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New York Health Law

Shareholder Liability for the Misconduct of Others: What is “Direct Supervision and Control?”

Posted in Audit and Compliance, Corporate and Business, Hospitals and Health Care Facilities, Physicians and Other Licensed Professionals

Physicians often practice through a limited liability entity to shield the physician from practice liabilities. In New York, such entities may take the form of a professional service corporation, professional limited liability company, or professional limited liability partnership. Regardless of the type of entity selected, professionals in New York remain “personally and fully liable and accountable for any negligent or wrongful act or misconduct committed by him or her or by any person under his or her direct supervision and control while rendering professional services on behalf of [the entity],” See NY BCL§1505(a); NY LLCL §1205; N.Y. PTR. LAW § 26(c).

The issue of whether certain alleged tortfeasers were under a physician-shareholder’s “direct supervision and control” was recently presented in Schaefer v. Mackinnon, 117235/09, NYLJ 1202669507383, at *1 (Sup., NY, Decided August 27, 2014). In Schaefer, Plaintiffs Frank Schaefer and his wife, Maria Schaefer, brought a medical malpractice suit against Broadway Cardiopulmonary, P.C. and its four shareholders for injuries Mr. Schaefer sustained during a cardiac stress test. Additional defendants include the alleged tortfeasers, David Mackinnon, M.D., a non-shareholder physician, a medical assistant and a medical technologist, all employees of Broadway Cardiopulmonary, P.C.  According to the record, the test was ordered by Dr. Mackinnon, but Dr. Mackinnon did not interview or examine Mr. Schaefer prior to or during the course of testing. The test was administered by the medical technologist who apparently left the room during testing. Mr. Schaefer passed out and fell resulting in injuries.

The defendant shareholders moved for summary judgment arguing they did not directly supervise or control the alleged tortfeasers during the rendering of professional services as the test was performed by the other named defendants and not the shareholders. Plaintiffs opposed the motion stating the shareholders failed to implement guidelines, controls and procedures for proper and safe testing.

In analyzing the issue, Justice Joan B. Lobis looked to the Appellate Divisions ruling in Wise v. Greenwald, 208 A.D.2d 1141 (3rd Dep’t 1994).

“In Wise, the appellate court considered the liability under Section 1505(a) of the Business Corporation Law of a shareholder of a dental practice, whose employee dentist allegedly negligently extracted Wise’s tooth. Indicia of liability included the shareholder’s hiring responsibilities, setting hours of operation, evaluation of employees, and whether any intermediary supervisor lay between the shareholder and employee whose actions were at issue. Id. at 1142. Applying these factors, the Wise Court affirmed the denial of the shareholder’s motion for summary judgment. Id. at 1143.”

Turning to the case at hand, Justice Lobis looked to the testimony of the defendants finding that

• the four shareholders met at least every two months to discuss practice operations;

• all four shareholders signed the office lease, approved of the imaging machine at issue, and ordered medical and office supplies;

• all four shareholders hired and/or evaluated Dr. Mackinnon and the defendant medical technologist;

• one of the shareholders regularly discussed operational issues and staff scheduling with Dr. Mackinnon;

• the shareholders had the power to terminate employees;

• the medical technologist testified he reported directly to one of the shareholders yet he had not been trained or given procedures to follow in operating the imaging machine, he failed to monitor blood pressure, respiration or pulse before the resting portion of the stress test and he was not instructed to remain in the room with the patient during the equipment’s operation.

Based on the record, Justice Lobis found that genuine issues of material fact remain for a jury to determine whether the shareholders are liable for the actions of other persons at the practice.

Direct supervision and control by a shareholder-physician goes beyond supervision of the professional care provided. Shareholder-physicians who take on administrative oversight  responsibilities can be liable if they fail to properly train and control persons rendering professional services for the practice.

October Jury Trial in EDNY False Claims Act Case

Posted in Fraud and Abuse and Stark, Hospitals and Health Care Facilities, Litigation, Medicaid and Medicare, Physicians and Other Licensed Professionals

False Claims Act cases do not often go to trial, so they are noteworthy when they do.  EDNY Judge John Gleeson has scheduled an FCA jury trial in October, United States ex rel. Ryan v. Lederman.  Earlier this year, the Court granted summary judgment to the government in part and scheduled the remaining issues for trial. 

Dr. Gilbert Lederman was Director of Radiation Oncology at Staten Island University Hospital (“SIUH”), where he performed various radiological procedures, usually for cancer treatment.  One such treatment was stereotactic radiosurgery, a form of radiation therapy that focuses high-power energy on a small area of the body.  Elizabeth Ryan filed a qui tam action in 2004, alleging that Lederman and SIUH had improperly billed the federal government for health services under Medicare, because stereotactic radiosurgery was not “reasonable and necessary.”  The government intervened in 2008.  SIUH had also been a defendant in the case, but settled all claims against it later that year for $25 million. 

Under local medical review policies (“LMRP”), now called “local coverage determinations,” treatment of below the neck diseases such as lung carcinoma with stereotactic radiosurgery was considered “investigational.”  The government alleged, and Lederman did not dispute, that he had submitted claims for at least 300 below-the-neck stereotactic radiosurgeries.   

Summary Judgment Establishes Claims Were False; Knowledge Issue Set For Trial

In its summary judgment decision, the Court first determined that the claims were “false” on two grounds.  Lederman had submitted false claims because the LMRPs excluded coverage for stereotactic surgery performed below the neck.  Lederman argued that the LMPRs provided only guidance, but the Court held that local coverage determinations are mandatory for the areas they cover.  In addition, the Court held that Lederman had misrepresented the procedures performed, because they were not coded as below-the-neck procedures. 

The False Claims Act requires a knowing submission of a false claim, however, so the Court next looked to whether Lederman had acted “knowingly.”   The Court found the government’s case persuasive, but not sufficient for summary judgment, necessitating a trial on that issue. 

With respect to common law claims of payment based on mistake of fact and unjust enrichment, however, there is no knowledge element, so the Court granted summary judgment to the government on those claims. 

The Court scheduled a trial on the issues of: (1) whether Lederman acted with a culpable mental state for FCA liability, and (2) the amount of damages on the government’s common law claims, and possibly also the FCA claims. 

Court Finds Jury Trial Appropriate, Bifurcates Liability and Damages

Recently, Judge Gleeson addressed two procedural issues in advance of trial, Lederman’s request for a jury trial and the bifurcation of liability and damages. 

The relator’s complaint contained a jury demand, but the government’s complaint-in-intervention did not.  Lederman did not demand a jury in answering the government’s complaint.  The Court held that he could rely on the relator’s jury demand, rejecting the government’s argument that, once it intervened, the original complaint ceased to operate and it could not be bound by the relator’s jury demand. 

Earlier this month, the Court decided that it would bifurcate the trial, trying first the issue of Ledermen’s mental state for FCA liability, and then the issue of damages on the common law claims and, if necessary, on the FCA claims.  The jury trial is scheduled for October 20.

Failure To Promptly Return Overpayments Arising From Computer Glitch Leads To False Claims Act Complaint

Posted in Audit and Compliance, Fraud and Abuse and Stark, Litigation, Medicaid and Medicare, OMIG and OIG

At the end of June, the U.S. Attorney’s Office in Manhattan filed a False Claims Act complaint against Beth Israel Medical Center, St. Luke’s-Roosevelt Hospital Center, and Continuum Health Partners, United States v. Continuum Health Partners, Inc., alleging that defendants had knowingly failed to return overpayments owed to Medicaid arising out of a computer glitch. 

In 2010, the Affordable Care Act amended the False Claims Act to provide that overpayments of federal funds must be paid within 60 days after they are identified, and that the failure to timely return an overpayment constitutes a reverse false claim, subjecting a party to liability for three times the amount of the claim and a penalty of between $5,500 and $11,000 for each claim. 

Under the Medicaid regulations applicable to this case, the defendant providers were not permitted to receive additional payments from Medicaid above amounts paid by a managed care organization.  A computer glitch caused defendants to erroneously seek additional payments from Medicaid. 

According to the complaint, defendants became aware of the problem in September 2010, when the State Comptroller identified a small number of improper payments.  A review by defendants in February 2011 revealed a more significant problem, involving approximately 900 claims totaling over $1 million that were wrongly submitted to Medicaid.  Nevertheless, defendants only repaid the small amount of claims identified by the Comptroller. 

The employee who identified the significant overpayment problem was terminated, and later filed the qui tam case in which the government intervened.  The State Comptroller continued to investigate, and defendants made certain payments when they were identified by the Comptroller.  The complaint alleges that defendants dragged their heels on making all the repayments, however, and sought to conceal the true extent of the problem.  Defendants only finished returning the overpayments in 2013, more than two years after they were identified.  In addition, many of the repayments were not made until after June 2012, when the government issued a Civil Investigative Demand to defendants. The government now seeks to recover treble damages and a penalty of up to $11,000 for each claim. 

There is no question that the overpayments in this case resulted from a mistake, a computer glitch.  Nevertheless, this case shows that the government will aggressively seek to recover False Claims Act damages and penalties for the failure to timely return overpayments once they have been identified, even if the original overpayment was due to mistake or inadvertence rather than fraud.  The allegations of this complaint seem particularly egregious, with defendants allegedly being aware of significant overpayments and making only minimal efforts to repay the government.  The law, however, only requires a failure to return an overpayment within sixty days after identification for False Claims Act liability to attach. 

This case highlights a serious problem for providers who become aware that they may have been overpaid on claims to the United States.  In that situation, providers will have to promptly assess whether an overpayment has in fact occurred, and then determine what next steps are in order to avoid False Claims Act liability.  The government can be expected to aggressively prosecute these cases.  In addition, False Claims Act investigations into allegedly improper claims will likely include investigation into whether providers were aware of problems with certain claims, and whether they let more than sixty days lapse before addressing them.

A Refresher on Noncompetes for Health Professionals

Posted in Compensation and Employment, Corporate and Business, Hospitals and Health Care Facilities, Litigation, Physicians and Other Licensed Professionals


A recent article in the New York Times examined the growth of noncompete agreements, noting “Noncompete clauses are now appearing in far-ranging fields beyond the worlds of technology, sales and corporations with tightly held secrets, where the curbs have traditionally been used. From event planners to chefs to investment fund managers to yoga instructors, employees are increasingly required to sign agreements that prohibit them from working for a company’s rivals.”

Health professionals, and especially physicians, have for countless years been required to execute noncompetes and other restrictive covenants as part of their partnership agreements or employment agreements with professional practices, healthcare facilities and institutional providers.  While nothing new, noncompetes and restrictive covenants continue to be an important consideration in any professional partnership or employment situation.

There are certain key points which the parties must carefully consider regardless of which side of the transaction they are on.  New York courts will consider the following when determining the enforceability of a noncompete or restrictive covenant:  (a) the practice/employer’s need to protect legitimate business interests (such as patient lists, payor contracts and payment rates, and the terms of its business arrangements), (b) the individual/employee’s need to earn a living, (c) the public’s need to access the services of physicians and other health professionals, and (d) the reasonability of the time, scope and geographic areas restricted by the agreement. 

Common restrictions include non-solicitation of a practice’s patients and employees for a period of time following separation; prohibition on the practice of medicine (or the individual’s specialty) within a certain mile radius of the office or practice site(s) (or within certain zip codes) for a period of time.  Moonlighting during the term of employment or affiliation may also be restricted.  Parties to these agreements may consider ways to make the restrictions less burdensome, which could include severance payments or full or partial release from the restrictions if the individual is terminated without cause or his/her employment agreement is not renewed.  Commonly, a practice or employer may be entitled to injunctive relief (court order) and liquidated (monetary) damages for violations of the restrictions. 

Employers and employees should recognize that reasonable restrictions are enforceable, but also that litigation over enforceability can be expensive and time-consuming.  The parties to an employment agreement for a cardiologist might recognize that a restriction on practicing cardiology for 6 months within 5 miles from the practice’s offices in Uniondale may be considered reasonable and likely to be enforced, while a restriction on the practice of all medicine for 5 years in the counties of Nassau, Suffolk and Queens may not be considered reasonable; they can negotiate the restrictions accordingly.

Discussion of noncompetes and restrictive covenants should be part of an overall discussion with competent legal counsel regarding potential employment and partnership agreements.  The restrictions should be carefully reviewed and understood before executing agreements, as their impact may be felt by the parties for years after execution of the agreement.

Court of Appeals Upholds Comptroller Audit Of Non-Participating Provider’s Billing Records

Posted in Audit and Compliance, Corporate and Business, Fraud and Abuse and Stark, Hospitals and Health Care Facilities, Insurance and Managed Care, Litigation, OMIG and OIG

medical-record-auditThe New York Court of Appeals decided last week, in Handler v. DiNapoli, that the State Comptroller has the authority to review the billing records of a non-participating provider receiving funds from the State’s primary health benefit plan, even though the payment of state funds is made indirectly. 

New York State provides health insurance to its employees, retirees, and their dependents.  The plan at issue, the Empire Plan, is funded by New York State.  United Healthcare Insurance of New York (United) contracts with the State to process and pay claims by Empire Plan beneficiaries.  United processes and pays the claim, and then the State reimburses United and pays it an administrative fee.  

When non-participating providers provide a service to Empire Plan members, they charge market rates and bill the patient directly.  United reimburses the patient for 80% of the actual fee or the “customary and reasonable charge” for the service, whichever is lower.  The patient must then pay these funds to the provider  and also pay the remaining 20%.  Non-participating providers have a legal duty to collect co-payments from the patients.  

The New York Comptroller sought to examine the billing records of non-participating providers to determine if they had waived Empire Plan member co-payments.  The Court provided an illustration of how failure to collect the co-payment “inflates a claim’s cost and adversely impacts the State’s fisc.”  If a non-participating provider charges $100 for a service, receives $80, and does not collect the $20 co-payment, then the service was provided for $80.  In that case, the State should have only paid $64, and has overpaid by $16. 

The providers gave the Comptroller access to their records upon request.  After auditing a random sampling, the Comptroller concluded that the providers had routinely waived the co-payment, extrapolated the sample amount to the universe of claims, and sought recovery of overpayments of $787,000 in one instance and $900,000 in another.  The providers then filed suit, challenging the Comptroller’s authority to audit their records because they did not receive state funds directly, but rather through United. 

The Court of Appeals upheld the Comptroller’s authority, stating that the fact that a third party is a conduit for the funds does not change the character of the state funds.  The Court found that limiting the Comptroller’s authority would make its task of auditing state funds impossible; there would be no other way to determine whether providers had required a co-payment.  The Court also noted that the providers certainly knew that the payments were state funds and required the collection of co-payments. 

This decision confirms that the Comptroller has wide authority to audit when state funds are at issue, even where the state does not contract with the entity being audited.  Litigants will have to try to fit themselves into some of the areas where the Court states the Comptroller may not act, such as performing the administrative duties of another State agency or overseeing activities that, while financial in nature, have no impact on the state fisc.

False Claims Act Complaint Dismissed Where Defendant Followed State Regulations

Posted in Audit and Compliance, Fraud and Abuse and Stark, Litigation, Medicaid and Medicare, OMIG and OIG

DOE-logoA recent SDNY False Claims Act decision provides strong support for the argument that a false claim may not be based on conduct that follows federal or state rules and guidelines. 

In United States ex rel. Doe v. Taconic Hills Central School District, relators alleged that the New York City Department of Education (“DOE”) and several school districts submitted fraudulent claims to Medicaid for case management services provided to disabled children when defendants had already received funding under the Individuals with Disabilities Education Act (“IDEA”). 

New York State agencies receive federal grants under the IDEA, and distribute the funds to public school districts for the development of special education services.  In addition, Medicaid provides federal funds to states for Targeted Case Management (“TCM”) services furnished to school children.  The New York State Education Department issues a handbook that describes the type and scope of TCM services covered by Medicaid. 

Relators alleged that defendants billed Medicaid for TCM services that had already been funded by IDEA grants.  Relators argued that the school districts did not provide services beyond development and implementation of an Individualized Educational Program (“IEP”), which had been funded under the IDEA, and that billing Medicaid for those services was the  presentation of a false claim. 

Judge Crotty stated that the federal government approved New York’s Medicaid program, and it was then up to New York State to determine the standards and procedures for claims submission.  The state provisions authorized schools to bill Medicaid for IEP reviews, regardless of whether they had received any IDEA funding.  If there was a conflict between federal and state Medicaid regulations, the Court said, that was the fault of New York State.  “[I]t is not appropriate to hold DOE liable for submitting a ‘false claim’ when it complied with all applicable regulations and therefore did absolutely nothing wrong.”

The Court questioned whether federal law is violated when a school bills Medicaid for services that also received IDEA funding.  Even if it were a violation, however, the Court held that relators failed to sufficiently allege that defendants acted knowingly.  The DOE billed Medicaid “under the exact procedures set up by the State. . . .  As a result, it would have been impossible for the DOE to know that billing Medicaid – using rate codes provided by the State and approved by the Federal government – violated federal law.” 

The Taconic Hills decision provides defendants with a strong argument that reliance on federal or state guidance can defeat a False Claims Act case by undermining the requirement that a false claim be presented with knowledge of its falsity.

Private Right of Action Recognized Under New York’s Prompt Pay Law

Posted in Corporate and Business, Hospitals and Health Care Facilities, Insurance and Managed Care, Litigation
Hands holding U.S. currencyClaimants have a private right of action against insurers under New York’s Prompt Pay Law, N.Y. Ins. Law 3224-a, according to the Appellate Division in Maimonides Med. Ctr. v. First United Am. Life Ins. Co., decided earlier this month.   
 
Under the Prompt Pay Law, an insurer must pay undisputed claims within 45 days, and within 30 if electronic submission is received.  The insurer must pay any undisputed portion of a disputed claim within 30 days and notify the policyholder, covered person, or healthcare provider of the reason the insurer is not liable.  The insurer may also request additional information to determine its potential liability.  A violation of the Prompt Pay Law obligates the insurer to pay the full amount of the claim plus 12% interest. 
 
Maimonides Medical Center billed First United American Life Insurance Co. over $19 million for medical services, but First United paid only slightly more that $4 million.  Maimonides sued under the Prompt Pay Law, and First United argued that the statute did not provide a private right of action, but could only be enforce by the Superintendent of Insurance. 
 
The Appellate Division, Second Department held that the claimants including health care providers have a private right of action to sue under the Prompt Pay Law.  The parties did not dispute the first two requirements for finding a private right of action, that plaintiff is one of the class for whose particular benefit the statute was enacted, and that recognition of a private right of action would promote the legislative purpose.  As to the third, the Appellate Division held that a private right of action would be fully consistent with the legislative scheme.  The Court found that the Prompt Pay Law “does impose specific duties upon insurers and creates rights in patients and health care providers, and thus militates in favor of the recognition of an implied private right of action to enforce such rights.”  The Court noted that the legislative history of the statute reflected its purpose in protecting health care providers and patients from late payment, and not as a mechanism for preventing harm to the public in general.  
 
This decision gives health care providers and patients a powerful tool against recalcitrant insurers.  First United will likely seek to bring this issue before the Court of Appeals, and we may see a definitive ruling from New York’s highest court on this important issue. 

United States Provides Supreme Court With Its View of False Claims Act Pleading Standard

Posted in Fraud and Abuse and Stark, Litigation, OMIG and OIG

On Tuesday, the United States filed an Amicus Curiae Brief on a closely watched petition for certiorari.  The Department of Justice articulated the government’s view of the proper standard for pleading fraud in a False Claims Act case.  The petition in United States ex rel. Nathan v. Takeda Pharms. N. Am. asked the Court to resolve the Circuit conflict on whether an FCA relator must identify specific false claims with particularity to satisfy the pleading requirement of Fed. R. Civ. P. 9(b).  The government’s brief ultimately argued that the Supreme Court should deny certiorari and let the lower courts continue to hash this issue out. 

In Nathan, the relator alleged the defendant company promoted one of its drugs for off-label uses, and argued that allegations of a fraudulent scheme supporting the inference that false claims were presented to the government is sufficient.  The Fourth Circuit affirmed the dismissal of the complaint, holding that when a defendant’s actions “could have led, but need not necessarily have led, to the submission of false claims, a relator must allege with particularity that specific false claims were presented to the government for payment.”  Nathan, 707 F.3d 451 (4th Cir. 2013). 

Relator filed a petition for certiorari, arguing that the Supreme Court should resolve a split among the Circuits.  The FCA requires a false claim for payment to the government; it is not enough to simply allege a fraudulent scheme.  Some courts have therefore held that particular allegations of the false claims presented to the government are necessary, something often not within relator’s knowledge.  Other courts have found details of a fraudulent scheme and reliable indicia leading to an inference that claims were submitted to be sufficient. 

The Supreme Court raised speculation that it would take this case in October 2013, when it asked the United States to file a brief stating the government position.  The United States had previously declined to intervene.  

The government’s brief recognized that there is a split in the Circuits, with some courts having a per se rule requiring specific allegations of particular false claims.  The government argued that this approach is wrong, and that the correct rule is that “a qui tam complaint satisfies Rule 9(b) if it contains detailed allegations supporting a plausible inference that false claims were submitted to the government, even if the complaint does not identify specific requests for payment.” 

The government concluded, however, that the Court should deny the petition, for a few reasons.  First, it argued that the complaint was dismissed below not just for lack of specificity, but also for lack of plausibility, so the case should not go forward under any 9(b) standard.  Also, even in Circuits holding to the per se view, the government found cases taking a more relaxed view, so it argued that the disagreement among the lower courts is uncertain and needs further development. 

On why the per se rule is wrong, the government referenced the role Congress intended relators to play in the detection and remediation of fraud against the United States, and argued that a rigid rule hinders that role.  The government also noted that it has any needed claim information, so a per se rule improperly attaches dispositive significance to the relator’s awareness of details that are already known to the government.  This highlights the fact that a per se rule requiring particularity of claim information is typically not a problem for the government when it intervenes, since it has the claim information.  It is more a problem for the relator in a declined case.  This could be one reason that the government does not see a strong need for the Supreme Court to decide this issue, in addition to possible concerns that a ruling could sweep broadly to other FCA issues.   

The Supreme Court now has the government’s position on the proper pleading standard.  The United States does not want the Supreme Court to grant certiorari, but False Claims Act practitioners will be watching closely to see if the Justices decide that they do want to take the case and decide the Circuit split.

HHS-OIG 2014 Work Plan Focuses On Health Insurance Transitions

Posted in Audit and Compliance, Fraud and Abuse and Stark, Medicaid and Medicare, OMIG and OIG, Regulatory Issues
At the end of January, the Office of Inspector General for the Department of Health and Human Services (“HHS-OIG”) released its 2014 Work Plan.  The Work Plan summarizes new and ongoing reviews and activities that HHS-OIG plans to pursue with respect to HHS programs and operations in the coming year. 
 

Senior HHS-OIG officials outlined agency goals in a video presentation entitled “OIG Outlook 2014.”  In OIG Outlook 2014, HHS-OIG Inspector General Daniel Levinson described “a period of great transition in health care, as insurance marketplace models are introduced, and as payment models transition from volume to value-based.  These transitions intend to produce higher quality of care at lower costs.”  The Inspector General said that agency oversight of new health insurance marketplaces would focus on four primary areas of risk: payment accuracy, eligibility controls, contracting oversight, and privacy and security issues.  He also said the agency would continue to focus on the use of health information technology, including the use of electronic health records. 

Gary Cantrell, Deputy IG for Investigations, outlined the issues facing his investigators for 2014.  Chief areas of concern are prescription drugs and home based services.   With prescription drugs, Cantrell said that in addition to pain medication abuse, which the agency has been combatting over the past few years, investigators have been finding cases of “pure financial greed” involving drugs that are not necessary or sometimes not even dispensed.  In home health and personal care, services are often not being provided, or services are delivered but are not necessary.  The patient harm that often accompanies financial fraud remains a strong focus of administrative efforts.  Cantrell said that investigators would also be monitoring the transitions in health insurance, with an emphasis on identity theft and educating consumers so they are not victims of fraud schemes. 
 
An appendix to the Work Plan identifies work-in-progress and planned reviews for 2014 related to the Affordable Care Act.  For 2014, ACA oversight focuses on operation of the new health insurance marketplaces and the expanding Medicaid program.  Increasingly, HHS-OIG resources are likely to be spent over this year and the coming years on oversight and investigation of the healthcare and insurance industry response to ACA.      
 

The New York Nonprofit Revitalization Act of 2013 – What NFPs Need to Know

Posted in Audit and Compliance, Corporate and Business, Regulatory Issues

Farrell Fritz partner Lou Vlahos recently issued an important advisory report addressing the New York Nonprofit Revitalization Act of 2013 (the “Act”). Nonprofit corporations in New York will need to comply with many of the Act’s provisions by July 1, 2014.

Major new requirements include:

-the adoption of conflict of interest and whistleblower policies;

-creation of an audit committee composed of independent directors; and 

-adherence to guidelines regarding related party transactions.  

Many of these provisions turn best governance practices into statutory mandates.

Nonprofits are advised to consult with legal counsel familiar with the Act’s requirements.  New policies may need to be developed, and corporate bylaws may need to be amended, in order to comply with the new law.