McDermott recently launched a special edition podcast providing an in-depth discussion of the interplay between State Attorneys General enforcement authority and nonprofit Board of Directors responsibility in the governance and operation of health systems. This special edition of the Governing Health podcast series welcomed four prominent State Attorneys General (AG) to discuss the transformation of the nonprofit health care sector.
Episode one focuses on the jurisdiction of the State Attorneys General, the types of data commonly flagged for review, and the importance of an actively engaged Board of Directors. Here are five key takeaways:
- An actively engaged board is critical to avoid pitfalls. The board of directors must provide strategic oversight and organizational direction to help a nonprofit avoid pitfalls. When a board becomes complacent or overly deferential to executive management, problems almost always arise, said Mark Pacella, Chief Deputy Attorney General of Pennsylvania, Charitable Trusts and Organizations Section. Given the sheer size of the nonprofit sector, state AGs cannot monitor every entity for early warning signs, such as diversions of assets or conflicts of interest. Therefore, “[directors] have to be actively engaged, they have to put themselves in a position to be aware of a nonprofit’s activities, to be aware of the risks,” said Bob Carlson, Assistant Attorney General of Missouri.
- The AG has broad jurisdiction over nonprofit health care matters. In Pennsylvania, for example, court rules of procedure require that the AG’s office be notified of Orphan’s Court proceedings and civil matters that implicate a charitable [...]