Key Messages: December 13, 2017 Board of Directors Meeting

UPG Board of Directors Chair Kate Acuff introduced new Board members Babur Lateef, M.D. (UVA Board of Visitors Representative) and Timothy McLaughlin, C.P.A, C.F.A.

UPG President Bobby Chhabra, M.D.  made opening remarks, stating his intention to use his role as UPG President to help improve communications and provide information about UPG. He expressed his gratitude to Department Chairs and members of the UPG Board for their support.

UVA EVP for Health Affairs Dr. Richard Shannon made leadership remarks emphasizing the rapid pace at which changes in healthcare, and specifically in reimbursement, are occurring. Dr. Shannon stated that it is vital both to be nimble and cost-conscious in order to navigate unanticipated changes.

UVA Medical Center CEO Pam Sutton-Wallace presented an update on Ambulatory Optimization. With 1.1M ambulatory visits recorded in 2016, outpatient settings prove a major point of entry for UVA Health System. Changes in ambulatory environment and patient expectations have occurred, and adequate processes and systems to manage the complexity of care are required. The A3 Problem Solving Approach is being employed to make improvements in ambulatory patient care from the time of scheduling through post-visit follow-up. The timeline for this project initiative is aggressive over the next three quarters.

UPG Chief of Clinical Operations Wes Campbell provided information about the opening of UVA Primary Care – Riverside, which is a relocation of UVA Forest Lakes Family Medicine. The rationale for the move included location visibility and responsiveness to marketplace changes around urgent care and retail medicine. The practice is designed to facilitate team care and materially increase patient access to care, and provide a prototype for future clinics.

UPG Board Treasurer Bill Shenkir announced that the Audit Committee had accepted the results of the external audit of consolidated financial statements for FY17, and introduced BDO representatives Karen Fitzsimmons and Tracy Lewis to review the audit findings. There was one corrected misstatement related to the Medicaid Supplemental settlement receivable which had a net effect of increasing revenue by $322,000. There was one unrecorded misstatement related to the receivable from the UVA Medical Center and the School of Medicine as it relates to funding FY17 Clinical Department deficits. An adjustment was proposed to reduce revenue by $965,000 based upon the final resolution and approval by the School of Medicine’s Fiscal Advisory Committee of Clinical Chairs in October of 2017 for FY17 department deficit funding.

UVA Chief Human Resources Officer Kelley Stuck and UPG CEO Brad Haws provided an update on Ufirst. The intention of the update was to expand upon the information presented at the September UPG Board of Directors Meeting, with the understanding that no final recommendation was being offered at this time. Ms. Stuck presented the business case for, and objectives of, Ufirst – including the emphasis on integration of knowledge and service delivery, streamlining of processes and succession planning. UPG will continue to have customized local support for clinical faculty, providers and team members, and will retain its decision making role. The Memorandum of Understanding (MOU) between UVA and UPG is currently in draft form, and addresses the following legal considerations: Security and Confidentiality, Cost, Service Level Expectations, Wind Up Provisions, Preservation of UPG as an Affiliated, Independent Foundation of UVA Precluding Exposure to UVA, and the Freedom of Information Act. Mr. Haws reviewed the progress that had been made since the last update to the Board, including the analyzation of specific tasks and allocation of FTEs. Next steps in the process are: Coming to an agreement on open items, finalizing the MOU and presenting to the Board of Directors, supporting the smooth transition of services and HR professionals to aligned roles, engagement in Workday technology configuration and engaging clinical faculty to support the transformation.

Dr. Gina Engel presented on Opioids in the Primary Care Setting, with particular focus on how to limit use of opioids in order to minimize addiction risk which can lead to heroin use and addiction. Data supports use of thorough documentation, nonpharmacologic therapy and nonopioid options, and improved communications with patients, pharmacists and office teams. Improved pain screening tools are recommended for use, as well as the prescription drug monitoring program that has recently become available for use in Epic.

UPG CFO Susan Rumsey provided an update on FY18 Financial Operations and Investments. Consolidated Financial Results for the first four (4) months of FY18 demonstrate that Clinical Departments are $2.9M unfavorable to budget, driven by $1.0M reversal of FY17 support, $1.0M unfavorable patient revenue, and compensation $2.5M over budget. Regional Primary Care practices were $1.1M unfavorable to budget on $1.5M unfavorable patient revenue, offset by $0.4M favorable expenses. Funding status for the CRP/CSRP was 86%/73% as of June 2017, compared to 81%/68% as of December 2016. FY18 Year to Date Workload Trends November results are over stated by approximately 23,000 WRVUs. Adjusting for these values, November results are 1.8% over budget and 4.1% over prior year. Patient Collections Trends FY18 Year to Date November results are 0.8% below budget and 0.8% ahead of the prior year.

UPG CFO Susan Rumsey presented an Epic Phase 2 update. System optimization began October 1, 2017, and system upgrade will begin in February 2018 with completion expected in Fall 2018. Ms. Rumsey reviewed identified issues, including unscheduled referrals and orders to schedule, and reporting. Resolutions are in progress to resolve these issues. Metrics as of December 2017 demonstrate that UVA is performing above average compared to peers, and in the top quartile in Legacy Days, Cumulative Epic-Only Payments and Undistributed Days. Impact to Physician Billing AR days was at its peak as of December 2017 and is expected to decrease in upcoming months. Likewise, the impact to Physician Billing cash has followed the expected trajectory with the low point in October 2017 and is demonstrating increase which can be expected to continue.

During her recommendation of Consent Agenda items, Dr. Acuff made particular note of the resolution honoring Ella Strubel in recognition of her impactful contributions during her tenure on the UPG Board of Directors.

UPG Board of Directors Meeting Agenda December 13, 2017

  • Introductions and Approval of Minutes (Dr. Acuff)
  • Leadership Remarks and Discussion (Dr. Chhabra)
  • Clinical Operations and Management Update
    • Ambulatory Optimization (Ms. Sutton-Wallace)
    • Opening of UVA Primary Care – Riverside (Mr. Campbell)
  • Committee Reports, Updates and Recommendations
    • Audit Committee Report (Dr. Shenkir)
    • FY2018 Annual Audit Report (Ms. Fitzsimmons, Ms. Lewis)
  • Benefits
    • Ufirst Update and Discussion (Ms. Stuck, Mr. Haws)
  • Board Education
    • Opioids in the Primary Care Setting (Dr. Engel)
  • Administrative and Financial Updates
    • CFO FY2018 Financial and Operations and Investments Update (Ms. Rumsey)
    • EPIC Update (Ms. Rumsey)
  • Consent Agenda (Dr. Acuff)
  • Committee Reports
    • Billing Quality Oversight Committee
    • Compensation Committee
    • Finance Committee and Investment Subcommittee Report

**Stay tuned for Key Messages from the meeting.

Key Messages from UPG Board of Directors Meeting September 21, 2017

Introductions and Leadership Remarks 

UPG Board of Directors Chair Kate Acuff made leadership remarks emphasizing the UPG Board of Directors’ commitment to fostering a collaborative relationship with other UVA Health System entities, while fulfilling its fiduciary duty to UPG and its constituents.

Dr. Acuff introduced new Department Chairs Martha Zeiger, M.D. (Department of Surgery), Stephen Park, M.D. (Department of Otolaryngology – Head and Neck Surgery), Susan Pollart, M.D. (Interim Chair, Department of Family Medicine) and Brian Hoard, D.D.S. (Department of Dentistry). Dr. Acuff also introduced Bobby Chhabra, M.D., who was elected President of UPG on September 12, 2017. Dr. Chhabra, via conference call, expressed intent to use his leadership role to further the success of UPG and the Health System as a whole.

In his leadership remarks, UVA EVP for Health Affairs Rick Shannon echoed Dr. Acuff’s sentiment regarding renewed conversation and collaboration between Health System leadership and UPG management in support of their shared purpose.

Dr. Shannon presented an overview of UVA Health System successes, opportunities for improvement, and strategies. UVA Health System has enjoyed unprecedented success over the past year, having been ranked the number one hospital in Virginia for the second year in a row. Dr. Shannon highlighted UVA’s capacity to respond to emergency situations, as evidenced by the response to the events of the weekend of August 12. Dr. Shannon stated that recent clinical growth in the existing footprint has been substantial, and that the operating budget and the balance sheet are strong and healthy: necessary conditions for the infrastructure investments that are underway. The positive performance and direction in which UVAHS appears to be headed is in stark contrast with many other academic medical centers. This is the result of a combination of factors including exceptional commercial rates and a unique relationship around Medicaid and indigent care, as well as growing patient volume. Dr. Shannon emphasized the strategic advantage of practice reform over payment reform and stated that looking to the future, markets outside of Charlottesville provide UVAHS with the greatest chance of relevance and long term stability – and that it is of critical importance that UVA is the first Health System to reach those markets. Good business opportunities are afforded by the newly formed partnerships with Novant and Inova.

UPG FY17 Year-End Financial Update

UPG CFO Susan Rumsey provided FY2017 Year-End, and FY2018 Year-to-Date financial updates. Ms. Rumsey’s slide deck is included for reference here.

Epic Phase 2 Update

Ms. Rumsey provided an update on Epic Phase 2. After July 1 Go-Live, the initiative is toward the end of phase 2, going into the beginning of the optimization phase with improvements scheduled to begin on October 1. Upgrades to the system are scheduled to begin in February 2018. The top five issues being tracked and addressed are: Provider schedules, system privileges, printing/labels, patient movement workflows and integration/workflow. Ms. Rumsey shared metrics showing how UVA is performing relative to other Health Systems that have gone through implementation.

Novant Health/RPC-North Primary Care Management Transition Update

UPG CEO Brad Haws provided an update on the transition in management of UPG Primary Care facilities in Culpeper (“Regional Primary Care North”) to Novant. Mr. Haws pointed out that the agreed upon administrative service fee cap at 10.3%, leaving a 5.5% service fee collected by UPG, is significantly different than the Charlottesville cost structure; data which demonstrates that UPG wants to meet the needs of clinics at lower cost while also delivering the clinics the benefit of UPG contracts. Mr. Haws outlined the Regional Primary Care-North Support Services Agreement and provided information on progress to date including the successful transition of 84 FTEs; as well as current challenges faced, of which the AXIA status of Novant employees is the most complex. Mr. Haws credited the overall smooth transition to cooperation on both sides and in particular the efforts of Alison Haines from Novant and Katie Fellows from UPG. 

UPG HR Future State/Ufirst

Mr. Haws and UVA Chief Human Resources Officer Kelley Stuck presented a framework for UPG HR Future State as a shared agreement of joint partnership to manage services: a relationship which differs from the previously discussed understanding that UPG was to treat UVA as a vendor with regard to Ufirst. In the agreed upon joint partnership of UPG HR Future State, UPG will retain its decision making role with the UPG CEO and UVA CHRO partnering to provide counsel and recommendations to the UPG Board of Directors. UPG will retain appropriate embedded staff to continue to provide localized services aligned with the new process design, while UVA Human Resources will partner with UPG to provide core services, consulting, counsel, training, strategic support and transactional support. All services will require ongoing collaboration between UPG and UVA HR, and will require memorandums of understanding (MOUs) to address specific responsibilities. UPG will adapt the Workday IT platform associated with Ufirst in response to department chairs’ requests on behalf of faculty for a more streamlined IT process with increased functionality.

UVA EVP COO Pat Hogan initiated discussion of the importance of data security as protected by UPG’s separate status from UVA. A multilevel approach to data security and protection through the use of a separate FEIN will be employed to maintain the desired confidentiality of UPG proprietary data, and UPG HR Future State MOUs will be designed with the importance of FOIA protections in mind. Due care will also be taken to ensure corporate lines are respected.

UPG HR Future State service agreements will be created in the coming months leading up to the July 2018 Go Live date. Service measures will be addressed to assess and maintain quality levels of services that are important to UPG constituents, and further study will be done on cost impact given the new joint partnership framework.

 

Key Messages from UPG Board of Directors Meeting June 15, 2017

Financial Performance and Operations

UPG Interim CFO Beth Allen provided information on UPG financial performance and operations. The consolidated balance sheet at the end of April showed a 0.8% decline in net assets over the 10-month period in FY2017, while cash on hand remained strong at $33.5M. The consolidated accrual-based UPG income statement for FY2017 showed an operating deficit of $12.3M through April, reflecting the first year of a new Health System Funds Flow model and transition to mission-based financial reporting for the clinical departments. Total revenue was marginally favorable to budget (1%), and indigent care revenue was over budget with mid-year projections indicating that this revenue would exceed budget for the year by roughly $7.8M. Total pension expense for the fiscal year is expected to be $25.8M; the unbudgeted cost of which is expected to be $15.3M. While this is not a direct cash outlay, it reflects annual expense and therefore can create an operating loss. Workload trends reflect strong productivity in March with lower productivity in April, and higher productivity is expected in May and June based on trend data from FY2015 and FY2016. Clinical departments as a whole are exceeding the 65th percentile in productivity. Investment results for the 9-month period ending March 31, 2017, showed positive returns with strong market conditions. Cash collections from patient care services exceed cumulative year-to-date targets but April results reflect low collections due to a Medicare processing issue. Ms. Allen submitted resolutions for approval of the FY2018 Consolidated Budget, and Approval of the Group Practice Fund Budget for 2018. Both were unanimously approved with no abstentions.

Fiduciary Training

Mr. David Pettit, outside counsel for UPG from firm Lenhart Pettit, provided training information with regard to the fiduciary duty of the UPG Board of Directors as the governing body of the Foundation. The function of the UPG Board of Directors is to make decisions about the operations of UPG, and to exercise oversight and planning to enable UPG to fulfill its best interest and mission in support of UVA Health System. Directors are legally bound to discharge their duties in accordance with their good faith business judgment of the best interests of UPG. Mr. Pettit emphasized the point that in order for a decision to be made in good faith, UPG directors must be fully informed of all the facts and circumstances associated with the decision before they take action.

Ufirst

UVA EVP COO Patrick Hogan addressed the Board with regard to the letter he had received from UPG Board Chair Dr. Kate Acuff on May 30, 2017, about the Ufirst initiative, which stated that UPG Board members felt that that they needed more information and proof of concept to outsource UPG’s Human Resources and Payroll functions to the University as a vendor. Mr. Hogan stated that he would be happy to provide further information on the initiative before asking them to vote on the issue of UPG participating in Ufirst. Mr. Hogan stated that a 15% savings could be promised by participation in Ufirst. A number of options were discussed regarding UPG employees, including employees remaining at UPG and UPG using the Workday IT platform. Mr. Hogan stated that he plans to present more data to the UPG Board at its meeting in September.

Audit Plan

UPG Board of Directors charter requires partnership with an independent audit firm. Members of the Audit Committee voted to engage BDO for the third consecutive year. A resolution to engage BDO for the FY2017 independent audit was passed unanimously with no abstentions.

Consent Agenda

A resolution approving Scopes of Practice for UPG Outreach Practitioners was approved, as were resolutions honoring retiring Department Chairs Thomas Leinbach, D.D.S. and M. Norman Oliver, M.D., M.A.

Key Messages from Board of Directors Meetings: December 2016, January 2017, March 2017

Key Messages from UPG Board of Directors Meeting December 7, 2016

The theme for this meeting was changes underway across UPG. Mr. Haws outlined external influences affecting change, and internal initiatives involving UPG. In his leadership remarks, Dr. Shannon also addressed the issue of change being the new normal in healthcare.

Representatives from UPG’s audit firm, BDO, presented information from the FY2016 Annual Audit Report, as well as consolidated financial statements and supplemental information for the past two fiscal years. There were no new notes for improvement in FY2016.

Professor DeMong, a UPG Board member, provided a financial analysis of UPG which showed that the organization has demonstrated profitability, stability and low financial risk over the past five (5) years. 2016 was an unusual year with several unique pressures to the income statements and cash flow statements; it is most likely that these will not be repeated and therefore should not be of concern for the financial outlook of UPG.

Mr. Haws provided an update on the Clinicians Supplemental Retirement Program (CSRP), outlining developments to this point: A Special Meeting of the UPG Board of Directors was convened in November 2016, during which they passed a resolution delaying changes to the CSRP in order to allow for more time to consider potential alternatives. Actuarial firm AON Hewitt was commissioned again for analysis, and their experts discovered that if the clinician pension plan were tested in aggregate with the staff plan, it would no longer be in imminent danger of failing federal testing. Investigation was still underway regarding departmental cost of maintaining the plan. The Board unanimously passed a resolution stating that all clinicians hired on or after January 1, 2017, be enrolled in the new defined contribution plan.

Key Messages from UPG Board of Directors Meeting January 19, 2017

This Special Meeting was convened to consider a resolution stating that all clinicians hired before January 1, 2017, would remain in the existing CSRP, while all new hires on or after that date would be enrolled in the new defined contribution plan. After new Board Chair Kate Acuff introduced Dr. Robert Thiele as a new faculty director to the Board, this resolution was discussed and unanimously approved.

Key Messages from UPG Board of Directors Meeting March 16, 2017

Ms. Acuff and Mr. Haws began this meeting with leadership remarks. Ms. Acuff focused on the leadership role played by UPG as a key collaborator in the clinical and academic mission of the Health System, contributing significant funds during this challenging time for healthcare financing. There is a clear need for resilience and collaboration in this uncertain climate.

Mr. Haws also stressed the importance of resilience, instead of resistance, when it comes to change. Across the UVA Health System, big changes are being implemented at a challenging time in the healthcare industry. These system-wide initiatives either involve millions of dollars or thousands of people, or both. UPG has aligned itself  with these initiatives, as a strategic partner of the Health System.

Dean Wilkes provided a research overview from the School of Medicine. Between FY15 and FY16, UVA moved from 40th to 35th in the NIH rankings of medical schools, according to total NIH grant awards. The School of Medicine has engaged in several partnerships across UVA grounds, including the Data Science Institute, the UVA Brain Institute and cluster hiring: recruiting multiple faculty members across disciplines who work in a particular interdisciplinary field with potential for broad impact. Dean Wilkes discussed three of the major initiatives underway at the School of Medicine: the Strategic Hiring Initiative, Pinn Scholars and the CTSA application. Top current priorities for the School of Medicine include executing the development of the Inova/UVA Genomics Institute, continued development of the regional Medical School campus at Inova, aggressive investment in research and faculty recruitment and increasing the NIH portfolio to $150M within 3 years.

In her last Board of Directors meeting as UPG Chief Financial Officer, Susan Rumsey provided updated financial results through January, and operations results through February. While revenues are in target range, the numbers on the expense side are not as favorable. Ms. Rumsey stated that there were two important things to consider regarding expenses: departmental incentives were over budget, and the impact of the high cost of the pension plan. The balance sheet represents a strong cash position, with liquidity having been created going into the Epic revenue conversion. Patient care volumes have been strongly above target all year, contributing to Ms. Rumsey’s optimism regarding the budget cycle.

UPG Chief of Human Resources and Development Brenda Jarrell provided an update on Ufirst operations and technology. This initiative is intended to eliminate inconsistencies across the system and define HR as a whole, and is on track to become effective in July 2018. The UPG legal team is currently working with the University General Counsel’s office to ensure that legal boundaries are carefully evaluated and keenly observed.

Mr. Haws provided an update on changes in clinical operations and proposed a resolution to enter into a management agreement with Novant for Regional Primary Care North Primary Care Clinics. Extensive discussion ensued with regard to UPG’s assumed risk under the proposed agreement, focusing on ways to ensure UPG is protected financially with an outsourced manager. The resolution passed with three opposed and one abstention.

Mr. Haws provided an update on the Epic, with focus on timeline and workflow scenarios in preparation for Go-Live. The system has been designed and built; testing is underway and end user training is scheduled for April and May.