Board of Visitors minutes :: October 2, 2000 :: University of Virginia Library

AGENCY 209 — Medical Center

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1) Retain interest on operating balances ($4,400,000 [NGF]) — This amendment accompanies a legislative proposal that will modify the Code of Virginia to require the Medical Center to be credited with the imputed interest on its nongeneral fund operating cash balances (primarily patient care revenues), on deposit with the State Treasurer. This change will help the Medical Center achieve a realistic operating margin, specifically helping to offset losses resulting from the Balanced Budget Act of 1997.

2) Provider-based clinics ($27,000,000 [NGF], 250.0 FTEs in each year of the biennium) — On April 7, 2000, the Health Care Financing Administration ("HCFA") published its longanticipated final rules concerning a new prospective payment system ("PPS") for most hospital services. In addition to establishing the outpatient PPS, the rules also established complex requirements for obtaining provider-based status for clinic facilities that are operated by a hospital. The new PPS rules clearly defined a provider-based clinic and established specific criteria that must be met to obtain this designation. The organization of the clinics at the University did not comply with the new rules. To do so, we are required to move the control and management of most of the clinics to the hospital. This includes adding revenue and expense to the hospital that had historically been included in the physician practice plan and in the clinical departments of the School of Medicine.

3) Expansion of renal services ($1,800,000 [NGF], 20.0 FTEs in each year of the biennium) — The Medical Center recently acquired outpatient renal dialysis services in Augusta County and must account for this new volume of activity in its operating appropriation.

4) Improvements: Surgery Clinic ($2,525,000 [NGF]) — This project will provide additional authority to renovate several adjacent clinical Departments including Plastic Surgery, Transplant and Neurology. By renovating this space the Health System will eliminate the current overcrowding of patients and improve departmental efficiency. If this

project is deferred and these essential improvements are not made, the Health System stands to lose part of its current market share.

5) Improvements: Breast Health Center ($3,337,000 [NGF]) — This project will provide authority to reorganize the Departments of Radiation Oncology and Mammography and to create a new Breast Health Center in the West Complex. The consolidation of these departments improves the cost and delivery of health care. If this project is deferred, the Health System will be unable to adequately meet current patient needs, resulting in potential loss of market share and associate revenue.

6) Improvements: Transitional Nursery ($2,200,000 [NGF]) — This project will provide authority for the current Pediatric and Newborn Intensive Care Units to take full advantage of all the space available to them. By renovating and reorganizing these Departments, the Medical Center can create a transitional nursery area within University Hospital designed to train parents in the specialized care of their newborns. If this project is deferred, the high number of parent calls and return visits will remain, increasing the overall cost of patient care.

7) Improvements: Intensive Care Units ($3,500,000 [NGF]) — This project will provide authority to renovate the Intensive Care Units on the Third, Fourth and Fifth Levels of the University Hospital, updating finishes and generating room for additional beds. The population growth of the City of Charlottesville and the surrounding area has increased the demand for bed space beyond the Health System's current capacity. If this project is deferred, the Health System will be unable to accommodate the increasing needs for these critical care beds, resulting in the potential loss of market share and the associated revenue.

8) Improvements: Cosmetic Surgery Center ($2,700,000 [NGF]) — This project provides authority for a 6,400 gross square foot addition to the Northridge Clinical Facility and an additional structured parking facility for 32 vehicles, in order to relocate the Cosmetic Surgery Clinic. This clinic is needed to provide the staff and patients with a centrally located clinic facility. It will have an efficient plan layout, a pleasant environment and be able to accommodate the anticipated growth in patient loads over the next five years. If this project is deferred, the Medical Center could lose part of its market share in the growing clinical area.

9) Planning: University Hospital Expansion ($1,757,000 [NGF]) — This project will provide additional planning authority for an expanded project scope including bustle addition and renovation to University Hospital, expansion and renovation of adjacent clinical facilities and pedestrian bridge connections to surrounding buildings. The Heart Center, the Interventional Radiology Procedure Suites, the Surgical Operating Suites and the Clinical Laboratories will be reconfigured and/or expanded as a result of this work. These changes will allow the University to respond to current market forces, provide for more efficient utilization of space within University Hospital and enable the Medical Center to meet current and future standards of patient care delivery. If this project is deferred, the Medical Center will continue to experience costs associated with operational inefficiencies, a loss of existing and future market share to competitors and more difficulty in recruiting and retaining highly sought after clinical faculty and staff.

10) Acquisition: Medical Office Buildings ($3,000,000 [NGF]) — This project will provide authority to acquire clinical facilities. The Medical Center needs to acquire these properties in order to maximize the potential revenue under the current Medicare reimbursement structure. If this project is deferred, there will be a loss of potential revenue to the Health System.

11) Acquisition: West Radiation Therapy Center ($2,000,000 [NGF]) — This project will provide authority to acquire a Radiation Therapy Center west of Charlottesville in Augusta County. The Medical Center needs to acquire this property in order to maximize the potential revenue under the current Medicare reimbursement structure. If this project is deferred, there will be a loss of potential revenue to the Health System.

12) Blanket: Medical Center Planning, Renovation, Utilities and Acquisitions ($2,000,000 [NGF]) - This project will provide additional blanket authority to plan, renovate, perform utility work or acquire properties for the Medical Center not originally envisioned as part of the current six year plan. Many of the clinical renovations in the Medical Center require the use of this authority to meet unanticipated changes in technology and health care practice. Based on the current projected volume of projects, it is anticipated that additional authority will be required during the biennium.

If this project is deferred, the ability of the Medical Center to execute projects of this nature may be curtailed.