2018-05-14T13:32:06-05:00 2017-06-30 990 2016-07-01 421178403 Mercy Hospital of Franciscan Sisters Inc % TIMOTHY HUBER MERC 3192833000 201 8th Avenue SE Oelwein IA 50662 TIMOTHY HUBER VPF/CFO 3192727607 2018-05-10 2016 2022-09-23 18:48:47Z Jack Dusenbery 3421 West Ninth Street Waterloo IA 507025499 15310561 false 0928 X www.wheatoniowa.org X 1982 IA General inpatient and outpatient acute and skilled health care services. Provides 37 long-term care nursing units with a utilization rate of 88 percent. 14 10 180 189 0 231244 623431 13033862 14393189 17684 15444 298247 278497 13581037 15310561 37449 0 0 0 7475051 6977552 0 0 0 6230425 7004033 13742925 13981585 -161888 1328976 7662837 7331907 1999066 1778795 5663771 5553112 X AS A MEMBER OF WHEATON IOWA, OUR AFFILIATES STRIVE TO LIVE OUT THE HEALING MINISTRY OF THE JUDEO-CHRISTIAN TRADITION WHILE PROVIDING EXCEPTIONAL AND COMPASSIONATE HEALTHCARE SERVICES THAT PROMOTE THE DIGNITY AND WELL BEING OF THE PATIENTS AND COMMUNITIES WE SERVE. OUR VISION IS TO BE RECOGNIZED FOR SUPERIOR HEALTHCARE SERVICE, CLINICAL EXCELLENCE, AS THE HEALTHCARE EMPLOYER OF CHOICE, AND THE PREFERRED PARTNER OF PHYSICIANS. false false 13397770 14585279 WHEATON FRANCISCAN HEALTHCARE IN IOWA Wheaton Franciscan Healthcare - Iowa is a faith-based 511-bed, not-for-profit, comprehensive medical/surgical health care provider offering acute levels of medical care at Covenant Medical Center in Waterloo, Sartori Memorial Hospital in Cedar Falls, and Mercy Hospital in Oelwein. Its services in the region also include Covenant Clinic with more than 100 primary care and specialty providers; Covenant Foundation, Sartori Health Care Foundation and Mercy Hospital Foundation. Areas of excellence include cardiology, orthopedics, neurosurgery, maternity and NICU, cancer treatment, minimally invasive and Bariatric surgery. The Iowa operations have been part of a 140 year system of care sponsored by the Wheaton Franciscan Sisters, formerly incorporated in 1983. In 2016, the Wheaton Franciscan Sisters transferred their Iowa operations to Mercy Health Network, an Iowa-based health care system based out of Des Moines, Iowa. Mercy Health Network (MHN) is an integrated system of member hospitals and other health and patient care facilities united into one operating organization to improve the delivery of healthcare services to the people of Iowa and adjoining states. MHNs sponsors own and operate medical centers and other services in Clinton, Des Moines, Dubuque, Mason City, and Sioux City, and community hospitals in six other locations. In addition, MHN has 27 members who participate through contracts for management and other services. Mercy Health Network (MHN) was founded in 1998 under a joint operating agreement between two of the largest Catholic, not-for-profit health organizations in the United States: Catholic Health Initiatives, based in Englewood, Colorado, and Trinity Health, based in Livonia, Michigan. Covenant Medical Center in Waterloo, Iowa was founded in 1986 when Wheaton Franciscan Services consolidated St. Francis Hospital (founded in 1912) and Schoitz Medical Center (founded in 1904). Covenant Medical Center was located in two locations until 1991 when all acute care services were combined at one site. The other site was transformed into an assisted living center and adult services center. In 1995, Wheaton Franciscan Services Iowa region was renamed Covenant Health System and included Covenant Medical Center in Waterloo, Covenant Foundation in Waterloo, Mercy Hospital in Oelwein, N. E. Iowa Real Estate Investments and Schoitz Health Resources. Sartori Memorial Hospital became a part of Covenant Health System in 1996 when the system entered a long-term lease agreement with the City of Cedar Falls. In 2006, Covenant Health System was renamed Wheaton Franciscan Healthcare-Iowa, to reflect its continued commitment to an integrated health care delivery system for residents of Northeast Iowa. Today Wheaton Franciscan Healthcare Iowa includes Covenant Medical Center (and its unincorporated division, Covenant Clinic) and Covenant Foundation in Waterloo, Mercy Hospital in Oelwein, Sartori Memorial Hospital and Sartori Health Care Foundation in Cedar Falls, and N. E. Iowa Real Estate Investments. WHEATON FRANCISCAN HEALTHCARE IN IOWA LIST OF ENTITIES Hospitals Covenant Medical Center, Inc. Mercy Hospital of Franciscan Sisters, Inc. Sartori Memorial Hospital, Inc. Covenant Clinic, an unincorporated division of Covenant Medical Center, Inc. Patients have access to more than 100 primary and specialty care physicians, physician assistants, nurse practitioners, and other health care professionals located throughout Northeast Iowa in 24 locations. Regional Service Lines Covenant Cardiology Covenant Cancer Treatment Center Covenant Clinic Orthopedic Services Covenant Home Health Emergency Services Imaging/Radiology Services Iowa Spine and Brain Institute Midwest Institute of Advanced Laparoscopic Surgery Maternal Child Health Occupational Medicine and Wellness Covenant Retail Pharmacies Rehabilitation Services Philanthropic Foundations Covenant Foundation, Inc. Sartori Health Care Foundation, Inc. Other N.E. Iowa Real Estate Investments, Ltd. WHEATON FRANCISCAN HEALTHCARE COMMUNITY IMPACT IN IOWA / 2017 Charity Care: $4,520,613. Charity Care is defined as free or discounted health services provided to those who cannot afford to pay and who meet all criteria for financial assistance. Charity care is based on costs, not charges, and does not include bad debt. Unreimbursed Cost of Public Programs: $8,564,262. Unreimbursed cost of public programs is defined as the shortfall experienced when payments received are below the cost of treating public beneficiaries through Medicaid and other local public programs. Community Health Improvement Services: $1,364,985. Community Health Improvement Services are defined as clinical and non-clinical services designed to improve community health, which are provided to the community for free or for fees that did not cover costs. Financial Contributions: $689,939. Financial contributions are defined as contributions, including cash, non-cash items such as food, furniture, equipment, supplies, and loaned staff for volunteer and charitable purposes, made to individuals, community groups, or nonprofit organizations for charitable purposes. Health Professions Education: $3,580,190. Health professions education is defined as direct costs incurred for accredited training and education programs for physicians, nurses, allied health professionals and technicians (does not include ongoing education for staff). Community Building Activities: $31,098. Community building activities are defined as programs that, while not directly related to health care, provide opportunities to address the root causes of health problems, such as poverty, homelessness, and environmental issues. Costs for these activities include cash and in-kind donations. Community Benefit Operations: $156,481. Community benefit operations are defined as costs associated with dedicated staff and community health needs and/or assets assessment, as well as other costs associated with community benefit strategy and operations. Subsidized Health Services: $5,648,906. Subsidized health services are defined as the negative margin for clinical services that are provided despite a financial loss because of an identified community need that would need to be met by the government or another not-for-profit if it was not offered. The financial losses are so significant that negative margins remain after removing the effects of charity care, bad debt, and Medicaid shortfalls. TOTAL BENEFIT TO THE COMMUNITY FOR IOWA 2017: $24,556,474. 13397770 true true false true false false false false false false true false false false true true false true false false false false false false false false true true false false true false false false false false false false false false false false false false true true true false false true 0 0 180 true false false false false false false false false false false X 14 10 true false true false true true true true true false false true true true true true true false false false X TIMOTHY HUBER 3192727607 3421 WEST NINTH STREET WATERLOO IA 507025499 X Luis Avila MD Director; Physician Employee 1.0 40.0 X 0 518955 52195 David Deaver V Chair - Director 1.0 1.0 X X 0 0 0 Jack Dusenbery Director; President 1.0 40.0 X X 0 683271 65981 Sandie Graf Director through 12/16 1.0 1.0 X 0 0 0 Noreen Hermansen Director 1.0 1.0 X 0 0 0 Eric Locke Chair - Director through 12/16 1.0 1.0 X X 0 0 0 Michael Mallaro Director through 12/16 1.0 1.0 X 0 0 0 Neil McMahon MD Director; Physician Employee 1.0 40.0 X 0 417252 39314 Kenton Nelson Director 1.0 1.0 X 0 0 0 Robert W Petersen Director 1.0 1.0 X 0 0 0 Gregory Schmitz Chair - Director 1.0 1.0 X X 0 0 0 Brian Sims DO Director through 12/16; Phys E 1.0 40.0 X 0 568827 54129 Paul Stapella Director 1.0 1.0 X 0 0 0 Richard Valente MD Director; Physician Employee 1.0 40.0 X 0 1058625 43816 David Vellinga Director 1.0 1.0 X 0 0 0 Shirley Dunlap Director as of 1/17 1.0 1.0 X 0 0 0 Casey McLaughlin Director as of 2/17 1.0 1.0 X 0 0 0 Joan Lowe Director as of 1/17 1.0 1.0 X 0 0 0 Michele Panicucci Asst. Treas.; CFO through 4/17 1.0 40.0 X 0 423761 68730 Nancy Schaefer Asst. Secy; Exec. Asst. 1.0 40.0 X 0 56992 8376 Timothy Huber Asst. Treas.; CFO as of 4/17 1.0 40.0 X 0 158445 41706 James Lehman MD VP Medical Affairs 1.0 40.0 X 0 444752 30144 Terri Derflinger Site Administrator 40.0 1.0 X 111569 0 45788 Anne Pelc Pharmacist 40.0 1.0 X 131341 0 36042 Ryan Meyer Admin Directr; Former Key Empl 1.0 40.0 X 0 149115 24782 242910 4479995 511003 2 true true false Acute Care Inc 1609 N Ankeny Boulevard Suite 200 ANKENY IA 50023 Physician Services 1409581 Larson Construction Company PO Box 112 INDEPENDENCE IA 50644 Construction 1228824 Millenium Rehab Consulting Group 4725 Merle Hay Road Suite 107 DES MOINES IA 50322 Medical Services 132545 3 4277 12501 606653 623431 NET PATIENT SERVICE REVENUE 622110 3919199 3919199 MEDICARE/MEDICAID PAYMENTS 622110 10473990 10473990 14393189 15444 15444 0 0 22559 22559 0 22559 22559 0 0 0 0 0 0 0 0 0 0 WELLNESS CENTER 900099 178337 178337 GIFT SHOP 900099 8099 8099 CAFETERIA 722514 55749 55749 13753 13753 255938 15310561 14585279 101851 0 0 0 0 0 0 5478047 5213066 264981 121422 115549 5873 978784 931439 47345 399299 380561 18738 0 0 0 1523 1523 0 0 1320675 1316425 4250 555 555 827967 803742 24225 0 0 310319 310319 12540 8157 4383 0 4226 3834 392 0 0 541568 541568 0 CORPORATE SERVICES ALLOCATION 249521 36605 212916 PURCHASED SERVICES 460435 460435 MEDICAL SUPPLIES 761999 761842 157 BAD DEBT EXPENSE 329138 329138 2183567 2183567 13981585 13397770 583815 0 0 0 788820 791774 0 0 1580486 1659988 0 0 0 0 0 0 98812 100423 12068 17930 5302528 605098 4695305 4697430 0 0 0 0 0 0 0 0 487346 64362 7662837 7331907 769977 639068 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1229089 1139727 1999066 1778795 X 5176425 5488750 487346 64362 0 0 5663771 5553112 7662837 7331907 X 1328976 -1439635 X false true X true false X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED false false false false false true 1523 false false false 1523 false Schedule C Disclosures Schedule C Part II-B Line 1f: Mercy Hospital of Franciscan Sisters, Inc. has made grants to other organizations for lobbying purposes. These grants have been in the form of membership dues paid to regional and national health care organizations, where the organizations have provided Mercy Hospital of Franciscan Sisters, Inc. with an estimated percentage of dues payments which are used for lobbying activities. 360000 360000 2108623 74139 2034484 2833905 530959 2302946 4697430 0 OTHER LIABILITIES 1139727 1139727 X IRS Form 990 Schedule D, Part X The Company follows the provisions of ASC Subtopic 740-10, Income Taxes - Overall. ASC Subtopic 740-10 clarifies the accounting for uncertainty in tax positions and also provides guidance on when the tax positions are recognized in an entity's financial statements and how the values of these positions are determined. As of June 30, 2017, the Company did not have a liability for unrecognized tax benefits. true true X true X true X true true true false true true 260391 260391 0.01910 3624494 2973132 651362 0.04770 3884885 2973132 911753 0.06680 7954 7954 0.00060 71068 6411 64657 0.00470 1923258 1134035 789223 0.05780 24149 24149 0.00180 2026429 1140446 885983 0.06490 5911314 4113578 1797736 0.13170 1683 1683 0.00010 1683 1683 0.00010 true 329138 4502061 4180435 321626 X true true 1 1 Mercy Hospital of Franciscan Sisters 315 8th Avenue SE Oelwein IA 50662 http://www.wheatoniowa.org 330141H (IA) X X X X 1 Mercy Hospital of Franciscan Sisters 1 false false true X X X X X X X X X X 15 true true true true X wheatoniowa.org - full url in narrative X true 15 true wheatoniowa.org - full url in narrative false true X 200. 400. X X X X true true X X X true X WHEATONIOWA.ORG-full url in narra X WHEATONIOWA.ORG-FULL URL IN NARRATIV X WEATONIOWA.ORG-FULL URL IN N X X X X X X X true X false X X X X true X false false schedule H supplemental Information Schedule H Part V Section B Line 3j: Iowas Community Health Needs Reports provide additional detailed information in response to many of the Schedule H questions on our Community Health Needs Assessments and Implementation Plans. These reports can be directly accessed at wheatoniowa.org under the About Us page or at this link: https://www.wheatoniowa.org/about-us/community-outreach-benefit. A Community Health Needs Assessment and Implementation Plan for each of the three Wheaton Iowa hospitals are available. Schedule H Part V Section B Line 5: This report was compiled by Wheaton Iowa as required for Mercy in Oelwein, one of two hospitals in Fayette County, and in partnership with Palmer Community Health and Palmer Lutheran Health Center. Palmer Lutheran Health Center is a Fayette County hospital located in West Union, Iowa that has taken on the responsibilities of the former Fayette County Health Department. Representatives from the listed entities included Joan Svendsen (Palmer Community Health/Home Health/Hospice Director), Jamie Hoey (Marketing Manager Palmer Lutheran Health Center), Kelly Langreck, BA Scheduler/Marketer, and Jessica Wegner (Community Health Nurse Fayette County). Through this collaboration, a survey was developed, and made available to the public online and in paper form. The public was invited through advertising, publicity, and mass emailing efforts on behalf of the partners, community chamber organizations, etc. to take the survey November 11-30, 2015. In September of 2015, initial conversations took place regarding the CHNA process, and future implementation. On October 6, 2015 Wheaton Iowa hosted a conference call with the partners to create survey questions, plan of distribution and method of data analysis (using the previous Fayette County Health Plan for guidance). The survey was finalized on November 9, 2015 and paper surveys were distributed and made available at the hospitals and clinics, chamber offices, mobile food pantry line, etc. Information on how to access the link for the online survey was promoted heavily and emailed to internal and external audiences, chamber members, etc. A total of 323 electronic and paper surveys were collected, with paper responses being entered into the electronic survey database. Attempts were made to ensure a cross-section of residents completed the survey. A meeting was held at Mercy Hospital on December 14, 2015 to review the results of the survey outlined in the next section. For details of the survey and the results, see Appendix D. Schedule H Part V Section B Line 6a: Our community health needs assessment was conducted in partnership with Palmer Community Health and Palmer Lutheran Health Center. Palmer Lutheran Health Center is a Fayette County hospital located in West Union, Iowa that has taken on the responsibilities of the former Fayette County Health Department. Schedule H Part V Section B Line 6b: Mercy Hospital, part of the Wheaton Iowa system, worked with Palmer Community Health and Palmer Lutheran Health Center. Palmer Lutheran Health Center is a Fayette County hospital located in West Union, Iowa that has taken on the responsibilities of the former Fayette County Health Department. Schedule H Part V Section B Line 7a: https://www.wheatoniowa.org/about-us/community-outreach-benefit/community- health-needs-assessment.aspx Schedule H Part V Section B Line 10a: https://www.wheatoniowa.org/about-us/community-outreach-benefit/community- health-needs-assessment.aspx Schedule H Part V Section B Line 11: Using the CHNA completed in June 2013, the hospital developed, adopted, and worked on executing a three-year Implementation Strategy to address priority community health needs. The following summarizes how the hospital addressed priority health needs in the community. Health Behaviors & Social Factors o Mercy Hospital partnered with the Northeast Iowa Food Bank and local government officials to continue the Mobile Food Pantry to ensure access to perishable food items not currently offered at the local pantry. The hospital continues to donate funds to support transportation costs, and provide nearly 40 volunteers each month during the two hour food distribution process to address food insecurity. o Mercy continues to partner with the Northeast Iowa Food & Fitness Initiative (NEIFF) to organize walkability initiatives in the region. Mercy has taken steps to engage with other health care agencies, schools, NEIFF, and others to adopt messaging, and develop programming to continue education for students and parents on reversing these trends. o Mercy continues its partnership with Helping Services of Northeast Iowa, have worked to refer residents and patients to Quit Line Iowa. Clinical Care o The Covenant Midwives & Womens Health Center (CMWHC) continue operating an outreach clinic at Mercy increasing access for local women in this rural setting. o Health care screenings were offered at Williams Wellness center, diabetes education & support groups, health fair events for seniors, babysitting classes for kids, prom safety, breast care awareness campaign, SHIIP consultations, and much more. Although much progress has been made, Mercy will remain focused on the same key findings with its partners. These will include: Healthy Behaviors, Clinical Care and Social Support. Based on the CHNA completed in June 2016, the hospital developed and adopted, a three-year Implementation Strategy to address the same priority community health needs. The following summarizes how the hospital will address the priority health needs in the June 2016 Implementation Strategy: Healthy Behaviors o Educate community on how to achieve a healthier lifestyle through increasing awareness of healthy eating, diabetes trends, and how to improve their cardiovascular health o Provide screenings and education at community events o Partner with the Northeast Iowa Food & Fitness Initiative and the school system on creating awareness and providing tools for change o Support local programs to improve access to healthy foods o Continue diabetes education to impact diabetes rates o Continue partnership with Helping Services of Iowa to educate about the negative effects of tobacco use, and provide access to tools to stop o Participate in educational programs centered on the effects of alcohol/drug abuse, and the development of chronic conditions related to tobacco use. Clinical Care o Continue to recruit physicians to the rural setting o Provide womens health education, specifically to expectant mothers to enhance understanding of healthy behaviors and the health impact for mother and baby o Provide education and access to wellness screenings. Social Support o Continue our partnership with community leaders and the Northeast Iowa Food Bank to expand the Mobile Food Pantry o Provide education to expectant mothers to promote healthy behaviors, and ensure access to prenatal care o Partner with schools to provide children and families with education focused on safety, respect, and support of each other. While our organization understands the importance of meeting all of the needs of the community, an in depth assessment was completed in which key leaders identified/confirmed the prominent needs that would be most impacted by the site. The top community health needs assessed, but will not be part of the current implementation plan are as follows: Teen Births: Obstetric services are not offered at Mercy Hospital so teen birth rates will not be a focus, however the expansion of womens services from the Covenant Midwives & Womens Health Center provides an opportunity for those providers to collaborate with the school system as needed. Motor Vehicle Crash Deaths: These services are already integrated into our current care model, and we work with local partners to ensure ongoing care for this growing population. Dental Care: Dental care is not a focus area for Mercy Hospital. Physical Environment: The report outlined the poor housing conditions of properties within the community. This will not be a focus area for Mercy. Schedule H Part V Section B Line 16: Organizations in the Iowa region take several proactive approaches to make our patients aware of our financial assistance policy. In addition to our policy being posted on our website there is abundant signage throughout our facility explaining the financial assistance policy and how to obtain a copy. Notices regarding the availability of financial assistance are displayed in highly visible locations where there is a significant volume of inpatient or outpatient traffic such as in patient admitting and registration areas (both inpatient and outpatient settings), physician offices, and emergency departments. Brochures describing the policy are available in the same locations, and the policy is reviewed at the time of registration or pre-registration, admission, discharge, and with billing for those identified with a need. Patients who call and express a financial ha 1 Outpatient Rehab Therapy 317 8TH AVENUE SE OELWEIN IA 50662 PHYSICAL THERAPY OCCUPATIONAL/SPEECH THERAPY Schedule H Supplemental Information Schedule H Part 1 Line 6A For Fiscal Years prior to 2017, the Annual Report that included the Hospitals community benefit information was contained in a report prepared by the former parent organization, Wheaton Franciscan Services, Inc. However, effective May 1, 2016, the Iowa region of Wheaton Franciscan Healthcare was transferred to Mercy Health Network. As a result of this transfer, the Iowa region conducted their own audit, and prepared their own Community Benefit Reports for Fiscal 2016 and subsequent years. The Fiscal 2017 Community Benefit Report entitled Moving Our Community Forward can be accessed at this link: http://wfhcia.trinity-health.org/Documents/2017%20Community%20Benefit%20Re port.pdf. Schedule H Part 1 Line 7 Community Benefit amounts are reported using total actual costs per the hospitals managerial accounting system in use, which includes all patient segments including inpatient, outpatient, emergency room, private insurance, Medicaid, Medicare, Medicare HMO, uninsured, and self-pay patients. Medicare is reported using the most recently filed cost report at the time the Annual Report and related community benefit information is published. Amounts are summarized using a software application recommended by the Catholic Health Association in conjunction with the Iowa Hospital Association, because it has the ability to provide the information in a format suitable for Schedule H presentation. After the data is entered by the Site Finance Directors, its accuracy is verified by employees who are trained in community benefit reporting, and then approved by the Chief Financial Officer and the President/CEO of the Iowa organization. After amounts are verified and approved, community benefit amounts become finalized. Finally, the information is compiled with the assistance of CBISA software for presentation in IRS Forms 990 Schedule H and Statement of Program Service Accomplishments Part III. The Iowa hospital facilities are not required to report community benefit information to the State of Iowa, but do make the information readily available on certain websites, and report the information to the Iowa Hospital Association. Schedule H Part 1 Line 7 Column f Iowa Hospitals follow guidelines established by the Catholic Health Association and the Iowa Hospital Association, who recommend that bad debt expense not be included in community benefit amounts. As a result of this applied methodology, a total amount of $329,138 has not been included in the denominator of the calculation that determines the percentages reported on Schedule H Line 7 Column f. Schedule H Part 1 Line 7g In the Iowa region, clinic operations are included as a department of the hospital, Covenant Medical Center, Inc. Clinic operations for the Iowa clinics are included only in the community benefit reporting of charity care, government sponsored health care, and Medicare shortfall. Therefore, costs related to physician clinics are not included in subsidized health services reported on Schedule H Part I Line 7g. Schedule H Part III Section A Lines 1-3 In determining bad debt amounts, the Iowa organizations use a two-level scoring process as follows: First, for any patient account that is categorized as having no insurance, when the amount becomes 60 days overdue or greater, the patients account is reviewed for financial assistance qualification. If the patient is found to qualify for financial assistance, the necessary steps are taken to apply, and the needed adjustments are made so as to treat as charity care and not as bad debt. A similar scoring process is completed for those patients who do have insurance, but after 120 days or greater, still have not paid the patient responsibility portion. Again, these patient accounts are reviewed for financial assistance, and if they qualify, similar steps are taken to remove from bad debt. As a result of these scoring procedures, Iowas position is therefore that none of the patients resulting in uncollectible accounts would have qualified as charity care patients as this determination is made at the time of admission, or later with the timing of the scoring procedures mentioned above. Bad debt is therefore only determined for each organization at the time the amount due is truly determined to be uncollectible, after financial assistance has been determined, and after many months of collection efforts. Additionally, the organization followed guidelines established by the Catholic Health Association and the Iowa Hospital Association, who recommends that no bad debt amounts be included in community benefit amounts. For these reasons, Part III Section A Line 3 is reported at zero. Schedule H Part III Section A Line 4 Mercy Hospital of Franciscan Sisters, Inc. is included in the consolidated financial statements of Wheaton Franciscan Healthcare - Iowa, Inc. The following is the text of the footnote from the financial statements which addresses the allowance for doubtful accounts. This footnote can be found on page 14 of the attached consolidated financial statements. Patient's account receivable are reduced by an allowance for uncollectible accounts. In evaluating the collectability of patient accounts receivable, the Hospitals analyze their past history and identify trends for each of their major payor sources of revenue to estimate the appropriate allowance for uncollectible accounts and provision for bad debts. Management regularly reviews data about these major payor sources of revenue in evaluating the sufficiency of the allowance for doubtful accounts. For receivables associated with services provided to patients who have third-party coverage, the Hospitals analyze contractually due amounts and provide an allowance for doubtful accounts and a provision for bad debts, if necessary. For receivables associated with patient responsibility (which includes both patients without insurance and patients with deductible and copayment balances due for which third-party coverage exists for part of the bill), the patients are screened against the Hospital's charity care policy and uninsured discount policy. Each charity care application is inspected even if a patient has insurance, as they may be underinsured and qualify for the charity care discount. For any remaining patient responsibility balance, the Hospitals record a provision for bad debts in the period of service on the basis of its past experience, which indicates that many patients are unable or unwilling to pay the portion of their bill for which they are financially responsible. The difference between the standard rates (or the discounted rates if negotiated) and the amounts actually collected after all reasonable collection efforts have been exhausted is charged off against the allowance for doubtful accounts. The Hospitals' allowance for uncollectible accounts for self-pay patients, which includes unisured patients and residual copayments and deductibles for which managed care has already paid, covers 65% of self-pay accounts receivable at June 30, 2017. The Hospitals do not maintain a material allowance for uncollectible accounts from third-party payors, nor did the Hospitals have significant write-offs from third-party payors. The Hospitals recognize patient service revenue associated with services provided to patients who have third-party payor coverage on the basis of contractual rates for the services rendered. For uninsured patients that do not qualify for charity care, the Hospitals recognize revenue for services provided (on the basis of discounted rates, as provided by policy). On the basis of historical experience, a portion of the Hospital's uninsured patients will be unable or unwilling to pay for the services provided. Thus, the Hospitals record a provision for bad debts related to uninsured patients in the period the services are provided. Schedule H Part III Section B Line 6-8 Schedule H Part III Section B Line 6 reports allowable costs of care as taken from the most recently filed Medicare cost report available at the time the Community Benefit Report is published. The Medicare cost report calculates its allowable total costs based on applicable Medicare regulations. Medicare and Medicaid cost is determined using individual cost center cost-to-charge ratios. This cost to charge ratio is determined using all payer cost and all payer charges. The cost to charge ratio is applied to the actual Medicare and Medicaid charges to determine the Medicare and Medicaid cost. This organization has adopted the cost and charge practices as recommended by the Catholic Health Association and the Iowa Hospital Association, and therefore, does not count any Medicare shortfall numbers in its annual reporting of Community Benefit amounts. Schedule H Part III Section C Line 9b Iowa organizations follow a policy that outlines all collection practices for patients who are known to qualify for government programs and for our charity care program. We make every attempt false false false false false false false false false Luis Avila MD Director; Physician Employee 0 510175 0 3000 0 5780 0 24020 0 28175 0 571150 0 0 Terri Derflinger Site Administrator 109613 0 0 0 1956 0 15548 0 30240 0 157357 0 0 0 Jack Dusenbery Director; President 0 435816 0 234000 0 13455 0 42835 0 23146 0 749252 0 0 James Lehman MD VP Medical Affairs 0 332313 0 103700 0 8739 0 14506 0 15638 0 474896 0 0 Neil McMahon MD Director; Physician Employee 0 412619 0 1800 0 2833 0 22501 0 16813 0 456566 0 0 Ryan Meyer Admin Directr; Former Key Empl 0 135883 0 12099 0 1133 0 6160 0 18622 0 173897 0 0 Michele Panicucci Asst. Treas.; CFO through 4/17 0 278835 0 129100 0 15826 0 52142 0 16588 0 492491 0 0 Anne Pelc Pharmacist 130615 0 0 0 726 0 10051 0 25991 0 167383 0 0 0 Brian Sims DO Director through 12/16; Phys E 0 560432 0 6000 0 2395 0 24178 0 29951 0 622956 0 0 Richard Valente MD Director; Physician Employee 0 1047377 0 675 0 10573 0 20058 0 23758 0 1102441 0 Timothy Huber Asst. Treas.; CFO as of 4/17 0 144205 0 13242 0 998 0 16386 0 25320 0 200151 0 0 Schedule J Disclosures Schedule J Part I Line 3 Mercy Hospital of Franciscan Sisters, Inc. is a subsidiary in the Wheaton Iowa system. Mercy Hospital of Franciscan Sisters, Inc.'s President/CEO is paid directly by a related entity, Covenant Medical Center, Inc. Covenant Medical Center, Inc. used the following methods to establish the compensation of Mercy Hospital of Franciscan Sisters, Inc.'s President/CEO: -independent compensation consultant -written employment contract -compensation survey or study, and -approval by Mercy Health Network board of directors Schedule O Disclosures IRS Form 990 Part I Line 6 Mercy Hospital of Franciscan Sisters, Inc. received donated services through volunteers assisting in such areas as the gift shop, x-ray, Mercy clinic, dietary, emergency room, 2nd floor, long-term care, and auxiliary events. Part V Line 1a and Part VII Section B Line 1-2 Wheaton Iowa streamlined their reporting of IRS Forms 1099-MISC so that most 1099-MISC are now reported using the FEIN number of the parent organization or of a related organization. The actual expense continues to be either paid by, or transferred to, the individual entity, which is normally a subsidiary or related organization to the organization(s) issuing the 1099. For this reason, the reader may notice on some 990's that there are top 5 independent contractors reported, but no 1099s are reported. Likewise on the 990's of the organization(s) reporting number of 1099's, there may be a disproportionate share of 1099's reported as compared with the actual expenses of the organization. IRS Form 990 Part VI Section A Line 2 Greg Schmitz and Mike Mallaro have a business relationship through The VGM Group. IRS Form 990 Part VI Section A Line 4 The organization's bylaws were amended and restated December 1, 2016 to reflect that the corporate member of the parent of Mercy Hospital of Franciscan Sisters, Inc. (Wheaton Franciscan Healthcare - Iowa, Inc.) was changed on May 1, 2016 from Wheaton Franciscan Services, Inc. to Mercy Health Network, Inc. IRS Form 990 Part VI Section A Lines 6-7b Mercy Hospital of Franciscan Sisters, Inc. has one member which holds several reserved powers over Mercy Hospital of Franciscan Sisters, Inc. These reserved powers include, but are not limited to, the election of members of the governing body and election of officers, approval of certain financial expenditures in accordance with policy, and approval of budgets and strategic plans; these approvals are based on recommendations from the governing body. IRS Form 990 Part VI Section B Lines 11a and 11b Affiliates of Wheaton Iowa during the fiscal year ending June 30, 2017 used a multiple-level review process on all IRS Forms 990 to ensure accurate and timely filing for all organizations. Under the direction of the Chief Financial Officer, the Accounting Department prepares Forms 990 and any applicable 990-T and associated state filings. When complete, the return is first reviewed by a Senior-Level (or higher) associate in the Finance Department, who focuses on the income statement and balance sheet items, and schedules where transactions of this type might be reported. If discrepancies are found, the item will be corrected prior to the next step in the review process. Once cleared through Finance, the return is provided to the Tax Department of the Wheaton Iowa sponsor organization, where the Tax Director concentrates primarily on consistency of reporting between all returns, accuracy of tax related information, and explanation and understanding of any outliers. Again, any problems or questions are investigated and corrected. Depending on the level of complexity of the year in question, as well as the individual issues specific to that filing, certain returns may be selected for outside review by a public accounting firm. This decision will vary from year to year based on many factors, and sometimes outside review is not utilized at all. Also, certain schedules, such as Schedule H or Schedule J may be reviewed by committees, such as the Community Benefit Team or the Compensation Committee in selected years. The board has asked for formal presentations on various 990 topics over the years. This decision will vary from year to year, again based on many factors. Once all levels of review have been completed, a designated finance and accounting employee will schedule an appointment with the signer of the 990. The signer, the Vice President-Finance and CFO, will perform an additional, normally high level review prior to signing the return. Once signed, the return is cleared to provide to members of the Board of Directors, who at a later date but prior to efiling, are provided access to all 990's throughout their assigned region. IRS Form 990 Part VI Section B Lines 12a - 12c Mercy Hospital of Franciscan Sisters, Inc. has adopted a Conflict of Interest policy which applies to all "interested persons" of Mercy Hospital of Franciscan Sisters, Inc. including directors, principal officers, key employees, and members of committees with Board-delegated powers. Interested persons are expected to discharge their duties in a manner the person reasonably believes to be in the best interests of Mercy Hospital of Franciscan Sisters, Inc. and to avoid situations involving a conflict of interest. On an annual basis, interested persons are required to complete a conflict of interest disclosure statement and to affirm their receipt of the conflict of interest policy, compliance with its requirements, and agree to notify the organization of changes impacting their annual disclosure in accordance with the policy. The annual disclosures are provided to internal Legal Counsel and the Integrity and Compliance Officer, from which Legal Counsel prepares a report for the Board Chair and CEO. A summary of potential conflicts is reviewed with the Board of Directors of Mercy Hospital of Franciscan Sisters, Inc. (or a delegated committee of the Board) on a yearly basis. Interested persons are required to make full disclosure to Mercy Hospital of Franciscan Sisters, Inc. of any financial or business interests that might result in or have the appearance of a conflict of interest. The Board of Directors of Mercy Hospital of Franciscan Sisters, Inc. (or a delegated committee of the Board) is responsible for the review of transactions to determine whether an actual conflict of interest exists. In the event of an actual conflict, the Board (or a delegated committee of the Board) will either avoid the conflict or appropriately scrutinize the transaction to ensure it is in the best interests of Mercy Hospital of Franciscan Sisters, Inc. Interested persons are required to recuse themselves from discussion and voting on matters involving a conflict of interest. The policy further addresses the proper documentation of the proceedings and potential disciplinary and corrective action for violations of the policy. The policy is available to the public upon request. Schedule O Disclosures (cont'd) IRS Form 990 Part VI Section B Line 15a Question 15a is answered "No" because the compensation for the CEO of Mercy Hospital of Franciscan Sisters, Inc. is established and paid by a related entity, Covenant Medical Center, Inc. In establishing CEO compensation, Covenant Medical Center, Inc. follows a process which includes the following: Use of an independent compensation consultant and compensation study, use of a written employment contract, and review and approval by the Mercy Health Network board of directors. This process is performed annually. IRS Form 990 Part VI Section B Line 15b Question 15b is answered "No" because the compensation for the other officers and key employees of Mercy Hospital of Franciscan Sisters, Inc. is established and paid by a related entity, Covenant Medical Center, Inc. In establishing other officer and key employee compensation, Covenant Medical Center, Inc. follows a process which includes the following: Use of an independent compensation consultant and compensation study, use of a written employment contract, and review and approval by the Covenant Medical Center, Inc. and Wheaton Franciscan Healthcare - Iowa, Inc. CEO, authorized to act on behalf of the board with respect to certain compensation matters. This process is performed annually. IRS Form 990 Part VI Section C Line 19 Affliates of Wheaton Iowa during the fiscal year ending June 30, 2017 provided upon request certain documents including our financial statements, conflict of interest policy, and governing documents that support our tax exempt status, including, but not limited to, articles of incorporation and bylaws. IRS Form 990 Part VII Column B Affiliates of Wheaton Iowa during the fiscal year ending June 30, 2017 operated as a controlled group of related healthcare organizations. As such, many employees who are at the Director level or above, or who are Officers and/or Directors of organizations where Wheaton has common boards and other overlaps in committee representations, spend significant time devoted to tasks not only for the filing organization, but also for related organizations. While there is no official time study tracking that is done, it is estimated that for each employee, tasks devoted to related organizations could approximate up to 80% or more of total hours. IRS Form 990 Part XI Line 9 Certain related organizations utilize receivable/payable accounts throughout the year. These intercompany balances were settled through the equity account at the end of the fiscal year to bring the receivable/payable balance to zero. For the fiscal year ended June 30, 2017 this resulted in a decrease in net assets or fund balances of $1,439,635. FORM 990 PART IX LINE 24 - OTHER EXPENSES DESCRIPTION:PARENT COMPANY ALLOCATION TOTAL EXPENSES:2121954 PROGRAM SERVICES:2121954 FORM 990 PART IX LINE 24 - OTHER EXPENSES DESCRIPTION:MISCELLANEOUS TOTAL EXPENSES:30038 PROGRAM SERVICES:30038 FORM 990 PART IX LINE 24 - OTHER EXPENSES DESCRIPTION:DUES & SUBSCRIPTIONS TOTAL EXPENSES:31575 PROGRAM SERVICES:31575 WF Healthcare - Iowa Inc 3421 WEST NINTH STREET WATERLOO IA 50702 421177001 HOLDING CO IA 501(c)(3) 12 - III-FI MHN true Covenant Foundation Inc 3421 WEST NINTH STREET WATERLOO IA 50702 421295784 FOUNDATION IA 501(c)(3) 10 COV MED CTR true Covenant Medical Center Inc 3421 WEST NINTH STREET WATERLOO IA 50702 421264647 HOSPITAL IA 501(c)(3) 3 WFH-IOWA true NE Iowa Real Estate Invsts 3421 WEST NINTH STREET WATERLOO IA 50702 421207432 HOLDING CO IA 501(c)(2) N/A WFH-IOWA true Sartori Health Care Foundation Inc 3421 WEST NINTH STREET WATERLOO IA 50702 421240996 FOUNDATION IA 501(c)(3) 12 - I SARTORI HOSP true Sartori Memorial Hospital Inc 515 COLLEGE STREET CEDAR FALLS IA 50613 420758901 HOSPITAL IA 501(c)(3) 3 WFH-IOWA true Mercy Health Network 1111 6th Avenue Des Moines IA 50314 421478417 PARENT DE 501(C)(3) 12 - III-FI NA true false false false false false false false false false true true true true true true true true false false Covenant Medical Center Inc o 166612 Book Value Wheaton Franciscan Healthcare - Iowa Inc m 2121954 Book Value