Transcript Document

UW Hospital & Clinics
Price Change
Mike Buhl,
Senior Vice President and
Chief Financial Officer
April 7, 2010
Confidential
Background
UWHC typically implements a price change
effective with the start of our fiscal year - July 1.
The Wisconsin Statute, section 153.08(4),
provides for a public notice of a hospital price
increase.
A reportable price increase is a change in a
hospital’s prices that causes the percentage
increase in the hospital’s total gross revenue.
Revenue from patient care services for the 12
months following the price change will be
greater than the change in the consumer price
index.
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Confidential
Situation
The transition to HealthLink Billing, ADT and
Operating Room systems in October 2009
provided the opportunity to implement revised
and improved patient charge structures and
capture processes in certain departments.
 These changes were put in place to advance
standardization in charging approaches across
the institution, to improve the overall accuracy
and specificity of charging, and to provide
increased alignment with professional charge
structures.
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Confidential
Situation (cont.)
The net effect of these changes is projected to be an
increase of $7.8m in gross revenue annually. The
principal areas impacted were:
a.Recovery Room – A change to a more precise system of acuity
based charging, enabled by the new HealthLink Optime system,
increase gross revenue by $4.5m annually.
b.Pharmacy – Improved documentation systems in HealthLink allow
more specific charging of medications used during operative cases.
Impact is $950k annually.
c.Ophthalmology – With the transition to HealthLink based
charging, facility charges for certain types of eye exams were
changed (increased) to standard rates and charges used across all
UWHC clinics. Impact is $828k annually.
d.Cardiac Cath/EP Labs – Procedure charges in these two areas
were restructured to a high level of specificity and alignment with
CPT/HCPC code structure and professional charges. This impact is
$560k annually.
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Confidential
Situation (cont.)
Overall, this annual increase in gross revenue
of $7.8m represents a .4% increase in our
annual FY 2010 gross revenue of $1.9b.
As noted above this qualifies as a “reportable”
rate increase, as this percentage increase
exceeds the year over year change in CPI of
.1%.
Normally this CPI-based reportable threshold
is much greater and this would not be a
reportable rate increase. For example, the
threshold in effect for any increases after
December 31, 2009 is 2.7%.
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Confidential
Recommendation
Based on the assessment of the rate
changes due to the HealthLink
transition and the Wisconsin Statute,
management recommends approval of
the .4% price increase.
If approved, a public notice will be
published as soon as possible.
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