Department of Health Three Capitol Hill Providence, RI 02908-5097 TTY: 711 www.health.ri.gov
24 June 2015
Russell Gross 117 Ellenfield Street Providence, RI 02905 Dear Mr. Gross: This is in regard to the Certificate of Need application filed on 10 June 2015 by Rhode Island Hospital to establish a Rhode Island Hospital Bone Marrow Transplantation Program in Exeter. In accordance with section 9.7 of the Rules and Regulations for Determination of Need for New Health Care Equipment and New Institutional Health Services (R23-15-CON) (“CON regulations”), staff has reviewed your proposal and determined that the application as submitted is not acceptable in form. The deficiencies identified by staff in the initial review for completeness are as attached. Please resubmit 3 complete paper copies of the revised application that corrects the deficiencies to the Office of Health Systems Development, Rhode Island Department of Health, Three Capitol Hill, Room 410, Providence, Rhode Island 02908 and a full electronic copy (pdf) by e-mail to
[email protected] or on a thumb/flash drive by no later than 3 July 2015. If you have any questions, please contact me at (401) 222-2788.
Sincerely,
Michael. K. Dexter Chief Office of Health Systems Development
Rhode Island Hospital Bone Marrow Transplantation (BMT) Program CON 24 June 2015 1. Question #1, please indicate the status of the planned agreement with Dana Farber Cancer Institute to provide stem cell laboratory support services for the proposed BMT program. The Dana Farber Cancer Institute (DFCI) and Rhode Island Hospital (RIH) leadership teams have met twice to develop a draft scope of services that DFCI would provide in support of the proposed RIH BMT program, including an outline of the proposed process for stem cell processing and documentation required to meet reporting regulations. In addition, the Blood Bank Medical Director and team have made a site visit to DFCI, and the DFCI team has visited RIH; and both institutions have signed a non-disclosure agreement to share the necessary confidential information to reach agreement. DFCI and RIH plan to continue to refine the process and the scope of services to be provided, and anticipate having an executed agreement before the state agency review of the application has completed. The response to Question #1 has been revised to reflect this status. 2. Question #7 A, please clarify whether Rhode Island Hospital is expected to qualify as a Center of Excellence for BMT and, if so, when is it expected that this designation will be attained. The response to Question #7A has been modified to add the following: As the RIH BMT program is implemented and begins to mature, RIH plans to work towards a designation as a BMT Center of Excellence (COE). Qualifying for and attaining designation as a BMT COE is multi-year process requiring certain information focused on utilization and outcomes, with some criteria required for COE designation varies among Payors. In the interim and consistent with hospital policy, RIH will treat any patient who is referred for BMT and will work with patients in accordance with RIH’s Financial Assistance policy. 3. Question #7 F, please provide the source(s) of the data used to complete these tables. The sources of the data used to complete the Tables in Question 7F are as follows: a. FY 1997 - FY 2013 RI Hospitals Market Data from Truven Health Analytics. b. FY 1997 - FY 2012 MA Hospitals Market Data from the Massachusetts Health Data Consortium (MHDC). c. FY 2013 MA Hospitals Market Data from the Massachusetts Center for Health Information and Analysis (CHIA).
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4. Question #16, please note that no physician staffing is indicated in the table as being dedicated to this program. Please revise the table or provide an explanation. The incremental physician staffing was incorporated into the Management staffing line, and represents 0.6 FTE and $169,000 in Payroll w/Fringes. The response to Question #16 has been revised to separately identify the incremental physician staffing, with the Management staffing line reduced accordingly, with no change to the overall total. 5. Question #18, please include a column with information for the ramp-up year (2016). The response to Question #18 has been revised to add separate tables at the end of the response for the ramp-up year, FY2016, which is based on 15 adult discharges, 5 pediatric discharges and 800 outpatient visits. 6. Question #18, please identify the units of service related to the figures 27 and 1,080. Is the 27 the number of patients? Is the 1,080 the number of associated patient visits? The two sections in each of the Service Unit Tables in the response to Question 18 are labeled as Discharges and Outpatient Visits, and have been underlined to stand out. The 27 is listed in the Discharge Table and represents the 27 discharges projected for the first full year of operation. The 1,080 is listed in the Outpatient Table and represents the 1,080 Outpatient Visits projected for the first full year of operation. 7. Question #18 and #19, please reconcile the net patient revenue as question #18 shows $4,518,000 and question #19 shows $4,427,000. RIH no longer accounts for Bad Debt as a separate line item of expense, but rather accounts for it as an offset to net patient revenue. For the purposes of the CoN, Bad Debt was accounted for as a separate line of expense in the response to Question #18 in compliance with the Table in the CoN application. However, the response to Question #19 accounted for Bad Debt as an offset to expense. The response to Question #19 has now been revised to be consistent with the response to Question #18 with Bad Debt accounted for as a separate line item of expense thereby increasing the total net patient revenue to $4,518,000 consistent with the response to Question #18.
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8. Question #19, please recheck the numbers and percentages as the sum of the cells in the columns do not appear to equal the totals. The numbers and percentages have been rechecked so that the sum of the numbers and percentages on the cells in the columns equal the total, consistent with the revision to Question #19 noted in the response to Deficiency #7 above. In addition, please note that the Self-Pay numbers were inadvertently omitted in the original response. 9. Question #26 B, please describe the quality assurance program for the proposed BMT program. The response to Question #26B has been revised to refer to the RIH BMT QA policy attached to the CoN, and with the following summary of the policy. RIH has developed a very detailed QA policy specific to its proposed BMT program that addresses each area of the proposed program, and which all hospital staff involved with the BMT program will be trained on as part of the implementation of the program. The policy includes sections on Quality Assessment of Apheresis Documentation; Collection, Management and Maintenance of Transplant Data; How to Register a Donor for a BMT Recipient; Criteria for Recipient Selection and Evaluation; Use of a Mis-Matched Donor; Criteria for Donor Selection, Evaluation and Management; Administration of Growth Factors; GVHD Prophylaxis and Treatment; Transplant Physician On-Call Coverage; Related Donor Allogeneic Cell Counts for Reinfusion; Process to Document Planned and Unplanned Deviations; Infection Prevention and Control for the Immunocompromised Patient; Coordination, Approval, Review and Distribution of Policies/Procedures of the Insert Bone Marrow Transplant Program; Transplant Physician Maintenance of Cognitive and Procedural Skills; Pre Bone Marrow Transplant Coordinator; Criteria and Responsibilities of the Bone Marrow Transplant (BMT) Program Medical Director; How to Register a “National Marrow Donor Program” Donor”; Patient Education; Assigning Unique Patient Number (UPN); Therapeutic Apheresis Nursing Training Program; Blood and Marrow Transplant Physician Competency; Consent for Marrow Harvest; and Patient Education Review.
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10. Appendix D #1, please provide a schematic and a net change in space form for the adult BMT unit. Appendix D has been revised to include both a schematic and a net change in space form for the adult BMT unit.
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If there are any additional changes to the responses in the application as filed on 10 June 2015 and as resubmitted herein that were not identified as a deficiency by this letter, please identify these changes on a separate piece of paper and include the question number and the reason for the change. The response to Question #26C has been revised as follows: Please see Attachment 3, RIH BMT QA Policy, specifically developed for the proposed BMT program. RIH has developed a very detailed QA policy specific to its proposed BMT program that addresses each area of the proposed program, and which all hospital staff involved with the BMT program will be trained on as part of the implementation of the program. The policy includes sections on Quality Assessment of Apheresis Documentation; Collection, Management and Maintenance of Transplant Data; How to Register a Donor for a BMT Recipient; Criteria for Recipient Selection and Evaluation; Use of a Mis-Matched Donor; Criteria for Donor Selection, Evaluation and Management; Administration of Growth Factors; GVHD Prophylaxis and Treatment; Transplant Physician On-Call Coverage; Related Donor Allogeneic Cell Counts for Reinfusion; Process to Document Planned and Unplanned Deviations; Infection Prevention and Control for the Immunocompromised Patient; Coordination, Approval, Review and Distribution of Policies/Procedures of the Insert Bone Marrow Transplant Program; Transplant Physician Maintenance of Cognitive and Procedural Skills; Pre Bone Marrow Transplant Coordinator; Criteria and Responsibilities of the Bone Marrow Transplant (BMT) Program Medical Director; How to Register a “National Marrow Donor Program” Donor”; Patient Education; Assigning Unique Patient Number (UPN); Therapeutic Apheresis Nursing Training Program; Blood and Marrow Transplant Physician Competency; Consent for Marrow Harvest; and Patient Education Review.
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Please provide the following attestation: “I hereby certify that the information contained in this application is complete, accurate and true.”
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Certificate of Need Application Form Version 05.2013
Name of Applicant Title of Application
Rhode Island Hosoital Rhode Island Hos~ital Bone Marrow Trans~lantation Pro2:ram
Date of Submission
July 3, 2015
_x_ Regular Review Accelerated Review (provide letter from the state agency) Expeditious Review (complete Appendix A) Type of review Tax Status of Applicant
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- - For-Profit
Non-Profit
Pursuant to Chapter 15, Title 23 of The General Laws of Rhode Island, 1956, as amended, and Rules and Regulations for Determination of Need for New Health Care Equipment and New Institutional Health Services (R23-15- CON). All questions concerning this application should be directed to the Office of Health Systems Development at (401) 222-2788. Please have the appropriate individual attest to the following: "I hereby certify that the information contained in this application is complete, accurate and true. "
7. 2-15 d dated by the President or Chief Executive Officer
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Rhode Island Department of Health Office of Health Systems Development Three Capitol Hill, Room 410 Providence, RI 02908-5097 Phone: (401) 222-2788 Fax: (401) 222-3017 www.health.ri.gov/hsr/healthsystems/index.php
Certificate of Need Application Submission Instructions Please submit 3 paper copies and an electronic copy [to:
[email protected] ] of the completed application by 10 June 2015 (for non expeditious applications) to the Office of Health Systems Development, Rhode Island Department of Health, 3 Capitol Hill, Room 410, Providence, Rhode Island 02908. No application shall be accepted for review without a Letter of Intent submitted at least 45 days in advance by 26 April 2015 (for non expeditious applications). Upon submission, the application will be reviewed for acceptability, and within ten (10) working days the applicant will be notified of any deficiencies if the application has been found not acceptable in form. Applications found substantially deficient may not be reviewed in the current cycle. This application should be completed only after a thorough review of Chapter 15, Title 23, of the General Laws of Rhode Island 1956, as amended, and the Rules and Regulations for Determination of Need for New Health Care Equipment and New Institutional Health Services (R23-15 CON): http://www2.sec.state.ri.us/dar/regdocs/released/pdf/DOH/5342.pdf Full responses to each question must be submitted and references to other responses shall not be accepted as a complete response. Attachments must be listed under an individual tab at the end of the application form. Applications should not include the instruction pages nor appendices not applicable to the proposal. The applications must be submitted in a soft bound format to facilitate the mailing of the application to the members of the Health Services Council. A table of contents must be included to identify the specific location of responses to questions. Follow-up Questions: Additional questions will be sent to the applicant to supplement the information on the record specific to the proposal once the application is accepted for review.
Consultants, Legal and Application Fee Instructions Consultants: The state agency may in effectuating the purposes of Chapter 23-15 of the Rhode Island General Laws, as amended, engage experts or consultants including, but not limited to, actuaries, investment bankers, accountants, attorneys, or industry analysts. Except for privileged or confidential communications between the state agency and engaged attorneys, all copies of final reports prepared by experts and consultants, and all costs and expenses associated with the reports, shall be public. All costs and expenses incurred under this provision shall be the responsibility of the applicant in an amount to be determined by the Director as he or she shall deem appropriate, the amount not to exceed $22,810. An application shall not be considered complete unless an
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agreement has been executed with the Director for the payment of all costs and expenses, if determined by the state agency that such an agreement shall be required. Legal: The state agency may engage legal services for the review of the application. All costs and expenses incurred shall be the responsibility of the applicant [pursuant to Chapter 23-1-53 of the Rhode Island General Laws]. An application shall not be considered complete unless an agreement has been executed with the Director for the payment of all legal services costs and expenses, if determined by the state agency that such an agreement shall be required. Application: Pursuant to Chapters 23-15-10 and 23-15-11 of the Rhode Island General, the application fee requirements are as follows (health care facilities owned and operated by the State of Rhode Island are exempt): o The application fee shall be paid by check and made payable to the Rhode Island General Treasurer, o Application fees for applications accepted for review shall be non-refundable. Should your application be deemed unacceptable for review, the check for the application fee will be returned. o The application fee formula is: base rate + (0.25%*capital cost) Application Type Base Rate Regular Review* $ 500 Accelerated Review* $ 500 Expeditious Review* $ 750 Tertiary or Specialty Care Review** $ 10,000 *for non tertiary or specialty care review projects **this rate applies to any application that checks off “5 H“
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Table of Contents: Question Number/Appendix 1 2 3 4 5 6 7A 7B 7C 7D 7E 7F 7G 7H 8A 8B 9 10 A 10 B 10 C 11 12 13 14 15 16 17 18 19 20 A 20 B 21 22 23 24 25 26 A 26 B 27 C 27 28 29 A 29 B
Page Number/Tab Index 1 2 2 3 3 4 5 7 7 8 12 12 19 19 20 22 22 23 24 24 25 25 25 25 25 26 26 27 30 31 31 31 32 32 33 33 34 34 34 35 36 36 36
Question Number/Appendix
Page Number/Tab Index
29 C 29 D 29 E 30 31 32 33
37 37 37 37 37 38 38
Appendix B Appendix D Appendix G Attachment 1 Attachment 2 Attachment 3
Tab B Tab D Tab G Tab 1 Tab 2 Tab 3
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PROJECT DESCRIPTION AND CONTACT INFORMATION 1.)
Please provide below an Executive Summary of the proposal.
Rhode Island Hospital (RIH) proposes to implement an adult and pediatric Bone Marrow Transplantation (BMT) program to serve patients in Rhode Island and Southeastern Massachusetts who now travel to Boston and other locations in the United States for this treatment. The proposed program will consist of a two bed adult BMT unit and a two bed pediatric BMT unit to provide allogeneic and autologous bone marrow transplants. This program will build upon the continuum of cancer services already provided at RIH including the full range of screening, diagnostic procedures, radiology, surgical treatment, chemotherapy, radiation (including gamma knife), radio-frequency ablation, and cutting edge research. The only standard cancer treatment service not currently offered at RIH is BMT. While BMT would be a new program at RIH, there are a number of physicians and staff at the hospital who have established a solid record in this service in other locations. In addition, new physicians, nurses and multiple members of a collaborative team will be recruited to establish this new program. These individuals will interact with other members of the hematology/oncology division to provide overall support for the treatment of hematologic malignancies. The adult inpatient BMT unit will utilize two of four beds on the North wing of the 8th floor of the Zecchino pavilion (Main Building) designed to care for immuno-compromised cancer patients who have lymphoma, leukemia, and other myloproliferative disorders, as well as patients suffering from chemotherapy induced immuno-suppression complications. Since these patients have similar requirements as BMT patients, two of the beds can be used for the proposed BMT service, if approved. Both immuno-suppression and BMT patients need to be in an isolated area away from other patients since they are exquisitely susceptible to infection; they need to have special air filters for the air in their rooms (HEPA filters) and careful ongoing quality control for all water on the unit. Of most significance, they require highly specialized dedicated nursing to care for their unique needs related to painful mucositis, severe diarrhea, frequent lung, skin, intravenous line and rectal infections. Outpatient care for adult BMT patients will be provided in the existing Comprehensive Cancer Center located in the Ambulatory Patient Care (APC) Building on the RIH campus. The pediatric unit will be located in two beds on the 5th floor of Hasbro (the pediatric division of RIH), originally designed for BMT patients with some improvements to be made, with the outpatient pediatric BMT unit integrated into the pediatric oncology program located on the first floor of Hasbro. The Dana Farber Cancer Institute (DFCI) intends to provide Stem Cell laboratory support services for the RIH BMT program. Autologous stem cell products harvested and procured at RIH would be transferred to the stem cell laboratory at DFCI for processing and cryopreservation. Cryopreserved stem cells would be shipped from DFCI to Rhode Island for subsequent autologous transplantation.
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The Dana Farber Cancer Institute (DFCI) and Rhode Island Hospital (RIH) leadership teams have met twice to develop a draft scope of services that DFCI would provide in support of the proposed RIH BMT program, including an outline of the proposed process for stem cell processing and documentation required to meet reporting regulations. In addition, the Blood Bank Medical Director and team have made a site visit to DFCI, and the DFCI team has visited RIH; and both institutions have signed a non-disclosure agreement to share the necessary confidential information to reach agreement. DFCI and RIH plan to continue to refine the process and the scope of services to be provided, and anticipate having an executed agreement before the state agency review of the application has completed. 2.)
3.)
Capital Cost
$729,996
Operating Cost Date of Proposal Implementation
$4,972,000
From responses to Questions 10 and 11 For the first full year after implementation, from response to Question 18
February /2016
Month and year
Please provide the following information:
Information of the applicant: Name: Address:
Rhode Island Hospital 593 Eddy Street, Providence, RI
Telephone #: Zip Code:
(401) 444-4000 02903
Information of the facility (if different from applicant): Name: Address:
Same
Telephone #: Zip Code:
Information of the Chief Executive Officer: Name: Address: E-Mail:
Margaret Van Bree 593 Eddy Street, Providence, RI
[email protected]
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Telephone #: Zip Code: Fax #:
(401) 444-0054 02903 (401) 444-4218
Information for the person to contact regarding this proposal:
Name:
Address:
Jodi Bourque & Russell Gross 167 Point Street, Providence, RI (Bourque) 117 Ellenfield Street, Providence, RI (Gross)
E-Mail:
[email protected] [email protected]
4.)
Telephone #:
Zip Code:
Fax #:
(401) 444-3103 (Bourque), (401) 444-7423 (Gross)
02903 (Bourque) 02905 (Gross) (401) 444-6206 (Bourque) (401) 444-4857 (Gross)
Select the category that best describes the facility named in Question 3. Freestanding ambulatory surgical center
Home Care Provider
Home Nursing Care Provider
X
Hospital
Hospice Provider Inpatient rehabilitation center (including drug/alcohol treatment centers) Multi-practice physician ambulatory surgery center Multi-practice podiatry ambulatory surgery center Nursing facility 5.) A. B.
C.
Other (specify):
Please select each and every category that describes this proposal. ___ construction, development or establishment of a new healthcare facility; ___ a capital expenditure for: 1. ___ health care equipment in excess of $2,383,575; 2. ___ construction or renovation of a health care facility in excess of $5,561,675; 3. ___ an acquisition by or on behalf of a health care facility or HMO by lease or donation; 4. ___ acquisition of an existing health care facility, if the services or the bed capacity of the facility will be changed; ___ any capital expenditure which results in an increase in bed capacity of a hospital and inpatient rehabilitation centers (including drug and/or alcohol abuse treatment centers);
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D.
E. F. G. H.
___ any capital expenditure which results in an increase in bed capacity of a nursing facility in excess of 10 beds or 10% of facility’s licensed bed capacity, whichever is greater, and for which the related capital expenditures do not exceed $2,000,000 X the offering of a new health service with annualized costs in excess of $1,589,050; ___ predevelopment activities not part of a proposal, but which cost in excess of $5,561,675; ___ establishment of an additional inpatient premise of an existing inpatient health care facility; X tertiary or specialty care services: full body MRI, CT, cardiac catheterization, positron emission tomography, linear accelerators, open heart surgery, organ transplantation, and neonatal intensive care services. Or, expansion of an existing tertiary or specialty care service involving capital and/or operating expenses for additional equipment or facilities; HEALTH PLANNING AND PUBLIC NEED
6.)
Please discuss the relationship of this proposal to any state health plans that may have been formulated by the state agency, including the Health Care Planning and Accountability Advisory Council, and any state plans for categorically defined programs. In your response, please identify all such priorities and how the proposal supports these priorities. To the Applicant’s knowledge, there is no State Health Plan currently in effect for the State of Rhode Island. The Applicant is aware of both the 2013 and 2007 Rhode Island Cancer Prevention and Control Plans published by the Department of Health and the Partnership to Reduce Cancer in Rhode Island. With regard to the 2013 Plan, such plan’s primary focus is on prevention of cancer by addressing individual behavior (i.e., smoking and obesity) and not on cancer treatment. However, the 2013 Plan includes the following Goal: Increase access to optimal treatment for all Rhode Islanders diagnosed with cancer. This goal is addressed by the instant proposal as access to bone marrow transplant services in a Rhode Island academic medical center and access to in-state bone marrow transplant services of any kind for children improves treatment for Rhode Islanders. With respect to the 2007 plan, this proposal supports three of the goals of that plan: Goal 3. Ensure access to cancer care for all RI residents; Goal 4. - Improve the quality of cancer treatment provided in Rhode Island; and Goal 5. - Enhance the treatment experience for cancer patients. This proposal will support each of these goals through the provision of a tertiary academic medical center based adult and pediatric BMT program providing a full range of support services and medical subspecialties. As there is currently no pediatric BMT program available in the state, access to care in RI for all pediatric patients is critical to the patient and their family. Travel, lodging, loss of income and stress on the child and family are all emphasized by no program in our state. In addition, 65% of adult residents elected to go out of state for their transplant (140 of 216, FY’11 through FY’13). This percentage of
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adults seeking care outside RI speaks to a lack of access to an expected level of care. The 24/7 dedicated physician coverage, which the existing adult BMT program in the state does not provide, exemplifies the level of dedicated medical subspecialties that RIH can bring to this program to improve the quality of cancer treatment provided in Rhode Island. Having a tertiary academic medical center based adult and pediatric BMT program available in the state will not only alleviate the need for patients to travel out of state for their transplant, but will also enhance the continuity of care by being able to receive their pre and post-transplant care all at the same healthcare provider location. 7.) Please discuss the proposal and present the demonstration of the public need for this proposal. Description of the public need must include at least the following elements: A. Please identify the documented availability and accessibility problems, if any, of all existing facilities, equipments and services available in the state similar to the one proposed herein: Name of Facility/Service Provider Roger Williams Medical Center
List similar type of Service/Equipment
Documented Availability Problems (Y/N)
Documented Accessibility Problems (Y/N)
Distance from Applicant (in miles)
Adult BMT
Y
Y
3 Miles
There is currently no pediatric BMT service in RI. Thus there is no local availability or access for pediatric patients and their families who must bear the additional cost and hardship of traveling outside of RI for their transplant. In addition, the availability of and access to the existing adult BMT service in the state could be restricted based upon the patients’ insurance carrier. Some Employer Groups and Health Plans may limit transplants such as BMT to providers who have earned Center of Excellence (COE) designation based on quality, cost, outcomes, and volume, and other criteria. Below is a summary of some of some the top Health Plans and their BMT COE’s in RI, MA and CT. Note that RWMC is not a COE for these Plans.
Aetna
CONNECTICUT Yale-New Haven (Adult)
MASSACHUSETTS Beth Israel Deaconess (Adult) Brigham & Womens (Adult) Boston Children's (Pediatric) Dana-Farber (Adult) Mass General (Adult) Tufts Med Ctr (Adult)
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RHODE ISLAND NA
Optum
Yale-New Haven (Adult)
Beth Israel Deaconess (Adult) Dana-Farber (Adult) Mass General (Adult) Tufts Med Ctr (Adult/Pediatric) Boston Children's (Pediatric)
Blue Distinction
CONNECTICUT Yale-New Haven (Adult)
MASSACHUSETTS Beth Israel Deaconess (Adult) Boston Children's (Pediatric) Dana-Farber (Adult) Mass General (Adult) UMASS Memorial (Adult)
Cigna
Yale-New Haven (Adult)
Boston Children's (Pediatric) Dana-Farber (Pediatric) Tufts Med Ctr (Adult) UMASS Mem Med Ctr (Adult)
NA
RHODE ISLAND NA
NA
Since RWMC may be considered out-of-network for some of these plans based on the COE requirements for these providers, they may not cover BMT at RWMC which potentially could make the RWMC BMT service cost prohibitive for patients covered by these providers. As the RIH BMT program is implemented and begins to mature, RIH plans to work towards a designation as a BMT Center of Excellence (COE). Qualifying for and attaining designation as a BMT COE is multi-year process requiring certain information focused on utilization and outcomes, with some criteria required for COE designation varies among Payors. In the interim and consistent with hospital policy, RIH will treat any patient who is referred for BMT and will work with patients in accordance with RIH’s Financial Assistance policy. Further, In addition to insurance requirements, data reveals that a number of patients continue to travel outside Rhode Island for BMT even though RWMC has had exclusivity in Rhode Island for BMT since 1994.
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B. Please discuss the extent to which the proposed service or equipment, if implemented, will not result in any unnecessary duplication of similar existing services or equipment, including those identified in (A) above. Roger Williams Medical Center does not provide pediatric BMT service, thus there is no availability and accessibility for RI pediatric BMT patients and those in the nearby region in Rhode Island. These patients along with their families must travel to locations such as Boston, New York, or Tennessee for treatment, experiencing the stress and cost associated with the absence of a local pediatric program. In addition, there are referring physicians and adult patients who, after the patient has been evaluated, elect to receive their BMT treatment only at those tertiary care academic medical center institutions that provide a full range of support services and medical subspecialties. Since BMT service in this type of environment is not currently available in Rhode Island, providing an alternative in such an environment as the instant proposal will do does not result in any unnecessary duplication of services. At the Lifespan hospitals the comprehensiveness of support services and availability of research and clinical back-up is quite extensive, with RIH being the only tertiary care academic medical center in the state with a complete breadth of services that rival the top institutions in the country, for all medical subspecialties such as invasive cardiology and critical care services, and for other subspecialty services such as cardiothoracic, ENT and oncologic surgical specialties. As is clear by the volume of RI resident adult patients receiving care in Boston (65% FY’11 through FY’13) many hematology/oncology physicians in RI, including those not affiliated with Lifespan, do not refer patients to Roger Williams Medical Center (RWMC). While the specific reasons are not known, the most likely reason is the limited resources at that institution. It is the opinion of hematology/oncology attending physicians at RIH and other Lifespan hospitals that their patients would be best served by a hematopoietic stem cell transplantation capability at RIH. This would allow continuity of care for the large number of patients diagnosed and treated within the Lifespan system. In addition, as previously stated, patients would not need to be transferred to another institution or travel out-of-state. Finally, since patients seeking care in Boston are already using other sources of care other than Roger Williams, this proposal is aimed at bringing those patients back to a local academic medical setting similar to the settings in Boston. Hence, this proposed program does not duplicate service locally and further will make service more affordable because it will be less expensive for insurers and patients. C. Please identify the cities and towns that comprise the primary and secondary service area of the facility. Identify the size of the population to be served by this proposal and (if applicable) the projected changes in the size of this population. The RIH service represents approximately 1.5 million residents, with the primary service area being all of Rhode Island, and the secondary service are comprised of the
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following MA Towns: Attleboro, Bellingham, Blackstone, Dartmouth, Dighton, Douglas, Fall River, Franklin, Millville, New Bedford, N. Attleboro, Plainville, Rehoboth, Seekonk, Somerset, Swansea, Uxbridge, Westport & Wrentham D.
Please identify the health needs of the population in (C) relative to this proposal. The needs of both the adult and pediatric populations served by this proposal are for a comprehensive full service and easily accessible Bone Marrow Transportation (BMT) program, which this proposal will establish at the preeminent teaching hospital in Rhode Island, Rhode Island Hospital (RIH). Many of the adult patients and all of the pediatric patients who currently require these services travel outside of the RI for treatment at Boston Teaching Hospitals and other programs throughout the US. An additional local program in a tertiary academic medical center setting will insure RI BMT patients that they will not need to leave the State in future. RIH offers a full range of comprehensive cancer services and research trials with clinical care delivered in a multidisciplinary fashion, including medical oncology, surgical oncology, radiation oncology, advanced medical imaging and a multitude of support services. When patients are diagnosed with a hematological malignancy they meet with the oncology professionals who will be providing their care so they can become comfortable with each care team member and know whom to consult should a problem or question arise. Patients receiving cancer care at RIH are cared for by an experienced and collaborative medical team that includes: surgical oncologists, medical oncologists. radiation oncologists, pathologists, physical therapists, radiologists, psychiatrists,, registered oncology nurses, clinical social workers, patient advocates, pharmacists and nutritionists. The research program at the CCC is leading and participating in some of the most advanced cancer research in the industry and all patients are screened for applicability and participation. The team provides comprehensive care from diagnosis through to survivorship, including an inclusive treatment summary and care plan for the future which is also shared with the patient’s primary care physician.
Multidisciplinary cancer conferences take place every week, where physicians review the care plans of newly diagnosed patients on a disease-specific basis. Examples of disease specific cancer conferences are breast, lung, hematologic, genitourinary, neuro-oncology, head and neck and upper GI. Another multidisciplinary conference includes colorectal, sarcoma and orthopedic malignancies. Multidisciplinary clinics in breast, thoracic, GU, GI and melanoma allow team members to meet with the patient to review their treatment. These multidisciplinary clinics provide patients access to all specialties in one setting, promoting enhanced communication and collaboration with the team members and the patient. The Cancer Center also provides access to support groups, one-on-one counseling, and educational
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programs held in collaboration with the American Cancer Society and the Leukemia and Lymphoma Society. All appropriate patients are screened and referred to the Genetic Counseling Center which provides the most advanced care which includes genetic screening, identifying families with inherited cancers which affect five to ten percent of all cancers. It is important to identify families who have inherited cancers so that at-risk relatives can be identified and monitored to help ensure that if cancer occurs, it will be detected and treated early. In the area of Health Promotion, RIH supports an annual See, Test and Treat event to provide free mammography and pap smears to uninsured women. This program then ensures appropriate follow up care if any abnormalities are identified. In addition, an annual Cancer Survivors’ Day is held for patients and their families who have been involved with the diagnosis of cancer. During that day, health education and promotion activities are held for all attendees. To promote enhanced communication and effective patient management the RIH Comprehensive Cancer Center has installed state of the art telecommunications at each of its practice sites. This environment promotes collaboration and use of evidence based standards of care which are the hallmark of our system. Each site also has a procedure room which allows physicians to perform bone marrow biopsies, skin biopsies and suture and staple removal in the comfort and convenience of the Center. Another benefit of receiving cancer care in a tertiary academic medical center setting is the range of treatment options available. RIH offers: 1. Tru Beam Stereotactic System – The premier image-guided system that allows physicians to pinpoint cancer in the head, neck and body, and use the most effective treatments for each type of cancer. RIH was the first in the state to offer this powerful system. Trilogy is capable of delivering all forms of external beam radiation. 2. Intensity Modulated Radiation Therapy (IMRT) – A noninvasive procedure that uses pinpoint delivery of radiation therapy for various types of cancer, including prostate cancer, head and neck cancers, brain tumors, and some lung and pancreatic cancers. IMRT causes no fatigue, nausea or hair loss and enables better control of radiation to preserve the surrounding healthy tissue 3. Gamma Knife - A precise and powerful tool for treating certain tumors and vascular malformations in the brain. . RIH was one of the first sites in the United States to use Gamma Knife, and remains one of two facilities in New England to use the technology. It is actually not a knife at all, but an instrument that emits 201 finely focused beams of gamma radiation. Treatment rarely causes side effects and there is no risk of surgical complications such as infection, hemorrhage or leakage of cerebral spinal fluid. 4. Radiofrequency Ablation (RFA) - A minimally invasive technique that uses heat to destroy tumors and has been used successfully at RIH to combat breast, kidney, liver, lung, adrenal and bone cancers. The process takes between 45 and 90 minutes, is performed safely on an outpatient basis and can be done with intravenous sedation. Using CT scan or ultrasound guidance, a small needle electrode is placed directly into
9
the tumor. The electrode's high-frequency radio-waves create intense heat that kills the cancerous cells. The small incision requires only a Band-Aid. Because it is less traumatic than surgery, it is an excellent option for patients of any age and especially for older patients, those who are frail and those who have medical conditions that preclude surgery. RFA has also been used successfully when traditional treatments have failed. 5. Microwave Ablation – A minimally invasive procedure that heats and destroys tumors using microwave energy. RIH performed the first microwave ablation procedure in the United States, and is currently one of only ten facilities in the country that offer the treatment and a leader of clinical trials. 6. Antibody Therapies - Antibody Therapies are used for people with compromised immune systems. The center provides Immune Globulin Intravenous therapy, a highly purified preparation of immunoglobulin G and is used in the treatment of patients who have no, or very low levels of, antibody production. 7. The Lymphedema Program – Lymphedema is the collection of protein-rich fluid, which causes swelling of the extremities, trunk, face or abdomen which most commonly occurs after a patient has had breast cancer surgery, but also occurs after radiation, chemotherapy, pelvic surgery and lymph node dissection. Lymphedema can be managed with complete decongestive therapy, which includes specialized massage, compression wrapping and patient education. 8. The Melanoma Program – More than 50,000 new cases of melanoma are diagnosed each year. At RIH, the most experienced melanoma specialists in the area provide individualized assessment, develop a plan of care specifically for each patient, and determine and provide the best possible treatment. 9. Cyber Knife – Used to provide comprehensive and dedicated stereotactic radiosurgery center at the Radiosurgery Center of R I to treat certain types of malignant tumors and other maladies that are best treated through intracranial or extracranial stereotactic surgery. This service expands both the extracranial and intracranial stereotactic radiosurgery capabilities available in Rhode Island to meet the projected need for such procedures as supported by evidenced based medicine. For the pediatric population, HCH offers a complete range comprehensive cancer services in a family centered manner. We have complete range of pediatric medical, surgical and radiation oncologists available, a sedation service, psychosocial services, as well as dedicated pediatric emergency room. Each child diagnosed is followed by a care team led by a pediatric oncologist. For each step of the cancer journey, there is a pediatric specialist involved in the care team including surgeons, radiation oncologists, pathologists, blood bank specialists, physical therapists, radiologists, registered nurses, registered oncology nurses, clinical social workers, pediatric and family therapists and psychiatrists, patient advocates, parent liaisons, pharmacist, technicians, nutritionists, research nurses and phlebotomists. Other pediatric subspecialists are available on site including pediatric neurology, cardiology, nephrology, pulmonology, and intensive care.
10
Multidisciplinary Tumor Boards meet every other week, where physicians review the care plans of newly diagnosed patients on a disease-specific basis, including a solid tumor board as well as brain tumor board. There is a leukemia board that meets quarterly. As in our adult program, all evidence based national protocols and guidelines provide our standard of care for all patients. Multidisciplinary pediatric clinics allow cancer center team members to meet with the patient to review their treatment. The Cancer Center also provides access to support groups, one-on-one counseling, and educational programs held in collaboration with the American Cancer Society and the Leukemia and Lymphoma Society. Within the clinic, we have a multidisciplinary care team, which provides individualized care to each child and their family and includes nutrition, psychosocial support, and a child life specialist. We have active support groups for teens, patients on active therapy, bereaved families, and survivors. We have a local day camp on site in the summer for children with cancer ages 4-7 and siblings. We have support from the Tomorrow Fund for the psychosocial support of these children. We perform our procedures in the pediatric sedation center, staffed by our intensivist staff, which allow for a more comfortable experience, where parents are able to stay with their children during the procedures. Our pediatric sedation team also travels, so patients that require it can have sedation during radiation, or other procedures such as radiofrequency ablation. Once a child has been considered cured of their disease, they follow up in our survivorship program, the CHAMPS program. Late effects, fertility, and coordination of complicated care are done through this program. In addition, a BMT program at RIH will improve trainee education as medical students, medical residents and fellows will no longer need to the leave campus to go to Roger Williams Medical Center or the Boston teaching hospitals to learn transplantation medicine. Not only is this an inconvenience that interrupts education and training, but it prevents the medical trainees from caring for their patients at RIH with whom they have established therapeutic relationships. Additionally, patients seen by medical students, residents or fellows at outlying transplantation centers are not routinely followed by trainees, eliminating important outcome experiences from their education. The availability of bone marrow/stem cell transplantation at RIH will provide important opportunities for expanded clinical and basic research at Brown, and Lifespan-affiliated hospitals, including clinical trials that involve stem cell transplantation in adult and pediatric medicine with investigator-initiated (BrUOG) as well as national cooperative groups. As such, it will provide new treatment opportunities to Rhode Island and regional patients. Furthermore, laboratory-based scientists will have available to them reagents, such as discarded or unused stem cell specimens for investigations in hematopoiesis and immunology, physician articles and grants.
11
E. Please identify utilization data for the past three years (if existing service) and as projected through the next three years, after implementation, for each separate area of service affected by this proposal. Please identify the units of service used. Actual (last 3 years) N/A Hours of Operation Utilization (#) Throughput Possible (#) Utilization Rate (%)
FY____
FY ____
FY ____
Projected (A – Adult) Hours of Operation Utilization Throughput Possible Utilization Rate (%)
FY ‘17 8,760 440 730 60.3%
FY ‘18 8,760 550 730 75.3%
FY’19 8,760 660 730 90.4%
Projected (P – Pediatric) Hours of Operation Utilization Throughput Possible Utilization Rate (%)
FY ‘17 8,760 210 730 28.8%
FY ‘18 8,760 210 730 28.8%
FY’19 8,760 210 730 28.8%
Projected (Adult & Pediatric) Hours of Operation Utilization Throughput Possible Utilization Rate (%)
FY ‘17 8,760 650 1,460 44.5%
FY ‘18 8,760 760 1,460 52.1%
FY’19 8,760 870 1,460 59.6%
F. Please identify what portion of the need for the services proposed in this project is not currently being satisfied, and what portion of that unmet need would be satisfied by approval and implementation of this proposal. Community Demand and Unmet Need for BMT Services BMT patients receive a complete set of services that are both inpatient and outpatient. They are prepared for the service on an outpatient basis, and then admitted for treatment for an average of 22-26 days for adults and 30-33 days for children. They then receive follow-up for up to three months, 3 to 4 times per week. The best proxy for understanding how many patients need care is to examine the discharge abstract data
12
from Rhode Island and Massachusetts to identify the number of patients receiving cancer care and BMT inpatient care from the service area, as well as where they received care. The patients who travel out of region to Boston are the patients the proposed program seeks to serve. There were 93 BMT patients identified in Rhode Island and the nineteen surrounding Massachusetts towns in FY 2013, 89 adults and 4 children. Of these, 60 were RI residents (58 adults and 2 children). 15 or 26% of the RI resident adult cases were done at RWMC, with no 19 MA towns adult cases done at RWMC. The first table at the end of this response shows the multi-year trend (1997 to 2013) and the projections to 2023 based on a linear regression model, considering only those patients known to have received care in Rhode Island or Massachusetts. In FY 2017 (first full year of operation for the instant proposal), there are a total of 123 projected cases (116 adult and 7 children) in the regional market. 79 of the projected 116 adult cases are for RI residents. Assuming RWMC continues to do 26% of the RI resident adult cases (21), that leaves 58 projected RI resident adult cases of which RIH projects it could do 60% or 34 of these cases if an adult BMT service were at RIH. Of the 38 projected 19 MA town adult BMT cases in FY’17, RIH projects it could do 10% or 4 of these cases with an adult BMT service at RIH. In total, that’s a projected 38 adult cases. However, given the evolving technology toward stem cell infusion and accounting for potential increases in the number of cases done by RWMC each year, RIH conservatively estimates 30 annual adult cases by FY’19 (20 FY’17, 25 FY’18, 30 FY’19). RIH/Hasbro expects to serve all 7 of the projected RI resident pediatric BMT cases beginning in FY’17. The second table at the end of this response provides a breakdown of the distribution of adult and pediatric BMT cases for residents of RI and the 19 MA towns between Allogeneic and Autologous transplants from FY’10 through FY’13. Based on this table and the assumptions from BMT cases from RI and the MA 19 towns RIH has projected, RIH further projects that 60% of the adult and pediatric transplant cases it is projecting will be Allogeneic and 40% Autologous. Since 1994 Roger Williams Medical Center (RWMC) has been operating the only adult BMT program in RI. In FY 2013, RWMC treated 15 out of the 89 adult cases from within the region (and 1 from outside of the region), a market share of 17 %, with all but 2 of the remaining cases treated in the academic medical centers in Massachusetts (Beth Israel Deaconess, Brigham &Women’s, Boston Medical Center, Tufts, Lahey, St. Elizabeth’s, Mass General) None of the RWMC patients came for the surrounding 19 towns, but 1 did come from outside the region. Since RWMC does not treat pediatric patients, 100% of RI pediatric BMT patients must travel to Boston or other distant locations for treatment. Looking at only RI residents, RWMC treated 15 of 58, a market share of 26%, with all of the remaining cases treated in the 6 academic medical centers in Boston. While FY2014 data for the entire region is not yet available, based on FY 2014 data for hospitals in RI, RWMC treated 22 RI resident adult patients.
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It is important to note that the population of 93 patients on which the projections are based does not include patients who traveled out of the region to obtain BMT treatment. At this writing it is unclear how many patients leave the region for other states like New York, Texas and Washington. In addition, RIH/Hasbro pediatric oncologists have confirmed that there have been about 4 children in any given year; all of these patients need to leave the state since there is not an in-state option. Finally, these projections do not take into account patients from outside the region. However, keeping its estimated volume on the conservative side, RIH has not factored any of the volume going outside of the region into its BMT volume projections. As described above RIH is the leader in both adult and pediatric cancer care, offering a wide range of services and expertise. RI Market data demonstrates this important role. In FY 2013 RIH served 27% of all inpatient RI adult hematology/oncology cases, while RWMC served 8%. When RIH is combined with TMH and NH the percentage of RI adult cases served at Lifespan was 48%. RI/Hasbro serves 83% of all RI pediatric hematology/oncology patients. Bone Marrow Transplant would be a curative option for additional pediatric cases with non-malignant diseases. These include sickle cell disease, thalassemia, a plastic anemia and metabolic disorders. This would account for an additional 3 to 4 pediatric patients per year who would benefit from local BMT services. Again, keeping its estimates on the conservative side, RIH has not factored these cases into its BMT volume projections. The proposed adult and pediatric BMT program with two adult beds and 2 pediatric beds is designed to serve RI and nearby Mass residents whose care needs are not being met at RWMC, causing untold costs to patients and families due to the stress related to leaving home for the extended treatment time.
14
BMT Cases in the Region Adult: RI Residents 19 MA Towns Total Adult Pediatric: RI Residents 19 MA Towns Total Pediatric Adult & Pedi Comb: RI Residents 19 MA Towns Total Adult & Pedi
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
43 19 62
52 19 71
42 24 66
47 16 63
48 23 71
45 18 63
52 30 82
38 17 55
59 18 77
59 23 82
40 18 58
58 35 93
67 32 99
70 31 101
74 43 117
88 29 117
58 31 89
4 2 6
9 0 9
3 1 4
5 1 6
8 1 9
5 8 13
9 3 12
3 3 6
5 0 5
5 1 6
3 1 4
5 3 8
3 4 7
7 2 9
3 5 8
4 5 9
2 2 4
47 21 68
61 19 80
45 25 70
52 17 69
56 24 80
50 26 76
61 33 94
77 48 125
92 34 126
60 33 93
---
---
---
---
---
10-20
10-20
10-20
10-20
10-20
10-20
Total Estimated Adult & Pedi Cases
---
---
---
---
---
---
---
43 18 61 1020 7181
77 33 110
---
64 24 88 1020 98108
70 36 106
---
64 18 82 1020 95102
63 38 101
Estimated Cases going Out of Region
41 20 61 1020 7181
111121
116126
120130
135145
136146
103113
BMT Cases in the Region Adult: RI Residents 19 MA Towns Total Adult Pediatric: RI Residents 19 MA Towns Total Pediatric Adult & Pedi Comb: RI Residents 19 MA Towns Total Adult & Pedi
Projected based on Linear Regression Growth (1997-2013) 2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
73 34 107
75 35 110
77 36 113
79 38 116
80 39 119
82 40 122
84 41 125
86 42 128
88 43 131
90 44 134
3 4 7
3 4 7
3 4 7
3 4 7
3 4 7
2 4 7
2 4 7
2 5 7
2 5 7
2 5 7
76 38 114
78 39 117
80 40 120
81 41 123
83 43 126
85 44 129
87 45 132
88 46 135
90 47 138
92 49 140
Estimated Cases going Out of Region
10-20
10-20
10-20
10-20
10-20
10-20
10-20
10-20
10-20
10-20
Total Estimated Adult & Pedi Cases
124134
127137
130140
133143
136146
139149
142152
145155
148158
151161
15
ADULT BMT RI Residents Regional Hospitals
RWMC
BTHs
UMass
Total MA Hospitals Total RI & MA Hospitals
Donor Type
2011
2012
2013
Dist.% 13
Allogeneic
12
21
10
Autologous
10
18
Total
22
Allogeneic
19 MA Towns Residents #Chg Dist.% %Chg 2013 1113 11-13 13
%Chg 11-13
#Chg 1113
MS%2013
2014
2011
2012
67%
(17%)
(2)
26%
9
1
0
0
0%
(100%)
5
33%
(50%)
(5)
25%
13
0
0
0
0%
39
15
100%
(32%)
(7)
26%
22
1
0
0
24
25
28
65%
17%
4
74%
*
18
19
Autologous
25
23
15
35%
(40%)
(10)
75%
*
23
Total
49
48
43
100%
(12%)
(6)
74%
*
Allogeneic
0
0
0
0%
0%
0
0%
Autologous
0
0
0
0%
0%
0
0%
Total
0
0
0
0%
0%
0
Allogeneic
24
25
28
65%
17%
Autologous
25
23
15
35%
Total
49
48
43
Allogeneic
36
46
Autologous
35
Total
71
MS%2013
2014
(1)
0%
1
0%
0
0%
0
0%
(100%)
(1)
0%
1
17
59%
(6%)
(1)
94%
*
8
12
41%
(48%)
(11)
92%
*
41
27
29
100%
(29%)
(12)
94%
*
*
1
0
1
50%
0%
0
6%
*
*
0
2
1
50%
0%
1
8%
*
0%
*
1
2
2
100%
100%
1
6%
*
4
74%
*
19
19
18
58%
(5%)
(1)
100%
*
(40%)
(10)
75%
*
23
10
13
42%
(43%)
(10)
100%
*
100%
(12%)
(6)
74%
*
42
29
31
100%
(26%)
(11)
100%
*
38
66%
6%
2
100%
*
20
19
18
58%
(10%)
(2)
100%
*
41
20
34%
(43%)
(15)
100%
*
23
10
13
42%
(43%)
(10)
100%
*
87
58
100%
(18%)
(13)
100%
*
43
29
31
100%
(28%)
(12)
100%
*
MS%2013
2014
PEDI BMT RI Residents Regional Hospitals
Donor Type
2011
2012
2013
Dist.% 13
BTHs
Allogeneic
0
2
1
50%
Autologous
6
3
1
50%
Total
6
5
2
100%
(67%)
(mostly Children's)
19 MA Towns Residents #Chg Dist.% %Chg 2013 1113 11-13 13
#Chg 1113
MS%2013
2014
2011
2012
0%
1
3%
*
3
1
2
100%
(33%)
(1)
11%
*
(83%)
(5)
5%
*
2
4
0
0%
(100%)
(2)
0%
*
(4)
3%
*
5
5
2
100%
(60%)
(3)
6%
*
%Chg 11-13
16
ADULT BMT Total MARI Regional Hospitals
RWMC
BTHs
UMass
Total MA Hospitals Total RI & MA Hospitals
Donor Type
2011
2012
2013
Dist.% 13
%Chg 11-13
#Chg 1113
Allogeneic
13
21
10
67%
(23%)
(3)
Autologous
10
18
5
33%
(50%)
(5)
Total
23
39
15
100%
(35%)
(8)
Allogeneic
42
44
45
63%
7%
3
Autologous
48
31
27
38%
(44%)
(21)
Total
90
75
72
100%
(20%)
(18)
Allogeneic
1
0
1
50%
0%
0
Autologous
0
2
1
50%
0%
1
Total
1
2
2
100%
100%
1
Allogeneic
43
44
46
62%
7%
3
Autologous
48
33
28
38%
(42%)
(20)
Total
91
77
74
100%
(19%)
(17)
Allogeneic
56
65
56
63%
0%
0
Autologous
58
51
33
37%
(43%)
(25)
Total
114
116
89
100%
(22%)
(25)
%Chg 11-13
#Chg 1113
PEDI BMT Total MARI Regional Hospitals
Donor Type
2011
2012
2013
Dist.% 13
BTHs
Allogeneic
3
3
3
75%
0%
0
Autologous
8
7
1
25%
(88%)
(7)
Total
11
10
4
100%
(64%)
(7)
(mostly Children's)
17
Sources of Data a. FY 1997 - FY 2013 RI Hospitals Market Data from Truven Health Analytics. b. FY 1997 - FY 2012 MA Hospitals Market Data from the Massachusetts Health Data Consortium (MHDC). c. FY 2013 MA Hospitals Market Data from the Massachusetts Center for Health Information and Analysis (CHIA).
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G. Please identify and evaluate alternative proposals to satisfy the unmet need identified in (F) above, including developing a collaborative approach with existing providers of similar services. Adult 1a. Utilize two of four beds on the North wing of the 8th floor of the Zecchino pavilion (Main Building) designated to care for complex immuno-compromised cancer patients. This would include patients who have been diagnosed with lymphoma, leukemia, and other myloproliferative disorders, as well as patients suffering from chemotherapy induced immuno-suppression complications. Since these patients have similar requirements as BMT patients, two of the beds can be used for the proposed BMT service under the RIH license. 1b. Collaborate on the provision of BMT services with Roger Williams Medical Center (RWMC), utilizing two of four beds on the North wing of the 8th floor of the Zecchino pavilion (Main Building) designed to accommodate care for immuno-compromised cancer patients who have lymphoma, leukemia, and other myloproliferative disorders, as well as patients suffering from chemotherapy induced immuno-suppression complications. Since these patients have similar requirements as BMT patients, two of the beds can be used for the proposed BMT service under the RWMC license. 2a. Establish a stem cell laboratory on the 10th floor of the APC building. 2b. Utilize the stem cell laboratory already in place at RWMC eliminating the need for a stem cell laboratory at RIH. 2c. Explore a collaborative arrangement with the Dana Farber Cancer Institute to provide support for stem cell processing. Utilizing the stem cell laboratory already in place at DFCI would eliminate the need for a stem cell laboratory at RIH. 3. Provide outpatient care for adult BMT patients in the existing Comprehensive Cancer Center space in the APC Building at RIH. Pediatric 1. Renovate Hasbro 5 to accommodate two beds. This involves minor modifications to the HVAC system, can be done in a short period of time, and has minimal impact on the patient wing. 2. Renovate Hasbro 5 to accommodate four beds, with two rooms for inpatient and two for outpatient, which includes upgrading the current HVAC system as well as the room renovations. 3. Integrate the pediatric outpatient unit into the existing Tomorrow Fund clinic. H. Please provide a justification for the instant proposal and the scope thereof as opposed to the alternative proposals identified in (G) above. Adult - Alternatives 1a., 2c.and 3. were selected. A serious effort to collaborate on a joint BMT program took place over the course of several months between RIH and RWMC to work toward the joint program. This involved numerous meetings and conference calls, and while much effort was given, no agreement could be reached. During such time, RWMC turned its focus toward efforts to affiliate with another hospital or 19
system leading to the formation of CharterCare which eventually became part of the for-profit Prospect Medical Holdings system. RIH does not believe that further discussions would be useful. Thus Alternatives 1b. and 2b. were deemed not feasible. The combination of Alternatives 1a. for the physical inpatient unit, 2c to process stem cells and 3 for the adult outpatient care component meet the needs of the proposed BMT program. These alternatives forgo the additional cost of constructing a stem cell laboratory at RIH having to be incurred, thus minimizing the capital cost required to implement the proposed BMT program. Pediatric - Alternatives 1and 3 were selected Alternative 1 was selected since it can be completed in a shorter time frame than Alternative 2. Alternative 3 provides the outpatient component of care needed.
HEALTH DISPARITIES AND CHARITY CARE 8.) The RI Department of Health defines health disparities as inequalities in health status, disease incidence, disease prevalence, morbidity, or mortality rates between populations as impacted by access to services, quality of services, and environmental triggers. Disparately affected populations may be described by race & ethnicity, age, disability status, level of education, gender, geographic location, income, or sexual orientation. A. Please describe all health disparities in the applicant's service area. Provide all appropriate documentation to substantiate your response including any assessments and data that describe the health disparities. The Rhode Island Comprehensive Cancer Control Plan describes health disparities as differences in the incidence (new cases), prevalence (all existing cases), mortality (death), and burden of cancer and related adverse conditions that exist among specific population groups. These population groups may be characterized by gender, age, ethnicity, education, income, social class, disability, geography or sexual orientation. According to the Report, in both Rhode Island and the nation as a whole, the burden of cancer is higher among men than women. This disparity is largely attributable to cancers of the prostate, colon- rectum, lung-bronchus, and urinary bladder. Although some cancers are more common among children, the incidence of most cancers increases with age. Due to both internal factors, such as normal aging processes, and external factors, such as prolonged exposure to carcinogens, cancer is largely a disease of th age. Over 77% of all cancers occur in people over 55. RI ranks 8 in the nation for percent of population over 60, with 18.2% of the population in this category. With a population that is both growing and aging, even if cancer rates remain stable, the number of people diagnosed with cancer is expected to increase.
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While racial and ethnic disparities appear to have decreased over time but have not been eliminated, African Americans have the highest death rates in the state. The data on race and ethnicity for Rhode Island is limited, however, due to the small numbers. Cancers of the colon, rectum, breast, and cervix are found more often at advanced stages among African American and Hispanic Rhode Islanders, decreasing the likelihood of survival. This profile suggests that non-Hispanic Whites have greater access to many cancer screening tests than other groups. Cancer prevention and control efforts may not have effectively reached minority populations. Prostate cancer death rates for African American men are more than twice that of white men. Even though the greatest decrease in cancer mortality rates has been among African American men, they still have the highest cancer mortality rates of any racial / ethnic category with a death rate of 287 out of 100,000 in Rhode Island. New cases of breast cancer are higher in white women, but the death rate from breast cancer is higher among black women. In Rhode Island, Hispanics have a higher cancer incidence, but lower cancer mortality rate than US rates. There is considerable speculation, however, about the accuracy of Hispanic ethnicity data. The problem of under-identification may be resolved through increased compliance with the Office of Management and Budget’s (OMB) Statistical Policy Directive No. 15 concerning Race and Ethnic Standards for Federal Statistics and Administrative Reporting. The Report goes on to say that while disparities arise from a multiplicity of causes. However, socio-economic status seems to be a common theme across all population groups, as the report states: “Access to quality healthcare is most closely linked to socio-economic status, which includes level of income and education. Compared to people with health insurance coverage, those without health insurance have more difficulty accessing personal health services such as cancer screenings, use less medical services, and receive less outpatient and inpatient care. They often seek care at a later or more advanced stage of disease, leading to higher death rates. Lack of access to a regular source of healthcare including screening tests, early detection, and preventive health messages all contribute to these disparities.” In addition to the cost in terms of lives and emotional turmoil, cancer also costs a lot of money. Cancer costs Rhode Island about $881 million per year, about $312 million in direct medical costs, $74 million for cost of lost productivity due to illness, and about $499 million in lost productivity due to premature death. Beyond health disparities directly related to cancer, the Department of Health April 2015 “Minority Health Facts 2015” report , health care disparities exist with respect to access to health care for most minority groups in the state with a higher percentage of Hispanic/Latino adults under 65 years having no health insurance, a higher percentage of Asians and Pacific Islanders having no routine checkups within the past year, and higher percentages of Hispanic/Latino and Native American adults being unable to see a doctor because of cost in the past year.
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In addition, the report goes on to say among other things that whites and Asians and Pacific Islanders have better maternal and child health outcomes than other individual groups in the state and the state as a whole; blacks/African Americans and Hispanics/Latinos have higher rates of sexually transmitted disease than whites and the state as a whole; and that racial and ethnic disparities exist in health outcomes related to chronic diseases such as asthma, diabetes, heart disease, and stroke.
B. Discuss the impact of the proposal on reducing and/or eliminating health disparities in the applicant's service area. The proposal would make available to BMT patients the same services afforded to all RIH patients in terms of providing assistance to lessen the financial burden upon patients in compliance with Federal and State guidelines, language translation services, handicapped accessibility, etc. More importantly however, this proposal will make BMT service in a tertiary academic medical center setting available to RI residents on a local basis, eliminating the additional cost, time and stress associated with having to go out-of-state to receive BMT service in a comparable setting. Finally, this proposal will fill the current void of there being no pediatric BMT service available in RI. 9.) Please provide a copy of the applicant’s charity care policies and procedures and charity care application form. A copy of the applicant’s Charity Care policies, procedures and application form is included in Attachment 1.
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FINANCIAL ANALYSIS 10.) A) Please itemize the capital costs of this proposal. Present all amounts in thousands (e.g., $112,527=$113). If the proposal is going to be implemented in phases, identify capital costs by each phase. CAPITAL EXPENDITURES Amount Survey/Studies $ Fees/Permits $5,000 Architect $25,000 "Soft" Construction Costs $30,000
Percent of Total % 0.7% 3.4% 4.1%
Site Preparation Demolition Renovation New Construction Contingency "Hard" Construction Costs
$ $ $550,000 $ $55,000 $605,000
% % 75.3% % 7.5% 82.9%
Furnishings Movable Equipment Fixed Equipment "Equipment" Costs
$23,600 $59,600 $ $83,200
3.2% 8.2% % 11.4%
Capitalized Interest Bond Costs/Insurance Debt Services Reserve1 Accounting/Legal Financing Fees "Financing" Costs
$ $ $ $ $ $
Sub-Total
$718,200
% % % % % %
Land $ Other (specify CoN Fee) $11,796 "Other" Costs $11,796 TOTAL CAPITAL COSTS $729,996 1 Should not exceed the first full year’s annual debt payment.
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98.4% % 1.6% 1.6% 100.0%
B.) Please provide a detailed description of how the contingency cost in (A) above was determined. Construction contingency is calculated at 10% of soft and construction cost. The 10% is based on prior experience which has been shown to a fairly accurate and appropriate reserve.
C.) Given the above projection of the total capital expenditure of the proposal, please provide an analysis of this proposed cost. This analysis must address the following considerations: i.
The financial plan for acquiring the necessary funds for all capital and operating expenses and income associated with the full implementation of this proposal, for the period of 6 months prior to, during and for three (3) years after this proposal is fully implemented, assuming approval. Funding for capital costs will be through a combination of current unrestricted cash reserves and future unrestricted income from operations, as indicated above. Incremental expenses will be funded by revenues earned on incremental volume
ii.
The relationship of the cost of this proposal to the total value of your facility’s physical plant, equipment and health care services for capital and operating costs. (000)
Project
Facility
Percent
Capital Operating
$ 730 $ 4,881
$ 1,341,954 $ 1,077,289
iii.
A forecast for inflation of the estimated total capital cost of the proposal for the time period between initial submission of the application and full implementation of the proposal, assuming approval, including an assessment of how such inflation would impact the implementation of this proposal. The cost of capital includes an estimate of $0 for price escalation. This estimate is believed to be reasonable based on the nature of this proposal.
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0.05% 0.45%
11.) Please indicate the financing mix for the capital cost of this proposal. NOTE: the Health Services Council’s policy requires a minimum 20% equity investment in CON projects (33% equity minimum for equipment-related proposals).
Source
Amount
Equity*
$729,996
Debt**
$0
Lease** $0 TOTAL $729,996
Percent
Interest Rate
Terms (Yrs.)
List source(s) of funds (and amount if multiple sources)
100% 0%
%
0% 100%
%
* Equity means non-debt funds contributed towards the capital cost of an acquisition or project which are free and clear of any repayment obligation or liens against assets, and that result in a like reduction in the portion of the capital cost that is required to be financed or mortgaged (R23-15-CON). ** If debt and/or lease financing is indicated, please complete Appendix F.
12.)
Will a fundraising drive be conducted to help finance this approval? Yes____ No X
13.)
Has a feasibility study been conducted of fundraising potential? Yes___ No X
• 14.) •
15.)
If the response to Question 13 is ‘Yes’, please provide a copy of the feasibility study. Will the applicant apply for state and/or federal capital funding? Yes___ No X If the response to Question 14 is ‘Yes’, please provide the source: _____________, amount: ________, and the expected date of receipt of those monies: ______________. Please calculate the yearly amount of depreciation and amortization to be expensed. Depreciation/Amortization Schedule - Straight Line Method (000)
Total Cost (-) Salvage Value (=) Amount Expensed (/) Average Life (Yrs.)
Equipment Amortizatio Improvements Fixed Movable n $635 $ $83 $12 $ $ $ $ $635 $ $83 $12 15 11 5
(=) Annual Depreciation $42
$
$7
$2
Total $730 $ $730 14
$52
*1* Must equal the total capital cost (Question 10 above) less the cost of land and less the cost of any assets to be acquired through lease financing
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*2* Must equal the incremental “depreciation/amortization” expense, column -5-, in Question 18 (below). 16.) For the first full operating year of the proposal (identified in Question 18 below), please identify the total number of FTEs (full time equivalents) and the associated payroll expense (including fringe benefits) required to staff this proposal. Please follow all instructions and present the payroll in thousands (e.g., $42,575=$43).
Personnel Management Prof./Tech Nursing Serv./Maint. Office/Clerical Phys./Resident Other: (specify) TOTAL
($000) Existing Additions/(Reductions) Payroll Payroll # of FTEs W/Fringes # of FTEs W/Fringes 146.8 $23,473 2.0 $284 1,071.7 $118,722 0.8 $73 1,791.6 $209,604 24.1 $2,550 747.7 $49,457 1.3 $57 1,372.1 84,139 0.5 $22 635.1 $151,046 0.6 $169 0.0 $0 0.0 $0 5,765.0 $636,439 29.2 $3,156
New Totals Payroll # of FTEs W/Fringes 148.8 $23,755 1,072.4 $118,795 1,815.7 $212,155 749.0 $49,515 1,372.6 $84,161 635.7 $151,215 0.0 $0 5,794.2 $639,595
*1* Must equal the incremental “payroll w/fringes” expense in column -5-, Question 18 (below). INSTRUCTIONS: “FTEs”
Full time equivalents, are the equivalent of one employee working full time (i.e., 2,080 hours per year) “Additions” are NEW hires; “Reductions” are staffing economies achieved though attrition, layoffs, etc. It does NOT report the reallocation of personnel to other departments.
17.)
Please describe the plan for the recruitment and training of personnel.
Recruitment for the proposed incremental FTE positions will be consistent with applicable RIH policies, procedures and practices. All positions will be posted internally in accordance with hospital policy and with existing union agreements. Internal candidates will have the opportunity to bid on the open positions and receive due consideration. Should any of the new positions remain unfilled following internal posting external candidates will be recruited, interviewed and selected. The new positions will be posted within the Lifespan system, on the Lifespan intranet and on Monster.com. The same process will be followed to fill vacancies created as a result of internal transfers.
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The Registered Nurses who are hired into the BMT unit will receive additional training including, but not limited to, the critical care series, chemotherapy administration certification and ACLS certification. We will develop a BMT core curriculum series based on the American Society for Blood and Marrow Transplantation and Oncology Nursing Society. Rhode Island Hospital also has physicians, nurses and nurse practitioners with significant experience in caring for patients receiving high dose chemotherapy, induction chemotherapy, and transplant conditioning regimens. Dr. Eric Winer was the Associate Director of Bone Marrow Transplant at Roger Williams Medical Center prior to coming to Rhode Island Hospital, and has 9 years’ experience with these regimens and Dr. James Butera one of the region’s leading experts in the care of patients with hematologic malignancy who has been in practice for over 20 years. Dr. John Reagan has been conducting research on the response of cellular immunotherapy, has 3 years’ experience. There will also be active recruitment for a Bone Marrow Transplant Director via advertisements in the American Society of Bone Marrow Transplant. Hasbro Children’s Hospital has physicians, nurses and nurse practitioners with previous transplant experience. Dr. Anjlika Chawla has 6 years of experience at UCSF, Dr. Thomas Renaud has 6 years at Sloan Kettering in New York providing BMT care; a pediatric BMT director will be recruited through the Children’s Oncology Group (COG) where they are members of several Disease Committees and the Executive Committee. Virtually all pediatric BMT physicians are associated with the COG . Pediatric Registered Nurses will receive additional training including but not limited to components of pediatric critical care, chemotherapy administration and PALS certification. They will also participate in the BMT core curriculum series being developed as described above with pediatric specific content
18.) Please complete the following pro-forma income statement for each unit of service. Present all dollar amounts in thousands (e.g., $112,527=$113). Be certain that the information is accurate and supported by other tables in this worksheet (i.e., “depreciation” from Question 15 above, “payroll” from Question 16 above). If this proposal involved more than two separate “units of service” (e.g., pt. days, CT scans, outpatient visits, etc.), insert additional units as required.
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Actual Previous Year 2014 (1) REVENUES: Net Patient Revenue Other: Total Revenue
Budgeted Current Year 2015 (2)
<-- FIRST FULL OPERATING YEAR 2017 --> Incremental CON CON Difference Denied Approved *1* (3) (4) (5)
$1,016,297 $1,051,848 $1,074,659 $1,079,176 $4,518 $35,595 $37,470 $34,084 $34,084 $0 $1,051,892 $1,089,318 $1,108,743 $1,113,261 $4,518
EXPENSES: $ Payroll w/Fringes $580,11 Bad Debt $60,202 Supplies $194,648 Office Expenses $2,219 Utilities $16,236 Insurance $8,553 Interest $13,513 Depreciation/Amortization $42,024 Leasehold Expenses $ Other Controllable Exp. $147,066 Total Expenses $1,064,561 OPERATING PROFIT: ($12,679)
$ $611,698 $47,727 $188,587 $2,365 $17,635 $13,409 $13,055 $46,174 $ $164,223 $1,104,873 ($15,555)
$ $636,439 $47,727 $203,437 $2,460 $18,709 $14,088 $11,983 $53,567 $ $131,725 $1,120,135 ($11,391)
$ $639,595 $47,817 $205,088 $2,471 $18,711 $14,088 $11,983 $53,619 $ $131,735 $1,125,107 ($11,846)
$ $3,156 $90 $1,651 $11 $2 $0 $0 $52 $ $10 $4,972 $(454)
For each service to be affected by this proposal, please identify each service and provide: the utilization, average net revenue per unit of services and the average expense per unit of service. Service Type: Discharges Service (#s): 33,987 34,504 34,504 34,531 27 Net Revenue Per Unit *8* $30,950 $31,571 $32,134 $32,215 $81 Expense Per Unit $31,323 $32,022 $32,464 $32,559 $95 Service Type: Outpatient Visits Service (#s): Net Revenue Per Unit *8* $ $ $ Expense Per Unit $ $ $
1,080 $772 $747
1,080 $772 $747
INSTRUCTIONS: Present all dollar amounts (except unit revenue and expense) in thousands.
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*1* The Incremental Difference (column -5-) represents the actual revenue and expenses associated with this CON. It does not include any already incurred allocated or overhead expenses. It is column -4- less column –3-. *2* Net Patient Revenue (column -5-) equals the different units of service times their respective unit reimbursement. *3* Payroll with fringe benefits (column -5-) equals that identified in Question 16 above. *4* Bad Debt is the same as that identified in column -4-. *5* Interest Expense equals the first full year’s interest paid on debt. *6* Depreciation equals a full year’s depreciation (Question 15 above), not the half year booked in the year of purchase. *7* Total Expense (column -5-) equals the operating expense of this proposal and is defined as the sum of the different units of service; *8* Net Revenue per unit (of service) is the actual average net reimbursement received from providing each unit of service; it is NOT the charge for that service.
Actual Previous Year 2014 (1) REVENUES: Net Patient Revenue Other: Total Revenue
<-- RAMP-UP OPERATING YEAR 2016 --> Budgeted Incremental Current CON CON Difference Year 2015 Denied Approved *1* (2) (3) (4) (5)
$1,016,297 $1,051,848 $1,059,570 $1,063,046 $3,476 $35,595 $37,470 $34,515 $34,515 $0 $1,051,892 $1,089,318 $1,094,085 $1,097,561 $3,476
EXPENSES: $ Payroll w/Fringes $580,11 Bad Debt $60,202 Supplies $194,648 Office Expenses $2,219 Utilities $16,236 Insurance $8,553 Interest $13,513 Depreciation/Amortization $42,024 Leasehold Expenses $ Other Controllable Exp. $147,066 Total Expenses $1,064,561 OPERATING PROFIT: ($12,679)
$ $611,698 $47,727 $188,587 $2,365 $17,635 $13,409 $13,055 $46,174 $ $164,223 $1,104,873 ($15,555)
$ $623,945 $47,727 $195,790 $2,412 $18,164 $13,744 $12,535 $49,997 $ $136,453 $1,100,767 ($6,682)
$ $625,994 $47,794 $196,968 $2,420 $18,165 $13,744 $12,535 $50,032 $ $136,459 $1,104,111 ($6,549)
$ $2,049 $ 67 $1,178 $8 $1 $0 $0 $35 $ $6 $3,344 $133
For each service to be affected by this proposal, please identify each service and provide: the utilization, average net revenue per unit of services and the average expense per unit of service.
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Service Type: Discharges Service (#s): 33,987 34,504 34,504 34,524 20 Net Revenue Per Unit *8* $30,950 $31,571 $31,709 $31,773 $64 Expense Per Unit $31,323 $32,022 $31,903 $31,965 $62 Service Type: Outpatient Visits Service (#s): Net Revenue Per Unit *8* $ $ $ Expense Per Unit $ $ $
800 $772 $707
800 $772 $707
19.) Please provide an analysis and description of the impact of the proposed new institutional health service or new health equipment, if approved, on the charges and anticipated reimbursements in any and all affected areas of the facility. Include in this analysis consideration of such impacts on individual units of service and on an aggregate basis by individual class of payer. Such description should include, at a minimum, the projected charge and reimbursement information requested above for the first full year after implementation, by payor source, and shall present alternate projections assuming (a) the proposal is not approved, and (b) the proposal is approved. If no additional (incremental) utilization is projected, please indicate this and complete this table reflecting the total utilization of the facility in the first full fiscal year.
Payor Mix
Projected First Full Operating Year: FY 2017 ($000) Implemented Not Implemented Difference Projected Total Projected Total Projected Total Utilization Revenue Utilization Revenue Utilization Revenue # % $ # % $ # % $ 10,490 29.5 255,337 10,239 29.7 254,791 251 22.7 546 2,274 6.4 49,973 2,129 6.2 49,119 145 13.1 855
Medicare RI Medicaid Non-RI Medicaid RIteCare 6,387 Commercial/Blue 14,449 Cross/HMO’s Self Pay 1,244 Charity Care Other: _____ 767 TOTAL 35,611
17.9 136,955 40.6 533,264
6,387 13,815
3.5 33,383 1,244 $0 2.1 22,536 690 100 $1,031,449 34,504
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18.5 136,955 40.0 530,338
0 634
3.6 33,383 0 $0 2.0 22,346 77 100 1,026,932 1,107
00 57.2 2,927 0 0 $0 7.0 190 100 4,518
20.)
Please provide the following: A.
Please provide audited financial statements for the most recent year available.
See Attachment 2. B. Please discuss the impact of approval or denial of the proposal on the future viability of the (1) applicant and (2) providers of health services to a significant proportion of the population served or proposed to be served by the applicant. The approval of this project will provide availability of BMT service at RIH allowing patients to receive care in a tertiary academic medical center setting in Rhode Island, eliminating the need for adult patients to travel to Boston or other locations as many today decide to do. In addition all pediatric patients currently must leave the state to receive BMT services and the approval of this unit would eliminate these patients from seeking care elsewhere. It will also eliminate delays in gaining the acceptance into outof-state BMT programs that can adversely affect the success and even result in disease recurrence, and fill the void that presently exists with no available BMT for children in the state. It is well recognized nationally that state-of-the-art care in oncology is directly tied to the expertise and research programs associated with BMT. Provision of such to our patients in need is consistent with the concept of unified care throughout the course of disease. The Hospital proposes to draw down on existing unrestricted cash and future earnings from operations to fund this project. In addition, the project is expected to have a positive impact on the bottom line of the hospital. Therefore, this proposal will not negatively impact the future financial viability of the organization. Not completing this project will have a negative impact on the hospital’s goals of providing high quality health care services in an academic environment accessible to all those served by the hospital, as the lack of a comprehensive BMT adult program and the absence of any pediatric BMT program in the state will continue to drive patients to out-of-state programs where the risk of successful outcomes and disease reoccurrence can be higher. Since the projected adult cases RIH would do are now going out-of-state, RWMC should not be impacted by this proposal. 21.) Please identify the derivable operating efficiencies, if any, (i.e., economies of scale or substitution of capital for personnel) which may result in lower total or unit costs as a result of this proposal. This proposal is to improve patient care and not specifically to create operating efficiencies. Lower overall costs will likely result from better coordination of care of patients and alleviating patients’ travel costs of going out of state for these services.
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22.) Please describe on a separate sheet of paper all energy considerations incorporated in this proposal. This project will be constructed in an energy-efficient manner using the latest in highperformance construction materials and mechanical/electrical systems to ensure energyefficient units. Rhode Island Hospital will also continue its approach of optimizing individual pieces of equipment and overall mechanical systems. More specifically, this project will utilize: • High efficiency portable and fixed equipment; • Variable frequency drives, variable volume air handling, and variable flow pumping to match energy consumption with demand; • Building Automation Systems to monitor and optimize HVAC system operations; and • Energy efficient lighting and control devices. Equipment and system replacement/upgrades will be conducted in partnership with the local utility (National Grid) to capitalize on available Energy Conservation Rebate Programs 23.) Please comment on the affordability of the proposal, specifically addressing the relative ability of the people of the state to pay for or incur the cost of the proposal, at the time, place and under the circumstances proposed. Additionally, please include in your discussion the consideration of the state’s economy. The January 2015 Current Conditions Index Report indicated recent labor market data revisions contained several positives for Rhode Island, most notably that payroll employment performed better than thought, returning to 2008 levels. While the jobless rate was revised lower, so too was the labor force, which continues a well-defined downtrend that began in late 2012, responsible for a significant portion of the recent jobless rate declines, especially those since June of last year. On a positive note, the state's recovery is continuing, aided in large part by national economic momentum. In order for RI to shift into a higher gear, the state can no longer postpone essential structural reforms as noted below that will allow the economy to grow more rapidly In light of the newly released labor market data, Current Conditions Index values throughout 2014 were not as satisfactory as previously believed to be. Three months were revised higher while three were lower. While this sounds like a “wash,” it indicates that RI failed to sustain the string of 75 values from July through September, attaining that value only once last year, in September. This is the type of economic performance that inevitably emerges from a state such as ours that is in dire need of major structural reforms, most notably to taxes, fees, regulations, energy costs, and the lack of skills of our Labor Force. Fortunately Governor Raimondo is addressing all of these areas in her budget.
This proposal will provide needed local access to high quality BMT services in an tertiary academic medical center setting, thereby minimizing the number of RI residents who today travel out-of-of state for this service. Not only will the stress and strain of having to go out-of-state be eliminated for those BMT patients who elect to have their transplant
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done at RIH, but the will also be able to forego the additional cost of doing so. In addition, the cost to Insurers should be lower with BMT patients having their transplant performed locally rather than in such places as Boston. The cost to implement this program will also be minimal, estimate at less than $800,000, and 100% equity. Therefore, this proposal should have a de minimis impact upon the ability of the people of RI to afford this proposal. In addition, in-state jobs will be created because these services will no longer be moving out of state. 24.) Please address how the proposal will support optimizing health system performance with regards to the following three dimensions: a. Improving the patient experience of care (including quality and satisfaction) As already discussed in this application, this proposal will provide BMT service in a tertiary academic medical center setting locally to the residents of RI, thereby eliminating the need to go out-of-state to receive BMT service in a tertiary academic medical center setting. This local access will enhance the continuity of care delivered by the patients’ local physicians/providers without having to be cared for by out-of-state providers during the period of the actual transplant, and reduce the cost to patients and insurers by being able to receive the transplant locally. Thus, the quality of care will be enhanced and the cost o care will be reduced, leading to improved patient satisfaction. b. Improving the health of populations; and See response to a. above. c. Reducing the per capita cost of health care See response to a. above. 25.) Please identify any planned actions of the applicant to reduce, limit, or contain health care costs and improve the efficiency with which health care services are delivered to the citizens of this state. This proposal will help to reduce health care costs and improve the efficiency with which health care services are delivered to the citizens of RI by providing adult and pediatric BMT services in a tertiary care academic medical center institution setting that provides a full range of support services and medical subspecialties. Adult BMT patients who prefer to have their BMT done in this type of setting will no longer have to go out of state, nor will pediatric BMT patients and their families have to travel out of state in the absence of a pediatric BMT program locally. As a result, both payor and patient costs will be reduced, BMT patients will be able to receive all of their cancer care local in RI and oncologists will be able to monitor the care of their
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patients locally instead of having to deal with out of state institutions. Thus, the efficiency with which BMT health care services are delivered in RI will be improved. QUALITY, TRACK RECORD, CONTINUITY OF CARE, AND RELATIONSHIP TO THE HEALTH CARE SYSTEM 26.)
A) If the applicant is an existing facility:
Please identify and describe any outstanding cited health care facility licensure or certification deficiencies, citations or accreditation problems as may have been cited by appropriate authority. Please describe when and in what manner this licensure deficiency, citation or accreditation problem will be corrected. RIH does not have any outstanding cited health care facility licensure or certification deficiencies, citations or accreditation problems.
B) If the applicant is a proposed new health care facility: Please describe the quality assurance programs and/or activities which will relate to this proposal including both inter and intra-facility programs and/or activities and patient health outcomes analysis whether mandated by state or federal government or voluntarily assumed. In the absence of such programs and/or activities, please provide a full explanation of the reasons for such absence. Please see Attachment 3, RIH BMT QA Policy, specifically developed for the proposed BMT program. RIH has developed a very detailed QA policy specific to its proposed BMT program that addresses each area of the proposed program, and which all hospital staff involved with the BMT program will be trained on as part of the implementation of the program. The policy includes sections on Quality Assessment of Apheresis Documentation; Collection, Management and Maintenance of Transplant Data; How to Register a Donor for a BMT Recipient; Criteria for Recipient Selection and Evaluation; Use of a Mis-Matched Donor; Criteria for Donor Selection, Evaluation and Management; Administration of Growth Factors; GVHD Prophylaxis and Treatment; Transplant Physician On-Call Coverage; Related Donor Allogeneic Cell Counts for Reinfusion; Process to Document Planned and Unplanned Deviations; Infection Prevention and Control for the Immunocompromised Patient; Coordination, Approval, Review and Distribution of Policies/Procedures of the Insert Bone Marrow Transplant Program; Transplant Physician Maintenance of Cognitive and Procedural Skills; Pre Bone Marrow Transplant Coordinator; Criteria and Responsibilities of the Bone Marrow Transplant (BMT) Program Medical Director; How to Register a “National Marrow Donor Program” Donor”; Patient Education; Assigning Unique Patient Number (UPN); Therapeutic Apheresis Nursing Training Program; Blood and Marrow Transplant Physician Competency; Consent for Marrow Harvest; and Patient Education Review.
C) If this proposal involves construction or renovation:
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Please describe your facility’s plan for any temporary move of a facility or service necessitated by the proposed construction or renovation. Please describe your plans for ensuring, to the extent possible, continuation of services while the construction and renovation take place. Please include in this description your facility’s plan for ensuring that patients will be protected from the noise, dust, etc. of construction. The construction will be phased and segregated with construction barriers throughout the entire construction process. All areas shall be constructed to conform to AIA healthcare guidelines, building codes and fire codes. 27.) Please discuss the impact of the proposal on the community to be served and the people of the neighborhoods close to the health care facility who are impacted by the proposal. This proposal will have a positive impact on the community served, including people in the neighborhoods close to RIH. For adults requiring BMT services, this proposal will provide an alternative to the existing local BMT service that will be available in a tertiary academic medical center setting based in the states leading Academic Medical Center and that will be readily accepted by the population, thereby eliminating both the hardship and additional cost incurred by adult patients who today opt to travel out of state for BMT care in a tertiary academic medical center setting rather than utilize the existing BMT program in RI. For children requiring BMT services and their families, this proposal will provide a new program accessible locally at the RIH/Hasbro where over 90% of all inpatient pediatric hematology/oncology cancer care in the state is already provided, and eliminate the family stress, hardship, lost working days, and additional costs associated with the need to travel to Boston Teaching and other out of state hospitals for BMT treatment. It is important to note that it is assumed that children seen at RIH/Hasbro have easy access to BMT protocols, and that while the care may be far away it is at least available. The experience of the physicians at Hasbro is that this is simply not true, "our patients” do not have priority for protocols at other hospitals and so treatment can be delayed. In some cases delayed treatment is denied treatment. Further, the complexities associated with seeking care for a child at a distance can be insurmountable and require leaving the family with little choice but to forgo treatment. We would like to think this never happens but it has. Finally, it is easy to be cavalier or dismissive about the travel of time of “only 60 miles”. But it is important to recognize the nature of the burden, not only for children but also for adults whose families must travel to visit. First, these are very long hospitals stays with extensive follow-up. The visitors,(and the patients who later becomes ambulatory patients after treatment ) must commute two and half hours every day minimum to visit, find parking, miss multiple meals at home and disrupt the lives of their children who might wish to visit but cannot due to school commitments. Often for convenience, family members take apartments or stay at hotels at their own cost to be nearby, further isolating themselves from their other family members and friends. Second, patients become quite ill, need emotional support, and the families do not need the added stress of travel. When
35
it is a child who is sick, parents must choose who will stay with other children, who will work and support the family, and who will leave the community to support an ill child. Other family members are not able to visit. Siblings experience the stress of travel first hand with limited parenting. Single parent families are stressed even more, with choices about sending other children to relatives, hiring help, seeking transportation for other children to school and elsewhere becoming unimaginable burdens. This program will provide high quality local service to children with cancer requiring BMT and offer an important programmatic choice to adults who go to Boston and elsewhere for treatment in a tertiary academic medical center setting. Every community in RI will be positively impacted by this program. 28.) Please discuss the impact of the proposal on service linkages with other health care facilities/providers and on achieving continuity of patient care. There are no existing service linkages with other health care facilities or providers at this time. However, as discussed in the response to Question 1, the Dana Farber Cancer Institute intends to provide essential Stem Cell laboratory support service for the RIH BMT program, and would be processing all pheresis products, blood, and marrow harvests for subsequent cell infusion in the marrow transplant recipients. This is a complex process involving determination of total cell counts, CD34 cell count and cell viability in the stem cell product, controlled rate cryopreservation in cryoprotectant media and storage in vapor phase liquid nitrogen. 29.)
Please address the following:
A. How the applicant will ensure full and open communication with their patients' primary care providers for the purposes of coordination of care; Being one of the primary tertiary care centers in the region RIH has significant infrastructure currently in place that enhances communication between specialists in the hospital and primary caregivers in the community, including EPIC/LifeChart and LifespanLink. This will be enhanced with weekly communications via personal letters and telephone calls. B. Discuss the extent to which preventive services delivered in a primary care setting could prevent overuse of the proposed facility, medical equipment, or service and identify all such preventative services; There are certain known carcinogens that can increase the frequency of malignancies for which bone marrow transplant is a treatment. The most common cause is tobacco, which is a main target of preventive services. Unfortunately, there are very few known causes of leukemias and the other hematologic malignancies which use bone marrow transplant as a treatment. Other causes, such as atomic radiation, benzene exposure, or industrial pesticide exposure, are not under the aegis of preventative services provided by primary care physicians.
36
C. Describe how the applicant will make investments, parallel to the proposal, to expand supportive primary care in the applicant’s service area. The primary contribution to Primary Care will be utilization of the infrastructure in place as described in response to Part A above to ensure full and open communications with patients’ primary care providers, and consultation and collaboration among all providers involved in the treatment of patients. D. Describe how the applicant will use capitalization, collaboration and partnerships with community health centers and private primary care practices to reduce inappropriate Emergency Room use. The Applicant will provide high quality services and active communication and collaboration with all providers involved in the treatment of the patient, thereby minimizing post-transplant effects and unnecessary visits to the Emergency Department. E. Identify unmet primary care needs in your service area, including “health professionals shortages”, if any (information available at Office of Primary Care and Rural Health at (http://www.health.ri.gov/programs/primarycareandruralhealth/). According to 2012 data on the above referenced web site, Providence, Pawtucket, Central Falls and Woonsocket are identified as primary care health professional shortage areas in RI. 30.) Please discuss the relationship of the services proposed to be provided to the existing health care system of the state. The development of BMT service at RIH is an important step in the evolution of the Lifespan/RIH cancer program, which will enable Lifespan and RIH to become a regional academic and clinical leader in cancer care. In addition, development of BMT services at RIH is a critical step in meeting the goals of the Brown/Lifespan partnership, and will be critical for attracting new bio-medical enterprises to Rhode Island. A nationally recognized program can only be achieved with the presence of the full spectrum of clinical treatments, and although RIH currently has a vast array of cancer services, the program is incomplete without this service which is an impediment to its future development. RIH strongly believes that this program as proposed will have minimal impact on RWMC as the proposed program is intended to minimize the number of adults who have been going out-of-state for BMT services, as well as provide pediatric BMT services in RI which RWMC does not provide. 31.) Please identify any state or federal licensure or certification citations and/or enforcement actions taken against the applicant and their affiliates within the past 3 years and the status or disposition of each. None. 37
32.) Please provide a list of pending or adjudicated citations, violations or charges against the applicant and their affiliates brought by any governmental agency or accrediting agency within the past 3 years and the status or disposition of each. None. 33.) Please provide a list of any investigations by federal, state or municipal agencies against the applicant and their affiliates within the past 3 years and the status or disposition of each. None.
Select and complete the Appendixes applicable to this application: Appendix A B C D E F G
Check off: X X
X
Required for: Accelerated review applications Applications involving provision of services to inpatients Nursing Home applications All applications Applications with healthcare equipment costs in excess of $2,596,709 and any tertiary/specialty care equipment Applications with debt or lease financing All applications
38
Appendix B Provision of Health Services to Inpatients 1.
Are there similar programmatic alternatives to the provision of institutional health services as proposed herein which are superior in terms of: a. Cost Yes _X_No b. Efficiency ___ Yes _X_ No c. Appropriateness ___ Yes _X_ No
2.
For each No response in Question 2, discuss your finding that there are no programmatic alternatives superior to this proposal separately for each such finding. Cost: The capital cost associated with this proposal are minimal, and the operational costs which are largely for staff and pharmaceuticals are now being spent in other locations primarily Boston and would be somewhat lower if spent in RI. Efficiency: The proposed service as planned is extremely efficient in that it negates the need to spend unnecessary capital for a stem cell laboratory. In addition, the current referral arrangements to other hospitals for BMT services adult and the pediatric patients at RIH have been living with is inefficient and disruptive to the continuity of patient care, and can only be improved by the alternative included in this proposal. Appropriateness: The current referral arrangements for RIH patients to receive BMT services requires out of state travel for many adult patients and all pediatric patients, resulting in undue hardship and additional costs for the patients and their families, conditions that would continue to exist for adults and/or pediatric patients without the implementation of this proposal.
3.
For each Yes response in Question 2, identify the superior programmatic alternative to this proposal, and explain why that superior alternative was rejected in favor of this proposal separately for each such finding. N/A
4.
In the absence of proposed institutional health services proposed herein, will patients encounter serious problems in obtaining care of the type proposed in terms of: a. Availability b. Accessibility c. Cost
X_ Yes ___ No _X Yes ___ No _X_Yes ___ No
5.
For each Yes response in Question 5, please justify and provide supporting evidence separately for availability, accessibility and cost. Availability: Without implementation of this proposal there would be serious problems in terms of availability, as the needs of the adult and pediatric populations for a comprehensive full service easily accessible academic based Bone Marrow Transportation (BMT) program located within the state would continue unmet. Accessibility: Without implementation of this proposal there would be serious problems in terms of accessibility, as the current referral arrangements to other hospitals for BMT services that is disruptive to patients and for the most part requires out of state travel for many adult patients and all pediatric patients would continue, resulting in undue hardship for the patients and their families. Costs: Without implementation of this proposal, there would be serious problems in terms of cost as the referral patterns referred to under the Accessibility discussion above would not only result in undue hardship for the patients and their families, but also in additional travel and lodging costs.
40
Appendix D All applications must be accompanied by responses to the questions posed herein. 1. Provide a description and schematic drawing of the contemplated construction or renovation or new use of an existing structure and complete the Change in Space Form. Attached. This proposal only requires construction for the two pediatric beds at Hasbro Children’s Hospital. No construction is necessary for the adult beds. Accordingly, these responses refer to the pediatric beds only. 2. Please provide a letter stating that a preliminary review by a Licensed architect indicates that the proposal is in full compliance with the current edition of the "Guidelines for Design and Construction of Hospital and Health Care Facilities" and identify the sections of the guidelines used for review. Please include the name of the consulting architect, and their RI Registration (license) number and RI Certification of Authorization number. Attached. 3. Provide assurance and/or evidence of compliance with all applicable federal, state and municipal fire, safety, use, occupancy, or other health facility licensure requirements. All work will meet or exceed all local and federal fire, building and hospital guidelines. 4. Does the construction, renovation or use of space described herein corrects any fire and life safety, Joint Commission on Accreditation of Healthcare Organizations (JCAHO), U.S. Department of Health and Human Services (DHHS) or other code compliance problems: Yes____ No X o If Yes, include specific reference to the code(s). For each code deficiency, provide a complete description of the deficiency and the corrective action being proposed, including considerations of alternatives such as seeking waivers, variances or equivalencies. 5. Describe all the alternatives to construction or renovation which were considered in planning this proposal and explain why these alternatives were rejected. As described in the responses to Question 7G, the alternatives to construction and renovation considered were as follows: Adult 1a. Utilize two of four beds on the North wing of the 8th floor of the Zecchino pavilion (Main Building) designated to care for complex immuno-compromised cancer patients. This would include patients with who have lymphoma, leukemia, and other myloproliferative disorders, as well as patients suffering from chemotherapy induced immuno-suppression complications. Since these patients have similar requirements as BMT patients, two of the beds can be used for the proposed BMT service under the RIH license.
1b. Collaborate on the provision of BMT services with Roger Williams Medical Center (RWMC), utilizing two of four beds on the North wing of the 8th floor of the Zecchino pavilion (Main Building) designed to accommodate care for immuno-compromised cancer patients who have lymphoma, leukemia, and other myloproliferative disorders, as well as patients suffering from chemotherapy induced immuno-suppression complications. Since these patients have similar requirements as BMT patients, two of the beds can be used for the proposed BMT service under the RWMC license. 2a. Establish a stem cell laboratory on the 10th floor of the APC building. 2b. Utilize the stem cell laboratory already in place at RWMC eliminating the need for a stem cell laboratory at RIH. 2c. Explore a collaborative arrangement with the Dana Farber Cancer Institute to provide support for stem cell processing. Utilizing the stem cell laboratory already in place at DFCI eliminates the need for a stem cell laboratory at RIH. 3. Provide outpatient care for adult BMT patients in the existing Comprehensive Cancer Center space in the APC Building at RIH.
Pediatric 1. Renovate Hasbro 5 to accommodate two beds. This involves minor modifications to the HVAC system, can be done in a short period of time, and has minimal impact on the patient wing. 2. Renovate Hasbro 5 to accommodate four beds, with two rooms for inpatient and two for outpatient, which includes upgrading the current HVAC system as well as the room renovations. 3. Integrate the pediatric outpatient unit into the existing Tomorrow Fund clinic. The alternatives selected as described in the response to Question 7H were as follows: Adult - Alternatives 1a., 2c.and 3. were selected. A serious effort to collaborate on a joint BMT program took place over the course of several months between RIH and RWMC to work toward the joint program. This involved numerous meetings and conference calls, and while much effort was given, no agreement could be reached. During such time, RWMC turned its focus toward efforts to affiliate with another hospital or system leading to the formation of CharterCare which eventually became part of the for-profit Prospect Medical Holdings system. RIH does not believe that further discussions would be useful. Thus Alternatives 1b. and 2b. were deemed not feasible. The combination of Alternatives 1a. for the physical inpatient unit, 2c to process stem cells and 3 for the adult outpatient care component meet the needs of the proposed BMT program. These alternatives forgo the additional cost of constructing a stem cell laboratory at RIH having to be incurred, thus minimizing the capital cost required to implement the proposed BMT program.
2
Pediatric - Alternatives 1and 3 were selected Alternative 1 was selected since it can be completed in a shorter time frame than Alternative 2. Alternative 3 provides the outpatient component of care needed.
6. Attach evidence of site control, a fee simple, or such other estate or interest in the site including necessary easements and rights of way sufficient to assure use and possession for the purpose of the construction of the project. N/A 7.
If zoning approval is required, attach evidence of application for zoning approval.
N/A
8. If this proposal involves new construction or expansion of patient occupancy, attach evidence from the appropriate state and/or municipal authority of an approved plan for water supply and sewage disposal. N/A 9. Provide an estimated date of contract award for this construction project, assuming approval within a 120-day cycle. November 2015 10. Assuming this proposal is approved, provide an estimated date (month/year) that the service will be actually offered or a change in service will be implemented. If this service will be phased in, describe what will be done in each phase. February, 2016.
3
Change in Space Form Instructions The purpose of this form is to identify the major effects of your proposal on the amount, configuration and use of space in your facility. Column 1 Column 1 is used to identifying discrete units of space within your facility, which will be affected by this proposal. Enter in Column 1 each discrete service (or type of bed) or department, which as a result of this proposal is: a.) to utilize newly constructed space b.) to utilize renovated or modernized space c.) to vacate space scheduled for demolition In each of the Columns 3, 4, and 5, you are requested to disaggregate the construction, renovation and demolition components of this proposal by service or department. In each instance, it is essential that the total amount of space involved in new construction, renovation or demolition be totally allocated to these discrete services or departments listed in Column 1. Column 2 For each service or department listed in Column 1, enter in this column the total amount of space assigned to that service or department at all locations in your facility whether or not the locations are involved in this proposal. Column 3 For each service or department, please fill in the amount of space which that service or department is to occupy in proposed new construction. The figures in Column 3 should sum to the total amount of space of new construction in this proposal. Column 4 For each service or department, please fill in the amount of space, which that service or department is to occupy in space to be modernized or renovated. The figures in column 4 should sum to the total amount of space of renovation and modernization in this proposal. Column 5 For each service or department fill in the amount of currently occupied space which is proposed to be demolished. The figures in Column 5 should sum to the total amount of space of demolition specified in this proposal. Column 6 For each service or department entered in Column 1, enter in this column the total amount of space which will, upon completion of this project, be assigned to that service or department at all locations in your facility whether or not the locations are involved in this proposal. Column 7 Subtract from the amount of space shown in Column 6 the amount shown in Column 2. Show an increase or decrease in the amount of space.
Change in Space Form Please identify and provide a definition for the method used for measuring the space (i.e. gross square footage, net square footage, etc.): Gross Square Feet (GSF) is the method used for measuring the space below for this proposal, and is defined as total square feet within the outside faces of the exterior walls of the space being measured, including all vertical penetration areas, for circulation and shaft areas. 1. Service or Department Name
Hasbro 5 Hasbro 5 BMT Room
TOTAL:
1. Service or Department Name
2. Current 3. New 4. Space Construction Renovation Amount Space Space Amount Amount
5. Amount of Space Currently Occupied to be Demolished
6. Proposed Space Amount
7. Change [(6)-(2)]
570
0
0
0
0
-570
0
0
570
0
570
+570
570
0
570
0
570
0
2. Current 3. New 4. Space Construction Renovation Amount Space Space Amount Amount
5. Amount of Space Currently Occupied to be Demolished
6. Proposed Space Amount
7. Change [(6)-(2)]
Main 8 (east wing) BMT
2700
0
0
0
2700
0
TOTAL:
2700
0
0
0
2700
0
Appendix G Ownership Information All applications must be accompanied by responses to the questions posed herein. 1.
List all officers, members of the board of directors, stockholders, and trustees of the licensee, applicant and/or ultimate parent entity. For each individual, provide their home and business address, principal occupation, position with respect to the licensee, applicant and/or ultimate parent entity, and amount, if any, of the percentage of stock, share of partnership, or other equity interest that they hold. See Attached Board Listing
2.
For each individual listed in response to Question 1 above, list all (if any) other health care facilities or entities within or outside Rhode Island in which he or she is an officer, director, trustee, shareholder, partner, or in which he or she owns any equity or otherwise controlling interest. For each individual, please identify: A) the relationship to the facility and amount of interest held, B) the type of facility license held (e.g. nursing facility, etc.), C) the address of the facility, D) the state license #, E) Medicare provider #, and F) any professional accreditation (e.g. JACHO, CHAP, etc.). Pamela Harrop, MD - physician and Officer of Medical Associates of RI.
3.
If any individual listed in response to Question 1 above, has any business relationship with the licensee, applicant and/or ultimate parent entity, including but not limited to: supply company, mortgage company, or other lending institution, insurance or professional services, please identify each such individual and the nature of each relationship. Fred Schiffman - employed physician of The Miriam Hospital Brian Zink - employed physician of Rhode Island Hospital Shivan Subramanium - Chair of FM Global from whom Lifespan and its affiliates purchase insurance.
4.
Have any individuals listed in response to Question 1 above been convicted of any state or federal criminal violation within the past 20 years? Yes___ No X . •
5.
If response is ‘Yes’, please identify each person involved, the date and nature of each offense and the legal outcome of each incident.
Please provide organization chart for the applicant, identifying all "parent" entities with direct or indirect ownership in or control of the applicant, all "sister" legal entities also owned or controlled by the parent(s), and all subsidiary entities owned by the applicant. Please provide a brief narrative clearly explaining the relationship of these entities, the percent ownership the principals have in each (if applicable), and the role of each and every legal entity that will have control over the applicant.
See Attached Organization Chart 6.
Please list all licensed healthcare facilities (in Rhode Island or elsewhere) owned, operated or controlled by any of the entities identified in response to Question 5 above (applicant and/or its principals). For each facility, please identify: A) the entity, applicant or principal involved, B) the type of facility license held (e.g. nursing facility, etc.), C) the address of the facility, D) the state license #, E) Medicare provider #, and F) any professional accreditation (e.g. JACHO, CHAP, etc.). See Attached Facility Listing
7.
Have any of the facilities identified in Question 5 or 6 above had: A) federal conditions of participation out of compliance, B) decertification actions, or C) any actions towards revocation of any state license? Yes ___ No X •
8.
Have any of the facilities owned, operated or managed by the applicant and/or any of the entities identified in Question 5 or 6 above during the last 5-years had bankruptcies and/or were placed in receiverships? Yes___ No X •
9.
If response is ‘Yes’, please identify the facility involved, the nature of each incident, and the resolution of each incident.
If response is ‘Yes’, please identify the facility and its current status.
For applications involving establishment of a new entity or involving out of state entities, please provide the following documents: N/A • Certificate and Articles of Incorporation and By-Laws (for corporations) • Certificate of Partnership and Partnership Agreement (for partnerships) • Certificate of Organization and Operating Agreement (for limited liability corporations)
3
LIFESPAN BOARD OF DIRECTORS APRIL 2015 Board Member Thomas Anders, MD 8 Bayview Avenue South Dartmouth, MA 02748 (term: 12/2016) Lawrence Aubin Sr. President Aubin Corporation 1460 Fall River Avenue Seekonk, MA 02771 (term: 12/2015) Timothy Babineau, MD President and CEO Lifespan 593 Eddy Street Providence, RI 02903 (ex officio) Emanuel (Manny) Barrows Senior Vice President Bank RI One Turks Head Place Providence, RI 02903 (term: 12/2017) Roger Begin BNY Mellon One Financial Plaza Providence, RI 02903 (term: ex officio – Chair, RIHF) Peter Capodilupo BMW of Newport 1215 West Main Road Middletown, RI 02842 (term: ex officio – Chair, NHF)
Home Address
Disclosure/Occupation
Same address
2015 – Nothing Disclosed Physician
109 Cameron Way Rehoboth, MA 02769
2015 – Nothing Disclosed Business Leader
2 Holly Lane Barrington, RI 02806
2015 – Governing Board (UHC/VHA) Physician/ Healthcare Executive
41 Don Avenue Rumford, RI 02916
2015 – Nothing Disclosed Banker
15 Riverside Drive S. Kingstown, RI 02879
2014 – Nothing Disclosed 2015 – Not Yet Returned Financial Advisor
11 Leeshore Lane Tiverton, RI 02878
2015 – Nothing Disclosed Business Leader
4
Board Member Jonathan Fain President Teknor Apex Company 505 Central Avenue Pawtucket, RI 02861 (term: 12/2016) Edward Feldstein, Esq. Roberts, Carroll, Feldstein & Pierce, Inc. 10 Weybosset Street Providence, RI 02903 (term: 12/2015)
Home Address
Disclosure/Occupation
5 Holly Lane Barrington, RI 02806
2015 – Nothing Disclosed Business Leader
350 Taber Avenue Providence, RI 02906
Lawyer
David Gorelick, MD Aquidneck Medical Associates 20 Bark Avenue 50 Memorial Blvd. Jamestown, RI 02835 Newport, RI 02840 (term: 12/2015) Michael Hanna Blum Shapiro 50 Holden Street Providence, RI 02908 (term: 12/2016) Pamela Harrop, MD Medical Associates of RI 1180 Hope Street Bristol, RI 02809 (term: 12/2016) Marie Langlois 254 Wayland Avenue Providence, RI 02906 (term: 12/2015) Alan Litwin Kahn, Litwin, Renza & Co.,Ltd 951 North Main Street Providence, RI 02904 (ex officio – Chair, TMHF)
2015 – Nothing Disclosed
2015 – Nothing Disclosed Physician
248 Chestnut Hill Road Wakefield, RI 02879-7645
2015 – Nothing Disclosed
11Beaumont Street Rumford, RI 02916
2015 – Medical Associates of RI
CPA
Physician
254 Wayland Avenue Providence, RI 02906
2015 – Nothing Disclosed Financial Advisor
42 Intervale Road Providence, RI 02906
2015 – Nothing Disclosed CPA
5
Board Member Steven Paré Commissioner of Public Safety City of Providence 325 Washington Street Providence, RI 02903 (term: 12/2015)
Home Address
Disclosure/Occupation
499 Comstock Parkway Cranston, RI 02921
2015 – Nothing Disclosed Government Official
Lloyd Robertson Morgan Stanley Smith Barney 145 Saltaire Avenue One Financial Plaza -19th fl Narragansett, RI 02882 Providence, RI 02903 (term: ex office) Lawrence Sadwin 18 Oyster Point Same address Warren, RI 02885-4117 (ex officio – Chair, BHF))
2015 – Nothing Disclosed Financial Advisor 2015 – Volunteer Positions Ctr. For Medical Technology – Chair Friends of the World Heart Federation – President Financial Advisor
Fred Schiffman, MD Vice Chair of Medicine The Miriam Hospital 164 Summit Avenue Providence, RI 02906 (term: 12/2015)
2015 Board Positions 317 Laurel Avenue Providence, RI 02906
Homecare & Hospice of NE Leukemia and Lymphoma Society Physician
Shivan Subramaniam Chairman FM Global 270 Central Avenue Johnston, RI 02919 (term: 12/2016) Jane Williams, RN, PhD Dean, School of Nursing Rhode Island College 600 Mt. Pleasant Avenue Providence, RI 02908 (term: 12/2017)
2015 Director Fees 155 Grotto Avenue Providence, RI 02906
FM Global and Citizens Financial Group Business Leader
46 Huntington House Lane Scituate, RI 02857-1257 Tel: 401-934-2027
6
2015 – Nothing Disclosed College Executive
Board Member Brian Zink, MD Chair, Emergency Medicine Rhode Island Hospital 55 Claverick Street Providence, RI 02903 (term: 12/2017)
Home Address
Disclosure/Occupation
Split Rock Farm 156 Mile Road Coventry, RI 02816
2015 – Nothing Disclosed
7
Physician
RIH AND SISTER ENTITY FACILITIES 1.
A. B. C. D. E.
2.
A. B. C. D.
3.
A. B. C. D. E.
4.
A. B. C. D.
5.
A. B. C. D.
6.
A. B. C. D.
7.
A. B. C. D.
Emma Pendleton Bradley Hospital 1011 Veterans Memorial Parkway East Providence, RI 02915 Hospital License #: HOS00123 Medicare Provider #: 41-4003 Professional Accreditations: JCAHO Bradley Research Center 1 Hoppin Street Providence, RI 02903 Hospital License #: HOS00123-01 Professional Accreditations: JCAHO The Miriam Hospital 164 Summit Avenue Providence, RI 02906 Hospital License #: HOS00122 Medicare Provider #: 41-0012 Professional Accreditations: JCAHO and CAP TMH Laboratory 1 Hoppin Street Providence, RI 02903 Hospital License #: HOS00122-03 Professional Accreditations: CAP TMH Laboratory 1 Commerce Street Lincoln, RI 02865 Hospital License #: HOS00122-04 Professional Accreditations: CAP TMH Laboratory 400 Bald Hill Road Warwick, RI 02886 Hospital License #: HOS00122-05 Professional Accreditations: CAP RISE TB Clinic 14 Third Street Providence, RI 02906 Hospital License #: HOS00122-06 Professional Accreditations: JCAHO
9
8.
A. B. C. D.
9.
A. B. C.
10. A. B. C. D. 11. A. B. C. D. 12. A. B. C. D. 13. A. B. C. D. 14. A. B. C. D. 15. A. B. C. D.
TMH Immunology Research Center 14 Third Street and 11 Fourth Street Providence, RI 02906 Hospital License #: HOS00122-08 Professional Accreditations: JCAHO TMH Weight Control & Diabetes Research Center 196 Richmond Street Providence, RI 02903 Hospital License #: HOS00122-10 TMH Outpatient Rehabilitation Services 195 Collyer Street Providence, RI 02904 Hospital License #: HOS00122-11 Professional Accreditations: JCAHO TMH Cardiac Rehabilitation/Pulmonary Rehabilitation Center 208 Collyer Street Providence, RI 02904 Hospital License #: HOS00122-12 Professional Accreditations: JCAHO TMH Diagnostic Imaging Center 195 Collyer Street Providence, RI 02904 Hospital License #: HOS00122-13 Professional Accreditations: JCAHO TMH Pre-admission Testing Center 208 Collyer Street Providence, RI 02904 Hospital License #: HOS00122-14 Professional Accreditations: JCAHO TMH Behavioral Medicine Clinic 146 West River Street Providence, RI 02904 Hospital License #: HOS00122-16 Professional Accreditations: JCAHO The Miriam Hospital DBA Women’s Medicine Collaborative 146 West River Street Providence, RI 02904 Hospital License #: HOS00122-17 Professional Accreditations: JCAHO 10
16. A. B. C. D. 17. A. B. C. D. 18. A. B. C. D. 19. A. B. C. D. 20. A. B. C. D. E. 21. A. B. C. D. 22. A. B. C. D.
Cardiovascular Institute of Miriam Hospital 208 Collyer Street Providence, RI 02904 Hospital License #: HOS00122-18 Professional Accreditations: JCAHO Cardiovascular Institute of Miriam Hospital 1454 South County Trail East Greenwich, RI 02818 Hospital License #: HOS00122-19 Professional Accreditations: JCAHO Cardiovascular Institute of Miriam Hospital 950 Warren Avenue East Providence, RI 02914 Hospital License #: HOS00122-20 Professional Accreditations: JCAHO Miriam Hospital Immunology Center 1125 North Main Street Providence, RI 02904 Hospital License #: HOS00122-21 Professional Accreditations: JCAHO Newport Hospital 11 Friendship Street Newport, RI 02840 Hospital License #: HOS00127 Medicare Provider #: 41-0006 Professional Accreditations: JCAHO, CARF, and CAP Jamestown Family Practice Center 20 Southwest Avenue Jamestown, RI 02835 Hospital License #: HOS00127-01 Professional Accreditations: JCAHO, CARF, and CAP Family Physicians of Tiverton/Little Compton 1800 Main Road Tiverton, RI 02878 Hospital License #: HOS00127-03 Professional Accreditations: JCAHO, CARF, and CAP
11
23. A. B. C. D. 24. A. B. C. D. 25. A. B. C. D. 26. A. B. C. D. 27. A. B. C. D. 28. A. B. C. D. 29. A. B. C. D. 30. A. B. C. D.
Family Physicians of Newport 19 Friendship Street Newport, RI 02840 Hospital License #: HOS00127-04 Professional Accreditations: JCAHO, CARF, and CAP Newport Women’s Health 77 Turnpike Avenue Portsmouth, RI 02871 Hospital License #: HOS00127-06 Professional Accreditations: JCAHO, CARF, and CAP Newport Hospital Portsmouth Imaging Center 69 Turnpike Avenue Portsmouth, RI 02871 Hospital License #: HOS00127-07 Professional Accreditations: JCAHO, CARF, and CAP Newport Dermatology 79 Turnpike Avenue Portsmouth, RI 02871 Hospital License #: HOS00127-08 Professional Accreditations: JCAHO, CARF, and CAP NHCC Medical Associates, Inc. 19 Friendship Street Newport, RI 02840 Hospital License #: HOS00127-09 Professional Accreditations: JCAHO, CARF, and CAP Newport Endocrinology Borden Carey Building, 19 Friendship Street Newport, RI 02840 Hospital License #: HOS00127-10 Professional Accreditations: JCAHO, CARF, and CAP Newport Women’s Health Borden Carey Building, 19 Friendship Street Newport, RI 02840 Hospital License #: HOS00127-11 Professional Accreditations: JCAHO, CARF, and CAP Newport Hospital Imaging Center 345 Valley Road Middletown, RI 02842 Hospital License #: HOS00127-12 Professional Accreditations: JCAHO, CARF, and CAP 12
31. A. B. C. D. E. 32. A. B. C. D. 33. A. B. C. D. 34. A. B. C. D. 35. A. B. C. D. 36. A. B. C. D. 37. A. B. C. D.
Rhode Island Hospital 593 Eddy Street Providence, RI 02903 Hospital License #: HOS00121 Medicare Provider #: 41-0007 Professional Accreditations: JCAHO and CAP Rhode Island Hospital Child Research Center 1 Hoppin Street Providence, RI 02903 Hospital License #: HOS00121-08 Professional Accreditations: JCAHO RIH Pediatric Heart Center 1 Hoppin Street Providence, RI 02903 Hospital License #: HOS00121-11 Professional Accreditations: JCAHO RIH Sleep Disorders Center 70 Catamore Boulevard East Providence, RI 02914 Hospital License #: HOS00121-13 Professional Accreditations: JCAHO RIH Pediatric and Adolescent Health Care Center 1 Hoppin Street Providence, RI 02903 HOS00121-14 Professional Accreditations: JCAHO RI Hospital Hasbro Children’s Outpatient Rehab Services 765 Allens Avenue Providence, RI 02903 HOS00121-15 Professional Accreditations: JCAHO General Internal Medicine Research Group 111 Plain Street Providence, RI 02902 HOS00121-16 Professional Accreditations: JCAHO
13
38. A. B. C. D. 39. A. B. C. D. 40. A. B. C. D. 41. A. B. C. D. 42. A. B. C. D. 43. A. B. C. D. 44. A. B. C. D. 45. A. B. C. D.
Dialysis Center of Rhode Island Hospital 22 Baker Street Providence, RI 02905 HOS00121-17 Professional Accreditations: JCAHO Audiology and Speech Pathology Services 115 Georgia Avenue Providence, RI 02905 HOS00121-18 Professional Accreditations: JCAHO Hallett Center for Diabetes and Endocrinology 900 Warren Avenue East Providence, RI 02914 HOS00121-19 Professional Accreditations: JCAHO Pediatric and Adult Medicine 900 Warren Avenue East Providence, RI 02914 HOS00121-20 Professional Accreditations: JCAHO Ophthalmology Clinic 1 Hoppin Street Providence, RI 02903 HOS00121-21 Professional Accreditations: JCAHO Rhode Island Hospital Surgery Center at Wayland Square 17 Seekonk Street Providence, RI 02906 HOS00121-22 Professional Accreditations: JCAHO Rhode Island Hospital Molecular Lab Coro East, 167 Point Street Providence, RI 02904 HOS00121-23 Professional Accreditations: JCAHO Rhode Island Hospital Outpatient Rehabilitation Service 765 Allens Avenue Providence, RI 02905 HOS00121-24 Professional Accreditations: JCAHO 14
46. A. B. C. D. 47. A. B. C. D. 48. A. B. C. D. 49. A. B. C. D. 50. A. B. C. D. 51. A. B. C. D. 52. A. B. C. D. 53. A. B. C. D.
Rhode Island Hospital Department of Psychiatry 146 West River Street Providence, RI 02904 HOS00121-25 Professional Accreditations: JCAHO Pre-Admission Testing 79 Plain Street Providence, RI 02903 HOS00121-26 Professional Accreditations: JCAHO Dialysis Center of Rhode Island Hospital 950 Warren Avenue East Providence, RI 02914 HOS00121-27 Professional Accreditations: JCAHO Pediatric Multi-Discipline Clinic and Rehabilitation 1454 South County Trail East Greenwich, RI 02818 HOS00121-28 Professional Accreditations: JCAHO Comprehensive Cancer Center 11 Friendship Street Newport, RI 02840 HOS00121-29 Professional Accreditations: JCAHO Comprehensive Cancer Center 164 Summit Avenue Providence, RI 02906 HOS00121-30 Professional Accreditations: JCAHO Comprehensive Cancer Center 1454 South County Trail East Greenwich, RI 02818 HOS00121-31 Professional Accreditations: JCAHO Rhode Island Hospital Center for Wound Care 950 Warren Avenue East Providence, RI 02914 HOS00121-32 Professional Accreditations: JCAHO 15
54. A. B. C. D. 55. A. B. C. D. 56. A. B. C. D. 57. A. B. C. D. 58. A. B. C. D.
Rhode Island Hospital Rehabilitation Services 235 Plain Street Providence, RI 02903 HOS00121-33 Professional Accreditations: JCAHO Rhode Island Hospital Center for Primary Care and Specialty Medicine 245 Chapman Street Providence, RI 02905 HOS00121-34 Professional Accreditations: JCAHO Medicine Pediatric 245 Chapman Street Providence, RI 02905 HOS00121-35 Professional Accreditations: JCAHO Children’s Neurology & Development Clinic 335 R Prairie Avenue Providence, RI 02905 HOS00121-36 Professional Accreditations: JCAHO Lifespan Clinical Research Center 1 Hoppin Street Providence, RI 02903 HOS00121-37 Professional Accreditations: JCAHO
16
ATTACHMENT 1 – CHARITY CARE POLICY
17
PF00.0054 PF40.1100
RHODE ISLAND HOSPITAL CHARITY CARE SLIDING SCALE FOR OUTPATIENT and INPATIENT SERVICES per INCOME LEVEL and FAMILY SIZE
NEW SLIDING SCALE EFFECTIVE March 1, 2015 Family Size 1 2 3 4 5 6 7 8
Federal Poverty 11,770 15,930 20,090 24,250 28,410 32,570 36,730 40,890
Low
23,541 31,861 40,181 48,501 56,821 65,141 73,461 81,781 90,101 98,421 106,741 115,061
High 23,540 31,860 40,180 48,500 56,820 65,140 73,460 81,780 90,100 98,420 106,740 115,060 123,380
Maximum savings levels Medicaid savings levels
1 O/P Free 90% 78% 78% 78% 78% 78% 78% 78% 78% 78% 78% 78% $ 9,400 $ 4,000
I/P Free 80% 60% 40% 20% DRG DRG DRG DRG DRG DRG DRG DRG
2 O/P Free 90% 78% 78% 78% 78% 78% 78% 78% 78% 78% 78% $ 14,100 $ 6,000
I/P
3 O/P
I/P
Free 80% 60% 40% 20% DRG DRG DRG DRG DRG DRG DRG
Free 90% 78% 78% 78% 78% 78% 78% 78% 78% 78%
Free 80% 60% 40% 20% DRG DRG DRG DRG DRG DRG
$ 14,100 $ 6,000
Family Size 4 O/P I/P
Free 90% 78% 78% 78% 78% 78% 78% 78% 78% $ 14,100 $ 6,000
Free 80% 60% 40% 20% DRG DRG DRG DRG DRG
5 O/P
I/P
6 O/P
I/P
7 O/P
I/P
8 O/P
I/P
Free 90% 78% 78% 78% 78% 78% 78% 78%
Free 80% 60% 40% 20% DRG DRG DRG DRG
Free 90% 78% 78% 78% 78% 78% 78%
Free 80% 60% 40% 20% DRG DRG DRG
Free 90% 78% 78% 78% 78% 78%
Free 80% 60% 40% 20% DRG DRG
Free 90% 78% 78% 78% 78%
Free 80% 60% 40% 20% DRG
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
Outpatient (O/P) - The automatic discount is 78%. Patient's receive the deduction on charges. Examples: The bill is $100.00, the patient receives an automatic discount of 78%, the balance is $22.00. If the patient receives a charity care discount of 90% and the bill is $100.00, the balance is $10.00. Inpatient (I/P) - The automatic discount is the DRG Medicare payment. Example: If the DRG payment is $10,000, that is the automatic discount. If the patient's qualifies for a greater discount, it will be deducted from the Medicare DRG payment. Example: DRG pays $10,000, the patient qualifies for an 80% reduction. The patient pays 20% of the DRG, which equals $2,000.
Sliding Fee Scale March 2015 RIH
3/10/2015 10:13 AM
THE MIRIAM HOSPITAL CHARITY CARE SLIDING SCALE FOR OUTPATIENT and INPATIENT SERVICES per INCOME LEVEL and FAMILY SIZE
NEW SLIDING SCALE EFFECTIVE March 1, 2015 Family Size 1 2 3 4 5 6 7 8
Federal Poverty 11,770 15,930 20,090 24,250 28,410 32,570 36,730 40,890
Low
23,541 31,861 40,181 48,501 56,821 65,141 73,461 81,781 90,101 98,421 106,741 115,061
High 23,540 31,860 40,180 48,500 56,820 65,140 73,460 81,780 90,100 98,420 106,740 115,060 123,380
Maximum savings levels Medicaid savings levels
1 O/P Free 90% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% $ 9,400 $ 4,000
I/P Free 80% 60% 40% 20% DRG DRG DRG DRG DRG DRG DRG DRG
2 O/P Free 90% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% $ 14,100 $ 6,000
I/P
3 O/P
I/P
Free 80% 60% 40% 20% DRG DRG DRG DRG DRG DRG DRG
Free 90% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Free 80% 60% 40% 20% DRG DRG DRG DRG DRG DRG
$ 14,100 $ 6,000
Family Size 4 O/P I/P
Free 90% 80% 80% 80% 80% 80% 80% 80% 80% $ 14,100 $ 6,000
Free 80% 60% 40% 20% DRG DRG DRG DRG DRG
5 O/P
I/P
6 O/P
I/P
7 O/P
I/P
8 O/P
I/P
Free 90% 80% 80% 80% 80% 80% 80% 80%
Free 80% 60% 40% 20% DRG DRG DRG DRG
Free 90% 80% 80% 80% 80% 80% 80%
Free 80% 60% 40% 20% DRG DRG DRG
Free 90% 80% 80% 80% 80% 80%
Free 80% 60% 40% 20% DRG DRG
Free 90% 80% 80% 80% 80%
Free 80% 60% 40% 20% DRG
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
Outpatient (O/P) - The automatic discount is 80%. Patient's receive the deduction on charges. Examples: The bill is $100.00, the patient receives an automatic discount of 80%, the balance is $20.00. If the patient receives a charity care discount of 90% and the bill is $100.00, the balance is $10.00. Inpatient (I/P) - The automatic discount is the DRG Medicare payment. Example: If the DRG payment is $10,000, that is the automatic discount. If the patient's qualifies for a greater discount, it will be deducted from the Medicare DRG payment. Example: DRG pays $10,000, the patient qualifies for an 80% reduction. The patient pays 20% of the DRG, which equals $2,000.
Sliding Fee Scale March 2015 TMH
3/10/2015 10:12 AM
NEWPORT HOSPITAL CHARITY CARE SLIDING SCALE FOR OUTPATIENT and INPATIENT SERVICES per INCOME LEVEL and FAMILY SIZE
NEW SLIDING SCALE EFFECTIVE March 1, 2015 Family Size 1 2 3 4 5 6 7 8
Federal Poverty 11,770 15,930 20,090 24,250 28,410 32,570 36,730 40,890
Low
23,541 31,861 40,181 48,501 56,821 65,141 73,461 81,781 90,101 98,421 106,741 115,061
High 23,540 31,860 40,180 48,500 56,820 65,140 73,460 81,780 90,100 98,420 106,740 115,060 123,380
Maximum savings levels Medicaid savings levels
1 O/P Free 90% 79% 79% 79% 79% 79% 79% 79% 79% 79% 79% 79%
$ 9,400 $ 4,000
I/P Free 80% 60% 40% 20% DRG DRG DRG DRG DRG DRG DRG DRG
2 O/P Free 90% 79% 79% 79% 79% 79% 79% 79% 79% 79% 79%
$ 14,100 $ 6,000
I/P
3 O/P
I/P
Free 80% 60% 40% 20% DRG DRG DRG DRG DRG DRG DRG
Free 90% 79% 79% 79% 79% 79% 79% 79% 79% 79%
Free 80% 60% 40% 20% DRG DRG DRG DRG DRG DRG
$ 14,100 $ 6,000
Family Size 4 O/P I/P
Free 90% 79% 79% 79% 79% 79% 79% 79% 79%
$ 14,100 $ 6,000
Free 80% 60% 40% 20% DRG DRG DRG DRG DRG
5 O/P
I/P
6 O/P
I/P
7 O/P
I/P
8 O/P
I/P
Free 90% 79% 79% 79% 79% 79% 79% 79%
Free 80% 60% 40% 20% DRG DRG DRG DRG
Free 90% 79% 79% 79% 79% 79% 79%
Free 80% 60% 40% 20% DRG DRG DRG
Free 90% 79% 79% 79% 79% 79%
Free 80% 60% 40% 20% DRG DRG
Free 90% 79% 79% 79% 79%
Free 80% 60% 40% 20% DRG
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
Outpatient (O/P) - The automatic discount is 79%. Patient's receive the deduction on charges. Examples: The bill is $100.00, the patient receives an automatic discount of 79%, the balance is $21.00. If the patient receives a charity care discount of 90% and the bill is $100.00, the balance is $10.00. Inpatient (I/P) - The automatic discount is the DRG Medicare payment. Example: If the DRG payment is $10,000, that is the automatic discount. If the patient's qualifies for a greater discount, it will be deducted from the Medicare DRG payment. Example: DRG pays $10,000, the patient qualifies for an 80% reduction. The patient pays 20% of the DRG, which equals $2,000.
Copy of Sliding Fee Scale March 2015 NH
3/10/2015 10:15 AM
Bradley Hospital PERCENT DISCOUNT FOR ALL PATIENTS per INCOME LEVEL and FAMILY SIZE
NEW SLIDING FEE SCHEDULE EFFECTIVE March 1, 2015 Family Size 1 2 3 4 5 6 7 8
Federal Poverty 11,770 15,930 20,090 24,250 28,410 32,570 36,730 40,890
Low 23,541 31,861 40,181 48,501 56,821 65,141 73,461 81,781 90,101 98,421 106,741 115,061
High 23,540 31,860 40,180 48,500 56,820 65,140 73,460 81,780 90,100 98,420 106,740 115,060 123,380
Maximum savings levels Medicaid savings levels
Sliding Fee Scale March 2015 BRADLEY
1 Free 90% 75% 60% 50% 40% 25% 25% 25% 25% 25% 25% 25%
$ 9,400 $ 4,000
2
3
Free 90% 75% 60% 50% 40% 25% 25% 25% 25% 25% 25%
Free 90% 75% 60% 50% 40% 25% 25% 25% 25% 25%
$ 14,100 $ 6,000
$ 14,100 $ 6,000
Family Size 4
Free 90% 75% 60% 50% 40% 25% 25% 25% 25%
$ 14,100 $ 6,000
5
6
7
8
Free 90% 75% 60% 50% 40% 25% 25% 25%
Free 90% 75% 60% 50% 40% 25% 25%
Free 90% 75% 60% 50% 40% 25%
Free 90% 75% 60% 50% 40%
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
3/10/2015 10:14 AM
LIFESPAN PHYSICIAN GROUP PERCENT DISCOUNT FOR OUTPATIENTS per INCOME LEVEL and FAMILY SIZE
NEW SLIDING SCALE EFFECTIVE March 1, 2015 Family Size 1 2 3 4 5 6 7 8
Federal Poverty 11,770 15,930 20,090 24,250 28,410 32,570 36,730 40,890
Low 23,541 31,861 40,181 48,501 56,821 65,141 73,461 81,781 90,101 98,421 106,741 115,061
High 23,540 31,860 40,180 48,500 56,820 65,140 73,460 81,780 90,100 98,420 106,740 115,060 123,380
Maximum savings levels Medicaid savings levels
Sliding Fee Scale March 2015 LPG
1 Free 90% 75% 60% 55% 50% 50% 50% 50% 50% 50% 50% 50% $ 9,400 $ 4,000
2
3
Free 90% 75% 60% 55% 50% 50% 50% 50% 50% 50% 50%
Free 90% 75% 60% 55% 50% 50% 50% 50% 50% 50%
$ 14,100 $ 6,000
$ 14,100 $ 6,000
Family Size 4
Free 90% 75% 60% 55% 50% 50% 50% 50% 50% $ 14,100 $ 6,000
5
6
7
8
Free 90% 75% 60% 55% 50% 50% 50% 50%
Free 90% 75% 60% 55% 50% 50% 50%
Free 90% 75% 60% 55% 50% 50%
Free 90% 75% 60% 55% 50%
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
$ 14,100 $ 6,000
3/10/2015 10:14 AM
ATTACHMENT 2 – AUDITED FINANCIAL STATEMENTS
18
RHODE ISLAND HOSPITAL AND AFFILIATES
Consolidated Financial Statements September 30,2014 and 2013 (With Independent Auditors' Report Thereon)
RHODE ISLAND HOSPITAL AND AFFILIATES Consolidated Financial Statements s~plcmbcr
30, 2014 and 2013
Table of Contents
Page(s) Independent Auditors' Report Consolidated Financial Statements: Consolidated Statements of Financial Position Consolidated Statements of Operations and Changes in Net Assets Consolidated Statements of Cash Flows :-.lotes to Consolidated Financial Statements
2 3 4
5 6-49
KPMGLLP 6t"'l Floor. Suite A 100 Westminster Street P•ov1de-nce. AI 02903 232 1
Independent Auditors' Report
The Board of Trustees Rhode Island Hospital: We have audited the accompanying consolidated tinancial statements of Rhode Island Hospital and Affiliates, which comprise the consolidated statements of financial position as of September 30, 2014 and 2013, and the related consolidated statements of operations and changes in net assets, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
Management's Responsibility for tlte Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements base-d on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perfom1 the audit to obt
OpilliOII
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Rhode Island Hospital and Aftiliates as of September 30, 2014 and 2013, and the results of their operations and their cash tlows for the years then ended in ac-cordance with U.S. generally accepted accounting principles.
Providence, Rhode Island february 19.2015
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RHODE ISLAI\D IIOSPITAI. A'<0 AFF'II.IAn:s Consolidated StatcmcnLo;; of(}Jxration!\ and Chang~.·~ in T\ct A:..M.'l:..
Years ended September )0, 20 I~ and
~0 13
(In thousands)
201~
Unrc--.trich.-d R:\ cnuc:.. and other ~upport: Paticnl '\en icc rc,cnlA". net of contra(tual allowances Prmio;;ion f(,r had debt!\ ~et patient
s
servtce revenue
Other rc,cnuc
l:ndO\\mcnt camml!> contributed tO\\nrd community benefit .'-let a»ets released from restncuons used for operations ~et
assets released from restricuon'i u...;cd tOr
rc~carch
I otal unrestricted revenues and other support
2013
1.071,901
s
(60.~0~)
1.017.~0')
( 73.0')3)
1.0 I 1.1>'1')
9~~.110
24,603
11.355
9,30~
9.453
15,648 52.828
~3.:!4~
50,523
I, 114,080
1.048.695
616,631 260,150 135,419 42,024 13.433 49.456
615,487 220,7V6 132,472 38,821 13,491 47.451
1. 11 7.113
1,06R51 R
Opcratmg 1.:\.J"ICO"cs: Comrcn'\ation und hcnclits Suppl ics and other cxpcn:-.cs Purc ha~i.Cd li.Crviccs Depreciation and a1nnrti'latinn
Interest License fees Total operating cxpcn,cs
(3.033)
Loss from operouons
Nonopl"ratmg gams and losses,: Net rcali.
>Cs) t~ains on bonrd-designutcd ime
nonopcrallnt~
(19.823)
(I ,884)
2,4:15
(50)
(96)
~.31>5
(1,980)
(losses) gams. net
s
Deficiency ofrc"cnuc' o'er C\pcn-.c'
3
(5.013)
~
( 17,43XJ
(('ununucd)
RHOOF. ISL \ '\0 HO!>I'II A L AJ\'ll AFFILIATES Consolidated Stat
2013
20 14
Lnrestricted net assets:
Deficiency of revenues over cxpc.:nw:-.
$
Other changes in unrestricted net a.''d!\: Change in limdcd statu.' uf pcn>ton and other postretirement plans, other lhan net pt:"riodic peiDion and postret1 remenl hcndit cost'\ Net chanl!e m unrealized 2:ains on inve~unent~ 3\ailahlc l
s
(22.\19~)
l\'el assetS released from re.;rric-rion'\ u~d f(lf purchibe of
property and equipment Oonall-d cquiprrn:nt IA"Cn:~c m mtcre:,t m net bs.ets of Rhode Island lfo.,.pital Foundation lralbfer.; from Hospital Propert1es. Inc. l>«rcase tn noncomrolling intere
S8A~6
(l.IR.>)
4.XR7
·1.583
(14~)
()(>l)
114 (245)
78
I cmporafll) restricted net assets: GIns. grants. and bequests Inco me from restricted end0\\<1ncnt and o ther rc:-.tr1ctcd mvestments l ncrea~e (decrease) in interest in net a.\:o.ct:-. nf RhoUe Island I fn;;,rnt.al Foundatic.m Tr•nsfcrs from Rhode Island Jlospual Foundauon Net 3.).)C!l) released from restrictionc; Ne1 realized and unrea1i7ed gains on im c ..tmcnl:-.
(22.122)
43,913
56.5'10
59,737
1.15.)
1.634
17
(91~)
6,8.10 (73J6)) l S,0)1
a.'~b
(17.438)
539
s:n
(lJecrease) increase in unrestricted n\!t a~·H:L'
Increase in temporarily rc...tric.:tcd ncl
(5,0 13)
7.19R (7lU54) 14.755
<>.1119
4.056
Perm.1nently restricted net as.«:L<: Net change m unrcali7cd gains on in\c;)tmcnb hSet> of RhoM Island llospotal Foundation lncrc-ao,;,e in pcnnam:ntl) rcstncted net as.~ets
1\'et ns,ets. beginning o f year
Sec accompanying notes to consolidated tinancial 'wtcmcnb.
~6.1
1~3
815
3Xl
1.279 49.248
(11,4nl
( Oecrease) increase in net as...ct:-. Net as;;,ct~. end of year
lXX
74$,R09 $
733,337
696.561 $
745.809
RHODE ISL.\I'oO IIO':>I'ITAI. A '\1> AmliATES ConwluJ
_lO. ~014 and ~0 13
lln thUt.•~nnds)
2013
2014
Cash flov.s lfom operatlng activities: {Occrca:-.c) incre-ase in net ass~t.s A<.l_tu::,tments to reconcile (decrease) incrcasl" in ne1 pr0\1dcd by operating aCU\·itie~:
( 12.472) $ asset~
Change in funded status of pension and Nher pn..,tr~tlfcml·nt plans. other than net periodic pcn~ion and J)\btn:tirement l'lenefit CO"t.;; ~·ct n:alued and un.reali7ed gainc; on in\C,.tmc.:nb
Lndi,.tnbutcd portion of chan~e in mttrt't m J\1..'1 a.'~b of Rhode Island Hospital Foundation Tr.m>fcn from Rbodo l1!31 Foundation Tl"llrnfcr.; from Hospital Prop
2~.Q\J~
(5~_+16)
( 16.N751
(16,J il) ~63
C72)
I )eprecmtion and amortiattion Pn)\lMOil for estimated health care bcnclit scll~ansurance costs Occrca'\.C in liabilities for ~timated health care hcnctit
self-inc;urance costs resulting from daim~ paid Net dc~.:rea~¢ (increase) in patient :lccount!-1 rccct"ablc (Decrease) increase in accounts ptl)Oble lnCI'Case in accrued employee bcnclib (tnd compt.:msation lncrca:-.c in c~tirnated third-pal'tY JXtym ~cttlcmcnt.s (l>ecrea<;e) incrca'\C in all other cum:nt and n()ncurrcnt a.."iscts and liabilittes. net
tM301 171\)
( 7.198) (114)
J~.U1J
38.Sll
57.767
56.~73
(56.0-IXI 11.431 (5.0R21
(56.746) ( 11,269) <),464 1.608 2.169
I.) ICI
3.744
Net cash pro"ided b~ operating acti\ith;) ('a-:h OO\\~ from in' c:stine acth nie">: l'urch3 under lon~-t<'ml debt ~onts Ocher net decrca"iCS in assets limilcd a:,. to u~ r'-oet cash pro\ided by (u.."iCd in) in\c>ting <.lCii\iCie~
(21.465)
16,483
~0.352
24,285
(hl,llQ)
(60.19~1
~<1.017
(~:!.638)
,l J.5S7
34.51~
~~5
\a-:h flO\\ !'I from Hnam:ine actt" 1ties: Procccd.s tfom issuanc; of lon~-tenn de he Pn)·metlt<; on long-term debt Tr~tnslt:rs from Rhode Island Hospital Foundution Tran:-.ICrs from Hospital Propertieo;. lnc. }Jet cash (used in) provided h)
4'1,248
to net cac;h
(48.4~01
35A~0
(11.2121 ().830
fi l'ltUlCIIlS activittcs
'Jet increase in cash and ca~:;h equivalent<\
Ca)h and cash equivalcntc;. beginning of) c.lr
78
(7.988) 7.198 114
(11.304)
34.774
14.303
10,639
I R,lil>-l
8.025
Ca)h and ca)h equivalent<;, end of)c-ar
s
l2,Q67
'>upplemcn!31 d1sc:IOMITC of ca>h llo" .nformot,on: ta~h p:ud tor mtcrcst
~
14.11~
S..:\." u'~ump.tn)o 1ng 0()(~ lO consolidated linan\.'iill )(,llcmenl"'
5
s
18.664
~
14.0011
RHODE ISLA:\'0 HOSI'ITAL AND AFFILIATES Notes to Consolidated Financial Statements September 30.2014 and 2013 (In thousands)
(I)
Description of Organization Rhode Island Hospital (the Hospital), located in Providence, l{hode Island, is a 719-bed nonprofit general acute care teaching hospital with university aailiation providing a comprehensive range of diagnostic and therapeutic services for the acute care of patients principally from Rhode Island and southeastern Massachusetts. As a complement to its role in service and education. the Hospital actively supp011s research. The Hospital is accredited by the Joint Commission on Accreditation ofHealthcare Organ i7.ations (JCAHO) and pa11icipates as a provider primarily in Medicare, Blue Cross, and Medicaid proJ,'I'ams. The Hospital is also a member of Voluntary Hospitals of America, Inc. (VllA). Effective August 9, 1994, the Hospital and The Miriam Hospital (TMI-1) of Providence, Rl (247 beds) implemented a plan which included the creation of a not-for-profit parent company. Lifespan Corporation. Each hospital continues to maintain its own identity, as well as its own campus and its own name. Lifespan. the sole member of the Hospital and Tl\1H, has the rcsponsibilicy for strategic planning and in itiatives, capital and operating budgets. and overall governance of the consolidated organization. The Hoard of Directors of Lifespan Corporation and the Boards of Trustees of the Hospital, TMH, ~cwport Health Care Corporation (NHCC), Newport Hospital. and Emma Pendleton 11radley l lospita l (EPBH) approved a restrucntring of the ir governance, effective October 23, 20 12. The restructuring has increased governance etlectiveness and has streamlined governance operation, as well as provided a single strategic perspective for the Lifespan system hospitals. Pursuam to the restrucru.ring. the composition of the Boards of Trustees of each of the hospitals and of NHCC is defined
6
(Continued)
RHODE ISLAND HOSPITAL AND AFFILIATES
Notes to Consolidated Financial Statements September 30, 2014 and 2013 (In thousands)
(2)
Charity Care and Other Community Benefits The total net cost of charity care and other community benefits provided by the Hospital for the years ended September 30,2014 and 2013 is summari~ed in the following table: 2014
Charity care Medical C{lucation. net Research Subsidized health services Community health improvement services and community benefit operations Unreimbursed Medicaid costs
$
34.074 55,916 12.527 10.872
2013 $
776 11 ,590 $
Total
125,755
=~~=
53,533 54,013 12,381 12,425 ')'? ~-
9,535
s
142,819
Charity Care The Hospital provides full charity care for individuals at or below twice the federal poverty level, with a sliding scale for individuals up to four times the poverty level. In addition, a substantial discount consistent with Medicare program reimbursement is offered to all other uninsured patients. The Hospital determines the costs associated with providing charity care by a~'fcgating the appli cable direct and indirect costs, including compensation and benefits, supplies. and other operating expenses, based on data from its costing system. The total cost, excluding medical education and research, incurred hy the 1lospital to provide charity care amounted to $34,074 and $53.533 in 2014 and 2013, respectively. The decline in 2014 is due largely to the January I, 2014 expansion of Medicaid eligibility and the gr0\\1h of health insurance exchanges. Charges forgone, based on established rates, amounted to $ 124,637 and $185,731 in 2014 and 2013, respectively.
Medical Education The Hospiml provides the setting tor and substantially supports medical education in various clinical training and nursing programs. The total cost of medical education provided by the Hospital exceeded the reimbursement received from third-party payors by $55,916 and $54.013 in 2014 and 2013, respectively. In 1969, the Hospital and certain other Rhode Island hospitals entered into an <1ffiliation agreement to participate jointly in various clinical training programs and re;earch activities with Brown Medical School, renamed The Warren Alpert Medical School of Brown Uni versity (Brown). ln 2010, Brown named the Hospital its Principal Teaching Hospital. TMH and EJ>BH continue to be designated as major teaching affiliates. The goals of the partnership arc to facilitate the expansion of joint educational and research programs in order to compete both clinically and academically. The Hospital currently sponsors 4 7 graduate medical education programs accredited by or under the auspices of the Accreditation Council for (;raduate Medical Education (ACGME). whi le also sponsoring another 26 hospital-approved rcsidcnC) and fellowship programs. The Hospital serves as the principal setting for these clinical training programs. which encompass
7
(Continued)
RHODE ISLAND TIOSPITAL A:-10 AFFILIATES Notes to Consolidated Financ ial Statements September 30,20 14 and 2013 (In thousands}
(2)
Charity Care and Other Community Benefits (continued) the following disciplines: internal medicine and medi cine subspecialties, including hematology and oncology; orthopedics and orthopedic subspeciahies; clinical neurosciences; general surgery and surgical s ubspeciah ies; pediatrics and pediatric subspecialties, including hematology and oncology; dermatology: radiology; pathology; child psychiatry; emergency medicine and emergency medicine subspecialties; dentistry; and medical physics. The Hospital provides stipends to residents and physician fell ows while in training. The Hospital is also a participating clinical training site for residents from other programs in anesthesiology, pediatric dentistry, family medicine, infectious disease, obstetrics/gynecology (OI3/(iyn) and OBiGyn s ubspecialties, otolaryngology, podiatry, psychiatry, geriatric psychiatry, orthopedics, rheumatology, and radiation onco logy. With respect to nursing education, the Hospital has developed educational afliliations with the L'niversity of Rhode Island College ofNursing: Rhode Island College School of Nursing; Community College of Rhode Island (CCRI); Salve Regina University; Boston College: Yale t;niversity; Regis College; Simmons College; St. Joseph's Tlealth Services' School of Nursing; the University of MassachusettS campuses at Dm1mouth, Boston, Amherst, and Worcester; the University of Connecticut; New England Technical Institute; N011heastem University: Walden University; Georgetown Universiry School of Nursing a nd Health Studi~s: and the UniversiTy of Pennsylvania, as well as other Schools of :\ursing, pursuant to which their nursing students obt
8
(Continued)
RHO OF. ISLAND HOSPITAL AND
.~FILJATF.S
Notes to Consolidated financial Statements Septcm her 10, 20 14 and 20 13 (In thousands)
(2)
Charity Care and Other Community Benefits (eonlinued)
Research The Hospital conducts extensive medical research and is in the forefront of biomedical health care delivery research and among the leaders nationally in the Nationalln~tiMcs of Health programs. The Hospital also sponsors a sib'Ililkantlevcl of these research activities, as indicated in the table on page 7. Federal support accounts for approximately 71% of all extemally ftmded research at the Hospital. Researchers focus on clinical trials whkh investigate prevention and treatment of HIV/AIOS, obesity, cancer. diabetes. cardiac disease, neurological problems, onhopcdic advancements, and mental health concems. Researchers work in the laboratory or with patients, or both.
Subsidht
Community Health Improvement Sen-ices and Community Benefit Operatiom Tite llospital also provides numerous other services to the community for which charges arc not generated. These services include certain emergency services, ~ommunity health screenings for cardiac health, prostate cancer and other diseases, smoking cessation, immunization and nutrition programs. diahetes education, community health training programs, patient advocacy. toreign language translation. physician referral services. and charitable contributions.
Unreimbursed Medicaid Costs The Hospital subsidi7.es the cost of treating patients who receive government assistance where reimbursement is below cost. Medicaid is a means-tested health insurance program, joimly funded by state and federal governments. States administer the prob'J'am and set rules for eligihility, henetits. and provider payments within broad federal guidelines. The program provides health care coverage to low-income children and families, pregnant women, long-term unemployed adults, seniors. and persons with disabilities. Eligibility is determined by a variety of factors, which include income relative to the federal poverty line. age and immigration status, and assets. The unreimburscd Medicaid costs do not include any allocation of medical education or research costs. (3)
Summary of Significant Accounting l'olicies
(a)
Basis of Presentation Tite consolidated tinancial statements. which arc prepared on the accrual basis of accounting, include the accounts of the Hospital, RIH Ventures (R!HV). Radiosurgery ('enter of Rhode Island, LLC (RCRl), and Lifespan Pharmacy, LLC. OJ)erations of RIHV include phlebotomy services which facilitate laboratory specimen testing. as well as parking facilities that serve patients and staff of the Hospital. The Hospital owns a 100% interest in RCRI, a limited liability company fom1cd 10 operate a radiation therapy center utilizing cyherknife technology. The Hospital is also the sole member of
9
(Continued)
RHO OF. JSL.\ 'I> HOSPITAl. AND AFFILIA I E.S :'\ol•'> 10 Con-;olida!ed Financial S!alcmcnts Sep1ernber 30. :!0 14 and
~0 IJ
(In lhousands)
(3)
Summury of Significant Accounting l'olicie• (contin ued) Lifespan l'hannacy, LLC, which provid~s sen ices 10 both paliems and cmplo)CCS. All signiticanl intercompany accounts and lransaclions ha\ c heen eliminaled in consolidation. The Hospital considers C\ ems and 1ransac1ions 1ha1 occur after the consolidalcd 'lalemem of financial position date. but ~fore 1hc consolidated tinancial Slalcrnents are issued. lo provide additional c' idcnce relati,·e to certain cslimale' or 10 identif) mailers !hal require addi1ional disclosure. These consolida1ed fmancial '\uuemems \\ere is>ucd on February 19. ~015 and sub"-quent e\ents ha'e ~ C\ aluated through that d
(b)
Use ofE~timute~ The preparation of tlnancial slmcrnerm in confonni1y " ith U.S. genenrfl) accepted accounting principles requires rnanagemenllo ma~c cslirrrates and assumptions !hal aflixtamounls r~por1cd in the consolidated tlnancial staterrrenls and ;rccompan) ing nme'\. Actual resulls Cl)Uid differ from !hose es1ima1cs.
(c')
Ca.
Cash and cash cqui\'alems include all hi!)hl) liquid deb! instrumcn1s "ith rna1uri1ies of lhrc'C months or less when pur~h:i>cd. e'cluding amounls limi1ed as to use b} board-dc~ignation or other ••rrangements under tru~l agreement~.
(d)
Jm·estmem~
and lnustment ln~omt'
financial Accounting Swndard' Roard (fASB) Accounting Standards Codific;rlion (AS() Subtopic 820-10. Fair Value \lea.wremems a11el Dm·lmures (ASC 8:!0- 10). defines lair \alue. ~slablishc<; a tramework for measuring fair value. and expands disclo'\ures about fair \ transaction between market participanls as of 1hc measurement date. ASC 820-10 e'\lablishes a fitir 'aluc hierarchy thai priorili<:cs irrpu1s used 10 me;r>urc fair value into lhree l~vds: rnca~urement
o
Level I -quoted prices ( unad_ju'ied) in active markcls !hat are accessible ullhc dale;
o
Lc' el 1- observable price' 1ha1 are based on inputs no1 quoted in acti\ c m;rrkcts. hul which are corrobomtcd b) market da1a; and
•
le,·el 3 - unob"·nahle inpu1s that ar~ used "hen linle or no markcl dala" 3\ailahle.
The fair value hierMch) gi'e' the highesl priori!) to l e,ef I inputs and 1hc lo"c'l priority to le,el 3 inputs. In detemtining fair \
10
(Continued)
RHOOF: ISLAN D HOSl'l fAT. A '\"1) AF FILIATES Notes 10 Con~olidated financial Statements September 30.
~0 14
and 2013
(In thousands)
(3)
Summnry of Significant Accounting
f>ofi cie~
(continued)
Fol lowing is a description of the v~luation methodologies used for investments measured at fair value:
(ash and . l>r ks> "hen purcha~ed. I,., .S gon'mmem ·a gency and corporate obllgationv · Valued using market quotatllll" or prices obtained from independent pricing source~ which ma~ emplo) 'arious pricing method> to 'aluc the im~'Stmcnts, including matri" pricing based on quoted prices for >ccuritie' \\lth similar coupons. ratings •md maturities. These ill\ estml'nts ilfC dc>ignated by the Hospital '" trading 'l!l:urities.
Corporate equity set'urities. Valued ill the closing prices reponed b} an acti\c market in which the individual securities are traded. Thc'>e investments are designated b) the llospllal as trading securities. (ollecti.-c! in"'?.spital has applied the accow1ting guidance in Accounting Standards L.pdatc ~o. ~009-1 ~. Jm·estments in (erlain f:lllities That Culcttlare Ser Asset l 'a/m· pt'r Share for Its EqwmleiiiJ (ASU ~009-11), which pennils the usc of NAV or its equivalent reported b) cilch underlying alternative ill\c>tmcnt fund a~ a practical expedient to estimate the fair value of the in' cstmcnt. These in,·esrments arc gcncr.tll) redeemable or rna) be liquidated at ~A\ under the origonaltem1s of the subscription agreements or operations of the underl) ing funds. Also. because the Ho:.pital u'cs "iA \'as a practical cxpcdoent to estimate fair \alue. the level in the fair 'alue hierarchy in which each fund's fair 'alue measurement ts cla»ified is ha~ed primaril> on the Hospital's abilit} to redeem its interest in the fund •II or near the date of the consolidated statem~nt of financial position. Accordingly.the inputs or methodolog) used for valuing or classif)ing investments for financial reponing purposes are not nccc».tril) an mdication of the risk associated v.ith those investments or u rdlcction on the liquidity of each fund's undcrl>ing assets and liabil ities. Investments oflcss than 5% in limited pannerships arc recorded at historica l cost. lmcstments of 5% or more in limited pannerships. limited li ability corporations. or similar investments arc accounted for using the equity method. 111\estments dcsignat~d hy the Hospital'" tr.1ding ~ecurities are reported at f:1ir ,aJue, with gains or lo,seo; reo;ulting from changes in fair \'alue recognized in the consolidated '\tatement> of opcmtions and changes in net assetS a.~ reali7ed gain> or lo»c> on ill\e.;m1ents. For ime>tmc'Tll ,..:curities other than trading. a decline in the mar~et 'aluc olthe securit~ belo" it~ coq that is designated to be other than tcmpora~ is recognized through :ut impairment charge classified as a reali7ed loss, and a n~" co~t basis is established.
II
(Continued)
RHODE JSI.A 'o"O >.ot~s
w
HO~I'IIAL
Con~olidoted
ANll AFFILIATI::S
financial
Starcmcm~
Septembe1· 30,2014 aml2013 (In thousands)
(3)
Summary of Significant Accounting l'olici~ (continued) lnwstmem income or lo>s (including realiz«l gains ~nd loss~ on imestm. interest. and dividends I is included in the deticiency of revenues over e\penses unless the income or loss is restrict~d b) donor or law. Unrealiz~d I:F'ins and lo~~es on im cstmcnts other than those desi):.'Tlatcd as trading securities are ~xcludcd from the deticiency of revenues over expenses. Realiz~d
gains 11r losses on sales ofin,cstment< are determined b) the average cost method. Rcalitcd losses on unrestricted investments arc recorded as nonoperating gains or losses; realized gains or losse~ on restricted inwstment< are recorded as an addition to or deduction from the appropriate restricted net '"'et catego~·. gain~ or
Investment income trom funds held b) thtrd panies under long-term dcht agreements is recorded as other revenue. I h" Hospital maintains a spending policy tor cenain of it> board-designated funds which provides that investment income from is recorded within nonoperating gains "hen unrestricted b) the donor and as an addition to the net assets of the appropriate temporaril) rc~tricted fund when restricted b) the donor. (t!)
Asset~
l.imited as to Lu
Assets limited a:, to u"~ primarily include designated a.crction subsequent!) usc for other purpo~cs. and assets whose usc by the l lospital has been pcrmonentl) restricted by donor< or limited hy grantors or donors to a specitic purpose. as well as assets he ld b) third parries under longterm debt agreements and irrevocable split-interest trusts. Amount>. required to meet current li ahi lities of the ll ospital arc reponed in current asset> in the consolidated statements of linancial position. (/)
Property and Equipmttnf PropeM) and cquapmcnt acquisitions are rcc(>rded at cost. Depreciation ;, computed o,·er the estimated u.seful life of c.ach cia's of depreciable a"ct u.sing the straight-line method. Building' and impro,cmcam laves range from 5 to 40 years and ~quipmcm lives range from 3 10 20 years. Cenain software dcvdopment costs are amortited us11tg the straight-line method over a period of live years.
(g)
Deferred Fil/(lllcing CoM.) Deferred tinancing eost'\, which relate to the i»uance oflong-tenn bomb payable to the Rhode Island Health and l"ducationall:luilding Corpnration ( IUHl:.BC), arc heing arnoniL~d r
12
(Continued)
RHODE ISLAND HOSPTTAL ANO AFFTLTATF.S Notes to Consolidated Financial Statements September 30, 2014 and 2011 (In thousands)
(3)
Summary of Significant Accounting Policies (continued) (lz)
Goodwill and Indefinite-Lived lllfangible Assets Goodwill and intangible assets detennined to have indcfmitc Jives arc not subject to am011i7.ation. Goodwill and indefinite-Jived intangible assets are re.viewed tor impairment on an annual basis or more frequently if circumstances indicate a potential impairmcm exists or has occurred.
(i)
Classification of Net A.<.
Pernumemly resiricied ne1 assers contain donor-imposed stipulations that neither expire with the passage of time nor can be fulfilled or otherwise removed by actions of the Hospital and primarily consist of the historic dollar value of contributions to establish or add to donor-restricted endowment funds.
•
Temporarilv resiricted net assets cont.cess of their historic dollar value arc classified as temporarily restricted net assets until appropriated by the Hospital and spent in accordance with the standard of prudence imposed by \JPMIFA.
•
Unre.Hrir.Ied net asse1s contain no donor-imposed rcstri(;(ions and arc available tor the general operations of the Hospital. Such net assets may be designated by the Hospital for specific purposes, including functioning as endowment funds.
Sec note 5 for more information about the Hospital's endowment.
OJ
Deficiency of Revenues Over &penses The consolidated statements of operations and changes in net assets include deliciency of revenues over expenses. Changes in unrcstrktcd net ass-ets "hich arc excluded ft·om deficiency of revenues over expenses, consistent with industry pr
13
(Continued)
RHODE lSI.\"0 II OS I' ITAL .~'10 AFFIU ,\ TF.S ~ot~> to
Consolithlled financial Statements
September 30. 2014 and 2013 (In thou:.ands)
(3)
Summary of Significant Accounting Policies (continued) net assets re leased from restrict i on~ u~ed for purchase o f proper!) and equipment, and the change in interest in net assets of Rhode Island Hospitul hundation. (A)
N<'t Patient Service
R l!l't'llllt'
I he Hospital prO\ ide~ care to pauems under ~tedicarc, ~fedicaid, managed care. and commercial insurance contractual ammgemo:nts. The Hospital has agreements" ith mpital at amount~ less than its established r.ues. patient sen·ice re,enue is reponed at the estimated net reali.a~bk amounts from patients, third-pan) pa)or>. and others for services rendered. including estimated retroacti\e adjustments under reimhur
'ct
Medkarc and Medicaid utilize prospective pa)mcnt S)Stems tor most inpatient hospitul scn ices rendered to program bencficiarie~ based on the classi fication of each case intn a diagnostic-related group (DRG). Outpatient hospital services arc primarily paid us ing an umbul. Senlements and adjustments arismg under reimbursement arrang~menb "ith 'omc thord-parl)· pa~ors. prirnaril) Medicare, t\ledicaid, •md Blue Cro>s. arc accrued on an estimated bitsis on the period the related services are rendered and adju~ted in future periods as final >Cttlcmcnt~ are determined. I he Ho:,pital has classified a ponion of ;~cenocd estimated th ird-part} pa)or :,cttlcmcnt-; as long-tem1 because such amounts, b) their narure or by ' irtue of regulation or legislation, will not be paid within one year. Changes in the Medicare and Medicaid programs, such as the r~du"ion of reimbursement. could have an adverse impact on the Hospital.
(I)
Provision for Bud J)eht., Accounts receivable are reduced b) an allowance tor doubtful accounts. In eHtluatong the collectibilit) of accounts receivable, the Hospita l analytcs it:; past history and identities its re' cnuc trends for each of its major payors to estimate the appropriate allowance for doubtful accounts and the associated pro' bion for bad debts. \lanagemcnt regular!~ re,·iew-; data about the>e maJor pa) or sources of revenue in e,·aluating the sunicicncy of the allowance for doubtful accounK For receh able> a:,ociatcd "ith sen· ices prO\ ided to pati1.'11ts "ho ha\'e third-pan} CO\ erage. the Hl>Spital analyzes contractual!) due amount-; and pro\'ides an allo"ancc for doubtful account~ and a pro' i:,ion for bad dehts. if necessary (for e:1.ample. fl>r e\ pccted uncollectible deductibles and wp.1~ ments on accounts for which the third-part) pa)Or hu> n(>t )Ct paid. or for payors who are lillo"n to be ha\ing financial di fficultie5 that make the realization of umoums due unl ikely). For receivables as.ociJtcd "ith selt~pay p
(Continued)
R IIOOI:: ISLAND IIOSI' ITAL AND AFFILIA TF.S Notes to Consolidated Financial Statemems s~ptcml>er
30. 20 I-I and :?0 13
(In thousands)
(3)
Summar) ofSignificuot Accounting l'olicies (con tinued ) allowance for doubtful account:. Mld pro,·ision for bad debts in the period of service on the basis of its past experience, which indicates that many patient< are unable or unwilling to pa) the portion of their hill tor which they are financial!) rcsponsibl~. 'I he ditlerence between the standard rates (or the discounted rates. if applicable) and the amounts actual!~ coli cered after all reasonable collection ciTort< have b.:o:n e\hau. ft>r self-pay patienh decreased from 80"o ofself-P<~> accounts receivabk at September 30, 20 13 to 78• o of self-pay account; receivable at September 30, 2014. T he Hospital's self-pay writeo iTs for the years ended September 30,201-1 nnd 2013 amounted to $60.727 and $59319, r~spcctively. The Ho,pital did not change its charity care or uninsured discount policie> during the ~ear, ended September 30. ~014 and 1013. rcspecti,·el) .
(m)
Charity Care 'I he Hospital provides care to pati~nts who meet certain criteria under its charil) care policy without charge or at amounts less than it< established wtcs. llecause the Hospital does not pursue collection of amount.s determmed to quali~ a> charit~ care, the~ an: not reponed as net paticm ~en tee rc' cnue (see note 2).
(n)
Dmror-Restric-t1•d Gifts Unconditional promises to gi'e cash and other assets to the Hospital are reported at lair value at the date the promise is received. I he gifts are reported as temporaril) or penuanently rc~tricted support that increase those net asset classe> if they are receh ~:d "ith stipulation> that limit the usc of the assets. When a donor or grantor rc,triction expire>. that is. "hen a stipulated purpo
(o)
hll'entories lmentoric,, C<\nsisting primaril> of medical Mtrgical supplies lower of cost or market.
(p)
<~nd phamtaceutic<~b.
are stated at the
Estimated Se/f-lnsurum:e (MI.~ The Hospital participates in Lifespan sclt~insurancc programs with other Lifespan affiliates for lo>se> arising from professionalliabilit~ medical malprenelits to its employees. I he Hospital has recorded pro\ ioions for estimntcd claims, which are based on the llospit
IS
( ConLinucd)
RHO OF. ISLA '0 HO Sl'll AL A'"ll AFFILI ATES 1\:otes to Con~olodated Financial Statements Septemb~r
30.
~0 14
and
~0 13
(In thou,;md>J
(3)
Summ ar y of Significant Acco unting Policie~ (co nti nued) (q)
Fair Value of FifiOflciol l flslrumt•nl>
The carrying amounts recorded in the con~olidated statements of financial po~ition for cash and cash equivalents. patient account.~ recei,able. assets limi ted a.~ to use, accounts pa~able, accrued expenses. estimated third-part) p3) or <,ettlcments. and estimated health care benetit sclf-in,urance costs approximate their respecti' e fair' alue<. The estimated fair' aluC> of the llo~pital's asset> limited a.~ to u~. pension-related assets, and long-term d~bt arc disclosed in notes 5. 8. and II. respecti,el). (4)
Disproportionate Share The Hospital is a panicipant in the State of Rhude bl and'~ Disproponionate Share Pmgram. established in 1995to assist hospitals which pro\ ide a di~proponionate amount of uncompensated care. Under the program. Rhode Island hospitals, including the Hospital. receive federal and state Medicaid funds as additional re imbursement for treating a d ispropon ionate shar~ of lu" income patients. Total pa> mcnts to the Hospital under the Disproponionate Share l'roJ,,'Tam aggregated $55,605 and $5 8,277 in 2014 and 201 3. respect ively, a nd are rellected as part o f net patient service rc,cnuc in the accompanying con,olidated statements of upcrations and changes in net assets.
Ft" periods beyond 2017. the fcd,Tal g<)' ernment is scheduled to change the level of fed~ral matching funds for the Uispruponionate Share Program. ,\ccurdingl~, it may be necessaT) for the State of Rhode Island to modify the progrditl and the reimbursement to Rhode bland hospitals under the program At this time. the scope of such modifications or their cff~-,;t on the llospital cannot be rcasonahly determined. (S)
l nn~;tmeot;
1h.: composition o f a.
s
39,!\59 $
Total
16
195,956 11 .397 236,152 483,364
2013
$
221,75!\ 40,414 228,221 39,6 71
s ==,;,;53;,;0;,;;.0;;;64~
(Continued)
RHODE 1ST.\ 'ID II OS P ITA L AN D AFFILIA I £5 :'\oh~> to Con>olidatcd financial Statements
September 30. :!0 14 and 2013 (In thou,ands)
(5)
lnvc~tments
(continued )
Assets limited as to use at September 30 arc c1assitied as follows: 2014
s
A vai1able-for-sale Trading
310.138 173 •.:!.:!6
s
Total
4lB.:l6-l
2013 $
348.398 181,666
$ ==.;;5~3.;;.0·;;;06-1 ,;;,;,=
A~'Ch limited as to use are classified a:; trading 'ccurities if the bu) c"sell dcci~ion \\ith respect to each portfolio sccurit) is the rcsponsihilil) of an external imcstmcnt manager. All other as~ct~ limited as to use arc classiticd as available-for-sale sccuritic~.
17
(Continued)
RHODE ISLAN D HOSPITAL AND AFFILIATES Notes to Consolidated Financia l Statements September 30.2014 and 2013 ( In thousands)
(5)
Investments (continued)
Fair Value The following tables summari7.c the I Iospital's investments and assets held in trust hy major category within the ASC 820-1 0 fair value hierarchy as of September 10, 2014 and 2013, as well as related strategy and liquidity/notice requirements: 2(114
U.S. cquiucs: l.al-g.e cap \ttluc ,\hd~.ap \ alu(' Large ~p g;ro\\1h Markctablt: .dtmw.li\e":>:
$
s
Total
IA\'eiJ
[t'veil
Lcn·l 1
Dail)
23,415
Daily
Out:
} 1.087
31.087
Dail}
One
10.17~
QuaJ1Ub Monthly · Annudll) Mouth!) . Annuall)
Furty-Ji,·e. Sixty Five· Sixty-five
~
$
10.171 30.7% 51,-.192
3.786
34,1X2
9,56:!
61.05<
International e4uitits:
5.363 8.6JS
:iX,KiS
O.C~38
:; 1.327
~1).965
Commoditit"~:
~.936
<.936
Fncrgy Variou>
7,15::!
Rc.1l~atc
10,667 ~.405
Global oonds
A<><:ets. held in trust (note: 6) Held hy third panie-: undt:r long· term debt agreement!\. (note I I)
11.397
Total
141,414
$
7.352 :!:0,(167
Daily · '-" «kl~
SA05
O"'ily O.ail~ • Wc:
01\C · Fhc f,\o One
11.2:\ I
II,:!S 1
I I.SOS
I I,XOX
2fl)t.4X7
One· rcn Otle · '..: ·A Hficc:n
6.1-'5
136.037
One • :;c, en
Dail) · Illiquid \.1omhly
4R.306
6,245
('ash and shon-term invc:>lmc:nb
Daih • tvl onthl~ Duil~ . Monthh
~ixty- tivc
Dait~
X,R43
)4;
8.701
fi.\.tod iJlCOnlC: lJ.S. Trl."a:.uric:':> U.S. ·1 rc.'tc;ury inOauon-protectt'd U.S. Go,omestit: t'lond<:
One
:;s,6X6
Lung-:.hort t>(luit) Absolute rctum o;mucgie<> Developed markets
Uay-.'
ootiee
21,4 15
}5.6S6
~1uhiplc qratc£!-i~
Emc•-ging market<:
Re-demption or- liquidation
13.490
418.014
13.~30
13.230
One
on,
Five One:
11.397
s
26~.487
>
~6.7~0
s
442.MI
Investment suhscriptions in transit at September 30,2014 in the. real estate category above amount to $7,352.
18
(Continued)
RHODF.ISLANU HOSPITAL ANU AFFILI ATES No~es
to Consolidated financial Statements Scptem~r
30. 2014 and 2013
(In thou,~nds)
(5)
ln' e~uncnts
(continued) !O IJ l.e\' cl }
Lt:\tll
rut ill
Ct\ el ·'
Rtc1tmpt1on or liguidwtluo
Oa)•' notice One One
l l.'\, tt~u ities: L.t:~,·
C:lfl value
\1td"'\:oi.P ,.tJu~
s
Lara:( (.lJ'I S!J'O\\th
J.).!>OQ
.,'·"''" 19.0.1
s
'
H.~69
lhil)
:c.w;l'!
U.1il.\
IV,0.,1
lhtl~
"""
57 •.3~ JO.J I'
S7.JI).I
<)uancrl,
""l)·lhc-
W. i 11
\k•nthh
fj,~
-f7.59)
M,l16
:0,9~5
105Q1
Dail) \lr.nlhl) llail) · \hmlhl)
$
\1.u'lr.ewbk .ditmali'\~
\t.Jtt•rtc \Uatc-.;i~ Ahs\1lute teturn
17 •.q~ 8,611
Cnh:r¥-ine. markrl.'i
Otte
\C\Cfl
One- len
('t"'lffll'lk"'!Jiti~:
[n('f~ \ WIC'IU'
~.171
Kc.alnL.ate fi\C"d ''"'"Pmc:
~.710
lJ.~.
9.~71
Tr.:.uurics
CO\i.h Md -c.horHmn in,t"Wrlcm..
I}.J.tl) l>-.!il~ Illiquid l>~il~
One-~ \
One· the
J.i,()J()
Oail) • \l.ccio:l~
857Q
,,,97>: 30.476
I J,9'1~
)Q,.
·~-~:: ~~~~:
J "' .. - ..
~~.~
IJ:.ul)" Daily • W«k.l~ 1.>-..til) • \\rtl.l> l"bll) O.!il)
1~7.J-C
!61.')6')
OC'wnc"
~.PI ~.l·lli. ~.710
~579
1-1,1116
Ll.'\, "Ire-awl"} innutil-'ll·j>l\."'ltcetcd lJ.I\. G1."crnmcnt and ll.f:t'rll.)
A!.S.C:I~t
J..l7
.n(,
-'·-·-
1:!..:!~~
held 10 lrul>l (note 6)
1.17
.:]~.~5b
11,0-C
I~.OJ:
"""
Thl« 1\\~)
One ()0('
OrlC ·t-he
One
IldJ b~ third p..·mics undc:r lutljt•
term debt agJ'CCnlCnt~ cnn•c: II)
Iotal
111,414
40.-U-1
5
l'l1,"?~0
s
~(,),961'
~
1>.1 S9 $
.n:_qp
Investments held hy third partie> under long-term debt agreements consist o fmone) market funds inve,tcd in U.S. (iovemmcnt and agency obligations and other high-quality, shon-tcrm debt securities. ln'e'unents of less than 5" o in collccti\1: investment funds "hich do not h'" c month!) pricing or liquidit) are rcwrdoo at historical cost. lmestments of less than in limited partne!'l>hips are also n:cordoo at historical cost. The aggregate historical cost ofthe<>e im estmcnts. "hich ts less than market 'alue"" reponed by investment managers. amounted to $40.723 at September 30, 2014 and $57.1 SO at September 30, 20 13.
s•.
Most investments c la,sified in Levels 2 and 3 consi>t t>f 'hares or units in im estment funds as opposed to direct int~-rcsts in the funds' underlying holdings, which rna~ be marketable. Bcca11 clnssilication in Le\el ~or 3 is based on th<: Hospital's abilit) to redeem Its interest at or nearthe date of the con~olidated stificat ion ofinvc>tl11cl\ls in the fait' \aluc hierarchy is not necc"arily an indication of the rislu. liyuidity. or deJ:.'Tcc or difliculty in .:stimating the lltir ,.a lue of each im C>tment · ~ underlying a,eL< and liabilitic>.
19
(Continued)
RHO DE
I S LA~ I)
HOSP ITAL A:\0 Al.-HLIATF.S
'\otes to Consolidated financial Statemomts September 30. 10 I-I and 2013 (In thou~and.')
(5) In vestments (con tinu ed ) 'I here "ere no transfers bet\\ CCil l.cvcl I und Lc, c] 2 fair va lue measurements during the September 30,2014 and 2013.
)CUrs
ended
The follo"ing tables present the Hospital's activity tor the years ended September 30. 2014 and 2013 for iU\c,tment' measured at fair \alue on a recurring ba.<;i<; using significant unoh<;crvable input> (lc•cl 3) as defined in ASC 820- 10:
2014 Marl..etable altcrnutives Fair value at October I. 20 I3 Purchases Net unrcali7ed (losses) g
$
r air V
s
.\ ~~e!\ held in tru\1
Commodities
$
~
1-17
13,0-12
13.348
s
20 13 Asset< held in trust
Commoditits faiT value at October I. 2012 1\et unrcalued (losses) gain>
s
Fair 'alue at September 30. 2013
s
172
$
!151 1-17
20
$
142
12.57& 46-1
s
13.042
s
IS&
( 5}
13,348
Total
13.230
IJ, I89 l.l..l48
183 $
26.720
Total
s
12.'50 -B9
s
13,189
(Continued)
RHODE ISLA NO ll OSPITAI. A'ID AFFILL~TF.S Notes to (<>n<.(llidated l'inancial Statements Septemb~r JO. ~0 14 and :!0 13
(In thou>and>)
(5)
In vestments (contin ued) llt\'t!~tmenl Income.
Gains and Lo~·,e,\
Investment income. gains and losses for cuoh equivalents and assets limited as to use are comprised of the following for the )Car< ended September 30: 20 13
2014
Other r..:' cnue: In' c~tment income
s
145
s
13-1
rndo"ment camings contributed toward conununit) benetlt: Interest and dividend income
s
9.30:!
s
9,~53
s
( I.RR4)
$
2.435
$
51Q
s
(1.183)
s
1.153 18.03:!
s
1.634 14.755
s
19.185
s
16.389
s
!!)~
'!>
46..\
Nonop~rati ng gains
and lo>ses: Net rcal i/cd (losses) gain' on board·dc,ignated investment<
Othe1· changes in unrestricted net assets: Net change in unrealized gains nn invest mcnl'i
available for sale Changes in temporarily restricted net assets: Income from r~stricted endowment and other rc>tricted investments
Net realized and unrealized gains un nlvestmenb
Changes in permanent!) re>tricted net ""et<: 'ct change in unn:alized gains tm invc:sunent> held in perpetual trusts by other'
:!I
(Continued)
RIIODE ISLAND HO S!'I fAL A'\'f) AFFTLL\ TES -.:mes to Consolidated
Fin<~nci
Statement<.
Scptcmt>cr 30. 20 I-I and ~0 13 (In thousands)
(5)
l nve~l rnents
(continu ed)
Uquitlity 1n' estments as of September 30. 20 14 and 2013 are summarized belo" based on "'hen the) may be redeemed or >old:
2013
2014 ln""tmcnt n:dcmption or sale period: Dail) Weekly Mont hi> Quanerl) One~to-tive years Locked-up until liquidation Total
18~.239
.W.692 128.61 5 51 ,.~OJ 1-1,078 20,616
s
.j.j 2,()4 1
s
25;1579
-11,979 98,889 57,30-1 730 20.431 $ ==.;.-1';..;'2;.:;·9;.;1.;,-1_
Locked-up until liquidation includes as~ct ~ held in trust (note 6) and the tnmec-held debt service reserve fund under the 2009A bond indenture agreement (note 1 1).
Commitmentl· Venture capital. pri,atc equity, and cenain cner~:') and real e>rate invesm1ents arc made through limited pannerships. Under the telliD of th.:-;.: agreements. the Hospital i> obligat.:d to remit additional funding periodicall) a~ capital or liquidit) calls arc c\crcbcd by the manager. The;e panm.nhips have a limited existence. generall) ten )~' e\tend the tcmh of a fund beyond its originally anticipated existence or may "ind the fund down premmurel}. I he Hospital cannot anticipate such changes because they arc ba~cd on unforeseen events, but ; hould they occur they ma) result in less liquidity or rcrurn from the investment than originally anticipated. As a result, the timi ng and amount future capital or liquidity ca lls C\J'CCtcd to be exercised in any par1icu1ar future )ear is uncertain. The aggregate amount of unfunded commitments associated with the abo' c nmed investment categories "-' of September 30.2014 "as $6,5~6.
or
(Continued)
RHO OF: IS LA '\0 HOSPI TAL A:\0 AH' lLl \ TF:S !'\me<; to Con>olidatcd Financial Statemenb Septem her 30. 20 14 and 2013 (In thousand<;)
(!')
Investments (continued) fm•e.(//llents with Unreali;ed Lo.ues
lnfonnation regarding investments '>ith unrealized losses at September 30. 20 1-l and 2013 i> presented helow. segregated between those that ha\c been in a continuous unreali?cd IO!i!i position forks-; than tweh·e months and those that ha'c been in a continuous unrcali7ed loss position for twehe or more month': I f'<' thu 1l mu•lll~
~h1lll"oc13V.
Tvu.l
12 montb.s or lon:,:t'r hir lnrtalatd ~ I
...
l"nrulittd
hir utur
,.,..,
h.r
,
lnnliud kK...s
ul~
ZOI.l
t f ll"~lri..:tcd boatd·di."Sigl1ated lUll! I('Rij:K'ratil~ C'\.--smctcd fun..b~
Colk-.:ti\.: im·cs(mcnt funds
s
3~.(n1
\
1.115
s
1!;.701
s
5~h:
\
~)l,t'l ~.:
s
1.-:'111
Tol.ll 1~mpornrity impail':d sccuri1ics
s
JQ,Q)I
~
1.11 5
s
8.'01
~
5oR
s
J~,(olZ
s
1.70)
Lt.·n thon ll moruh.. ( nrt•ii,cd Fa1r
tlmooths or lnn&rr Fair l nre111iLl'd 'alue IO»t'~
,.,......,.
\tlut
I otal
hir
Unn.·ali.ttd
\lluc
loss.es
.,.,,.."".....,. 30. :otJ ~..1N bo.a.N~ignated U"MJ lctt~JX!roltlt).
restri-:r.:d fund.,· funcb
Cul~ti'< ia\~rmcn~
T'-U la-.tpvraril~ imp;lin:d ;t;;uriues
s
.~.os~
~
)Q4
s
.... i;""'"l
\
516
s
;.oM~
>
010
s
1~,0!<.3
s
<04
'
1~.5~2
s
5lt!
s
J.O.W~
~
910
lhe Hospital reviewed the above investmem:. "ith unrealized losses and determined that no impairment was considered to be other than temporal). In the e' uluation of whether an impairment i!i other than temporary. the llospital considers the reasons for the impairment, its ability and intent to hold the imc,tment until the mar~ct price recovers, the severity and durm ion orthe impairment, c urrent market cond itions. and CXJ>ected future pcrrormance. £ndOH'IIIt'niS
The Hospit endowment consist> of appro:~.imatd~ 30-l indiYidual funds cst;lblished for a 'aricty of purpoo;es, including both donor-restricted cndo" mcnt funds and funds designated by the Hospital to function as endo" mcnts. lm·estmems a:.sociatcd "uh endo" m~nt fund<;, including funds d~'ignated by th~ Hospital to function a.s endo\\mems. are classified and reported based on the existence or abs~n.:.: of donor-impos.:d rc...;trictions.
2.l
(Continued)
RHO OF. ISL\ '\"0 HOl>l'lfAL
A~
AFF ILIATES
'.ott:' to ('ono;olidated hmmcial Statements
September .10. 20 14 and ~0 13 (In thous,lmb)
Emfllll'meuts (continued)
Endowment funds cons ist of the follo" ing at September 30, 2014:
L.nre"ricted Temporarily rt'stricted
hoard· de)ignated Donor-restricted endo" rncm fund-; lntcmall~ hoard-designated endowment funds
s
s
Total
re~rric rcd
s
39.859
s
S
195.956
27 6.0ll 195.956
195.9S6
rotal cndowmem funds
236.152
l'umun entl)
s
236.1 52
s ==,;;,39;.;·;;;;8~::;9= $ =::::"::,';.;1.;;;90;.;7=
Endowment funds consist of thc fol lowing at September 30. 2013: LJnre~trictcd
Donor-restricted en do" mcnt funds lntcmally hoard-designated endo"ment funds Total endo\\m ent funds
s
Permanently
Temporaril) restricted
bourd·
designated
s
228.221
s
221.758 $
24
39.671
s
267.892 221.758
221.758 $
Total
re~ rric tcd
~2K.22 1
S
(Continued )
RHOUJ:: ISLA '1""0 HOSPITAL A.'D AFFIUA TES :'\otes to Consolidated Financial Statcrncms September 30.
~0 14 :md
2013
(In th
Endoo..,nents (cominued) Change;; in endowment fund; for the year ended S.:ptcmher 30. ~014 are a> fl>lfn"' :
tndowmc:nt funds, October I, 20 13 Interest and di\ idend mcorne :-let rcali/.cd and unrealized (IOSSC'>) gains Cash gifts. b...ants, and bequests Transfer> from Rhode lsl:md Howital Foundation Net assets released from
$
Unrestricted hoard-
Tem(>Orarily
desi~natcd
re~trictcd
1~ 1.758
s
9.3P
228.221 $ 1.153
restrictions
.19.671
Total
s
16,875 55.279
6.830
6,830
(73.363)
(73.363) 1,842 (35,616)
188
1,842 (35,611>)
s
195,956
s
489.650 10.4' 0
55.:!79
18.03~
(1.345)
lkposits Withdrawals Endo\\ment fund,, Septembt:r 30, ~0 14
rcrmnnt!ntly r·c~t ric ted
~36.15~
s
.W,859
s
-PI,91>7
Changes in endO\\ mcnt funds for the year ended September 30, 2013 are a; folio" s: Cnre~trictcd
Temporarily restricted
hoard dcsiJZnatcd Endowment funds. October I • 10 11 Interest and dividend income Net reali/cd and unrealized gains Ca.sh gifts. grants, and t>..'
s
245.1>42 9.475 1.2S2
s
restrictions
~
Total
60.1~5
507,692 11,109 16.47 1 60.145
7.198
7.198
222.84.1 1.634 14. 7 55
39.207
$
464
(7!U54) I,R42 (36.453)
(7R,354)
Deposits Withdrawals End0\\111Cnt fund,;, September 30. 20 I 1
l.,crnHtnently restricted
1.842 136.4H)
s
221.751>
~5
s
228.221
s
3'1.6 71
s
489.MO
(Continued)
lUiOOJ:: ISLANT> HOSPITAL AND AFFILIATES Notes to Consolidated Financial Statements September 30, 20 14 and 20 13 (In thousands)
Em/owme/1/s (continued) (a)
Interpretation ofRelevant Law fhc portion of donor-restricted endowment funds that is not classified as pcnnancntly restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the I lospital in a manner consistent with the standard of prudence presciibed b) UPMIFA. In accordance with lJPMIFA, the Hospital considers the following factors in making a detennination to appropriate or accumulate donor-restricted endowment funds:
(b)
•
The duration and preservation of the fund
•
The purposes of the Hospital and donor-restricted endowment funds
•
General economic conditions
•
The possible etl'ect oCinflation and de nation
•
The expected total retum !Tom income and the appreciation of investments
•
Other resources of the Hospital
•
The investment policies ofl.ifespan
Retum Objectil•e.< and Risk Parameters Lifespan has adopted investment pol icies fi>r endowment assets that attempt to pro,•idc a prcdictahle stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets, including both donor-restricted funds and unrestricted board-designated funds. Under this policy, as approved hy Lifespan, the endo"ment assets arc invested in a manner that is intended to produce results that exceed the total benchmark return while assuming a moderate level of invcsunent risk. The llospital expects its endowment fUnds, over a full market cycle, to provide an average annual real rate of return of approximately 5% plus inflation annually. Actual returns in any given year or period of years may vary from this amount.
(c)
Strategies Employed for Achieving Obje<'liw!.< To satisfy its long-term rate of return objecth•es, Lifespan relics on a total rerurn strategy in which investment returns arc achieved through hoth capital appreciation (realized and unrcaliLcd) and current yield (interest and dividends). Lifespan targets a divcrsilicd asset allocation that places emphasis on investments in public equity, marketable altematives, real assets. and fixed income to achie,·e its long-tenn return objectives within prudent risk constraints.
26
(Continued)
RIIOOI<: TSLA:'\0 HOSPITAL A "'j0 AFFILI \ TES Notes to Consolid,ned financi<~l Statement> September 10, 20 l-1 ""d 2013 (In thousands)
Endowment., (continued) (d)
Spending Policy The Hoopital invests its endo"ment funds in itCCordance "ith the total rcrurn concept. Applicable endowments include unrestriw~d board-designated endowmem fumb and donor-rc,tricted endowment funds. The governing Ooard of1hc llospit based on all of the above factors. Thb 'pending rate is applied to the trailing rwelve-quarter aver<~gc fair 'aluc of the applicable endowment>.
(6)
A~sets
licld in Tru st
The Hospital is a beneficiary of variOu'- irrevocable split-intcrC'-t trusts. The fair market vnluc of these ill\ estments at September 30. 201-1 and 201.1 was S13.2.l0 and S13.0-12, resp.:ctivcl~. and i> reported as J>Crman.:ntl) restricted funds "ithin a.sseb limited as to U>C in the con,olidated statcmems of financial position.
(7)
Proper!)• and t<:quipmcnt Property and equipment. b) major c-dtcgor:. is as follows at September 30: 2014 $
L
l.css accumulated depreciation and amortization
Con~truction
in progress Property and cqui pment. net
$
24,9R9 742.994 373.4-15
2013
S
2-1.979 691.638 35-1.279
I , 1-IJ ..f28
1.070.896
617,097
598,167
504.331
-172.729
4-1,401
5-1.19~
54R,732
S ==~5~2,;;;6-~9;,2,;,1=
Depreciation nnd amortization expense for the years ended September .>0. 20 14 and 2013 amounted to $42,024 and $38.82 1, re~pectively.
I he estimated co'i of completion of the llospital 's portion of Lifespan·~ multi-year information >)stems comen.ion projo:ct approximated $2-1.400 ,'C note Ill. The estimated cost of completion of con>truction in pn>p,ress appro,imated S2. 700 m September 30. ~0 14. comprised of various projects. ln addition. the llospital has se\'ent l building rcnuvation projects pending contractual commitment>" ith an estimated cost of compktion of al>pro;-,imately $6.300.
27
(Continued)
RHO OF. ISLA '\0 HOSPITAL AND AFFILIATES Notes w Consolidated Financial Statements September 30, 2014 and 2013 (In thousands l
(8)
Pension and Other Postretirement Renelits
Pension Benefits Lifespan Corp. sponsors the Lifespan Corporation Retirement !'lao (the Plan), which was established c!Tcctivc January I, 1996 when the Rhode Island IIOSJ>ital Retirement Plan (the RJH Plan) merged into The Miriam Hospital Retirement Plan. Upon completion of the merger, the new plan was renamed and is governed by provisions of the Plan. J::ach employee who was a participant in the RJH Plan and was an el igible employee on January I, 1996 cominues to he a participant on and after JanuaJ)' I, 1996, subject 10 the provis ions of the Plan. Employees are included in the Plan on the first of the month which is the later of their first anniversary of employment or the attainment of age 18. The Plan is intended to constitute a plan described in Section 4 14(k) of the Internal Revenue Code. under which benefits are derived fi·om employer contributions based on the separate account balances of participants in addition to the defined benetlts provided under the Plan, which are based on an employee's years of credited service and annual compensat ion. Lifespan's funding poli cy is to contribute amounts to the Plan sufficient to meet minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code as amended, plus such additional amounts as may he determined to be appropriate by Lifespan. Lifespan may also make certain discretionary matching contributions to participant account balances included in Plan assets based on sa lary deferral elections of participants. Substantially all employees of Lifespan Corporation who meet the above requirements are eligible to participate in the Plan. The provisions of I'ASJ3 ASC Topic 715, Compensarion-Reriremem Hem•firs · Employers ' !lccounrinx.fi>r Defined Henefir Pension and Orher Postreliremenl Plans (ASC 7 15), require an employer to recognize in its statement of financial position an asset for a benefit plan's overfundcd status or a li abi li ty for a plan's underfunded status, and to recogni 7.e changes in that funded status in the )'ear in which the changes occur through changes in unrestricted net assets. The funded-status amount is measured as the di!Terence between the fair value of plan assets and the projected benefit obligation including a ll actuarial gains and losses and prior service cost. Based on September 10, 2014 and 2013 funded-status amounts for the Hospital's portion of the Pl
Net actuarial loss Prior service cost
8,437 165
$ ===8;;;;,6;;;;0;;,2=
28
(Continued)
RIIODJ:: IST.AND HOSI'ITAI. AN D At'FILTATF.S ~otes to Consolidated Fin.mcial Statem~nl>
Septcmb<:r 30.
~0 14
and
~0 U
(In thousands)
(8)
Pen>ion and O ther l'o>tretirement Benefits (continued) Tite following tahles s~t forth the Plan's projected henelit obligation and the fair value or plan assets. 2014 Change in projected hcnetit obligation: Projected b<:netit obligation at beginning of year Scr' ice cost Interest cost Actuarial loss (gain) Rcnetits paid
th~
601.633 ~~.051
s
664,768
6.l8, 739 ~5.801 ~6.657
31.272 47.968 (3!U 56)
s
l'rojccted benelit obligation at ""d of)ear
Tite accumulated hcnelit obligation at
s
2013
(66.235) (23.329)
s =~""60='=·6=3=3=
end of20 14 and 2013 was $593.805 and $538.986. respective!>. 201 4
Change in plan assets. Fair \aluc of plan assds at beginning of year Actual return on plan assets Employer contrihutions Hcncfits paid
s
-1~9.006
2013
s
25.33-1 3:!.029 (38,156)
fair value of plan assets at end of year
448.213
.'94.336 27.380 30.619 (23.329)
$ =-,;;42;;,;9;,:,;,0;,;;0,;;, 6=
The funded status or the Plan and amounts n:cogni7ed 111 Lifespan's consolidated statements of financial position at September 30. pursuant to 1\SC Topic 715 (a~ opposed to I'R ISA). are as roltows: 201 4 funded status, end of) ear: h1ir 'alue of plan a>,cts Projected bene tit obligation
s $
29
2013
4-11!.213 664.768
s
(216.555)
$
-1~9.006
601.633 { 172.627)
( Continuctl)
RHODE JSLA.' O HOSPITAL A:-iD AFFILIA rf:S '\otes to Consolitl,ll~d F nancial Statements Scpt~mh.:r
30.2014 and 2013
(In thous,mtls)
(8)
Pension and Other Postretirement Bcncfib (continued) Amounts recognized in the Hospital's consolidatt:d statement> of financial position at September 30, 2014 ond 2013 arc us follows: 2013
2014
s
Accrued pcn,ion liability
144,362
s
2014 Amounts not yet reflected in net periodic pension cost and included in unrestricted net as>cb: Prior sef\ ice benefit Accumulated net actuarial Joss Amounts not yet rccogni7.ed as a component net periodic pension cost
s
3.92-1 ( 176,5 17)
llX.163
2013
s
4.465 ( 133.360)
~~r
Accumulated net periodic pension cost in ~'cess of employer contributions
s
Net amount recogni7ed
( 172,593)
( 12R.R95)
(43.962)
(43,732)
(216.5551
s
2013
2014 Sources of change in unrestricted net a>> Cis: Net (loss) gain arising during the year Amoniations: '\ ct actuarial loss l'rior service cost
(32.512)
s
6.542 165
'Jotul unrestricted net asset (loss) guin rceogni ;ed
duri ng the year
30
s
(25.H05)
(I n.627)
.j 1.13~
10.295 165
$
5 1,592
(Continued)
RHODE lSI.. \ '10 HOSPITAL A-'10 AFFTI .L\ n
:s
Notes to Con..ohdated Financial Stattm~cnts Scptcrnhcr 30.2014 and 2013 ( In thousands)
(8)
l'cnsion
>~od
Other Postretirement Benefit s (continued)
N et Periodic Pension Cost Components of net periodic pcn~ion cost are as follo"s for the ) ears ended September 201~
s
Service cost Interest cost c:-.pcctcd rerum on plan assets Amortllation of net acruaria11o» Amorti7.ation of prior ser,icc benetit
22.051 31.:!72 (30.:!59> 9.735 (5~1)
~0:
2013
s
25.801 ~6.65~
1:!9.5m IS.5+1 (541)
:\et periodic pension cost for Lifesp
s
32.258
$ ==...;;3,;.;7·:.;;8~ 90~
Net periodic pens ion cos t for the Hospil
$
21,407
$ ==..:2:;;:5.;.;.1:.;. 7.;.4=
f hc fol lowing weighted a\·cragc as~umptions "ere used by the Plan's ncruary to dctc nninc net periodic pension co:>t and hcnetit obligations:
2014 4 .~.) ..... 0./0
Oiscount rate for benefit obligations Discount rate for net periodic pension C("t Rate of compensation in~TI:a..: Expected long-term rate of rerum on l'l:m a"c"
31
2013 4.88%
4.Rs· ~
3.66°o
4.so~ ;,
4.500/o
7.5~~
., . .., :;o,·o
(Continued)
RHOO.I:: ISLAND HOSPITAL A.'\ll AFFILIATES Notes to Con>Oiidatcd Financial Stat~mcnt> September 30,2014 and 2013 (In thou:,anus)
(II)
Pension and Other Po~trctircment Benefit ~ (continued) The a~set allocation for the Plan at September 30. 20 I-I and 2013. and the target alk>eation for 2015. b> a»et category, arc a~ follows:
Asset categorv
Tnrget allocution 2015
::w.oo.
U.S. equities Marketable altcmatiq:~ International cquitic' \'enrure capital Commodities Real estate fixed income Cash and cash C
::!3 .0" 0 ::!0.0" 0
·'·00;,
1.5•. 11.5°o 1.0°/0
Total
Perccntnge of plan assets September 30 2014 2013 17.3° o 1.1.4 23 9 0 .7 .I ..I 1.1 31.2 7.!\ 100.0' 0
15.7°·o 14.5 16.5
O.R 6.2 2.0 39.3 5.0 1oo.o•.
fhc asset allocation table above does not include Sl07.702 and $102.83::! of l'lan 35>Ct<; at September 30. ::!014 and ::!013. re,pc<:mely. attributable t<) the separate sa,ings account balances ofpanicipants which are managed in various mutual fund.; hy Fidel it) 111\c:,tmcnts (Fidelity). fhc overall financial objccti'c of the Plan is to meet pre>Cnt and future obligativn:, to beneticiaries. "hile minimizing long-term contributions to th~ Plan ( hy earning an adeyuatc. ri~k-adjusted return on Plan a~~ets), with moderate volatil it ) in year·to-year contribution levels. TI1e primary inv.,stment objcctiw of the Plan i> w ana in the expected long-term rate of return on Plan asset~ in support of the abO\ e objecti' c. The Pl an·~ specific im cstmcnt objective is to ana in an average annual real total return (net of invc~tment management fcc~l of at least ~. 75° o o' cr the long term (rolling fhe-) ear period~). Real total return is the swn of capital appr<'Ciation (or loss) and current income (dividend> and interest) adjusted for inllauon as measured b) the ('onsumer Price lndc-... Lifespan empiO)S a rigorous proce,, to annually determine the expected long-term mtc of return on l'lan assets which is only changed based on significant shi lls in economic and financial market conditions. This estimate is primarily drhen b) actual historical u~~ct ·das' returns along with our long-term outlook for u g lobally divcr:,ilicd portfolio. Asset allocations are regularly updated ba<.cd on evaluation~ of future market returns for each asset clas>.
,,
-'~
(Continued)
RROOF: TSLA:'\D HOSPITAL A'ID AFFILIATES Notes to Consolidated Financial Statements Sertemher 30, 20 14 and 20 13 (In thousands)
(8)
Pension and Other Postretirement Benefits (continued)
Fair Value The toll owing tables summarize the Plan's investments by m
$
19.::!12 ; :!0.4-.16 18.639
T()tal
Lt:u•I,J
l,e\'t·ll
s
$
19,::!12 ::!0,4·.1(· I R639
Ua~ys·
notice
D3il y
One
D3ily l huly
lhrt"t' On<
ahc:m
\.fuhiple Slt:uc_si~
39.27:?
.\9.27:!
l .oog-s.hort equi ty
::!.000 21. 113
1,(100
Absolute rctum str:ucg;ics
lntcm.ationaJ cqu1tic~: U
~'i.·H)
Em~rging marktti V~nture
lbdemprion
or liquid:uion
0u
.,\nnu..'lll}
Sixty· Nincry-tivc
Q\J:li1CII >
~iXt>
27,171
tVIMthl>·Scmiannually
hvc ·~ met>
40,)6(.
65J.;Q9
l>aily • Month!:-
15.621
1~.62 1
M<.mll•l)
5.00S
llliql•id
N:A
6.22 1
IY.lily ()ail) Monthly
One One 1 11\ccn
l>ail~
On<
L>aily Daily Monlhh
On¢ Fifteen
~.00~
Cilpital
<\
On~
Cununoditie~: En~rgy
(,,22 1
Vad('IUS
6.624
Real ~tale
>500
6.62-1 l_:iOO
1-ixcd income:
U.S. 'I r<-
To~al
1~.670
18,670
I,::;(,(,
1.~66
s1,:ng
~7.:!.\~
::K:ws
28.205 5.(110 107,702
5.6 10
107.702
s
121 !)43
s
2~1.~65
s
5.005
s
D:tily Dail~
On ~
On< On<
~48.~13
Investment subscriptions in transit al September 30. 2014 included in the above major categories arc as follows: Absolute return strategies Real estate Long-sho11 equity
$15.900 3,500 2,000
(Continued)
RHODE ISL A:\"D HOSI'ITAL AN D A FJ:<'I LIAT.ES
Notes to Consolidated Financial Statements September 30, 20 14 and 2013 (ln thousands)
(8)
Pensio n and Other Postretirement Benefi ts (continued) Rcdt.'utpl iun
Da)S'
or liguic:tarion
notice
201.1
Lcvd 1
Le, el2
Tot~ I
U'tl3
U.S. equitie:,: Mid
17.3-19 s 17.239
L..·ugc cap grov.1h
lfl,:!XI
l.argc cap value
s
s
s
17.349 17,2W
Daily
One
Datly
Thr«
16.381
Daily
One
Markctnhlc ahc."mativcs:
Quarh:rly-AnnuoiiMiy· Ninc{)'·ti\'C
Muhiple- :.tr::llegie::.
~(,,527
36.5::!1
Ah<;olutc rcmm .;tratcgtcl'.
10.84-1
10.844
'-'fomhly
l· ive
39.060
39.060 14.942
Motuhly Daily
fi ve · Seven
14/H2
5.786
IJiiquid
N ·'A
10.653
Daily
One
(~,95:1
IJatly Oaily
lhre::
lnl~mu t ional ~4uitit"..s: I )reveloped msrkct.<;
Emergiog markets
5.786
Venture capttal
Conunoditie::.: Fnc-rgy
10.65.\ 6.Q53
Various RCOll cst:n~
4.925
4,925
One
On~
Fixt'd in.;:omc::
U.S Treas-uries
1~. 347 ~.xn
9 .S I3
4~. 556
44.55(•
2X.21K
11.310
•9 ..\70 17.310
102.~)2
102K!2
2 1.152
Fiddity mutual fuod:. rot.'!.I
10.119 14.347
11),119
U.S. 'I rea!'.UI)' mflauon-protc:ctt'd U.S. Goverruneru and ageocy I)ome<>ue bond"' Globall>oud:. <'a.<;h and cash eqmvatc:nt...;
:;
211,960 :;
205.260 s
5.786 s
Daily l>:nly Daily O:uly Daily · ~fonthly Oaily Daily
One Two 0Jl~
One
One . Fift«n One Oil¢
429.006
There were no transfers between Level 1 and Level 2 fair value measurements during the years ended September 30.2014 and 2013. The following tables set forth a summary of changes in the lair value of the Plan's Level 3 invcslments for the years ended September 30. 2014 and 2013: 2013
2014
Venture capi1al: Fair valueatOctober 1,20 13 Unrea liLcd losses, net Purchases Sales/redemptions Rcal i/.Cd gains, net
$
5,786 (399) 10 (2JO.l)
1.911
rair value at Seplcmbcr 30,2014
5.005
34
$
7.889 ( 1.580) 14 (2.299) 1.762
s ==~5~,7,;;:86~
(Continued)
RHODE !SLANt> HOSPITAL ANll AFFTI.IATF.S '-.otes to Consolidated Financial Statements September 30, 2014 and 2013 (In thousands)
(8)
Pension and Other Postretirement Benefits (continued)
Expected Cash Flows Information about the expected cash tlows tor the Plan is as follows: Employer contributions: 2015 (required for Lifespan) 2015 (required for the Hospital) Expected benefit payment<: 2015 2016 2017 2018 2019 2020 through 2024
s
35,208 22,958 36,265 30,425 30,405 31,352 35,157 202,134
Managcmcm evaluates its Plan assumptions annually and the expected employer contributions in 2015 could increase.
Other Postretirement Benefits In addition to )lrovidi ng pension benefits, the Hospital provides certain health care and life insurance benefits to retire{! employees. As of December 11, 2001. health care and life insurance postretirement benefits were eliminated for all active employees of the Hospital with fewer than fifteen years of consecutive service.
35
(Continued)
RHODE ISLAC\ 0 HOSPITAL AND AFFlLL-\TES '>;me-; to Consolid.,tcd Financial Statements September 30. 20 14 and
~0 13
(In thousands)
(R)
Pension a nd Ollte r Postretire ment 13 cn cfits (continu ed) The llospital recognizes in its consolidated stat~mcnts of financial position an assel for a benefit plan's O\'erfund~d status or a liability for a plan's underfunded stants. and recof,'llites changes in that funded status in the year in which the changes occur through changes in unrestricted net assets. The lunded-status amoum is measured as the difference bet"ccn the fair ,·alue of plan ass~ts and the henelit obligatiOn including all actuarial gains and lossc; and prior senic~ cost. Rased on September 30. 2014 and 2013 funded-status amounts for the Hospital's postretirement benelit plan. th~ Hospital recorded increa>cs in unrestricted net assets of$:2.801 in :2014 and $6.854 in 2013. re'p..-cti\ely. Approximatd) $352 of prior sen ice bendit "ill he amortized !Tom unrestricted net assets into n
Bmejit Obligations 2013
201-1 Change in accumulated postretiremem benefit obl i~,tation: /\~cumulated postretirement benefit obligation at beginning of year Service cost lntereSI co>t Bcnclits paid Actuarial gain Accumulated postretirement bendit obhgat1on at end of year
S
18.1-10
$
2-1,762 424 875 ( 1.382) (6.539)
s
lll.l-10
271 SS2 ( 1.11 0) (:2.807)
s
15.3-16
Funded Status The llospital has ne'er funded its other poslrctiremem benefit obligation>. The funded status of the postrctircmem benefit plan, reconciled to the amount reponed in the consolidated st
2013
201-1
Funded sl
s s
Accrued postretirement b.:nelit cost recognilcd m the con-.olidated statement> of financial position
s
Benefit obligations
36
( 15,346)
s s
( 18.140)
15.3-16
~
IS.I-10
15.346
18,140
(Continued)
RHOOF. ISLA '\'0 HOSP ITA L AN D AFFILI ATES :-.utc:. to Cun:.olidated Financial September 30.
~0 14
Statem~nt~
and 20 13
(1 n thousands)
(8)
l'ension a nd O the r
Po~rretirement
Benefits (continued)
Amounts recognized in the eun:.ulidated :.tatements of financial position at September 30• .:!014 and .:!013 cun:.i>t of: 201-1 Accmed postretirement bcndit c<~St: Current (indudcd 111 accrued emplo}ee benefits and cnmren,ation 1 Noncurrent (included mother liabil ities)
2013
s
1.380
16.760
Total accrued postretirement benefit cost
18. 140
201 3 Acc umulated net actuarial gain not yet rei:Ob'lli.ccd as a component of net periodic postretire ment benctit cos t
$
1.545
Accumulated net periodic postret ire ment ])ene tit cost
( 19,685)
N et amount rccogni7cd
( I !!, 140)
2013 Sour~:e' nf change in unrestricted net 'ct ~;a in ari,ing duri ng the year
assets:
s
6.539
\rnortitation': '"t actuarial h>"
315
rota! unrc,trictcd net a> " et !lain rccognitcd durin!( the ) car
s
.\'t't Periodic Ptl\tretirl!ntl!lll Be11ejit Cost Components of net periudi~: po:.trcllrcmcnt benefit cost are a-; follows tor the years ended ~eptcmbcr 30:
20 13
201-1
s
SeT\ icc co:.t
lntcrCS[ COSl Amortiattiun uf net actuarutl loss
~~I
<;
424
875
&51
.~I~
'et periodic postrcttrcmcm benefit co>t
37
1.123 s ==~~
~
1.614
(Continu~d )
RHODE ISLAND HOSPITAL A:-ID AFFII.IATF.S Notes to Consolidated Financial Statements September 30,2014 and 2013 (In thousands)
(8)
Pension and Other l'ostn•tirement Benefits (continued)
The following weighted average assumptions were used by the plan's actuary to detennine net periodic postretirement bene tit cost and benefit obligation,;:
2013
2014
4.88% 3.66%
4.33%
Discount rate for benefit obligations Discount rate tor net periodic postretirement benefit cost
4.88%
Assumed Health Care Cost Tre11d Rates at September 30:
2014 Health care cost trend rate assumed for next year Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) Year that the rate reacheds the ultimate trend rate
2013
7.44% 4.50%
7.66% 4.50%
2030
2030
Assumed health care cost trend rates have a significant effect on the amounts reported. A one-percentage-point change in assumed health care cost trend rates would have the. following effects as of September 30,2014: Onc-l'crccntage Point Decrease
One-Percentage Point Increase
s
Effect on total of service cost and interest cost Effect on accumulated postretirement benefit obligation
78
880
s
(7 1) (809)
Expected Cash Flows Information about the expected cash !lows tor the postretirement benefit plan follows: Expected bene tit payments: $
2015 2016 2017 2018 2019
1.125 1.21 5 1,325
1,499 1.547 7.300
2020 lhroug.h 2024
38
(Continued)
ImOOJ:: ISLA ~ 11 IIOSI'ITAL ANO AFFI LIA I'ES '\otes to Con>Ulidated fin:1ncial Scptem~r 30,
20 I-I ;md
Statement~
~0 13
(In thousand->
(9)
Patient Sen ice Revenue and Related Reimbursement The Hospital recogniz~s patient ~crvice re,cnuc associated with sen ices provided to patients who ha ve third-party payor co\eragc on the basi> of comracrunl rates for the ~e" ices rendered. for uninsured patients that do not qual if)· tbr charit) care, the Hospital rccognozes re' aiUC on the basis of ih ,tandard rates for se" tce:. pro' ided (•" on the basis of di,counted rat~~. if negotiated or pro' idcd by pnlic~ ). I he following b an approximate percentage breakdO\m of gross patient service rc\cnue by payor typ.: tnr the years ended September .10:
2013
2014
Medicare and Senior <:arc Blue Cro,s Medicaid and Rite Cnre Managed care Commercial. self-pa), and other
-100.0 17
21 II II
38" 17 18 II 16
too•.
·1 he I I<)Spital grants credit to patients. ntost of whom urc local residents. I hc Hospital gcncru lly does not require collateral or other sccurit) in extending c red it to patients; hO\\Cver. it routine!) obtains assi~'llll1Cnt of(or IS othen' be entitled to recch C) patients' benefit> payahle under their health insurance programs. plan, or policies (e.g .. :\tedicarc. \tedicaid. l:llue Cross, managed care. or commercial insurance pnlicit:l>). On the basis of historical e'perience. a significant portion of the Hospital's unntsured patknh will be unable or un" ill ing to pay for the sel"\·ices pro\ itkd. nms. the Ho:,pital records" :,igni ticant provision for had debts related to uninsured patients in the period the services are provided . Medicare cost reports tiled annually with The CcnLCK for \ledicarc and Medicaid Sen ices (CMS) are subject to audit prior to final settlement. I he ~0 I.! \tedicarc co>t repnn has not ~-en filed and. therefore, is not settled. In addition, the \fcdicare CO>t reports for ~01~ and ~013 ha,·e not b.:en ,cnlcd. The State of Rhode Island :-.1cdie.aid Program no longer requires annual cost reports and year-end rctrospecme settlements; however. Medicaid cost reports for ~005 through 2010 have not been final settled. Regulations in effect require annual settlements ba,cd upon cost reports filed b) the llospital. ·1 hese settlements are estimated and recorded in the accompan~ing consolidated financial statements. Changes in these estimates ar.: reflected in the cMsolidated finiln.:ial statement> m the year in "hich the~ occur 'ct patient set'\ ice revenue m the accompan) ing consolidated >tatcments of operations and ch;mgcs in net assets was increased b) $2,863 and $4,556 in 20 14 and 2013, respective!), to retlect changes in the estimated sett lements tor ce11ain prior years. Revenue> from \lcdicare and Medicaid programs acc<>ullled for appw,imately -IO"·o and ~I"'· respecti' ely. ofthe Hospital's gro" patient sen icc rc\cnue for the )Car ~nded Septemb-:r ~0. ~01-1. Lt\\, and regulation:. gO\crnmg the Medicm..: and Medicaid pro~'Tarns are comple:-. and subject to interpretation. J9
(Continued)
RHO OJ:: ISLAND BOSI'ITAI. AND AFFILIATF.S 'lotes to Conwlidated Financial Statements September 30. 20 I-I ;md 2013 (In thousands)
(9)
Patient Sen ice R evenue and Related Reimbursem ent ( continued ) T he Hospital believes thut it is in compliance with a ll appl icable laws and regulations. ComJlli ance with law~ and regulations can be subject to future government review and interpretation as well as significant regula to~ action: failure to com pi) "ith ~uch laws and n:gulations can result in tines. P<'naltic<., and exclusion from 1\ledicare and ~lcdicatd programs.
(10) In come Tax Status TI1e llospital and its atli liates arc not-for-profit corporations as described in Section 50 I (c)(3) of the Internal Rc' cnue Code (the C<>dc) and are ~~cmpt from Federal income taxes pur,uant to Section 50 !(a) of the Code. I he Hospital recognilc' the effect of mcome tax positions only iftho.e positions are more likd) than not to he sustained. Recognized income tax positions are measured at the largc't amount of hcnetit that is greater than fi lty percent like!) to he realized upon settlement. Changes in meu~uremcnt are reflected in the period in which the change in j ud~mcnt occurs. I he Hospita l did not rccogni7c the effect of any income tax positions in either 201 4 or 2011.
40
(Continued)
RIIOOE ISLAND HOSPITAL ANU AFFIT.IATF.S Not~~
to Consolidated l"innncial Statements Scptcmh~r
30, :!0 14 ;md 2013
(In thou,ands>
(II) Long-Term Oebt Long-t~rm
debt consists ofth~ following at
Septcmb~r
10: 20 U
Hospital ftnancing Rc' cnue tixed rate s
$
119.784
2013
s
127.544
Ilospital financing Revenue lixed rate serial and term bonds due Ma) I~. 2027 through :!039 in annual amounts ranging from $1.870 to $7.900
-2.~1
7::!.~1
Hospital Financing Rc,·enue tixed rute serial and term bonds due May 15, 2015through 2026 in annual amounts ranging from $810 to $14,705 at rates ranging fmm 5.25"o to 5.75%. (1996 Series- Lifespan Obligat~d Group)
4:!,170
42.805
Master lease and loan and ~ecurity agre~mcnt due December 15. :!0 I 4 through 20~0 in ~emiannua1 amount.; rangmg from S3.439to $3,766 at 1.66°o (the 2013 financtngl
30.633
35.450
3.071 101
3.523 107
268.204
281,870
U,713
11.212
Unamortitcd premium- 2006/\ ~eric~ Unamortit.ct.l premium- 20091\ $cries
Less current portion Long-term debt. net of curr
s
254.491
s
.268.658
The estimated fair valu~ of the llospital 's long·t~rm debt at September 10, 2014 and 20 I 3 approximates S2B4,000 and $286,000. re~pcctivcly. and is estimated using discounted ca'h flow analyses. ba,cd on the Hospital'> current incremental borro"ing rates for :.imilar types ofborro"ing arrangements. l'hc fain·alue of Jong-tem1 debt is based on ~igniticant obser,ahle inputs and is categorized as Lc'cl 2 for purpos.:s of ,-aJuation disclosure. On June 1-1. 2013. the Hospital, I MH. and EPI311 entered into a tax-exempt ~50.000 master l~a>e and loan and security agreement (the 20U Financing) "ith a ~even-year term. 111 partiall) fund th~ capital costs associated "ith l.i feSJlan's multi·)car inlormation systems conversion project. The 2013 rinancing is secured b) a first priorit> lien and securily interest on the equipment (~Tll\\ fund (the Escro" Fund). The Hospital, I \Ill. and EPBH arc JOintly and se\erall) liable tor repa)ment of the 2013 Financing. NHCC indirect!) pilrticipated in the 2013 Financing
41
(Continued)
RHODJ::
ISL~"-'D
HOSPITA L AND AFFII.IATF.S
Notes to Consolidated financial Statements September 10, 20 14 and 20 13 (In thousands)
(11) Long-Term Debt (continued) via an intercompany payable of$4,500 to the Hospital in exchange for an equivalent interest in the Escrow Fund. On July 8, 2008, the Board of Directors of Lifespan Corporation. acting as the sole corporate member of EPRH, adopted a resolution authorizing EPB H to become a member of the Lifespan Obligated Ciroup (OU). The EJ>BH Board of Trustees, as well as the floards of the Hospita l and TMH, also authori7.ed related resolutions. On March 30, 2009, RJHEBC issued, on beha lf of the OG, which consists of the Hospital, TMH, EPRH, Rhode Is land Hospital Foundation (RIHF) and T he :Vtiriam Hospital Foundation (TMIIF), $ 114.985 of tax-exempt bonds (the 2009A Bonds) for the purposes oftinancing the acquisition, construction, renovation, expansion and equipping of certain hospital and related health care facilities owned and operated by the Hospital, TMH and EPBH (the Obligated (iroup I lospitals), including the expansion. construction, renovation, equipping and furnishing of a two-story addition to EPRH's existing building and the renovation of vacated space in the existing building. T he above outstanding 2009 Hospital Financing Revenue Bonds (00 - the Hospital. TMH. EPRH, Rlllf' and TMHF) are secured by a pledge of the gross receipts oftbe Obl igated Crroup Hospitals and by mongage li ens on the llospital's and TMH's real property and all buildings, strucrures and improvements thereon. The Obligated Uroup Hospitals, RJHF and TMI!F are j ointly and severally liable for repayment of the 2009A flonds, recorded directly by the Obligated Group Hospitals as tollows:
s
The Hospital TMH EPBH
72.441 19,547 22,997
$ =~1,;,14~,;9;8;;;, 5=
Total
Payment of the principal amount of and interest on $64,825 of the 2009A Bonds when due is guaranteed by a financial guaranty insurance policy issued by Assured Guaranty Corp. On February 14, 2006, RIIIEBC issued. on behalf of the OG. which consisted of the Hospital and TMH, $ 192,135 of tax-exempt bonds (the 2006A Bonds) for the purpose of refunding $123,405 and $65,315 of the OG' s 1996 flonds and 2002 Bonds. respectively. The advance refundings were allocated as follows:
2002
1996 Bonds The Hospital TIVfl-1 Total
Bonds
s
IOIJW9 21.596
s
48.986 16.329
$
123.405
$
65~3l5
42
(Continue())
RHODE ISLAND HOSPITA L ANU AFFILIATES Notes to Consolidated FiMncial Statemcnl' Sept~mber
30. ~0 I-I and ~0 13
(In thousands)
( 11) Long- rerm Oebt (continued ) On September 12, 2006. the Board of Dtrectors of Lifespan Corporation. acting as the sole corporal~ mcmher of both Rhode Island llospital Foundation and The Miriam Hospital Foundution (the Found by the Hospital and T\!H. re,pecti\el). Pay rncm of the principal and intere>t on the 1996 Bonds when due is guaranteed b> a financial guamnt:y insurance policy issued by National Public Finance (iuarantcc Corp. Loder the tenus of the 2009A, 2006,\, and 1996 Bonds, the Obligated Group Hospitals are required to satisfy cenain me-asures of firumcial performance a< long as the bonds arc outstanding. At September 30, ~014. management belie' c-; the Obligated Group Hm.pitals were in compliance "ith all CO\ enant' of the 2009 ·\ ;md 1996 bonds. A' previous)) noted. the 2006A flonds are in,ured by Assured Guarani> Corp. and the insurance policy requires the Obligated Group Hospitals to maintain a Oeht Sen icc CO\ crag"' Ratio (OSCR) of2.0x or higher. The I)SCR is 2.29x for the year end~d September 30, 20 14, comparl!d tu 1.69x for the ycor ended September 30, 10 13. Sine"' the OSC R for the year end~!d September 30. 20 13 resulted in this insurance CO\enant not being met. the Debt Sen icc Re,;ene Fund (OSRFI associated with the Ohligated Group Hospitals' 2006A Bond~ was fund~d in the appro\imate amount ofSI-1.900 ,;a the Otablishment oLt '\tandb) kncr of credit "hich provides for the a,·ailabilit) Mthe DSIU requirement. The llospital' s aggregutc maturities of long-term debt fl>r the live tlscal years ending in September 2019 are a~ follows: :!OIS. S U,713: 2016, $14,231: 2017, $14,763: 201 S. S 15.334: and 2019. S 15.nR.
43
(Continued)
RIIODE
lSL~J'\'1)
HOSPITAL AND AFFTLIATES
Notes to Con:.olidatcd financial Statements September 30, 20 14 and 2013 (ln
th()u~ands)
(II) Long-Term Oehr (continued) Agreement.< underl)ing the \arious llospital hnanl!ing Re,enue Bonds and the 201.> rinancing r.:qmrc that the Obligated Grl)Up Hospitals maintain cen:un funds included with as~ets limited to use in the consol idated statements <)f tinancial position, its foll()ws: Project hmd The Obligated Group Ho,pitals a1·e required to appl) monic< in the Project Fund to pay the costs of debt issuance, facility renovationlrcplaccment, and routine ~!apital equipment. Bond Fund- The Obligated Group llospitab arc required to make periodic deposit.< to the tnJ>tcc sufficient to pnmde sinking funds for the rayment of principal and intere>t to bondholde"' when due. Debt SeT\ ice Re:.ene Fund-;- The Obligated Group I Jospitals are rcqu1red to apply monies in the Oebr Sen icc RcSCT\C funds to remed} deficiencies in the Bond Fund, if an). Master Lca of the llo
20 U Project Fund- 2009A Seric:> Rond Fund- 1996 Seric' Debt Senicc ReseT\ c Fund- 20091\ Scrie; \laster Lease Obligation Escrow Fund - 2013 financing
s
1.662 730 7.2+1
s
731 1.2-1-1 25.2<)2
1.761
Total
l 1.397
2013 ., .p
s ==,;;-10;;,;,·4,;,;,1.;,4=
(12) Temporarily and J>crmancntl) Restricted 'let A);cts
Temporarily restricted net a.
2014 General health care >Cr\·icc activities Research Interest in net assets of ]{}1ode Island Hospital Fm111dation
s s
Total
44
190.977
!013
4~.845
IR4,750 45.lGO
11.964
11,937
251.786
S
$ ==~24,;;;2;,:; ,5;,;,1,;,7_
(Conti nued)
RHOOF: ISL AN L> HOSPITAL A:'\D AFFILI ATES Note~
to Consolidated Financial Statements s~pteml>er 30, ~0 I-I ~In
(12)
Temporuril~
•md
~0 13
thousands)
and Pcrmaneotl) R e•trictcd .\et
As~ef(
(continued)
Permanently restricted net a.
2014 General health care sen icc activities Research lntere't in net asset- or Rhode Island Ho,pital Foundation
Income from
pennanentl~
~
35.39-1 -1.-161 35.~08
s
Totu l
20 13 35,206 4,-161
35.015
s ==~7,;,4,;,;;6,;;,82==
75,063
restricted inYestments is C\Jl
( 13) Lea'e' The Hospit
s
2018 2019
Thereaficr l'otal mmimum lease pa)'lllCnts Rental
~x~'llse.
S~ptcmber
8,814 7,034 5.368 4.066 2.864 7.447
$ --~=)=5=,5=9=3~
including rentals under leaM.~ with tenns of Jc,_ than one 30.:!01-land 2013 \\as Sl-1,225 and 512.61~. respecti\el~.
~ear.
for the years ended
(14) Con centrations of Credi t Risk 1-inancial instrumems "hich potential!} >Uhject the Hospital to concentnttions of credit ris~ consist primarily of accoun~ rcx:ei,·able and ccnain im estm1.11tS. TI1e risk associat~d "ith temporary cash imestmcms is mitigated by the fa~t that the in,cstments are placed \\ith what management helie,·es arc high credit qualit> financoal institutions. lmcsunents, "hich include gO\ ernmcnt and agency obligations, stocks.
(Continued)
RHODE ISLA "D HOSPITAl. AND AFFILIATES Note> to Consolidated Financial Statem.:nts Septemb.:r 30.
~0 14
and 2013
(In thousands)
(IS) .\falllnlctice and Other Litigation Prnfe.~~ionaf Liability/Medical Malpractice
and Gt'llcruf Liability
Professional liability/nwdical malpractice coverage for the Hospital is supplied on a claims-made ba,i~ by Rhode Island Sound f'nterprises Insurance Co. Ltd. (RISf.!. Lifespan's afliliated captive in,urance comp
CO\ered under the Hospital'' protessionalliability·medical malpracuce polic) are 645 nonemplO)<:d ph)sicians. Each ofth~sc physicians is provided with a $2.000 indemnilicatitm per claim and a $6.000 annual indemnification aggregate. The llospital or its indenmificd ph) sic tans ha' e been named as defendants in a numher of p.:nding actions scekmg damages for alleged medical malpractice liahiltty. In the opini<>n of management. any Jiabilit) and legal defense costs rc,ulting from thc>e actions "ill be within the limtt< of the Hospital'' malpractice insurance cov-erage provided by RISr and/or commercial excess carriers. Gcn~ralliability coverage is pro,·idcd ttl the llospital b) RISE amounting to $2.000 per claim and S4,000 in the annual aggregate. Commercial excess liability insurilncc ha< been obtained by Lifespan "hich pro' ides aggregate gencralliabolil) co,erage ofS80.000.
Jt'or/..er., ' Compensation
The llospital has incurred a number of workers' compensation claims and, in the opinion of management, the li ability of the Hu,pital will be "ithin the limit> of the assets of I ifespan·s "orkers· compensation selt~insuran~-c tru.st fund.
Other Litigation Tile llospital is involved in a number of miscellaneous suits and generalliabilily suits arising in the cour>c of busi ness. After ct>tNJitation with legal counsel, mam\gement estimalc' that these matter< wi ll be rcsohed without material adver>c effect on the Ho>pital's funtr~ financial position or r~suiLs from operations.
46
(Continued)
R HODE JSLA.'\"1> HOSP ITAL AND AFFI LIATES '\otes to Consolidated financial Statements Scptcm her 30, :!0 14
( 16) Relatt'd-Parf)· "J ntn~actions The Hospital rent~ ~pac~ ;md prO\ ides laundl') and hncn .;en·ices to alliliatcs. Included in the Hospital·, other re,·enue in the consolidated statement' of operations and change' in net <~>sets arc the following amounts resulting from trunsactions with ani liatcs for the years ended September 30: 201-1 lkntal income Sen ices rendered
s
1.379 1.598
s
2,473 1,618
s
1.9"'7
s
-1,1191
laundr) and linen
Total
20 13
During 2014, the llo~pual also rented ~pace trom I :-.tH. Included in the Hospit;~l ·,operating expenses in the consolidated statement of operations and changes in net assets is rental eXJ><:nse of S555 re~ulting from transactions w ith TMH. rhe Hospital was charged a management fcc b) Lifespan of $'15.742 and 1;89.821 in 201-1 and 2013. respecth ely. Life,pan pro' ides infonnation sen ic~s. human resources, financial, and Yarious other suppon '""ices to the Hospital Included in other recehable. and other accrued C\pcn,.:s in the consolidated statements of financial po;;ition are the folio" ing amoun" due !Tom (to) cenain relatt:d cntitic> at September 30:
2013
201-l O ther receivables: Lifespan Physician Group. Inc. TNIH Ncwpon llospital EPBH
$
457
s 207 24 70
RIHF
,
61 Total
Other accrued expenses: TMH Li fespan Hospitpital
s
518
s
s
(1.015) (I ,095) (.\.1!\)
s
303
(1.196)
(4111 (3'10)
( 148) 127)
s
Total
47
(3.633)
s
( 1.'1'17)
(Continued)
RHO OJ:: ISLA '\-rl II OS PIT Al ANU AFFTU \ TF:s '>otes to Consolid.ned financial Statements Scptcm her 30, :!0 14 and 2013 (ln thtHI\ands)
( 16) Related-Part) 'f ransactions (continued) During the years ended September 30, 201-1 and :!0 l.l. the Hospital recei' transfers from RIHf amounting to $6,830 and $7, 19!1, respectivel).
eo tcmpt>rarily restricted net ll»ct
RlHF, whose sole corporate member is Lifespan Corporation. was established to engage in philanthropic activities to support the mission and purpo>cs nf l.i iespan and the Hospital. fu nds are distributed h) the Hoopital upon collection for usc in confom1it) with purpose restrictions stipulated hy donors. or '" determined by the Boards of Trustees of the Ho,pital and RIHF. A summar~ of RlliF's assets. liabilities, net assets. deficiency of re\ enues over expenses, and changes in net assets folio" s. The Hospital's interest in the net assets of RIHF ;, reponed as a noncurrent asset in the consolidated statements of tinam:ial posiuon. 201 ~
Assets, principally asset> limited as to use
s
Liabilities Unrestricted net assets l'emporarily restricted n~t assets Permanently restricted net as~el<
$
Totalliabilitic> and net a.
s s
502 6,329
$ ==,;5~3~.9;;;2.;.7~
s
1l .96-1 .15.:!08
Total unrestricted r~' enues. gains and other 'uppon l'otal expense' Deficiency of revenue;
5-1.00.1
2013
54.003
3.7S9 -1.280
s ===~=·3=,9=:!=7= S
(491)
0' cr e'penses
3,636 -1,00:!
(366)
343 6.477
Other increases in unrestricted net assets Unrestricted net assets, beginning of year
-198 6,-177 11,937 35,0 I 5
6,M41
s ==....;6;,;..4;,;,7,;.7~
Unrestricted net assets. end of year
$
6.329
lnerea.~e
(decrease) in temporarily restricted n~t a"ets Temporaril) rc>tricted net assets. beginning of year
s
:!7 11.937
s
Temporarily restricted net a">">CL~. end of~ear
s
1 1.96-1
s ==..,;.;11~.9;,;;}.;.7-
lncn:asc in permanently restricted net assets Pcm1anently restricted net assets. beginning or )ear
$
19> .15,015
s
J5.20R
S ==~3=5,=0=15;;....
l'enmmcntly restricted net assets. end of year
48
(91-l) l~.S51
815 34,200
(Continued)
RHODE ISL\ "0 IIOSI'ITAL ANU AFFILI.\ TfS Notes to Conwlidatcd financial Statements s~ptcmh<:r
30.2014 and 2013
(In thousands)
(17) License Fees In 2014 and 2013, the State of l{.hod~ lsl3nd ha~ assessed a license fee to all Rhode Island hospitals, based on each hospital's 2012 and 20 I I net patient ser' ice revenue. respect ively. as deli ned. ·1 he Hospital's license f~c C\pcn~c was $49.456 in 2014 and $47,4~ I in 2013. (18) Functional Expenses
The Hospital pro' ides general health care >om iws to rcsidenL~ within its geog:mphic location. Expenses related to pro' iding th<'>C scr. ices arc as tollo\\s forth~ ~cars ended September 30: 201-1
s
Health care ser.ices Research General and administrative: Depreciation and amortization Interest Other
90 1,112 65.355
2013
s
42,024
Total general and adrninistrath e
s
861,949 62.904
I :1,433 95,1X9
38.821 13.491 91.353
150.646
143.665
I, 117.113
$
I ,068.518
(19) 'lon· rccurring Charges Lo>s from operations includes non-recurring charges ofapproximatel~ $526 and SI.7S!I m the ) ended September 30.2014 and 2013. respeeti\el~. rdatcd to wearnlining initiati,fit' operating strategies. lhc charges include pro,·isions for the se,erance costs of pcrmanem manag~m~nt and supcr.·isory workforce reductions. The liability related to the non-recurring charg~s is appro\ imately S ll3 and S767 at Septemher 30. 2014 and 2013. rc.;pcctively. and is included in accrued emplo}ce benefits and compensation in the consolidated statements of financi31 position. In July 2013. Lifespan announced a voluntary carl) retirement program (VF. RP). v.hich was designed to pro\ ide salaT) and medical henelits continuation for cligihle employees \\ho "ishcd w retire. The Hospital's C>t imatcd costs of this pro1-'Tam in 1013 amoumed to $2.933 and arc included in compcn>atit111 and benefits in the consolidated statement of operations and changes in net assets. The liahilil) related to the Ho,pital's VERI' pro~'Tam is approximately S2!i5 and S 1.182 as of September 30. 2014 and 20 I :1, respecti\d~. and is included in accrued emplo~ee b.:ncfit, and compensation in th~ consolidated statement> of financial position.
49
ATTACHMENT 3 – RIH BMT QUALITY ASSURANCE POLICY
19
