Policy 2702: Operation of BSD Off-Site Clinical Practices
Subject Area: Miscellaneous
Responsible Office: Financial Services
Sponsor: Chief Financial Officer
Originally Issued: March 1990
Revised: October 1992
Refer Questions To: John Kroll, 773-702-1941
Purpose: To establish policy guidelines which address the Operation of BSD Off-site Clinical Practices.
Physicians from the Biological Sciences Division (BSD) of the University of Chicago operate clinical practices off campus. These practices vary widely across sites in terms of the scope of activities and administrative procedures followed. Of central importance are sites where the University owns or leases space, and those where billing is not directly managed by the University. The volume of offsite activity has increased in the past few years, and, for financial management and control purposes, it is important that University and BSD policies and procedures are consistently applied at all offsite locations.
The baseline University financial management and control policy requirements are summarized below:
1. Bank Accounts – Unless specifically recommended by Financial Services and approved by the Board of Trustees, the use of separate bank accounts for offsite activities is not permitted.
2. Petty Cash Funds – The establishment of a petty cash fund requires approval of Financial Services upon recommendation of The University of Chicago Physicians Group (UCPG). The operation of a petty cash fund must be in accordance with the University’s petty cash policy. See Financial Policy No. 1505, “Imprest Balance Accounts: Petty Cash.”
3. Financial Accounting System – The Financial Accounting System (FAS) is the official financial accounting and reporting system of the University. All accounting transactions must be recorded within this system in accordance with Financial Services’ “FAS User’s Manual”.
4. Revenue and Accounts Receivable – All revenue and accounts receivable transactions from physicians fees at offsite practices must be processed in accordance with established policies and procedures of BSD. Revenue transactions from sources other than physicians fees (e.g., salary support of other reimbursement agreements) must be processed through Financial Services and recorded properly in FAS.
5. Cash receipts – All payments must be sent to the University of Chicago Physicians Group (UCPG) unless a special depository bank account has been authorized by the Board of Trustees.
6. Purchasing – All purchases must be made through authorized procurement centers as described in the University procurement policy. See Financial Policy No. 1201, “Authority and Responsibility for Procuring Goods and Services.”
7. Non-Payroll Expenditures – Non-payroll expenditures should be processed in accordance with established University policy as described in Financial Services’ “Accounts Payable User’s Guide” (Revised September 1988). Note: To fulfill IRS reporting requirements all payments to consultants must be processed in accordance with established University policy and procedure as outlined in the “Independent Contractor Payments” section of the Accounts Payable User’s Guide.
8. Payroll – Payroll expenditures must be processed in accordance with established policies of the Human Resource Services and Financial Services.
9. Leasing – The leasing or renting of offsite space and any improvements to that space requires advance approval from the Chief Financial Officer.
10. Insurance – Prior to establishing an offsite clinic or executing any lease or other contract related thereto, approval to extend the University’s professional/malpractice liability coverage to the clinic must be obtained from the department chairman, office of Medical Legal Affairs, the Dean of BSD and the President of the Hospitals. Further, the University’s Risk Management Department must be consulted regarding other liability and property insurance requirements.
11. Audits – Offsite activities will be monitored through periodic reviews conducted by the University’s Office of Internal Audit and/or the University’s external independent auditors.
In order to ensure that appropriate guidance is made available to physicians practicing outside of the campus community and that policies are consistently applied, the following steps must be followed when establishing and operating an offsite practice:
1. The plan for a practice at an offsite location is developed including the targeted community, the scope of clinical activity, participating physicians and anticipated patient volumes.
2. The physician(s) setting up the practice secures the approval of the Department Chairman to pursue activities in an offsite location.
3. The plan for the offsite facility is submitted to the Associate Dean for Clinical Activities for assessment of fit within the mission of the Division as well as any necessary coordination of activities across Departments.
4. Any leases or other rental agreements must be sent to the Associate Dean for Clinical Activities for forwarding to the University Office of Legal Counsel and approval by the Chief Financial Officer.
5. A plan management of patient accounts and billing activities is submitted to the Department chairman and the Physicians Group Office. Billing should be done by UCPG unless an exception has been granted by the Associate Dean for clinical Affairs.
6. If services are not billed by UCPG, the billing agent must provide UCPG with a monthly check for the practice’s receipts and financial reports summarizing the month’s charges, payments and write-off. Monthly reports of financial performance as well as statistics on clinical activity comparable to those from IDX system must be made available to Physicians Group and BSD at the physician level.
7. The Department requests a Ledger 2 account to record expenses. A single account can be used for each site or section within a site as needed. If more than one Department is represented at a site, a separate account should be used at least for each department.
8. The Physicians Group will maintain a general ledger account and a corresponding Ledger 2 account for recording accounts receivable, revenue, allowance for uncollectible accounts, write-offs, and collection expenses. The Physicians Group will transfer cash from the collection account to the Departments subsidiary ledger (i.e. Ledger 2 account).
9. The Physician(s) develops a profile of personnel needs. The employees at Hospital/University sites must be University or Hospital employees and paid through the University or Hospital payroll system.
10. Ninety percent of all professional fee receipts will be referred to the Departments. The remaining ten percent will be retained by the Dean as is consistent with the distribution formula applied to all on-site activity.
11. The internal distribution of Department income arising from offsite activity as well as prerequisites and incentive plan options for physicians operating at the sites remain largely at the discretion of the Department. However, all recommendations for assignments of personal income to physicians must be approved by the Dean before commitments are extended to the physicians.