ROSWELL PARK CANCER INSTITUTE CORPORATION FINANCE COMMITTEE OF THE BOARD OF DIRECTORS

Transcription

1 ROSWELL PARK CANCER INSTITUTE CORPORATION FINANCE COMMITTEE OF THE BOARD OF DIRECTORS A meeting of the Finance Committee of the Board of Directors of Roswell Park Ca cer Institute Corporation was held on Monday, March 2,2015 at 8:30 am i the Patric P. Lee Board Room, 8th Floor, Main Hospital Building of the Institute. Present: R. Buford Sears, Committee Chairperson Michael Joseph, Chairman of tire Board Linda Dobmeier (telephonically) Amre Gioia Candace Johnson, Ph.D. Kenneth Ma ning, Esq. Elyse Nemoyer (telephonically) Thomas Stewart, Ph.D. (telephonically) Dennis Szefel (telephonically) Sylvia Tokasz (telephonically) Excused: Donna Gioia Present by Invitation: Lisa A. Damiani, Vice President, External Affairs Betsy Doty, Administrative Assistant Victor Filadora, MD, Chief Clinical Operations Officer Armen Gallucci, Vice President, Business Development & Outreach Pamela Germain, Vice President, Ctr for Personalized Medicine Kerry Kerlin, Chief Information Officer Terri Kothe, Vice President, Managed Care Gregory A. McDonald, Chief Financial Officer Carl Morrison, MD Executive Director, Ctr for Personalized Medicine Jon Neumeister, Executive Director, Clinical Practice Plan Thomas Schwaab, MD, Vice President Michael B. Sexton, Esq., Chief Institute Operations Officer, General Counsel and Corporate Secretary David Taber, Assistant Vice President, Fiscal Administration I. OPENING/MINUTES Mr. Sears opened the meeting with a review of the Minutes for the Finance Com ittee meeting held December 10, Those Minutes were reviewed and two typographical errors were corrected. As so corrected and on motion made by Mr. Manning, seconded by Mr. Joseph, those Minutes were unanimously approved.

2 II. CONTRACTS/CAFITAL EXPENDITURE PROTECTS Mr. Sears then moved on to approval of contracts/capit l expenditure items as follows: 1) Sterile Processing Department (SrP): Management & Staffing. Dr. Filadora presented on the request for approval of a new contract for the management and staffing of the Sterile Processing Department. After a bid process, Integrated Medical Systems was awarded the contract at a total cost of $3,566,952 for a 3-year term. Dr. Filadora noted that the cont act envisions the possibility that RPCI will bring this function back in house prior to tire end of the t ree years, and the contract can be terminated in that event. A motion luas made to approve the contract by Mr. Manning seconded by Ms. Gioia and unanimously carried. 2) Clinical Documentation Improvement Program. Mr. Neumeister made a brief presentation on the need for a software and haining pro ram to improve clinical documentation for record documentation and billing purposes. The reater accuracy will be positive from a compliance prospective and also may result in enhanced reimbursement. An RFP process was conducted and 3M was selected as the successful bidder. Management is recommending approval of tliis contract in the amount of $2,372,583 for a 5-year term. A motion was made by Ms. Gioia, seconded by Mr. Manning to approve the contract, ivhich motion was unanimously carried. Mr. Szefel noted that this contract envisions a staffing increase of three. He noted that the transformation savings currently being administered by Pricewaterhouse Coopers (PwC) are intended to result in a number of illions of savings. He felt that it will be hard to assess that process due to increases in costs in other areas. There was a discussion and it was noted that there is a need to benchmark the savings achieved. Mr. Sears suggested separately accounting for those savings so that they can be identified against increases in other areas. 3) New Main Hospital (NMH) Retro Commissioning. Mr. Sexton presented on a proposed contract in the amount of $1,303,491 to IBC Engineering to conduct a retro com issioning on the main hospital. This is phase 1 of a project and involves functional testing and repairs to the HVAC system in the hospital building. This contract will be for a 12-month term and will likely be followed by at least or two additional phases as critical systems are identified for rehabilitation or repairs. Mr. Sexton also noted that it is likely that management will be coming back to the Board soon to enhance this project with immediate remediation to the HVAC controls system in order to remediate the environmental con rols to the surgical suites. A motion ivas made to approve the project by Mr. Joseph, seconded by Mr. Manning and unanimously carried. A consent agenda item was in the book. This was an additional 1-year term for Pediatric Anesthesia services by Great Lakes Anesthesia. Great Lakes is the only provider of pediatric anesthesia services in Western New York. This contract is for $500,000 for 12-months of service. There was a motion for approval by Ms. Gioia, seconded by Ms. Tokasz and unanimously carried. 2

3 The meeting proceeded to five (5) post implementation reviews covering the Allscripts EMR program extension, the new PC refresh purchasing program, the Gamma Knife source unit replacement, the Immunohistochemistr equipment purchase, and the Robotics purchase. The post implementation reviews were reviewed and were positively commented on by tire attendees. Mr. Taber reviewed a proposal seeking approval to raise the procurement approval thresholds for Finance Com ittee and Board approval of acquisitions and purchases. Comparable benchmarks were reviewed from other Institutions. The recommendation is to increase the approval th esholds for the Finance Com ittee to $1M for operating expenses and $500,000 for capital expenses, and to increase tire Board approvals to $2M operating and $2M capital. There was a discussion, and on motion by Mr. Manning, seconded by Mr. Joseph, the recommendation ivas unanimously carried. III. CLINICAL SCIENCES CENTER Mr. Sears briefly commented on status updates that were in the meeting book dealing with the constraction of the Clinical Sciences Center and with a proposal for future development of the 901 Washington Street site. A motion was made by Mr. Manning for the meeting to move to Executive Session, for discussion of business development and clinical outreach activities, an update on the commercialization of the Personalized Medicine Project, and a status report on the transformation process. The motion seconded by Ms. Gioia and unanimously carried to proceed to Executive Session. IV. PERSONALIZED MEDICINE CENTER PROTECT Dr. Morrison gave a detailed update on the Center for Personalized Medicine project. He reviewed milestones and noted that the Newco corporate entity, OmniSeq, LLC had been formed. Mr. Sexton noted that the entity is formed as a limited liability company in the State of Delaware. Directors and Officers have not yet been appointed. Dr. Morrison updated the Board on the process for OmniSeq, LLC to obtain a CLIA licensing. The application is being developed. Lab space is being looked at Hauptman Woodward Institute directly across from the Institute on Ellicott Street. Dr. Morrison reviewed recruiting tor the executive and management team for OmniSeq, LLC. Candidates for the positions of CEO, VP of Sales and VP of Marketing are being interviewed. 3

4 Mr. Sexton gave an update on the CTG relations ip. It appears that an agreement is forthcoming from CTG to resolve issues between RPCI and that company elating to sublicensing of software and mutual releases of claims. Ms. Germain gave a brief reimbursement update. Reimbursement rates have been negotiated with HealthNow Blue Cross and she is close to ag eement with IHA. Negotiations are continuing with Univera and other payers. Dr. Morrison updated on die recruitment of Jan Nowak, MD who is a major player in the genomics field. It is hoped that he will sign on as the Chief Medical Officer of OmniSeq, LLC. V. ALBANY UPDATE Ms. Damiani gave a brief government relations report. She informed the Com ittee that the Roswell Park management meeting with the Western New York Legislative Delegation was held February 27th at HealthNow Blue Cross. The State budget is still in process in Albany but is expected to be finatized very soon. There is a legislative effort underway to restore some or all of the Roswell Park funding that was reduced in the original Governor s budget. Dr. Johnson will be in Albany next week to meet with Senate leaders. Mr. Sears mentioned that Dr. Johnson did an excellent job in presenting to tire WNY Delegation at the February 2 th meeting. VI. BUSINESS DEVELOPMENT UPDATE Dr. Johnson introduced D. Thomas Schwaab from the Department of Urology at RPCI. Dr. Schwaab will be taking a position of leadership in the Business Development and Outreach area, working with Mr. Gallucci Dr. Johnson also informed the Committee that Dr. Kuvshinoff is cur ently in Baltimore meeting with US News and World Report on their ranking system. 4

5 VII. TRANSFORMATION PROTECT Mr. McDonald then gave a report on die transformation project, reviewin current status. Realization g ds for the period were reviewed. PwC has identified approximatel $1.6 million in additional savings that are potentiall available, mostly in purchased services and in standardization of equipment purchases and practices. Mr. Szefel reiterated drat when a look back is done on this project it will be necessary to come up with a benchmarking process to accurately measure savings since in future year s volumes, costs associated with those volumes, and other costs, will change. Mr. Manning suggested possibly asking PwC for input on how to properly measure savings in the future. Mr. McDonald indicated that he is having those discussions with PwC. VIII. FY16 BUDGET Mr. McDonald then reviewed the proposed budget for FY2016. He also presented a 5- year net income and cash on-hand projection with assumptions as to NYS support. Margins for the periods were reviewed. Mr. McDonald reviewed those numbers both including and excluding the accruals for post-reti ement health. He also reviewed post-retirement health costs and building debt payments through calendar years Finally, Mr. McDonald reviewed the history of NYS support for the years and also financial results projected for the Bauer Soniwala practice. Mr. Sears noted that the Institute has, throu h the current fiscal year, exceeded revenue projections from the Strategic Plan prepared in Mr. McDonald reviewed labor cost projections expected through tire next 2 years and also reimbursement rate projections through He informed the Board that IHA has notified Roswell that it will be proposing a new Tiered Medicare product for next year. Mr. McDonald expects a likely attempt by IHA at a rate cut as part of that product. Mr. Manning made a motion to ret rn to Open Session, which was seconded bp Mr. Joseph and unanimously carried. After a brief summary, there was a motion by Mr. Manning to recommend to the Board approval of the Fiscal Year 2016 Budget, which was seconded by Ms. Gioia and unanimously carried. 5

6 Mr. McDonald reviewed the HRI Fu ding Resolution. On an annual basis, PCI seeks approval from the Board to fund the deficit incurred by Health Research, Inc. in covering costs for staff and grants administration for Roswell Park. On motion by Mr. Joseph, seconded by Mr. Manning, the Resolution approving the funding for HRI in the amount of $7.66M for Strategic Recruitment for Fiscal Year 2016 and up to $6.3M for other costs associated with RPCI was unanimously approved. Mr. Taber reviewed tire Section 203 New York State Bud et filing re uired of Roswell Park. This includes current results on a 5- ear projection, excluding HRI results, mandated by the State and involves converting Roswell Park s financials to modified accrual methodology. The budget filing was reviewed and on motion by Mr. Manning, seconded by Ms. Gioia the filing was unanimously approved. IX. 3rd QUARTER FINANCIALS FY15 Mr. McDonald reviewed the 3rd Quarter Financial statements, noting that margin is favorable to budget due primarily to case mix, vacancies not being filled and strategic initiatives being delayed. On motion by Mr. Manning, seconded by Ms. Tokasz, the 3rd Quarter Financials were unanimously approved. X. 3rd QUARTER INVESTMENT REPORT Mr. Taber gave the Investment Report for the 3rd Quarter, reviewing cash investments for the Institute and also the investment results Health Research, Inc. On motion by Mr. Joseph, seconded b Ms. Dobmeier the Investment Report was approved, with Mr. Sears and Mr. Manning abstaining. Mr. Manning and Mr. Sears abstained due to their relationships with financial Institutions at which Roswell Park has accomits. XL MANAGED CARE UPDATE Mr. Sears introduced Terrie Kothe, who is tire new Vice President for Managed Care at Roswell Park. Ms. Kothe gave a Managed Care update. Negotiations will be underway this year with Univera. A contract is in place with IHA but as earlier reported, IHA is proposing a new Medicare product which is likely to include Tiers. Ms. Kothe indicated that the strategy for this coming yea will be for Roswell to be included in all plans that Roswell Park wants to be included in. Mr. McDonald offered an invitation to any Director to participate in the Managed Care subcommittee with respect to the Univera contract negotiations. XII. OTHER ISSUES Mr. Sears called for any additional business and there was none. There being no further business, a motion was made for adjournment by Mr. Joseph, seconded by Ms. Gioia and was unanimously carried.