45 - Financial Performance of the Division of Neonatology in a Funds Flow Model

Publication Number: 4044.45

Brittney Phillips, University of California, Davis, School of Medicine, Sacramento, CA, United States; Janette Lee, UC Davis Health, Sacramento, CA, United States; Pamela Roualdes, University of California Davis Children's Hospital, Sacramento, CA, United States; Brooke Trifeletti, University of California, Davis, School of Medicine, Folsom, CA, United States; Satyan Lakshminrusimha, UC Davis, Sacramento, CA, United States

Background: In 2021, the UC Davis School of Medicine (SOM) adopted a new Funds Flow Revenue model where all collections from patient revenue go to SOM. Departments are paid in a payor agnostic method through wRVU payments for a $/wRVU value (productivity model) and cFTE (clinical full time equivalent) payments required to cover service obligations (staffing model). These calculations include the weighted average of AAMC salary benchmarks. The impact of a Funds Flow model on the Division of Neonatology's finances is unknown.

Objective: Compare the financial performance of the Division of Neonatology under the Funds Flow Revenue Model implemented in 2021 to the traditional collections-based model.

Design/Methods: The analysis compared financial and productivity metrics between pre- (2019-2021) and post-funds flow (2021-2025) periods. Financial performance was evaluated using total collections prior to (minus billing fees and taxes), and revenue following, the transition. Staffing requirements were estimated by dividing total NICU coverage hours by average clinical hours per cFTE. wRVU data was further analyzed to determine the division's proportional contribution to overall departmental productivity.

Results: Prior to the funds flow model, the Neonatology contributed to 26% of the department's total collections. Following the transition to the funds flow model, the division's proportion of overall clinical revenue declined to an average of 15% (p=0.03, figure 1). Despite this decline, the division maintained a substantial share of clinical collections (figure 2), productivity, accounting for an average of 24% of the department's total work wRVU generation during the post-funds flow period (figure 3).

Conclusion(s): Following implementation of the funds flow revenue model in 2021, the NICU division exhibited a relative decline in its proportional contribution to total departmental revenue compared to the traditional collections-based model. This reduction occurred despite the division's continued high wRVU productivity, suggesting a decoupling between clinical productivity and revenue allocation under the revised financial model for neonatology. However, the revenue of other divisions significantly increased, reducing the dependency of the Department of Pediatrics on revenue from Neonatology.

Figure 1 NICU and Department of Pediatrics revenue before and after funds flow
*P less than 0.05 compared to pre-funds flow

Figure 2 NICU and Department of Pediatrics collections before and after funds flow
*P less than 0.05 compared to pre funds flow

Figure 3 NICU and Department of Pediatrics wRVUs before and after funds flow
*P less than 0.05 compared to pre funds flow