Overhead

Off-site Clinical Practice Overhead
(Implementation Plan)
(Last Updated 06/28/2000)

EFFECTIVE FEBRUARY 1, 1999, revised 7/1/2013

1. Full overhead of 11.5% will be charged for on-site clinical practice activities. On-site means on campus or within one mile of campus. The campus is defined as the WUMC Redevelopment District bounded by Kingshighway to the west, I-64 to the south, Boyle to the east and Forest Park to the north. The inner figure on the WUMC Area Map Defining “On-Site” (for Overhead Purposes) shows the campus boundaries. The outer figure shows the “on-site” area or the area within one mile of campus. Reduced overhead of 7% will be charged for practice activities outside the outer boundary or “off-site.” Also available is a list of the off-site patient care IDX location codes.

2. WUSBCS will continue to use the existing guidelines for assigning location codes and, in addition, will notify Finance – Information Systems and the Budget Office when a new location code is established in the 44xx, 92xx, 61xx and 62xx ranges but is on-site. This is occasionally necessary due to the way in which location codes are linked to WU Space System building numbers. Note that, technically, these special series are used in place of 3 digit building numbers in the Space System most of which are off campus.

3. Finance – Information Systems (F-IS), in coordination with WUSBCS, will maintain a definition (in Focus) of on-site vs. off-site locations and will display the location codes in both groups in a monthly report of all locations. This definition of off-site will be used in overhead calculation logic. Off-site locations will include all IDX location codes of the format 29xx, 44xx, 61xx, 62xx, 83xx, 85xx, 88xx, 92xx, and 95xx, and exclude specific codes (hard-coded) known to be on-site. Note that 61xx and 62xx have been identified as the next ranges for off-site location codes when no more 44xx and 92xx codes are available. The locations 9235 (Montclair), 9244 (Parc Frontenac), 9250 (CID), and 4467 (Independence Center), (Renal space on Forest Park), 9289 (BJC Health Center on Lindell) will be coded as on-site.

4. Budget Office Senior Analysts will identify and confirm for each department the IDX location codes to be treated as off-site for posting fee-for-service revenue based on the above rules. FFS revenue generated at these locations will be charged the off-site overhead rate of 7%. A one-time Original Budget module will be created by F-IS at February month-end with the new budget/object 5196 codes to be opened prior to the first run of the overhead module with these new rules. At subsequent month-ends, new revenue and/or overhead budget/objects will be opened per the existing procedures.

5. Budget Office Senior Analysts will identify and confirm for each department the clinical practice sales & service activities that occur in off-site locations. The sales & service revenue generated at these locations will be charged the off-site overhead rate of 7%. Analysts will open 7296 budgets upon department request when sales & service revenue earned at an off-site location is first recorded.

6. Overhead on revenue deriving from capitated contracts will be adjusted at year-end to effectively reduce the rate for off-site activities. A rebate will be calculated (separately for each department or IDX division with capitation) by multiplying the fraction of off-site charges out of total charges times the full overhead collected on capitated revenues times the percentage overhead to rebate, that is, (11.5% – 7%)/11.5%. Charges here are total: included are FFS, capitated, and all other charges. The formula is: (off-site charges/total charges) x full overhead charged to capitation x (5.5/11.5).

7. New off-campus practices are elibible for a 3-year reduction from 7% to 6%.  Please review with your analyst (effective 7/1/2013)


8. Following February month-end close, a copy of the clinical practice overhead report (with account detail but not location detail) will be mailed to each department for their review. In addition, F-IS will create a one-time detail report of off-site revenue by IDX location code for distribution to departments. We do not expect to need to distribute these reports to departments except for this one “start-up” month.