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IU - SPEA-H 341 - Study Guide - Final

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Schools > Indiana University > OTHER > SPEA-H 341 > IU - SPEA-H 341 - Study Guide - Final

IU - SPEA-H 341 - Study Guide - Final

School: Indiana University
Department: OTHER
Course: Legal Aspects of Healthcare Administration
Professor: James Whitlatch
Term: Fall 2017
Tags: Healthcare and Law
Name: Legal Aspects of Healthcare Final Review
Description: Notes for the final exam.
Uploaded: 12/10/2017
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background image Healthcare Law  Final Exam Review December 14 2017 (8 am)  Exam Details:  Book Chapters 6, 12, 15, 11, and 14  Mostly Lecture Notes  Book is fair game too Chapter 6: Organization & Management of Corporate Healthcare Institution Types of Organizations:  Sole Proprietorship: an individual assumes all organizational roles (employer, 
employee, and owner) 
o Bears full risk of enterprise  Partnership: two or more individuals agree to share in the rewards and risks of an
o General Partnership: partners usually (1) receive equal shares of profits or losses (2) Equal voting rights, and  (3) Are personally liable  Limited Partnership: provides limited liability to some investors  General Partners: hold the managerial powers;  NOT immune from Liability  Limited Partners: share in profits; do NOT participate in day-to-day 
Immune from liability  Joint Venture: special form of partnership created by contract for a specific 
purpose and for a limited duration 
o Different b/c participants are not agents of each other  Corporation: organization formed with governmental approval to act as an 
artificial person to carry on business, which can sue or be sued 
o Can issue shares of stock (unless non-profit)  Limited Liability Company: flexible form of enterprise that blends elements of 
partnership and corporate structure 
Types of Healthcare Providers:  Hospitals: public, private, profit  o PPO  Preferred Provider Organization 
o IPA  Independent Practice Association 
o MSO  Managed Services Organization 
o HMO  Health Maintenance Organization 
o IDS  Integrated Delivery System 
Long Term Care Facilities  Nature of Corporations
~ (Generally) 
Person under the law… 
Legal entities distinct from individuals 
background image Receive protection of the fifth due process clause and the 14 th  amendment equal  protection clause  Has ability to acquire, own, and dispose of property and can be sued and sue  ~ Citizens United ~ landmark supreme court case that held spending is a form of 
protected speech under the First Amendment, and the government may not keep 
corporations or unions from spending money to support or denounce individual 
candidates in elections 
Corporations can lobby  Formation of Corporation  Incorporators: individual, corporation, or association responsible for the process 
of forming a new corporation 
o Prepare, sign, and file the articles of incorporation with the secretary of state  Articles of Incorporation: requirements vary state-to-state but typically include:  o Name of corporation
o Address
o Name of registered agent 
o Name and addresses of incorporators
o Duration of corporate existence
o Purpose of Corporation
o Names of Initial Members of the board of directors
o Number and classification of shares of stock or designation of members 
By-Laws: Internal rules for the internal management and governance of 
o Defines the rights and duties of the corporate members or shareholders,  powers and responsibilities of the governing body and the rights and duties 
of major corporate officers 
Certificate of Incorporation  Not-For-Profit & For-Profit Corporations are governed by separate statutes  For-Profit  owned by shareholders, who are entitled and expected to receive 
dividends from the earnings of the corporation and to share in assets should the 
corporation be dissolved 
Not-For-Profit  cannot distribute earnings for the private gain of an individual  o Must use profit for institutional purposes (motives of ethical, moral, or social  purpose predominate and profit is secondary concern)  o Purpose must be stated in the articles of incorporation  Not-For-Profit Status – required for tax exemption  Upon Dissolution of nonprofit, assets must be distributed according to state law 
and the articles of incorporation 
Governing Board of Healthcare Institution:  Functions o Develop policy and strategic plan
o Appoint Medical Staff and Senior Administrators
o Delineate Clinical Privileges
o Peer Review
Committee Structure and Execution of Policy
background image o Relationship between Board and Administrators and Medical Staff
o Delegation of Authority
Board should not be involved in day-to-day operations, but it must 
have mechanisms in place to hold its agents responsible
o Board is Supreme Authority within Corporation
o Independent action by one or even by a majority of the board will not bind 
the corporation Composition & Meetings of the Board  o Size: determined by the articles of incorporation / bylaws  Nonprofit members ordinarily elect the governing board or board 
selects new directors 
o Election of Board In membership-type nonprofits, members usually elect governing 
In a nonprofit without members, board may select new directors (Self-
Public official or body may also appoint board members  o Meeting Requirements Proper notice must be given to each board member Location of meeting within board’s discretion, absent bylaw, statute, or
charter to the contrary 
o Minutes: written record of meeting 
o Quorum: required number of board members present to hold a meeting 
Usually stated in bylaws  Default Rule: majority  o Proxy: may not vote by proxy absent a statute or bylaw stating otherwise  Fiduciary Duties of a Governing Board o What is a fiduciary “trust and confidence”? Special responsibilities owed to the corporation, its members (if any), 
and its intended beneficiaries by directors and trustees
o Duty of Loyalty Interest of Corporation Comes First Self-Dealing: no trustee is permitted to gain personally, to accept 
bribes, or to compete with a corporation
Conflicts of Interest: every hospital should have a conflicts-of-interest 
policy (including disclosing gifts, gratuities, and lavish entertainment 
offered by companies doing business with hospital)
o Duty of Responsibility Exercise Reasonable Care, Skill, and Diligence Duty to Direct, Not Rubber Stamp Business Judgment Rule: legal principle that makes officers, directors, 
managers, and other agents of a corporation immune from liability to 
the corporation for loss incurred in corporate transactions when 
sufficient evidence demonstrates that the transactions were made in 
good faith
Liability for Breach of Duties o Corporate Veil: provides protection from legal and financial liability
o Piercing the Veil: places liability on the owners of the corporation
background image Three Elements Corporation’s owners dominated it completely (means 
domination of the finances, business practices, and corporate 
policies to such an extent that the entity has no mind or will of its
The owners used their control of the corporation to commit fraud 
or perpetuate a wrong, violate a statutory or other duty, or 
commit a dishonest of unjust act
Corporate control was the proximate cause of the injury that is 
the subject of the suit
o Personal/Joint and Several Liability Protection against Liability  o Act in Good Faith
o Insurance
o Indemnity in By-Laws or Articles
Indemnification: corporate reimbursement of a trustee’s personal 
expenses in the event the trustee faces a civil suit or criminal 
prosecution for alleged violation of fiduciary responsibilities
o Statutory Protection Chapter 12: Taxation of Healthcare Institutions Political Climate Are not-for-profit hospitals any different than for-profit hospitals? For-Profit vs. Not-for-Profit Charitable corporations are not-for-profit, but not all not-for-profit organizations are
Tax Exemption
No taxes on income earned from exempt activities.  o Can be tax on unrelated income from non-exempt activities. Qualifying for Exemption 501(c)(3) o "Operated exclusively for religious, charitable, scientific, testing for public  safety, literary, or educational purposes,   . . . no part of the net earnings of 
which inures to the benefit of any private shareholder or individual, no 
substantial part of the activities are for propaganda, to influence legislation 
or intervene in any political campaign.”
Organizational test. Documents must meet requirements for 
Operational test. Is organization operated primarily for exempt 
Exempt Purposes: "To benefit community“ Private Benefit  o No benefit to private individual. 
o No dividends. 
o Reasonable compensation to carry out exempt purposes.
Lobbying on behalf of or in opposition to candidates for public office prohibited o No substantial portion of activities for campaigning, but absolute prohibition  on electioneering

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School: Indiana University
Department: OTHER
Course: Legal Aspects of Healthcare Administration
Professor: James Whitlatch
Term: Fall 2017
Tags: Healthcare and Law
Name: Legal Aspects of Healthcare Final Review
Description: Notes for the final exam.
Uploaded: 12/10/2017
15 Pages 101 Views 80 Unlocks
  • Better Grades Guarantee
  • 24/7 Homework help
  • Notes, Study Guides, Flashcards + More!
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