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  • 1.  Question - Compliance and Rate Setting

    Posted yesterday

    Hi Everyone,

    I was in a discussion with some colleagues about rate setting. There was a lot of back and forth. We are wondering how people interpret the regulations for recouping deficits from a previous year with the following year's rates.

    For example, if I have a service that recovered 80% of its expenses this year, and I adjust my rates for next year, is it allowable for me to adjust such that recover not only 100% of the cost in the coming year, but also the 20% from the previous year?  

    Also, how does this apply to rolling out a new service? If I'm working to build my user base in the first two years of a new service and running a deficit, am I allowed to pay that deficit off in subsequent years until I'm at net zero?

     



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    Andy Chitty
    Executive Director, MGB Research Cores
    Mass General Brigham
    Boston MA
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  • 2.  RE: Question - Compliance and Rate Setting

    Posted yesterday

    Hi Andy,

    Yes, it is my understanding (and interpretation) that if individual core facility deficits are carried forward from year to year (not covered by an institutional subsidy to reset the fund to $0) that rates can be adjusted to bring in enough revenue to cover the deficit in the following year.  So in year 1 if the core brought in $100k in revenue but ended with a balance of -$20,000 and year 2 starts with that negative balance, one would strive to bring in $120k in year 2 to cover existing expenses plus the deficit.  My interpretation has been that a core should break-even over a "reasonable" time, say 3-5 years. A brief statement regarding this can be found on this in the NIH FAQ document published in 2013 (search NOT-OD-13-053), specifically in section 2.b. While old, it is still a document I live by!  :)

    best,

    Julie



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    Julie Auger
    Executive Director, Research Operations
    Salk Institute for Biological Studies
    La Jolla CA
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