Boards and Policies - Establish, Adopt and Approve

Which policies must the Board approve? Does the Board adopt policies or approve them? Is there a difference?

Most of us hear and use these words interchangeably. By and large, common sense does rule the day here. The Compliance Manual and Site Visit Protocol use the terms "establish" or "adopt" for creating a policy for the organization for the first time, and "approve" for updates to an existing policy.

In practice, we find that most health centers limit the number of policies the Board has to adopt or approve to just the policies specifically required by HRSA. Other organizations have the Board adopt and approve all policies for the organization. Regardless, this much is clear, the board minutes and records must clearly demonstrate that, at a minimum, the required policies are presented to the Board for adoption, evaluation, and updates.

For more detail, let’s review three places in the Site Visit Protocol (as of May 31, 2022).

1. Chapter 19 Element B - Board Authority: Required Authorities and Responsibilities

2. Chapter 19 Element D - Board Authority: Adopting, Evaluating, and Updating Health Center Policies

3. Chapter 19 Element E - Board Authority: Adopting, Evaluating, and Updating Financial and Personnel Policies

In 19(b), the Site Visit Protocol requires reviewers to ensure these items are specifically contained in the Board's bylaws:

• Holding Monthly Meetings

• Approving the selection (and termination or dismissal, as appropriate) of the health center's Project Director/CEO

• Approving the health center's annual budget and applications

• Approving health center services and the location and hours of operation of health center sites

• Evaluating the performance of the health center

• Establishing or adopting policy related to the operations of the health center

• Assuring the health center operates in compliance with applicable federal, state, and local laws and regulations

So, first things first, the bylaws must explicitly state that the Board is responsible for establishing or adopting policies related to the operations of the health center. In this case, HRSA is not distinguishing between adopting and approving. Instead, HRSA is requiring that the charter document for the organization empowers the Board of Directors with the authority to oversee and adopt policies in the organization.

In 19(d) an 19(e), the compliance manual reads:

The health center board has adopted, evaluated at least once every 3 years, and, as needed, approved updates to policies in the following areas: Sliding Fee Discount Program (SFDP), Quality Improvement/Assurance, and Billing and Collections.

and

The health center board has adopted, evaluated at least once every 3 years, and, as needed, approved updates to policies that support financial management and accounting systems and personnel policies. However, in cases where a public agency is the recipient of the Health Center Program federal award or designation and has established a co-applicant structure, the public agency may establish and retain the authority to adopt and approve policies that support financial management and accounting systems and personnel policies.

For questions in these sections, reviewers are looking for evidence of Board action in the form of a formal motion and vote to adopt, evaluate and approve polices related to the following in the past 3 years:

• Sliding Fee Discount Policy

• Quality Improvement/Assurance Program

• Billing and Collections (including waivers and refusal to pay)

• Financial Management

• Personnel

We recommend that health centers schedule for these policies to go to the Board at least every three years.

So, what about all the other policies we have?

That is up to you. Beyond these required policies, there is room for a health center to clarify that the Board adopts certain policies but allows the executive staff to approve updates to them. There may even be some policies the Board delegates entirely.

How do we show they have been approved? Do they have to require a signature?

Some organizations add a signature to policies to indicate the most recent updates have been approved. We recommend this as a best-practice, but this is entirely up to the health center and what your internal requirements are. The HRSA requirement is that the approval of the Board is recorded in the Board’s approved minutes.

In summary, there must be documentation in the bylaws of the Board’s authority to adopt and approve policies, the Board’s minutes must confirm the specific policies have been adopted, evaluated, and approved, and the health center should be in compliance with its own standards in approving other policies and finalizing the approval process.