OSU Medical Trust Finance Committee Minutes

OSU Medical Trust

Thursday, August 27, 2026 12:00 PM CDT to 1:00 PM CDT
@ OSU Medical Center, 2d Floor Executive Boardroom, 744 W. 9th St., Tulsa

Agenda

Notice of the meeting was given in writing to the Oklahoma Secretary of State more than forty-eight (48) hours prior to the meeting, and the agenda of this meeting was posted at entrances of Oklahoma State University Center for Health Sciences and Oklahoma State University Medical Center twenty-four (24) hours prior to such meeting, excluding Saturdays, Sundays, and legal holidays, in compliance with the Oklahoma Open Meeting Act.

Attendance

Present: Brett Lessley, Jay Helm, Barry Steichen
Absent: Tracy Poole
Guests: Johnny Stephens, Eric Atkinson, Jessica Russell (remote), Karlee Belle Ghoulson, Steve Thompson, Deborah Dage, Mike Fields, Catherine Gann, Melissa Macarthur, Finny Mathew, Erica Woolf, Terri Tinkler, Leslie Stewart, Michael Herndon

1. Call to Order
   • Presented By Brett Lessley
   • A quorum was established, and the meeting was called to order at 12:02 PM by Brett Lessley.
2. Approval of the minutes from the June 25, 2026 meeting - ACTION
   • Presented By Brett Lessley
   • Motion: Motion to approve by Barry Steichen and motion seconded by Brett Lessley. Aye: Helm, Steichen, Lessley Nay: None Abstain: None
3. Discussion, consideration, and possible vote to recommend the Fiscal Year 2027 OSU Medical Trust Operating and Capital Budgets - ACTION
   • Presented By Eric Atkinson, Eric Polak
   • Eric Atkinson gave permission of revised 2027 budget, reflecting changes requested during the June Meeting, including updates for two previously approved initiatives.
   • PS, LLC
     • Budget adjustments include the addition of a temporary clinic set to begin in February 2027 with Dr. Natalia Polito, with financial ramp-up modeled based on prior provider experiences.
     • Inclusion of diabetologist (Dr. Shah) in the budget, scheduled to start October 2026. Volume expectations were reviewed and incorporated. A follow-up review of Dr. Shah's impact is planned for January 2027, three months after start.
     • Commitment to update the Trust on the start date for Dr. Shaw and adjust budget accordingly.
     • Addition of Dr. Pat Schuall (IR physician) starting August 1, 2026, and a placeholder for another IR physician starting September 1, 2026. No contract signed yet for the second IR physician.
     • Budget reflects hiring two IR physicians to replace daytime coverage previously provided by DIA, resulting in a reduction of EDIA expenses. Hospital expenses decreased by $946,000 due to this change.
   • OSUMC
     • Hospital volume remain flat for Polito and Shaw adjustment, as contracts were not finalized and ramp-up was not expected to significantly impact volumes. Any future increase in volumes will be net positive.
     • Updated guidance on GASB 103 reversed previous changes, so DPP and SHOP revenue will remain in operating revenue, maintaining consistency with prior years. The previously anticipated $30 million shift from operating to non-operating revenue will not occur.
   • Motion:
   • Motion to recommend the revised budget to the Trust for approval at the upcoming trust meeting.
   • Motion moved by Jay Helm and motion seconded by Barry Steichen. Aye: Helm, Lessley, Steichen Nay: none Abstain: none
4. Finance Reports
   • Eric Atkinson gave the presentation of PS, LLC.
   • Financial statements for June, nothing that the fiscal year had not closed at the last meeting and that July financials are available in the appendix for review.
   • Hospital visits and FTEs for PSLLC remained consistent month to month, with increases due to new orthopedic provider and supporting staff, and a reduction in Dr. Haley Frederick's Position.
   • Volumes were favorable to budget, primarily driven by orthopedic and pulmonary services, with pulmonary volume regularly exceeding targeted baseline.
   • Salaries and wages were higher than budgeted, mainly due to increased RVU volume and bonus compensation for the full knowledge group.
   • Year-to-date net revenue is trending in line with expectations, with offsetting collections anticipated. Eric Atkinson and Rick Birkner are working with Eric Polak to investigate pulmonology reimbursement to ensure alignment with targets.
   • For June, PSLLC was slightly under budget, but year-to-date results were favorable by $178,000 for the fiscal year.
   • Eric Atkinson gave the presentation of OSUMC.
   • Hospital admissions and census volumes were significantly higher than budgeted, with approximately 500 more admits than anticipated. Throughout initiatives and divisional collaboration contributed to managing these volumes effectively.
   • Length of stay was slightly elevated in June, but case mix was higher, resulting in favorable year-over-year metrics. Outpatient and procedural volumes, especially orthopedic surgeries and Cath lab procedures, were up by about 30% over budget for both the year and the month.
   • Admissions increased by 13% over budget and surgeries by 8%, leading to higher net revenue.
   • Contract services exceed budget due to strategic initiatives and ongoing contract negotiations. A notable item is the $14 million favorable position in non-operating reserve fund in a separate bank account pending program activation.
   • Year-to-date net income was $34 million, compared to a budget of $17 million, with $14 million attributed to managed Medicaid IME funds and an $8 million increase over the prior year.
   • Cash on hand is at 214 days, up from the prior year, but expected to decrease as funds are allocated to the expansion project. Transfers and acceptances remain high.
   • The business office achieved 22 Epic trophies for performance, with 12 in the top 50% of their class, resulting in an additional $4 million collected over expectations. Recognition was given to the team for their efforts.
   • Hospital-employed RN FTEs are increasing while contract FTEs are decreasing. There will be an overlap until new staff are fully oriented, after which contract nurse numbers should decline in the next month or two.
   • The board reviewed the updated cash flow calculations for FY26, noting a minimum cash reserve requirement and changes to the calculation methodology moving forward.
   • Cash flow for expansion projects was discussed, including the use of $30million in Legacy Capital Funds and a $30 million TSET grant. Expenses will be paid up front and reimbursed later, which may cause fluctuations in cash reserves as payments are drawn and received.
   • With all approved expansion initiatives, projected debt is approximately $9 million based on current cash flow models.
   • The board reviewed the reserve philosophy for DPP and SHOPP programs, noting a $6.6 million reserve on DPP funds since the program's inception in April 2024, covering the last quarter of 2024, all of FY25, and all of FY26.
   • There is uncertainty regarding reconciliation outcomes for the DPP program; preliminary third-party assessment indicates a repayment will be required, but the amount is within the current reserve.
   • For FY27, the board expects a $300,000 decrease in DPP funds, offset by a $3 million reserve in the revised FY27 budget, resulting in a projected $2.7 million surplus if budget targets are met.
   • The board intends to maintain the reserve until further updates from the OCA clarify whether the historical reserve method is still needed.
   • A request was made for a schedule detailing DPP and SHOPP funds received and reserved from April 2024 through FY27, to aid in tracking and understanding reserve allocations.
   • Discussion focused on projecting funding needs for fiscal years 2028 and 2029, noting that costs are expected to decrease with HR1 implementation. The group emphasized the importance of planning for these changes to anticipate future financial requirements.
   • The team discussed the need to begin work on legislative appropriations and explore opportunities to offset anticipated costs.
5. Discussion, consideration, and possible vote to approve the release of Restricted Net Assets - ACTION
   • Presenter: Eric Atkinson
   • The board reviewed the alignment regarding funds received from OSUMA and their application, including balances and allocations for FY2025 and FY2026.
   • Key financial figures discussed included a balance of $5.2 million for FY2025, of which the board considered releasing $4.6 million for the use of C-Section and leaving $151,000 for the final C-Section project payment. The Board discussed the use of the remaining $424,210 in additional FY2025 assets previously designated as restricted or strategic funds, confirming that the expenditures such as the $1.7 million Cardiac CT purchase were appropriate uses.
   • $6 million was received in FY2026 related to strategic capital and $14 million in potential Managed Medicaid IME funds,
   • Representing $20,151,017 as restricted net assets for the FY26 audit ending balance.
   • Motion:
   • Motion to approve the allocation and release of funds as presented, including alignment for audit and reporting purposes.
   • Motion moved by Jay Helm and motion seconded by Barry Steichen. Aye: Helm, Lessley, Steichen Nay: none Abstain: none
6. Unfinished Business - Presented By Brett Lessley
   • None
7. New Business - Presented By Brett Lessley
   • None
8. Adjournment - Presented By Brett Lessley
   • Meeting adjourned at 12:42 PM due to exhaustion of agenda items and the Finance Committee session formally concluded.

Minutes signed off by Oklahoma State University Medical Trust Finance Committee Chairman, Brett Lessley.

If you would like a copy of these minutes, please reach out to Terri Tinkler at osuma@okstate.edu.