President Obama's Executive Order Establishes White House Office of Health Reform

On April 8, 2009, President Obama signed an executive order establishing a White House Office of Health Reform (OHR) that will spearhead the Obama Administration's policy agenda for health care. The principal functions of the OHR include providing leadership for and coordinating the development of the Administration's agenda; working with Congress, various executive departments and agencies, and State, local and community policymakers and public officials; and monitoring the implementation of the agenda.  If requested by the OHR Director, executive departments and agencies are required to designate a liaison to work with the OHR.

The executive order also requires the Secretary of Health and Human Services to establish its own Office of Health Reform within the Department of Health and Human Services to coordinate closely with its White House counterpart.

President Obama has appointed Nancy Ann Min DeParle as the first Director of the OHR. During the Clinton Administration, DeParle served as the Associate Director for Health and Personnel at the White House Office of Management and Budget and as the Administrator of the Health Care Financing Administration, which is now the Centers for Medicare and Medicaid. Before joining the Clinton Administration, she served as the Tennessee Commissioner of Human Services and worked as a lawyer for a law firm in Tennessee. Since leaving the Clinton Administration, DeParle is reported to have served on the board of directors of various medical device companies, such as Boston Scientific and MedCo.

The Right Ways to Employ Physicians

We invite you to learn more about developing successful Hospital-Physician relationships by reviewing a recent article and case study by Great Boards. Or, feel free to visit www.greatboards.org/newsletter to preview the full Spring 2009 newsletter and case studies.

"Piercing the Corporate Veil" Does Not Apply to Sister Corporation

The Ohio Supreme Court recently issued an opinion in corporate law, which may be of interest to readers that work for health industry participants with multiple entity organizational structures.  Per syllabus, the Court held:

 "A corporation's veil may not be pierced in order to hold a second corporation liable for the corporate misdeeds of the first when the two corporations have common individual shareholders but neither corporation has any ownership interest in the other corporation."

2008 Form 990: Related Organizations

In the 2008 Form 990 instructions, the I.R.S. recommends a sequencing list for completing the core form and schedules.  Chronologically second on this list, after completing some basic information on the core form, the I.R.S. recommends determining the filing entity’s “related organizations”?

What is a related organization?

The I.R.S. definition, simplified, characterizes a related organization as an organization that stands in a parent, subsidiary, brother/sister, and/or supporting/supported relationship with the filing organization.  Disregarded entities (for example, single member LLCs) are treated as part of the filing organization and not as related organizations.

If you are not directly responsible for preparing Form 990, why might you care about this definition of related organization?

The related organization concept is significant to various disclosures in separate parts of the 2008 Form 990.  By way of example:

(1)  If you are a listed person in Part VII, Section A of the core form (i.e., director/trustee, officer, key employee, or highest compensated employee), compensation from a related organization may be reportable on the core form or Schedule J.  (We will save discussion on listed persons and compensation for another day.)

(2)  Transactions with related organizations are transparent under Schedule R of the 2008 Form 990, which, among other disclosures, generally requires identification of related organizations and disclosures on transactions with related organizations.