University of Virginia Library

Operating Budget Amendments

• 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.