CONFLICT OF INTEREST POLICY

GOAL
To establish a uniform mechanism for determining when a potential or actual conflict of interest exists, establish leadership responsibilities in managing potential or actual conflicts of interest, assign responsibility for reporting of potential or actual conflicts, and to communicate to employees the standards for determining whether a potential or actual conflict subject to this policy may exist.

POLICY
Employees will report the existence of any potential or actual conflict of interest on an annual basis and/or at the time they become aware of any precipitating incident.

An evaluation of each disclosure will be conducted to assess whether the circumstances might create a potential or actual conflict of interest, or the appearance of a potential or actual conflict of interest, between the employee’s responsibility to Cottage Health System (CHS) and any outside personal, family, or financial interest. 

Employees will document their knowledge of this policy on an annual basis.

DEFINITIONS
I.  Conflict of Interest:  Occurs when an individual’s private interest interferes in any way, or even appears to interfere, with the interests of the Cottage Health System as a whole or any of its facilities individually.  A conflict situation can arise when an employee takes action or has interests that may make it difficult to perform his or her company work objectively and effectively. Examples of conflicts that require disclosure, but not limited to, are:

1. Having a personal or family interest in a transaction with the Health System.
2. Having a material financial interest in a competitor, supplier or customer of the Health System.
3. Having a material financial interest in an organization that has a business relationship with or seeks to do business with the Health System.
4. Participating in a venture in which the Health System has expressed an interest.
5. Holding or acquiring a material financial interest in property (such as real estate, intellectual property rights, securities or other properties) in which the Health System has, or might have, an interest.
6. The solicitation or acceptance of any personal gifts, tips, cash, donations, significant business favors, or other special considerations of economic value from patients, patients’ families and visitors. Gifts such as candy, baked goods or flowers may be accepted but must be made available to all staff members within the department.  Items such as gift certificates, theater tickets or gifts that can be used by only one or a limited number of staff members and of any cash value cannot be accepted.
7. The solicitation to sell or distribute any article or service on Health System property (Please see the Human Resources policy: Solicitation and Distribution.)
8. Receiving non-cash gifts, favors, meals, loans, special services, or special treatment of any kind from any individual or organization, including physicians, which conducts or seeks to conduct business with the Health System, or who competes with the Health System, unless:
   • it would not violate any law or regulation (such as the Stark or Antikickback regulations);
   • it would be consistent with established business practices; and
   • public disclosure of the transaction would not embarrass the Health System.

   Occasionally, individuals/organizations such as physicians and vendors provide parties or meals to departments. The parties or meals may be accepted as long as the parties or meals are made available to all members of the department and not directed to specific individuals.  Keep in mind that any parties or meals will constitute a Conflict of  Interest, even if offered to everyone, if the the individuals/organizations (physicians and vendors) providing the party or meal are seeking to influence a decision making/purchasing process. This prohibition does not include acceptance by employees (but not solicitation) of promotional items such as pencils, pads, calendars and the like. ACCEPTANCE OF CASH OF ANY AMOUNT IS NOT PERMITTED.

9. The formal endorsement or recommendation of any particular product or service that is allied with the health care industry where the name of the Health System or its hospitals are connected or involved.  Product or service endorsement may be excepted upon advance authorization of Administration.
10. Engaging in political activities on Health System premises or identifying themselves as representatives of the Health System in political activities. Employees may identify themselves as representatives of the Health System in Political activities with advance authorization of Administration.
11. Using confidential or proprietary information, or any other Health System-related information, if such disclosure would compromise the Health System, any of its employees or associates, or any of its patients or their families.

II. Material Financial Interest: 

• Any financial interest of any individual involved in any decision making or purchasing process for the Health System that could possibly affect or be perceived to affect the results of the decision making or purchasing process;
• Salary or other payment for services (e.g., consulting fees or honoraria);
• Equity interests (e.g., stocks, stock options or other ownership interests); or
• Intellectual property rights (e.g., patents, copyrights and royalties from such rights including licensing arrangements that may arise through the Health System)

The term does not include:

• Salary or other non-royalty remuneration from the Santa Barbara Cottage Foundation;
• Income from seminars, lectures or teaching engagements sponsored by nonprofit entities;
• Income from service on advisory committees or review panels for nonprofit entities; or
• Investments in mutual funds.

PROCEDURE
I.   The employee

1. Refrains from activity that might create a potential or actual conflict of interest or the appearance of such (see Definitions; section II, Examples of conflicts that require disclosure).
2. Reports any situation that might create a potential or actual conflict of interest or the appearance of such, to the Director of Corporate Compliance using a “Disclosure of Potential Conflict of Interest and Annual Policy Acknowledgement” form (available on the Employee Portal).  This includes reporting all gifts as described in Section I.H. above. 
3. Refers offers of tips, cash gifts or donations to the Health System or any of its individual hospitals to the Director of Development.
4. On an annual basis, in conjunction with the annual appraisal, reviews this policy, and, using a “Disclosure of Potential Conflict of Interest and Annual Policy Acknowledgement” form (available on the Employee Portal), documents the review by:
   • checking the appropriate box;
   • when applicable, documenting the facts that may constitute a conflict of interest or create the appearance of a conflict of interest in the area provided on the form;
   • printing their name;
   • writing the date;
   • signing the form; and
   • promptly submitting the completed form to the department director who will forward to the Human Resource Department along with the annual appraisal.

II.  The employee who has hiring or leadership authority (Administration, Vice Presidents, Directors, Managers and/or Supervisors):

1. Extends no preferential treatment in hiring or in other Human Resource actions to relatives or friends of employees, medical staff, volunteers, board members or other persons officially or unofficially affiliated with CHS.
2. Hires or transfers no blood relative, close relative by marriage, significant other, or domestic partner to a position which would result in a supervisor/subordinate relationship between the two related parties.
3. Reports potential or actual conflicts of interest to the Director of Corporate Compliance or the Chief Compliance Officer.
4. At the time of annual appraisal, will have all staff review this policy and sign the “Disclosure of Potential Conflict of Interest and Annual Policy Acknowledgement” form (available on the Employee Portal in the Forms Library in both English and Spanish).
5. For decision making or purchasing processes, leadership strategies include but are not limited to:
   • Recusal from chairing a decision making or purchasing process if you have a potential or actual material financial or other conflict of interest;
   • Asking all members of a decision making or purchasing process to fully disclose material financial or other potential or actual conflicts of interest before proceeding with the decision making or purchasing process;
   • Ask members of decision making or purchasing processes who have disclosed potential or actual material financial or other conflicts of interest to recuse themselves from final decision making or purchasing decisions; and
   • Document all disclosures and recusals in meeting minutes.

III.  The Human Resources Department:

1. Receives all completed and signed “Disclosure of Potential Conflict of Interest and Policy Acknowledgement” forms and maintains them in the employee file; and
2. Forwards all disclosed potential or actual conflicts of interests to the Director of Corporate Compliance.

IV.   The Corporate Compliance Director:

1. Provides staff with explanations of this policy; and
2. Assists staff in the implementation of this policy.
3. Reviews all disclosed potential or actual conflict of interest forms to determine any necessary follow-up;
4. Reviews all disclosed potential or actual conflict of interest forms with the System-wide Ethics and Compliance Council;
5. Makes recommendations to the Chief Compliance Officer/Administration if further action is required; and
6. Maintains appropriate documentation.

V.  Chief Compliance Officer:

1. In consultation with Administration, decides whether a conflict or the appearance of a conflict of interest exists;
2. In consultation with Administration, decides what action, if any, will be taken to address such conflict; and
3. Chief Compliance Officer or Director notifies immediate leader (VP, Director, Manager, Supervisor) of employee’s conflict of interest and any action taken.