Conflict of Interest

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I. PURPOSE

The purpose of this Conflicts of Interest (COI) policy is to protect the interests of Alegent Creighton Health (“system” or “corporation”) when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer, director, committee member, or key employee of the system or corporation. This policy is intended to supplement but not replace any applicable state laws governing COI applicable to nonprofit and charitable corporations. Additionally, disabling conflicts that may preclude the individual’s appointment to the Board of Directors or the director’s continued service on the Board of Directors are further defined under duty of care and duty of loyalty. Not all transactions or financial interests are COI. A person who has a financial interest may have a COI only if the applicable board, board committee, or corporate member decides that a COI exists. The system or corporation mandates the disclosure of any potential conflicts so that the appropriate determination may be made.

Members of the Board of Directors and key employees must disclose any interest they have in a transaction or matter that comes before corporation and/or system where that interest could be viewed by a reasonably prudent person as affecting the objectivity or independence of the decision maker, even if the interest is not the result of the board member or key employee having a formal affiliation with some other party. Such disclosure may be made in the manner described in III F 1.

II. DEFINITIONS

A. Ad hoc Committee – Will mean an ad hoc committee established by the COI Committee or corporation and/or system Board of Directors to investigate a potential disabling conflict.

B. Board of Directors or Board – Board of Directors or board will mean the corporation’s and/or system’s Board of Directors or board on which you are currently serving.

C. Committee – Will mean the COI Committee designated by the corporation and/or system Board of Directors. This group of individuals is responsible for compiling reviewing and investigating possible conflicts of interest. The committee is comprised of the Chief Executive Officer, Chair of the Governance Committee, Chief Financial Officer, General Counsel, and Compliance Officer.

D. COI – Exists when the personal interests of an officer, director, committee member, or key employee may affect the ability of that officer, director, committee member or key employee to act in the best interest of, and with good faith and loyalty to, the system or corporation. A COI may be considered to exist in any instance where the actions or activities of an officer, director, committee member, or key employee also involve the obtaining of direct or indirect personal gain or advantage or an adverse or potentially adverse effect on the interests of the system or corporation.

E. Conflicts of Interest Transaction – Describes a transaction or other arrangement with the system or corporation in which you have a direct or indirect interest (including a financial interest). An indirect interest exists if:

1. Another entity in which you have a material interest or in which you are a general partner is a party to the transaction, or

2. Another entity of which you are a director, officer, or trustee is a party to the transaction.

F. Corporation – Corporation will mean the entity for which you are currently serving as an officer, director, or committee member that is also an entity within the system.

G. Disabling Conflict

1. Repeated, intentional failure to disclose a COI.

2. A single, but significant, intentional failure to disclose a COI.

3. Intentional violation of Alegent Creighton Health’s confidentiality policy or standards of conduct.

4. Engaging in any external conduct that the board construes may adversely impact Alegent Creighton Health.

5. Serving as a board member, partner, investor, or senior executive of a direct competitor to Alegent Creighton Health.

a. Does not include physicians whose practices offer routine services, such as in-office laboratories.

6. Speaking publicly against positions of the board or the best interests of Alegent Creighton Health. 7. Serving as an owner, partner, employee, board member, or investor of a vendor (professional services, financial institution, or other business) receiving a substantial amount of revenue from Alegent Creighton Health.

a. The greater of $200,000 or 2% of the annual revenue of that vendor in the preceding or current year.

H. Disqualified Person – Any person who was in a position to exercise substantial influence over the affairs of any entity within the system or corporation at any time during the 5-year period ending on the date of the transaction (the look back period). It is not necessary that the person actually exercise significant influence only that the person is in a position to do so. In addition, the following persons are also considered disqualified persons:

1. A “family member” of a disqualified person includes the disqualified person’s spouse, brothers or sisters (by whole or half blood), spouses of brothers or sisters (by whole or half blood), ancestors, children, grandchildren, great grandchildren, and spouses of children, grandchildren, and great grandchildren.

2. Entities (including corporations, partnerships, limited liability companies, trusts, estates, and any other type of entity) wherein the disqualified person owns 35% or more, directly or indirectly, of the controlled entity. This does not include voting rights held only as a director, trustee, or other fiduciary, without any stock, profit, or other beneficial interest.

3. Persons having substantial influence. A person who holds any of the following powers, responsibilities, or interests is in a position to exercise substantial influence over the affairs of the system or corporation.

a. Voting members of the governing body.

b. Presidents.

c. Chief Executive Officers (CEO).

d. Chief Operating Officers (COO).

e. Chief Financial Officers (CFO).

f. Members of Executive Leadership Council (ELC).

g. General Counsel.

h. Persons with a material financial interest in a provider-sponsored organization, and i. Persons determined annually to be a disqualified person for the purposes of form 990 reporting.

I. Duty of Care – The officers, directors, and committee members of system and/or corporation must exercise due diligence consistent with a duty of care that requires an officer, director or committee member to act in good faith, with the care an ordinary prudent person in a like position would exercise under similar circumstances, and in a manner the officer, director, or committee member reasonably believes to be in the best interest of system and/or corporation.

J. Duty of Loyalty – A duty of loyalty requires an officer, director, or committee member to act in the interest of system and/or corporation rather than in the personal interest of the officer, director or committee member or some other person or organization. In particular, the duty of loyalty requires an officer, director, or committee member to avoid conflicts of interest that are detrimental to system and/or corporation.

K. Financial Interest – Any instance where a person has, directly or indirectly, through business, investment, or family:

1. An ownership or investment interest in any entity with which the system or corporation has a transaction or arrangement, or

2. A compensation arrangement with the system or corporation or with any entity or individual with which the system or corporation has a transaction or arrangement, or

3. A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the system or corporation is negotiating a transaction or arrangement. 4. Compensation includes direct or indirect remuneration, as well as, gifts or favors which are substantial in nature.

5. A financial interest is not necessarily a COI. A person who has a financial interest may have a COI only if the board or committee decides that a COI exists.

L. Key Employee – Alegent Creighton Health Level 1-3 management and other individuals as designated by the CEO.

M. Other Provider – Any provider other than those related to or affiliated with Alegent Creighton Health.

N. Provider – Any hospital, nursing home, skilled nursing facility, home health agency, intermediate care facility, renal disease center, independent clinical laboratory, rural health clinic, HMO or carrier, intermediary or fiscal agent under Medicare or Medicaid, or any other entity that furnishes, or arranges for the furnishing of, health related services.

O. System - Any and all of the related or affiliated organizations within Alegent Creighton Health, including but not limited to:

Alegent AfterOurs, LLC
Alegent Creighton Health
Alegent Creighton Health Bergan Mercy Health System
Alegent Creighton Clinic
Alegent Creighton Health Community Memorial Hospital
of Missouri Valley, Iowa
Alegent Creighton Health/Creighton Saint Joseph
Managed Care Services, Inc., d/b/a UniNet
Alegent Creighton Health Foundation
Alegent Creighton Health Immanuel Medical Center
Alegent Creighton Health Memorial Hospital, Schuyler
Alegent Creighton Health Mercy Hospital, Corning, Iowa
Alegent Creighton Health Northwest Imaging Center, LLC
Alegent Creighton Health Quick Care, LLC
Avantas, LLC
Bergan Mercy Surgery Center, LLC

Community Memorial Hospital, Medical Services Foundation
Harbor House
Hospice of Southwest Iowa
Lakeside Ambulatory Surgical Center, LLC
Lakeside Endoscopy Center, LLC
Memorial Community Hospital Corporation
Mercy Health Care Foundation
Midlands Choice, Inc.
Midlands Data Center, LLC
NW Village, LLC
Omaha Ambulatory Investment Company, LLC
PET/CT Imaging Partners, LC
Pottawattamie County Mental Health and Substance Abuse Network, Inc.
Prairie Health Ventures, LLC
Premier, Inc.
Premier Purchasing Partners, LP


P. You or Interested Person – Any officer, director, committee member or key employee required to complete the annual statement, and all of your family members that have a direct or indirect financial interest as defined above, is an interested person. If a person is an interested person with respect to any entity in the system, he or she is an interested person with respect to all entities in the system.

III. PROCEDURE

A. Determination of Disqualified Person – Annually, during the fourth quarter, the COI Committee will evaluate and determine those individuals who will be designated as disqualified persons for purposes of form 990 reporting.

B. Information regarding the COI policy will be published on the Alegent intranet (MyAlegent) and also on the public Alegent website.

C. Duty to Disclose – In connection with any actual or possible COI, an interested person must disclose the existence of his or her financial interest and must be given the opportunity to disclose all material facts to the directors and members of committees considering the proposed transaction or arrangement.

D. COI Committee will investigate all disclosed COI and report to the corporation’s and/or system’s Board of Directors; the board will take such action as deemed appropriate that is in the best interest of the system and/or corporation.

E. Determining Whether a COI Exists

1. After disclosure of the financial interest and all material facts and after any discussion with the interested person, he/she will leave the board or committee meeting while the determination of a COI is discussed and voted upon.

2. The remaining board members will decide if a COI exists.

F. Procedures for Addressing the COI (see Attachments A and B)

1. An interested person may declare to the Board Chair, CEO, Chair of the Governance Committee, Chief Financial Officer, General Counsel, or Compliance Officer that he/she has a COI and will then remove himself/herself from all discussions and negotiations surrounding the transaction; additionally, conflicts may be reported through the Corporate Integrity Hotline (1-800-261-5607) or www.ethicspoint.com.

2. An interested person may make a presentation at the board meeting, but after such presentation, he/she will leave the meeting during the discussion of, and the vote on, the transaction or arrangement that results in the COI.

3. The Chair of the Board will, if appropriate, appoint a disinterested person or ad hoc committee to investigate alternatives to the proposed transaction or arrangement.

4. After exercising diligence, the board will determine whether the system can obtain a more advantageous transaction or arrangement with reasonable efforts from a person or entity that would not give rise to a COI.

5. If a more advantageous transaction or arrangement is not reasonably attainable under circumstances that would not give rise to a COI, the board will determine whether the transaction or arrangement is in the system’s or corporation’s best interest and for its own benefit and whether the transaction is fair and reasonable to the system or corporation and will make its decision as to whether to enter into the transaction or arrangement in conformity with such determination.

G. Procedure for Addressing a Potential Disabling Conflict (see Attachments A and B)

1. When it is determined that a potential disabling conflict exists, the Board Chair or designee will appoint an ad hoc committee to investigate the potential disabling conflict.

2. The ad hoc committee will investigate the potential disabling conflict and report their findings to the Board of Directors.

3. The potential disabling conflict will be discussed at the next scheduled meeting of the Board of Directors or, at the discretion of the Board Chair; a special meeting of the Board of Directors may be called to address the potential disabling conflict.

4. The individual with the potential disabling conflict will be allowed to address the board to offer additional information and explanation; the individual will be excused from the meeting once the board begins its deliberations on the potential disabling conflict.

5. If the board determines that a disabling conflict does not exist, the conflict will be noted in the minutes.

6. Applicable to the Alegent Creighton Health, Bergan Mercy Health System, or Immanuel Medical Center Board(s):

a. If following its deliberations the board concurs that a disabling conflict does in fact exist, the Board Chair will contact the applicable corporate member (CHI and/or HIS) and present the relevant information about the disabling conflict and the board’s determination.

b. The corporate member may conduct its own investigation on the potential disabling conflict and take any appropriate action.

c. The corporate member may notify Alegent Creighton Health of its determination.

d. Following its deliberations if the corporate member concurs that a disabling conflict does in fact exist, the corporate member will remove the individual from the system and/or corporation Board of Directors.

7. Applicable to all other boards - If following its deliberation the board concurs that a disabling conflict does in fact exist, the board will remove the individual from the Board of Directors.

8. If the board or corporate member determines that a disabling conflict does not exist, the conflict will be noted in the minutes, and

a. Applicable to Alegent Creighton Health, Bergan Mercy Health system or Immanuel Medical Center board(s):

1) The corporate member’s decision will be forwarded to system and/or corporation. b. System and/or corporation reserve the right to recuse the officer, director, or committee member from future discussions involving the concerned parties.

H. Violations of the COI Policy

1. If the board or committee has reasonable cause to believe that an officer, director, committee member, or key employee has failed to disclose actual or possible COI, the board or committee will inform the officer, director, committee member, or key employee of the basis for such belief and afford the officer, director, committee member, or key employee an opportunity to explain the alleged failure to disclose.

2. If, after hearing the response of the officer, director, committee member, or key employee and making such further investigation as may be warranted in the circumstances, the board or committee determines that the officer, director, committee member, or key employee has, in fact, failed to disclose an actual or possible COI, the committee will take appropriate disciplinary and corrective action.

I. Records of Proceedings

1. The minutes of the board and all committees will contain:

a. The names of the persons who disclosed or otherwise were found to have a financial

interest in connection with an actual or possible COI, the nature of the financial interest, any action taken to determine whether a COI was present, and the board’s or committee’s decision as to whether a COI in fact existed.

b. The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and record of any votes taken in connection therewith.

J. Compensation

1. Alegent does not compensate the members of its Board of Directors.

2. Compensation is approved following the IRSs recommended three-step approach to show a rebuttable presumption that the transaction was not an excess benefit transaction.

a. Compensation was approved by an authorized body of disinterested persons (sponsors), b. Who reviewed all written material concerning the compensation plan, as well as, comparability data provided by an independent compensation firm, and

c. The determination of approval is adequately documented.

3. Executive compensation is annually reviewed by an independent compensation firm who issues an opinion on executive compensation.

4. A voting member of the Board of Directors who receives compensation, directly or indirectly, from the system or corporation for services is precluded from voting on matters pertaining to that member’s compensation.

5. A physician who is a voting member of the Board of Directors and receives compensation, directly or indirectly, from the system or corporation for services is precluded from discussing and voting on matters pertaining to that member’s and other physicians’ compensation.

a. No physician or physician director, either individually or collectively, is prohibited from

providing information to the Board of Directors regarding physician compensation.

6. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the system or corporation for services is precluded from voting on matters pertaining to that member’s compensation.

7. Physicians who receive compensation, directly or indirectly, from the system or corporation, whether as employees or independent contractors, are precluded from membership on any committee whose jurisdiction includes compensation matters.

a. No physician, either individually or collectively, is prohibited form providing information to any committee regarding physician compensation.

K. Many other circumstances which could not possibly be listed here could give rise to a potential COI transaction, including any instances where the actions or activities of any individual on behalf of the system or corporation also involve the obtaining of an improper gain or advantage, or an adverse effect on the system’s or corporation’s interests.

1. For example, to accept gifts, excessive entertainment, or other favors from any outside concern that does, or is seeking to do, business with, or is a competitor of the system or corporation, or who could otherwise profit from information available to a member of the management team under certain circumstances might give rise to a claim that such action was intended to influence or possibly would influence an individual in the performance of his or her duties.

a. This does not include the acceptance of items of nominal or minor value that are clearly tokens of respect or friendship and not related to any particular transaction or activity of the system or corporation.

2. To disclose or use information relating to the system’s or corporation’s business for the personal profit or advantage of an individual or his or her family members would constitute conflicts of interest transaction.

a. Full disclosure of any such current or future situation or any other circumstances in doubt will be made to avoid any possible appearance of conflict and permit an impartial and objective review of circumstances.

L. Annual Statements – All officers, directors, committee members, and key employees will annually sign a statement that affirms that such person:

1. Understands that the COI policy applies to all officers, directors, committee members, and key employees.

2. Has received a copy of the COI policy.

3. Has read and understands the policy.

4. Has agreed to comply with the policy, and

5. Understands that system and/or corporation is a charitable organization and that in order to maintain its federal tax exemption it must engage primarily in activities that accomplish one or more of its tax-exempt purposes.

M. Periodic Reviews

1. To ensure that the system or corporation operates in a manner consistent with its charitable purposes and that it does not engage in activities that could jeopardize its status as an organization exempt from federal income tax, periodic reviews will be conducted. 2. The periodic reviews, at a minimum, include the following subjects:

a. Whether compensation arrangements and benefits are reasonable and is the result of arm’s length bargaining.

b. Whether acquisitions of physician practices and other provider services result in inurement or impermissible private benefit.

c. Whether partnership and joint venture arrangements and arrangements with management service organizations and physician hospital organizations conform to written policies, are properly recorded, reflect reasonable payments for goods and services, further the system’s and corporation’s charitable purposes and do not result in inurement or impermissible private benefit.

d. Whether agreements to provide healthcare and agreements with other healthcare providers, employees, and third party payors further the system’s and corporation’s charitable purposes and do not result in inurement or impermissible private benefit.

N. Use of Outside Experts

1. In conducting the periodic reviews provided for in the preceding section, the system or corporation, may, but need not, use outside advisors.

2. If outside experts are used, their use will relieve the board of its responsibility for ensuring that periodic reviews are conducted.

2009 CONFLICT OF INTEREST STATEMENT
For Alegent Creighton Health Officers, Directors and Committee Members

CONFLICTS OF INTEREST

Pursuant to Article 12 of the Alegent Creighton Health Bylaws, the purpose of Alegent Creighton Health’s Conflicts of Interest Policy (“Policy”) (000.053) is to protect its interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an Officer, Director or Committee Member of the System or Corporation. This questionnaire is submitted in order to obtain information necessary for compliance with the Policy, and the federal disclosure requirements of the System under the Medicare and Medicaid programs.

As an Officer, Director or Committee Member Person, you are required to read, understand and comply with the Policy and associated policies. If you have questions regarding the Policy, please contact Charles V. Sederstrom, General Counsel (402-343-4425). All terms used in this questionnaire have been defined in the Policy.

It is important to remember in answering this questionnaire that an affirmative answer should be given in an affirmative response is appropriate to either you or to any of your Family Members.

Please respond to all of Questions 1 through 9 by clicking on the appropriate box and/or providing documentation in the gray expandable field.

Outside Concerns

1. Do You or a Family Member hold any positions whether as a director, employee, consultant or other capacity, in any outside concern from which you have reason to believe that System now makes purchases, obtains services (including the services of buying or selling stocks, bonds or other securities) or with who it has had a previous or ongoing discussions concerning a potential transaction or arrangement, including, but not limited to, lease arrangements or shared facility, employee, or equipment arrangements)?

Yes   No

If yes, please provide a brief description of such positions or material Financial Interests held in the space below.

Control Interests in the System

2. Do You or a Family Member own, directly or indirectly, through business, investment or family, in whole or in part any interest in any mortgage, deed of trust, note or other obligation which is secured in whole or in part by the System or any institutions affiliated with the System, or any assets of the institutions affiliated with the System?

Yes   No

Other Providers

3. Are You or a Family Member an employee, officer, director, consultant to or partner of any other Provider?

Yes   No

If yes, please list in the space below the name(s) of the other Provider(s) and the position(s) you or Family Member hold.


4. Do You or a Family Member own directly or indirectly, through business, investment or family, any capital stock, profits, or interest in any other Provider?

Yes   No

5. Do You or a Family Member own directly or indirectly, through business, investment or family, any capital, stock, profits, or other interest in any entity which in turn owns capital, stock, profits, or interest in any other Provider?

Yes    No

6. Do You or a Family Member own in whole or in part any interest in any mortgage, deed of trust, note or other obligation which is secured in whole or in part by any other Provider or its assets?

Yes    No

7. If You or a Family Member are now or contemplate being engaged in activities or circumstances not referred to in your prior answers, from which a potential Conflicts of Interest Transaction or Financial Interest might occur, please list and briefly describe those activities or circumstances below.

None   Explanation

Disqualified Person

8. As defined in Policy #000.046, are you a Disqualified Person?

Yes   No

If Yes, which section of the Policy defines your circumstances?

General

9. Many other circumstances which could not possibly be listed here could give rise to a potential Conflicts of Interest Transaction.  These would include any instances where the actions or activities of any individual on behalf of the System also involve the obtaining of an improper gain or advantage, or an adverse effect on the System’s interests.

For example, to accept gifts, excessive entertainment, or other favors from any outside concern that does, or is seeking to do, business with, or is a competitor of the System, or who could otherwise profit from information available to an Interested Person of the System under certain circumstances might give rise to a claim that such action was intended to influence or possibly would influence an individual in the performance of his or her duties.  This does not include the acceptance of items of nominal or minor value (less than $50 annually) that are clearly tokens of respect or friendship and not related to any particular transaction or activity of the System.  Also, to disclose or use information relating to the System’s business for the personal profit or advantage of an individual or his or her immediate family would constitute a Conflicts of Interest Transaction.  Full disclosure of any such situation or any other circumstances in doubt at this time and as it should occur in the future should be made to avoid any possible appearance of conflict and permit an impartial and objective review of the circumstances. 

SUBMITTING ELECTRONICALLY – Must be received by January 31, 2009

You may return your Conflicts of Interest Annual Disclosure Statement electronically by typing your full legal name in the Print Name and signature fields, the current date and your e-mail address. When returned by electronic mail, your type name will be acceptable as your signature. Save the completed form to your personal files and e-mail the completed form back to Kelli.Reischl@alegent.org. Completed forms submitted electronically must originate from your own e-mail address.

SUBMITTED BY MAIL – Must be received by January 31, 2009

You may return your completed Conflicts of Interest Annual Disclosure Statement by mail. Return your signed, completed form to Kelli Reischl, Alegent Creighton Health, McAuley Center, 12809 W Dodge Road, Omaha, NE 68154.