Loading...
HomeMy WebLinkAbout1987 i - Cn '.;e ractiirr_ r; p :,Easkir.d & Sella, and not -~o bi r,r r,,uua,i in any form without their per:aiaston., Mr. John F. Mcarane, February 220P 1987 Director of Finance City of Denton Municipal Building 215 East McKinney Street Oenton, Texas 76201 w Dear Mrs McOrane: We are Pleased to respond to your request for a proposal to assist °hs City of Denton in evaluating the future financial viability of Flow Memorial Hospital. We have developed a program of assistance that is designrd to most the needs of the City of Oonton in this critical and sensitive project. Our approach is based upon conversations with You, and our experience on similar engagements. We are highly qualified to assist the City in this endeavor. Our project team meats the critical factors related to the engagement: &czn~Cid~ni;ialitr - As Your auditing firm we are wall aware of the need to maintain strict confidentiality of the data gathered and our findings and recommendations. Iee4nie®1»Exeel:i~ns:e - as evidenced by the project teaem resumes, DH&S has the neededr proven skills in the key areas of financial feasibility studies and strategic planning for health carp providers. rt1d11strY.EXe~!>:ii~~ - The references provided describe our extensive background in working with similar hospitals. Coupled with our knowledge of Texas municipal financial operations, and the City of Denton in particular, we have an unequaled depth of industry expertise, rimalinazz - Our track record in working with the City aptly demonstrates our commitment to meeting your reporting and budgetary timeframes. This combination of capabilities makes us the overwhslming choice to most your needs. In the remaining sections of this proposa2, after a brief ' statement on the background of the proJect, we describe the proJoct background, scope of work, estimate of timing and costa, and our qualifications. We appreciate this opportunity to further serve our valued audit client, and look forward with enthusiasm to working closely with your the City's management team, and the City Council, If you have any questions, or any need for additional information, please feel free to call me at (214) 9544535 or ken Staples at (817) 336-2531. Sincerely, Mark E. Delano Consulting Managing Partner i V r F ~IIY_QE..QEaI4L~ ' PROPOSAL TO ASSIST WITH A FINANCIAL EVALUATION OF ELiild_MEbQBSBL_~~aesres. Z'A9LE_G2E_GQdIEdI~ EEOIIQN PROJECT BACKOROUNDr OBJECTIVES AND APPROACH I PROJECT OROANIZATION AND STAFFING II PROFESSIONAL FEES....... III REFERENCES, GUALIFICATIONS AND RELATED EXPERIENCE........... IV RCSUMES...................... V t I r G SE~Z1Qd_Z EgS2~IB~T_B9~~SSi8gL1~IRx_aH~IE~ISSLEB_8a~_AE~B49.Cd I - 1 ~~cTZ~d~z EEQZEirI_EA&~flgQUdQi_fl9~ECII~EE_QdQ_AEeBQE.~b 8ackeround_end_CbieciiYee Flow Memorial Hospital (the "Hospital"), like many public hospitals across the country has recently encountered considerable difficulty in meeting its financial obligations. Unaudited financial information for the three months ended December 31,'1486 reflect, an operating loss of over $878,660. This represents a deterioration of over 267% from the same peria' last year. The administration of the Hospital has requested submtantlal financial assistance from the City in order to most its obligations. City Management is appropriately and justifiably concerned as to the financial viability of the Hospital, acid desires a study which would project the relative financial health of the institution over the next five years. Such a study is to be based upon projections of operating revenue and expenses and assumptions relating to the future environment in the health care marketplace. The results of the study would serve to inform City and County officials os to the potential amount of financial assistance the Hospital may require during the next five years. Ag=acb A project of this magnitude will require an analysis of many factors, including: The growing demand for indigent care. Shrinking debt capacity and access to additional working capital due to current and proposed reductions in Medicare reimbursement. A national trend in the shifting of admissions to an outpatient basis. The Hospital's ability to handle this shifting of admissions in light of the Hospital's physical plant restraints. Competition in the service area. The influx of alternative delivery systems into the Hospital's service area and the pressure to discount Hospital charges. The impact of community awareness and anticipated health care industry change:, upon the Hospital's utilization. The deteriorating economic condition of the overall Texas economy. r-e Our approach to serving the City would resemble a preliminary feasibility/debt capacity study. While our report would not be suitable for financing purposes, many of the same steps and Procedures employed in a formal feasibility study would be utilized. Accordingly, the primary cbJectives of our participation ire this prodect will be to identify the facts that can be used by the City and/or the Hospital to assess: The Hospital's financial outlook over the next five years assuming current utilization trends and methods of operation. The future cash needs of the Hospital based upon this scenario. The "critical success factors" that must be present in order to improve the Hospital's financial outlook. In addition, a secondary obJsctxtm of our participation will be to provides information useful in future strategic planning for the Hospital. To do this we will: Most with the City and Hospital management and others, as necessary, to discuss risk areas, from a financial feasibility standpoint, much as competitive factors, third-party reimbursement factors, and the future financial viability of the Hospital. Prepare selected alternative utilization levels and/or methods of operation to identify and assume the financial impact that alternative levels of utilization, Payor mix, staffing, etc. has on that future cash flows of the Hospital. Be available to attend critical City and/or Hospital planning meetings to review the study. The goal of the sensitivity analysis is to inform the City management of the potential outcome of alternative scenarios to that knowledgable decisions can be made. I - 3 5~ R EE..4E~ 9 EB~I I CES_ r4_ 9~_ E'B4yz RE Q In Preparing a study where we provide a compilation of projections, it is mana ourgemen pot liccoync to baise these compilations on assumptions provided by ernng future events and circumstances. As such, the underlying assumptions are the responsibility of Hospital or City management and we will assess the reasonableness of those assumptions. A general description of the scope of serviceem, Procedures performed and information analyzed during our involvement is included below. Qg~a_Qathsnine_And_6nslr~is We would beesin by analyzing historical data provided by the City and Hospital. The historical data analyzed would include; Patient charges and other operating and non-operating revenue. Third-party reimbursement data such as coat reports, admissions by payor type, and alternative delivery contracts. Operating expenses by key expense categories such as medical supplies, purchased seervicss, professional feces, utilitiees, insurance and other expenses, Historical stnffing patterns and employee benefits. Analysis of historical balance sheet% and working capital requirements. Historical utilization and workloads, both Inpatient and outpatient. Service area statistics and competitive factors if readily available. They historical data obtained will serve as the basis of our utilization and financial analyses, the data collection and review phases will also enable us to gain a &sod understanding of the Hompital's operations and management -;',&ff. I - 4 lll:ilizatiaq_Analxsim We will them make an initial assessment of the future demand for the Hospital's sarvicass and programs taking into consideration the market area served by the Hospital. Our approach to would include consideration of: . Historic admitting patterns. . Service area definition and demographics. Historic and alternative projected use rates. An overview of attitude and age characteristics of the medical staff. The Hospital's future plans as to services and/or program changes. One task in this phase would be to most with management to review our findings end obtain an understanding of management's expectations of future utilization. We would than prepare the utilization projectiono that will be the driving factor behind the financial analysis. ~igBgG1~8X..Anf91Y8~.9..QOd_E1:a39dC.~~.agPS This phases will cnmbine all information gathered during previous taskre, examine the information for reasonableneres, develop assumptions, and prepare the financial projections that will be summarized and included in our final report. Our approach includes: An assessment of the Hospital's historical and projected patient charges in terms of d competitive position. Identification of fixed and variable expensoa of the Hospital. An analysis of Projected staffing patterns and employer benefits, Assessment of working capital needs are to any future capital additions and improvements. An analysis of reimbursement from third-party payors. I I I - S • The conduct of sensitivity and Other feasibility determinant tests including: The potential impact Of alternative operating levels. Calculation of key ratios used by financial rating agencies to apitos,1al. In identifying strengths and weakness., of the Ho • Use Of our microcomputer-based, "utilization- madel to incorporate all assumptions and prO,~fctvthe Currenteand alternative operating levelss of the Hospital. We will meet with FlOepital management to review our findings and obtain an understanding of their expectations re,ults. This phase of our work is dessi Of future financial assumption, pertaining to the gned to finalize all proJectfonsa and our final report. The final phase of our, work will include preparation of our, to the City. report ~'ictml_Beectl;~ ~ Our final report will be analysis. It will be designed to incorporate the result, n am the Citr will a comprehensive document and serve as abasis for th direction, In and the Hospital to eveluat. the institutionle encompass, at a minimum$ thetfollowing discussionrsuppo will es rted xhibitmr as necessary: by pn • Executive summary Comparative analysis of to proJectionsa under alter nati~an nperating exiting conditions velss. Identification and discussion of the "critilcae~l success factors" of the Hospital. Summary assessment of factors affecting future utilization: Service area M@,:._;al staff Trends in medical treatment patterns 'e 6 A summary of the projection assumptions used in the fcia projectionsi and a discussion of the alternative aperatnan iinelelvels evaluated. Projected financial informations along with various reimbursement assumptions. Summary of conclusions. Financial projections; In additions all of the supplemental and supporting detail information used in preparing the alternative financial projections ran be included as an Appendix to our Study. Although stated previously, we would reiterate that the scope of our work on this engagement would be considerably less than that of a full financial feasibility study which would be used for financing purposes. We believe the focus and scope of a full feasibility study would not be relevant to the needs of the City at this point, a nd would also be more costly. We would also point Out that much of the itselffto atfuionllgathered an future. liming Due to the critical nature of this engagement, we are prepared to begin our work within ten working days of being notified that our proposal has been accepted. Assuming the full cooperation of Hospital and City management in data gathering and interviews, we anticipate rendering our report within thirty days of our start date. During the course of our work, we would suggest that periodic interim meetings be held with representatives of the City to review progress on the engagement, ;-lch meetings will help to assure that our efforts are wall-facusedt and will serve to keep City officials APPrised Of Our Progress. . ~~~zx~a..xx esQ~E~i_QSS~edxz~rxs~d_ed~_~zeE~zda WIR II - 1 i I EBi~~E.~I_S~B~iA~IIZAT.ikC _.Adf~_S~AEEIdg We have assembled for this important project, a multi-diociplined team of professionals with the critical blend of skills and experience to provide financial consulting services to the Cir.y of Denton. The consulting team has had significant experience in the following areas: Financial feasibility studies Computerized financial modeling Strategic planning Market anal ysi s Tax-exempt financing and related bond documents Knowledge of the specific market and third-party reimbursement systems Stratn is business planning studies including joint venturesp mergers and acquisitions and debt capacity analysis Corporate reorganization Multi-hospital organizations Design Structure Imp I Women to t ion Cases mix management Additionally, our project team has experience in a broad range of consulting services including operations revisal, productivity studies, reimbu rsementp and automated systems. The organizational chart an the following page depicts how we propose to staff this proJr t. F, i1 ~i xx - z .G.ITY.ri?F_Q~dT4~1 ~BS?,IEOTrTE6d Vw_rr_-----------r-- > CITY OF DENTON 'DIRECTOR OF FINANCE> > CLIENT > > SERVICES PARTNER ) > "KENNETH E. STAPLES 6rr..r _rwr __rr_rwr> r> w t } rr_-r r_rrr rrr_rwrrr 4 ---rr__-----__--- } j w r> }ENGAGEMENT PARTNER > > CONSULTING PARTNER,, > >r__-> MARK E. DELANE > > STEPHEN 0. WEST Ly_r wrrrr _ r y rrrwwwr 1$ err..-------rwrrwr__r> > ~rrwr-rrrrL__r_r__rwf > PROJECT MANAGER > > RANDALL W. LUECKE > zrr > } r--------~--- -r-_ LEAD CONSULTANT > } } > CHARLES 0. CHRISTY> OTHER CONSULTANTS AS NEEDED TT-S Kenneth E. Staples, Partner in the Fort Worth office and Audit Partner on the City of Denton audit, will serves as the client services partner. He will ensure that the project deliverables are appropriate for the City's needs. Mr. Staples has worked with numerous governmental and corporate organizations to develop successful and viable financial strategies. Technical advisor to this engagement will F'irm's Great Lekos Region Director for Healthcarre Services. Heaur r~ brings to the project extensive experience in health care strategic business planning and financial feasibility studies." Randall W, Luecke is a Senior Manager in our Great Lakes Health Care Consulting Group, and one of our Firm's lead specialists in health care planning and operational analysis. He has over ten years of health care consulting experience, served as National Health Care Directoriforeanother international public accounting firm. He will be the Project Manager on this engagement and be responsible for the day to day engagement activities, Charles D. Christy, a Manager in our Great Lakes Health Care Consulting Group, will serve as the lead consultant for this project, Mr. Christy is the regional financial feasibility specialist and brings to this engagement the experience of successful mana,,~oment of many such studies. Mr. Christy has had experience its health care feasibility studies and financial modeling. Staff level activities will be provided as needed by a variety of consultants. These consultants will bring to the engagement both the clinical and financial backgrounds necessary to ensure a successful project. All of the consultants utilized will have varying experience in the areas of reimbursement) financial modeling) systems, operations, financial feasibility studies) corporate reorganization and case mix management. Resumes for each of the identified members of the project team are included as Section V of this proposal. Mark E. Delaney Consulting Managing Director of the [Energy Region headquartered in Oallas► will beg the engagement partner. He will hAVO avorali responsibility for the quality of the engagement, Mr. Delano hale extensive experience in consulting engagements to similar financial institutions, I ♦ Je? - b 1a6 f~ k IrI h 1 h $~cxxQd_sss BBSlEE68Ti~~16L_EEE~ AIYIMM~ ii TII - 1 SE'~I~Q~!_IxI Our professional fees for this engagement will be $25,000 plus out of pocket expenses of travel, subsistence and clerical support. Our reimbursable expenses are customarily billed at actual, each month they are incurred. it is not practical to predict with any degree of precision how many special meetings you may require or the particular situations we may encounter at Flow Memorial, both of which affect our out-of-pocket expenses, Howeverr we will establish a ceiling for reimbursable expenses of $6000. In no event would we exceed our estimates without your prior approval. Should any unforeseen factors change the scope of our work, we would confer with you immediately before proceeding. We follow the practice of submitting progress billings] at the and of each calendar month during the course of our work, with a final billing at the completion of the engagement. t ~,I 1 e l ti'R a 41 i I ss~zs~..zu RERERENCESY QUALIFICATIONS 6dQ..BEL9IE~..~X~Ef3IE~l&E 4 YT BEEEREd~EB~_slUAL Z~ZCAIIQE~B_©d(2_ BELAIESI..EX eEBSEOlSiE In an effort to demonstrate our qualifications to assist the City of Denton in this very important project, we are pleased to provide both a list of references+s and a listing of financial planning clients we have served in the past few years. r BeEs~ance As evidence of the experience of members of the project team to bm assigned to the Cityr we offer the following select references anu appropriate contact people that would be of interest to you. Southwest General Hospital Middleburg Heights, Ohio Mr. L. Kenneth Taylor Executive Vice President 216-e26-8000 Pt-ojact: Strategic Planninp/Service Review and Analysis Riverside Hospital Mr. Scott E. Shook Senior Vice President and Chief Operating Officer 1600 Superior Street Toledo, Ohio 43604 (4117) 729-6000 Project; Formal Financial Feasibility Study Baptist Hospital of Miami, Inc, Mr. Richard C. Marx Director of Financial and Long-Range Planning (3900 North Kendall Drive Miami, Florida 33176 (305) 596-6503 Projerctl Formal Financial Feasibility Study San Pedro Peninsula Hospital San Pedro, California Mr. Andrew P. Marincovich Chairman, Board of Directors 219-514-5233 Project: Management Audit Susinese Office Review A listine of financial planning clients is included at the end of this section, on pages IV-19 and IV-20. IV -2 The remainder of this section discusses the services we have rendered to our health care client", audiiiua-Sesuicem i Early in our history we began serving health care institutions - first as accountants and auditors and then, as the needs of the industry became more complex, we began the continuous development of specialized consulting skills. Today, the Firm nerves voluntary health and welfare agencies) mental health contorsf physicians and dentister both individual and group practices) large teaching hospital") community hospitals) maJor hospital and nursing home management companies. We take a constructive approach in serving our clients, blending f technical knowledge with business insight, and providing timely communication of financial and accounting developments to client executives. One partner is assigned the responsibility for all services to each client and is Supported by all of the Firm's resources, Audit work is planned ground the concept of acntinuousp contact. An audit team frequently perform a substantial the audit during periods prior to yearend, Theuseorelatively ortion of small team at planned intervals during the Yearr rather than a large audit crew at year-sand closing, fosters a more efficient working relationship with client personnel and minimizes any disruptive effect on the client's normal operations. opportunity to identify and resolve It also affords the questions the client bettor plan for the as they arise and to year-end closing, In making an examination, we use many advanced auditing techniques that we have deavoloped through the years , These techniques are designed to achieve audit economy and efficiency while maintaining strict quality ccntrolzo We also make many of those techniques available to our clients for use in internal auditingr special anaIYSOs, and other applications, During the audit, we coordinate our work with client that we can operate most efficiently and avoid duplicationnofiwork. We make maximum use of the financial statements, schedules, and special Analyses that the client of our work as feasible at those tPrmpa We imesrwhen theaclient'sorm as much and computers, are least burdened with periodic work loadseandnnel, special projects, IV-3 While carrying out our normal auditing Procedures, we often raise questions and develop suggestions for improving the organization's system of internal accounting controls and administrative procedures. We also make recommendations from time to time for improving the organization's financial structure, achieving maximum rainbursesment benefits, increasing the profitability of operations, and strengthening the overall management process. Einaucial_EeaeibilitY_8.tudiea_and_.~agi.tsl..Plegning A mador area of service to our health care clients Palates to feasibility studies and related analyses (such as debt capacity studies and Certificates of Need) performed in connection with ' planning and financing for expansion and/or modernization programs, mergers and acquisitions, reorganizations, and budgeuting and strategic planning. In addition to studies prepared for public preparing feasibility studiesnfar Inclusionlin various experience loan c applications (such as Farmers Home Administration applications and FHA-242 loan guaranty l programs), Private placement% and limited partner syndications. The clients that we have serviced include hospitals, life care and continuing care centers and other types of extended care facilities. Our health care consulting group utilizen sophisticated 4 4 computer modeling in condunction with our capital planning and budgeting services, and can tailor our microcomputer models for in-house use. As evidence of our expes3rience, our staff has assisted more than ninety hospitals in the capital financing process. The combined protect size for the health care organizations they have assisted, or are assiesting, exceeds $1,500000,000. AsrsnLnta_@,~cei~atili~_~lmnagam~ni In the past two years, many changes in the health care environment have resulted in hospital accounts receivable levels climbing higher than ever before, Those changes include; Medicare implementation of Prospective Payment eystem (PPS) which included additional billing requirements. Implementation of U8-82, a uniform bill for all Payors. Increased use of negotiated contracts for HMOs, PPO% and others. e Hospital diversification into home health care and skilled nursing homes which raequires specific billing, e We have been actively involved in interpreting these changers and helping hospitals respond appropriately. i 4l li IV -4 T~~sa>ai:ins3..6ccs~>Jnta_BacalYsatile A significant contribution to the effort of meeting today's health care environment challenge can be made by improving cash flow through effective management of patient accounts receivable. We help hospitals effectively manage their receivables by! Determining an appropriate level of ratient accounts receivable for each individual hospital. Implementing a reporting system which enables management to identify troublesome areas. 8u~inass_4,Efica_Blauiasna The objectives of our Business Office Reviews are! To identify ineffective policies and procedures. To identify bill processing delays. r To review staffing - organization structure and number of employees. To meet cost justified recommendations. Our approach to Business Office Reviews includes; Interviews with managers, supervisors, and staff members. Reviewing patient account documentation. Reviewing third-party documentation. Compliancy testing to policies and procedures, Reviewing file sys;stmms, automated and hard copy. Reviewing interdepartmental interfaces including Medical Records, Data Processing, and ancillary departments responsible for Processing charges. Reviewing batch control procedures to ensure timely and accurate submission of charges. ' s r IV - 5 ~e~ret~ons_t~~txinwa_and..E?nnduc.~ixitY_9nalxsea Our health care consulting group has extensive experience in performing productivity studies designed to ensure that hospital services are provided effectively and efficiently. In approaching these protects, we take the position that client participation is vital to the success of such programs. Accordingly, our consultants work closely with client personnel in all phases of a proJect, scheduling frequent reviews of engagement progress with management officials and user groups throughout the course of our work. Through this approach, client personnel become sufficiently proficient to carry an the programs developed once our consultants have completed their work. Our Executive Office considers productivity measurement and monitoring in health care to be paramount to the services we offer. To ensure that, as a Firm, internal resources arm fully utilized. We have created an ad hnc committee of senior consulting personnel to continually evaluate and, when necessary, enhance our Firm-wide productivity monitoring product. To supplement this, we employ on a regional basis an •vxperienced staff of management mnginmering, clinical and electronic data processing specialists with they operations experience to establish effective productivity analysis and monitoring systems, and to train clients in their use. Furthermore, we utilize IBM microcomputers and compatibles software to perform our initial analysis at the department loved, which remains with our clients for ongoing use once our field work is complete. As evidence of our experieance, our health care consulting group has performed staffing and productivity studiass in almost every area of a hospital, including the design and implementation of productivity monitoring systems. Our staff has vast experience in performing operational reviews which focus on the administrative, professional, and support service sections of hospitals. Examples of the range of productivity and operational review studies performed in non-nursing areas include: Reviewing the effectiveness and efficiency of selected operating compommnts in numerous clinical and support departments. Evaluating staffing levels in key support departments by implementing time and workload studies, while considering interdepartmental relationships. IV - b In addition to services in the non-nursing areas, we have developed and implemented a patient acuity/nurse staffing system. The system is flexible, simple to maintain and involves detailed observations of nursing activities. In connection with services in the nursing area, our staff has recently; Completed an audit of an existing patient acuity system to evaluate its effect on short and long-term staffing needs. As a result of this work, a redistribution of skill mix and decentralization of nursing management was implemented. r Implemented a patient acuity system, utilizing a Work sample of nursing activities to ensure proper staff acuity ratios. Performed a detailed staffing evaluation of operating room, recovery room, emergency department and nursing services. This study included direct observation of nursing activities and evaluation of scheduling methodology, resulting in a redistribution and reduction of full-time equivalents. Performed operational reviews of nurse management functions, leading to the, reorganization of nursing services to increase management effectiveness and productivity. As a result, techniques were implemented to increase span of control, reducing nursing management full-time equivalents. Finally, with the increased emphasis on health care costa, we have begun to apply management engineering techniques to the area of cost accounting where detailed work standard development becomes an integral part of determining the standard costs of revenue producing 4 procedures, Our consultants have assisted hospitals in the development of detailed cost standards by: Ouidino the process of work standard development through meetings with senior management and cost analysts, auditing results as produced. Playing a lead role in developing standards for ma6or revenue producing ancillary procedures and nursing units, integrating acuity rating, labor, and non-labor standards. Assisting in the development of a "cost" performance report. This report includes variance analysis and is tailc;red to management's needs. Iv -7 SiaEfing_Studias The Business Office's organizational structure and staffing plan should facilitate response to their volatile environment. Unfortunately, tasks in the Business Office have been historically assigned to individuals who had insufficient time to complete nsw tasks. This often results in inefficient processing and illogical, flows of tasks. Staffing study ob,iectives include: Review of adequate manager and supervisor support'. Identification of tasks being completed by the wrong level of personnel. Management reporting to identify activity levels to determine appropriate staffing, ` Initial review of existing staffing levels. ~clici~a_and_~>=ccedL~ess Never underestimate the power of good policies and procedures! For training, retraining, and informing hospital personnel, physicians and rhea publicr hospitals should have documented policies and procedures. key areas of concern in the Business Office are: Admitting and outpatient registration. File maintenance. Credit and collection. Bad dobt referrals. To assist hospitals, we will: Evaluats established policies and procedures for appropriateness and compliancy to those procedures. Revise policies and procedures to improve Business Office effectiveness within the guidelines of hospital philosophies and mission statements. Document policies and procedures, Monitor implementation of new and/or revised policies and procedures to ensure successful implementation. IV E3 datariels_Manasemenk_Tmers~s~smeul Our Materials Management Improvement Program IS designed to assist hospitals in abtnining quality materials at the best possible prices and in the most efficient manner. Specifically, this program helps reduce inventory levels and purchasing costs and improve productivity and service levels from vendors to users. Modularly organized, this program can be applied to all supply, processing and distribution activities and any of the elmmonts thereof (e.g., requisitioniner purchasing► rerceiving, inventory management). , Madi,cal_Swaord5 In this increasingly restrictive health care environments it is imperative that hospitals and physicians fully understand the changes that are occurring in financial incentivesf and the impact of these processes on their organizations. One of the mador changes in the third-party payor system is the hospital's direct dependence on the quality and accuracy of documentation contained in the medical record and the conversion of narrative diagnoses and procedures to numeric codes. Because the Medical Record Department in the hospital is responsiblp for providing the appropriate coded information which ultimately determines the level of hospital reimbursement, we include among our consultants Registered Record Administrators who arm prepared to address the specialized information and medical record data needs required in the current health care environment. Sorvices performed by the medical record consultants focusing on operat'ons and optimum reimbursement include; Data quality reviews which assess medical record data to assure that it is complete, valid, consistent, and measuring what it is intended to measure. Theme reviews evaluate the sequencing of diagnoses and procedures, the accuracy of ICD-9-CM codsaf and the timely availability of this data to maximize reimbursement and improver cash flow. Operatichal analyses, which asseasm the efficiency of overall departmental operationmr work flow, staffing levels? and information systems. Recommendations are then made, as needed, to improve quality control, prcductivityr interdepartmental reporting prormdurms, and work flow. IV -q Data analysis activitiesa, which examine and interpret data generated from the medical record abstracting systeem, case mix management system or in-house information system. These activities can assist the hospital in helping achieve the most effective use of the data in strategic planning, corporate restructuring, marketing, research, and in evaluations of outpatient care alternatives. Educational programs, which address the specific information needs of trustees, administrations medical staffs financial managersa, medical record professionals, and other hospital disciplines. Depending on the audience, the programs may focus on peer review organization activities# coding and sequencing, medical record documentation, or other related topics. In response to the current activities of Peer Review Organizations (PROs), the medical record consultants of Deloittea Haskins & Sells have also bes+n actives in assessing hospitals' Utilization Review Plane and Procedures in order to assimilate the preadmission and retrospective reviews of the PRO. Specificailyr consulting services focused in the Utilization Review area include; i Assistance in the formulation or review of Utilization Review Plan elements concentrating on the procedures for preadmissionr concurrent and respective review. A review of the physician peer review activities: including the process of physician advisor raviewsp criteria and guideline approvals and the methodology for physician profile analyses. An assessment of the documentation requirements of the Utilization Review Plan and Procedures and statistics maintained for analyses of profiles. In addition to these services provided to hospitals, we offer a variety of similar services tailored to the individual requirements of outpatient facilities, physicians' offices and lone-term care facilities. These services include, record management systems, risk management, transcription searvicees, microfilming options, and assistance with accreditation and licensing compliance. r°. sf IV - 10 ~agt..Accns~otins Our health care personnel have had extensive experience in the design, development and implementation of standard and other cost accounting systems within both health care and other industries. As evidence, we: Are presently assisting sow oral hospitals in conceptual and detailed design and implementation of standard cost accounting systems. At the completion of these engagementsp the systems will accumulate actual detailed costs for patient services, _ compare these costs with established standards and report pre-established variances by department and ORO. Have and are presently assisting hospitals to develop procedure level standards for use in conJunction with standard cost and productivity monitoring systems. Have assisted numerous hospitals in implementing revised manual and automated systems to comply with uniform reporting requirements. Have developed sophisticated planning models and analysis techniques aimed at evaluating the feasibility of expandingr contracting or closing services. Included within these models have been the identification of costs as variables semi-variable and fixed as. related to changes in volume. Developed a cost-benefit based overhead cost allocation methodology for a maJor university with over 100 indirect cost centers and eight different auxiliaries, including two hospitals. Participated in the cost accounting design of integrated financial management systems for numerous organizations in the industrial sector - both large and small. Evaluated and recommended order processing, inventory contrali bill of material and general ledger systems for several companies. ~na~_dix..daasaem~a~ In 1976, DeIoitte Haskins & bells was among the first to consult with a state developing diagnosis-related groupinge when the State of New Jersey engaged us to provide technical expertise as they imple-iiwnted this prospective payment system. To this dayr we still consult on this important protect. I Iv - 11 It was through this experience, in which we assisted New Jersey in establishing DRO rates for approximately 100 hospitals, that the DH&S approach to case mix management was developed. Our approach recognizes that hospital needs vary. Furthermore, we know that there are large variations, from provider to provider, in the content and flow of patient bills/abstracts, volumes, desired costing methods and the availability of data processing hardware. For these reasons, we have developed our Casa Mix Management (CMM) System to operate in a number of varying configurations including: A COBOL version for the IBM PC microcomputer. l` COBOL version for mainframe computers. • ! ~-house Statistical Analysis System (SAS). Our health carQ consulting group has been involved in the installation of this system at eight major teaching hospitals, including those with large ISM mainframe computers. Certain salient points incorporated in these installations are: Integration of a costing system which produces standards for approximately 60'% of the hospital's operating revenues, Integration of a nurse acuity rating system which provides for the costing of ten acuity classifications within each DRO, coupled with disease staging analysis. Full intograti,on of Medicare's outlier logic. Development of a concurrent system which tracks patient costs and length-of-stay on a daily basis and compares these with HCFA standards and DRO rates of reimbursement. In>~anmatian_.9r~t~ms~_nnd_~t~ice..Autamm.i:ian Withirs the area of information systems, we haven performed a wider variety of services for a large number of indusatriss, including health care. Services rendered have included long-range SDP planning, comprehensive effectiveness and control reviews of large installations, identification and prioritization of information requireament$, and assistance in the selection and installation of bath mainframe and minicomputers as well as telephone? systems, Representative health care systems proJ ectss performed by our health care consulting group, include: Performance of a comprehensive review of a shared data processing taervic:e providing services to numerous hospitals, This review, performed in two major phsawss, addre%zed: {{21 li T~ k IV - 12 It Long-range planning and future role Modifications to existing applications Communications Documentation No Contractual arrangements as Competitive position Development of a long-range data processing plan '#or all sizes of acute care hospitals. . Selection of cast accounting software for an acutee care hospital. Protect management for the installation of a minicomputer system in a medical clinic. Assistance in the development of a strategic data processing plan for several specialty children's hospitals. Assistance with the selection of a comprehensive management information system for many large urban hospitals. Assistance with the development of Request for Proposals (RFP) and the selection of financial systems for many community hospitals. Office automation (OA) is a field that has experienced tremendous growth in recant years. With the benefits of faster/easier information storage, retrieval and data manipulation, coupled with potential labor savings, we expect this growth to continue, In connection with this, we have provided our health care clients a broad range of services in this area, including: . Assistance in defining OA obJmctives and needs. Assistance in linking various components (e.g., word processing, telephone, etc.), plus defining future system direction. . System design and vendor selection (including telephone system selections). < f j 1 IV - 13 BeiIDt~LLSS3ID@IIi:_dnd_Bais_S@.ttiaa We strongly believe effective third-party reimbursement services are critical to serving our clients. As a result, we have developed an effective workin6 relationship with Medicare intermediaries, Blue Cross plans, and various state regulatory bodies. We regularly: Participate in pro,iects designed to maximize Medicare reimbursement and analyze the reimbursement effects of operational changes. Prepare Medicare, Medicaid, and when applicable, Slue Cross cost ' reports for our clients. Consult with clients on the applicability and interpretation of reimbursement regulations, including dealing with the Provider Reimbursement Review Board (PRRB) and the Health Care Financing Administration (HCFA). During recent years, our health care consulting group has: Completed third-party maximization projects for numerous hospitals. In connection with these projects, we have successfully proposed numerous adJustments to prior yearn, cost reports end, in all completed proJects, have found the additional reimbursement received by our clients through our Participation greatly exceeded the professional fees charged. Consulted with numerous hospitals on a variety of reimbursement matters, including those associated with state sponsored rate setting agencies. Successfully settled several controversial reimbursement issues administratively with the Blue Cross Association, and have assisted numerous clients in the preparation and presentation of appeals to the PRRS. Assisted numerous hospitals in developing reimbursement strategies as they relates to operational and regulatory matters, including TSFRA and PPS. In addition, we continually update our clients an the potential impact of changes in PPS regulations, specifically the incorporation of capital costs into ORd rates and establishment of foo-for-service payment rates for outpatitint services. IV - 14 Stnaiesic_Elaanins Our health care consulting group has extensive experience in performing strategic planning consulting services from both an entire institution perspective and a specific service perspective. We firmly believe these pro3ects must be approached by a protect team composed of many disciplines. We staff these engagements with personnel experienced in the areas of not only strategic planning but also operationsr corporate restructure, productivity, accounting and finances organizational design, and reimbursement and rate setting. The competitive environment in which health care providers now function causes the financial implications of decisions to be of more significance than ever. Our health care professionals, complemented by our accounting and finance skills, help assure that we assist clients in establishing strategies that are realistic and pragmatic. In addition to the more traditional approaches to assessing markets, demographics and needs for services we utilize our advanced techniques in financial modeling and cage mix management to test the validity of alternative strategies. Int~xnalLExiernal_8inenatti..Bss~s~msnt , Our Tnternal/External Strength Assessment for multi-hospital systems facilitates the sharing of resources by individual hospitals within a system, making the system and each member hospital stronger and better able to compete. The first phaser data collection, provides our health care consultants with information about the system. We interview key personnel to determine: The mix of programs and services offered by each hospital and their relative success Each hospital's strengths and weaknesses in market position and ability to compete The best demonstrated practices and "expert" managers within the system Each hospital's priorities and expectations of system membership as a guide for system goals. This information makes it possible for the system to share experiences, match needs with resources intornally► and lessen the dependency an external advisors. Additionally, the goal setting process is simplifi®d. r s i IV - is In the second phases our health care consultants or a system task force, analyze the data and develop recommendations for sharing capabilities and resources. Opportunities for operational improvements are developed by a task force of line managers. The results of the assessments are summarized in two reports: a summary report with comparative statistics and market per+estration information and an optional hospital specific report. If the multi-hospital system is not making the most of its potentials the Internal/External Strength Assessment can provide the techniques and expertise to bring about a new degree of cooperation and mutually beneficial sharing of the strengths and capabilities the system already possesses. ~O1r90r8ti@_I3~81;LUG~LL~09 External forces which affect the health care industry have become much more severe. As a results many hospitals have determined that their present corporate structure must be evaluated as part of an overall strategy to most the challenges of the future. Our health care consulting group has assisted numerous hospitals with these important protects. In connection with those situdies, we have: Assisted in the development of short and long-range business planning goala, resulting in the design of proposed corporate models for hospital management and board of trustee working group sessions. Performed studies of the legal (performed in cooperation with hospital legal counsel), tax, reimbursements governance) and operational aspects of various corporate structures. Assisted in the implementation of revised corporate structures, including: a. Requesting the necessary revenue rulings. Gaining the acceptance of third-party regulatory agencies. as Presenting revised corporate structures to appros-iriate parties. Developing implementation plans and procedures. Performed financial impact reviews for selected diversification service plans such as home health, ambulatory surgery, renal estate venturmss child cars centers, rehabilitation units, etc. lot IV - 16 Is:l ecs~mmu a is a t i cn s Recognizing the growing importance of both voice and data communications planning in the health care industryp we offer a wide range of consulting services to address the issues within the telecommunications area. Typical services include; Indeeendsnt_Telecammuni~~tinns_ZecbnalasY_Assessmeni_~IZIAi - We identify opportunities to enhance the efficiency and effectiveness of the telecommunications function within an organization. Ielecammi;nica~tir~nas_EeasibilitY_5tudY - We performs detailed financial analysis to be used as the basis for objectively evaluating telecommunication options. CCtmmuniCetit~n>3_detws~r~S.BnslxSie.~nd_QEasiaa - We design a voice and/or data network that is economical, provides optimum performance, and is capable of expanding to accommodate unknown or undefined future communications requirements. ~elecntnmunicetisane_~Yfai:em_geleci:ian - We select the optimum hardware and software solution through an unbiased and competitive process. 64MME-E8Q[2UCIS Deloitte Haskins & Sells is committed to developing and maintaining microcomputer software to assist clients in resaponding to today's competitive health care environment. Examples of software currently available are described below; ~lUl3BEE64 NURSEPROe our patient acuity system, is designed to help hospitals minimize nursing labor costs through increansd efficiency. Specificallye the software provides management with a staffing plan based on actual patient acuity levels. The plan details the, appropriate skill mix of nursing personnel based on satandardss custom-developed for the hospital. Additionally, NilRSEPRO monitors the effirimney of the, nursing labor component and producers reports which highlight the areas needing improvement. The data is maintained at the level of detail resquirs.f for costing nursing services and may be utilized in the development of cost accounting standards. 's IV - 17 NURSEPRO also serves as a planning tool which tracks trends in patient acuity levels and provides comparisons of budgeteds actual and required personnel resources. EroductimitY_6ndlyzer Productivity Analyzer is a high level productivity analysis system designed to provide hospital management with the information necessary to operate more efficiently. This product measures past and present productivity levels and ' provides an ongoing monitoring system. Target hours-per unit of service are developed for each department giving consideration to the department's methods of operation and productivity improvement potential based an historical performance. Productivity Analyzer is a microcomputer-based product featuring menu-driven ssoftwares on-demand reporting capability and fully integrated graphics. ita~a_tliY_tlanegsm~nt_~~stam CaMMSr our case mix management systems is designed to provide hospital management with the information necessary to better manage under PPS. The system, which operates an IBM mainframes and the IBM PC-XTs features a flexible data base design, both standard and ad hoc reporting, simple processing options and easy access to information. The PC version interfaces with LOTUS 1-2-3. CaMMS includes reports by DROP physician, payars clinical service, ancillary department and patient. The system also assists the user in developing hnspital-specific standards for comparative reporting purposes. Through the LOTUS interfaces summary level data may be formatted for graphic presentation. A grouper program is part of the system. OrDugBl: Grouper is a software product that assists the user in tracking ORO-based third-party payor information. In addition to Medicare, the system can handle three ORO-based payor groups. Grouper has both tutorial and interactive options, providing efficient modes of operation for both nelw and experienced users. Requiring an IBM-PC or compatible equipments the software is generally used by medical records and utilization review personnel. IV IS Elus_Ela❑ Plus Plan performs financial projections and consolidates financial statements from various entities to produce actual or pro forma financial statements. We also have available software designed to assist in preparing financial pro,iections, developing standards for cost accounting systemsr analyzing physician admitting patternar etc. I C7 r lip, IR lva9 SELECTED IIObP1TAL CAPITAL PLANNING AND/OH F'EAS1BIL11'Y STUbY CL1hNT5_.UP '1'H!: NlA L711 l' ut. ,r h6 p q•, NG GR UP DEBT CAPACITY/ 110S1'ITAL LOCATIDN FINANCING PHEL1HlNAKY CERTIFICATE FINAL 612L INVKSTHENT BANKFSI(B) STUIMY UP NEEU STUDY SELECTED PtAnei6¢AII Healthcare Corporation Colorado Springgs, Colorado 4110,000,000 Goad Samaritan Hospital Cincinnati, Ohlo 108,345,000 X X Harrill Lynch 1000000,0n0 X X Salomon Brothers Jawlah Hospital X Dillon Road Cain Broa „ Shattuck, - Hospital Cincinnati, Ohio 106,500,000 X Murrill Lynch and bankers Trust % X Sa ongocd it Mayor and Morrill Lyn¢'i Foothill Preab turlen Hoapital Glendora California 86,500,000 % 84,385,000 Gaeongood b Mayer and Merrill Lyntn uaun s lladfca Genter 80.000,000 X Ntiler & Schroeder Honolulu, is, In X E, F. Hutton 6 Co. Fu rum Oro up, ln¢, tndlanapolia Indiana b5 UUU OUO Bethesda Iloapital Cincinnati, Ohio b3',000',0ouu UU X Drexel, Burnham 6 Lambert, Inc. 5t X Goldman, Bache 6 Co., Merrill Lynch . Mark' a Hoappital Salt Laka City, Utah 191DUU,000 X X and Seasangood L Mayor Fort }lemllton-liughee Hospital Humlltou, ullio 31 300,000 X X X X E. F, Button 6 Co. and Sessongood & St. I,uko Hospital Fort Thomes, Kentucky 32,000,Ouu X X k aMayngood 6 Mayer and Murrill Lynch Albert S, Chandler Mndieal Guntur Luxln8ton, Kentucky 9,100,000 X % X Seaaongood & Mayor and Harrill Lynch St. Fren¢le•Bt, George Hospital 33,SOU 000 X Cincinnati, Uhio 31 5501,000 X X Harrill Lynch and Hessongood & Mayer Chi Ldrun's Hospital Columbus, Ohio 29,310,000 X X Bossongood 6 Mayer lasuack Valley }Inappltal Westwood, New Jersey 29,100,000 X Lehmann Bros, YOUVIIIe Chronic Ulaoas0 and X Harrill Lynch Rehabilitation Hospital Baotou, Massachusetts 28,000,000 g Riverside Hospital Toledo, Ohio 25,SOO,tlUU X Goldman, Sachs & Co, S Baptist Hospital Miami, Florida 25 UUU 000 X btlion Read & Co. and Money 6 Co, Our Lady of Marcy Hospital Cincinnati, Ohio 25~OUD,000 X X % b. C. /4eiggter southern Ca1L1arnia Prusbyterian ' ' BeaeongooJ & Mayor and Connors & Co. homoe Glendale California 23 000,DOV Good Samaritan Medical Center 2aneavLl~a, oldo 23,5SU,000 X X E. P. huttca b cc, % X R, P. Hutton 6 Co. and G Parkview ranada Hills Community Hospital Granada Hills, Californiu 20,000,000 X McDonald & Co, Co"Un Itllosoopal Hospital Pueblo, Colorado 20,0110,000 X % X. P. Hutton & Co, Cowunl y losplte] SprSnggltold Springfield, Ohio 20,000,000 X X Hollywood Presbyterian Hedicat Center 1.06 Angeles, California 19,000,001) X { Middletown Rational Hospital Middletown, Ohia 13 500 OUO X PLquA Iloapital Piqua, Ohio L2~750j00U Souther0 Neved X k Baasonggcod & Hsyer St. Joseph Hospital Ft. Wayne, Indians 1'',692,000 X X X t*Vonnld & co, Southern Memorial Hospital Loa Vogao, Nevada 12,40 00 0,000 at, Elisabeth Hospital Chicego llinois 1 X Paine Weber St, Cathortne's Iloapital Chicago, Indians t,°,000 k X Btiefol Nicolas Stouder Hoapital Ch Uhio 1L,25U,oU0 k X X Wooden k Ccapany Brown County Oenural Hospital 0uocgetown, Uhio lU,SUU,000 X Seaeongood s Meyer IU,000,U k g 'a 5 IY-20 StLCCTLU }IUSPITAL CAP.rAL PLANNING AND/OR hXASIUILITY STUDY CLIKN'f5 DF' TIIE CLNCSNNAI'1 IIEAIT}I t'ANa' r'ONSULT1NOwCHO,v DLBT CAPACITY/ US AL FINANCING PNELIHI14ANY CERTIFICATE P1NAL INVP.BTHENT tlANKER(S) LUCAI'lUN SIZE STUDY OF Nh DD STUDY (I[ F gB.KCTEU) Union Hospital Neu Yel'k, New York b 10,000,000 X Pleasant Valleyy hospital Camarillo, California 8,52U,000 X X Miller S Schroeder Murry General Hoapital M0Yla Morrie Hospital tts, Ohio 6,330,000 X X Hearner, Wilkins end Company McCullough- Morris, Illinois 6,'l0U,000 % Kidder, Peabody li99du Meaorial Hospital, Inc. Oxford, Ohio 6,100,000 X Otto C. Epp Memorial hospital Cincinnati, Ohio 000000 Wayne Hospital Com en ' % p Y C, Ohio 4:215 ,000 Providence n tai Cincinnati, Ohio 4, 000OUO % % X Ohio Company Schroeder Manor 4:000:00U X X Clifton Springe Ilnapltel and CILnLC Clifton Springs, New York 3,5U0,000 X Community health Center of g Branch County Coldwater, Michigan 3,5OU,000 X Cushing Memorial Hospital Leavenworth Kansas 3,500,000 St. Joseph Ilospiial Mishawaka, Indiana 3 260 OUO g X Paine Webber and Houseman Securities ` Chootaw County Memorial Iloapital Hugo Oklahoma 3,260,000 X Sachs, Halsey, Stuart, Shields, Inc. Memorial Ilomae Foundation Ctno;nnatl, Ohio 3,000 000 X Nouaeman Securities F Tillman County Hospital FrodorICk, Oklnhama 3,000,UUO X Huron Road Hospital Cleveland, Ohio 3 UUO OUO X Houseman securities , Huecle shoals PereonaL Cara X McDonald Y Co. Facility Tuscaloosa, Alabama 3 UOU 000 X X PoshmatAhs County Hospital Antlers, Oklahoma 2,40U,000 e tl ol Layne Hospital Memorial Hospital Sallisaw, Oklahoma X Houseman Saouritlo 2uuU,000 X Housemen securities pital hollevuu, Ohio HeLnearlin Foundation L l00 DU X X X HcUOaaI U Co. Wetumka Uenaral hospital Wotumka~~Dklahome 1 940 00 -v 0 X Herethy Orr It Janes, Inc, Aul x Mouaemsn Securities Total sL W, U92,U0U , 1 low Vy fis~~xx~d_~ e~sua~s r V - 1 BESUbEB The success of any consulting engagement depends on the technical competence and human resources of the firm conducting the study. We can provide both the technical expertise and the capacities required to conduct the engagement outlined in this proposal. Key requisites for conducting an engagement of this type include defining required skills and selecting qualified professionals with related experience and capabilities in specialized disciplines. The professional backgrounds of those individuals specifically selected for this engagement are shown on the following pages, i' { V - 2 C1A6~_E,._QELA~JE Consulting Managing Partner Role in Engagement: Engagement Partner EX22ria a: Ten years of diversified data processing experience in both the public and private sectors. Examples of Qlient~_Barsced: HEALTH CARE: UCSD Medical Center UCLA Medical Center Sharp Health Care University of Washington Hospitals Providence Hospitals Children's Hospital and Health Center Scripps Clinic and Research Foundation GOVERNMENT: County of San Diego City of Orange County of Orange - LIS Sweetwater Authority San Diego County Registrar of Voters EDUCATION: Department of Edurationr San Diego County San Diego Community College District San Diego Unified School District California Western School of Law FINANCIAL MANAGEMENT: Salk Institute INFORMATION SYSTEMS: Signal Companies Han Diego Office Supply Southwest Marine Big Bear Supermarkets Wavetek Corporation Equitable Life Leasing r ?J r" v-3 Mark E. Delane In additionp Mr. Delane has over eight years experience in health care systems consulting. Particular engagements include; Project manager and team member for vendor evaluation of patient care systems for a major Southern California teaching hospital. Areas evaluated include ADT, census, order entry and results reporting, ~~~1 respiratory and occupatio»al therapy, and outpatient clinics. Project manager for the evaluation and design of all financial policies and procedures for a San Diego hospital and health center. Managed an evaluation of the accounts receivable system for a significant San Diego hospital and clinic. Designed and implemented hospital-wide patient charge procedures for a large Alaskan acute care hospital. Developed and implemented revised patient scheduling and control procedures for two Pacific Northwest teaching hospitals. Installed an automated budgeting system in three pacific Northwest hospitals. Co-authored a budgeting systems manual used state-wide. Financial Management Managed the development of complete accounting procedures for a major hospital. Cash management studies. t Financial system installations. r . z V - 4 Mark E. Delano Special Exn~rtis+~: Mr. Delano has been with the Firm wince 1979. Throughout his career he has been consistently involved in EDP system selection pro,iects in a variety of client environments. These engagements have tYPically included requirements analysis, Request for Proposal (RFP) preparation, vendor evaluation, contract negotiations and system installation. r Education: M.S.A., University of Southern California S.A., University of California, Log Angeles Professional AG1;lYiiie~: Association for Systems Management Center for Data Processing Professional Development f 1i V - S 5TEE~iSE~_ 9 ~ _ 4~1JEST SIGNIFICANT CAREER EXPERIENCE Deloitte Haskins & Bells, Partner - Management Advisory Services (Cincinnati) EDUCATIONAL BACRGROUND B.S.I.M. - Purdue University r M.B.A. - University of Chicago Mr. Wuest is ra partner in the Health Care Consulting Group of the Cincinnati office. His experience with Deloitte Haskins & Sells has included consulting assignments as well as varying assignments as a member of our audit staff. He has bean with Deloitta Haskins & Sells for nine years and has substantial health care and data processing planning experience. He has participated in and managed numerous financial feasibility and debt capacity studies for hospitals as well as nursing homes. During the last two years, he has managed approximately ten financial feasibility studies. Mr. Wusat has alsao performed debt capacity, data processing, and procedures efficimncy studies for numerous Ohio hospitals and health care organization.. His financial faasibilit5•c:li.ents have included: St. Francis-St. George Hospital, Cincinnati Medishare, Dayton Piqua Memorial Hospital, Piqua Stauder Memorial Hospital, Troy Health Care Industries, Dayton Miller's Merry Manor, Plymouth, Indiana Mr. Wuest also has extensive health carer data processing experience. He is currently supervising projects for four hospitals who are ervaluating total hc,srl tal information systems. He is also responsible for an eangagemont in which DH&S is developing a strategic business plan for a hospital service bureau, which provides opplicatiori systems to B2 hospitals. In addition, Mr. Wuast has provided data processing !services to physician groups, nursing homes, and community mental health organizations. His health care data processing clients Include: Providence Hospitals Cincinnati Doctor's Hospital, Columbus Otto C. Epp Memorial Hospital, Cincinnati Morrtgornery County Board of Mental Retardation, Dayton Southwest General Hospital, Cleveland Children's Hospital, Pittsburgh 97»....._ slay. pp~i i ;t V - b E$QEE$9IQWAL_ 95 $S?.CIATZ Q~J$ Healthcare Financial Management Association American Institute of Certified Public Accountants Ohio Society of Certified Public Accountants 1 i~ • V - 7 SSIlt~ISES.CAt~?'_CABEEB_EXPEBSE~lifE ~ Daloitte Haskins Bells - Senior Manager, Management Advisory Services (Cleveland) KMB Main Hurdman - National Healthcare Director (Washington) Ernst & Whinney - Senior Consultant (Cleveland) MBA - Lehigh University SA - McMaster University PSQ EE 685g~lAL_ QE8Is3~lAIS S~~1S Certified Management Accountant Certified Purchasing Manager Mr. Luecke has over ten years experience in the health care area. He has participated in numerous hospital audits, preliminary and final financial feasibility studies and debt capacity, long range planning, corporate restructurings and nurse staffing studies. He has prepared and reviewed Medicare Cost Reports and assisted hospitals in optimizing their reimbursement under Federal and State government programs. He has participated in operational reviews and cost containment studiesp and has prepared and assisted with Certificate of need applications. Mr. Luecke has worked with hospital architects, program plannerrs, bond underwriters and attorneys, comprehensive health planning agencies► third-party reimbursorsr bond rating firms, county commissioners, hospital financing authorities, state health departmesnter and other agencies concerned with the health care delivery system. r V-8 eeQESSSxs~~e~,_ess~sixerxQ~s Healthcare Financial Management Association American Hospital Association American Association of Hospital Consultants Institute of Management Accounting ~ eQrx~~,ES "Pension Plans: More Than a Savings Accounts for the Hospital", dealtbGBrs_Einencial_aanagemanl, December, 1986. "Diversifying Revenue Sources: A Key to Hospital Survival", ~ornarate_6ccauniiner Spring, 1906. "The Implications of SFAS No. 81: Disclosing Certain Postrotirement Benefits", Clanagemani_Accnuniins► Octabar, 1985. "Corporate Healthcare Costs; A Strategy for Containment", .i~Aragratfl 8aQauniing, Fall, i984. "Updating the Controversial Social Security Option", baaltbcars Einancial_h]anamement► November, 1982. "Feasibility Study Offers Guidance"r CcntempncaCx_~dminletretmn, ,Tuner 1982. "Corporate Restructuring: Positioning for Future Viability", Qetasagstbic_tiQasitals► Februarys 1982. "How to Work With the New Rulers for Compensated Absences", Ibe Eractical_BGGCiLniant► October, 1981. "The New Accounting for Compensated Absences", dsaltbcasa_Einansial Mananamentr July► 1981, "The New Economics of PORO Review: An Uncertain Futurmip baagiiml EinanGiel_Clsna~,ament, April, i98i, "Ths Economics of Delegated vs. Undelegated PSRO Review"r dQegital Einancial_banasamentr Julys 1980. 11 V - 9 s~~sB~. es_ a. _ si dezszy 7 Deloitte Haskins & Sells - Managwr, Management Advisory Services klosterman's Baking Company - Controller { EQ~JC9rIS~dBL_k~ACli4BQ~lCIQ { B.B.A. - Ohio University Since ,coining Deloitte Haskins & Sella, Mr. Christy has been involved with the financial segment of financial feasibility and debt capacity studies. Mr. Christy has also assisted in the preparation of a microcomputer health care financial model which is primarily designed to forecast the financial, statements required in a formal feasibility study. Mr. Christy also has experience in working with large investment banking and bond counsel firms. His experience includes the assistance in the analysis of advance refunding of bond issues for hospitals and municipalities. Prior to Joining Deloitte Haskins & Sells, Mr, Christy had a broad range of experience in accounting, personnel, cost and financial management. His experience includes taxers, financial statement preparation, analysis and design, profit sharing plane, manufacturing feasibility studies? budgeting and strategic planning, unit cost and pricing, and administrative management. Mr. Christy has also negotiated and obtained structured pricing agreements with maJor customers in order to ensure adequate returns on investment and has experience .En the private placement of Industrial Revenues Bond issues. Mr. Christy is presently a member of the !National Association of Accountants. He has previously served as a director on the bonrd of the Cincinnati Chapter. i „ FLOW 1310 Scripture Str cet MEMORIAL HOSPITAL Denton. TX 76201 (817) 3878861 October 12, 1987 The Honorable Ray Stephens Certified Mail - RRR 215 East McKinney H509-858 286 Denton, Texas 76201 Dear Mayor Stephenat This letter is to advise you, as a trustee of the Homer E. Flow Trust, that representatives of the charitable trust department of the Attorney General's Office of the State of Texas will meet with the Board of Directors of Flow Memorial Hospital at 6t30pm, Thursday, October 15, 1987, This meeting will be held in the East Dining Room of Plow Memorial Hospital, Sincerely, r Charl" B. Linton Chief Executive Officer Flow Memorial Hospital CBL/kf ' OCT 1 41987 ritr ,M~tt:~c~: . 1 i, Sept:. 28, 1867 OGr s 1s~r Denton County Commir,sioners 212 W. Sy.,amore St. Denton, TX 76201 Door Commiesloner, The Denton County Commleeionore Court individuals represents over 'L00,000 crisis with health toarooIntDenton County andr):lowoHospitalnfrom a perspective different Prom the usual, "Glow yea or No?" cyuerst i on. ALL attention has focused around the indigent care fiscal responsibility of the political entities involved, but I am asking you to broaden your focus at this tlmo. We have a doeperato nand to assess the health Caro needs of all the people in Denton County - insured and uninsured - and unite to meet those needs. It 10 Bald that we have too many acute care in-patient bode in Denton County, I agree, but a hospital - if allowed to - can provide more than Just In-patlent earn. The resources nro here at Plow llonpital, and should be channeled to provide what is neeossary for our citizens. However the question remains, "Pow do we know what to do, if we don't even know what we need?" To the best oil my knowledge, thorn has nevtir been a thorough assenament of the health care needs oP our county. We are blessed with two universities that are filled with highly qualified people. Lot's use those resources and assess the overall health care needs of the entire county and work towards the goal of meeting thoso hoods. Money could be spent to sube.id.izo a gradunto study at one, or both, of the universities. This rortainly would cost loss that simply closing Plow lloepltall The students could work to meet their degree requirements and contribute to the growth of the county. We, in essence, would Integrate our resourcoe and aohiove a goal for the common good. -2- I recognize that thle is a comm.ttment to Innovation, but why can't Donton County be innovative and be Piret• to gyoptq rather than one or the last to comply? ANtor all., aren't we one of the faetest growing COUntles in Toxos? Ono oP our problems is the entire population of medically indigent, nor, Just the indigent defined by federal guidelines, The entire indigent population If not a Pircal reoponeibility by the letter of the law, but we in Denton County are facing this ( proh.lom, and It must be addreesed. However, the health care noods of all citizens of Denton County - both North and South - must be addroesod, not Just the indigent population. We all have health care of-odn, Perhaps the puhllc hospital can be tailored to moot the needs identified by the Aseessmont. Our community health exports tell us that we hood an extended ear•e Facility in our county. This would necensitate some initial expanse, but it is as nocoESSary a function a,i repaving roads, Some Individuals in the south part of the County any that they don't use Flow as an acute care facility. That may be true, but what d2 they require in health care services - a clinic, health acreenings, health education programs? Why couldn't Flow's resources and personnel work to meet those needs? Obviously, this would not simply be a DroJect of the hospital. It would. require) a county-wide effort. To oummnrize - t am asking that, as an olooted body roprosenting the whole of Denton County, you make every effort to assess the health cart) needs of the citizens, and systematically work to moot those needs rather than simply acting and reacting to the arisen we taco daily. Sincerely, C acz-~ hinda Ashmore 2010 Westwood Denton, TX 76205 oo s U. S. Son. Phil tlramm (l, S. Son. Lloyd Bentsen U, S. Rep. Dick Armey State Son. Bob 0180gow £-tato Rep. Jim Horn State Rep. Ben Cnmpboll Lewisville City Council Flower Mound Council iighlnnd Village Council iutunJ GrY Cvu.u('i~, is G i~ y~ VIC BURGESS " COUNTY COURT OF DENTON COUNTY 8t2 JOSEPH A. CARROLL COURTS BUILDING 401 W. HICKORY DENTON,TEXAS 78201 V:v (817) 586.8688 a Ma« March 13; 1987. w Doloittei Haskins and Sells Mark E. Delano Managing Director of Consulting Services 1400 Lincoln plaza LBt4 Dallas, Texas 75201 Dear Mr. Delanot inetheDensttonudycoreguntyrdicommngiFlssiowonMemoriers pproved participation financial si The Cout't would like for your Study to include the following3uation. 1. Statement of the current financial condition of plow Memorial Hospital. 2. isolate the actual cost of Indigent Care Services as defined by law for fiscal year 1986-87. 3, Criteria to qualify for indigent care. 4, possibility of reducing the size of the hospital and scope of service. 5. Projections of the following scenarios: A. Bolling the hospital. S• Leasing to a profit and non-profit corporation. D. Creation oofsa Hospital strict, E. Close the hospital. 6• AComparison of (Westgate), FBrstoTexasoMedicaliand to stay at low. 7. Is it reasonable to expect the Denton area to support 3 hospitals? (M of bads currently in the area) S. What annual contracts does Flow have with physicians and what are the amounts of each? (Total of packages) S' i !lark B. Delano page 2 9. Are we paying retail price for supplies or are we using Baylor Hospital's joint buying process? 10. An analysis of patient mix and numbers relative to the bottom line. 11. Should we handle MHMR or subcontract? The court is anticipating a report relative to the financial items in 14 day and the final report in 30 days, If you have any questions, please call me. sincerely, r U~ 13ca.,t~a... ; Vic Burgess County Judge cc: Co!,-issloners Court Mike Whitten, President Flow Board Charles Linton, Flow Administrator Lloyd Harrell, City nager Mayor Ray Stephens Councilman Jim Alexander G= s FfOW 13 10 Sctlpl;,rc Street MEMORIAL HOSPITAL Denton. Tx 76201 iel~laar•seel ~ July 2, 1987 Mr. Lloyd V. Harrell -7r City Manager Municipal nuilding JUL M 61987 ,i fff 215 n. McKinney i Benton, Texas 76201 e1iy~„'^; c171 "j,:,, . Dear Mr. Harre111 This letter concerns the hospital accounts that the Denton City Police Department has with Flow Memorial Hospital. During the past few months, inmates and prisoners at the city Jail have been brought to Flow Memorial Hospital for medical care. The normal procedure of the Police Department has been for the patient to sign a waiver releasing the Police Department of any financial responsibility for the bills incurred. However, there have been a few instances where a release has not been signed. The hospital, therefore, felt we should bill the City for these accounts. On June 160 1987, the enclosed bills were sent to the City of Denton for payment. On June 30, 19870 we received a letter from Captain Jim Dotson of the Denton City Police Department (copy en- closed) stating that the Police Department was not responsible for the medical bills incurred by inmates. Due to the financial situation of Flow Memorial Hospital, we feel that it is the responsibility of the City to pay for the bills where services have been rendered to the inmates and prisoners of the City of Denton Police Department. Please review this situation, and should you have any questions regarding any of the above, feel free to call map or my assistant, Mr, John Carter, at 383-6417. ~1Ylcerely, amen Pont a0rt1?1C7A.*MBA FLOW£MEMORIALaHOSPITALr F JMllw Enclosures i n e!3U~f~ < ~r g, t cirvoiDENrON, rEXAS MUNICIPAL BUILDING / DENTON, TEXAS 76201 / TELEPHONE (817) 566-8200 June 26, 1987 Jim Dotson, Captain Denton Police Department 221 N. Elm St. Denton, Texas 76201 John Carter, Credit Department Flow Hospital 1310 Scripture St. Denton, Texas 76201 Dear Mr. Carterr we are returning your itemized statements with this letter. The Denton Police Department is not responsible for these medical bills for services incurred by jail inmates. These persons need to be billed directly to their home address. Regards, J Jim Dotson, Captain Patrol Division Denton Police Department JD/ps 1 Ii1J i;Ki~FJ2_ Ti '.F IRS NQ_ 1 K 7 G ; 1 DATE ADMITTED DATE DISCHAROED PAGE NO, fFCI PAriFNT Numm PATIENT NAME -11111 ` DOCTOR M0NOSIS -1 7 I' INSURANCE CAAAIER rfOUP U.Molln PILL a r] v I D R POLM.yNuMa A ro; 111 z .l, •r v v 1 )rvfJV► r9 7E.ia1 - i/11/8 70';S9U{ 11 •T~4:t~i-rTli'd.;`. I~•.J 74D°~ a • 5,1.:r,)1 L GU2 t~oi( ~7) - I7'1r24L JPI'LY 5131 97 5917J41 ST .II-:,TRI 75 CAC)i -f 1±°"10110 S7) - IA013LOoY 5/5!/97 +J21~i5 S JILL LEI - ;E'.Arl::: 4A7UUQ 1 G/S1/9'1 4)?5352 4A)IaL(I(+Y GALL E_Af'R Ik.7F T) ICo 7; 4iJ CK 3: ENCY R:,y6Af 5151197 S11S11' ~:•i. 3CV~trtL,-r11t;;f rtH i!,ti0:''iJ 5/SL7A7 S?15111 P+{l LV: /Tr~4T tl.~?:,SGU i 1211V; r)~T4LS d }t4u F;7 CfAR:'~ 1'11.9 ' P7,YML'uTl; .GC NOTICE: TO AVOID PAYMENT OF ?u DELAYED PAYMENT PAYA ktMAOEAFT(A PEE ( 96 ANNUAL PEACENTAOE RATE), YOUR PAYMENT MUST iNApp~~1E Wlr 1 P. MADE IN FULL WITHIN DAYS OF STATEMENT DATE.►EAN.INMNENrSTATpMEN! ,COPY 3 r i ^I (4 DETAIL BILL lSTJ ,:RItiTIi; ST2_~1 o ins NO. 'J T J V 1 h 1 1 OATS AOMITTEO D E_ DISCHAROEO PAGE NO. a 7 _ (FC) PATIENT N JAWR PATTE T AME DDCTOR DIAGNOSIS t-4 T 11 INSURANCE C49RICA GROUP NUMBER POIJCY NUMSER BILL CITY F'.[7. TO. V1')N* TA 7,5101 'A PIVICI [A %ClllllTr0N '27 iAtI L'd Y Sf•,e7'' 157 IS 'J Y iJU 7.7.5 3'SE .k ~NYStGInN 1 S.OC TtaV~ TJTAS3 al) :S1L a~JU."111E141 •v'. NOTICE; 10 AVOID PAYMENT OF Ta DELAYEb PAYMENT P4YMENIMADEmt(h ~1•'~' FEE ( • % ANNUAL PERCENTAGE RATE), YOUR PAYMENT MUST iM911ETE Mll SE MADE IN FULL WITHIN DAYS OF STATEMENT DATE APPEARdINE%TdfATfMiNT J!Ao COPY . 3d h.1`siaL iJS>IT4L DETAIL I 131D 3:rtIii I2EF:i T-.-1, 00. l v 3: V! 3 V T x 76,1 01 RS NO DATE ADMITTED • ATi; 01K E PAGE P ,'v~ NUM9 R ' ERl 92Y l0-Tl LL E/f f1:RGI:':CY Rr ILL PATIENT NAME T ~ TTYTi i"- w~ , i0V1Qt L)U25 i i ItNS~1nAN o. 4a I J1;: }I c IN .`4 •Crr fV l'. ` ~~Ir(''ii+~ r , [ BILL GDJANt LSJIJ G.) TO: M015C st SID: /Rl DooM acoo AMOUNT oil NIA"k., l 9RI CR PHYSICIAN V25f3l 3213717 L.l. 4IMUR C ill l L> x.00 601 i SJ"r)10iaL 1 ';i.70 I 1 I t p3 i I { fl i .I Y {77 E i r 1 V ti 1 tw 9l sl Pi1Y5 TOTALS 40 0FWD CHAR ES 25. U0 aU,1U&THENTS QUO PAYMENTS .00 1 NOifCE: 70 AVOID PAYMENT OF % BELAYED PAYMENT 1 Nr 1 flt~ v~' FEE ( 9G ANNUAL PERCENTAGE RATE), YOUR PAYMENT MUST BE MADE IN, FULL VATHIN DAYS OF STATEMENT DATE, J " yr,:•~~i ~ ~ v s i J t COPY 4 i I ISLG S Q1:1TJt: SFT F! ~~1~ 7 DETAIL BILL i,c0 r,l )ivr34 TK 76201 isNo. DATfi A MITTCO OATS DISC HAR ED PAC! NO `w frc WENT - i`i@ lZl 1 0-7 3-1t. r/! CCI °:i:Y r`f. ;iTLL PATIENT NAMI; - r- - ~`IJAV~ L)J y F6 ",J r.c • wton ~N9uRANCE CAMAIER f G J Y A U I L J i) f S 4. . POLMNUmOr BILL "*a I,~s ~f)K'sE >T T0, ) VTDVr. TK 76u01 I - _ S/05/97 500-0000 981 LV PHYSICIAN 1 25.00 7; t f l it I { 'i ,t i t MVS T iTALS d/J 34L F40 rt4AA ES ?a.OG 4)iwi'rMENTS •00 PAVRFNIS •QO NOTICE; TO AVOID PAYMENT OF % DELA FEE ( % ANNUAL PERCENTAGE RATE), YO YED PAYMENT AMA UR AYME PNT MUST 8E MADE IN FULL WITHIN DAYS OF 9TAT1 MENT DATE r y COPY { JN N;.NJRIAL 1DS~i1«L DETAIL f 1310 i;Rl>TJI II," D O2 i"f: J V T 0 N T X 7 6 01 f AT9 HDMATED, {H9CHAR~ED P"' AO /&7 DV KR 4RV 1 3^'v +•bl EC4f R{,F`JrlY ft t. ;'1 LL (FC NT r11t3JAs lERON1-4` + rP .tii, .S1.µ1 F,qW 4 III ~9r~% ~fy i ,fr; r e~ i BILL ;A 10 1 VERO'11CA "s ~.Z) 510 ,1 JAK 41 TO: D_NTOUs Tx 76201 S/O3 /0) H17 i65-i54U i 259 - PHARMACY i/tJfBI 7D53233 Vl; DDlN TAILEY ry7o-?40 4 3.00 606 00 O r0 I A4 + 32D - RAD13L0CY 51kJIK? 402051'1 E.IJR 1 VI uS C110O 1. ':x1.25 15 9ff SUBTOT41. 1 "S1.ell 5 PHYSICAL THVkAPY 1 5119/!i) 9121700 11 RJTCHCS IZ373(10 1 40000 606 SU7TDiAL 1 X0.00 ~ 50 - E4E13ENCY RG016 Sy 5/13/81 31131t5 .R. SF.NCRAL-FIRST Hk ?000250 1 27.50 606 i o• SuPlOfAL 1 21.;.0 41 - LZ P081CIAN 5/It D/RT 3213147 vR PHY OVAL/TREAT H119u500 1 3^.00 601) SOBTO1AL 1 3:,.00 I •z + I i r- i [i4YS T itLS 410 94L FWO CHAROt..`> 156«1S ADJU~TMCNT; *00 PAY4ENT; NOTICE: 'FO AVOID PAYMENT OF % DELAYED PAYMENT AirlA ` FEE { 96 ANNUAL PERCENTAGE RATE), YOUR PAYMENT MUST ; t DE MADE IN FULL IMTHIN DAYS OF STATEMENT DAZE 'i .11 COPY 2 D{i i I I 1510 3ti11IyTJ4:' 3YR"ET Ia No. 75-GO0 2'.151'. ] tj T G Y 7 K 1 f,'c' 01 PATE ADMITTED ATIED SCHARQE PADS 0. „ (FC)PATIENT MUeR plR 4RT 10-i1~bt r/!: Ey:RGc"1CY RE :'ILL I J Y j PATIENT NAME DOCYOF?~ ~yy QI 0 OSI WRANCECARRIER - T ` a iA4R I VE041CA BILL 51.0 a A K 4 1 TO: a- NTGN► Tx 76;:OI - 5/01/97 111 ib5-I'iIt 0 _ 250 PliARNAC.Y 4 3.00 i f 327 IA710L(J~Y l 51.%~ 420 PNMStCAL FNCRAPY [ 4U.00 450 ENrR3CNCY 3004 1 27.:10 901 CR PNY :ICIAN k 35«00 t F ~ itl I i I i n c't J '.i 1'I44S WAILS .if] BAL Fa,~ CHARV"S I-i6.7 01 JU".IMLNTS .00 PAy4rNTS IOU NOTICE: TO AVOID PAYMENT OFY % DELAYED PAYMENT[ FEE ( % ANNUAL PERCENTAGE RATE), YOUR PAYMENT MUST . BE MADE IN FULL WITHIN DAYS OF STATEMENT bA1E~F ; yt,d ' COPY 2 i I DEML RILL 1110 >.RI~I S1? c:T (nJI„~7 71.1L, L y ):YT7J TX 7G%U1 / _ IRSS lrO._ D0.TE,AD4ITTFD D WSCwtA6EO PA(SfNO, . fPCj PATIENT NUMSEH ` 12 alu 10-71-11 /'t £ui:+G+'>;CY RLLI > PATIENT NAME DOCTOR DIAGNOSIS >~43i L AiCS :i 5T.R i ~ wr r ~ TT?Yt C `--Y-~--.^ ` INS13ggNCE CARRIER 4ROUP SUM EH a u"r W I Bll.l S L A U T; R9 J 4 H E C 4 R `TlY'P.-Y; TO: 151 0 T 4 C K f VNEY 9+1409 1iVT) Vt TX 76201 270 - C; NI AL f;Uf'PLY J 5/1)/R7 301R?'~1 D 4L IYSIE4C 'cTT 47.;1600 1 <.0u 600 ~U:.?1 QT 4L .9 1 1.00 981 - ER :1KYSICTAN 3It5IBt 3213?t3 R, 41NOR C ^R 1 :':'.00 6(1 SURTDt--L +A 1 25.00 i l i M I i i30.YS T TA1$ af7 '31L Ill Ill103ES 27.06 G eDJUSTMLN7S .0(... PAYMENTS .00 NOTICE: YO AVOID PAYMENT Of % DELAYED PAYMENT f~~ AFitR PEE ANNUAL PERCENTAGE RATED YOUR PAYMENT MUST RE MADE IN PULL WITHIN DAYS OF STATEMENT DATE AAD.JI~, I ^~h a± COPY 2 E ILBLL ~"-cD0?`~`~! Id ~;MJRIa_ IUD=[TL 7 IHS No. 1 Q i •`i I ; S } r T DATE ADMiiTEd DATE fIl`T ED WE ND,. JE4T~Y 1M Tbdirl , T?. (Fc) Pan NY NUMBER ::~1 FC7 f, /f f ARK ILY f,C ILL ~..3 1C - ST7C Al ~12Y 10-11-11 NO Is - - PATIENT' IAME $LAJIi3s i4Nf> viE _ /WNCECARIiR BILL sLAUT2► J~aCS 4N TEh - T0: 10 = 4 CK14'ILY 111409 U.-4T09r Tx 16201 { I~ 1 51oz,!fsr Soo-ouoo 'I I P DD i, I 2T0 G~ViRAL $J~PtY agk_,~ PHYSICIAN i III i f 1 a i 'C I 3 f 1 t I I lii i 7gg I r 1 'I,•f 1 ~j 5 +l ~ n F',dU CHA116;.: <'T.GG 4 121 V5 TITALS dty iibt AbJUSTµfNTS OU PAYMLNTS v00 NOTICE: TO AVOID PAYMENT OF % DELAYED PAYMENT FEE ( % ANNUAL pERCENTAOE RATEI. YOUR PAYMENT MUST BE A~AbE IN FULL WITHIN DAYS OF 5TATEMENT BATE. tTAL sTJR No; DATE ADMITTD DAT£ SCNAR(!Eb pAQg Np, 1 i - C) PAPIEW NMIR 4 S LI } {C,41 IAIL C'U1 DPATIENT NAME r a 03 U7 t,t.KEht:J(ll'IT CXF'4INSURANCE "1fIRIER D M Fou11 4Aii~ a PTUYe F,Lgl VAT AMOUNT ')91 - E'R PIYSTCIdru 5/?1/t 1211?7: ,13V0R C OIE U E, C10 4 SJb T01 ALL i i Y i 1 i r,l r Y d 5 A i } I 3 1 1. { l 7 "a 1 I i MVS t)TALS a aka. rojo ClARG`S ~5.u f A)JU.STN¢NT5 .U PAYLiENTS .OE NOTICE: YO AVOID PAYMENT OF % DELAYED PAYMENT FEE I 96 ANNUAL PERCENTAGE RATE), YOUR PAYMENT MUST SNf,, i BE MADE' IN FULL WITHIN DAYS OF STATEMENT DATE ~ w; COPY 7 _)x'K:J31Aw '~os~trr,L DETAIL B L T31U"i:Bi~TJi' aIkCCT inSNp,_ l _la+;011 I;1 J' F. J T Y, '1 6 2 C' 1 DATE ADMITTED DATE DN$CHANOED . aAO~ F10. (FC PATIENT NUM9ER u lp~ E~ tfi''d V .i1ii1l :ICkU( 1U1]0C4:-t r . PATIENT NAME / j / I l I , k /!i - DOCTOR DbWNOSl9 a i i H f~L 010 E t 41 A t+ C T t K r T I U r kNSUE CARRIEfl . ;,AR4* yATTHH PNU BER P[ 2 C X- rTO. J:VTOV~ rN 76'ZDI i? 0 9A Ep PHYSICFAN l`5~0 i I J i f I l I 7 s, { a ^1 1144S I)TALS a ) NAL FWD CHARGCS 2,) 0, A0JU1MEto T8 PAYMENTS ~0 NOTICE: TO AVOID PAYMENT OF ?6 DELAYED PAYMENT AFtt4~ a FEE I % ANNUAL PERCENTAGE RATE), YOUR PAYMENT MUST BE MADE IN FULL WITHIN DAYS OF STATEMENT DATEcI6T COPY 2 " OR 1 iSiG 's: K;>1t1~: SrtC'T IRSNO _ T 7 7 T 4 I bATE ADMITTED 1j DATE DISCHARDED FADE N0. FC ' I PATFEM NUM6ER i PATIEWWME DOCTOA ~DMNOSIF NSURANC OR NUMBER E TER OILl ~_OUP p011CyN11M9BR 1 t3:1 I ) L 0',); 5J)i/al 1)711 't 1 ilr., ;Ir•,r,q{, i `4 .I E1tr, Y Rv 51)S/8I 7113)1'i E.Z. VF L F1RST lif: 9'il - ~R n•'.Y ICI~'~ ~ F,fJ314 32I✓117 '1f ;'l4L/Ti 0 3 ,.OrJ I I 1 4it, )IaLS A/ t4; rwD +:11 A4'Il' Iq •J'~, AJJU-i'4LN:ir ~r PAY'•IC . NOTICE; TO AVOID PAYMENT OF DE % PA'lMENT YME PEE ( ANNUAL PERCENTAGE RATE). YOUR PAYMENT MUST Wm BE MADE IN FULL WITHIN DAYS OF STATEMENT ELATE. AIADEREXiAFTB1Eq ATfhkHt COPY 3 i 4 i _~d •I.a7lls_ t,i'.s37 ,.L DETIL ► 1;ID 1 rt" 'i IRS No. i Y I ? l I k I 1 DATE ADMITTEb DATE DISCHARGED PACE NO IFCI PATIENT NUMBER ' 1 ) .S/f: f PATIENT NAME DOCTOR A D4ICNOSI3 INSURANCE CARRIER CROUP NUMBER POUCY NU ER BILL M1 11 1_ i 4 y 2.^.Y t r,' FII1Y f'. TO: 'I VAII 2A)1)L03Y ii4V6 1I4LS de 34: r.{J C IARS:`. 14; ,7': A:)JUf'TI'lEr.IS .ilp PAyuI" APTFq l h . 7 j NOTICE: TO AVOID PAYMENT OF % DELAYED PAYMENT PAYMµ MyW~ b1ATEMINi FEE ti ANNUAL PERCENTAGE RATE). YOUR PAYMENT MUST AAAHEkT BE MADE IN FULL WITHIN DAYS OF STATEMENT DATE. COPY 3 Iffirw c RUTH TAN$EY l ~ APR - 61981 ^Qr~s1"1~,SION13>z COMMISSIONERS COURT OF DENTON COUNTY 212 W. BYCAMOPE KWON, TEAS 76201 (8 171382-4508 (817)383.8399 (6171366Q240 IB171886,2381 (HOME) rl ~ rio R a N n u PI TO. DENTON CITY COUNCIL`/ FLOW 50103 DOARD FLOW 44941-1 FLOW 130ARD OF ADVISORS P,RON; RUTH TANSEV a•.< DATV': APRIL 1, 1987 I tlrnuglit YOU would lilte to %(,e the County's official response to I,he 601c3 Doavd's I.etter. lL means that. Lhoy essentially no longer function and there Ls riot a oontrant "on the table" to impede our progress toward a declaLon. 1 Bickerst al lT Heath Smiley [TCVCWCACAITAFF JIMMY AUM HALL C. AOS[At MLATM W[AN C. OLAT2 'MAXIMA SAM JACINTO C[MT(ASUIT[ 1600 MAXIMA: CMILCY NONINA CACTY AOLLAN NATI[:ONO 98 SAN JACINTO UOULCVAAD ANN CLAAA[.M[LL CANOLINC$COtT AvLtIN. TPA[ 7870{.4030 ANOA[WACVCA MANV[LO MCN042 44AOLTM[. [eCLLMAN $T"LV W. AAULA,In 71314>2B0t1 OOUOLALO CAAOOM OAYIDMCNDC[ TLL[COAr ONLY-1121320-5636 LINDA AAN2N AIOAAOOJ NAVAANO MYAAA. MCOANICL MAACIAM[WLANOS/[k0 CATR[AIM[AAY[A March 24, 1987 CERTIFIED MAIL - RETURN RECEIPT R;QOESTED Mr, Michael J. Whitten Chairman Flow Regional Medical Center, Inc. c/o Whitten, Loveless, Kelsey, Gregory, Holt & Phillips, P,C. 218 N. Elm St, Denton, TX 76202-1566 Dear Mr. Whitten: MY client, Denton 60 19870 signed by a majority County, has received of the Flow Regional Medical Center, Inc. board of directors. In it you indicate that the corporation cannot operate the hospital unless the city and county make an immediate cash contribution of $1.5 million. Additional requirements are set out, including an "absolute minimum requirement" that the city and county retire the existing bonded indebtedness or otherwise remain liable for the debt. This last requirement would make it impossible to fulfill one of the conditions precedent to the obligations of the lessors. To the obligations ont Denton f Cany, ounty, ~aandh the ncorportion stir is Dour position that the letter of March 6, 1987, constituted an anticipatory breach, and on March 23, 2987, the Commissioners Court of Denton County, by unanimous vote taken in open court, directed me to inform you of this fact. i I Mr. Michael J. Whitten 2 March 24, 1987 Since there has been an anticipatory breach by the corporation, it is our position that we have no current obligations to the corporation and that we are free to explore other options that might be available for the operation of the hospital. 1 Sinnerely; C, Robert Heath CRH/kkt cc: C, Robert Butterfield Debra A. Drayovitz David Petruska Anne Schwartz John Vasquez Hon. Vic Burgess Hon. Ruth Tansey Hon. Sandy Jacobs Hon. Lee Walker r 1 Hon. Don Hill Lone Star Gas Company 319 Wni Oak SIMI • D.nton, To mot 76201 mux:h 180 1487 H'. tharltas Linton Administrator Flow -%fwrial Hospital 1310 Scaciptm t7enton, TX 76201 As$ J ommts 18-27552-0100-10 18-2-7552-0110-1 and 18-2-7552-0120-1 Dear Mr. Lintcni Your attention to the throe gas aommts with plow tbshital is solicited. The uma aavcmts am seriously past due and in need of imnodiate payawt. I reauntly talkW with Mr. Nowiski, Fiiaanao Diroator at Flow, azui informed him of the naosrluity of a payout plan. He stated he woal.d attoYpt to pay the Oldest bill an each aommt but omad not propose a paymm3t plan clue to the teiu»us financial oorAition of the hospital. I OVlainOd W Mr. Nowiski that we could work with a 30-day delinquent statub but 00uld not oontinuu service with 60 to 90 day arrears. Wb do Wt want to burdmi tha ramalrOur of our cveta,wrs with the addition of tAd dot attributable to these threw &Ooowits. As a oMWp"M it is i»'gmretive that wa have the carrent 30 end 60 dens arrears paid or a uatisfactMT rAY-out plan withL3 tun days or service intarru))tion is Passible. Your aor>Pxtraticn is apPvmiatad, At this data the total clabt is 537,167.400 0260223.01 of which is in arrears. Sincerely, J. C. bataman JUit jr out Mr. Mike M-itten County JW%N Vic: Mwqu" Deloltte HaskinsAells 1400 Lincoln Naze ` LB #4 Dallas, Taxes 75201 1214 964.4500 Telex 732848 XIA~ I(~ ~fit er's~ Direct Dial Number Mr, John F. Mcorane fUMarch 9, 198' Director of Finance City of Denton Municipal Building N' y 215 East McKinney 5tree O~ Denton, Texas 76201 Dear Mr, McGraner This letter will update our proposal dated February 200 1987, and address the issues we discussed at our meeting on March 61 1987, our understanding of the key issues are as follows; We will perform the project under the joint funding from, direction of, and reporting to both the City and County of Denton, We anticipate that you will continue to be our primary liasion with those agencies and the Hospital. We will begin the project as soon as possible after receivinn normal City and County approval, but no later than ten days after those dates, our current relationship with the City should facilitate contract develotment. We have added a task to analyze the Hospital's planned deficit for the current fiscal year, This analysis will be designed to determine an appropriate amount of funding this year, by the City and County. Assuming these hospitals' cooperation, our oral report and outline of findings from this analysis will be available within two weeks of our start date, our overall analysis of the Hospital's long-term "survival potential" will be determined four weeks from our start date, This analysis will consider the financial implications of three major operating options; current operations with management improvements leasing to an outside group, and, closing the Hospital, our written report from this alternative analysis will also present advantages and disadvantages of each alternative, but not offer a recommended course of action, We will discuss our report in one or two readings with selected representatives from the City and county. Mr, John F, McGrane Page 2 I hope this addresses all of the issues. We look forward to starting as soon as possible. Please call me tiA th any questions, Sincerely, Mark E, Delane Managing Director of consulting services Enclosure . r Mr, John F. McGrane, Director of Finance February 20, 1987 City of Denton f Municipal Building 215 East McKinney Street Denton, Texas 76201 Dear Mr, McGrane: We are pleased to respond to your request for a proposal to assist the City of Denton in evaluating the future financial viability of Flow Memorial Hospital, We have developed a program of assistance that is designed to meet the needs of the City of Denton in this critical and sensitive project. Our approach is based upon conversations with you, and our experience on similar engagements$ We are highly qualified to assist the City in this endeavor. Our project team meets the critical factors related to the engagement: Confidentiality - As your auditing firm we are well aware °r-ERe nee to maintain strict confidentiality of the data gathered and our findings and recommendations. . Techn cal Ex erience - as evidenced by the project team areas of financial feasibilitypstudieskandsstr the key planning for health care providers, ategie I i~xtans ndustr Ex ertise - The references provided describe our ground in with similar operations, and the City of Denton in particular, we have an unequaled depth of industry expertise. Timeliness - Our track record in working with the City apt y emonstrates our commitment to meeting your reporting and budgetary timeframes. This combination of capabilities makes us the overwhelming choice to meet your needs. 'r ?i 3 In the remaining sections of this proposal, after a brief statement on the background of the pro Oct, we describe the project background scope of work, estimate of timing and costs, and our qualifications. We appreciate this opportunity to further serve our valued audit client, and look forward with enthusiasm to working closely with you, the City's management team, and the city Council. If you have any questions, or any need for additional information, please feel free to call me at (224) 954-4535 or Ken Staples at (817) 336-2531. Sincerely, Mark E. Delano Managing Director of Consulting Services 'i ti J clT~x of D~NTnr~ WITH APFINANCIALOEVALUATION OF FLOW MEMORIAL HOSPITAL TABLE OF CONTENTS SE~ C_ TION PROJECT BACKGROUND, OBJECTIVES AND APPROACH,,,,,,,,.I PROJECT ORGANIZATION AND STAFFING YI PROFESSIONAL FEES..........., YII REFERENCES, QUALIFICATIONS AND RELATED EXPERIENCE,.,,IV RESUMES.,...... V , ~ I~ 1 ~~CT~-~ ' PRU,tECT BACKGROUND OBJECTIVES AND APPROACH 1 I-l PROJRCT BACKGROUND OBJECTIVES AND APPROACH B-ackground and Ob actives Flow Memorial Hospital (the "Hospital") like man public across the country, has recently encountered considerable difficult tals in meeting its the financial three obligations, months ended Information for any December Unaudited 32 financial 1986 ial reflect an operatin loss of over $878 000, This represents a deterioration of over 267 from the same period last year. The administration of the Hospital has requested substantial financial assistance from the City in order to meet its obligations. City Management is appropriately and justifiably concerned as to the financial viability of the Hospitals and desires a study which would project the relative financial health of the institution over the next five years. Such a study is to be based upon projections of operating revenue and expenses and assumptions relating to the future environment in the health care marketplace. The results of the study would serve to inform City and County as to ount of Hospitalsmay requirepduringarhemnext fiveiyeargal assistance the A roach A project of this magnitude will require an analysis of many Li 4 factors, including; The growing demand for indigent care. Shrinking debt capacity and access to additional working capital due to current and proposed reductions in Medicare reimbursement, A national trend in the shifting of admissions to an outpatient basis. The Hospital's ability to handle this shifting of admissions in , light of the Hospitals physical plant restraints. Competition in the service area. Th,s influx of alternative delivery systems into the Hospital's service area and the pressure to discount Hospital charges, The impact of community awareness and anticipated health care industry changes upon the Hospital's utilization, The deteriorating economic condition of the overall Texas economy. I pp gg I - 2 f Our roach o City easibility/debtscapvacityh study. wWliilerourmreportpwouldinotybe suitable for financing purposes, many of the same steps and procedures employed in a formal feasibility study would be utilized. Accordingly, the primary objectives of our participation in this project will be to identify the facts that can be used by the City and/or the Hospital to assess: The Hospital's financial outlook over the next five ears assuming current utilization trends and methods of operatic.+,. The future cash needs of the Hospital based upon this scenario. The "critical success factors" that must be present in order to improve the Hospital's financial outlook. In addition, a secondary objective of our participation will be to provide information useful in future strategic planning for the Hospital. To do this we will: Meet with the City and Hospital management and others, as necessary, to discuss risk areas, from a financial feasibility standpoint, such as competitive factors third-party reimbursement factors, and the future financial viability of the Hospital. Prepare selected alternative utilization levels and/or methods of operation to identify and assess the financial impact that alternative levels of utilization, payor mix, staffing, etc. has on the future cash flows of the Hospital. Be available to attend critical City and/or Hospital planning meetings to review the study. The goal manaiementf of the sensitivity potential outcome analysis of is alto inform ternative tscenarios so that know edgable decisions can be made. I I-3 SCOPE OF SERVICES TO BE PROVIDED In ppreparing a study where we provide a compilation of projections, it is our policy to base these compilations on assumptions provided by management concerning future events and circumstances. As such, the underlying assumptions are the responsibility of Hospital or City management and we will assess the reasonableness of those assumptions. A general description of the scope of services, procedures performed 1 and information analyzed during our involvement is included below. Data Gathering And Analysis We would begin by analyzing historical data provided by the City and Hospital. The historical data analyzed would include: Patient charges and other operating and non-operating revenue. Third-party reimbursement data such as cost reports, admissions by payor type, and alternative delivery contracts. Operating expenses by key expense categories such as medical supplies, purchased services, professional fees, utilities, insurance and other expenses. Historical staffing patterns and employee benefits. Analysis of historical balance sheets and working capital requirements. Historical utilization and workloads, both inpatient and outpatient. Service area statistics and competitive factors if readily available. The historical data obtained will serve as the basis of our utilization and financial analyses. The data collection and review phase will also enable us to gain a good understanding of the Hospital's operations and management staff. i i I-4 Utilization Analysis We will then make an initial assessment of the future demand for the Hospital's services and programs taking into consideration the market area served by the Hospital. Our approach to would include consideration of: Ir Historic admitting patterns. Service area definition and demographics. Historic and alternative projected use rates. An overview of attitude and age characteristics of the medical staff. The Hospital's future plans as to services and/or program changes. One task in this phase would be to most with management to review our findings and obtain an understanding of management's expectations of future utilization. We would then prepare the utilization projections that will be the driving factor behind the financial analysis. Financial Analysis And Projections This phase will combine all information gathered during previous tasks, examine the information for reasonableness, develop assumptions, and prepare the financial projections that will be summarized and included in our final report. Our approach includes: An assessment of the Hospital's historical and projected patient charges in terms of a competitive position. , Identification of fixed and variable expenses of the Hospital. . An analysis of projected staffing patterns and employee benefits. Assessment of working capital needs as to any future capital additions and improvements. An analysis of reimbursement from third-party payors. I I I I - 5 The conduct of sensitivity and other feasibility determinant tests including: The potential impact of alternative operating levels. Calculation of key ratios used by financial rating agencies to assist in identifying strengths and weaknesses of the Hospital. Use of our microcomputer-based, "utilization-driven" financial model to incorporate all assumptions and project the current and alternative operating levels of the Hospital. We will meet with Hospital management to review our findings and obtain an understandin of their expectations of future financial results This phase o our work is designed to finalize all assumptions pertaining to the projections and our final report. The final phase of our work will include preparation of our report to the City. Final Report Our final report will be designed to incorporate the results of our analysis. It will be a comprehensive document and serve as a basis for the Clty, Countyy and the Hospital to evaluate the institution's future direction, In support of this, the final report will encompass, at a minimum, the following discussion supported by exhibits, as necessary: . Executive summary Comparative analysis of projections under existing conditions to projections under alternative operating levels. Identification and discussion of the "critical success factors" of the Hospital. Summary assessment of factors affecting future utilization: Service area Medical staff Trends in medical treatment patterns 1 - 6 A summary of the projection assumptions used in the financial protections, and a discussion of the alternative operating levels evaluated. Projected financial information, along with various reimbursement assumptions. . Summary of conclusions. Financial projections: . In addition, all of the supplemental and supporting detail information used in preparing; the alternative financial projections can be included as an Appendix to our Study. Although stated previously, we would reiterate that the scope of our work on this engagement would be considerably leas than that of a full financial feasibility study which would be used for financing purposes. We believe the focus and scope of a full feasibility study would not be relevant to the needs of the City at this point, and would also be more costly. We would also point out that much of the information gathered and analyses to be performed would lend itself to a full scope feasibility should one be needed in the near future.' g Timing Duo to the critical nature of this engagement, we are prepared to begin our work within ten working days of being notified that our proposal has been accepted. Assuming the full cooperation of hospital and City management in data gathering and interviews, we anticipate rendering our report within thirty days of our start date. During the course of our work, we would suggest that periodic interim meetings be held with representatives of the City to review progress on the engagement. Such meetings will help to assure that our efforts are well-focused, and will serve to keep City officials apprised of our progress. w' ,e_„_~ h' i ~Q PROJECT ORGANIZATION AND STAFFING II - 1 S~FC IQ~ PROJECT ORGAAIZATION AND STAFFING We have assembled for this important project a multi-disciplined team of professionals with the critical blend of skills and , experience to provide financial consultingg services to the City of Denton. The consulting team has had significanC experience in the following areas; Financial feasibility studies Computerized financial modeling Strategic planning Market analysis Tax-exempt financing and related bond documents Knowledge of the specific market and third-party reimbursement systems Strategic business planning studies including oint ventures, mergers and acquisitions and debt capacity analysis Corporate reorganization Multi-hospital organizations Design Structure Implementation case mix management Additionally, our project team has experience in a broad range of consulting services including operations reviews, productivity studies, reimbursement, and automated systems, , The organizational chart on the following page depicts how we propose to staff this project. a C II 2 CITY OF pENTON PROJECT TELM CITY OF DENTON DIRECTOR OF FINANCE SERVICES PARTNER KENNETH E. STAPLES EENGAGEMENT ARTNER CONSULTING PARTNER ANE STEPHEN G. WUEST AGER UECKE LEAD CONSULTANT CHARLES D. CHRISTY OTHER CONSULTANTS AS NEEDED I E zz-3 Kenneth E, Staples, Partner in the Fort Worth office and Audit Partner on the City of Denton audit, will serve as the client services partner, He will ensure that the project deliverables are appropriate for the City's needs. Mr. Staples has worked with numerous governmental and corporate organizations to develop successful and viable financial strategies. Technical advisor to this engagement will be Stephen G, Wuest, our Firm's Great Lakes Region Director for Healthcare Services. He brings to the project extensive experience in health care strategic business planning and financial feasibility studies. Randall W. Luecke is a Senior Manager in our Great Lakes Health Care Consulting Group, and one of our Firm's lead specialists in health care planning and operational analysis. He has over ten years of health care consulting experience. Until recently, Mr. Luecke served as National Health Care Director for another international public accounting firm. He will be the Project Manager on this engagement and be responsible for the day to day engagement activities. Charles D, Christy, a Manager in our Great Lakes Health Care Consulting Group, will serve as the lead consultant for this project, Mr, Christy is the regional financial feasibility specialist and brings to this engagement the experience of successful management of many such studies, Mr, Christy has had experience in health care feasibility studies and financial modeling. Staff level activities will be provided as needed by a variety of consultants. These consultants will bring to the engagement both the clinical and financial backgrounds necessary to ensure a s varying experience in the areas of uccessful project. All of the consultants utilized will have modeling, systems, operations, financial reimbursement financial feasibifity studies, corporate reorganization and case mix management. Resumes for each of the identified members of the project team are included as Section V of this proposal. Mark E, Delano, Consulting Managing Director of the Energy Region headquartered in Dallas will be the en agement partner. He will have overall responsibility for the quality of the engagement, Mr. Delano has extensive experience in consulting engagements to similar financial institutions. ti t, ~a t ES ES CTInN rrrrrr PROFESSIONAL FEES ~ r } Y11 IzI - 1 S~;CTI~„ OWN r~r PROFESSIONAL FEES ofrpocketsexpenseseof travel,ssubsistence willcbler caf0suupport.ou OCur reimbursable expenses are customarily billed at actual, each month they are incurred. It is not practical to predict with any degree of precision how many special meetings you may require or the particular situations we may encounter at Flow Memorial both of which affect our out-o£-ppocket expenses, Howevcr, we will establish a ceiling for reimbursabla expenses of $6,000. M In no event would we exceed our estimate without your prior approval. Should any unforeseen factors change the scope of our work, we would confer with you immediately before proceeding. We follow the practice of submitting progress billings at the end of each calendar month during the course of our work, with a final billing at the completion of the engagement, H 'i k 5 SESE TICON IVTV REFERENCES, QUALIFICATIONS AND RELATED EXPERIENCE 4- IV - 1 SECTION Iy REFERENCES, QUALIFICATIONS AND RELATED EXPERIENCE In an effort to demonstrate our qualifications to assist the City of Denton in this very important project, we are pleased to provide both a list of references and a listing of financial planning clients we have served in the past few years. References As evidence of the experience of members of the project team to be assigned to the City, we offer the following select references and appropriate contact people that would be of interest to you. Southwest General Hospital Middleburg Heights, Ohio Mr. L. Kenneth Taylor Executive Vice President 216-826-8000 Project: Strategic Planning/Service Review and Analysia Riverside Hospital Mr. Scott E. Shook Senior Vice President and Chief Operating Officer 1600 Superior Street Toledo, Ohio 43604 (419) 729-6000 Project: Formal Financial Feasibility Study Baptist Hospital of Miami, Inc. Mr. Richard C. Marx Director of Financial and Long-Range Planning 8900 North Kendall Drive Miami, Florida 33176 (305) 596-6503 Project: Formal Financial Feasibility Study San Pedro Peninsula Hospital San Pedro, California Mr. Andrew P. Marinoovich Chairman, Board of Directors 213-514-5233 Project: Management Audit Business Office Review A listing of financial planning clients is included at the and of this section, on pages IV-19 and IV-20. IV 2 The remainder of this section discusses the services we have rendered to our health care client., Auditin Services in our fiEarsrly as accou1ntanCs andbauditorsv$nd then~hasatheineedtutions of the industry became more complex, we began the continuous development of specialized consulting skills. Todey health and welfare agencies; mental health centers physicians dentist., both individual and group ' the Firm serves voluntary hospitals; community hospitalmajorrhospital andgnursingihomeand management companies. We take a constructive approach in serving our clients, blending technical knowledge with business insight, and providing timely communication of financial and accounting developments to client executives, One partner is assigned the responsibility for all services to each client and is supported by all of the Firm's resources. Audit work is planned around the concept of continuous contact'. An audit team frequently performs a substantIa Vp"ortiond the audit during periods prior to year end, small team at 1 Y The use a relatively yyears rather er than a large audit crew at year-endiclosing' fosterrstaemore efficient working relationship with client personnel and minimizes any disruptiveeffect on the client's normal operations, It also affords the helprtileiclientibetteryplan forotlve he year-endsclosingY arise and to In making an examination, we use many advanced auditin techniques that we have developed through the These technues are designed to achieve audit economy andaefficiency whileimaintaining strict quality controls, We also make many of these techniques available to our clients for use in internal auditing, special analyses, and other applications, During the audit, we coordinate our work with client personnel, so , that we can operate most efficiently and avoid duplication of work. We make maximum usa of the financial statements, schedules, and special analyses that the client prepares, We also perform as much of our work as feasible at those times when the client s and computers, are least burdened with periodic work load sandnnal, special projects, IV - 3 While carrying out our normal auditing procedures, we often raise questions and develop suggestions for improving the organization's system of internal accounting controls and administrative procedures, We also make recommendations from time to time for improving the organization's financial structure achieving maximum reimbursement benefits, increasing the profitability of operations, and strengthening the overall management process, r Financial Feasibilit Studies and Ca ital Plannin A ma or area of service to our health care clients relates to feasibility studies and related analyses studies and Certificates of Need r (such o debt capacity nnection planning and financing for expansion rand/or modernization programs, with mergers and acquiattions, reorganizations, and budgeting and strateggic planning. In addition to studies prepared for public financin s, we have also had experience in preparin$ feasibility studies or inclusion in various loan applications (such as Farmers Home Administration applications and FHA-242 loan guaranty programs), private placements and limited partner syndications, The clients that we have serviced include hospitals, life care and continuing care centers and other types of extended care facilities. Our health care consulting computer modeling in conjunction with our capital planning and budgeting services, and can tailor ourmicrocomputeremodels iforCated in-house use, As evidence of our experience, our staff has assisted more combinedgpro ect sizeiforathin the e health capital assisted, or are assisting, financing process, The care ornizations the ha g, exceeds $1,500,000,000, y ve Accounts Receivable Afena~aement In the past two years many changes in the health care environment have resulted in hospLtal accounts receivable levels climbing higher than ever before. Those changes include; Medicare implementation of Prospective Payment System (PPS) which included additional billing requirements. Implementation of UB- 82, a uniform bill for all payers. Increased use of negotiated contracts for HMOs, PPOa and others. Hospital diversification into home health care and skilled nursing homes which requires specific billing. We have been actively involved in interpreting these changes and helping hospitals respond appropriately, L IV -4 Targeting Accounts Receivable A significant contribution to the effort of meeting today's health care environment challenge can be made by improving cash flow through effective management of patient accounts receivable. We help hospitals effectively manage their receivables by; '^1 Determining an appropriate level of patient accounts receivable for each individual hospital, r' Implementing a reporting system which enables management to identify troublesome areas, Business Office Reviews The objectives of our Business Office Reviews are; To identify ineffective policies and procedures. To identify bill processing delays, To review staffing - organization structure and number of employees. To meet coat justified recommendations, Our approach to Business Office Reviews Includes: Interviews with managers, supervisors, and staff members. Reviewing patient account documentation, Reviewing third-party documentation. Compliancy testing to policies and procedures. Reviewing file systems, automated and hard copy. Reviewing interdepartmental interfaces including Medical Records, Data Processing, and ancillary departments responsible for processing charges. Reviewing batch control procedures to ensure timely and accurate submission of charges. I r IV - $ aerations Reviews and Produrtiyit Y An--- a---l~ sea Our health care consulting group has extensive experience in performing productivity studies designed to ensure that hospital services are provided effectively and efficiently, In approaching these projects, we take the position that client participation is vita- to the success of such pro rams, Accordingly, our consultants work closely I ggi all phases of a project, scheduling frequenttreviewstofeengagement progress with management officials and user groups throughout the course of our work, Through this approach, client personnel become sufficiently proficient to carry on the programs developed once our consultants have completed their work, Our Executive Office considers productivity measurement and monitoring in health care to be paramount to the services we offer. To ensure that, as a Firm, internal resources are fully utilized. We have created an ad hoc committee of senior consulting personnel to continually evaluate and, when necessary, enhance our Firm-wide productivity monitoring product. To supplement this, we employ on a regional basis an experienced staff of management engineering, clinical and electronic data processin8 specialists with the operations experience to establish effactive productivity analysis and monitoring systems, and to train clients in their use. Furthermore, we utilize IBM microcomputers and compatible software to perform our initial analysis at the department level, which remains with our clients for ongoing use once our field work is complete, As evidence of our experience, our health care consulting group has performed staffing and productivity studies in almost every area of a hospital, including the design and implementation of productivity monitoring systems. Our staff has vast experience in performing operational reviews which focus on the administrative and support service sections of hospitals, Examples of ptheerangeaof productivity and operational review studies performed in non-nuraing areas include: Reviewing the effectiveness and efficiency of selected operating components in numerous clinical and support departments. Evaluating staffing levels in key support departments by implementing time and workload studies, while considerin interdepartmental relationships, 8 IV - b In addition to services in the non-nursing areas, we have developed and implemented a is flexible, patient acuity/nurse staffing system, The system simple to maintain and involves detailed observations r nursing activities, In connection with services in the nursing area, our staff has recently; Completed an audit of an existing patient acuity system to evaluate its effect on short and long-term staffing needs, A result of this work, a redistribution of skirl mix and decentralization of nursing management was implemented, As a Implemented a nursing patient acuity system, utilizing a work sample of activities to ensures proper staff acuity ratios. Performed a detailed staffing evaluation of operating room, recovery room, emergency department and nursing services. This study included direct observation of nursing activities and evaluation of in meo restin in a redistributionsan=ddreductionhofofuggll-timeuequivalents. Performed operational reviews of nurse management functions, leading to the reorganization of nursing services to increase mana techniques resu, nursing management full-time equivalents, r educing Finally, with the increased emphasis on health care costs, we have begun to apply management engineering techniques to the area of cost accounting where detailed work standard development becomes an integral part of determining the standard costs of revenue procedures. Our consultants have assisted hospitals in the development of detailed cost standards by; producing Guiding the process of work standard development through meetings with senior management and cost analysts, auditing results as produced, Playing a lead role in developing producing ancillary procedures andenursingsunits,Faintegrating acuity rating, labor, and non-labor standards, • g of a management's needs, y aeigo~~ioYeaecort, WIN r IV - 7 Staffing Studies The Business Office's organizational structure and staffing plan should facilitate response to their volatile environment. Unfortunately, tasks in the Business Office have boon historically assigned to individuals who had insufficient time to complete new tasks. This often results in inefficient processing and illogical flows of tasks. Staffing study objectives include: . Review of adequate manager and supervisor support. Identification of tasks being completed by the wrong level of personnel. Management reporting to identify activity levels to determine appropriate staffing. Initial review of existing staffing levels. Policies and Procedures Never underestimate the power of good policies and procedures; For training, retraining and informing hospital personnel physicians and the public, hospitals should have documented polices and procedures. Key areas of concern in the Business Office are: Admitting and outpatient registration. File maintenance. Credit and collection. Bad debt referrals. To assist hospitals, we will: Evaluate established policies and procedures for appropriateness and compliancy to those procedures. Revise policies and procedures to improve Business Office effectiveness within the guidelines of hospital philosophies and mission statements. Document policies and procedures. Monitor implementation of new and/or revised policies and procedures to ensure successful implementation. IV - 8 Materials Management Improvement Our Materials Management Improvement Program is designed to assist hospitals in obtaining quality materials at the beat possible prices and in the most efficient manner. I~ Specifically, this program helps reduce inventory levels and purchasing costs and improve productivity and service levels from vendors to users. Modularly organized, this program can be applied to all supply, processing and distribution activities and any of the elements thereof (e.., requisitioning, purchasing, receiving, inventory management Medical Records In this increasingly restrictive health care environment, it is imperative that hospitals and physicians fully understand the changes that are occurring in financial incentives, and the impact of these processes on their organizations. One of the major changes in the third-party payor system is the hospital's direct dependence on the quality and accuracy of documentation contained in the medical record and the conversion of narrative diagnoses and procedures to numeric nodes. Because the Medical Record Department in the hospital is responsible for providing the appropriate coded information which ultimately determines the level of hospital reimbursement, we include among our consultants Registered Record Administrators who are prepared to address the specialized information and medical record data needs required in the current health care environment. Services performed by the medical record consultants focusing on operations and optimum reimbursement include: Data quality reviews which assess medical record data to assure that it is complete, valid, consistent, and measuring what it t.s intended to measure. These reviews evaluate the sequencing of diagnoses and procedures, the accuracy of ICD-9-CM codes, and the timely availability of Chia data to maximize reimbursement and improve cash flow. Operational analyses, which assess the efficiency of overall departmental operations, work flow, staffing levels, and information systems. Recommendations are then made, as needed, to improve quality control., productivity, interdepartmental reporting procedures, and work flow. w f1 i k IV - 9 Data analysis activities, which examine and interpret data generated from the medical record abstracting system, case mix management system or in-house information system. These activities can assist the hospital in helpingg achieve the most effective use of the data in strategic planning, corporate restructuring, marketing, research, and in evaluations of outpatient care alternatives. . Educational programs, which address the specific information ! needs of trustees administration medical staff, financial managers, medical record professionals, and other hospital disciplines. Depending on the audience, the programs may focus on peer review organization activities, coding and sequencing, medical record documentation, or other related topics. In response to the current activities of Peer Review Organizations (PROs), the medical record consultants of Deloitte Haskins & Sells have also been active in assessing hospitals' Utilization Review Plans and Procedures in order to assimilate the preadmission and retrospective reviews of the PRO. Specifically, consulting services focused in the Utilization Review area include: Assistance in the formulation or review of Utilization Review Plan elements concentrating on the procedures for preadmission, concurrent and respective review. A review of the physician peer review activities including the process of physician advisor reviews, criteria and guideline approvals and the methodology for physician profile analyses. An assessment of the documentation requirements of the Utilization Review Plan and Procedures and statistics maintained for analyses of profiles. In addition to these services provided to hospitals, we offer a variety of similar services ta,lored to the individual requirements of outpatient facilities, physicians' offices and long-term care facilities. These services include record management systems, risk management, transcription services microfilming options, and assistance with accreditation and licensing compliance. I jl IV 10 Coat Accounting Our health care personnel have had extensive experience in the design, development and implementation of standard and other cost accounting systems within both health care and other industries. As evidence, we: Are presently assisting several hospitals in conceptual and detailed design and implementation of standard cost accounting systems. At the completion of these engagements, the systems will accumulate actual detailed costs for patient services, compare these costs with established standards and report pre established variances by department and DRG. Have and are presently assisting hospitals to develop procedure level standards for use in conjunction with standard cost and productivity monitoring systems. Have assisted numerous hospitals in implementing revised manual and automated systems to comply with uniform reporting requirements. Have developed sophisticated planning models and analysis techniques aimed at evaluating the feasibility of expanding, contracting or closing services. Included within these models have been the identification of costs as variable, semi-variable and fixed as related to changes in volume. Developed a cost-benefit based overhead cost allocation methodology for a major university with over 100 indirect cost centers and eight different auxiliaries, including two hospitals. Participated in the coat accounting design of integrated financial management systems for numerous organizations in the industrial sector - both large and small. Evaluated and recommended order processing, inventory control, bill of material and general ledger systems for several companies. Case Mix Mana ement In 1976, Deloitte Haskins & Sells was among the first to consult w ith a state developing diagnosis-related groupings when the State of Now implementedethisgprospectiveppaymenttsystem. Topthis8day, we estill consult on this important project. IV - 11 It was through this experience, in which we assisted New Jersey in establishing DRG rates for approximately 100 hospitals, that the D US approach to case mix management was developed, Our approach recognizes that hospital needs vary. Furthermore, we know that there are large variations, from provider to provider, in the content and flow of patient bills /abstracts, volumes, desired costing methods and the availability of data processing hardware. For se reas Systemeto operaonste,inweahnumberave configurations including: (8 s A COBOL version for the IBM PC microcomputer, A COBOL version for mainframe computers. An in-house Statistical Analysis System (SAS), Our health care consulting group has been involved in the installation of this system at eight major teaching hospitals, including those with large IBM mainframe computers. Certain salient points incorporated in these installations axe: Integration of a costing system which produces standards for approximately 80% of the hospital's operating revenues. Integration of a nurse acuity rating system which provides for the costing of ton acuity classifications within each DRG, coupled with disease staging analysis. Full integration of Medicare's outlier logic. Development of a concurrent system which tracks patient costs and length-of-stay on a daily basis and compares these with HCFA standards and DRG rates of reimbursement. Information SYStema and Office Automation Within the area of information systems, we have performed a wide variety of services for a large number of industries, including health care. Services rendered have included long-range EDP planning, comprehensive effectiveness and control reviews of large Installations, identification and prioritization of information ' requirements, and assistance in the selection and installation of both mainframe and minicomputers as well as telephone systems. Representative health care systems projects performed by our health care consulting group, include: Performance of a comprehensive review of a shared data processing service providing services to numerous hospitals. This review, performed in two major phases, addressed: r IV - 12 Long-range planning and future role Modifications to existing applications Communications Documentation Contractual arrangements Competitive position Development of a long-range data processing plan for all sizes of acute care hospitals. Selection of cost accounting software for an acute care hospital. Project management for the installation of a minicomputer system in a medical clinic. Assistance in the development of a strategic data processing plan for several specialty children's hospitals. Assistance with the selection of a comprehensive management information system for many large urban hospitals. Assistance with the development of Request for Proposals (RFP) and the selection of financial systems for many community hospitals. Office automation (OA) is a field that has experienced tremendous growth in recent years. With the benefits of faster/easier information storage retrieval and data manipulation, coupled with potential labor savings, we expect this growth to continue. In connection with this, we have provided our health care clients a broad range of services in this area, including: Assistance in defining OA objectives and needs, Assistance in linking various components (e.g., word processing, telephone, etc,), plus defining future system direction. System design and vendor selection (including telephone system ' selections). , a IV - 13 Reimbursement and Rate Settin We strongly believe effective third-party reimbursement services are critical t an effective working nrelationship clients. with As Medicare tintermediaries,oBlue Cross plans, and various state regulatory bodies. We regularly; . Participate in projects designed to maximize Medicare reimbursement and analyze the reimbursement effects of operational changes. Prepare Medicare, Medicaid, and when applicable, Blue Cross cost reports for our clients. Consult with clients on the applicability and interpretation of Reimbursement ReviewtBoard l(PRRB)iannddtheiHealth hCathe Provider Administration (HCFA). re Financing During recent years, our health care consulting group has; Completed third-party maximization projects for numei.1us hospitals. In connection with these projects, we have successfully proposed numerous ad,justmencs to prior years' coat reports and, in all completed projects, have found the additional reimbursement received by our clients through our participation greatly exceeded the professional fees charged. Consulted with numerous hospitals on a variety of reimbursement matters, including those associated with state sponsored rate setting agencies. Successfully settled several controversial reimbursement issues administratively with the Blue Cross Association, and have assisted numerous clients in the preparation and presentation of appeals to the PRRB. Assisted numerous hospitals in developing reimbursement strategies as they relate to operational and regulatory matters, including TEFRA and PPS. In addition, we continually update our clients on the potential impact of changes in PPS regulations, specifically the incorporation of capital costs into DRG rates and establishment of fee-for-service payment rates for outpatient services. i IV - 14 Strategic Planning Our health care consulting group has extensive experience in performing strategic planning consulting services from both an entire institution perspective and a specific service perspective. We firmly believe these projects must be approached by a project team compposed of many disciplines. We staff these engagements with personnel experienced in the areas of not only atrateggio planning but also operations, corporate restructure productivity, accounting and finance, organizational design, and reimbursement and rate E setting. The competitive environment in which health care providers I now function causes the financial implications of decisions to be of more significance than over. Our health care professionals, complemented by our accounting and finance skills,. help assure that we assist clients in establishing strategies that are realistic and pragmatic. In addition to the more traditional approaches to assessing markets, demographics and needs for service, we utilize our advanced techniques in financial modeling and case mix management to test the validity of alternative strategies. Internal/External Strength Assessment Our Internal/External Strength Assessment for multi-hospital systems facilitates the sharing of resources by individual hospitals within a system, making the system and each member hospital stronger and better able to compete. The first phase, data collect.son, provides our health care consultants with information about the system. We interview key personnel to determine: The mix of programs and services offered by each hospital and their relative success Each hospital's strengths and weaknesses in market position and ability to compete The best demonstrated practices and "expert" managers within the system Each hospital's priorities and expectations of system membership as a guide for system goals. This information makes it possible for the system to share experiences, match needs with resources internally, and lessen the dependency on external advisors. Additionally, the goal setting process is simplified. IV - 15 In the second phase, our health care consultants or a system task force, analyze the data and develop recommendations for sharing capabilities and resources. Opportunities for operational improvements are developed by a task force of line managers. The results of the assessments are summarized in two reports; a summary report with comparative statistics and market penetration information and an optional hospital specific report, If the multi-hospital system is not making the most of its potential, the Intern WExternal Strength Assessment can provide the techniques and expertise to bring about a new degree of cooperation and mutually beneficial sharing of the strengths and capabilities the system already possesses, Corporate Restructuring External forces which affect the health care industry have become much more severe, As a result, many hospitals have determined that their present corporate structure must be evaluated as part of an overall strategy to meet the challenges of the future. Our health care consulting group has assisted numerous hospitals with these important projects, In connection with these studies, we have: Assisted in the development of short and long-range business planning goals, resulting in the design of proposed corpporate models for hospital management and board of trustee worlcing group sessions. Performed studies of the legal (performed in cooperation with hospital legal counsel), tax, reimbursement, governance, and operational aspects of various corporate structures. Assisted in the implementation of revised corporate structures, including: Requesting the necessary revenue rulings, Gaining the acceptance of third-party regulatory agencies, Presenting revised corporate structures to appropriate parties. Developing implementation plans and procedures. Performed financial impact reviews for selected diversification service plans such as home health, ambulatory surgery, real estate ventures, child care centers, rehabilitation units, etc. , is IV - 16 Telecommunications Recognizing the growing importance of both voice and data communications planning in the health care industry, we offer a wide range of consulting services to address the issues within the telecommunications area. Typical services include; In_. dependent Telecommunications Technology Assessment (ITTA) en y opportun es to on ante to ac~ency an We effectiveness of the telecommunications function within an organization. Telecommunications Feasibilit Stud We perform a detailed nanc a ana ys s to a use as t e basis for objectively evaluating telecommunication options. Communications Network Anal sis and Desi n an or ete networ tat is econoro ca We desiiggn a voice performance, and is capable of expandingpto accommodate unknown or undefined future communications requirements, Telecommunications System Selection - We select the optimum ar ware an so tware so ut on t rough an unbiased and competitive process. SOFTWARE PRODUCTS Deloitte Haskins & Sells is committed to developing and maintaining microcomputer software to assist clients in responding to today's competitive health care environment. Examples of software currently available are described below; NUR___IEPRO NURSEPRO, our patient acuity a stem, is designed to help hospitals minimize nursing labor costs through increased efficiency. Specifically, the software provides management with a staffing plan based on actual ppatient acuity levels. The plan details the customrdevelopedlforxthe hospitalperaonnel based on standards Additionally, NURSEPRO monitors the efficiency of the nursing labor component and produces reports which highlight the areas needing improvement, The data is maintained at the level of detail required for costing nursing services and may be utilized in the development of cost accounting standards. 4 IV - 17 NURSEPRO also serves as a planning tool which tracks trends in patient acuity levels and provides comparisons of budgeted, actual and required personnel resources. Productivity Analyzer Productivity Analyzer is a high level productivity analysis system designed to provide hospital management with the information necessary to operate more efficiently. This product measures past and present productivity levels and servicesaran ongoing e developed monitoring for each department a u givingoconsideration of the department's methods of operation and productivity improvement potential based on historical performance, Productivity Analyzer is a microcomputer-based product featuring menu-driven software, on-demand reporting capability and fully integrated graphics. Case hlix Management System CaMMS, our case mix management system is designed to provide hospital management with the information necessary to better manage under PPS. The system which operates on :{BM mainframes and the IBM PC-XT, features a flexible data base design, both standard and ad hoc reporting, simple processing options and easy access to information. The PC version interfaces with LOTUS 1-2-3. CaMMS includes reports by DRG, physician, payor, clinical service, ancillary department and patient. The system also assists the user in developing hospital-specific standards for comparative reporting purposes. Through the LOTUS interface, summary level data may be formatted for graphic presentation. A grouper program is part of the system. Gr°.uRer Grouper is a software product that assists the user in tracking DRG-based third-party payor information, in addition to Medicare, the system can handle three DRG-based payor groups. Grouper has both tutorial and interactive options, providing efficient modes of operation for both new and experienced users, Requiring an IBM-PC or compatible equipment, the software is generally used by medical records and utilization review personnel. i zv - Plus Plan 18 Plus Plan performs financial rojections and consolidates financial statements from various enti Financial statements. ties to produce actual or pro forma We also have available software designed to assist in preparing financial projectiona$ developing standards for cost accounting systems, analyzing physician admitting patterns,-etc, 1 x IV-19 8ELLCTED HOSPITAL CAPITAL PLANNING ANU/Ok Vt.ASI61LITY STUDY ~)LNTS UV' TkIL If~AL711,~ C,~AwA~nI,N SUL1'1tE 'k ~ P DENT CAPACITY/ FINANCING PKLLIMINAkY CEkTIVICATE FINAL INVESTMENT BANKER(S) NUSf1TAL LOCATION SIZE ST. UUY (it. Ma STUDY (IF SLLECT4:p Franciscan Healthcare Corporation Colorado Sprln e, Colorado $110,000,000 X Merrill Lynch r~ Good Samaritan Hospital Cincinnati, Ohfo 100,345,000 X X % Salomon brothers 1000000,000 X Dillon Road Cain Bros,) Shattuck, Jewish Hospital Cincinnati, Ohio 106,500,000 X % Merrill LyYnch and honkers Trust S6 500 COO X Saaeongood 6 Hayer and Merrill Lynch Footh}ll Presbyterian Hospital Glendora, California 64,385,000 % X Mil Scaler b Meyer and Merrill Lynch Outon a Medical Center Honolulu, Hawaii BO 000 00U 6 Schroeder orur croup, Inc, Indianapolis, Indiana 65,000,000 X E. F. Hutton 6 Co, , gethesde Hospital Cincinnati, Ohio 63,000,000 X X Goldman S Bachehsm 6 6 Harrill Co., o., Harrlll LlL 58,590,000 and Se ecynch St. Mark Hosppital Salt Lake City, Utah 39 000 000 X end aeongood 4 Meyer Fort Hamilton-Hughes Hospital Hamilton, Ohio 37,300,000 ,,X % % % % E. Y, Hutton 6 Co. and Saaeongood 6 St. Luke Hospital Fort Thorax, Kentucky 32,OQO,tl00 X Moyer U0 % X Soaeongcod L Meyer and Merrill Lynch Albert B, Chandler Medical Center Lexington Kentucky 31,560;000 R X % Saaeongood 6 Mayor and Merrill Lynch St. Francis-St. George Hospital Cincinnati, Ohio 31 SUU 000 x X X Merrill Lynch and Saaeongood 6 Mayer , Children's Hospital Columbus, Ohio 29,91U:000 X X Saaeongood 6 Mayer Pescock Valley Hospital Weetwood, Now Jersey 29,1U0,000 X Lehmann Lynch Youville Chronic Uleeeae and X Morrill Lynch Rehabilitation Hospital Boston, Massachusetts 281000,000 X X Goldman, Niche 6 Co, Riverside Hospital Tolado, Ohio 25 50U,000 X DLllon, Road 6 Co. end Raney 6 Co. Baptist Hospital Miami, Florlde 25:000,000 X B. C, 7.aiggter Uur Lady ok Marcy Hospital CLncinnetl, Ohio 25,000ODU X X J( Seasongo0d 6 Mayor end Connore 6 Co. Southern California Presbyterian Homes Glendale Calilornia 25,000,000 X E. P. Hutton 6 Co. Good basoritan Medical Center Zenesvllta, Ohio 23,550,000 X X X E. F, Hutton L Co, and Grenade Hills Community Hospital Grenade Hills, California 20,000,000 X McDonald k Co. Parkvlew iacapal Hospital Pueblo Colo redo 20,000,000 X X E. F. Hutton 6 Co. Couunity oapital • Springgfield bpringlleld, Ohio 20,000,000 X X Hollywood Presbyterian Had eel Center Loa Angeles, California 190000,000 X X Middletown Rational Hospital Middletown, Ohio 1315001000 X Saaeongood 6 Meyer Piqua Hospital Piqua, Ohio 12,750,000 X X NcDonaid 6 Co. St. Joseph Hospital Pt. Wayne, Indiana 12,692,000 X X X Nuvoon Southern Nevada Memorial Hospital Lea Vegas Nevada 12 400 000 X Paine Weber At. Elizabet h~Hoepltal Chicago, lllinola 12,00tl;000 X St X Stlefel Nicolas St. Catherine s Hospital Chicago, Indiana 11250,000 X % X Woods n Coapeny Stouder Hospital Troy, Ohio 10:50D,000 Saaeongood 6 Meyer Brown county General Hospital Georgetown, Ohio 10;000000 X X I IV-20 SELECTED HOSPITAL CAPITAL PLANNING AND/Uk tLASIBII.ITY STUDY CLIENTS Or -jilt Clfl('UNAT1 HEALTH 0J ONSUL•' u CROUP DEBT CAPACITY/ - FINANCING PRELIMINARY CEkTIFICATE FILIAL INVESTMENT BANKER(S) 0 P TAL LOCATION b:_l'LF; MDA UP NEED STUDY ()F SELt:Cm Union Hospital New York, New York $ 10,000,000 x Pleasant Valley Hospital Camerillo, California 8,520,000 X x Miller & Schroeder Selby General Hospital Marietta Ohio 6,330,0011 X x Hearner, Wilkins and Company Morris Hospital Morrie, Illinois 6,2UU,UVU x Kidder, Peabody McCullough-Hyde Memorial s Hospital, Inc, Oxford, Ohio 6, IOU, 000 x Otto C. Epp Memorial Hospital Cincinnati, Ohio 5 ,000,U00 X Wayne Hospital Company Oreenville, Ohio 4,215,000 X x Ohio Company I Providence Hospital Cincinnati, Ohio 4,ooo'000 x Schroeder Manor 4,000,GUO x x Clifton Springs Hospital and Clinia Clifton Springs, Few York 3,400,000 x x Community Health Canter of %renth County Coldwater, Michigan 3,5006000 x Cushing Memorial Hospital Leavenworth Kansas 3,500,000 x Paine Wobber and Houseman Becuritiea St. Joseph Hospital Mishawaka, Indiana 3,260,000 x x Bache, Halsey, Stuart, Shlelda, inc. Choctaw County Hewrial HoapLtal Hugo Oklahoma 3,000,000 x Housemen Securities Memorial Homes Foundation Cincinnati, Ohio 1,000,000 x Tillman CountyppHoeital Frederick, Oklahoma 3,000,ODU X Houseman Securities Huron Road Hoeporeonal Care CleveIend, Ohio 3,000,000 X McDonald & Co. scle Shoals Facility Tuscaloosa, Alabama 3,000,000 X X Pulhmatahs County Hospital Antlers, Oklahoma 21800,000 x Houseman Securities Sequoyah Memorial Hospital 5allisaw, Oklahoma 21600,000 x Houseman Securities Bellevue Hospital Bellevue, Ohio 21UU,000 x x x McDonald 6 Co. Hainaerlins Foundation Columbus, Ohio 1:960,000 X Hereth, Orr & Jones, Imo, Wetuaka General Hospital Wstumke, Oklshcea 11515,00 x Houseman Socuritlee Total }x,528.092.000 I~ 4 RESUMES 5 V - 1 1C RESUMES The success of any consulting engagement depends on the technical competence and human resources of the firm conducting the study. We can provide both the technical expertise and the capacities required to conduct the engagement outlined in this propcfsal. Key requisites for conducting an engagement of this type include defining required skills and selecting qualified professionals with related experience and capabilities in specialized disciplines, The professional backgrounds of those individuals specifically selected for this engagement are shown on the following pages, F .d V-2 MARK E -DELANE Consulting Managing Partner Role in EgSaS ement: Engagement Partner Expea Q; Ten years of diversified data processing experience in both the public and private sectors. Examples of Clients Served: HEALTH CARE; UCSD Medical Center UCLA Medical Center Sharp HealthCare University Of Washington Hospitals Providence Hospitals Children's Hospital and Health Center Scripps Clinic and Research Foundation GOVERNMENT: County of San Diego City of Orange County of Oranga - LIS Sweetwater Authority San Diego County Registrar of Voters EDUCATION- Department of Education, San Diego County San Diego Community College District San Diego Unified School District California Western School of Law FINANCIAL MANAGEMENT: Salk Institute INFORMATION SYSTEMS: Signal Companies San Diego Office Supply Southwest Marine Rig Sear Supermarkets Wavetek Corpovation Equitable Life Leasing F n. V-3 I Mark E. Delane In addition, Mr. Delane has over eight years experience in he(Jth care systems consulting. Particular engagements include: Project mana er and team member for vendor evaluation of patient care systems for a major Southern California teaching hospital. Areas evaluated include ADT census, order entry and results reporting, respiratorycand occupational therapy, and outpaien. Pro act manager for the evaluation and das gn of all financial policies and procedures for a San Diego hospital and health center. Managed an evaluation of the accounts receivable system for a significant San Diego hospital and clinic. Designed and implemented hospital-wide patient charge procedures for a large Alaskan acute care hospital. Developed and implemented revised patient scheduling and control procedures for two Pacific Northwest reaching hospitals. Installed an automated budgeting system in three Pacific Northwest hospitals. Co-authored a budgeting systems manual used state-wide. Financial Management Managed the development of complete accounting procedures for a major hospital. Cash management studies. Financial system installations. t~ i3 - Mark E. Delano V 4 Special Expertise; Mr. Delane has been with the Firm since 1979. Throughout his career he has been consistently involved in EDP system selection projects in a variety of client environments, These enggagements have typically included re uirements analysis, Request for Proposal (RFP) preparation, vendor evaluation, contract negotiation, and system installation. Education: M.B,A,, University of Southern California B.A,, University of California, Los Angeles Professional Activities: Association for Systems Management Center for Data Processing Professional Development i i 4 V -S STEPHEN G. WUEST SIGNIFICANT CAREER EXPERIENCE Deloitte Haskins & Sells, Partner - Management Advisory Services (Cincinnati) EDUCATIONAL BACKGROUND B,S.I,M, - Purdue University M,B,A, - University of Chicago Mr, Wuest is a partner in the Health Care Consulting Group of the Cincinnati office, His experience with Deloitte Haskins & Sells has included consulting assignments as well as varying assignments as a member of our audit staff. He has been with Deloitte Haskins & Sells for nine years and has substantial health care and data processing planning experience. He has participated in and managed numerous financial feasibility and debt capacity studies for hospitals as well as nursing homes. During the last two years, he has managed approximately ten financial feasibility studies. Mr, Wuest has also performed debt capacity, data professing, and procedures efficiency studies for numerous Ohio hospitals and health care organizations. His financial feasibility clients have included; • St. Francis-St, George Hospital, Cincinnati • Medishare, Dayton • Piqua Memorial Hospital, Piqua • Stouder Memorial Hospital, Troy • Health Care Industries, Dayton • Miller's Merry Manor, Plymouth, Indiana I Mr. Wuest also has extensive health care data processing whexpearerienevaluace. totalnhospitalrinformationesystems.foHe issalsols responsible for an engagement in which DH&S is developing a strategic business plan for a hospital service bureau which provides a plication systems to 22 hospitals. l Mr. Wuest has provided data processing services toaphysician groups, nursing homes) and community mental health organizations. His health care data processing clients include; • Providence Hospital, Cincinnati • Doctor's Hospital, Columbus • Otto C, Epp Memorial Hospital, Cincinnati • Montgomery County Board of Mental Retardatiow, Dayton • Southwest General Hospital, Cleveland • Children's Hospital, Pittsburgh yyl~o 1 V - 6 PROFESSIONAL ASSOCIATIONS Healthcare Financial Management Association American Institute of Certified Public Accountants Ohio Society of Certified Public Accountants r 'r it r? t V - 7 RANDALL W. LUECKE SIGNIFICANT CAREER EXPERIENCE Deloitte Haskins & Sells - Senior Manager, Management Advisory Services (Cleveland) DIG Main Hurdman - National Healthcare Director '(Washington) Ernst & Whinney - Senior Consultant (Cleveland) EDUCATION MBA - Lehigh University BA - McMaster University PROFESSIONAL DESIGNATIONS Certified Management Accountant Certified Purchasing Manager Mr. Luecke has over ten years experience in the health care area, He has participated in numerous hospital audits final financial feasibility studies and debt capaci.ty,mlongryraand nge planning, corporate restructuring, and nurse staffing studies. Fie has prepared and reviewed Medicare Cost Reports and assisted hospitals in optimizing their reimbursement under Federal and State government programs. He has participated in operational reviews and cost containment studies, and has prepared and assisted with Certificate of need applications. Mr, Luecka has worked with hospital architects, program planners, bond underwriters and attorneys, comprehensive health planning agencies, third-party reimbursore, bond rating firms, county commissioners, hospital financing authorities, state health departments, and other agencies concerned with the health care delivery system. S V-8 PROFESSIONAL ASSOCIATIONS Healthcare Financial Management Association American Hospital Association American Association of Hospital Consultants Institute of Management Accounting ARTICLES "Pension Plans: More Than a Savings Accounts for the Hospital", Healthcare Financial Ptana ement, December, 1986. "Diversifying Revenue Sources: A Key to Hospital Survival", Corporate Accountins, Spring, 1986. "The Implications of SFAS No. 81: Disclosin Certain Poetretirement Benefits", Management Accountin&, October, 1985. "Corporate Healthcare Costs: A Strategy for Containment", Corporate Accounting, Fall, 1984, "Updating the Controversial Social Security Option", Healthcare Finanei,11 Management, November, 1982. "Feasibility Study Offers Guidance", Contemporary Administrator, June, 1982, "Corporate Restructuring: Positioning for Future Viability", Osteopathspitals, February, 1982, "How to Work With the New Rules for Compensated Absences", The Practical Accountant, October, 1981, "The New Accounting for Compensated Absences", Healthcare Financial Mama ement, July, 1981. "The New Economics of PSRO Review: An Uncertain Future:, Ho-.sue Financial Management, April, 1981. "The Economics of Delegated vs, Undelegated PSRO Review", How i Financial Mana ement, July, 1980. v-9 CHARLES D. CHRISTY SIGNIFICANT CAREER EXPERIENCE Deloitte Haskins & Sells . Manager, Management Advisory Services Klosterman's Baking Company - Controller EDUCATIONAL BACKGROUND B,B,A. - Ohio University Since ,joining Deloitte Haskins & Sells, Mr, Christy has been involved with the financial segment of financial feasibility and debt capacity studies. Mr, Christy has also assisted in the preparation of a microcomputer health care financial model which is primarily deal nod to forecast the financial statements required in a formal feasibility study, Mr, Christy also has experience in working with large investment banking and bond counsel firms. His experience includes the assistance in the analysis of advance refunding of bond issues for hospitals and municipalities. Prior to joining Deloitte Haskins & Sells, Mr. Christy had a broad erie manrange Hisnexperience accounting, personnel, cost taxes, financial dstatementl preparation, analysis and deal n, profit sharing manufacturing feasibility studies, budgeting and strategic planning, unit cost and pricing, and administrative management. Mr. Christy has also negotiated and obtained structured pricing gr major customers in order to ensure adequate returns oninvestmentth and has experience in the private placement of Industrial Revenue Bond issues. Mr, Christy is presently a member of the National Association of Accountants, He has previously served as a director on the board of the Cincinnati Chapter. r Delcitte Haskinslells FLOW MEMORIAL HOSPITAL Supplemental Information a Aprii 198 Deioitte Haskins4eiis 1400 Lincoln P1ara LB #4 Dallas, Texas 76201.3320 (214) 964.4600 Telex! 4906828 i I Mr, John F, McGrane April 13, 1987 Diractor of Finance City of Denton Munioipal Building Denton, Texas 76201 Dear Mr. McGranet In ppour letter of March 26, 19870 we indicated that pwe would would 3,= c,~ 5euandt8 off JudgeiBurgess' letterrdateddMarcho13, and points 1, 4 and S of Mayor Stephens' letter dated March 18, The purpose of this letter is to provide information pertaining to ?oints 6 and 8 of the Judge's letter, and point 5 of the Mayor s letter, These points were not part of the proposed and approved scope of our work, and some data is sensitive. The other above-referenced points are addressed in our formal report under separate cover, point 6 of the Judge's letter requested a comparison of hospital costs for a patient to stay at the AMI Denton Re ional Medical Center, the Denton Community Hospital (FTM) and Flow Memorial Hospital, We would refer you to a re ore pprepared by the Medical Task Force Subcommittee of the Denton Economic Development Committee dated September 1986, Page 26 of the report presented herein as Appendix A, contains comparisons ok charges for various hospital services at Denton, Dallas and Fort Worth facilities, including the above-mentioned facilities, We have not audited or tested this data; however, the information pertaining to Flow Memorial Hospital appears to be accurate. Point 8 of the Judge's letter requested a listing of annual contracto the Hospital has with pphysioians, and th® amounts of each ?roposal, We have compiled a summary of the Hospital s contracts with physician in Appendix B, Point 5 of Mayor Stephens' letter requested information pertaining to outstanding leases. A listing of all capital leases, and equipment-related notes payable, appears in Appendix C. I hope this information is of help to the City and County management. Sincerely, Mark E. Delane Managing Director of Consulting Services APPENDIX A COMPARISON OF IN THE DENTON/DALLAS/FFORT W RTHEAREA Semi-Private Two-View Facility Room Rate Chest SED Per Day_ _X-Ray CHC Rate Flow Memorial Hospital $185000 $57,00 AMI Denton Regional $26.50 $11,00 r Medical Center 216,00 73.30 28.25 23.65 Lewisville Memorial 188,00 43.00 23.30 16,00 North Hills Medical Center 180000 58,00 21,00 17,00 Harris Hospital HEB 203,00 53,25 Harris Methodist 31.25 12,50 189.00 55.65 17,85 15.50 Harris Hospital EMASH 177,50 47,30 15,80 17.90 Trinity Medical Center 220.00 76,00 25.00 37,00 Irving Community Hospital 185.00 45074 16,00 16,50 St. Joseph Hospital 188,00 57,00 20,00 15.50 St, Paul Medical Center 215,00 53,50 21,00 17,00 Walls Regional Hospital 177,00 54,85 22,25 17,25 Cook/Ft, Worth Children's 200,00 55,00 20,00 17.50 John Peter Smith Hos ital 172,00 36,50 18,00 10.50 Presbyterian Hospital 198,00 51.00 16.25 10,25 Arlington Memorial Hospital 151,00 32.50 15.50 10400 MeParklthodiandtMemorial Centeral 1230 89.00 38,50 15,50 8,25 Mod, Ctrs Dallas Hosp, 226,00 56600 Doctor's Hospital 225,00 17,50 61,50 36,00 18,25 Garland Memorial Hospital 180,00 34,50 14,75 10.25 SOURCE: Medical Task Force k%.,bcommittee Denton Economic Devo,ipment Committee September, 1986 A-1 APPENDIX B PHYSICIAN CONTRACTS According to Hospital records the following physician contracts are currently in effect. The information provided' is based upon our review of the contracts. For a more detailed understanding, the contracts should be reviewed in their entirety. rr PHYSICIAN: Daniel H. Bailey, M.D. PURPOSE: To maintain a program for providing prenatal, intranatel, and postpartum oars to the patienta at Flow Memorial Hospital by Certified Nurse-Midwives. COMPENSATION: $100,000.00 per year, TERM: Twelve months beginning September 1, 1986, The contract may be terminated by either party for cause proved to the satisfaction of a majority of a three member arbitration panel. The contract may be terminated at any time by either the Hospital or the Physician by given sixty days' written notice. NOTE: A term of the contract calls for Dr, Bailey to maintain policies of insurance acceptable to the Program, with minimum policy limits of five hundred thousand ($500,000,00) per occurrence, insuring him against claims of medical malpractice, and to provide the Hospital with a Certificate of Insurance, satisfactory to the Hospital for Physician's General Liability, Malpractice, and Worker's Compensation Insurance, ..r....r ..................rrrr..r. PHYSICIAN: John Dulemba, M,D. PURPOSE: To assist the physician in establishing his practice and to form a primary affiliation between the physician and the Hospital, COMPENSATION: The Hospital guarantees the ph sioian a minimum income of $18,000.00 in the first twelve months of ' the pphysician's medical practice. The Hospital will subeidize~the physician the exact monetary sum that the physicians income before expenses would fall short of B-1 V R $78,000,00 in the first twelve months the first year fift of his practice. After , y ppex~eit (50%) of the physician's gross income in excess of S10,000,OQ in any paid to the Hospital until the total mubiven aidymiatrepaid, be The physician may secure from the towards expenses Hospital up to $20,400,00 I practice, of establishing his office for medical The physician ahall repay any funds extended under this clause at the t`ate of lift income in excess of $10,000.00 peremonCh ~f~er thetfirsa°ss year beginning with the month after which the gross income subsidy supplied by the Hospital has been repaid. TERMi The term of this agreement is for one year beginning on the day the physician opened his office for the practice of medicine (a proximately August 1986) and remains in force until all funds extended by the Hospital have been repaid. There is no termination clac.sas in the contract, NOTE; Through the first five months of fiscal year 1987 the Hospital has issued payments totalling $13,902 to Dr, Dulemba. .rrr..r r... r.... PHYSICIAN: Bridger P. Little, M,D,► p,A, PURPOSEi To provide physician emergency department, staffing to the Hospital twenty-four (24) hours per day, COMPENSATION= $37.40 per physician hour, TERM! Two years beginning March 1, 1986. The contract may be terminated with cause by either party upon written notice given sixty days in advance, NOM Hospitalhhasgissuedfpaymentsetomonths of fiscal talling $136,485 year under the contract, under th this .rr....rrrrr.r......rrrrr.r..r.rrr PHYSICIAN= Richard Frazier, M,D, ' PURPOSE1 To serve as Codirector of the Anesthesia Department, B-2 F COMPENSATION; The physician has the righ to bill patients and third party payors wherever applicablt e for his professional fees and the professional fees of all Certified Registered Nurse anesthetists (CRNAs) employed by the Hospital but under his supervision, The Hospital guarantees that the physician shall earn a total of $9,167,00 per month in fees (110)000,00 per annum) for the first twelve months of the agreement, In each month beginning on the first day of the second month of the agreement and extending through the first day of the first month after the initial twelve _ months of the agreement, the Hospital shell pay to the f t , physician an amount equal to the difference between his actual collection of fees in the preceding month and $9,167.00, if such payments are requested by the ph sician or Codirector. The physician agrees to reimburse the Hospital for any monthly guarantee amounts aid to the physician under terms of the agreement in the event the physician's total collection of fees related to services performad during the course of the agreement exceeds $110,000,00, TERM% Twelve months beginning July 14, 1986, The contract may be terminated by either party. In the event that the party receiving notice of termination objects, both parties are entitled to pick one arbitrator and the two party arbitrators will select a third arbitrator. The decision of the panel shall be binding on both parties. NOTEt Through the first five months of fiscal year 1987, the Hospital has not issued any payments under this contract, r w w r PHYSICIAN: A, Christian Green, M.D, NOTEt The contract between the Hospital and Dr. Green is the same as that of Dr, Frazier, Through the first five months of fiscal year 1987, the Hospital has not issued any payments under this contract, r..rrrwr...rr.w.r..rrr..rrwwrr.w.. PHYSICIAN: Richard Frazier and A, Christian Green, M.D. PURPOSE: To assist the physicians in establishing their practice and to form a primary affiliation between the physicians and the Hospital, B-3 COMPENSATION: The Hospital guarantees the physicians a minimum income of $220,000,00 in the first twelve months of their medical practice. After the first year, fift percent (50X) of the physician's gross income in excess of 20,000,00 in any given month will be paid to the Hospital until the total subsidy is repaid, The physicians may secure from the Hospital up to $40,000.00 towards expenses of establishing their office for medical practice. The physicians shall repay any funds extended under this clause at the r to of fifty percent (50X) of the gross income in excess of 200000,00 per month after the First year, beginning with the month after which the gross l income subsidy supplied by the Hospital has been repaid. TERM: The term of this agreement is for one year beginning on the day the physicians open their office for the practice of medicine and remains in force until all funds extended by the Nospitai have been repaid, There is no termination clause in this contract, NOTE: Through the first five months of fiscal year 1987, the Hospital has not issued any payments under this contract. rrrrr. r rrrrr r rrrrrrrrrrrrrrrrrrrwr PHYSICIAN: Edward Riadweg, M.D. PURPOSE: To assist the physician in establishing his practioa and to form an exclusive affiliation between the physician and the Hospital, COMPENSATION: The Hospital guarantees the physician, through a loan arrangement, a minimum income of $72,000.00 in the first twelve months of the physician's medical practice, The Hospital will subsidize the physician the exact monetary sum the the physician's income before expenses would fall short of 72,000.00 in the first twelve months of medical practice. TERM: The term of this agreement is for one year beginning on the the physician first relocated his practice to the Hospital {approximately November 6, 1986), and remains in force until all funds extended by the Hospital have been repaid. There is no termination clause in the contract, B-4 NOTE: Through the first five months of fiscal year 1987, the Hospital has issued payments totalling $23,492 under this contract. I ' PHYSICIAN: Edward Riedweg, M.D. PURPOSE: To secure the Physician's services as Medical Director of the Hospital's Alcohol and Chemical Dependency Unit, r COMPENSATION: $4,000.00 per month, TERMS The contract may be terminated with sixty days' advance notice, NOTE: Through the first five months of fiscal year 1987, the Hospital has issued payments totalling $16,000,00 under this contract. ...rrrrrrrrrr rrr...... rrr.r....... VENDOR: Medical Laboratories, Inc. PURPOSEt To secure laboratory services for the Hospital. The vendor is to provide technical laboratory personnel, supplies equipment maintenance, and other such services as are consLdered necessary for standard laboratory operation, COMPENSAT'IONt The Hospital is to be billed on a cost basis for both in-house and reference chemistries. The Hospital will pay Medical Laboratories, Inc,, the cost of performing the laboratory work requested, Costs are to be determined by standard cost accounting procedures as indicatad. Coat for lab work perfcrmed in the Hospital will be made up of the following itemst 1. Wages and benefits extended to employeas for the services they perform within the Hospital laboratory, 2. Supplies utilized in the performance of service in the Hospital 1Rboratory, HrS 3. Allocated costs; a. Medical Laboratories, Inc., Business office expenses such as accounting, billing for laboratory work etc., but not to inolude billing for Affiliated Pathologists, P.A. business activities. b. Data processing fees. c. Expenses incurred in providing courier services. d, Maintenance exppenses and maintenance contract expenses on laboratory equipment. Costs for lab work performed in Medical Laboratories, Inc., reference laboratory will be made up of the following itemsi 1, Service will be reimbursed based upon the cost of operating the Medical Laboratories, Inc., reference laboratory, The Hospital would be charged based on the ratio of tests performed to the total reference laboratory volume per area of the reference laboratory such as bacteriology, hematology, chemistry, etc, 2. Medical Laboratories Inc,, cost accounting records are available to audit for Hospital financial agonts, Any major item which will result in significant cost increase must be approved by the Hospital before ci, Failure tobobtainiapprove ienggsroundsefore nonpayment of cost increase. Bills will be rendered monthly. On or before the 15th of each month, a bill will be rendered for the previous month's laboratory service. Payment is due on or before the let of the following month. 3. Billing information, relative to laboratory work performed, provided to the ti:spital by Medical Laboratories, Inc., shall be received by the Hospital within seventy-two hours from the time the work was ordered, Accordingly such information received by the Hosppital after the above specified time period shall be bille~ to Medical Laboratories, Inc,, at the Hospital a normal charge rates, B-6 TERM: This contract shall run for a period of one year. Renewal is automatic for one year terms in perpetuity until termination is reache9 by written notice. To terminate the contract, written notice must be given and received ninety (90) days prior to the termination date of the contract. The contract currently in effect is dated October 19, 1978, NOTES Through the first five months of fiscal year 1987 the Hospital has issued payments totalling $344,415 under this contract. B•7 The following contracts between physicians and the Hospital were recently allowed to expire, and were not renewed, by Hospital management: PHYSICIAN: Diresh Pandurang Kagal, M.D, PURPOSE: To secure the ?hysician's services as Medical Director of the Hospital a Department of Respiratocy Therapy. COMPENSATION: $60000.00 per year. TERM: One year beginning January 1986. PHYSICIAN: Robert M, Lockwood, M,D, PURPOSE: To secure the physician's services as Medical Director of the Hospital, and Chairman for the Department of Radiology. The purpose of the Medical W reotor of the Hospital is to assist Hospital in its administrative function in relation to the practice of medicine and the Hospital's relationship with staff physicians. The purpose of the Chairman of the Department of Radiology is to administer for the maintenance, operation, slid use of the Department for diagnosis and treatment of illness. COMPENSATION: $90,000.00 per year, TERM: October 1, 1985 through 9eptamber 30, 1986, PHYSICIAN: Tanveer A, Qurechi, M.D,, P.A. PURPOSE: To secure the physician's services as Medical Director of the Coronary Care Unit, Intensive Care Unit and Progressive Care Unit, B-8 { COMPENSATION: $2,917,00 per month, TERM: October 1, 1985 through September 30, 1986, ...rrrrrwrrrrrrrrrrr rrrr~r......... , Hospital management hae informed us that these represent all existing contracts between physicians and the Hospital. Duricontrangctthe, scourse of our work, we discovered no other B-9 I APPENDIX C CAPITAL LEASES AND NOTES PAYABLE Hospital management provided the following list of cappital leases which were in effect at February 28, 1987 Thi information has not been audited by us, However, we did trace the information to the audited financial statements for the fiscal year ending September 30, 1986, Description Principal Monthly Pay-off ..P..e_yment Date Lanier Word Processors $ 10673,35 CT Scanner (Old) 457 248.23 334,67 8-01-87 Hospital beds and GTE 264j900,35 9'022,00 12-15-91 IBM System 38 242064,96 5;483,00 4.3091 Intermountain Software I 127,081.31 3j211.00 30-9 Intermountain Software II 140,880,02 3;211.00 11.011-91 Decision Data Equipment 133,012,81 21911,00 6-15-91 CT Scanner (New) 364_ ,8x33 8~63~9 70 12-13-90 Total $1,731,702,36 39 364.25 In addition, at February 28, 1987, the Hospital held the following notes payable related to the acquisition of equipment; Description Principal Monthly Pe -of£ Hake Pa ment Date Gas Sterilizer $ 9,041,21 $ 413,09 2-03-8 Mammography Equipment 51633,31 20850,60 4.01-87 Phaco Emulsifier 8,539,35 21178,49 6.01-87 Ultrasound Equipment 20677,03 478,19 8-0 Electrocardiograph 65,373,46 11954,86 4.01-80 EEO Equipment 6,150,97 462.04 4.01-9 Anesthesia Machines 25,220,73 1,059,96 4-r88 15 89 Total ~.122 636 06 9 397,23 The Hospital is party to a non-capitalized lease with N.A,P, Commercial Eleotro►tics Corp, for communica ion and television equippment, The lease is in the amount of 89,33 per day. The Hoappf.tal has the option to exercise a buy-out based on the fol lowe; ing schedul January 1, 1988 - 105,633,00 January 1, 1989 - 79 974,00 January 1, 1990 - 53'815,00 January 11 1991 - 28 156,00 January 1, 1991 - 7;000.00 rar. C-1 i~ r') Ruth and Walter Bowen 3008 Weston, Denton, TX 76201 /w~fl (817) 566-1206 ~AP l 4 198( March 22, 1987 Lloyd V. Harrell City Manager City of Denton 215 East McKinney Dentou, TX 762U1 Dear Mr. Harrell, As professionals, parents, residents and registered voters of Denton, we feel it is time to ndd our voices to those expressing concern over the present health care situation in Denton. Specifically, we feel it is time for the city n;,J county leadership to take an assertive, fJrn, stand in support of Flow Memorial Hospital, To do otherwise now will result in a critical lose of essential health care resources for residents of our city and county. Our population has growl, considerably in the nine plus years that we have resided here. We have seen our universities grow substantially. We have seen Denton emerge as an attractive location for new business and industry, As the city and county populations have grown, so has the need for health care services. This need cannot be absorbed by our for-profit hospitals alone, The non- profit hospital with its more economical fee structure will always be an important and necessary alternative for many of us, whether we are "full- pay," "third-party insured," Medicare, indigent or whatever. Flow's lower hospital fees are a priority item for many of us in this community, Believe it, Individuals in the middle and loner income brackets, including many local state employees, must budget very carefully to make health care dol- lars stretch as far as possible, For many, Flow will be the onIZ alterna- tive, Remember, too, that our community is still growing, With the advent of such new industry as the upcoming Boeing and TI plants, we as a community must act with foresight and commitment to ensure expanded availability of essen- tial services-health care included--to support that continued growth. Frankly, we have been spelled at the apparent foot-dragging that line taken place in this community in recent years on this issue--despite repeated appeals from administration at Flow, Where is it written that there must be a crisis bafore action will be taken? Let's approach this matter with a little more sensitivity and vision and consider the impact that our positive support of Flow will have not only for today, but for the future as our community continues to grow, We urge you to support Flaw. We are writing all our city council members and our county commissioners to encourage them to do the some. We have Ifs I~ I 4[ 1,1 heard the arguments for a proposed hospital tax district Co provide needed funds for Flow, We agree that this option is bulb reasonable and clearly the only way to go. Let's not delude ourselves that our individual pocketbooks will not be affected by the closure of Flow Memorial lospital. Ultimately we would all pay more for our health care services as our insurance companies raise premiums to keep pace with higher face nt the remaining for-profit hospi- tals, These hospitals would themselves be forced to raise fees to offset increased demand for services--particularly those in the 11 no-pay" and blodi- care categories as well as other so-called "uncollectablea," which in turn would further impact insurance rates, and on and on and on, And then there Js the mutter of indigent care. Let's not forget who really pays for that, As taxpayers, we would much rather the county be billed at Flow's lower rates that at higher rates charged by the for-profit hospitals. One way or another, we pay, In the long rurt, it would make much more sense for Denton to keep Flow alive than to stand by and watch it die. The bottom line is that our community needs the Flow Hospital alternative of quality health care at more affordable rates, We have personally utilized Flow's services in past years. Flow will continue to be our preferred choice whenever we need hospital services, please don't let our community down on this issue, Support Plow Demorial Hospital and the creation of a i tax district to help fund it, Sincere y, Walter A, Bow n Ruth Ann Bowen i Ciry*10"r4N, reXAS MUNICIPAL BUILDING / DENTON, TEXAS 76201 / TELEPHONE(817) 566.8200 February 16, 1987 011ice of City Attorney Mr, Elbert Morrow Fulbright 4 Jaworski Attorneys at Law 2001 Bryan Tower, Suite 1400 Dallas, Texas 75201 Re: Denton County Health Facilities Corporation Dear Elbert: Pursuant to our conversation last Thursday, here are tho names addresses and telephone numbers of the existing board members oh the Health Facilities Corporation: Lloyd Odle Bill Switzer 1020 West Main Route 2, Box 2555 Lewisville, Texas 75067 Sanger, Texas 76266 (817) 221-2721 (0) (819) 668-6590 (H) Wallace Batey Lee Walker Route It Box 525 County Commissioner Denton, Texas 76201 212 West Sycamore (817) 382.9437 (H) Denton, Texas 7620' (817) 387.3845 (0) (817)383.8349 George A. Preston, Jr, 1341 West Mockingbird, Suite 704.U P. 0, Box 47386 Dallas, Texas 75247 Dallas, Texas (214) 630.8621 (0) As we discussed, Commissioner Ruth Tansey would like for ynu to telephone the board members and explain why they must convene again. Please advise as to when you could be present and wo will schedule a place and time, inaccordance with your schedule. Thank you for your assistance in this matter, Very truly yours, Debra Adami Drayovitch City Attorney DAD:js . ,t ciryofDeNTON, rs)tAs MUNICIPAL BUILDING / DENTON, TEXAS 76201 / TELEPHONE W7)566.8200 Office of City Attorney August 23, 1989 T. Scott Smith Henderson Bryant & wolfs Attorneys & Counselors Fifth Floor, MBank Building P. 0. Box 239 Sherman, Texas 75091 RE, In ret Flow # 8842099 Dear Scott= Enclosed please find a summar of the details on the utility deposit for xibw ianal lad action f041 oonteP,. please advise what you tHi nk the City should take, if any, in this regard, Very truly yours, Debra At Drayovitoh City Attorney Drlah xas Lloyd V. Harrell, City Manager Cohn McGrane, Executive Director of Finance A CITY of DENTON, TEXAS MUNICIPAL BUILDING ! DENTON, TEXAS 76201 ! TELEPHONE (817) 566.8100 MGMOkANI}UM DATE, August 18, 1989 TO; Debra A. Urayovitch, City Attorney FROM, John F, McGrane, Executive Director of Finance 8UnJdCT; FLOW RUGIONAL MEDICAL CWHR UTILITY UGPOSI'r Flow Memorial Hospital on January 15, 1988 pursuant to a reorganization agrooment transferred the utility service from their responsibility to that of Flow Regional Medical Center, Inc.. Subsequent to the transfer, Flow Regional Medical Center Inc,, filed for protection under the bankruptcy laws on September 22, 1988, The delinquent utilities account incurred by Flow Regional Medical Center, Inc., on or before September 22, 19880 was $b5,323.13. In order to continue service after the post bankruptcy filing a deposit of $22,000 was required of Flow Regional Medical Center, Inc., debtor-in-possession, Un January 18, 1989, temporary service was possession to oin Flow Regional Medical Center, Inc., debtor-in- Flow Regional Medical Center, The termination of service by Regional Iviedical C nter, Inc,, debtor-in-possession, left a balance of on the account, This amount is comprised of the orig nal , 00 deposit less deductions for the final billing of utility services. Would you please advise tno accounting division of the appropriate disposition of these funds since Flow Regional Medical Center, Inc., is no longer in existence. If you have any additional questions or need further information, please feel free to contact me, y~ , to curane Jr^ l " AUG L J11McG:af 4757E CITY LEGAL. i A 0810itte Haskins+S®Ils 1400 Lincoln Plaza . L8 #4 Dallas, Taxaa 75201.3320 (214) 9b4.4500 Telex: 4995828 Mr. John F. McGrane April 13, 1987 Director of Finance • City of Denton Municipal Building 215 Fast McKinney Street f Denton, Texas %81 Dear Mr. McGrane! • We have completed our analyass with respect to the financial condition of Flow Memorial Hospital. our report outlines our forecast of the Hospital's required funding to meet its financial obligations. P We appreciate the cooperation we received from the Hospital management personnel involved in this project. Without their support, it would have been impossible to complete this undertaking with the allotted timeframe. We look forward to meeting with the City Council and the • County Commissioners on Wednesday, April 29, to respond to any questions concerning our findings. We appreciate this opportunity to be of service to the City of Denton, and Denton County, in this very critical assignment. We look forward to the succaseful resolution of • the Hospital's problems, and the issues relating to the health care needs of the community, sincerely, Max F. Delane Managing Director of Consulting Services s; i A FLOW MEMORIAL HOSPITAL TABLE OF CONTENTS PAGE A ACCOUNTANTS' ",SPORT ~ 1 r COMPILED FORECAST Compiled Balance Sheets 3 Compiled Statements of Revenue and Expenses g Compiled Statements of Cash Flow 6 BACKGROUND OF FLOW MEMORIAL HOSPITAL 7 SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND NOTES TO THE FORECASTED FINANCIAL STATEMENTS: General 7 i Medical Staff Analysis 8 Patient Service Area 11 Population of the Service Area 11 Service Area Acute Care Facilities 12 Historical and Forecasted Acute Care Utilization 12 M Patient Service Revenues 15 Provision for Contractual Allowances, Uncollectible Accounts Receivable and Indigent Care 15 Other Operating Revenue 17 Salaries and Wages 18 Employee Fringe Benefits 18 Other Operating Expenses 19 Depreciation Expense 19 Interest Expense 19 Balance Sheet Accounts 20 APPENDIX A - Financial Implications of Closing r the Hospital A-1 APPENDIX B - Comments on Management Improvements B-1 APPENDIX C - Month-by-Month Pro action of City/County Contributions 0-1 1 r ?.'4Yrta!~{i t, I 1 M. f1 I M ACCOUNTANTS' REPORT F Denton County Commissioners Court h 212 We Sycamore Denton, Texas 76201 Denton City Council Municipal Building Benton, Texas 76201 w The Honorable Commissioners and Council Members. The accompanying forecasted balance sheets and statements forecast eassumptionslof'Fland summary ow Memorial o ggHospital i as significant 0 September 30, 1987 and 1988, and the years then ended, have been compiled by us. Such financial forecast is management's estimate of the most probable financial position and results of operations for the forecast period. management's o,judgment,tbased ronapresent ncircumstances, eof w the most likely set of conditions and its most likely course of action, We have made a review of the financial forecast in accordance with applicable gguidelines for a review of a financial forecast established by the American Institute 0 of Certified Public Accountants, Our review included procedures to evaluate both the assumptions used by management and the preparation and presentation of the forecast, We have no responsibility to update this report for events and circumstances occurring after the date of this report, • Based on our review, we believe the accompanying financial 3 forecast is presented in conformity with applicable guidelines for presentation of a financial forecast 1.F xi.~ay 7. r* established by the American Institute of Certified Public Accountants, we believe that the underlying assumptions provide a reasonable basis for management's forecast. ' However, some assumptions inevitably will not materialize and unanticipated events and circumstances may occur, Therefore the actual results achieved during the forecast pperiod will vary from the forecast, and the variations may be material. n April 2, 1987 r r .M L f A n *y 4' 1 ii t~ A FLOW MEMORIAL HOSPITAL h FORECASTED BALANCE SHEET STATEMENTS FOR THE TWO YEARS ENDING SEPTEMBER 30, 1988 .00044(000's OMITTED)466061 YEAR ENDING SEPTEMBER 30 h Actual ` ASSETS 1986 1987 1988 CURRENT ASSETS: Cash and cash equivalents $ 1,005 $ 494 $ 484 a+~ Accounts receivable - net 29544 1,899 11745 Other accounts receivable 180 200 200 Inventories 482 400 373 Prepaid expenses 99 109 109 Zl Total current assets OTHER ASSETS 75 75 75 ASSETS WHOSE USE IS LIMITED: Certificate of deposit secured as collateral on note payable 227 Assets designated for the retirement of revenue bonds 100 83 88 Total assets whose use is limited $3 PROPERTY, PLANT AND EQUIPMENT; Property, plant and equipment 10,390 11,149 11,349 Less accumulated depreciation 5 552 6 016 6 905 Ir Net property, plant and equipment 438 - 5;133 4!444 TOTAL ASSETS 9 550 8J93 7 518 • See Accompanying Summary of Significant Forecast Assumptions. e -3- ~e Y; w rj Q, f~ F FLOW MEMORIAL HOSPITAL • FORECASTED BALANCE SHEET STATEMENTS FOR THE TWO YEARS ENDING SEPTEMBER 300 1988 (000's OMITTED)...... YEAR ENDING SEPTEMBER 30 A _XCtu8 LIABILITIES AND FUND BALANCE 1986 1987 1988 CURRENT LIABILITIES: Total current portion long-term M obligations $ 417 Accounts payable 1,289 $1,748 $ 10330 Accrued expenses 541 349 345 Settlements payable under third- party reimbursement contracts 435 136 237 Total current liabilities 0 LONG-TERM OBLIGATION - NET OF CURRENT PORTION: Series 1975 revenue bonds 220 210 200 Series 1975-A revenue bonds 140 120 100 Notes ppayable 81 44 13 w Capitalized leases 987 1 149 747 Total long-term obligations ""T, ►"8 `T;''~"7'3 '-Y,'Ob~ TOTAL LIABILITIES 41110 49198 3,434 FUND BALANCE: M Undesignated 5,113 4,112 3,996 Designated 327 83 88 Total fund balance 7721 TOTAL LIABILITIES AND FUND BALANCE 9j5501 8s393 7 518 See Accompanying Summary of Significant Forecast Assumptions. r O .4• s: • .r:a. r FLOW MEMORIAL HOSPITAL FORECASTED STATEMENTS OF REVENUE AND EXPENSES FOR THE TWO YEARS ENDING SEPTEMBER 30 1188 -i&,(000'8 OMITTED),,,,,, YEA-t ENDING SEPTEMBER 30 ctua 1986 1987 1988 i OPERATING REVENUES: Revenue from patient services: Inpatient revenue 43 $15,656 Outpat atient se revenue ient revenue $18)289 $160353 Total 0 57 Less c ~ ~ ontractualradjustments, allowances and provision for doubtful accounts 7 304 8 687 Net patient service revenue Other operating revenue 2 x'347 8 037 '34Zff 0 Total operating revenue OPERATING EXPENSES (EXCLUDING DEPRECIATION AND INTEREST EXPENSE): Salaries and wages 6,499 5,174 4,839 Fringe benefits 10032 787 Other operating expenses 774 6 423 6 040 5 974 Total operating expenses EXCESS OF OPERATING REVENUE OVER r OPERATING EXPENSE BEFORE PROVInoN FOR DEPRECIATION AND INTEREST EXPENSE b3) (1,551) (-l , P19 6) ROVISION: r Depreciation 615 818 889 Interest expense ~ 120 ~147 '125 Total provision Tom, NET OPERATING REVENUE 798) 2 51b) .210) NON-OPERATING REVENUES: Interest income 106 44 29 Contributions G76) 1,227 2,070 650 Lose on disposal of assets Total non-operating revenue ---Y EXCESS OF REVENUES OVER EXPENSES 518) $ { 1 245} 7.11) See Accompanying Summary of Significant Forecast Assumptions, -5- N FLOW MEMORIAL HOSPITAL • FORECASTED STATEMENTS OF CASH FLOW f FOR THE TWO YEARS ENDING SEPTEMBER 30, 1988 (000's OMITTED) YEAR ENDING `SEF1' , -30 P 1987 1988 i BEGINNING CASH AND INVESTMENTS 11407 652 ADD CASH PROVIDED FROM: M Excess of operating revenue over operating expenses before provision for depreciation and interest expense (1,551) (11196) Total non-operating revenue 1,271 20099 Increase in capital leases 625 w Increase (decrease) in other liabilitipes (32) 321) Total tal cash Dash ovided DEDUCT CASH USED FOR: Long-term obligation - principal payments 505 441 Interest payments 147 125 Capital additions 1,113 200 Increase (decrease) in other assets 697) 179) Total cash uses ENDING CASH AND INVESTMENTS 652 647 COMPOSITION OF CASH AND INVESTMENTS: Cash and cash equivalents 494 484 Assets whose use is limited 83 88 Other assets 75 75 TOTAL CASH AND INVESTMENTS 652 1____L47 i r See Accompanying Summary of Significant Forecast Assumptions. -6- ; r 1 d FLOW MEMORIAL HOSPITAL w+ BACKGROUND OF FLOW MEMORIAL HOSPITAL Flow Memorial Hospital (hereinafter "the Hospital") was dedicated on September 3, 1950, The original structure of the Hospital was designed to accommodate 60 beds. Construction of the Hospital was mede possible in large v, measure by a bequest of Mr. Homer E. Flow, after whom the Hospital is named. ' Since construction of the original facility, there have been two major additions and renovation projects which { have taken place. The Hospital now has a licensed 166-bed v! complement, which consists of: 61 Medical/Syyrgical beds 20 IntensiveMogressive Care beds 13 Neonatal Intensive Care beds 23 Obstetric beds r 16 Pediatric beds 33 Psychiatric beds , The Hospital is currently operating 127 of its licensed beds. Flow Memorial Hospital Foundation, Inc., was established as a tax exempt, not-far-profit organization for the purpose of providing medical care for the citizens of Denton. All property and money given to the Foundation is to be used solely for the benefit of the Hospital, The Foundation's Board of Directors have discretionary control over amounts to be distributed to the Hospital and the purposes for which the money is to be used. In 19840 the Flow Memorial Fund was established to purchase non-medical or medical equipment items which do not meet the criteria of the Foundation. SUMMARY OF SIGNIFICANT FORECAST ASSUMPTIONS AND NOTES TO THE FORECASTED FINANCIAL STATEMENTS General The forecast of future demand for services of the Hospital provides the basis for the forecasted financial statements, The assessment of the future demand for these services included analysis, review and evaluation of the following factors. ~r .7. 1i ]lYr i.:U f i 11 f Medical Staff - including the staff's historical and current use of the Hospital's facilities, its specialties and ages service Area - including historical and current patient origin, market penetration, population projections, demographic characteristics and uae-rate trends Historical and Forecasted Utilization Data - including * trends in admission rates, patient days and average length of stay r Medical Staff Analysis The demand for a hospital's services is determined largely * by the members of its medical staff who admit patients and order F-,c'llary eervices. Thus, an important step in forecA;rir•:; the future results of Hospital operations is to dev<'-:, ;assumptions about the future composition of the medical staff and the staff's potential for generating admissions. As of February 28, 1987, the Hosppital's medical staff was comprised of 87 active staff members, 50 courtesy staff members 7 dentists, 9 emergency room physicians and 2 podiatrists, for a total of 155 physicians. w The chart on the following page summarizes the composition of the medical staff during 1986, estimated admissions for 1986, and year-to-date 1987 admissions. 1M 1 N 1 s t . 8 . +Ltlkapy r COMPOSITION OF THE MEDICAL STAFF h NUMBER APPROXIMATE APPROXIMATE SPECIALTY OF 1986 YTD 1987 PHYSICIANS ADMISSIONS ADMISSIONS(1) Allergy 1 1 Aneet esiologY 8 - Arthritis 1 " Cardiology 2 30 3 Chemical Dependency 1 28 Dentistry 10 18 1 ~r Dermatology 3 Endocrinology 1 2 Emergency Medicine 7 - Family Practice 32 1,303 238 Gastroenterology 2 13 General & Vascular 04 Surgery 10 364 38 Ganetics/Ulrrasound 1 Hematology/Oncology 2 42 4 Internal Medicine 10 442 81 Nephrology 2 2 Neurology 4 62 3 w Obatetries/Gynecology 13 1,751 222 Ophthalmology 4 8 Orthopedic Surgery 9 377 52 Otorhinolaryngology 4 68 2 Pathology 6 PediAtr ca 8 10468 138 M Plastic Surgery 2 4 Psychology 5 479 68 Pulmonary 1 37 2 Radiology 8 8 Urology 4 82 11 • TOTAL 161 6,559 (2) 895 Source: Hospital records (1) Estimated year-to-date 1987 admissions re resent the A period of January 11 through March 13, 1987, (2) Includes newborn, S I - 9 f I i I We noted that estimated year-to-date 1987 admissions, when annualised have declined by almost 32% from 1986 levels. Of particular concern is the precipitous decline in the • areas of obstetrics/gandopediatricshopedicsignificant otorhinolaryngology, decline in Hospital admissions is largely responsible for the Hospital's current financial situation. The profile of the twenty physicians with the highest 0 number of 1986 admissions, along with their estimated year-to-date 1987 admissions, is illustrated in the following table: PROFILE OF HIGHEST ADMITTING PHYSICIANS Y APPROXIMATE APPROXIMATE 1986 YTD 1987 SPECIALTY AGE ADMISSIONS ADMISSIONS(1) Obstetrics/Gynecology (2) 34 251 124 Pediatrics 0 Obstetrics/Gynecology (3) 32 249 - 229 17 Pediatrics Obstetrice/Gynecology (3) 40 223 - Internal Medicine 37 220 40 Obstetrics/Gynecology 51 209 22 Obstetrics/Gynecology 32 197 a Family Practice 31 190 49 Psychology 61 187 40 Pediatrics 454 185 14 0 182 32 Orthopedic Surgery 43 165 31 Family Practice 37 147 Pediatrics (3) 144 28 M Pediatrics 57 61 127 15 Pediatrics 33 126 14 Obstetrics/Gynecology Internal Medicine 38 117 Pediatrics 35 116 14 Psychology 36 114 3,976 528 TOTAL Source: Hospital records pp 1967 admis (1) periodtof January-I through Marchs13t,s1987resent the w (2) AThe dmissions physician theeHospital hthrough fthe program are under his name. r (3) The physician is no longer a member of the medical staff. 10 - W T The table illustrates that several high admitting physicians have left the medical staff, and that numerous others have substantially reduced their level of admissions to the Hospital. We performed several analyses to further document and explain the recent deterioration of Hospital admissions. We noted that ten physicians, who in 1986 had a cumulative total of 1,138 admissions, had no admissions for the year-to-date 1987 period. Furthermore, 43 physicians who cumulatively in 1986 had 2,663 admissions had only 102 admissions in the year-to-date period, A'fmost all of these physicians also have admitting privileges at the AMI Denton Regional Medical Center or the Community Hospital of Denton. ,w Patient Service Area The Hospital's primary and secondary patient service area was determined based upon an Ianalysis of the geographic distribution of the Hospital a discharges over the past several years. The architect/engineer/planning firm of Harwood K. Smith c the ompleted a study in early 1985, The firm concluded that serviceyarea,~ewhilerDentonnCountyerepresented rhemary secondary service area. According to the study 60,6% of the Hospital's patients during 1981-82 resided In the City of Denton, while 84.3% resided in Denton County. A review of patient origin data for the period of January I through March 13 1987, indicates that this r~ definition of ::he Hospital's service area remains valid, Population of the Service Area The population of Denton County has grown steadily over the years, and is projected to continue to increase, The following table summarizes the historical, estimated and projected population for the County: POPULATION Or DENTON COUNTY 1980 1986 PERCENT 1991 PERCENT w CENSUS ESTIMATE CHANGE PROJECTION CHANGE 143,126 177,655 24.1% 206,070 16.0% Source: National Planning Data Corp. r ~ - 11 - 3 ~I :-e lVj al Obviously, the decline in the utilization of Flow Memorial Hospital cannot be attributed to a declining population. A Service Area Acute Care Facilities There are three acute care hospitals in Denton County. Flow Memorial, the AMI Denton Regional Medical Center and the Denton Community Hospital are located within a five-mile radius. we The 195-bed AMI Denton Regional Medical Center has been in operation for approximately 13 years. It is considered to be a full service health care facility offering over 24 specialty services and programs including outpatient sur eryy pplastic and reconstructive surgery, pediatrics, ophahalmoligic surgery, cardiac intensive care, urology general and vascular surgery and home health care. The H ospital recentl opened 'a 23,000 square feet, $2.7 milli labororooms, 2soperating-delivery roomstann8-bed mnurser and 12 postpartum rooms. y M The 56-bed Denton Community Hospital opened on Februar 9, 1987. The 85 000 square foot facility provides genera~ surgical, obstetric and pediatric acute care. Diagnostic radiology, nuclear medicine, ultrasound, w servsical ices areYavailable, Theomedicalrstaff ofrrhe Hnpital consists of approximately 50 physi^Eans representing 20 specialties. Historical and Forecasted Acute Care Utilization The historical acute care utilization of the Hospital was a nalyzed to identify significant trends from 1985 through 1987, discharFesmdefiscal creased eby 14.89% while fiscal days decreased service type. patient y decreased decreased in every M by 6.09;. Through the first five months of fiscal year 1987 the downward trends have continued. Based upon annualized five-month statistics discharges have decreased by 27.9% from 1986 levels; patient days have declined by 15,5%. M The forecasted acute care utilization of the Hospital was based upon the following critical assumptions; Significant further defections from the current medical staff complement are not anticipated. r I The Hospital's medical staff is expected to continue to support the Hospital and its programs. V - 12 - .,W. 4p M The Hospital will continue to attract patients from the defined service areas and its market share will r+ not vary materially from Its historical market share in the service area. There will not be a substantial change in the financial payor mix of patients. The Hospital's average length of stay wall not decline below current levels. The historical and forecasted utilization of the Hospital, Septemberf30, servicefor , presented ending the tab on the following page. 1e ry r 013 - s • HOSPITAL UTILIZATION • AVERAGE PATIENT LENGTH YEAR TYPE OF SERVICE DAYS DISCHARGES OF STAY Historical (1) • 1985 Medical/Surgical 140226 25801 5.1 Pediatrics 21471 913 2.7 Obstetrics 41089 10765 2.3 Psychology 5,838 560 10.4 ACD (2) - 0 Total ~b;b'1r 00`6919 4.4 1986 Medical/Surgical 13,679 2,510 5.5 Pediatrics 1,347 485 2.8 Obstetrics 3,306 19635 2.0 Asychology 5,033 512 9,8 • Total .b3 5;Tr"Z+ 4.5 Forecasted- (3) 1987 Medical/Surgical 9,745 1,613 6.0 • Pediatrics 915 235 3.9 Obstetrics 21300 10100 2.1 Psychology 4,010 522 7.7 ACD 3 690 130 28.4 Total 0 T,-bm 5.7 • 1988 Medical/Surgical 8,575 1,430 6,0 Pediatrics 750 188 4,0 Obstetrics 2,200 11048 2.1 Psychology 4,200 545 7,7 ACD 4 025 144 2810 Total " M M 5.9 (1) Sourcef Hospital records (2) Alcohol/chemical dependency • (3) The forecast for 1987 is based upon five month's actual data. 11 r - 14 - 1 r. ;o 1 Patient Service Revenues Revenue from routine patient care was projected by applying historical inpatient revenue er amounts to forecasted patient days. We ha vetassumedythat the Hospital will increase rates by five percent effective October 1, 1987. perpancillaryVerocedure projected p fiscal year 1988. The percentage of revenue by type of payor throughout the forecast period, based upon historical experience, is as follows; a> FORECASTED PAYOR MIX TYPE OF PAYOR PERCENTAGE Medicare Medicaid 30.7 Commercial Insurance 12. 1 Self-pay 31.1 25.4 Source: Hospital records 100.0% Provision for Contractual Allowances Uncollected Accounts ece ve a an n ent are Contractual allowances consist of deductions from the Hospital's revenue to reflect the amounts expected to be w received from third-party payors who do not pay full charges. The forecasted contractual allowances are based upon rules, regulations and limitations currently in effect. Major third-party payers have attempted to implement or w have proposed further limitations on their payments to health facilities. Various legislation has also been introduced to control health care costa at the State and Federal levels. Because of the uncertainty as to which proposals, if any, will be enacted, it is not possible to qquantify the impact of their implementation in the M forecast. The Hospital regularly makes provisions for uncollectible accounts receivable, or bad debts, and charity or indigent care. Uncollectible accounts receivable result from r♦ ♦ - 15 - providing services to patients who are deemed able to pay, but who do not pay for their care. Charity care is provided to patients who are unable to pay for their v+ care. A summary of the Hospital's recent provisions for uncollectible accounts and charity care is presented below: ALLOWANCE FOR BAD DEBTS AND CHARITY CARE FISCAL YEAR PROVISION PROVISION TOTAL ALLOWANCE r ENDING FOR BAD FOR CHARITY FOR BAD DEBTS SEPTEMBER 30 DEBTS Z CARE AND CHARITY CARE Historical (2): 1985 2,983,138 1,056,813 4,039,951 1986 3,39:,723 1,0511505 4,451,228 Forecasted (3): 1987 3,313,000 8300000 41143,000 1988 3,038,000 761,000 3,7990000 (1) Net of recoveries. r! (2) Source: Hospital records (3) The forecast for 1987 is based upon five month's actual data. The ratio of the total allowance for bad debts and charity u~ care as a percentage of total patient service revenue leas increased from 20.2% in fiscal 1985, to 24.1% in fiscal 1987 year-to-date. The forecast assumes that this ratio will be reduced to the level of 21.0%, due primarily to changes the Hospital has made to policies and procedures concerning deposits from self-pay patients in the w+ emergency room and obstetrical departmer:e. Senate Bill No. 1, enacted by the Texas Legislature, established that each county will provide health care assistance to eligible residents. In addition, the Hospital has a legal obligation to provide a reasonable • level of uncompensated services under the Hill-Burton Act. Charity care is available to eligible persons for all Hospital services. In order tc, qualify for charity care, the patient's family income cannot exceed the following guidelines: 16 . r 1 E t~ y. CHARITY CARE FAMILY INCOME GUIDELINES r+ FAMILY FAMILY INCOME 2 5,360 3 7,240 w 4 9,120 5 11,000 6 12,880 7 14o760 8* 18x520 * For family units with mere than eight members is added for each additional member, ' $1,880 Source: Hospital records It is difficult to assess with any certainty how many M pphouseholds in Denton County fell within these income incometprovideswsome~inthe sights as tog theacurrent sand projected population in the lower income brackets: HOUSEHOLD INCOME ~ «a 186 ESTIMATED POPULATION re -as t an Number of Households 7 500 - '5 OOOo "ffF- 5 000 % of Total Households 9.9% `X14 10.8% 2~,6% 1992 PROJECTED POPULATION Le`ea` zian Number of Households 7 500 15 OOOo ` % J~5 600 of Total Households 8.0%, V V- ~ 8.4% U.7% Source: National Data Planning Corp, Note: Data on income is expressed in current dollars for respective year, Other Operating Revenue Other operating revenue consists primarily of cafeteria revenue, nutritional counseling services, mammography services and gift shop sales, w N 17~ Y:l trq R Y,IL Salaries and Wa&es Salaries and wages have been forecasted by analyzing each department's historical expenses and modifying it based upon recent staffing adjustments and discussions with management. For the purpose of the forecasts, an increase in the average salary per full-time equivalent of 4% was assumed to be effective October 1, 1987, Actual and ppro ected staffing levels for the Hospital is summarlZed in he following table: ~1 STAFFING PATTERNS r~ FULL-TIME E UIVALENTS FTEs FISCAL YEAR TOTAL PER PER ENDING HOSPITAL LICENSED OCCUPIED SE.PTE~30 FTEs BED BED Historical (1):____ 1985 353.37 2.13 4,85 1986 322,61 1.94 5.03 Forecasted (2): 1987 256 (3) 1.54 4.67 1988 240 1.45 4.51 (1) Source: Hospital records (2) The forecast for 1987 is based i:pon five month's actual data. da (3) The Hospital is currently operating at 240 FTEs. The data reflects that Hospital management has reduced staffing in correlation with the decline in census. Employee Frin a Ben__ of Employee fringe benefits and wage- forecasted on the basis of the Hospital's historical been experience as a percentage of salaries and wages. Employee benefits and wage related taxes are assumed to increase from the historical level, experienced in 1985 and 1986. The table on the following Hospital's fringe benefit expense asga percentaee ofegross salaries and wages assumed for the forecast period: w to 18 Y'EMPLOYEE FRINGE BENEFITS FRINGE BENEFIT EXPENSE • AS A PERCENTAGE OF SEPTEMBER 30 SALARIES AND WAGES Historical: 1985 14.43% 1986 15.87 • Forecasted: 1987 16.00 1988 16.00 The slight increase in fringe benefit expense as a percentage of salaries and waged is due to the fixed • component of fringe benefit expense which is spread over fewer dollars of salaries and wages during a period of FTE reduction. Other Operating Expenses • Forecasted purchased services, professional fees, supplies, repairs and maintenance, utilities, and other expenses were developed by relating the historical cost to a relevant statistical measure and extending the result by the relevant forecasted statistic. Certain professional fees, leases and rentals, and insurance expense were • forecasted based upon historical cost adjusted for inflation. Depreciation Expense Depreciation on buildings, improvements and equipment has • been forecasted based on useful lives using the straight-line depreciation method. Provision has been made in the forecast for $316,000 capital expenditures during the period of the forecast. Interest Expense • Interest expense for the period of the forecast is based upon actual year-to-date expense, and assumes no additional burrowings. ih • . • - 19 - rvgr._uf~ s P4 Balance Sheet Accounts Balance sheet accounts for the Hospital were forecasted M~ based on historical experience and discussions with management. Account Basis Cash and equivalents Historical percentage of operating expenses Accounts receivable Historical average days of patient service revenue Inventories and other Historical percentage of assets supplies and other expenses Accounts payable and Historical average days of accrued expenses expenses Long-term debt Actual obligations less 04 anticipated payments ca m► If► - 20 I f, 1 APPENDIX A - FINANCIAL IMPLIGATIONS OF CLOSING THE HOSPITAL It is impossible to pro ect with any degree of accuracy the financial ramifications of closing an institution the size and complexity of Flow Memorial Hospital, The sheer number of variables involved in such an undertaking render the projections extremely speculative in nature, In March, 1986 the Board of Directors of Flow Regional ! Medical Center, Inc, issued a statement which estimated the immediate obligation in the event of closing at approximately $3,2 million, aloe with an obligation of continuing lease payments of $1,9 million. We estimate that at July 30, 1987, the Hospital will have accounts payable of $1,678 000; accrued e:3enses of $339,000, capital lease obligations of $1,554 000- notes pa able of $851000; bonded indebtedness of $36 060, and o The ther contractual commitments of Approximately 1250000, liquidateduarerimpwhich ossiblestoopr ggedict. Vendors band other creditors will react differently to the plight of the Hospital, and will settle with varying degrees of forgiveness . In addition, the Hospital would incur significant legal fees and security expenses during the phaseout period. Outplacement counselling personnel should be retained to limit the Hospital's unemployment compensation liability. We also estimate on July 30, 1987, the Hospital will have 04 $646,000 in cash and investments- $1,815,000 in net accounts receivable; and $700 006 in' n other assets. The book value of the land, building and equipipment will be dg certainty what sthepHospita1 wilrerealizet in athe disposition of these assets, M The responsible political body or bodies would remain responsible for the pprovision of indigent cars. Indigent care could possibly be arranged on a negotiated basis with the remaining acute care providers in Denton. Obviously there are many other factors which would impinge 40 on closing the Hospital. We would urge City and County management to fully consider the wide range of financial and non-financial implications of such a step prior to reaching and implementing a final decision. M W A-1 • APPENDIX B -COMMENTS ON MANAGEMENT IMPROVEMENTS • City and County management have requested information cn managementiimprovements, ofManFlow agemMemorial takwith has already Hospital en actions which have resulted in significant cost reductions. For example: t • Full-time equivalents (FTEs) at the Hospital have been reduced from 353.37 at September 30, 1985 to 322.61 at September 30, 1986 to 281.70 at February 28, 1987. At an average salary, wage and fringe benefit cost of $23,315 per FTE, the fiscal year 1987 year-to-date reductions will result in an annual savings of over $950,000. Funding for the home health care program has been discontinued for an estimated annual savings in excess of $20,000. The Hospital has contracted with the Visiting Nurse Association, a not-for-profit organization, to provide this service to patients. Hospital management has instituted a policy of upfront deposits which are requested of emergency room and obstetrics patients. While it is difficult to w quantify the financial results of this policy, the accounts receivable position of the Hospital has improved considerably since the implementation of the policy. Contracts with physicians have been allowed to expire, . resulting in an annual savings of over $130,000. In addition to these actions, management yyhas recently elimination in monthly savings of between $150000 to $20,000. • • d 8-1 -01 • r APPENDIX C - MONTH-BY-MONTH PROJECTION OF Based upon the forecast, the following projected City/County contributions would be necessary for Flow Memorial Hospital to remain solvent. An average operating cash balance of $5000000.00 has been assumed throughout the forecast period. FISCAL, YEAR 1987 Marc $ 249 000 Jule 162'000 August 141;000 September 1592000 TOTAL 1 227 000 FISCAL YEAR 1988 October $ 114,000 November 950000 December 2250000 January 173,000 February 208,000 March 160,000 April 206,000 June 2131000 16;000 July 183,000 August 206,000 ry September 153,000 TOTAL 2 070 000 w w C-1 i r° VIP HEALTH-PUBLIC Art, 4438e r HEALTH-PUBLIC 1411811 Title 11 (7) "Hospital district" Conlydenllallty IX, Sections 4-11, of th, Sec, 7. (a) Any data reported or submitted to the department under this article that (8) "Mandated provfdr relates to a specific patient or any financial data that relates to a provider or facility Is public hospital, or hospi confidential. Before the department may disclose such data under this artcle, the residents. department must remove any Information that would Identify a specific patient, provider (9) "Medleald" meant or facility. t Department of Human (b) Dlsclosur% distribution, or sale of confidential 'intorMi n obtaiI under this (10) "Public hospital" article or other viotallon of this section is prohlbitedl'+}Any who vlolates this entity, sedition shell be III of a Clan B misdemeanor. • A&LI Com*#*.. See. 1.0$. (a) For pt ! Sea 8, (a) The board shall appoint a hospital data advisory 6+oiitnifttda' id;"tin the governmental entity in ' development of reporting requirements and in the InterpretwlOw"ievoluadoWofthe pps~rov,intwds to iieo* i data received under this article, a,,ant Idl home.or fixed place of (b) The advikry corfimittee must include reprotshtl'iiW ,U, i 1''i ivU1 p), to be a resident of that ! y, i i a s,, l~, I 7v~T 1. rtr ' +,i (1) the,hgeplfA)al~,lt~JJc,~ ++a i++urifdmst n 'h~ip,,'7s1i11fwtOdml'~'f to ~no, f ,1+,1 (Of) ' r (2) private btultleMJila ~ c , .,i5+rir tu~titrdrnrv+tit~U+iolbdd4dr>;mk~'TYty tMrl'tnlo;°~F))tir " ~ 1 s (8) the.1g11►fepa111Ipl1NNrYi'v,;n I: ,i i -3'IWir~l1llf dX}`Nb 1rriu!dt4;i teiini 1IM8.1hr pQ e 1 Beeo b t Texas; Texat rent of o Human I,4+..P f1i ?t TexaiJ so s (2) Y!oung'ret4rlly r 'r III 01 iWlyxlll 1),aptocoobile form i (ii) consumer organiutiotir, al or-lIvIA -gin j I , ` '(8}r)fN&atbt►~dv+Health CoeadYdabllr~la'otnseitlr w ~~lut, ialai uioa +rE '1 :n+ a,~(4)•~erYlll'drhror'ti HS Acts 1f is"6OtH`Liii, obr 9810 art, 18,''eft *14" 'i98¢ i I 1 i""w (r~ 'bllmetit of°°r'Y „ :.r , is! it J 1+ ,•J d . lat.'s v. ' , + (6)•11 hInAnt.of pro* I 11tk 41 A* i~ mA ~f with the, Teius ' i An Act relatiag to the contisustIon, oompoet•;. De ant of doming 041 , (71 any; outer relevar r tied, powers and duties of the Texas Daparb Acts :988, (18th ah. 9al (d) A' potion Is notI meat of Health add the Texas Board of Healthi the person attempted to certain hoolth•reisted pubes,. regutatigrlel,u C",p4l + programs, facilities, and agenc{ee; to the re' hiishmenq Chia b tdiedemeenor, so (e) Th` burden •of''# quirement that certain state agenew execute C.A. penal Code (i 12,22. (C For purposes of It institution operated b Art, 44881, Indigent Health Care and Tr4athwht Aet+ Mental Health and M! Blind, Texas School fol TITLE 1, OENFRAL PROVISIONS or resident of a schoo Short Title resident of a hospital government. Sao. 1,01, This Act may be cited as the Indigent Health Care and Treatment Act. t~Meluom Sec, 104. (a) If a 1 See. ,1.02. In this Act. ance cannot agree on ; (1) "AMC" means the Aid to Families with Dependent Children program administered provider of asslr'ancs by the Texas Department of Human Resources under Chapter 81, Human Resources (b) The government Coda. submit all relevant ini (2) "Department" means the Texas Department of Human Resources. (c) If the departure: (8) "ENgPok tetldent" moans a person who meets the income and resources require' may be Involved In th e menu established by this Act or by the governmental entity, public hospital, or hospital hospital district and "Wet in whoeeaeee jurWlofion the person resides, e (d) From the Infor Le(sisEEtlu gg Regulu services" Seselonh 1816 (Artle{eeaa4488s, Vorrnbon's Teprdtie Clly l Stawte#). 64th of assistancedof the d ] "General revenue levy" meant the proper Was imposed by a county that are not (e) If it governmen dedicated to the construction and maintenandas otyfamto'matket roads or to flood control agree with the depa under Article Will, Section 1-a, of the Terris' Constitution; or dedicated to the further provider of assistance maintenance of the public roads under Article VIII, Section 9, of the Texas Constitution, not later than the 80 (A) "Governmental entity" includes a county, dity, town, hospital authority, or other dbtrfot, or provider r, political subdivision of the state, but does not include a hospltal district 2A8 HEALTH-PUBLIC HEALTH-PUBLIC Title t1 79t1e 71 n ArtL , 4438E (7) "Hospital district" means a hospital district created under the authority [X, Sections 4-11, of the Texas Conetitudon, "Mandated provider" mesas ap Article ?rder ovider this or article facility to that public(8)hospital, or hoa !t mesas that vlder of hest t4 care services Inc patient, provider Depart nYen ~cl of Humeana tits MI , " t provide sety satedlceo by to OUCRO this . a county lnlstend, lyr the j n' ;~j y (10) ' pup i moo under Chapter 82, i,lstbllyd+;1 rti!''' entity ,w heap meuu a ho~piWi I°wt,1 n' omen Aesourte+tCgJe,, , To01q ~a►~ twed by ; ?rf , r `~''1lr lSl ar )tool )ill ittr;8itbit(ai~lffl8'~l+e Sea, I.Q. (a) For Rr~lixJa+ u1 riA9 Ali, y.l di>rrt1lt~bslu0l+the iQr to"gill rrr:rnlrcehiAUY ' ;.ai9eas israi (88) n2# r11~i~j~f+~~r0n1~~p(T)1c , r or Went of h1~.bb~ttlb~a ,i 11109 4:,J, (U1) t ,+t ° tut X11 ~ ~~a~a ~{rt) 'N8t ' w ' 1 I, #1 1 a r (21 votit►~'+eoordeRMWINniylt ~1 Jrl,lakt!!i 9on1 h f lf6et; !o' a) nokt9esdut) +1{ tiGr1 ut,dlargrpl}1 (xM114f ro7-i;ri,nha trr9ipiit', ,hivny r ~~'t0y~ ' xm 1l:A!lIIYN'rll! tYdlc+Ml err d CY+ss~a~a d de 140')dJ oT( rl 9z ab~ y ~ dr ~(ttlt'ohUdtidtlitjsg' dHtlb'~~s +r 11 T i M fN.a !r'Sg) W 1✓rOll tjY~ 4 lu ~,,.i„'.4 a f,iolin 1 1,IanUaAj9fr or i f )'r4' r1yY..IfA JI1ff 1;u(yb 1L' (d) WYr other releysnt evldeaa4,r, i 1 Tu r~r d N', + , f ! (d) Af 4 -11 l~re(An 1a nOt'°eneMeredia 'ti.'nr yt 7 .1J u. a .ri 1'fl „J L qIl tfl the pereoh attempted to eetabllai r a of :1 aOVb~ MOW eato ttt Identea,pr, eee:V,T, (e) T}w borden =of proving- intent toi °y so}e1y to obtain he/1 tam (4 For purposes of this A ~ en the' 10 0 innwte pereo+t4>r9ueatltlt 404400. Inedludon o ra ° a w °or Mental fleait~h antd Mental $etardidHep°°nt of Co of a'state s~llDot or Blind, Texas. School for the Deaf grrectlonar Tezaa, De It, of on1,.Texae Youth Cotnmle, Texas 6ohoo for the or resident of a school or fnedtulon o~ratedeb as enoy or who is ~ lnmtite,p1tdent, resident of s hospital d(atMet or of an y federal ag4noy to not cono(derod a i Treatment Act government Y governmental entity except the state or federal 940. 1,04; (a) II 'a governmental enEttgMe ~ yM administered prov ro cannot agree on a person's residency, the go elrnmeata n nd a Provider of "gilt. uman Rlm6urcaa iddle "ot soeiatanoe may submit the :nutter to the, may, hospital district; or The governmental entity or hos itat, difittlelt. the pro d au Aft alt V111 ht information to the departure and the Arorier of ase(stance shot] Soure" ruery (c) If the department determines that another over,tmen or hoe P1Wor,iiiulbj may be involved In the dk u IS tat entity dfq pits) dbtrfot p hospital district and allow the the d" ry pr h the gerernmentai entity or We of the 84th (d)'FroM the information submitted, the oepiW dlaUicb respond. ltttt that residency and shall notify each gd p hasha2f determine the my that are not of aeeletance of the decision and the reasons overnmental d e for the deobfold~l dbtrlet and the pp to rro vidw to flood control (e) If a governmental entity, tithe r l dins f o, or the VOID With the further the department's decision,, the governmeatpa of aesLtance tics not u Cy, or udon, Provider of asoietance may file an appeal }vith the de na hoepltal dls ar lorlry, or other not later than the 80th day after the date on aplue! must distri the ct, or provider received notice of the dee(elw onIl governmental e,tityhapttal • 267 1 M , HEALTH-PUBLIC HEALTH-PUBLIC Art 4438f Tate It Title 71 obligation to reimburse the (t) Not lator than the 21st day after the date on which the appeal is tiled, the The county and the applies department shall issue a final decision, pa artment rules ohs pp the finaA oyernmental entity, distrt or provider of assistance gorder of the d partmentipulrsuant to thehAdministrative Procedure ando xee months { p transferred title to Texas assistance tt g Statutes for that api egister enoe Act (Article 6262 1W rnshall not be dlenlied pe dinguin administrativetor an expenunder this title, I property e nee review apps The department shell which was judicial review of residency, or Medicaid guidelines that Contribution Toward Coat of ~heauaent t adopted under t1 S". 105. (a) A county, public hospital, or hospital district may request an aligible the rules orl sident re°etving health an assistance under this Act to contribute a nominal amount programs. NOW county ma use t} re i ~ ord4 ':eaf<.ot, the dent M t, Is w . unable to contribute ar rafusea'ta eoabr9rn ~N ll may be lessite aW tive st ayelde not ds>sy,or. roduce .aaeMeatxA c haipiW this At l1?ktMd9hlt Rt 6UJ'f'Nj Axb l_~nndvet,,~ gA1ab fi t,, ~►u~►'icl► f,Orf, i,~ ltfie'! rqq men ~'pi'bvlding' `Ac that are in seeo~rydaace *"a" Is Is Irso5we o ~sdd~llflt * Is ro) ' yed'hr9ubwotien (a) of Seet Sootbts 8,01 of thke Ads be aeeo~tif49Ylita gnitav M [(a) i e 96dieW program. r t ~atlag to the ApDG Q4 atMT l 4° ° 1e ,s (b) To tm,exteat necessary to vide efflele 1 adrninir•, ~Ahe 91, dr epattme elmpllfy the~ b ' A3be eatitlekl atvr. de ent." lu Getabl(ehng a s}ant. rd r a (t;) re)rvAat l Ho de~mttent may not op ' ' A(rDQ.ldadkald standards or procedures, The isr*AlyDdP I ofthls TM'L11 reon ho meets the basic Income and roeourresufor asltatat>ce under AN A1iEA IR Whifli~liti4N '11 1tllQgtillel idC'k9~.lNill be ellglbl! .17 '1 1,,+111 1:,k~, e,;; ,i f A ):0o O t- st rules, reladng to tWC catlon and docusoeatplion. p~ut" mtt , paranent 0400t!'Wg intornuta4n I regtdrp.elAl► applicant.,t9 provide at 8ec,1.41, This t1di (t)4W4pplksatt'a full name and addro* , , if avaBable, (2)' (hW apptidmt'a social eeanrlty number treohr'rooeiving' A AFDC or Sgt who does obligation to not serve, reside wl 'ZO of the applicants household,, excludatlg pe ber~ieJt1481 1 ~ (4) the applicant's county of residence; _ title to each e((l!lgible rc (5) the existence of insurance uCe coversge or other hospital or health care benefits efor pubSec lic 2,02, alao Each which the applicant Is eligible; the applicant has made in the pre (0) any transfer of title to real property that MOO", (b) The county is tt % (1) th (Z) the applicant's annual household income, excluding the Income of any household adequate public or pr member reoelving,APDC or 981 banefita; and (8) the applicant's liquid assets and the equity value of. the applicant'a car and real gee, 2.48, (a) A p` (d) Ds roan does Rl d) Do t rube for determining eligibility must provide that: (1) has a the legal peTurk (IM lotyen (1), a c.l,tdnEy may not consider the value of the applicant's homesteads department under 8 ~ (2)•a county must consider the equity value of a car that is, in excess of the amount (2) the parson moo exempted under department guidelines as a resouree; allowance allowed requested; and (9) a county must subtract the work•relatsd and child care expense (8} no other adequ count under department mutt wander and other than a homestead and prescribed byy9ubay in detas s, resource real ermining eligibility, counted toward rd etig m(oast a coun tty must consider countaE property disregard theaepplica tetreal property t8thesapplicant)agoil this rees to atlegally enforcaabla provided by Section 288 HEALTH-.Pt;9LIC HEALTH-.PUBLIC :h the appeal if Art is filed, the nile 71 to reimburse the county for all or t 4438. W of assistance may A ?Peal The county and the applicant me part of the benefits received under this title. the on, ttttve Procedure sty Texas (0 Department r rules shall also pronegotiate e vide cf~atElt an Pplkant has Iwithin the pttit~d(a ~ It,") using the substantial menthe transferred title to real rondtng an administrative or U111 tance under this tulle the county mat not lose Mn edit t ~kOit value to become ellgibis for It which thexpenditure fj°Jry t applicant made during a two-year peei'iod b 2a for state aesistapoe he department shall n y s ~ on the data on et may request an eHgible or 1ltedlcald gukleltttaul that e>Yect the pro y and publk bosptw of ythp to AMC - ntrlbuts `a nominal amount phgtu~ adopted under this Act to retl4ct tht Of A*rk" under this Act arht shall ,aftW I ~ ' gtattatu'd`e,aad 1~ ~t ' 1m.de to they a t , ,asst ~~t'r~d"e d. r l~a,trt Yt~ :mrrd "e~ y~,'~~} lr rl!trl ltw'.i~ ~y~lKYW1 Y f ,tl Ul 1 ' i.. fa A1'Y d' , n,:d1 !1'!11'1•. « .;Ji4 !^f7far>,,ll J"ft 6f~ldr~'A; Il'rur ~fl IrA e , . ' i.~. r,~ay t'Peit °~br ! lltea~ r, efi tq,i, `,lay { i1 tlRllcr~ 4~ij yw y rV } manta for ~Quuppties, and governmea f. oetMy , A>`oJfdlttg tiliiatlhlM'' Wen tat owe e €•f f.tr 9YI7, rJ9Y r r u'p.4C) T dI Jim" r ; tell jletnepte shall IltdhVdd f a.: nu fi ~r. n tW ~ lavelp the den(!)tlexpendituree , ' Vii; M!tµre at~))o ced J Y. the (2) aliglblUty 9 I r a'"^w X14^ Oslo Roup tra• tandardi and t b More de entitles that awn p wee . est;bhe!%tyd b ' , , operate, t tit. 'thitt'da0h (8) relevant a or }ease l, l hospitals; apd by ° ' ,aad', g+pvsrgpp~~J for AFDC flW%t hartwterietka of eligibble r esident,. ass Uwe 201" TITLE 2. COUNTY RESPONSIBIWTY.FOR PERSON$ NOT'.RESIDINO WITHIN ntatlon Procedures must AN AREA SERVED BY A PUBLIC HOSPITAL OR HOSPITAL Dion" lion: $UBTnu A, EWOIBILITY FOR SERVICES See. 2.01, This title applies to health care Seri eba and assistance pro recelving AFDC or $81 who does not reside within the area that a public hospital or hospka district has a legal obligation to serve. 1 ~ h a person health care benefits for General Prorblom Sec. e2.02 (a) ke h eligible Each county title to eac shall provide health are assistauce as prescribed raldant of that county who doaa.not reside within the Public hospital or hospital dlfot has county obit area that this :ome of ally household (b) The county la the gallon to serve, area thaE a made.ia the previous 2+ adequate public or privates ources}oft resort and payment re shall provide assistance only If other pplicant's car and real a not available. tat Sec. 2.08. (a) A Oeaerd Ellalbility Prorisloas person Is eligible for aatstance under this title it., astead; has the person does not reeler within the area that a public hospital or hospital district ezcaae of the amount has a legal obligation to serve; resources d pa)rtmente under Section 108c ofcthis and rose allowance allowed requttemens ine 801 by the requested; and i flea at the tests :hen a homestead and (3) no other adequate source of eeteht_ ee is (b) A county may use a leer res ectkn, a county may trictive0standard of eligibility for residents than a legally enforceable provided by Section 8.01 of this Act zpendltures for a resident may be 00esuntfii d toward eiglbUl~ (forosta its seetanca but under Subtitle t of this title only ae 288 I R t Art, 4438f HEALTH-PUTitle BLIC HEAALTH-PUBLIC ic) A county may contract with the department to perform eligibility determination (2) In pa nt andcoutpatient rur health services. (3) laboratory and X•ray Be Central Application PrnrleYone See, 2.04. (a) Each county shell adopt an application procedure in accordance with this (4I (4) fumily physician rvicel subtitle, not more t (b) A county may use the application, documentation, and verification procedures (6) (7) skilled payment for nursing facility eetabliahed byy,,the department under Section 1.06 of this Act or may use a lose restrictive application, documentatlon, or verification procedure. However expendltures for a I Y IdgttO may lie countefa Wward eligibility for state assistance un~er Subtitle D of this age e only as provided by Becton 8,01' of this Act {b) eligibility A c cforounty state may a provide 1 I (o) Not ip r•th tba beginning of a county's fiscal year, the. county ehsil specify the ~qqt fiscal year to, ev ell bllity and the documentation l 4 (s' d tit fpraestauyce, aqd, AhglJ a ~?Wo!l?!e effort to notify 0utlllds Pi ako"P' ea tf pmts du e: See, 3,02, (a) A county. r health department' a pub ) i lkil O (d) Each county shall famish each applicant with written application forme, he ,the provider's location, c e Ob regtfeet of ad lkaati •a'ooue►tylaNll~ tae 6 kw In out forms sad A county mr'f affiliate p lgcpse, Fc%s14h1Raw#,P qrA?; M!¢! ~Vi!0!4 °~1e hEspital„ ddstrlat to Pzavidetg: F tlf'HU - h1; f r f4hq Ol,. t•IOQ. ib, a 11 , ft 1 Y .19:1 '4 rV v '{.i ( uR OAV I n r l l' 4"d ~eq Qadil pi ~9 ►?7 1?F+r tG~ ,bid , .vj u , orI t w to the't1v o ono 001'' is exce t n an emergency i r require eligible county e char oce6rs, YL(lY'LMliu+ge In ncome•o'r"iesdtirdteKeV 11 r~~~ On ,r 4''IlftbonMfbflall thbtleesiMtt~t N Et A county shall itcospt an 'ttbvieiv estol4' tlgdatlon''and atd►11' o4e~a1' Sec 8 . I ) It a co ` spP&A1don not later than tie 14th day,after the date'ott.vvhiehi two. ; t+polJtre ! the prot►lderi p a~rb prtktle, r ! completed applicaton form, oy:heal l' 1 rovide.a proNsb~Ot.tgyl4tpbt>; appiottons,agd for ~l16*iin hea~)i'( E" gas (n' care ser sits • ' apPlldtlllt'nty shall prgdeblalv ;of lk•n written notitleatfan qf, the cotinty'e decision, prhealth vlc es A county shall aselatttt4ttri; I t d etenbwho reside•In (de a fli Q hh ient -w(d If the county denies ass)sance, the written notiflcatlori a all Inctltde the reason for the . denial'and an explanation of the procedure fun appealing the denial, ov ,by ro6l It's pro ub es.I s donv o qt) Each doµntyy shall maintain the records relating to each application for at lust three Who the provider suspect years attar the date,on which the .appllcat~gn wee submitted, who t)e otter der suspect reside (1) If an applicant is denied assistance, the applicant may resubmit an appllcatlon'at ppossib atient's county dotomin any time circumstances justify a redetermination of eligibility, pprovided to the patent. ' Revitir of glltlbility by mall postmarked not I; ' county of residence, Sac, 2,06.' Each county must review at least once every six months the eligibility of each resident for whom sit applicaton for assistance has been granted and who has prov)id If the provider conou or it, after received assistance under this Act. the patlent be transferrer Choate in EllatblI ty Statue to the mandated provider See, 2,08, (a) Each eligible resident must report any change In income or resources (e) Not later than th statue that might affect the resident's eligibility not later than the 14th day after the date euftti Not information to on which the change occurs, eligible for assistance fr (b) If am ell bie-rosident fails to report,&.change In Income or resources status as eligibility within the 14•t prescribed by fhb section and the change, has made the resident ineligible for assistance ~ The county shall n under the standards adopted by the county, the resident to liable for an benefits received ((0 if a provider who while Ineligible, This Section does not affect a person's criminal liability under any eligible for sovide w o relevant statute, eligible for payment for SUBTITLE 0, HEALTH CARE SERVICES Mandatory and Permissive Semites Sec. 3.06, (a) If a i the f shal See. Each services (r anee with department rulestad pteldpn der S tionl106 ofhthis th,cft services in accord• county ofyresidence sea 210 HEALTII, PUBLIC 71110 ! hie 71 H._pUBLIC Irform 091bility determ n ation Tle L (I) inpatient and out (2) rural patient hospital norvices Art, 4438f health cllnlca; as limited b xedure In accordance with this (3) iabcrato by this title; (4) Tamil and X•ray services; and verification (b) pamity nl a ning aervicea; .t or may use a less reettu iowever, expend! ictlve (0) Payment for not more than three r once under sub three for a (7) skilled nursing prescription dru Mite A of the age, facility services as limited b gs per month,, and the county, shall s (b) A count by this title regardless of the patleat'a fbltlty oad the d PeCit~ M4 eligibility for atatey Provide additional services I A rea~nsbl waft > i tatbA asaletance, ~ but W43P not Credit the saeMgtnes ' toVaa)y application forms, ::,a erns rSea' 8.02 (a) A•ee „ P~urlalop'o lkyt)t,' ais 04 ?tom 1e tUlhtg out fornlr Aisd o1l d°lgae to r~, Provider's tIon aoUity; a 1 K so4S'~ of, the ~ebY'attlliato , ugh the pus Q ~'4 elte staf!ra?G~a'+i %'~tri "r + I .vd!~ PivoFtdsr regional r ty~rgs `111,~~• , u. 3 ~ ,1 , r ,'1 rI~ ~a1 r nf:1,,~ l i aYpr day after the m ht ~ep:,~ 08 Aucotgtrq~" ? ht affect M6 a j~ exceppE In an emer en pry st , s ?yais;, .o i ~+~a, !,rrra a ,r, ; rpt.,, 0 r f ~F regt'Ire eligible Coun ar,m414 ~ 9T~ xv~,,~ : r bh th~s a of r~ tY residents to obtain l 00"'~l~, e Wan ca"a~mandated.,anoG av' 00 h ++eoetved the sec, 8,04 Nott> p44,~ ' Pro~1i jj et (p provkter; e~e{ ' 'atlons And for all the mandated (a) 1f a county has set e 1 o provlder,Eo s eetdd Y health a ni°'xw oig an care services 'Co anal obtain pproyal fro th tlte• , un Provider tt~ include the e County May 'e n of the couprysos (b) If a cotEyy ~b1e resident of that Conn befojo p101'a noaerngrgn reason to the health care s shall lnf kited a mandated ~ , ' lenlal, Patient who serv iceresides in arm the county of prov'der, A provldbl of nonemet~g~t~ reskle rplicatlon for at least three Provided by gubaeotlon (e) that of this county sand who is eligible for a an fapOAb Provided to who(o) th h a provider delivers on, applicatio>; At e provider or Will deliver nonemer e re under this t1tle eanbmft Possible after dote sus suspects may be eligible for g 'health se Patient's county of residen abPA ent's Count asalotat.ro under this title, as aoo»Aas ptovlded to the Y telephone that hea thd~ce' the pr°vtder Must Wolf months the 011 N,yi Y mall Poatmarpatient The provider must also noNcare Be~ro" have it the granted andgwhn }a (d) ked not later thAn the third workin 0 Patient a county! Of Will be m county of residence, g ay after dete'rm knows that t he Wing the patient'n the ,vPl If atieni the it, air Provide?' the p dente oun my of residence has selected a mandated + 14 Income day aft mandated provider unless It d te pprovider; th; Provider shat transfer quests that Y tter the date (op, Not later than e.dlCOvi ins out elent r the 14th day after PPropHata to do so, Patient nformatlOn to determine elf the patlent'rl coun Ineligibleul rs status as asefataMee from glbUlty, thecounty t r residence aesbtanCe 0 ellglbl0 491bility for within th, 14 da that county.. the coup shall determine If the patient ivae or anq benefits deceived (f) 't'he county shall notify ~~odJ Me aU" ty does not dotermine the to nol 11ib111ty under any P nt IS considered to be oligibie, patbnta (g) if a provider who delivers oProvider Of i namergono~ deelaion, ellgible for assistance under this title fallu to cY heal 9 eligible for payment for th care services to a patient who is am I the services from the. P Y With care services recces, the provider b not patlenel county of raatdence, era aetvicea In accord. • emergency provialen of Bmergeney 9ervlces 8.05, it services from ge nt who le e1191ble for emergency county of residence. as provideman dated provider, t SloProvide, ts 's ndiot not this tIths requires by this section, y the. pa ent a 271 • 4 J Art. 4438f HEALTH-PUBLIC HEALTH-PUBLIC Title 71 Title 71 (b) If a provider delivers emergency services w a patient who the provider suspects legal obligation to serve might be eligible for assistance under this title, as soon as possible after determining the provided to that resident patient's county of residence, the provider mint notify that county by telephone that (b) If a county provi emergency services have been or will be provided to the patient. resident of that county (c) The provider must also notify the patient's county of residence by mall postmarked hospital district has a lei not later than the third working day after determining the patient's county of residence. for a total of 30 days of (d) The provider shall attempt to determine the patient's county of residence at the time during the county's flee the patient first receives services, provided to that eligible (e) The provider, the fatlent, and the patient's family shall cooperate with the county of ( which the patient is presumed to be a resident in determining it the patient actually Is an eligible resident of that county. (f) Not later than the 14th day after the patient's county of residence receives Aetermi notification and any available information to determine eligibillty, the county shall Sec, 6.01. (a) A cou determine if the patient Is eligible for assistance from thateounty. Itt the county dose not lion procedures estabib determine the patient's eligibility within the 14,day period, the patient is conaklered to be expenditure made to , eligible, under this subtitle, A (g) The county shall notify the provider of its, decision, . , lion procedure but m; (h) If the county and the rrovider disagree 6n the pstienBs realde yr the county or W procedure toward Milli provider may submit the matter to the department as provided by Section 1.04 of this Att. (b) The county, may (1) If a provider who delivers emorgenocyy aervll xes to a patient who is eligible for state Wifit pee if the assistancO under this title falls to comply with this section, the provider is note b1a for department under Sec payment for the services from the patienga county of tOVOW( ,'11SU11TITLE C. PAyMk't 1,Q $I X C S,; See; 6.02. Tlii( tlNwtrlPeorWau.,! ;y ellgt'ble couatlaa'to It of 0 See. 4.01, (a) To the extant prescribed by this Ach a county Is tlab% fdr healthws go~tal hisj services provided under this title by any provider, including a pubile hoapiW pr hosdiW J district to an eligible resident of that county v,ho do ea not reside within the trey that a (b) Except as prp public Gpital or hospital district has a legal obligation to serve.: assistance, a county' (b) A county Is not tlable for payment for health care servlces rovided by an provider, (1) expend in a fig Including a public hospital or hospital district, to a resident of that county It the resident that year to provide realdes within an area that a public hospital or hospital district has n legal obligatou to who do not reside x serve, obligation to serve a• (e) A county Is not liable for health care services provided in a hospital to an eligible Lhat It by contract t resident of that county who does not reside within the area that a public hospital or care provider the pp hospital district has a legal obligation to serve If the hospital rovidin services has a Indigent persons, flu Hill-Burton or state-mandated obligation to provide freeservIces and the hospital Is such xmtraet shall considered to be in noncompliance with the requirements of the Hill-Burton or state•man• this aect'.on so long dated obligation, by the department (d) To the extent prescribed by this Act, it another source of payment does not (2) notify the dep adequately cover a health care service a county provides to an eligible resident of that county has reached county, who does not reside within the area that a public hospital or hospital district has a pe cent of the a pli legal obligation to serve, the county is responsible for payying for or for providing the health care services health care service for which other payment is not available, that a public hospit for unde Payment of Mandatory Health Care 8ervleea ) If a hospital al Soc. 4.02, (a) A count Is not liable for the cost of a mandatory health care service district (s sfhall detll dal! Y er that Is in excess of the ayment standards for that service established by the department outside the hospit under Soetlon 1,08 of this Act. shall consider ont+ (b) A county may contract with a provider of assistance to provide a health care service outside the hoop( at a rate below the payment standard set by the department.. expends at least from the pro W Limllatlon services to el glbb Sec, 4.03. (a) County liability for health care services provided by all +rovlders of hospital or hog It assistance, including hospitals and skilled nursing facilities, to an eligible realdiml; of that under Section G 0 county who does not reside within the area that a public hospital or hospital distn, ! has s this subtitle, 272 HEALTH-PUBLIC Title 71 REALTH...pUBLIC Tl;le 71 the provider n e that lega Provided l obtfgatlon to serve Is limited to a maximum rnery After by determining the to that resident during totayel pay, arment of $80,000 for si a cBf telephone that the county's [fecal ice by mall atmarked (b) if a county provides hospital or skilled nursing facility sarvIces to an eligible po district has a It A County of at t the the tlnceme , hospital rf residence g1 who obih atlon to serve, the county's ' liability la lim Cited bllc to hospital or a total of 80 days of hospltallzatlon, or treatment in a skill that a duringg the 's fiscal year or a maximum tote} Skilled nursing faoillty for t,gtht county's rate with the eounry 01 Provided to that eligible resident during that flscai Payment of $30,000 for all 1 e patient actually IN an Year, whichever occurs throt, sal tl of r'esktgaoa 8U8T]TI E D, 8TATE ASSISTANCE ktqq the county DeterirtnaUon of CllalbJptr for Purim « If }fie eountp dos See, 5,01, (a) A count ~ Aa," .el eat 1sc y must comply, with the a i 'r'opl►>K fldowtllta bt+ d0n up" esta al "t the de expMtUrs p u» tgtioa, v~ tradee'thia du to:.asrtst alt Qt ~ b98tol, aq "4rt to cap tJtN}~rre adRrAM! Egon Procedu re but m'countgntaY.uae+l =t tesnyggl may. not, ~bdlwWa~eaty, oredib 64,1 or ~ ;>t~IMd►1re•.tntvard q?Ii1.4Wgs , ~Pe°°I~'~,!?~l,I~aYi,.'t!i!tN for 0 t!^n+tl ,not bridltlaare~~Mfh f~A1r9t~~~~ ,.HKr :f idl. e~j W awdstatl a Male, xPendNars+ oe,lt'thaPllaeob' ~rtia , a , , t' depagent udder r 8eetioa 1,08 Of thla q''e~diMdaktfbM~tsY •~~o9c1 6A2. ' {a) anp.d@ 1 r1 f J a}fgible countles'to aeelbt t ant met c 'gKb{(W. an `iql 46, ",t IiabW~fbr,j' eligible residents of that coup oWho I 1 b~"i►trtkle~to a laepfeil or Ao eplt~l hospital district has A legal obt0, dia, t ee ry firsti ' car linldfb. 044fW Am, that a lh) 1'gcept as provided by Subs ti' Idedb "r 't°a(a~~car s county must-: econ (c) o} t~ts.on to ell~lbk for state Y, p~. {1) expend In a fiscal year at least 10 ° ' that year to Provide rrtsndato percent a lega of the Doan I re l obligation to who do not realde within the aareaathet a publb hoe ftal car httyyoe eta vq~~ levy for Obligation to serve and who qualify for aa4ta lic nndd~ eligible residents of At ro Is e >ePltal to an e1lgl la that It by contract elgned on or before Jane trloY pro a public hoeVftai : or care provider the provider boa 6.01 of thil A ding eervk:es agrees to furnish a ee 18~, lev between s aces a Ith end' the: hospithPA, l le euchgconLetoshalbe Included as furnfshed wt el f f~*I so ja~tj ar ureuant to IurWn or state a Dun ye map. this section ao long As the value of serrvvicestshallailtI xceed the a Its ex n t by the department under Section 1.08 of this t; and under Yment done .not p yment rate astabllehed b e Ac resident of that (2) notify the department, not later than the seventh day alter the date on which the +spital district has a county has reached the expenditure level, that the r for providing the teen, of the a pliable coon aunty has expended at least el ht alts care 80 spi s to howl tjdi entraelof that county whttohodo not reside within the aria that a ppublic ho hunder or r hospita dletrlct hoe A 16901 ob)lgstl nyto rovide mandatory for aeslatance under 8ect(on 6,01 of this Act serve and who he &M health are service (c) 11 a hospital district is loafed in by the department district shall determine the part but not all of'a county, that coup's a outslde the hospital district to determinl of elfeplp~)jj~~ located Inside the coupnty but health care service shall consider onlyy the county general revenue (e 1, for at" Assistance, that county expends st least 6 party located 0.1 e the hot 10 dlean A county la eligible forus~atgefa%aletanoerf ®aunty from the ropy Percent of the county g'+naMI revenue 16 ,7 that year resulting y all providers of aenlcea to e11gIb a residents of that, ountotyyspwho d1 oOt reelde to r VI a the area that public Is resident of that hO~pltal or hoepltal district has s Iegga1 obi, who to serve end who pmandatory ear for ae a 1 r plta) district has a under S¢ctlon 6,01 of this Act, and If the county c to ewith the other this subtitle, repulMalente of 278 Art, 4438f HEALTH-PUBLIC HEALTH-PUBLIC Title 71 Title 71 • (d) If a county antlClpatea that it will reach the 10 percent expenditure level, the county t must notify the department as soon as possible before the date on which the county Sec. 10.02. (a) Each public I anticipates that it will reach the level. by this title to each eligible reef (e) The county shall give the department all necessary Information so that the depart. serve, Each governmental ent ment can determine If the county has met the requirements of Subsection (b) or (c) of this provide sufficient funding to seetlon, assistance as prescribed by Be (0 If the department determines that the county has met the requirements of Subsea (b) A person is eligible for a tion (b) or (o) of thin section and Is eligible for assistance, the department shall distribute area that a public hospital has funds appropriated to the department from the indigent health care assistance fund or (1) meets the basic income a, any other available fund to the county to.asalst the county It providing mandatory health under Section 1,08 of this Act care services to eligible residents of that county who do not reside within the area that a (2) meets a legs restrictive public hospital or hospital district hag a legal obliption'to serve• and'who qualify for hospital serving the arse in wh wisllFasaee;under Section 6.01 of this Act (e) If a public hospital used 1:n(t)r$1sto funds ithalt be equal to 80 percent-of the ac *W payment for;bealth ears i , sosrtaes+foe aItgtbli rfsldentls of that county wh6 do not.reside,wRiin the area, that a year at ended before Januu re4o b y Iretn egta establi, r p*688 hoeplbl or haopibl dletrbt has a legal obllgsdon.to serve dutdntlitheretttstaslsr of req f f,l Wayea►l ttfter`tho f0 pu 11e hospital Shall adopt that per+atst expatditure level has bws'reaehedc;,, aw „uc , , ) It the department fails to provide osslststice to rut eiiglbldidbgifty-srtv{+ebset+Wed by Il a ubll haeptta) did a r Su bkoft(>T:Sa4 (g) of; this sectkn,:the county Is haliobll-lorya~nq~fphhlNlq, sire d? f eNd bs I pravlded to. aRgRAareeklents after the eottntil reaahoaitiy! Ai ,pl6opa6,tn4slpoltttiy ~ , iris heath ' • l lave . 0111"Burtor o llaatlon to dater. ,,I 1 uod".~;' r;t rii foa,n?~' q h (e)' A public hospital eo'tabllol Duty of State PrspW4 Tax Board care services to each resident AAC oprd- shall give, tha,.departm t inform&#on Ilehed by the department un4o b,08 •:,Tits State . Property .Tax B, i relotlng to the taxable value., of 9~} laps restrlativ npoMe, and M property taxable by,.e odwAty-and s14~1,coW!b?a appliOahle, genera) revenue tax levy for the relevant period,. (4 A pubifo~oepttal m#y ad, time, It because of a change County Reportln; Rtlui:r," s' { " the department under Section.: Sao (s) The department shall establish rep6idng requlyetnnhfA for ORO'' goupty stricter thaw the,requiremente seeking state assistance and establish procedures necessary to determine If the county (a standard to at least comply eligible far stata resistance, (g) A publia hospital may co Tha depar4s•. 166hall establish requirements, relating to! tion sarvicas. (11) documentation rreeqqulred to verify the eligibility of residents to whom the county (h) This section does not ap provided.ass,3tance; and (2) county expenditures for mandatory health can servicesr Sec, 10.08. (s.) Each pnbll (c) The department may audit county records to determine if the county Is eligible for procedure in accordance with state assistance, (b) Not later than the bash TITLE 8. PERSONS WHO RESIDE WITHIN AN AREA SERVED BY A PUBLIC year, the hospital or igibil el year to determine el district ty , HOSPITAL OR HOSPITAL DISTRICT assistance and shall make a SUBTITLE A. ELIGIBILITY FOR SERVICES (o) Each public hospital or AppWauon of ?isle application fgorms. ) Ott to Sec. 10.01, (a) This title applies to health can services and assistance provided to it app icant in fileast of an ap ling out forms ti person who resides within the area that a public hospital or hospital district has a legal or hospital district shall Infor obligation to serve, (e) &oh ppublic hospital or I (b) This title does not apply io a hospital authority that is located wholly within a etatemgn, fn which the Spy hospital district or wholly within the area that a public hospital not affiliated with any (q Each public hospital or authority has a legal obligation to serve, application is approved, the a (o) If a hospital authority Is located wholly within a hospital district, that hospital Income or resources that mlg~ district Is responsible for the care of the residents as provided by the Taxes Constitution after the data on which the and the statute creating the dletHa. possible penalties for failure (d) If a hospital authority Is located wholly within an area that a public hospital not (g} Each public hospital or affillated with any authority has a legal obligation to servo, that public hospital to shall accept or deny each appI responsible for the care of the residents as provided by this Act, the hospital or district recely 274 r 1 HEALTN~pIJBLIC EALTH-PUBLIC ant expe ndlture level, the Tllle Tl Title 11 TI the date on which the county Art. 4428f Sec- 10.02. (a) Each 91,01 General Pllelblllty provisions pp information so that the depart by this title to each ellg}bresident ofhospital the sshall res that the hoseftal has a 1e t .1 resaribed of Subsection (b) or {c) of this serve re Each suffiggovernmental Antlt that owns, o assistance e yy ?1 ga If provid silo c i ent fundtn rat the rAqulrementa of gub6eC asefatance g t allow the hopitelratas' or ases a publlc hoaplta! anal? department shall dlstrlbuto (b) A Prescribed by see tion 12,09 of this Acfto Provide the required health care health person Ia eligible for aeetatanee under this title it ! rare assistance fund or area that a public hoe ItaJ has a legal the Ark1o wi g rnah tory health (1) meeta the basic income and iatlon to servo and; Person r afdee within the oto eervswandin~, ° tha t a under Section 1.68 of this Act and in effect at tho t, eta eetabllehed b VualUy 'eme for meets a leas restr resources d, o Income and ~ Ume the Agel+tanee'the department tea! P+tYdredb for hsaltlt hospital serving the area In which the tAtt's"I standard ~doP"°gteted; or in person resiadopted by the public " Wlth, the a+~er► caw {c) If a public hoepltal. used an come ejede~ there :a Year th at ended before Jaau and resources Itan 'nalnret:ot r'P40u1"requirement, estab11,4.74b 0~ tdhat was joes dar'd during he Gtr ar tine igtp)yr a Pubbllo hospital shall adopt that,tan pa ~ t under e•tee;pafirnkh ,by 0 s public hospital did not " ta bd el intto4udder LOA Of this Aat, the rea fps •014tN46.00o dt" h,*od Oki ppark oing Yr ar that ended be o Ja~~~ an fnCOMO and resources s ft title, tr`dol l HIIhBu.to( "lift rd n t o bbl year,lgetlon the h'oeplg ehe11' 14 1 aOt had a Hflhu t ft ~~u^ay hoopQ _ the determine d (e) A public hospital setib!lsned ate lity under this the to 1. "loot thlt care services t ntor to each resident who Yifeeti the eftecth+e delta protide health upa llehed by the department under the'f of thte• Act ghall ncome and, tesouroee. con leas restrictive income and "eeorrSroa~eHs on 1,08 08 of1b Aft or the Pubik hospital m u may (J) A ublic hospital may ly adopt it rdard; pt " time, If because of a may ado t a lee's re,Mctlve Income and resources aQttf[bmetits t4r'eaoh cup e~c~rertment under Section l 08 ~f thle ~ e and resources regq~ ~ AQ ~t°~h tit y t0 determine it the county b fe than the requtremente eatablbhad b`~ the standut d ttdop Y ha ttsl staederd to at least comP1Y with tae department, the hoepplt~) ehAll ohsf nge le 01 (g) A public hoepltal ma con tae r utrementa seta llehed b t~ ddenta to whom the coon Won aervlces, Y tract with the de Y the department. ~t (h) Thfe section dose net a I lrarlment t4 per#orm eliglblllty determina• r, ; Pp Y to a hoepltal district. It the county to eligible for Sear 10.08, tlenerrl Applitallon Prot.," (a) Each publlc hospital Procedure in accordance with or hospital district shall adopt an a of a application , SERVED By A (b) Not later than the beginnin this subtitle ~T. PUBLIC 'Year, the hospital or district shall epee Pub 11c hos ital a or hospital VICES dfatrlcYe Operating to determine e118'iblll and to ify tae pCOC~ It will use during the aestatanee and /hail make s reeeoneb u ty elocettort toon requtrod to support 0 operating or (c) Each public hoepltal or hospital district shell ofur tiff ten each the Proc# u for application form,, y the public of the procedreer d aaebtance provided to a (d) On uest of an a applicant with written capital dlstrfet has A legal Ippliant In flliln Applicant, a ublfo hospital or hospital dfstrfot shall or hospital an WdlAtri4t ild snot Intoram each applicant of the availability of "Ea Publ each app, ' g the ap liatlon rue,er "silt s Oftt#d a ivholl within a statement pubic hospital or ho,plts) distrlotalrsll Erich public hospital At not ot aflilate~ with spy f which the applicant (1) Bach ppubllc hoepltal or h tpltal dletrlcto the truth n f the Informatlon a Written ta) dbtrlc application fa a ed t, that hospital pprov ,the yt itant moat re P to the applicant that If the by the Texas Constitution Income or resources that mi h It to the hospital or district an eat It In After the date on which the Chief at the I y hat a public hospital not Poselble PP lent a eligibility not later than the 24th day } that public hospital is Each P 11 Public hospital or hospital UPort ocou are Each hospital or district shall explain the ( a changer tr ana accept or den pp P tai district shall accept and review each a pllcatfen and the hospital or distric tcrecsfveldct a not comple to ted app Ie a ati 14th day After p Y ter the date on which 2?6 J I Art, 4438E HEALTH-PUBLIC HEALTH-PUBLIC Title 11 Title 41 (h) Each public hospital or hospital district shall provide a process for reviewing (d) If the provider knows th applications and for allowing an applicant to appeal a dental of assistance. resides has sal cedpattentdbe (1) Each public hospital or hospital district shall provide each applicant written notifica• requests tion of the hospital's or district's decision. If the hospital or district denies assistance, the transfer the patient to the n written notification shall Include the reason for the denial and an explanation of the transfer the patient. procedure for appealing the denial. (e) Not later than the 14th t (j) Each public hospital or hospital district shall maintain the records relating to each to determine eligibility, the hot application for at least three years after the date on which the applidation was submitted, I he hospital does totbe deter slit (k) 'If an WRi ant to denied assistanoe, the applIeW may resubrot an application at patient 4Ederad any timisicircutastoaoes justify a redetermittatlon•ot ellgiblUty,., : r (4 The public hospital shall (g) If a provider who deliv r!rhrj n:1 u•^.., SUBTITLE - $ ti n~' ,q 441 ellgible,for,.ooslolppoe undert E.11~AI11'F1„t,AE;b) 3AI1ViU~$ eligible, far, paypltttlf7 for,tbgP ► ;2n11 rtMi' '+t as 'penhWl~e ~eiVkel tfdvtial ►y! pY~M the pmwliXAwof xa to -wq bti dj s t, ' L u ois'j . >Yfl JJ l11)fPltirl* OralAMt Jj '.u!! i le 9~ d ~?tri19MJ1: xort ~t~i~ J L ;•f 111J"d 7a? 111bly 10i 'pl Y. Alf' n I t Salo. 11,0, (a) If a patio) om, 4111,11 hompi, omer ` Pyt1 salty N1 r l i"I 1 t attfhttr~,nif'd'ritdlt& tl`tFtt f h9`pi „ i,!l4Nt t tilt ri~~ l4< „ ; pktfgsorf ~Ifduq ) uy I ~ArlddM ' d t~oIM4RtrllpB~Yht4~iir, , . ,ttttsbian~ uaAe of eontv'tus via:, to p t an11 then 1ra}11tit1 e )(I be {n~a as„taorl rl, , FrINe, r fr !liftthat hoe EE patio t , 'p q o titdtetRiC4,q 1 „s rain (Ali 1 fir . tt) :4PAOM , `the atatu{a ell 1 {c) Theptovfder must ale( 0 to fI&M, xt 1 1mL n'1 t>te third vrarldng day site + ffvxl%i ' l ` i; 'Id Pfwilpr OUR M1dr411te19sY1tkM 1 t9fn111 In,, egsb',rdl L~y~_i g r titM t~Yfll d •BHOnht,'6 1 11. `9.r (a) !ia hgqssp1t11M p'~ksa' ~;Cdp, 1~, tr' pis . cantraa6 TIN ~l.l'tha+ s"lacatWtir or:throo)sh+theo'purdom of insurance for eligible resldente, heap;~'[ning3t (b) A public hospital or hospital dletltiot may afflllate with othet public hosppl~taw or hospltatJ hospital districts or with a governmental entity to provide regional admin(atratimt and (4 Not, lat~r.thea thA.14t delivery of health can services, to deterimins'eligibllity, the oted ' Ptvrliee If the hospital does not dl Mand Be. 11,04, A public hospital may select one or more providers of health care services patient is considered to be and, excepptJn an emergency, when medically Inappropriate, or when care Is not available, (g) The public hospital al require eligible residents to obtain cars.from a provider. (h) It the public hospit , spital or the provider me Notification of Prorlelon of Nonetneraency services hoI,04 of this Apt, Sec. 11.05. (a) It a public hospital has solectcd a mandated provider, the hospital may It a provider who d require the mandated provider to obtain approval from the hospital before providing {g assistance a under this title nenemerggono.he th care selwic$s to an ejio resident of the skra, that the hospital has payment for the services a legal oG1l~tttfont servo, 1 '4, ides. (b) If a,ppubile Hospital has not selected'A'mandated'provider, the provider of nonemer resides, If emerrggency service gamy hea(tl care aaelstance shall inform the hoeplial serving the area in which a patient public hospital, that host e eliglbla for'asafstance under this title resides of any nohemergenay health care services a resident another hot prmided to that patient as preaoribed by Subeection (c) of this section. resident section doer nt (c) It a provider delivers or will deliver' nonemoPgeneq beaith can services to a pedant M.Thlo that the provider suspects might be e1YHe for assistance under this title, M soon as pp oweible after determining that the patient resider within the area served by a public SU hospital, the provider must notify that hospital by telephone, that health care sorvlcea have bean at will be provided to that patient,. The provider must also notify the public Iloapital by mall postmarked not later than the third working day after detormltdng that health 12.01, services a Toprhe the patient resides within the area served by the hospital. 298 w , mil, HEALTH-PUBLIC HEALTH- PUBLIC Title 71 i Title 71 ocess for reviewing Art, 4438E stance, (d) If the provider knows that the public hospltal Serving the area in which the patient ant written noHfica• resides has selected a mandated provider or if, after contactin I requests law" aseletanoe the that the patient be a mandated odthe erhothe p transfer rovider shail r<"Ptatlon of the transfer the the patient to the man transferred dated Provider rovider unless It l pre ovider))Y patient, (e) Not later than the 14th da Inappropriate to 1% was to each to determine ell b111t y after the public houpita receives fficl auent Information '*1% +s s au u k It the hospital does no determl el the p uenE s elfbfif 'It w "P40m4n: At Patiegt isc 11 the went is eligible for assistance, t ` rr IMu The 9n Ids gf red to, be eligible. t' Within the 14rIa Y period, the ;gp~r X51' pyblb horPita.,4h,!JI,'Outy, the.provlder..of its d~~a N fl( i`I`Jtl)d eligt) If a Provider ! who dellvgre nonemergenoy A it r,l eNtlblb j,~AGp y " qt ~ Oda NIS to ogg,n~Y~~ "nifts to a patlop who is the py , ro :tbai,P uR,ha~ y ~FXO) et ia. tUVIS111444e11 11., ,1 21 FT ~1} JP II~ 4 l1Y /4NM: ,{,,.~)a: riJ• 'll':U1 'I7/tti, r. IIA It i. J ~net apply. tb,A I Pital JM'a 5r1i;,1 QIltl) t/i, ht~hP"b'aa,UlWi,ldorl vad ;,.rr l , I o•' r,d 9dj ~ f.r,i'1fl °r'r9rrru,r ittf}~iha 1f +l)' SEO, 11,O r11brec?p ,It W Y' 10IV{i Of 0t ~Nrl ' u of zohi 11 . (a) !f a patient whpiyt j. -'d7i p,f ±li ,sl i/uigowl d<!ul'f r~pY,lyvlceS ttem,a noamanda ~11idblerfpr,;A~yIll uolln ,,a Waa~ ft+Rll no pitq~ nf ,rlduq (9) th(y 64M t ng the. area in wllfab3> p ifSEr' PM A Sot "1 e09flYrv 11V min'htberel ~~de}i0ere!etr~geaq;aarridSl, 'byr,rbl~ss qdo op, Ili: ,+r ~Ii lan ,ti! the'; yr ~fe4or,a/li1t~U~Lnder,1111Aut~ra1+100 ~~pA~pMlyidwMSyyrp~py PA s Mbldbe.pdthla thb.area Served Iat ApdbHDhwgfb);'t]Nr v1d rey)tilri.~ that ht p tel. Hytelephoe'tl~t,~r %i ~"`patient; ge>toy SerVloee hare~beea~orwlH be~provldsd~t4 t ;;,r (c) Theprov(der must also notify the ubllo hospital b rmall " , ,191, the third working day efter'defermidin p ~ )n n,t, :~f; ~,i, proW%*,as the hoapltaL g tat th'e patient y postmarked not later than e eontraet'Oh, a reetdle ( wlthln the Area Served by the PurchaSl of bya) public ho pitr alh At the Hmetthhe Patient nfireche Pates tV~~ng wit lin the am (b) he served public hospitals Provider, the dent,; add the Patient's family Shall cooperet#with' the public or hoepltsl in determining If f the patient Is as eligible resident of. the arse Served by the administration and hospital. yy to determine ehop ll tlty the hoeplta l Shall determine if the I re enit 1s sallftible for utlefent Ifsfsta anee~ aalth case aeriitxa it the ha) does does not determine the patient's e!t bllit e re is Sot avallable, Patient l4 e Co considered to be eligible, y within the lody period, the (g) The public hospital shell notify the provider of its decision, (h) al the public hospital and the provider dlsAgre on the patient's reeldenc, the the hoop lE 1.04 hospital of al thiors the Act. provider may aubmlt the matter to the a department AS provided b 6"flon a)►ry~uay before pro (W has (I) If tine who delivers emergency services eider tder he o hospital noneiner. has saslstance resides, under r this title fs!)s to com I wI~ it to a patient who is ellyb)e for payment for the services from the public hospltal2 eervi11 the thvider is r is which s patient 1 patent 11th Serrteee (n I! emergency services are usually and customarily available at a fsollltY Operated a public resident heap tai, that hospital to noteliable for emergency services t & faked to an eligible b Two to A patient by another provider in th (k) Thle Area the hospital has a legal title, as 066 AS Sectlon does not apply to a hospital diatrlck obllgAtlon to serve, rued by Y publkf dth cat's services IUBTfTLE C. notify the public PAYMENT Or., 9ERy1CE9 Ge"Irw determining thAt Sec. 52,01 (a) To the extent ht preeoHhed¢b vlatona P alth care is "I ea provided under this title by. sin Ac A Public hospital Is liable for by any provider, Including another public 277 M HEALTH-PUBLIC Art, 4438f HEALTH-PUBLIC Title 71 Title 71 hospital, to an eligible resident of the area that the hospital has a legal obligation to that the change would not hay( residents the hospital serves, th serve. (b) A hospital district 1s liable for health care services as provided by the Texas (o) The commissioners court, Constitution and the statute creating the district. body of the hospital must form (c) A public hospital is not liable for health care services provided to a resident of an detrimental impact on access to area that the hospital does not have a legal obligation to serve, SUBTITLE, E. TR WYA publi hgoP:1 I Is not liable for health care services provided 4~yy another hospital t 1 to an efildpresident of the area that the public hospital has a legal obligation to serve if the hospital providing services has a Hill-Burton or state•mandated ob gatlon to provide free services and the hospital is considered to•-be In noncompliance with, this requirements Sea 14.01. Notwithstanding of the'NllbBurtsnvar state•mandated obligation, + operated, or leased by a gover 1!''~liblio hoafltY,l''is'`ttre yor of last eesofli troller this title sttd is net llabte for after January 1, 1985, the se it(y~'l'eftt 8> 1"Ialatiso •to' an a !i glble resident of the 1"'thwt;tfs'e1 poblWholofal ha "a governmental entity s obllgatic egal.Obllgadon serve If any other public or private source of 0' svalLblsl assistance during the hospital' ((ffjj If soothgr'aoam of psymedt 6000 not; OlipdybM a+ N1Ye Wlv)cl{t a 1885, or the obligation to prov pttpfia hoop (tyl.provldes to an e~1g(b resident, o~~ that th6 WK" a 1e~ during that period, ob don It the hoeplW'td' ~p''t1Yi~l8'fdF ff'' r or to the heath itj' Yrl.' f N eroirli4r. oif MyMMile ' r rYnd m van x n 5 Mo whn rp lblAlr i OF4 ~TO + ` This UIM did not take'( h*46n std 'd lo*+'rnt :a ,1'ayraenalAlMeti aleflt1411dbf .r .arre )Ili Onl•nga l,digsod propoainp condtftuttonai; sf9iprr.'~32:E1i)v~ ~ 9'lld r4tee,a~~nppd,Nndoa'►t~Wsl(iildibpi'8letbtssMrQRr~ A.Q$)o! IM& ttl~ivtegbMdfWlproWd~tl ift~e a►~b~ahls "pkonidel~ 1 TITLE 6. [NDIf epl~rgal~d aaritl0a~ tlMb,ars, requh/d i~1d rile !'~tJD dedl/lMMhlrplgeolt Ixri1 In~tryM (b) This s e*b doee, not apply to a hospital dutsbf'` r' ~nvlia+f Sec 81.01, The Indigent he _ , i! t!4'. 7t 49L1 ).t. i 1, ttNpoiylirUttl~,a9fEr'n+waiFM..g''P~lr~B17r ,,i b •.,,fi ,i ~ i . t 1.}, +r Soo, 12,08, Each governmental entity that ovens, operates, or lasses a public bo*W Sec. 31.02. The Indigent ehaN.prorlds uuflfcknl,tWtdiny. to the hoaplt~~ 441" vk , th care a following purposes only,, 3~+ required by this Act, If, a pubIto )iogltal• QMh1Adt ope ar , by; 1 (1) for the payment of mon authority, the goyerar)tontal entity t created or au 0 c , of the siµ orlty (2) for the provision of her shall prowde ;sufflolent fundingg to the publle hQaplta) or )~ospl sut 0 ty to 00 do the hospital districts to be allocat health care assletance required by this Act who furnish s disproportional SUgTITI.'FI D. PRO%URR TO C ELICIIBILtTY StANDARDS (e) for the provision of heat OR SEF:VIC Il4YlDED care assistance administered children, handicapped or disc' Appltcatlon (4) for the provision of ma+ Sec. 13.01. This subtitle does not apply tie, hospital district, services for low income Indivi, ment Act (H,B. 1023, Acts of Pay other law providing for those See. 18,02, (a) A public hospital may not change Its eligibility standards to make the (5) for the provision of PHI standards more roetrlotive and may not reduce the healthcare services It offers unless It the Texas Primary Health C complies with the requirements of this section. Regular Session, 1985)' or u (b) Not )stir that, the 006 day before a change would take efteot, the public hospital (0) for cancer prevention, must publish notice of the proposed change In a newspaper of eneral circulation In the (7) for coordinating Impfr area served by the hospital and set a date for a pnbll0 hesrfng on the change. The Income or Indigent Inglvldua publ[shed notice must include the date, time, and ptseo of the public meeting. This notice (8) for any other health ea • dose not repIPA the notice required by the open meetings law, Captar 271, Acts of the Income or Indigent Indivldue 00th Legislature, Regular Session, 1847 (Art(* 6262-17, Vernon's Tgexsa Civil Statutes). Acts 1096, 09th Leg„ lot C.8„ e) later Not n shall co80th day nduct before the date on whic the chan meeting to dlmuss the changwuld e. The meeeting 9 OpP[e~ 142, ,'ewe Arri lice . thshefpbbel o hospital held at a convenient time In a convenient location within the area the hospital lua Title 4 of this article did no a legal obllgatlon to serve. Members of the general public may testify at the meeting. cause 121.02 rovlded that tht (d) If, based on the public testimony and on other relevant information, the commiaslon• on the adoption and the vo ere court, city council, or board of managers or other governing body of the hospital finds gat Log,, Reg. S the not adopted by the voters, the t 278 0 ra, suil-? r A'N-PUBLIC JIBALTII-.PUBLIC Title it TWO 71 I obligation to that the change would not have a detriment„1 impact Art, 4438f residents the hospital serves, the hospital may adopt the change, by the Texan (e) The commissioner, court, city council, or boardof access to health care for the body le the hospital resident of an dekrlmentaltmpact on access to health care, managers or other governing ct o acct formally adopt the finding tat the change does not have a ) tiori Other M.0d SUBTITLE E, TRANSFER OF OWNE C I to RSHIP OR ONTROL .I0te "a OF PUBLIC HOSPITAL Effect °pt Tnnefer uQb + IT '9) " 14,01, Notwithstanding any other >>db llabl;$y °perear or leased b a overnmentai entltreta aoldoorlleased ate P alter Janus y g publte hoe Ital o he+, )atiaA'blflif& wned o 1, 1985, the sale or lease o4 the public ties ftal another person on or ~tr twWb+wl g vernmenta~tr~enytity a obligation to continue to servo residents ~ tr 1986 or the obitg atWhoexihpltaPs last full operating year that ended ~ whoeweretelf8gblthe e for W k~ before Jamsary 1a; during that period,, provide the health care services the public hospital provided 8? VIP, i .tlgaod The Wk did nod take TITLE 4, r P >3 (Wd'r1.08iot pro nl7 constitutional merld,,, '~flure grade lton of1°fnd r lkttan i1VAMW, lihtl ! See 1101, /blluwfng WS artiole. TITLE 5, INDIGE ) HtOth Cape NT HEALTH CARE ASSISTANCE FUND ated rdrl See, 8101, 710 Indigent health care assistance nfund is Fund Created in the )u we. b]fo 81,02, The Indigent health Uses of Fund State Treasury. ° care assistance fund may be app by F hospl following purposes only; roPr;ated for the to ' tie provide Agthod this (1) for the tY payment of monoy to A count under Section 5,02 of this Act; hospital for o provision of health care aes~ ta to nee to the Indigent by Public WbO u sh a di proportiona allocated as provided by law and for reimbursement who furnish a ovate amount oiled apffa and IARD$ (8) for the provision of Providers care assistance to Indigents. of health care . aaslstane gh any assistance administered by the I y pro children, handicapped or disabled pars department, Inc throuuding Program security or health (4) for the prov(alon of maternal ons, and the aged; Programs for clan) Act (11,B, lant health improvement services end services for few Income Individuals under the Teas Mrnal Health I 1029 and in °thi'r l ,B, Aeta of the 69th Legislature x , ateRegular Sessand ion, Intent ) rlnatel aw providing ing for those health care services; re 'fern to make' it (6) for the pprovlefon of Hma 1988) or under any uaim leeelt the Texas primary rY h3ert'lealth care services for low income individuals under + Regular 8eselon, 198sa1~PCart ces Act (H,B. 1844 116110 hospital (6) for cancer ) or under al,y other law d Acts of the 69th LegJelahire, care illation in the Prevention, cancer treatment, pand medicfor al those ears for t saucer vt Nags; for Indigent I 1m lemanting, and adminfeterin health Cara This notki income or Indigent nt~ivfduals; and roorame for low (8) for any other health care assistance pprnventlve health, or lull Acts $tatu utea). the income or Indigent individuals authorized by law, Acts 1986, 89th Le , nutrition Program for low /d7y.8" ch. I, q 1, etG Sept 1, 1986. rho Meeting ?Chsp4r a9s, sse Ari alet C hospital has sr 14z, see Ark d18ad, the meeting, Title 4 of ails article did not tae oftect be , commbafon• gO" oli 21'~ ppr6dd~ that the title was Conti: 84", 20 did not pass the Regular Session of the )ospltal finds 69th ong j~ad0pplion by the voters of 8,LR. 29 09th Legfeisture. not adopted by'jhSesvo~nd If that amendment was Da Sections 18 and Mal of Acts 1986, 89th Leg., :y, the title had no offeck let C'S" ch. It provide; W$ A~7 +oe'bn. 279 Art, 4438f HEALTH..PUBUC HEALTH.- "Sec, 13. To the extent of any conflict be Ing Articles 2361 and 4487, by repeeBngTitle i rticle ular Session, No i Title 71 pUBL[C No. 20 of the 88th Le gislature, Reg- 4438, and by adding Article 4dd7x; repealing rear ss o 1186, and this Act, thia AcL revaila Art, 4442c, Convaleem regardless of the times of enactment of these ttureti Regular Sesnion9 Act ~ 1 the 0th 1,egVer• two Acts." amending K , r1S., 16, Ir+~' e effect e) Seed DIII EOTAcfs of the ke 8 1921 Atuts}, OO take ons 1 and 2 of this Act ~ptember 1, 1986, but a count Le iature, Regular public hospitah or hospital district is not required Office of the6doverrrmraland BRecdetlon 96 of Arriicle Sec. 2. (a) "]natltutit to provide health taro asefatence as prescribed y and eubetitutin new !anguage and by repeal. f4e1110e8) food and shelt by the IndlgOnt tfeaith Care and Treatment Act, Ing Section to ofg addition, provides minor !t Indigent p by this Act, until September 1, 1988, Reg„ 1st C'S" eb• 1cle V' Acts 1988, 89th Ilcanaed by the Texas 81 health care districts are authorized need beyond the beelo pt by constitutional amendment an Indigent health Croce RN'erenae apply tm I t care district V not requlrec{ to provkte health County hospitals k NO art. 4478 at aq 'airs aeCYtance as bed the Inds gant Maternal and I t Hea11h Improvement t . Aet (1) a hotel or other air. this A Ca urentil sad prescri Treatment Act by ae adopted by see art 447y, n guests; September 1, 1988, or the to on Medical Auietance prop'' (2) a hospital; later. H df8trkt Is created, whichever date in man $eaot Sep a Code 4 82,tlOt et QCq Hu• (8) an eatahli°hment C, ith care ueletaNo provided before Publielud °chpdul~ of expett►ba of taNnp unit or raliglow denomfnattor tember 1 1888, V governed by the taw and In pproviding servlebe ohxsd of the ehtk w . practice in ef'fecf at the time that the assistance U.C.A, Tax Code, r`°~ by ~ artkk, ~ h0 depend , G pprovided, It we and practieea are not ~ .~d the ues of atl,Y d or r of acted by the adoption of the IndJg~nt Noaith Admtngtradre Code Referenese and regul&tj* p~w Care and'ontinu e I Act until September l and 1,1888; D4prirtntent of Hume" S4rvlt'ei, 'rnedieal As. (4 n eehtblDlhment th y ~ a determlaln9 the reeponsibllltles AndtlabAt to fr il des for sleGnee pkgrama, see 40 TARO 46.101; t an la is ' aowlcea rendered before that date," (6)' awhisygtwn of bta Ttfit of Aeh Examibsrel . An Act relatlagg to health care for certain Notes of b"Islons (8) a Winty operated S tndI Ont Ind(vfduab and to flnanoing proviolone including but not)IMlted i i to the establfahment of the Indigent health care 1' Construction and appllcUlon of Mental Health and ltlb assistance fund and the cancer resource fund; The Montague County commfealonere court If, XAS Commiaslon for t8 making, reducingg, and transferring cartaln cep authorized to pap for medical aervtces readewd x" Dep°Ant proprlatbne; relating to ealariea and holtdayro to an Indigent who is'a countl resident but erhe of or stela employees amending t.04 d' ae dose not reside within an area sewed by a public Primarily en gad in emended, by amendingg Sections , 28,00, and hospital or a hospital district 0 ,A realdenta, and sash faotUt 28.0n amending the Revhed Statutes by amend• 1986, No, JM-42b• P tty.den, met standards eatabllshet , {7} a 108ter cars type Apt 4439, ltfepealed by Acts 1977, 86th Leg„ p, 316, eh. 149,'1 1, off, May 13, 1977 Operates under rules can also Bee, now, art, 4477, rules 8 and 19. t1o1t8 or Caarna for, overn regnant women or worn, gad Arts, 4441, 4441L Repealed by Acts 1988, Nth Leg„ P. 2899, ch, 498,0 2, off, ALL, 29, a child bon to them; 1988 who receive maternity c Sea, now, art, 083 1 3.02. consanguinity or affinity, ' pursuance of or as the$ Nothing in this Act shat Art. 4442a-1. Repealed by Acts 1989, 681h Leg• 1012, ch, 236, 8, off, Sept, 1,1883; years of on, agefrom slmulta Acts 1966, 89th I.eg, ' D' years o, , ch, 117, 1 1(b), on. $epi. 1, 1986 Institution also meant Seetlona t to 6 aced 8 to 10 of this article were Section 14 of the 1986 repealing got provides; to fewer than flue P and wk repealed by, the 1988 ro sling at. Section 6A to the ~M tatitor and h • othis artice was repealed by the 1986 repealing (a) Sections 1 through 12 of this Act are manta) )Imitation or both, ~he Intended ea a scodlffeatkn only, and no substan• individual which hall ( e repealed article, the Adult Day Care Act, live change If, the low (a Intended by those I such 1neWtutlon shall be was derived from, sections. IpaWon In the IntermedloU 197 Acts g, p. As pan Acts 10818, Nth Lag,, p 1701, ch, 891, It 1 to of'th¢ state's con nufng h 12 atatuwry rev~ldelon hereafter be amended, Acts 1888,`t 68th Leg„ p, 6163, ch. 998, 1 81 gram, and Chapter 466, Acts of the 00th LoAft. Aft. He,o now "'P C A r Human RReeeoourecs Cod, e, hereon a Texa~ lvllo$t, 1067 atut e){ applies to thos0 (e)) "R tepiten a eg mean 1 108.001 at seq, sections. Ieve! ordinorfl 280 more than two weeeks tors i I 1 0UN1.:v. ,ttl (i f; Wes` 6y5obAt1on71VB 9ERVICH H8 145 f 8 •!A•41••34Z A BILL TO 86 ENTITLED 1 AN ACT 2 relatln9 to the reapenelbility of public hospitals to provide 3 Indigent health care. 4 It IT EHACTLD my Tot LEO1sLATM 01 Tu sTATE Or ums, S AMION 11 6e010n 1,02(10), Indl"nt Health Cara and 6 Treataent Act (Article 4431f, Vernon's Texas Civil statutes), I$ 7 d"Aded to read as tellowa, 1 110) "Public hospl!al" jeans a hospital arced bill) 9 epented(t-•er•ieeasd) by a governmental entity. 10 61CTION 2. section 10,02(x), Indigent Health core and 11 Treatmant Act (Article 44$1f, Yemen's Teats Civil Statutes), is 12 emended tD read at tollows, 13 (a) Each public hospital shall provide health care 14 aeautanes is prescribed by this title to each eligible resident of 16 the eras that the hospital his a legal obligation to &am. tech 16 00461nmsnte1 entity that Dvns AMIF) eperstes)r•er•loae) a public 11 hospital shall provide su(fi0iont funding to allow 06 hospital to lA prevlde the required health aera asletanee as prescribed by 19 section 12.03 of this Act, 20 8EOT20N 3. loetions 12.03 and 14,01, indigent Health Care 21 and Treatment Act (Article 4431[, Varnen's Taxa Civil 6tatutea), 22 its emended to road as (ollova, 23 W. 12.01. 11AMNSIBILITY Or OOVttio"A6 twiTY, Each , 24 gevsrnmental entity that owns !q4(r) epsata(r•er-i•aea) a public 10111140 CBH•D 1 , , hospital Will provide sufficient tundinq to the hospital to 1 siU r•Jaarwyiri90ir•YAe•aaU•w• Nue•-ef••Y►e••prli4s••herptes{ 2 provide the health vary assistance required by this Act. It a 2 see►•aea atsseaeha•gey ermsuesi-snH Sy b-sYie9a4se a•u•esolirw•es 3 public hospital is owned AN ri oparated)r•se•isseN~ by a hospital J serrs••seswenre•-rho--wen-•siasiLle••ser-•asebesase••arrsa0•-she 4 authority, the governmental entity that created or authorised the 4 keaplesiie•IeaY•,ril•eparaYiat9•Year-4hea•eaaed••Leiwa-aearary1r 5 creation of the authority shall provide sufficient funding to the 6 t90ir••er••YMe••eYifgestea••ea•prw4da•Yhe•heaNh•sua earraaes-ohs 6 public hospital or hospital authority to provide the health dare d prYiN•MeapaesL•psevis•d•drrespYhaY•paraH). 7 assistance required by this Act. 7 MUCH 4. It a governmental ontity that owned but d/d not a too. 14,01. LrrtCT Or TKANSrtR. jgj Notwithstanding any 6 operate a public hospital sold, leased, or tranefarrod control at 9 other prevision of law, It a aoyrnaental entity, at owned. 9 the hospital before the effective data of this hot and therefore \ 10 pperated or lasted a f yO1io hospital sold or },geae that homes 10 easwed responelbillty for providing Indigent health sera unMr 11 t"o anon person on or attar January 1 1986 but before September 11 Section 14.01, Indigent Health Cara end Tedatwat Act (Article 12 11, 19M the. governmental ontity aseumad the obliastion to provide 12 44301, Wrnon's Tema Civil Statutes), the govermentai ontity'• 13 jbe a" gar* seslatlngo_undar this hot that the hospital would 13 responsibility ands on the effective data of this Act, 14 have.had on lootmftr 3, 1906, If the hospital had rgj. mA_Sg d n 14 SECTION S. This Act taxes offset September 1, 1961. 16 laesed. iL a aovernaNntal entity that owns and operates • public is SICTION 6. The importance of this legislation and the 16 hospital, tells, lessee, or sr(inaLera controS oL that hospital to 16 crowded condition of the calendars in both houses create an 17 another._ Person on or after September 1. 1966 the aovernmental 17 eaergancy and an laperatlve public necessity thitt the r 1S 0ntity_ssm)sss that hospital's oblication to provide health oars 10 constitutional rule requiring bills to lit read on three several E 19 a16 t6p~y)}~,p sa Aes. 19 days in each house be depended, and this rule is hereby Suspended. 20 ibl A dovsrn entel entity that sells, losses. or teansfera, 21 control of a Oubllo hospital to another person and tharsby _essuiiu 22 the hospital'1 _obllaatlon to ortylo Milth oars snl•tanca under 23 ,V" Acq„ayUy 6dool the ellaibillty Itandards the w4blia hospital 24 was or_would _hove been reelulted tO adopt and aha'1 provide he sans 25 esrvlces the le hsesital wes Or would hove been r%Nir•d to 26 pjavlde.under this Act )prm44a•hespNai•esadr•eporeab•es••ieaeN 27 liy •a9wernmeRYS1•eaYNyse•esia•es•lsesed•es•aresher•psnea•ea•es 7081140 CbH•D 2 70R1140 CBN•D 3 Possible Questions for Charles B. Linton Chief Executive Officer Flow Memorial Hospital i 1. I know you have stated this in the past, but could you summarize the factors which have contributed to Flow's poor financial condition. i 2. You did not mention as r factor which has drained the Hospital's reserves, anti capital expenditures which have been made in the past couple of years. Could you tell us about any major capital purchases which have had a negative influence on the financial condition of the Hospital? i 3. It has been reported in the community, that among such major purchases were a CAT scan and a new computer. Could you tell us about these purchases and the benefits which you have derived from these major purchases? 4. To your knowledge was permission sought from either the County or the City prior to makinr these purchases? 5. You heard the City Manager state two weeks ago that $200,000 could be freed up in this year's budget if the Council is willing to cancel the summer street program and not hire the three patrol officers which had been planned. In view of the size of the funding request you have made this evening and in past written communications, how could you effectively use $200,000 to help keep the Hospital going? 6. How much time would such a $200,000 donati~jn buy us in keeping the Hospital functioning? 7. What is the long term prospect of keeping the Hospital functioning in its current state without substantial operating subsidies from the City and/or the County? 8. Does the Board and/or Management have the responsibility to insure the balancing of Hospital expenses with income without outside contribution? 9. What steps can the Flow Board and Management take to insure continued operations until a Hospital District vote can be taken? k Questions for Charles Linton Page 2 10. What are your plans regarding the payment of the tlOro o0 outstanding hospital utility bill for services rendered by the City? When could we realistically expect payment of this past due utility bill and payment for future services provided by our utility system? 2607C r I I i FLOW MEMORIAL HOSPITAL FINANCIAL ANALYSIS PROJECT PROJECT STATUS STATEMENT In accordance with the contract, the Coordination Committee has received an oral report outlining preliminary findings related to the Hospital's fiscal year's projected deficit. The project is on schedule and a draft of the Final report will be delivered to the Committee the week of April 13, 1987, Based on current operating practices, the findings indicate a projected income deficit in the range of $200100,0 per month. The final report will address this projection in greater detail and present the financial implications over a longer term, lc: 3404M M VIC BURGESS JUDGE COUNTY COURT Of DENTON COUNTY 612 JOSEPH A. CARROLL COURTS SUILDINO 4,31 W. HICKORY DENTON, TEXAS 76201 (017) 606-0506 1 October 7, 1987 i Mr. Charles Linton ! Flow Hospital 1310 Scripture Denton, TX 76201 Dear Charles: The p purpose of this letter ot0 advisp insp)ctuFlow tHothe spital: 11 Karen Venable Public Leasinq Corp. 5909 Luther Ldne Dallas, TX 75225 2. Dave Lynch Lyntex Investments 2711 Valley View, suits 108 Dallas:, TX 3. Richard Urquhart Continental Medical Two Ravinia Drive, Suite 910 Atlanta, OA 30346 41 Sheldon Lutz Vice-President, Republic Health 15303 Dallas Parkway, Suite 1400 Dallas, TX 75248 51 Dr. Andrew Rosenthal 2709 Meadowbrook Court Plano, TX 75075 A copy of this letter is being sent to the City of Denton. Sincerely, VIC BURGESS VB:ja County .7udgv Oct Attorney Jim Allison, Allison & white Llnvd Harrell, Denton city Manager Couvty commissioners r CIrV of DFNTON,TEXAS MUNICIPAL BUILDING / DENTON, TEXAS 78201 / TELEPHONE (817) 686.8307 Office of the City Maneper October 8, 1987 Mr, Charles Linton Administrator Flow Hospital 1310 Scripture Denton, TX 76201 Dear Charles: Per the agreement at the negotiating session held on October 1, 19870 Denton County was to tak3 the lead in securing offers from third parties regarding Flow Hospital, The City of Denton concurred with the County taking the leadership in this effort. We have been advised that the following five individuals have been given permissiun by the County to inspect Flow Hospital, 1, Karen Venable Public Leasing Corp, $909 Luther Lane Dallas, TX 75225 2. Dave Lynch Lyntex Investments 2711 Valley View, Suite 108 Dallas, TX 3. Richard Urguhart Continental Medical Two Ravinta Drive, Suite 916 Atlanta, GA 30346 4, Sheldon Lutz Vice-President, Republic Health IS303 Dallas Parkway, Suite 1400 Dallas, TX 75248 5, Dr, Andrew Rosenthal 2709 Meadowbrook Court Plano, TX 75075 ilipw Individuals to Inspect Flow October 8, 1987 Page 2 In accordance with the agreement of October I 1987, please consider this letter as authorization on behalf of the City of Denton for these individuals to inspect Flow Hospital. Very ruly yours, L1 d V, Harrell City Manager dm cc: Mayor Ray Stephens l City Council Members Vic Burgess, County Judge Debra Drayovitch, City Attorney 36S9M i ClrY0f0BNr0N, r6XA8 MUNICIPAL. BUILDING I DENrON, TEXAS 76201 / TELEPHONE($17) 8ee•8307 October 7, 1967 OHIO* of the 0ty Manager Mr. Charles Litton Administrator Plow Memorial Hospital 1310 Scripture Denton, TX 76201 Dear Charles: ppermission on u best, lfpl ofSetheonCityr fora representativesgifrom Presbyterfan Hospital to examine the facilities and records of Flow Memorial Hospital, These individuals have made contact with the City and have received permission and encouragement to examine the Plow facility, Thank you for your consideration, If you have any questions, please feel free to contact me, Very ly yours, L1 y V, Harrel! City Manager dm cc: Ray Stephens 36S6M CITY of DBNTON, reXA$ h UINICIPAL BUILDING / DENTON, TEXAS 76101 / TELEPHONE (817) $66.8100 November 3, 1987 I Mr. Charles Litton Flow Hospital 1310 Scripture Denton, Texas 76201 Dear Mr. Litton: Please be advised that the following individual is authorized to inspect Flow Memorial Hospital: Mr. Oene Chapman 210 South Cedar. Road Duncanville, Texas 75116 Thank you for your cooperation, Since ely, ~r'~ 0 V. Harrel City Manager Ss 20689 low. VIC BURGESS 7*~ JUDGE 1 (~Jj ! OCT 1 51987 COUNTY COURT OF DENTON COUNTY 812 JOSEPH A. CARROLL COURTS BUILDING ~I• L..-- 401 W. HICKORY 61TY OF Pi I DENTOMEXAS 76201 • CITY MAPfAC!! `I i' c i (817) 666-8686 OtM I'Ml'"M+H W ~ 0.m IN4 r~~l October 13, 1987 Mr. Charles Linton Flow Hospital 1310 Scripture Denton, TX 76201 I Dear Charles: Please add the following name to those individuals who are authorized to inspect Flow Hospital> Mr. Bill Williams Presbyterian Hospitals 400 Olive Street Dallas, TX 75201 Yours truly, VIC BURGESS County Judge VB>ija cc: Attorney Jim Allison, Allison & White Lloyd Harrell, Denton City Manager County Commissioners Mr. Bill Williams FIOW 13 10 DenSerlpture ton, TX 76201 MEMORIAL HOSPITAL (817)387.6881 BOARD Or DIRECTORS Mr. J. Raymond David Mr. W. Keith Pate Post Office Box 278 Post Office Box 387 Pilot Point TX 76258 Sanger TX 76266 f 817-686-5526 0 817-458-7722 H 686-2071 H Mr. David W. Finch Mr. Michael J. Whitten Post Office Box 2606 218 North Elm Denton TX 76202 Denton TX 76201 817-565-1813 0 817-387-9551 0 566-8781 387-5329 H Officer: Secretary Officers Chairman Dr. Don F. Holt Mrs. Mary H. Williams 1614 Scripture 2515 Jamestown Denton TX 76201 Denton TX 76201 817-383-1578 0 817-387-5497 H 383-4376 Officer: Vice Chairman Mr. J. Stanley Monroe 1822 North Bell Avenue Denton TX 76201 817-387-6625 H Ex officio 1. Dr. Charles D. Hopkins Mr. Charles 8. Linton suite 10 Chief Executive Officer 1614 Scripture Flow Memorial Hospital Denton TX 76201 817-566-8081 0 817-383-6400 0 Medical Staff President 1987-1988 rlc~l~. First Texas Medical Center • Denton t' i~r r Gente)' ~i~ . lllt'ttlia/t April 26, 1985 I i Mr, Jim Riddlesperger Denton City Council ` 215 8. McKinney I` Denton, Texas 76201 Dear Mr. Riddlespergert It has come to my attention that Dr. Robert Lockwood was appointed to Medical Director of Flow Hospital In the April 18th meeting of the Board of Directors for a salary of approximately 4)50,000.00 a year. I feel like this is a gross injustice in that this position in the past has been on a voluntary baste, The hospital is suffering a severe financial crises and physicians who provide primary care, as far as I know, were not consulted about this particular appointment. I would be happy to serve ;;n this capacity. I think most doctors on the staff agree that this i.i a gross overcompensation and would be happy to serve at a much loner salary. I am enclosing a copy of the memorandum from Mr. Hausler regarding the appointment of Dr, Lockwood and his duties. If you have any questions, please contact me at my office. I appreciate your interest in this matter. Sincerely, Frank McGehee, M. D. Dept. of Pediatrics FTM/ld 2S09 Scripture + Denton, Texas 76201 • (817) 382-25211 µ 13 10 Scripture Street r6(" HOW ~ MEMORIAL HOSPITAL Denton, TX 78201 a" (817) 387.5881 JEFFREY E. HAUSLER ADMINISTRATOR April 22, 1985 h~ M E M O R A N D U M Tot All Members of'the Medical Staff F'ROMi Jeffrey E. Hausler SUBJECT: :Z edica1 Director At the April 18 meeting of the Board of Directors of Flow Memorial Hospital it was agreed to appoint Dr. Robert Lockwood as medical Director. P-ononsibilities of this newly created position include the follows t 1) Accountability of the organized medical staff including assurance of standards of care, proper organization and functioning of medical staff committees, and appropriate and timely credentialing, 2) Liaison between medical staff and hospital management, 3) Consultation to all hospital departntentti and services as necessary, 4) Certain administrative duties, sv.ch as participation in budgeting and planning efforts. This position of Medical Director shall, in a sense, compldment the position of Chief of Staff and at the same time relieve the Chief of staff of seemingly ever growing burdens of medico- administrative responsibilities. This position becomes effective May 1, 19850 and I know I speak for the Board in sayying that we hope this newly created position adds greater effectiveness to our medical staff organization. JEH/kt V ,