Contracting at the School of Medicine Joshua A. Barwick, J.D. Assistant Dean for Administration Emory University School of Medicine Department Adminis

Transcription

1 Contracting at the School of Medicine Joshua A. Barwick, J.D. Assistant Dean for Administration Emory University School of Medicine Department Administrator Training Program November 3, 2006 This Presentation s Focus Contracts that are not the subject of any formal process (e.g., OSP, GME, OMESA, CME) and are routed through Josh for execution by Dr. Adkison or the Dean 1

2 Purpose of this Presentation Help you be more effective in getting those miscellaneous contracts to signature Main Elements of this Presentation Universe of SOM contracts How do we distinguish miscellaneous contracts that are routed directly to Dean s Office from other contracts? How are those miscellaneous contracts processed? How can you make the process work better for your Department? 2

3 First, some nomenclature. Agreement and contract are synonymous Can be oral or written Should rarely be oral, especially not if involving financial commitments MOU (Memorandum of Understanding) usually means a relatively informal written agreement. The Bottom Line: There is no legal distinction among the terms agreement, contract, and MOU! 3

4 What are the major types of contracts at the SOM? Agreements routed to OSP Faculty consulting agreements Gift agreements GME affiliation agreements Allied health affiliation agreements Medical student affiliation agreements VA MOUs for research Agreements for EPIC transactions Construction/renovation agreements Real estate acquisition/leasing Software licensing and acquisition Miscellaneous agreements OUR FOCUS What agreements get routed to OSP (via Pat Davis in B&F with a SPAF)? Agreements w/ federal, state or local governments But not those with government authorities (e.g., Fulton-Dekalb Hospital Authority, State University Board of Regents) Agreements relating to research (IRB or IACUC approval, EHSO review, identified conflict of interest, research compliance issues) Agreements requiring detailed scientific or financial reporting 4

5 What agreements get routed to OSP? (Cont d) See Proposal and Solicitation Routing Procedures [attached to handout; includes decision tree] If you believe an agreement may need to go to OSP but you re not certain, contact Pat Davis [7-3119] Where are other agreements routed? Faculty consulting agreements: Brenda Seiton, J.D. Gift agreements: Institutional Advancement (Development Office - Maggie Mackay) these go to B&F (Sharen Olson) with DUR routing form GME affiliation agreements: through program directors to Marilane Bond, Ed.D., M.B.A. Allied health affiliation agreements: through program directors to OMESA 5

6 Where are other agreements routed? (Cont d) Medical student affiliation agreements (isolated): through Dept to OMESA New process to be created for affiliations required to support new curriculum Emory-VA MOUs regarding VA faculty time: B&F (Pat Davis) As part of annual process and also with proposals Agreements for EPIC transactions: Procurement Services Where are other agreements routed? (Cont d) Renovation/construction agreements : Charlie Andrews (Assoc VP for HSC Space Planning and Construction) Real estate purchase agreements and leases: Office of Exec VP for Finance and Admin (Beverly Cormican) Software licensing and acquisition agreements: Rehan Khan Other miscellaneous agreements: Dean s Office (Josh Barwick) 6

7 What are these miscellaneous agreements that go directly to the Dean s Office? Agreements to provide services of faculty or staff to outside parties Agreements to obtain services from individuals or vendors that don t go through EPIC When we re providing services to someone else, which Emory entity is the correct party? If clinical or admin services (e.g., medical director) of a faculty member whose primary appt is in Dept of Peds ECC If clinical or admin services of a faculty member whose primary appt is not in Peds TEC Some very limited exceptions you know who you are! 7

8 When we re providing services to someone else, which Emory entity is the correct party? (Cont d) If services of a faculty member that are not clinical or admin (e.g., educational) SOM services of non-faculty SOM employee SOM any services to Grady SOM Services of EHC employee EHC What service contracts go through EPIC? Dean s Office? EPIC commercial suppliers Obtaining services that are applied to tangible items (i.e., maintenance, repair, upgrade, enhancement, modification of something) Dean s Office Individuals or other educational institutions Services unrelated to tangible items 8

9 Gray areas between EPIC and Dean s Office These can go either route: Catering services Procurement Services is working on event order system with preferred caterers Web design services technical support services Recommendation: use EPIC for these unless there s some unusual aspect to the arrangement For information about EPIC and Emory s procurement processes. Website for Emory Procurement: ent/index.cfm Procurement Office Services Directory: ent/other/directoryassign.cfm EPIC On-line Requisitioning (training offered through Emory HR) 9

10 Who signs agreements for SOM? Most agreements: Dr. Adkison Agreements with significant strategic partners: Dean Lawley GME agreements: Dr. Zaidan Allied health and med student affiliation agreements: Dr. Eley CME agreements: Josh Barwick Emory University Signature Authority Policy Became effective January 1, 2006 Requires formal written delegation of authority for all agreements Delegations of authority for SOM agreements already have been put into place 10

11 What the Signature Authority Policy Means to You.. No Department Administrator, Chair, faculty member, or staff member should sign any agreement without a letter from the Dean or Dr. Adkison formally delegating signature authority to him or her What could happen if someone signs an agreement without formal authorization? Personal financial liability Discipline Inappropriate contract Damaged relationships (internal and external) 11

12 If you re not sure how an agreement should be routed or who can sign it, contact Josh Barwick ( or The rest of this presentation deals with the miscellaneous agreements routed to the Dean s Office. 12

13 Two basic situations You receive a proposed agreement from an outside party You have identified a need for a contract and want to get one drafted What should you do when you receive a proposed agreement from an outside party? Review the basic terms and make sure they re appropriate Description of services Compensation Term Review the basic terms with your chair and get his/her approval Forward to Josh Barwick (no routing form required) Obtain and provide an ELECTRONIC version please! It s easier to circulate to Counsel and others and to communicate requested changes back to outside party. 13

14 What should you do when you need an agreement drafted? Develop a list of key terms: Who will do what? For how long? Starting when? For how much money? For our services, how was compensation determined? For other party s services, what evidence do we have that proposed fee is reasonable? What should you do when you need an agreement drafted? (Cont d) Do NOT try to draft a full-blown contract yourself This will likely DELAY the process Let Josh and the Office of the General Counsel do it for you Review the list of key terms with your Chair and get his/her approval Forward it to Josh Barwick (no routing form required) 14

15 What questions should you and your Chair ask in determining whether a proposed arrangement is appropriate? Is the party expected to do the work (us or them) capable of doing it? If other party, does agreement describe exactly what we need them to do? Are appropriate deliverables defined in enough detail? If we re doing the work, does the proposed arrangement further our mission? How? What questions should you and your Chair ask in determining whether a proposed arrangement is appropriate? (Cont d) Is the compensation appropriate? (more on this later ) Is the timing right? Does the arrangement begin and end when it should? 15

16 What is appropriate compensation when we re providing the services? Must cover the cost of salary and benefits (currently 26.5%), at a MINIMUM Build in salary and fringe benefit increases when agreement spans multiple fiscal years Can tie payments to actual salary and benefits or use pre-defined COLA-type increase (3-5% recommended) SOM Fringe benefit rate generally is increased by an additional 0.5% annually What is appropriate compensation when we re providing the services? (Cont d) Don t forget to consider G&A (10% applied to all expenditures from SOM accounts) Whenever possible, G&A should be built into contract rate 16

17 It s okay for us to make a profit on a service agreement! In rare cases, it s okay not to make a profit---but only when there s compelling mission- related justification. 17

18 Watch out for UBIT! UBIT = Unrelated Business Income Tax We must pay tax on revenue we receive for services that don t express our mission. Example: we employ a person to take care of flowers and plants in our offices, and we contract his services to other institutions It s not education It s not research It s not patient care It s competing with professional plant service providers who aren t tax-exempt If the other party is doing the work, is its compensation fair market value? Always an important question we must all be responsible fiscal stewards. If purchasing non-unique services, get multiple quotes. Use Emory s preferred vendors whenever possible. 18

19 Faculty services to healthcare providers to whom our faculty refer patients Sometimes we contract with a party that receives referrals from our faculty (e.g., a local hospital) Compensation must be set in advance and be fair market value to comply with Stark and anti-kickback laws Term of agreement must generally be for at least a year No termination without cause Other payment considerations Requirement payment in advance of providing services whenever possible After contract is signed, contact B&F to set up account receivable for central invoicing and receipt/processing of payments Don t invoice customer directly or have payments sent directly to Department! 19

20 What happens after Josh receives your list of key terms and request for a draft contract? 1. He reviews and modifies/supplements where needed, in consultation with you Timeframe: about 1 week 2. He either drafts agreement and sends to OGC for review or sends term sheet to OGC with request to draft see OGC Request Form for Contract Review and contract Drafting attached to handout; Josh completes this Within a week, OGC identifies attorney assigned to project Usual timeframe for completion of draft/review: 2-4 weeks What happens after Josh receives your list of key terms? (Cont d) 3. Josh gets comments or sign-off from anybody else needed to review proposed final draft (e.g., ORIS, SOM- IT, CME) 4. He sends it to you for approval 5. You (or in some cases, Josh) share proposed final version with outside party 20

21 What happens after Josh receives your list of key terms? (Cont d) 6. Josh meets with Dr. Adkison, reviews proposed agreement with her, and obtains her signature on multiple copies Josh meets with her to review pending contracts about twice monthly, so typical timeframe is 1-2 weeks She signs most agreements; the Dean signs strategically significant agreements We should have as many original signed copies as there are parties 7. Josh returns original copies signed by Dr. Adkison or the Dean to you What happens after Josh receives your list of key terms? (Cont d) 7. You obtain signatures from other party (sometimes Josh does this) 8. You return one original signed copy to Josh and retain a copy for the Department file -- If agreement involves faculty member s services, Josh inserts copy in faculty file 21

22 What happens after Josh receives from you a proposed draft agreement prepared by the other party? Josh reviews and modifies proposed draft and then forwards to OGC for review If same form as previous agreement, OGC review not needed Then essentially same process as described above Contract Effective Date This is the date on which the contract performance is owed consistent with the contract s terms The effective date is independent of the date the contract is signed Should always be a future date Avoid retroactive contracts whenever possible! 22

23 If contract for us to provide services is not yet signed by planned effective date, please consult with Josh Contract Legal Notices These are formal notices that a contract right is being exercised (e.g., termination), not routine communications Must go to Department Chair in all cases Copies to Dept Administrator or other responsible administrator 23

24 Why don t we have ready-made contract templates? We do! But only for those limited situations that recur regularly, like our faculty service contracts with Georgia Tech and Grady We don t have them for more applications because. There is an infinite variety of potential arrangements and terms in many situations, the other party requires use of its own form agreement Important things to note about the contracting process You and your Chair are recommending these arrangements to the Dean, so you need to think them through carefully Josh can help you with this, if needed For turnaround time, the quality of information you provide and your response time on follow-up inquiries is critical Process typically requires 3-6 weeks (depending in part on whether we re drafting) 24

25 Ways you can make the process more efficient Think through the arrangement Identify the needed information clearly and thoroughly Be a responsible steward of University resources Get your Chair s approval of the proposed arrangement before submitting it to the Dean s Office (unless you need preliminary guidance) Ways you can make the process more efficient (Cont d) Respond to follow-up inquiries promptly and thoroughly Build in appropriate lead time Know who other party s contact person is and keep in touch with that person regarding status 25

26 How can you get an update on the status of your proposed agreement? Josh (We hope to roll out an online contract status facility sometime in 2007.) 26