Audit and Finance Committee

Transcription

1 Governing Board Audit and Finance Committee July 08, 2015, 3:00 p.m. Conference Room I/J Trauma Building/5th Floor 800 Rose Street, Las Vegas, NV

2 AGENDA University Medical Center of Southern Nevada GOVERNING BOARD AUDIT & FINANCE COMMITTEE July 8, 2015, 3:00 p.m. 800 Rose Street, Las Vegas, Nevada UMC Trauma Building, Conference Room I/J (5 th Floor) Notice is hereby given that a meeting of the UMC Governing Board Audit & Finance Committee has been called and will be held at the time and location indicated above, to consider the following matters: This meeting has been properly noticed and posted in the following locations: University Medical Center CC Government Center Third Street Building Regional Justice Center 1800 W. Charleston Blvd. 500 S. Grand Central Pkwy. 309 S. Third St. 200 Lewis Ave., 1 st Flr. Las Vegas, NV Las Vegas, NV Las Vegas, NV Las Vegas, NV (Principal Office) City of Las Vegas City of Henderson 400 Stewart Ave. 240 Water St. Las Vegas, NV Henderson, NV The main agenda is available on University Medical Center of Southern Nevada s website For copies of agenda items and supporting back-up materials, please contact Cindy Dwyer, Board Secretary, at (702) The Audit & Finance Committee may combine two or more agenda items for consideration. Items on the agenda may be taken out of order. The Audit & Finance Committee may remove an item from the agenda or delay discussion relating to an item at any time. Consent Agenda - All matters in this sub-category are considered by the Audit & Finance Committee to be routine and may be acted upon in one motion. Most agenda items are phrased for a positive action. However, the Governing Board may take other actions such as hold, table, amend, etc. Consent Agenda items are routine and can be taken in one motion unless a Committee member requests that an item be taken separately. For all items left on the Consent Agenda, the action taken will be staff's recommendation as indicated on the item. Items taken separately from the Consent Agenda by Committee members at the meeting will be heard in order. SECTION 1. OPENING CEREMONIES CALL TO ORDER 1. Public Comment PUBLIC COMMENT. This is a period devoted to comments by the general public about items on this agenda. If you wish to speak to the Committee about items within its jurisdiction but not appearing on this agenda, you must wait until the Comments by the General Public period listed at the end of this agenda. Comments will be limited to three minutes. Please step up to the speaker's podium, clearly state your name and address and please spell your last name for the record. If any member of the Committee wishes to extend the length of a presentation, this will be done by the Chair or the Committee by majority vote. 2. Approval of minutes of the regular meeting of the UMC Governing Board Audit and Finance Committee meeting of June 17 and the special meetings of June 3, and June 10, 2015 (For possible action) 1 2 of 52

3 3. Approval of Agenda (For possible action) SECTION 2. BUSINESS ITEMS 4. Review and recommend for approval by the Governing Board the extension Letter for Hearing Screen agreement with Pokroy Medical group of Nevada, Ltd. d/b/a Pediatrix Medical Group of Nevada; and take action as deemed appropriate. (For possible action) 5. Receive a presentation from BDO USA, Inc. regarding the planned scope and timing of the FY2015 audit; and take action as deemed appropriate. (For possible action) 6. Review the results of the audit of the Two Midnight Rule audit dated September 08, 2014; and take action as deemed appropriate. (For possible action) 7. Receive quarterly update on managed care contracts; and direct staff accordingly. (For possible action). 8. Receive an update on the financial impact of the Primary/Quick Care Clinics on the hospital s net revenue; and direct staff accordingly. (For possible action) 9. Receive a financial analysis of the initial three months business of the robotic surgery service line; and direct staff accordingly. (For possible action) 10. Receive an update from the Chief Executive Officer; and direct staff accordingly. (For possible action) 11. Review and recommend for approval the schedule of Committee activities; and take action as deemed appropriate. (For possible action) 12. Receive monthly update on replacement of Electronic Health Record (EHR) clinical product; and direct staff accordingly. (For possible action) 13. Identify emerging issues to be addressed by staff or by the Audit and Finance Committee at future meetings; and direct staff accordingly. (For possible action) COMMENTS BY THE GENERAL PUBLIC A period devoted to comments by the general public about matters relevant to the Committee s jurisdiction will be held. No action may be taken on a matter not listed on the posted agenda. Comments will be limited to three minutes. Please step up to the speaker s podium, clearly state your name and address and please spell your last name for the record. All comments by speakers should be relevant to the Committee s action and jurisdiction. UMC ADMINISTRATION KEEPS THE OFFICIAL RECORD OF ALL PROCEEDINGS OF UMC GOVERNING BOARD AUDIT & FINANCE COMMITTEE. IN ORDER TO MAINTAIN A COMPLETE AND ACCURATE RECORD OF ALL PROCEEDINGS, ANY PHOTOGRAPH, MAP, CHART, OR ANY OTHER DOCUMENT USED IN ANY PRESENTATION TO THE BOARD SHOULD BE SUBMITTED TO UMC ADMINISTRATION. IF MATERIALS ARE TO BE DISTRIBUTED TO THE COMMITTEE, PLEASE PROVIDE SUFFICIENT COPIES FOR DISTRIBUTION TO UMC ADMINISTRATION AND COUNTY COUNSEL. THE COMMITTEE MEETING ROOM IS ACCESSIBLE TO INDIVIDUALS WITH DISABILITIES. WITH TWENTY-FOUR (24) HOUR ADVANCE REQUEST, A SIGN LANGUAGE INTERPRETER 2 MAY BE MADE AVAILABLE (PHONE: ). 3 of 52

4 University Medical Center of Southern Nevada Governing Board Audit and Finance Committee Special Meeting June 3, 2015 UMC Conference Room I/J Trauma Building, 5 th Floor 800 Rose Street Las Vegas, Clark County, Nevada Wednesday, June 3, :30 p.m. The University Medical Center Governing Board Audit and Finance Committee met in special session in Conference Room I/J, UMC Trauma Building, 5 th Floor, Las Vegas, Clark County, Nevada, on Wednesday, June 3, 2015, at the hour of 4:30 p.m. The meeting was called to order at the hour of 4:35 p.m. by Committee Chair Eileen Raney and the following members were present, which constituted a quorum of the members thereof. CALL TO ORDER Board Members: Present: Eileen Raney, Chair (by conference phone) Robyn Caspersen (non-voting member) (by conference phone) Harry Hagerty (by conference phone) Donald Mackay Absent: Jeff Ellis (Joined by conference phone at 4:38) Michael Saltman Others Present: Stephanie Merrill, Chief Financial Officer Mason VanHouweling, Chief Executive Officer Cindy Dwyer, Board Secretary SECTION 1. OPENING CEREMONIES ITEM NO. 1 PUBLIC COMMENT Chair Raney asked if there were any persons present in the audience wishing to be heard on any item on this agenda. Speaker(s): None ITEM NO. 2 Approval of Agenda (For possible action) FINAL ACTION: A motion was made by Don Mackay that the agenda be approved as recommended. Motion carried by unanimous vote. 4 of 52

5 UMC Governing Board Audit & Finance Committee Special Meeting June 3, 2015 Page 2 of 3 SECTION 2. BUSINESS ITEMS ITEM NO. 3 Review and discuss proposals for a Consultant to assist with the process of replacing the Electronic Health Record (EHR) clinicals products, and make a recommendation to the Governing Board for final selection; and take other action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Consultant Selection Process; Presentation to UMC Audit & Finance Committee; June 3, Cordea Consulting Proposal - Dell Services Proposal - The Rosenberg Group Proposal DISCUSSION: CEO VanHouweling reminded the Committee that the purpose of today s meeting was to provide more detail and clarification regarding the process to select a consultant to serve as the oversight for the process of selecting and negotiating a vendor for EHR clinicals. Four vendors were invited to submit proposals, resulting in three proposals - from Cordea Consulting, Dell Services, and The Rosenberg Group (TRG). CIO McKinley reviewed the criteria staff used to score the three proposals, and reviewed the scoring for each proposal. He summarized that all three respondents touched all areas of the proposed statement of work, and noted that based on the proposals submitted it appeared that all three respondents could complete the statement of work. The staff recommended engaging the services of the TRG. The Committee discussed the three criteria where the vendors differed in scoring. - Ability to Support : Mr. McKinley explained that TRG was scored higher because they are a local vendor, and able to support at a moment s notice, while the other two vendors are located out of town and would be allowing for travel time during the regular work week - Methodology : Mr. McKinley explained that Dell scored higher than the other two vendors because in their proposal, Dell s response to methodology was more detailed than the other two proposals. - The prices were: $1.45 million for Dell, $1,000,050 for Cordea, and $669,000 for TRG. There was discussion about utilizing a smaller company verses a larger company with more resources. It was noted that one individual would provide continuity, whereas a larger group utilizing several individuals may lose some continuity in the project. It was also noted that a larger group would have more depth to cover over a long period of time. CIO McKinley reminded the Committee that the 5 of 52

6 UMC Governing Board Audit & Finance Committee Special Meeting June 3, 2015 Page 3 of 3 consultant would not be overseeing the implementation of the EHR, only the selection and negotiation of a vendor, as well as oversight of change management. The implementation phase will have a separate consulting group. The Committee was unable to reach a consensus to select a vendor, and concluded that due to the magnitude and expense of the overall project they needed additional time to review the proposals in detail and be more involved in the selection process. They gave staff direction to invite the three vendors to meet with the Committee next week during a publicly posted meeting to discuss their proposals. CIO McKinley will request that each of vendors send the actual individuals that would be staffing the project. A list of approximately ten questions will be established with input from the Committee members, to ensure that each vendor is asked the same questions. CIO McKinley was asked to include questions related to those areas considered most important in the project, specifically those areas in which the hospital didn t succeed in the previous engagement. FINAL ACTION: No action. COMMENTS BY THE GENERAL PUBLIC: At this time, Chair Raney asked if there were any persons present in the audience wishing to be heard on any items not listed on the posted agenda. SPEAKERS(S): None There being no further business to come before the Committee at this time, at the hour of 5:26 p.m., Chair Raney adjourned the meeting. MINUTES APPROVED: 6 of 52

7 University Medical Center of Southern Nevada Governing Board Audit and Finance Committee Meeting Special Meeting June 10, 2015 UMC Conference Room I/J Trauma Building, 5 th Floor 800 Rose Street Las Vegas, Clark County, Nevada Wednesday, June 10, :00 p.m. The University Medical Center Governing Board Audit and Finance Committee met in special session in Conference Room I/J, UMC Trauma Building, 5 th Floor, Las Vegas, Clark County, Nevada, on Wednesday, June 10, 2015, at the hour of 3:00 p.m. The meeting was called to order at the hour of 3:05 p.m. by Acting Committee Chair, Donald Mackay and the following members were present, which constituted a quorum of the members thereof. CALL TO ORDER Board Members: Present: Donald Mackay, Acting Chair Robyn Caspersen (non-voting member) Jeff Ellis Harry Hagerty Absent: Eileen Raney (Excused) Michael Saltman Others Present: Stephanie Merrill, Chief Financial Officer Mason VanHouweling, Chief Executive Officer Cindy Dwyer, Board Secretary SECTION 1. OPENING CEREMONIES ITEM NO. 1 PUBLIC COMMENT Acting Chair Mackay asked if there were any persons present in the audience wishing to be heard on any item on this agenda. Speaker(s): None ITEM NO. 2 Approval of Agenda (For possible action) FINAL ACTION: A motion was made by Jeff Ellis that the agenda be approved as recommended. Motion carried by unanimous vote. 7 of 52

8 UMC Governing Board Audit & Finance Committee Special Meeting June 10, 2015 Page 2 of 3 SECTION 2. BUSINESS ITEMS ITEM NO. 3 Discuss details of proposals with potential consultants to assist with the selection of the replacement Electronic Health Record (EHR) clinicals product, and make a recommendation to the Governing Board for final selection; and take other action as deemed appropriate. (For possible action) DOCUMENT SUBMITTED: Questions for Consultant/Advisor on EHR Replacement DISCUSSION: A list of 12 questions previously established to determine each vendor s experience and approach to the project was provided. However, in an effort to facilitate the interviews, Questions 6 and 7 were eliminated, as they were covered briefly in Question 4. For the purposes of discussion following the interviews, the Committee agreed that they would evaluate each vendor on each question with a score of 1 to 5, with 1 being the best. Each of the vendors met with the Committee and was asked the same pre-determined questions. Vendors included: - Dell Services o Greg Watson, Professional Services Leader o Sandra Nutten, Professional Services Leader - The Rosenberg Group (TRG) o Brian Rosenberg, Owner and Chief Executive Officer - Cordea Consulting o Andy Vassallo, President o Jerry Davis, Senior Partner Acting Chair Mackay called for a brief recess at 4:40 p.m. between the interviews with TRG and Cordea Consulting. The meeting was reconvened at 4:55 p.m. Following all three interviews, the Committee discussed the responses. All three companies appeared confident they could accomplish the statement of work with the resources they have. The Committee was in agreement that Mr. Rosenberg of the Rosenberg Group (TRG) was the best prepared to answer the specific questions. The Committee s main concern with TRG was that with a staff of one, if something unforeseen happened and he was unable to complete the assignment, there would be no back-up person to pick up the project. Though Member Caspersen noted that being a staff of one could also be an advantage he would have more flexibility and wouldn t be bound by processes and standardized methodology that a larger group would Member Ellis noted that during their interview, Dell made reference to flow charting the current state and future state at UMC. He asked how important that 8 of 52

9 UMC Governing Board Audit & Finance Committee Special Meeting June 10, 2015 Page 3 of 3 information would be for selecting a new system, and whether TRG would have the depth to perform that work on a timely basis. CIO McKinley responded that we have documented the current state over the past two years, and that there is much less work to determine the future state. He further noted that the contract could include specific timeframes for each phase. Mr. McKinley noted that the most important aspect of this engagement is strong in change management. The Committee was in agreement that change management was the strength of TRG. There was discussion about the varying prices of the three vendors, and it was noted that these consultant fees are an unbudgeted expense. Member Ellis noted that additional expense could potentially make the eventual investment in a system more effective. The Committee reached a consensus to recommend TRG for the project, with a requirement that Brian Rosenberg be the principal for the entire project with a financial penalty if he is not. FINAL ACTION: A motion was made by Donald Mackay to recommend that the Governing Board engage The Rosenberg Group, and that the contract include terms to ensure continuity with Brian Rosenberg as the project lead. Motion carried by unanimous vote. COMMENTS BY THE GENERAL PUBLIC: At this time, Acting Chair Mackay asked if there were any persons present in the audience wishing to be heard on any items not listed on the posted agenda. SPEAKERS(S): None There being no further business to come before the Committee at this time, at the hour of 6:19 p.m., Acting Chair Mackay adjourned the meeting. MINUTES APPROVED: 9 of 52

10 University Medical Center of Southern Nevada Governing Board Audit and Finance Committee Meeting June 17, 2015 UMC Conference Room I/J Trauma Building, 5 th Floor 800 Rose Street Las Vegas, Clark County, Nevada Wednesday, June 17, :00 p.m. The University Medical Center Governing Board Audit and Finance Committee met in Conference Room I/J, UMC Trauma Building, 5 th Floor, Las Vegas, Clark County, Nevada, on Wednesday, June 17, 2015, at the hour of 5:00 p.m. The meeting was called to order at the hour of 5:05 p.m. by Acting Committee Chair Donald Mackay and the following members were present, which constituted a quorum of the members thereof. CALL TO ORDER Board Members: Present: Robyn Caspersen (non-voting member) Jeff Ellis (by conference phone) Harry Hagerty Donald Mackay, Acting Committee Chair Absent: Eileen Raney, Chair (Excused) Michael Saltman (Excused) Others Present: Stephanie Merrill, Chief Financial Officer Mason VanHouweling, Chief Executive Officer Cindy Dwyer, Board Secretary SECTION 1. OPENING CEREMONIES ITEM NO. 1 PUBLIC COMMENT Acting Committee Chair Mackay asked if there were any persons present in the audience wishing to be heard on any item on this agenda. Speaker(s): None ITEM NO. 2 Approval of minutes of the regular meeting of the UMC Governing Board Audit and Finance Committee meeting on May 20, (For possible action) Member Hagerty had correction one typo correction to Item 6, should read principal rather than principle. 10 of 52

11 UMC Governing Board Audit & Finance Committee June 17, 2015 Page 2 of 10 FINAL ACTION: A motion was made by Harry Hagerty that the minutes be approved as recommended. Motion carried by unanimous vote. ITEM NO. 3 Approval of Agenda (For possible action) FINAL ACTION: A motion was made by Harry Hagerty that the agenda be approved with the deletion of Items 4 and 18, as recommended by staff. Motion carried by unanimous vote. SECTION 2. CONSENT ITEMS All matters of this section were considered to be routine and were acted upon in one motion, unless requested to be taken separately. For all items left on the Consent Agenda, the action taken was staff s recommendation as indicated on the item.) Harry Hagerty requested that Item No. 5 be heard separately. Donald Mackay requested that Items No. 7, 9, 15, 16, and 17 be heard separately. ITEM NO. 4 Review and recommend for approval by the Governing Board the Agreement for Television Program between Anxious Eleven, LLC and University Medical Center of Southern Nevada; and take action as deemed appropriate. (For possible action) Item deleted from agenda. ITEM NO. 5 Receive and recommend for approval by the Governing Board Amendment Seven to Hospital Services Agreement between Connecticut General Life Insurance Company d/b/a CIGNA Healthcare and University Medical Center of Southern Nevada signed by the Chief Executive Officer; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Amendment Number Seven to Hospital Agreement between Cigna and UMCSN DISCUSSION: In response to an inquiry from Member Harry Hagerty, Rose Coker, Director of Managed Care, noted that the amendment covers the hospital s costs as well as some contribution to overhead. FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Amendment. Motion carried by unanimous vote. ITEM NO. 6 Review and recommend for ratification by the Governing Board Amendment Two to Service Agreement for Interpretation and Translation Services between CyraCom International, Inc. and University Medical 11 of 52

12 UMC Governing Board Audit & Finance Committee June 17, 2015 Page 3 of 10 Center of Southern Nevada; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Amendment Two to Service Agreement between Cyracom International and UMCSN - Disclosure of Ownership FINAL ACTION: A motion was made by Harry Hagerty to ratify the Amendment. Motion carried by unanimous vote. ITEM NO. 7 Review and recommend for approval by the Governing Board the Single Site Agreement between DePuy Synthes Sales, Inc. and University Medical Center of Southern Nevada; and take action as deemed appropriate.. (For possible action) DOCUMENTS SUBMITTED: - Single Site Agreement between DePuy Synthes Sales and UMCSN DISCUSSION: In response to questions posed by Member Mackay, John Liston, Director of Materials Management, noted that there are no other vendors in the market and that UMC did not exceed the $495,000 threshold. FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Agreement. Motion carried by unanimous vote. ITEM NO. 8 Review and recommend for approval by the Governing Board, the Software License and Services Amendment between Hyland Software, Inc. and University Medical Center of Southern Nevada for use of the Hosted Onbase Suite of products; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Amendment to Host Agreement between Hyland Software, Inc. and UMCSN FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Amendment. Motion carried by unanimous vote. ITEM NO. 9 Review and recommend for approval by the Governing Board Amendment Ten to Food and Nutrition Management Agreement between Morrison Management Specialists, Inc. and University Medical Center of Southern Nevada; and authorize Chief Executive Officer to sign the amendment. (For possible action) DOCUMENTS SUBMITTED: - Amendment Ten to the Food and Nutrition Management Agreement between Morrison Management Specialists, Inc. and UMCSN 12 of 52

13 UMC Governing Board Audit & Finance Committee June 17, 2015 Page 4 of 10 DISCUSSION: Member Mackay inquired if the estimated $1.8 million was an appropriate amount. CEO VanHouweling explained that basing payment for food services on patient days is an industry standard. He explained that because this is based on volume projections, there are times when we have to true up with actual patient volume. FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Amendment. Motion carried by unanimous vote. ITEM NO. 10 Review and recommend for approval by the Governing Board Clinical Affiliation Agreement with The Board of Regents of the Nevada System of Higher Education on behalf of the Nevada State College and authorize the Chief Executive Officer to sign future amendments; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Clinical Affiliation Agreement between UMCSN and Nevada State College FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Agreement. Motion carried by unanimous vote. ITEM NO. 11 Review and recommend approval by the Governing Board, the Agreement for Physician Medical Directorship and Physician Professional Services with Mark L. Glyman, M.D., D.D.S. and Eric D. Swanson, M.D., D.M.D. Limited, d.b.a. Oral and Maxillofacial Surgery Associates of Nevada; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Agreement for Physician Medical Directorship and Physician Professional Services between UMCSN and Oral and Maxillofacial Surgery Associates of Nevada FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Amendment. Motion carried by unanimous vote. ITEM NO. 12 Review and recommend approval by the Governing Board, a new Agreement for Associated Physician Professional Services Template and authorize the CEO to approve each new Associated Physician Agreement as they are entered into, in support of the new Agreement for Physician Medical Directorship and Physician Professional Services with Mark L. Glyman, M.D., D.D.S. and Eric D. Swanson, M.D., D.M.D. Limited, d.b.a. Oral and Maxillofacial Surgery Associates of Nevada, herein referred to as the O&MF Primary Agreement (see Agenda Item #11); and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Template Agreement for Associated Physician Professional Services 13 of 52

14 UMC Governing Board Audit & Finance Committee June 17, 2015 Page 5 of 10 FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Amendment. Motion carried by unanimous vote. ITEM NO. 13 Review and recommend for approval by the Governing Board the Support Agreement for the RightFit Service Agreement Ingenuity CT between Philips Healthcare and University Medical Center of Southern Nevada; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Philips Quote FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Agreement. Motion carried by unanimous vote. ITEM NO. 14 Review and recommend for approval by the Governing Board the Support Agreement for the RightFit Service Agreement Brilliance CT 64 Channel between Philips Healthcare and University Medical Center of Southern Nevada; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Philips Quote FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Agreement. Motion carried by unanimous vote. ITEM NO. 15 Review and recommend approval by the Governing Board, the First Amendment to Master Services Agreement (MSA), which revises the Termination for Convenience notification period and incorporates a new Services Agreement for Perfusion and Related Services, with Specialty Care Cardiovascular Resources, Inc. (SCCR); and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - First Amendment to Master Services Agreement between SpecialtyCare, Inc. and UMCSN DISCUSSION: In response to an inquiry from Member Mackay, John Liston noted that Specialty Care Cardiovascular Resources is the only perfusionist group in the community and is used by all local hospitals. FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Amendment. Motion carried by unanimous vote. ITEM NO. 16 Review and recommend for approval by the Governing Board the Second Amendment to Standard Office Lease Agreement between Uptown, A Nevada Limited Liability Company and University Medical Center of 14 of 52

15 UMC Governing Board Audit & Finance Committee June 17, 2015 Page 6 of 10 Southern Nevada; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Second Amendment to Lease Agreement between Uptown and UMCSN DISCUSSION: Member Mackay questioned the length of the lease, which is five years. Andrew Chung, Associate Administrator, noted that the Peccole Quick Care is one of the more profitable clinics, and there are no intensions to decrease the level of efforts or services at that location. Because of the long term stability of the clinic, the hospital has the latitude to a longer lease term and realize a cost savings of $365,000. Member Ellis asked if the square footage rate was competitive. Mr. Chung answered that Clark County Real Property Management has been involved in this process and has assessed the rate to be fair market value. FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the Amendment. Motion carried by unanimous vote. ITEM NO. 17 Review and recommend for approval by the Governing Board the Option to Exercise a 3 year Extension for the On-Site Branch Banking Services, to U.S. Bank National Association; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Intent to Exercise Option to Extend Lease DISCUSSION: Member Mackay asked how much square footage US Bank leases from UMC, and asked for confirmation that the signage issues previously identified had been resolved. CEO VanHouweling noted that US Bank currently leases 806 square feet. The signage issue is addressed in Sections 8.8 and 29.1 of the Agreement, which gives the hospital the ability to move the bank s location or change signage with a 180 day written notice, based on master plan or remodeling. He noted that the large outdoor sign in question has been removed. CEO VanHouweling assured the Committee that US Bank has been a good partner, providing a valuable service to our employees and visitors, and they are very willing to accommodate the hospital s changing needs. FINAL ACTION: A motion was made by Harry Hagerty to approve and make a recommendation to the Governing Board to approve the 3 year extension. Motion carried by unanimous vote. ITEM NO. 18 Review and recommend for approval by the Governing Board Amendment One to the Clinical Affiliation Agreement with Roseman University of Health Sciences; and take action as deemed appropriate. (For possible action) DOCUMENTS SUBMITTED: - Amendment One to Clinical Affiliation Agreement between UMCSN and Roseman University Health Sciences 15 of 52

16 UMC Governing Board Audit & Finance Committee June 17, 2015 Page 7 of 10 Item deleted from agenda. SECTION 3: BUSINESS ITEMS ITEM NO. 19 Review the results of the follow-up audit of the Enterprise Physicals Billing Audit dated March 31, 2014; and direct staff accordingly. (For possible action) DOCUMENTS SUBMITTED: - Letter from Clark County Audit Department dated June 10, 2015 DISCUSSION: CFO Stephanie Merrill gave a report on the Follow-up Audit to Enterprise Physical Billings Audit conducted March 31, After the initial audit, the identified issues that related to accounting were remediated by moving those processes to the Revenue Cycle Department. The Follow-up Audit focused only on expired and unsigned contracts. In their examination, the auditors found that all contracts were signed and current, determining that adequate corrective action was taken on that finding. UMC successfully passed the Follow-up Audit. FINAL ACTION: No action taken. ITEM NO. 20 Receive monthly financial report for May 2014; and direct staff accordingly. (For possible action) DOCUMENTS SUBMITTED: May 2015 Financials DISCUSSION: The May 2015 Financials were reviewed, with the following highlights: - Net Revenue was $44.9 million, which is $3.4 million ahead of budget. This was mostly due to MCO enhanced rates and UPL rates which were higher than budgeted, without which Net Revenue would have been about $400,000 less than budget. - Total Operating Expenses were $45.4 million, which is $3.9 million better than budget. They continue to run below both budget and prior year. - Net Operating Deficit was $600,000, which is $7.3 million better than budget. - Net Patient Revenue has been re-stated to make sure all months show MCO and UPL enhanced payments in appropriate months. The trend is above both fiscal year to date and budget. In the June report, those pieces will be taken separately to show operational revenue vs. extra revenue vs. closed clinic revenue - Key Operational Expenses o Salaries & Benefits were $26.6 million, which is $1.4 million better than budget, with 4.7% overtime, and productivity at 106%. Ms. Merrill noted that the reason for comparing to prior year rather than 16 of 52

17 UMC Governing Board Audit & Finance Committee June 17, 2015 Page 8 of 10 budget is because the budget includes closed services. New fiscal year will go back to budget comparison o Supplies were $1.7 million below budget, and also below prior year o Purchased services were $600,000 better than budget, and even with previous year. o Professional fees below prior year and budget. Robyn asked if staff anticipates the same spike as Ms. Merrill will follow-up. - Average Daily Census continues to run below prior year and below budget - Adjusted Patient Days ticked up a bit, but still continue below prior year and below budget - Emergency Department volumes are about the same as April, but below budget and prior year - Outpatient visits are running above budget and prior year. Closed clinics were taken out of snapshot for comparison. - Surgeries o Volume has remained steady over past three months. o The new endoscopy equipment is not completely installed o There are have been 107 robotic surgeries year to date. There was one case less in May than April. Staff is working on analysis for the first quarter. The OR is seeing longer, more complex cases, and the analysis will show if that relates to additional reimbursement for inpatient cases. Other factors that will be included in the analysis include the halo effect and reduced length of stay for inpatients which reduces costs. Surgeons are pursuing a grant for a dual console. - Member Hagerty noted that while it s positive that the financials have a favorable variance vs. budget, the volume stats are down compared to last year and compared to budget. He reminded staff of the importance of looking at the financials absent the enhance rate adjustments, to ensure that expenses are being adjusted in accordance with true revenue minus the temporary adjustments. - DNFB (Dropped But Not Final Billed) Accounts Ms. Merrill reported that in April DNFB accounts totaled $69.5 million. At the end of May they totaled $47.5 million. The goal is to be in the $24-$30 million range. Extra resources are being utilized to address. FINAL ACTION: No action taken. ITEM NO. 21 Receive an update on Electronic Health Record (EHR) optimization; and direct staff accordingly. (For possible action) DOCUMENTS SUBMITTED: - Update of EHR Optimization (PowerPoint) 17 of 52

18 UMC Governing Board Audit & Finance Committee June 17, 2015 Page 9 of 10 DISCUSSION: CIO McKinley gave a report on utilization of the McKesson system following the recent optimization efforts. Provider adoption data was reviewed; which shows that utilization is very good. An update on live nursing documentation was reviewed, which is currently at 82%, and anticipated to be 88% live by Fall 2015, and 91% live by December Staff is hopeful that medication reconciliation will be live by February 2016 for meeting Meaningful Use, though we are awaiting CMS new rule on Stage 3 to know whether exceptions will be allowed. Two special Committee meetings were held earlier this month to select a consultant for executive level oversight and management of the process for selecting a new EHR clinical system. At their July 10 th meeting, the Committee recommended the selection of The Rosenberg Group (TRG). Because of time constraints, the contract will go directly to the Governing Board for discussion and approval. Committee members were invited to review the contract in advance of the meeting on the meeting portal once the agenda is posted. Legal Counsel Susan Pitz noted that at the recommendation of the Committee at their special meeting, language was included in the contract that would ensure that Brian Rosenberg would be the principal, barring any catastrophic event. Additionally, the contract includes four phases with clear deliverables and timeframes for completion. Both parties have the right to terminate without cause with 30 day notice. CFO Merrill noted for the record that while the Committee agreed to a rating system to evaluate the vendor interviews, the decision was actually a collaborative discussion and the ratings were only used by individual members to organize their thoughts for the discussion. FINAL ACTION: No action taken. ITEM NO. 22 Receive an update on replacement of Electronic Health Record (EHR) clinicals product; and direct staff accordingly. (For possible action) DOCUMENTS SUBMITTED: - Draft Potential Cash Flow for McKesson Replacement EHR DISCUSSION: CIO McKinley provided and reviewed a draft of potential cash flow for the McKesson replacement for July 1, 2015 through December 31, He noted that many of the expenditures are estimates, but the document will be appropriately updated on a monthly basis. FINAL ACTION: No action taken. ITEM NO. 23 Identify emerging issues to be addressed by staff or by the Audit and Finance Committee at future meetings; and direct staff accordingly. (For possible action) CEO VanHouweling announced that Senate Bill 33 was approved during the recent legislative session, which allow the Board to go into closed session to 18 of 52

19 UMC Governing Board Audit & Finance Committee June 17, 2015 Page 10 of 10 discuss expansion of existing services or addition of new services. Additional detail will be provided at the Strategic Planning Committee and Board meeting. COMMENTS BY THE GENERAL PUBLIC: At this time, Acting Chair Mackay asked if there were any persons present in the audience wishing to be heard on any items not listed on the posted agenda. SPEAKERS(S): None There being no further business to come before the Committee at this time, at the hour of 6:17 p.m., Acting Chair Mackay adjourned the meeting. MINUTES APPROVED: 19 of 52

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22 1800 W. Charleston Blvd. Las Vegas, NV (702) Mason VanHouweling Chief Executive Officer July, 2015 Pokroy Medical Group of Nevada d/b/a Pediatrix Medical Group of Nevada 770 The City Drive South Suite 4000 Orange, California RE: Hearing Screen Agreement as Amended, Effective May 1, 2012 Through July 31, 2015 Attn: Regional President In accordance with Amendment One to the referenced Agreement, this letter confirms UMC s desire to exercise the option to extend the above-referenced Agreement for one additional one-year period, through July 31, The total term of the subject Agreement shall now be from May 1, 2012 through July 31, Should you have any questions, please contact Veronica Ronni Kammler at Sincerely, Mason VanHouweling Chief Executive Officer Cc: File Board of Trustees Lawrence Weekly, Chair Chris Giunchigliani, Vice Chair Susan Brager Larry Brown Tom Collins Mary Beth Scow Steve Sisolak Donald G. Burnette, Clark County Manager 22 of 52

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27 Audit Report Two Midnight Rule July 2015 Angela M. Darragh, CPA, CISA, CFE, CHC Audit Director 27 of 52

28 TABLE OF CONTENTS BACKGROUND... 1 OBJECTIVES, SCOPE, AND METHODOLOGY... 1 RESULTS IN BRIEF... 2 DETAILED RESULTS... 2 Attending Physicians Not Co-Signing Admission Orders Prior to Discharge (HIGH)... 2 MANAGEMENT RESPONSE LETTER of 52

29 Clark County, Nevada University Medical Center of Southern Nevada Two Midnight Rule Follow up BACKGROUND In August 2013, the Centers for Medicare and Medicaid Services (CMS) implemented a new rule that required attending physicians to certify that a patient would either require a hospital stay of less than two midnights or certify that the patient would require being admitted for greater than two midnights in order to determine billing as an inpatient or outpatient. In August 2014, we completed an audit of University Medical Center of Southern Nevada (UMC) compliance with this rule. At that time we found that inpatient records did not include sufficient documentation to support billing for an inpatient stay. In October 2014, CMS changed the ruling to require that the focus be placed more on medical necessity through documentation in the medical record. The physician certification was no longer required. Other components remained the same, such as whether there was an order to support the stay, a signature from the attending physician agreeing with the admission status prior to discharge, and a plan for discharge prior to the patient s release. OBJECTIVES, SCOPE, AND METHODOLOGY Our objective is to determine whether University Medical Center of Southern Nevada (UMC) is in compliance with the current rules and regulations for the Two Midnight Rule set forth by the Centers for Medicare and Medicaid Services. While this is a follow up to the previous audit, we used the new criteria for our testing. To achieve our objective we selected a statistically relevant random sample of 20 accounts from January 1 through March 31, This included 10 accounts for less than 2 midnight stays out of a total of 54 accounts and 10 accounts for greater than 2 midnight stays out of a total of 292 accounts. Sample population was randomly selected for testing. We reviewed each record for the following criteria: Was there a valid order to support the patient s stay? Did the physician indicate in the medical record the medical necessity for the patient s stay? Did the attending physician sign the admission order prior to patient s discharge? Audit Department July 2015 Page 1 29 of 52

30 Clark County, Nevada University Medical Center of Southern Nevada Two Midnight Rule Follow up Was discharge planning started prior to the patient being discharged from the hospital? Based on the patient s stay, was the billing to Medicare correct? The last day of fieldwork was April 27, We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. RESULTS IN BRIEF UMC s Case Managers are contacting physicians for verification or to obtain orders when medical records are lacking documentation to support admission status. However, attending co-signatures for resident orders were not completed before the patients were discharged, resulting in incorrectly billed inpatient stays. DETAILED RESULTS Attending Physicians Not Co-Signing Admission Orders Prior to Discharge (HIGH) In order to submit a proper claim and receive reimbursement under Medicare Part A, CMS requires that physicians sign a valid admissions order. If the order is entered by a resident (student), the attending (supervising) physician must co-sign the resident s admission orders prior to the patient being discharged from the hospital. When the attending physician does not sign a valid order or co-sign the resident s order, the inpatient admission status is not valid. During our testing we found the following: Three out of 20 (15%) accounts did not have a valid inpatient order prior to discharge. In each of the cases, the admission status entered by the resident was not cosigned by the attending physician prior to discharge. (Note: 19 of 20 cases reviewed included resident orders.) Audit Department July 2015 Page 2 30 of 52

31 Clark County, Nevada University Medical Center of Southern Nevada Two Midnight Rule Follow up Payments received for these three accounts totaled $69, Without a valid inpatient admission, UMC cannot submit the claim to Medicare for Part A reimbursement (78 FR 50941). These claims can only be submitted under Medicare as Part B and paid at a lower rate for outpatient services. Recommendation 1. Refund amounts received for claims without proper inpatient status documentation and resubmit for reimbursement under Medicare Part B. 2. Meet with UMC business partners responsible for overseeing residents and ensure they provide proper training to residents on procedures for co-signing admission orders prior to patient s release from the hospital. 3. Develop and implement self-monitoring procedures to ensure that attending physicians co-sign all resident inpatient orders prior to discharge or ensure claims are billed as outpatient services. Audit Department July 2015 Page 3 31 of 52

32 MANAGEMENT RESPONSE LETTER Page 4 32 of 52

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36 Primary / Urgent Care Financial Impacts to UMC Prepared for 7/8/2015 Audit and Finance Sub-Committee 36 of 52

37 Past Performance Financial Performance FY14 Summary Primary/Urgent Care Clinic Combined FY14 Financials TOTAL NET OUTPATIENT REVENUE $ 22,444, TOTAL DIRECT EXPENSES $ 27,584, DIRECT MARGIN $ (5,139,357.81) TOTAL INDIRECT REVENUE $ 5,367, TOTAL INDIRECT EXPENSES $ 3,453, QC PC NET PROFIT/(LOSS) $ (3,226,217.61) Notes: Only includes clinics that are currently in operation for direct comparison to FY15 financials of 52

38 Past Performance Financial Performance Margin/Loss Breakdown FY14 Direct Margin NET OUTPATIENT REVENUE $ 22,444, SALARIES & WAGES $ 14,619, PAS COST CTR ALLOCATION $ 5,226, CONTRACT PERSONNEL $ - EMPLOYEE BENEFITS $ 5,405, PROFESSIONAL FEES $ - MEDICAL SUPPLIES $ 269, NON MEDICAL SUPPLIES $ 68, PURCHASED SERVICES $ 325, UTILITIES $ 194, OTHER $ 80, RENTAL/LEASES $ 1,393, TOTAL DIRECT EXPENSES $ 27,584, FY14 Net Profit/Loss UPL ALLOCATION $ 1,539, CAPITATION ALLOCATION $ 1,586, MEDICARE COST REPORT $ 47, B PHARMA ALLOCATION $ 1,496, UNRECON NET AR $ 244, MCO ENHANCEMENT $ 452, TOTAL INDIRECT REVENUE $ 5,367, ADMINISTRATION ALLOC (8615) $ 836, UMC HOSP BASED SUPPORT COSTS $ 2,617, TOTAL INDIRECT EXPENSES $ 3,453, QC PC NET PROFIT/(LOSS) $ (3,226,217.61) DIRECT MARGIN $ (5,139,357.81) Notes: For breakdown of Refer to Backup Slide of 52

39 Past Performance Financial Performance - Overall Financial Value to UMC FY14 w/clinic Generated Referrals to UMC (Within 90 Days) NET OUTPATIENT REVENUE $ 22,444, TOTAL DIRECT EXPENSES $ 27,584, DIRECT MARGIN $ (5,139,357.81) Patient ID match from PC/QC Visit with UMC Hospital Visit in 90 Days TOTAL INDIRECT REVENUE $ 5,367, TOTAL INDIRECT EXPENSES $ 3,453, QC PC NET PROFIT/(LOSS) $ (3,226,217.61) NET (90 DAY) TRANSFER REVENUE $ 8,497,279 TRANSFER VOLUME EXPENSE $ 5,922,594 TOTAL MARGIN FROM TRANFERS $ 2,574, UMC TOTAL PROFIT/(LOSS) FROM CLINICS $ (651,533.05) Notes: 120-day referrals would yield a direct margin of $8,047,839 leading to 365-day would yield $12,956, of 52

40 Past Performance Financial Performance - Overall Value to UMC FY14 Payer-Mix Comparison UMC Overall UMC ED UMC PC/QC Pay Source Payer Mix C1-HMO Plans 5.1% C2-PPO Plans 7.5% C-3 IPA Plans 0.0% C4-Self Funded Plans 6.3% C-Commercial Insurance 0.3% G-Governmental 6.8% K-1 Medicaid HMO 7.4% K-2 Medicaid Pending 7.7% K-Medicaid 8.9% M1-Medicare HMO/Mgd Care 3.1% M3-Medicare PPO/Advantage 3.9% M4-Medicare Transplant/Donor 0.4% O-Other 0.0% M-Medicare 13.1% S-Self Pay 29.5% 100.0% Pay Source Payer Mix C1-HMO Plans 3.2% C2-PPO Plans 5.3% C-3 IPA Plans 0.0% C4-Self Funded Plans 3.9% C-Commercial Insurance 1.0% G-Governmental 7.0% K-1 Medicaid HMO 6.8% K-2 Medicaid Pending 1.0% K-Medicaid 16.9% M1-Medicare HMO/Mgd Care 3.6% M3-Medicare PPO/Advantage 0.1% M4-Medicare Transplant/Donor 0.0% O-Other 0.0% M-Medicare 8.0% S-Self Pay 43.2% 100.0% Pay Source Payer Mix CCSS 2% Culinary/PPO;HPN 58% Insurance 2% Medicaid 6% Medicaid HMO 14% Medicare 4% Medicare HMO 6% Other Government 3% Pending Medicaid 0% Self Pay 5% Other 0% 100% Notes: Primary and Quick Care clinics present a higher-margin payer-mix than UMC hospital. Medicaid and Self-Pay volumes are significantly lower at ambulatory clinics. Between May 2014 May 2015 there have been 6,427 transfers, 3,784 to UMC (59.4%) 5 40 of 52

41 Current Performance Financial Performance FY15 Summary Primary/Urgent Care Clinic Combined FY15 Financials 1st Quarter 2nd Quarter 3rd Quarter (Est) NET OUTPATIENT REVENUE $ 5,143, $ 5,591, $ 6,659, TOTAL DIRECT EXPENSES $ 7,109, $ 7,338, $ 7,275, DIRECT MARGIN $ (1,966,076.29) $ (1,747,155.23) $ (615,890.03) TOTAL INDIRECT REVENUE $ 1,604, $ 1,665, $ 1,669, TOTAL INDIRECT EXPENSES $ 920, $ 850, $ 892, NET PROFIT/(LOSS) $ (1,282,624.16) $ (932,330.94) $ 160, Analysis: 3 rd quarter on track to be profitable. 27% margin improvement Q1 to Q2; est. over 100% Q2-Q3. Estimate methodology based on Improving margins through efficiencies gained via staffing realignments, labor cost-controls as well as increases in volume due to consolidation. Renegotiated rates w/hpn will take affect in 4 th Quarter providing further increased margin of 52

42 Current Performance Clinic Volumes Trend Across 3 Fiscal Years 179,427 Primary Care Volume 162,014 Urgent Care Volume 197,504 56,854 55,989 55,328 FY13 FY14 FY15 (Est) Trends: Est. 2% decrease in visits in Primary Care no shows, provider turnover, template management Est.10% increase in overall visits in Urgent Care since FY13 consolidation of patients, currently stressing capacity 7 42 of 52

43 Current Performance Opportunities FY16 Strategic Plan Review Goals Increase Market Share Increase Clinical Quality Scores Increase Provider Productivity Maintain Margins Initiatives Identify and promote services in additional market areas Resource modernization of facilities for visual appeal Streamline patient flow process to reduce wait time and walk-outs Improvement of CG-CAHPS scores Maximize HEDIS measures Seek accreditation via UCAOA / NCQA Streamline patient flow process to reduce wait time Maximize provider panels Revise clinical staffing model- adoption of mid-level providers Providers and clinical staff to practice at top of license Decrease no-show rate Enhance capacity via extenders Enhance Technology Adopt and implement Ambulatory EHR Maximize PCP Network Referrals Identification of out-of-network referrals to develop additional specialty alignment with UMC 8 43 of 52