III. Governance
A. Expectation
Governance by and for the people served is an essential and distinguishing element of the health center program. Except as noted below, health centers must have a governing body which assumes full authority and oversight responsibility for the health center. The governing board must maintain an acceptable size, composition and meeting schedule. Strategic thinking and planning are essential functions for the board within the context of the environment in which the health center operates, as well as pursuing its mission, goals and operating plan. The board carries out its legal and fiduciary responsibility by providing policy level leadership and by monitoring and evaluating the health center's performance.
B. Explanation
1. Overview of Requirements
Governance requirements for health centers are addressed in law, regulation and policies. Requirements in the law apply to all health centers. The regulations set forth in 42 CFR Part 51c and 42 CFR Part 56 apply only to community health centers and migrant health centers respectively, though they provide useful guidance for other types of health centers.
Section 330 requires that the health center has a governing body which:
- is composed of individuals, a majority of whom are being served by the center and who, as a group, represent the individuals being served by the center
- meets at least once a month
- schedules the services to be provided by the center
- schedules the hours during which services will be provided
- approves the center's grant application and annual budget
- approves the selection of the director for the center and,
- except in the case of public entities, establishes general policy for the center.
2. Board Composition
a. Consumer Board Members
Health center governing boards comprise individuals who volunteer their time and energy to create a fiscally and managerially strong organization for the purpose of improving the health status of their communities. A majority of members of the board must be people who are served by the health center and who, as a group, represent the individuals being served.
Health center programs that have had the consumer majority requirement waived by the Secretary are still expected to meet the intent of the legislation of ensuring strong consumer input into the policies of the health center program. In these situations, consumer input may be achieved in varying ways such as through formal advisory boards, regularly constituted focus groups, or by including persons who have previously been consumers but no longer meet the special population definition.
Since the intent is for consumer board members to give substantive input into the health center's strategic direction and policy, these members should utilize the health center as their principal source of primary health care. A consumer member should have used the health center services within the last two years. A legal guardian of a consumer who is a dependent child or adult, or a legal sponsor of an immigrant, may also be considered a consumer for purposes of board representation.
Additionally, as a group, consumer members of the board must reasonably represent the individuals served by the health center in terms of race, ethnicity, and gender. When a health center receives BPHC funding solely to support the delivery of services to a special population (homeless, migratory or seasonal farmworkers, residents of public housing or at-risk school children) the consumer majority must come from the target group, unless a waiver has been granted.
When a health center receives both community health center funding and funding designated for a special population, representation should be reasonably proportional to the percentage of consumers the special population group represents. However, there should be at least one representative from the special population group. The intent is not to impose quotas on board membership but to ensure that boards are sensitive to the needs of all health center consumers.
b. Other Board Members
Since health centers are complex organizations working in dynamic environments, the board should be comprised of members with a broad range of skills and expertise. Finance, legal affairs, business, health, managed care, social services, labor relations and government are some examples of the areas of expertise needed by the board to fulfill its responsibilities.
Regulations for community and migrant health centers place limitations on the percent of non-consumer members who represent the health care industry. No more than half (two-thirds for migrant health centers) of the non-consumer representatives may derive more than 10% of their annual income from the health care industry.
All health centers should strive for diversity of expertise and perspective among their board members.
c. Number of Members
The number of board members must be specified in the bylaws of the organization. The bylaws may define a specific number or provide a limited range if there are reasons for not maintaining a specific number of members. The size should be related to the complexity of the organization and the diversity of the community served.
Regulations for community and migrant health centers specify boards must have at least 9 and no more than 25 members. These size parameters are designed to ensure a large enough board to achieve diverse representation across the consumer groups and expertise while maintaining a size that effectively functions and makes decisions.
d. Selection of Board Members
The organization's bylaws or other internal governing rules must specify the process for board member selection. The bylaws should specify the number of terms a member may serve and provide for regular election of officers and periodic changes in board leadership.
e. Conflict of Interest
The organization's bylaws or written corporate board-approved policy must include provisions that prohibit conflict of interest or the appearance of conflict of interest by board members, employees, consultants and those who furnish goods or services to the health center. No board member shall be an employee of the health center or an immediate family member of an employee. The Chief Executive may serve as ex-officio member of the board.
3. Governing Board Functions and Responsibilities
The governing board of a health center provides leadership and guidance in support of the health center's mission. The board is legally responsible for ensuring that the health center is operating in accordance with applicable federal, state and local laws and regulations and is financially viable. Day-to-day leadership and management responsibility rests with staff under the direction of the chief executive or Program Director.
a. Bylaws
Bylaws which are approved by the health center's governing board must be established. The bylaws should be reviewed and modified as necessary to remain current. At a minimum, health center bylaws should address:
- the heath center's mission;
- membership (size, composition, responsibilities, terms of office and selection/removal processes);
- officers (responsibilities, terms of office, selection/removal processes);
- committees (standing, ad-hoc, membership and responsibilities);
- meeting schedule, quorum and acceptable meeting venues;
- recording, distribution and storage of minutes; and
- provisions regarding conflict of interest, executive session and dissolution.
b. Responsibilities
A governing board is responsible for assuring that the health center survives in its marketplace while it pursues its mission. This is a massive challenge in an extremely dynamic health care environment which is placing increasing financial and service delivery pressures on all providers.
Boards must be knowledgeable about marketplace trends and be willing to adapt their policies and position to reflect these trends. In addition to approving annual grant applications, plans, and budgets, boards should work with health center management and community leaders to actively engage in long-term strategic planning to position the health center for the future.
Success is dependent on the health center's ability to effectively adapt to marketplace trends while remaining financially viable. Boards must not only plan effectively but also measure and evaluate the health center's progress in meeting its annual and long-term programmatic and financial goals. The health center's mission, goals, and plans should be revised as appropriate to the feedback gained through the evaluation process.
The governing board must select the services provided by the health center. While certain services are mandated by law, health center boards have a great deal of latitude in deciding which additional services should be offered by the health center and whether the services should be offered directly or through referral and collaboration with other service providers.
Resources are always limited and a major challenge confronting health center boards is deciding which services should be supported with available resources. Effective needs assessment and planning processes are essential for making informed decisions about service configuration.
The governing board must determine the hours during which services are provided at health center sites. Health centers are expected to schedule hours that are appropriate for their community. Generally this means some early morning, evening and/or weekend hours should be offered to accommodate people who cannot easily access services during normal business hours.
The board must approve the annual budget and grant application. The intent is not that the board simply sign-off on documents but that it understands the substance and implications of the budget and application.
Ensuring the financial health of the organization and aligning the goals of the project application with the strategic direction of the health center are critical functions for the board. In order to effectively fulfill these functions, the board must be involved in health center planning throughout the year.
The board must approve the selection and dismissal of the chief executive or Program Director of the health center. Because the chief executive is the primary connection between board established policy and health center operations, the board must evaluate the performance of the chief executive and hold him or her accountable for the performance of the health center.
Together, the board, the chief executive and other members of the management team comprise the leadership for the health center. To succeed, they must work together to ensure a strong organization and move forward into the future.
Except in the case of public entities funded under section 330(e), the board must establish general policies for the health center. These include personnel, health care, fiscal, and quality assurance/improvement policies. These policies provide the framework under which health center staff conduct the day-today operations of the organization.
c. Board Meetings
Health center governing boards must meet at least monthly. Where geography or other circumstances make monthly, in-person meetings burdensome, the meetings may be held by telephone or other means of electronic communication. The board must keep minutes of each meeting which are approved at a subsequent meeting. The board should also maintain a systematic tracking system of approval/disapproval of board policies and procedures as well as other records to verify and document its functioning.
d. Board Training and Development
It is expected that governing board members have sufficient knowledge and information to make informed decisions about the health center's strategic direction, policies and financial position. Board members should be provided with opportunities for training and development, as well as conducting self evaluations. The board is responsible for identifying and assuring it meets its educational and training needs including orientation and training of new board members.
e. Committees
The board should have a committee structure which facilitates carrying out its responsibilities. Appropriate committees may include executive, finance, quality improvement, personnel, and planning. However, only the executive committee should be authorized to act for the Board.
4. Exceptions
a. Waivers for Special Population Health Centers
The law permits the Secretary to grant waivers for all or part of the requirements, for good cause, for health centers serving special populations; those serving migratory and seasonal farmworkers and their families - section 330(g); those serving homeless people including homeless children - section 330(h); and those serving residents of public housing - section 330(i).
Health centers requesting waivers for all or any governance requirement must provide a compelling argument as to why the program cannot meet the statutory requirement, as well as alternative strategies detailing how the program intends to meet the intent of the law. Community health centers funded under the authority of section 330 (e), with or without funding for a special population program, are not eligible for a waiver of any part of the governance requirements.
b. Public Entities
Community health centers funded under section 330(e) of the Act that are sponsored by public entities, such as health departments, public hospitals, public universities, etc., may meet the governing board requirements in one of two ways:
- The public entity's board may meet health center board composition requirements including having a consumer majority. In this case, no special considerations are needed.
- When the public entity's board does not meet health center composition requirements, a separate health center governing board must be established. The health center board must meet all the selection and composition requirements and perform all the responsibilities expected of governing boards except that the public entity may retain the responsibility of establishing fiscal and personnel policies.
The health center board should be a formally incorporated entity and it and the public entity board are co-applicants for the health center program. When there are two boards, each board's responsibilities must be specified in writing so that the responsibilities for carrying out the governance functions are clearly understood.
c. Tribal Entities
There is no governing board requirement for health centers operated by an Indian tribe or tribal or Indian organization under the Indian Self-Determination Act or an urban Indian organization under the Indian Health Care Improvement Act.
5. Network Grantees
Health centers are forming and participating in networks for many purposes. In most cases, participating health centers retain their own governing boards and these boards continue to be subject to applicable law, regulation and expectations. When health centers come together in a network, and the network is a section 330(e) grantee, with the health centers operating as subrecipients, the governing board at the network level, must meet the governing board requirements and expectations.
Furthermore, the network must have sufficient staff and other resources to ensure the network board carries out its functions.
6. Affiliations
In some organizational affiliations, the selection, composition and/or responsibilities of the health center governing board may be altered. This may happen through formation of a new board for an integrated delivery system or through the participation of affiliate representatives on health center boards. There may also be various arrangements where a portion of the scope of the project is being provided by an entity other than the grantee. With any such arrangement the governing board must retain its full authorities, meet selection and compositional requirements and exercise all responsibilities and functions prescribed in legislation and regulations.
Issued and Last Revised: August 17, 1998 |
