayless suggested modifying the charter if necessary. Director Rumer-Rivera said that the new Board Members would need to own the project, therefore, the list should be approved by the new Board. Vice Chairman Lara withdrew her second. Director Bicknell withdrew his motion. Chairman Gerard said action on hiring a consultant would be deferred until the new Board was seated. 2
3. Discuss, Review and Approve Revisions to the Amended and Restated Bylaws of the Maricopa County Bylaws amendments must be provided to Board Members two weeks prior to the meeting. Due to the number of changes, Ms. Talbot broke the bylaws down into three large segments. The first segment was presented and approved November 19, 2012. The final segment, which includes Article XII, and Article V, Section 2, will be presented to the Board after those articles have been reviewed with the department directors, including the Director of the Medical Staff. Director Bicknell moved to approve the revisions to the amended and restated bylaws of the Maricopa County. Chairman Gerard seconded. Director Bruno pointed out that Article XIV, Philanthropic Foundations, required the District Board to approve any articles of incorporation and bylaws of any such foundation. To his knowledge, the District Board has never approved any articles of incorporation or bylaws. He recommended that the Board of Directors review that responsibility with respect to any philanthropic support organizations or foundations, and approve any articles of incorporation or bylaws. VOTE: 5 ayes: Chairman Gerard, Vice Chairman Lara, Director Bicknell, Director Bruno and Director Rumer-Rivera. Motion passed. 4. Board Acceptance or Approval of the Fiscal Year Annual Audit for June 30, 2012 or Direct Staff to take Appropriate Action with Regard to the Fiscal Year Annual Audit if the Board Determines that Modifications or Revisions are in Order Mr. Ayres stated that Ernst & Young (E & Y) conducted the audit of the Maricopa Integrated Health System financial statements and that Maricopa Health Plan (MPH) was audited by McGladrey & Pullen. Both audits were free of material deficiencies. The MIHS Audit & Compliance Committee reviewed both audits and recommends approval. There were two minor adjustments related to the A-133 report. Director Bruno congratulated Mr. Ayres, Ms. Benaquista and the financial team for its hard work and having a clean audit. He noted that page one of E & Y s Report of Independent Auditors states, We did not audit the financial statements of the Maricopa Health Plan (a division of the District), which represents 10% and 12% of the assets and 29% and 35% of the revenues of the District as of and for the years ended June 30, 2012 and 2011, respectively. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Maricopa Health Plan, is based on the report of the other auditors. Director Bruno wanted to point out that E & Y did not audit the MHP; that audit was performed by McGladrey. In the past, he has brought up the fact that it was the Board s responsibility for selecting, removing, or terminating the District s external auditors (Board Policy Statement #99013G). This District Board did not hire McGladrey. McGladrey was hired by the administrator of the MHP, University of Arizona Health Plans. He believed it was best practice for the District Board to hire the auditors of the MHP. Chairman Gerard asked senior administration to respond and explain why the District Board should or should not control the MHP audit process. Mr. Ayres said that University of Arizona Health Plans (UAHP) manages the MHP and they select their own auditor. Standard practice is for the firm that manages the plan to selects its auditor. That auditor then opines on the MIHS portion of the MHP. 3
4. Board Acceptance or Approval of the Fiscal Year Annual Audit for June 30, 2012 or Direct Staff to take Appropriate Action with Regard to the Fiscal Year Annual Audit if the Board Determines that Modifications or Revisions are in Order (cont.) Page ten of the Maricopa Health Plan audit shows the IBNR claims (incurred but not yet reported) were reduced from $17 million in 2011 to $7.2 million in 2012. Director Bruno asked for the reason in reductions. Mr. Lee Coffman, Chief Operating Officer of the UAHP, attributed the reduction to less medical expenses, and fewer claims due to the drop in membership in the Plan. The medical loss ratio is approximately 87 percent and the Plan is doing well at paying claims on time. Director Bruno pointed out that both the external auditors addressed the Management Letters and Require Communications to the Audit and Compliance Committee. That does not fulfill the requirements. Those letters and required communications should have been addressed to the District Board of Directors and given to the Board in a timely manner. The District Board did not receive that information until just prior to this meeting. Mr. Ayres apologized for the misunderstanding. He was using what he thought was past practice. Director Bruno moved to approve the Fiscal Year Annual Audit for June 30, 2012. Vice Chairman Lara seconded. Motion passed by voice vote. 5. Approve Maricopa Integrated Health System Risk Management Insurance and Self-Insurance Plan Director Bicknell questioned why the Board was being asked to approve this plan when the plan clearly states the Chief Executive Officer has the power to dissolve it. Mr. Armfield stated it was out of respect. Mr. Sims added that it was in keeping with tradition, and the Plan cloned Maricopa County s document. The Board should discuss what delegated authority was given to the Chief Executive Officer, the Claims Committee and the Plan Administrator because the Board may want to retain authority instead. Mr. Armfield said the Plan was a self-insurance plan that has responsibilities directed to the Risk Management Director, the Chief Compliance Officer and the Chief Executive Officer. He plans to bring specific claims and lawsuits to the Board on a routine basis in order to get Board direction. He also recommends that a Board Member join the Claims Committee during the settlement of claims. The Claims Committee would have authority to settle any claims covered by the plan in excess of $500,000 and up to and including $1 million. Any claim covered by the plan in excess of $1 million would need the Board of Directors authority. Director Bicknell pointed out section 1.7.4, which is the definition of the Claims Committee, yet refers to the Committee as a Board. He questioned if it was a committee or a board, because the document defines the word Board as the Board of Directors of Maricopa Integrated Health System. Mr. Armfield stated that was an error and it was a claims committee not a board. Continuing with that same section, Director Bicknell said the Claims Committee would comprise of the Director of Risk Management, the Chief Compliance Officer and one member of the MIHS Board of Directors. Director Bicknell wanted to know which Board Member would serve, who would appoint the Board Member, when would the Board Member be appointed and for how long would they be appointed. 4
5. Approve Maricopa Integrated Health System Risk Management Insurance and Self-Insurance Plan (cont.): Mr. Armfield clarified that it would be for an indefinite term and the Board of Directors would decide themselves whom to appoint. Director Bicknell said that needed to be spelled out in the document. Mr. Armfield would change the document to clarify. Section 1.8.3 states that reports would be submitted annually to the Chief Executive Officer and the Chief Compliance Officer. Director Bicknell wanted to know when the Board of Directors would receive reports. Mr. Armfield said that the Board would receive written reports summarizing risk management activities, including the reporting of claims, and claims by department including expenditures. Director Bicknell questioned when the Board could expect its first report. Mr. Armfield said the first report would be in February 2013. Chairman Gerard commented that Director Bicknell s point was that the Plan is giving all authority to senior administration. What section in the Plan states where, when and what the Board will receive. Mr. Armfield said he pledges to the Board that he would give the Board of Directors what it needs. Chairman Gerard said that nowhere in the document does it state specifically what senior administration would provide to the Board of Directors. Mr. Armfield pledges active engagement and reports. Chairman Gerard agreed with Director Bicknell. There were many assumptions on senior administration s behalf on what would be provided to the Board. It s too easy for things to not happen. The document must be amended to include what would be provided to the Board, when it would be provided, and under what circumstances senior administration would ask for guidance from the Board. The document does not state what Mr. Armfield was promising. Mr. Sims suggested that any amendments to the Plan be reported to the Board of Directors. If the Board does not agree with the amendments, the Board would have the authority to request senior administration to change the Plan back (section 1.8.5.) Director Bruno said that the Board should decide on the levels of risk protection to purchase. Mr. Sims offered two changes: 1. the typographical error in section 1.7.4, which referred to the Committee as a Board. 2. the addition of the following sentence to section 1.8.5. Every six months, the CEO shall provide the Board a summary of all such amendments and modifications made during the prior six months for Board review and consideration. Director Bruno moved to approve the Maricopa Integrated Health System Risk Management Insurance and Self-Insurance Plan with the changes identified by counsel. Vice Chairman Lara seconded. Motion passed by voice vote. Break 3:03 p.m. 3:15 p.m. 5
9. Discuss, Review and Possible Action on the October 2012 MIHS Key Indicator Dashboards and Financial Report Dr. Hobohm reviewed the October quality indicator dashboard. Overall, MIHS did well on the quality indicators for the month. The percentage of readmissions within 30 days of discharge was high. MIHS has a challenging patient population, including the homeless. Mr. Vanaskie reviewed the October operational dashboard. Acute admissions and length of stay (LOS) were below budget, however, patient days were better than budget for the month. Observation days and patients being placed in observation status were below budget for the month as well as year to date. Behavioral health numbers were better than budget for the month. Visits to the Family Health Centers and dental clinic visits were below budget for the month as well as year-to-date. Visits to the Comprehensive Health Center specialty clinics and visits to the 7th Avenue Walk-In Clinic were better than budget for the month and year-to-date. The operating room utilization, surgical cases and births were close to meeting budget for the month. Adult Emergency Department (ED) visits were below budget, however, Peds ED visits exceeded budget. The total percentage of Adult ED visits resulting in admissions was low at 14 percent compared to over 20 percent in prior years. Mr. Ayres reviewed the October financial dashboard. The medical center performed well for the month with the total margin $179,000 above budget and $91,000 above budget year-to-date. The Maricopa Health Plan performed below budget with a negative variance of $224,000 for the month. Cash and investments, and days cash on hand were below budget. Days in accounts receivable remain strong at 54. Director Bruno questioned if MIHS would make its goal of days cash on hand by June 30, 2013. Mr. Ayres stated that it was a realistic goal, as long as future strategic capital investments were managed. Director Rumer-Rivera said that SNCP funding (safety net care pool) would end December 31, 2013. He asked what senior administration was doing about Maricopa Integrated Health System s position now, knowing that funding is ending. Ms. Bayless said that senior administration is unsure of what will happen on January 1, 2014. If AHCCCS is not restored, MIHS will be back in the same place financially just prior to the SNCP funding, with high uncompensated care. 6. Approve Amendment #6 to the Provider Participation Agreement Between Magellan Health Services of Arizona, Inc. and the Maricopa County Special Health Care District Director Bicknell moved to approve amendment #6 to the provider participation agreement between Magellan Health Services of Arizona, Inc. and the Maricopa County Special Health Care District. Vice Chairman Lara seconded. Motion passed by voice vote. 6
7. Consideration and Possible Action on the President & Chief Executive Officer s Attainment of Fiscal Year 2012 Performance Goals Director Bicknell said that based on the Board s review of Betsey Bayless performance for the 2012 fiscal year, the Board has determined that she has met the threshold target set by the Board for the financial goal, and for part one of the service goal; has met the target set by the Board for the growth goal and the quality goal. Therefore, he moved that the Board award Ms. Bayless a performance bonus based on the achievements reached. Director Rumer-Rivera seconded. Motion passed by voice vote. 8. Discuss, Review and Possible Action on Business Development Update/Goals Director Bruno said senior administration was far from reaching its first goal for the second metric, which was to grow FHC and CHC total visits by five percent compared to the prior year. He asked what the plan was to reach the goal by fiscal year end. Mr. Whitney believes senior administration is on track to reach the goal by fiscal year end. Director Bruno questioned if Mr. Whitney thought senior administration would turn the negative one percent result into a positive five percent with in the next eight months. Mr. Whitney said that was correct. Director Bicknell asked why Mr. Scott Trenter was listed as the Vice President of Business Development, when after a lengthy discussion in 2010, the Board was told he was a director, and not a Vice President or Chief Officer. Mr. Whitney explained that for purposes of continuity in the community, he has approved Mr. Trenter using the title of Vice President. 10. Approval of Consent Agenda: a. Minutes: Review and Approve Meeting Minutes dated: i. October 9, 2012 Special Meeting ii. October 22, 2012 Special Meeting iii. October 24, 2012 Formal Meeting b. Contracts: i. Approve Amendment #2 to the contract (C-90-09-506-1-02) between United Blood Services (Contractor) and Maricopa County Special Health Care District dba Maricopa Integrated Health System (MIHS) for Blood Product Services. 7
10. Approval of Consent Agenda (cont.): c. Board Governance: i. Approve registration fees not to exceed rates allowable under applicable District practices or policies, for all five Board members to attend The Center for Healthcare Governance s Winter Symposium Governing for High Performance Health Care, February 17-20, 2013, in Phoenix, Arizona ii. Approve a Revocable Easement and a Temporary Construction Easement with the City of Mesa for a bus turn-out lane at Desert Vista d. Medical Staff: i. Approve Maricopa Integrated Health System Medical Staff Appointments, Reappointments, Change of Privileges/Status, Waiver Requests and Resignations for November 2012 ii. iii. iv. Approve Maricopa Integrated Health System Allied Health Professional Staff Reappointments, FPPEs, and Resignations for November 2012 Approve Revision to the Global Procedural Sedation for Non-Anesthesiologist Privileges Approve Medical Staff Funds and Associated Dues and Assessments Policy and Procedure Director Bicknell requested that item 10.d.i. be removed from the consent agenda. Director Bicknell moved to approve the consent agenda minus item 10.d.i. Vice Chairman Lara seconded. Motion passed by voice vote. Director Bicknell questioned the lengthy temporary waiver for Dr. Himanshu R. Patel. Dr. Wisinger said that Psychiatry Board Certification used to offer both a written and oral board examination. Psychiatry is phasing out the oral board examination and the next opportunity to sit for the oral board will not be offered until 2014. Director Bicknell moved to approve consent agenda item 10.d.i. Vice Chairman Lara seconded. Motion passed by voice vote. 11. Reports to the Board of Directors; Discussion and Possible Action a. Patient Satisfaction Survey Results b. Quality Report: Whole Systems Measures Dashboard c. Arizona Children s Center Report d. Compliance Officer s Activities, Quality, and Effectiveness e. Audit and Compliance Committee Report f. Internal Auditor s Activities, Quality and Effectiveness g. Report on Maricopa Health Foundation Activities h. Patient Account Write Offs (more than $250K, less than $500K) i. Unbudgeted New Positions/FTEs 8
11. Reports to the Board of Directors; Discussion and Possible Action (cont.): Director Bicknell had questions on the Compliance Officer s report, item 11.d. The Code of Conduct and Ethics were revised without the Board s approval. He questioned why. Compliance staff members were unavailable to address the question, however, Mr. Vanaskie was able to confirm that it should have been brought to the Board for approval. Ms. Talbot will add the item to the next formal agenda. 12. Concluding Items a. Future Agenda Item/Report Calendar b. Board Member Requests for Future Agenda Items or Reports c. Comments i. Chairman and Member Closing Comment ii. President & Chief Executive Officer Summary of Current Events Ms. Talbot recapped the follow up items, including having a future item regarding Ms. Bayless contract and the bond committee. She questioned if those two items should be placed on December 2012 or January 2013 agendas. Ms. Bayless replied that her contract could wait until January, however, she was anxious to move forward with the bond committee. She requested that it be added to one of the December 2012 meeting agendas. Adjourn Director Bruno moved to adjourn the November 28, 2012 Special Health Care District Board of Directors Formal Meeting. Vice Chairman Lara seconded. Motion passed by voice vote. Meeting was adjourned 4:16 pm. Susan Gerard, Chair 9