2018-05-11T10:23:28-05:00 2017-06-30 450250958 Eide Bailly LLP 800 Nicollet Mall Ste 1300 Minneapolis MN 554027033 990 2016-07-01 460225483 Sacred Heart Health Services SACR 6056688000 501 Summit Street Yankton SD 57078 Douglas R Ekeren President & CEO 6056688000 2018-05-10 1 Kim Hunwardsen CPA P00484560 6122536500 2018-05-10 2016 2022-09-23 18:48:47Z Avera Sacred Heart Hospital Douglas R Ekeren 501 Summit Street Yankton SD 57078 143301712 0 0928 X www.averasacredheart.com X 1911 SD Promotion of Health 16 12 1320 311 0 0 850816 943887 121815480 125620739 2449104 16159759 -602544 -333615 124512856 142390770 261675 261829 0 0 57979037 60973246 0 0 420220 58707369 61285915 116948081 122520990 7564775 19869780 288972533 325213601 43567671 61341554 245404862 263872047 X Avera is a health ministry rooted in the Gospel. Our mission is to make a positive impact in the lives and health of persons and communities by providing quality services guided by Christian values. 1 0 99623344 261829 125620739 Avera Sacred Heart Hospital (Sacred Heart Health Services) leads delivery of healthcare to its region through over 1,200 employees (as well as approximately 80 physicians on its active medical staff) who coordinate care to deliver patient care as an integrated unit. Avera Sacred Heart and its affiliates (referred to collectively as Sacred Heart Health Services) also work seamlessly to meet the needs of the communities they serve in southeast South Dakota and northeast Nebraska. In addition to the 93-bed hospital and a 6-bed hospital in Yankton, Avera Sacred Heart includes one nursing home and a congregate housing facility, a hospice house; and in Creighton, Neb., has a 23-bed critical access hospital, long-term care facility, and two clinics. It also manages three hospitals and two nursing homes. (Continued on Schedule O)Avera Sacred Heart operates under the tenets of the Roman Catholic Church and in accordance with the philosophy and values established for Avera Health, a sponsored health ministry of the Benedictine and Presentation Sisters. Avera Sacred Heart engages in activities designed to improve the health of the individuals and communities that it serves in response to a calling to heal the sick, the elderly and the oppressed.Requirements of the IRS community benefit standard for tax-exempt organizations are integral to Avera Sacred Heart Hospital's larger charitable mission of improving health and quality of life. Specifically, Avera Sacred Heart is governed by an independent board including community leaders, business and clinical healthcare experts. The board has a history of commitment to act with the highest integrity and has been proactively evaluating opportunities to voluntarily adopt governance best practices for the benefit of the community. * Sacred Heart Health Services makes medical care accessible to the communities it serves regardless of ability to pay, of which there were 3,459 inpatient admissions, 87,586 outpatient visits, 40,894 clinic visits and 66,831 nursing home resident days in fiscal year 2017. The Hospital received a three-year accreditation from the Joint Commission. The National Organization of State Offices of Rural Health (NOSORH) and iVantage honored Avera Creighton Hospital and Avera Sacred Heart Hospital for "Excellence in Quality." Avera Sacred Heart was given the Healthcare Information and Management Systems Society (HIMSS) Analytics Stage 7 Award. Avera Sister James Won a South Dakota Association of Healthcare Organizations Quality Excellence Award. Avera Sacred Heart was recognized with a Hurst Gold Standard Of Nursing Award. Avera Sacred Heart was named a "2017 Top 100 Rural & Community Hospitals in the U.S" by The National Rural Health Association's Rural Health Policy Institute, iVantage Health Analytics and The Chartis Center for Rural Health. Avera Sacred Heart received American College of Radiology Accreditation. Avera Sacred Heart was given an "A" patient safety grade by the Leapfrog Group.Sacred Heart Health Services operates 2 full-time emergency departments, one in Yankton and one in Creighton, Nebraska, which provide emergency care regardless of ability to pay. Sacred Heart provides clinical services needed to operate the emergency center and provides on-site emergency medical, rescue and medical transportation services. In addition, Avera Sacred Heart, through its integrated network of providers, provides non-emergency services to the community it serves. It makes these services accessible to the community through participation in government programs like Medicare and Medicaid, regardless of ability to pay. Avera's charity care policy provides discounted and free services to patients who lack the resources to be fully responsible for the health care they receive. The charity care policy is designed to ensure the communities served by Avera facilities have access to needed healthcare services. The Avera Sacred Heart Board of Directors oversees services delivered under the charity care policy including assessing community needs, approving eligibility criteria and monitoring the effectiveness of the program in providing community access to medical care.Eligibility for discounted or free services under the charity care policy is based on income and asset levels and family size. Applications for coverage under the program may be obtained at any Avera Sacred Heart patient registration area or by calling the Avera Sacred Heart or Avera Creighton business office. Sacred Heart Health Services maintains records to identify and monitor the level of care provided under the charity care policy. Sacred Heart Health Services had charges forgone for charity for the fiscal year ended June 30, 2017 of approximately $4.2 million.Sacred Heart Health Services takes its mission to improve the health and quality of life of the people it serves a step further by reaching out to meet the broad health needs of the community. It strives to identify community needs beyond basic health care, respond to them, aiming to make a positive, life-enhancing difference in the community. Sacred Heart Health Services takes a strategic, community needs-based approach to delivering benefits to the community. Avera Sacred Heart Hospital demonstrates its commitment to providing community benefit through specific accomplishments:E-technology: Avera Sacred Heart utilizes an EICU program. EICU is a telemedicine-based system that aids in the care of ICU patients at Avera Sacred Heart and across the Avera system. Patients receive constant, around-the-clock monitoring and interventions from a remote care team in addition to the care they receive from their bedside team. Avera has also implemented an E-pharmacy program where facilities without 24 hour a day pharmacist coverage can access pharmacist services remotely.Teaching hospital: Avera Sacred Heart is a teaching hospital, which reflects a strong commitment to education, research and a high level of care. In the summer of 2007, the Hospital opened the Avera Professional Office Pavilion & Education Center to enhance their commitment to medical education. The Avera Pavilion is the new home of the unique Yankton Ambulatory Program for the third-year medical students of the Sanford School of Medicine of the University of South Dakota. The program challenges medical students to solve clinical problems and experience the doctor-patient relationship through the year. Yankton is only one of three communities in the state where a campus is provided for the Sanford School of Medicine. The Office for the Dean of the Yankton Ambulatory Program of the Avera Sacred Heart Yankton Campus is located on the first floor of the Pavilion. A unique component to the Pavilion is the expansion and enhancement of educational facilities. Along with a 116-seat auditorium, there are also three conference rooms, all equipped with the latest in audiovisual technology. Residency/health professions training: At any one time, 10 to 15 Sanford School of Medicine of the University of South Dakota medical students are in training at Avera Sacred Heart Hospital. In addition, students in nursing, pharmacy, physician assistant programs, radiology and respiratory therapy also affiliate here. Avera Sacred Heart also has a radiology technologist school, which graduates 6 to 8 new radiology technologists each year. Preventive care a priority: Avera Sacred Heart has taken steps to enhance preventive care for people of all ages through the many educational programs, health screenings and fairs that are held throughout the year. Avera Sacred Heart holds screenings throughout the region at their rural health clinics, as well as in Yankton. The Hospital is now connected to the Ask-A-Nurse program that provides general information concerning health-related topics. Our web site incorporates the "Adam" software that provides a unique level of health-related information to the consumer. In 2009, Avera Sacred Heart Hospital introduced Planet Heart (in conjunction with the Avera Heart Hospital) and an in-house cardiovascular screening package to keep the people we served better informed about their health. Based on community needs, we are continually striving to provide more preventative tools and risk assessments to our population. 99623344 1 1 0 1 0 0 0 0 1 1 1 1 0 0 1 1 0 1 0 0 0 0 0 0 1 0 1 1 1 1 1 0 0 0 0 0 1 1 0 0 0 0 0 0 1 1 1 0 0 1 167 0 1 1320 1 0 0 0 0 0 1 1 0 0 0 0 X 16 12 1 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 0 1 1 0 X X Jamie A Schaefer 6053223992 501 Summit Yankton SD 57078 Wayne A Kindle Chair 2.00 0.00 X X 0 0 0 Sr Jeanne Annette Weber Vice Chair 2.00 0.00 X X 0 0 0 Ryan Loecker Board Member 2.00 0.00 X 0 0 0 Byron Nielson MD Board Member 2.00 0.00 X 0 0 0 Sr Rosemary Weber Board Member 2.00 0.00 X 0 0 0 Brad Dykes Board Member 2.00 0.00 X 0 0 0 Marty Jans Board Member 2.00 0.00 X 0 0 0 Sr Lucille Welbig Board Member 2.00 2.00 X 0 0 0 Sr Lynn Marie Welbig Board Member 2.00 1.00 X 0 0 0 Kevin Bray Board Member 2.00 0.00 X 0 0 0 Russ Deidrichsen Board Member 2.00 0.00 X 0 0 0 Tim Irwin Board Member 2.00 0.00 X 0 0 0 Dan Specht Board Member 2.00 0.00 X 0 0 0 Michael Peterson MD Board Member & Physician 40.00 0.00 X 598999 0 36910 Michael Pietila MD Board Member & Physician 2.00 0.00 X 0 0 0 Douglas Ekeren President & CEO 2.50 60.00 X X 0 454936 46130 Jamie A Schaefer Sec/Treas & VP Finance 52.00 0.00 X 226677 0 33997 Anthony Erickson Exec Director-Senior Services 52.00 0.00 X 165338 0 32935 Gregory Taylor MD Diagnostic Radiology 40.00 0.00 X 542190 0 38460 Steve Gutnik MD FACP Gastroenterology 40.00 0.00 X 763600 0 37204 Matthew G Winkelbauer MD Family Medicine/OB 40.00 0.00 X 553582 0 35910 Ralph Tullo MD Diagnostic Radiology 40.00 0.00 X 494158 0 39050 Wayne Schneidermann MD Orthopedic Surgeon 40.00 0.00 X 570790 0 9824 3915334 454936 310420 59 0 1 0 Yankton Anesthesiology PC 1000 W 4th St Suite 13 Yankton SD 57078 Anesthesiologists 1580763 Yankton Medical Clinic PC PO Box 706 Yankton SD 57078 Physician Services 860828 Aegis Therapies Inc 7160 Dallas Parkway Plano TX 75024 Rehab & Therapy Services 749938 Jalal U Akbar 2405 Brisbane Ln Plano TX 75075 Physician Services 610627 Welfl Construction Company 800 West 23rd Street Yankton SD 57078 Construction 486879 26 58190 178971 706726 943887 Net patient service revenue 622110 122314120 122314120 Other revenue 900099 1255045 1255045 Nonmedical outreach 900099 1131239 1131239 Pharmacy revenue 900099 757615 757615 Meaningful Use 900099 162720 162720 125620739 624768 624768 524717 898286 -373569 -373569 -373569 15537231 0 2240 15537231 -2240 15534991 15534991 50370 58190 10416 39954 39954 142390770 125620739 0 15826144 X 241829 241829 20000 20000 1105301 630000 475301 52211 52211 47494734 42338869 5044575 111290 1618926 1411483 205304 2139 7488877 6576116 894719 18042 3213197 2827921 377494 7782 4830 4830 20097721 6364916 13730113 2692 49000 43182 4734 1084 6441891 5730302 711082 507 724355 282044 442311 2138201 2138201 323333 263522 58538 1273 299223 203748 94513 962 1195269 1195269 8119638 8119638 1052383 1052383 Medical Supplies 14287868 14286250 1618 Bad Debt Expense 4443178 4443178 Equipment Lease and Ren 336264 245114 91150 Licenses and Permits 135795 128094 7701 1636966 1029074 333443 274449 122520990 99623344 22477426 420220 7064577 5847797 17016065 18434942 839085 845245 2295133 2642560 1047053 1840916 190609486 105008338 72515317 85601148 6914205 7239447 180113931 195665057 632157 6537503 535010 558986 288972533 325213601 10474347 10677175 137450 153681 30582858 49016362 35558 23903 2337458 1470433 43567671 61341554 X 233896065 251556306 10869226 11637441 639571 678300 245404862 263872047 288972533 325213601 X 19869780 144840 -1547435 X X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 16605 16605 0 Part II-B, Line 1: Avera Sacred Heart Health Services paid dues to Health Organizations that have a portion of the dues attributed to lobbying activities. The amount attributed to lobbying activities was $16,605. 0 1 X 1071080 38729 -24812 13917 1071080 1045751 77699 -35356 17014 1071080 1013689 52266 -2578 17626 1045751 839365 51690 133464 10830 1013689 793011 6400 58742 18788 839365 0.63330 0.36670 0 0 4546594 4546594 128773518 68142063 60631455 47314341 32368093 14946248 9975033 4498182 5476851 85601148 Assets limited to use - Avera Pooled Investments 195665057 F 195665057 Estimated third-party payor settlements 1018973 Derivative liability 451460 1470433 X Part IV, Line 2b: Resident trust funds are held on behalf of the residents. Part V, Line 4: The Organization's endowment consists of various individual funds established for a variety of purposes. Its endowment represents donor-restricted endowment funds. As required by generally accepted accounting principles, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. Part X, Line 2: Avera Health and most of its sponsored organizations are considered nonprofit corporations as described in Section 501(c)(3) of the Internal Revenue Code and are exempt from federal income taxes on related income pursuant to Section 501(a) of the Code. These organizations are required to file a Return of Organization Exempt from Income Tax (Form 990) with the Internal Revenue Service (IRS). Avera Health and certain sponsored organizations also file an Exempt Organization Business Income Tax Return (Form 990T) with the IRS to report their unrelated business taxable income. Avera Health and its sponsored organizations believe that they have appropriate support for any tax positions taken affecting its annual filing requirements, and as such, does not have any uncertain tax positions that are material to the financial statements. The Organization would recognize future accrued interest and penalties related to unrecognized tax benefits and liabilities in income tax expense if such interest and penalties are incurred. The federal Form 990T filings and taxable subisidiary returns for consolidated subsidiaries are no longer subject to federal tax examinations by tax authorities for years before 2014. Simply D'Vine 93795 58190 35605 3660 850 Roses Just Because 14765 14765 5906 108560 58190 50370 3660 850 5906 10416 39954 1 1 X 1 X 1 X 1 1 1 0 1 1 2622 1484577 1484577 0.01260 8120 17876098 11039753 6836345 0.05790 10742 19360675 11039753 8320922 0.07050 28 2310 612009 31850 580159 0.00490 3 300 176491 176491 0.00150 3 24005 8450963 6476863 1974100 0.01670 2 244 9922 9922 0.00010 5 425 563551 563551 0.00480 41 27284 9812936 6508713 3304223 0.02800 41 38026 29173611 17548466 11625145 0.09850 1 1319 1319 0.00000 1 1319 1319 0.00000 1 4443178 0 27703407 29181621 -1478214 X 1 1 2 1 Avera Sacred Heart Hospital 501 Summit Street Yankton SD 57078 www.avera.org/sacred-heart/ 10576 X X X 5 provider based clinics 2 Avera Creighton Hospital 1503 Main Street Creighton NE 68729 www.avera.org/creighton/ 490001 X X X X 1 provider based clinic and 6 RHC's Avera Sacred Heart Hospital 1 0 0 1 X X X X X X X X X 15 1 0 0 1 X See part V Section C X See Part V Section C X 1 15 1 See Part V Section C 0 1 X 150.000000000000 400.000000000000 X X X X 1 1 X X X 1 X See Section C X See Section C X See Section C X X X X X X X 1 X 0 X X X X X 1 X 0 1 Avera Creighton Hospital 2 0 0 1 X X X X X X X X X 15 1 1 0 1 X See Part V Section C X See Part V Section C X 1 15 1 See Part V Section C 0 1 X 150.000000000000 400.000000000000 X X X X 1 1 X X X 1 X See Section C X See Section C X See Section C X X X X X X X 1 X 0 X X X X X 1 X 0 1 Avera Sacred Heart Hospital Part V, Section B, Line 5: Avera Sacred Heart Hospital worked closely with the SD Department of Health and also utilized Maximizing Excellence LLC to conduct focus groups. Careful consideration was taken to be sure that representatives from the community at large, the medically underserved, low-income and minority populations were included. Avera Creighton Hospital Part V, Section B, Line 5: Avera Creighton Hospital in conjunction with the North Central District Health Department used community stakeholder meetings, county focus groups and surveys targeted to specific population groups to determine potential areas to focus health improvement efforts on. Dr. Joseph Nitzke, a partner in Ionia Research, was contracted for data collection, compilation, analysis and presentation for the project. Avera Creighton Hospital Part V, Section B, Line 6a: Avera Creighton Hospital partnered with nine other hospitals in the North Central District Health Department including: Antelope Memorial Hospital, Avera St. Anthony's Hospital, Brown County Hospital, Cherry County Hospital, CHI Plainview, Niobrara Valley Hospital, Osmond General Hospital, Rock County Hospital and West Holt Memorial Hospital. Avera Sacred Heart Hospital Part V, Section B, Line 11: The 2015 Implementation Plan has addressed nutrition education, healthy choices, and awareness in the community and to continues to increase care coordination between the hospital and clinical providers in service of our mutual patients and colleagues.Nutrition:The first need identified is to increase nutrition education, healthy choices and community awareness of the issue. Avera Sacred Heart Hospital will implement quarterly nutrition education opportunities at various community events including RibFest, Riverboat Days, YankTON Challenge and others. Avera Sacred Heart Hospital will also post healthy recipes and tips quarterly on their Facebook page as well as update vending machines and snack bars to reflect the Good & Healthy SD vending criteria.Avera Sacred Heart Hospital was instrumental in establishing the Yankton Food Council which provides monthly education and recipes. Increase Care Coordination:Avera Sacred Heart has established a Chief Medical Officer position that has the primary responsibility of developing and strengthening physician and clinic relationships.The Hospital also plans to increase the number of patients with advance directives from 19% to 25%.Avera Sacred Heart Hospital requested from and granted access to electronic medical records within the hospital and various local clinics to facilitate a better flow of information for patient care where applicable and when appropriate.The OR Taskforce worked extensively with Huron Consulting and implemented changes to the surgical department at Avera Sacred Heart Hospital.Avera Sacred Heart Hospital researched the Joint Commission's certification for integrated care but elected not to pursue it. Avera Creighton Hospital Part V, Section B, Line 11: The most significant need identified was weight management, to include increased nutrition education, healthy choices and awareness in the community and increased physical activity in the community. Creighton has continued to offer a community Wellness Center that is the only one in our service area. We also offer reduced rates for Senior Citizens, employees and if the subscriber pays an annual fee to help financially. Avera offers through our marketing an education departments news and educational articles on healthy eating and wellness choices. We also offer the "Know Your Numbers" every weekday. Our vending and dietary services offer healthy meals and meal choices. We have also redone our vending machines to make snack choices "healthier" offerings. Aging Population and Related illnesses - We continue to operate our 47-bed nursing home/skilled nursing facility, the Avera Creighton Care Centre. There we offer Adult Day Care, respite care and other services as appropriate. We now offer Avera Hospice and Home Health through Avera at Home with Asera Care is also in the area.Housing/Environmental - The Creighton Chamber and Knox County Economic Development are groups we consider partners. We involve ourselves with those groups for economic development, recruitment, retention, and housing efforts. We also continue to lead or participate in emergency preparadeness including likely farm accidents and weather events. Mental Health and substance abuse continue to be a challenge and we continue to offer on-site and telemedicine services. We also participate in Avera wide opioid and mental health initiates. Avera Sacred Heart Hospital Part V, Section B, Line 13h: Presumptive charity care may be applied in situations where all other avenues of financial assistance have been exhausted. The facility has the discretion to weigh extenuating circumstances when determining eligibility for and the amount of charity care to provide. Avera Creighton Hospital Part V, Section B, Line 13h: Presumptive charity care may be applied in situations where all other avenues of financial assistance have been exhausted. The facility has the discretion to weigh extenuating circumstances when determining eligibility for and the amount of charity care to provide. Avera Sacred Heart Hospital Part V, Section B, Line 16j: A summary of the financial assistance policy is posted in the hospital facility's emergency rooms, waiting rooms, and admissions office and included on the billing statement. In addition, the financial assistance policy is discussed with the patient upon admission to the facility. Avera Creighton Hospital Part V, Section B, Line 16j: A summary of the financial assistance policy is posted in the hospital facility's emergency rooms, waiting rooms, and admissions office and included on the billing statement. In addition, the financial assistance policy is discussed with the patient upon admission to the facility. Avera Sacred Heart Hospital Part V, Section B, Line 20e: If a patient is self-pay and has a large balance, an Avera patient advocate will help them apply for other forms of assistance. If they are not eligible for any other coverage, the patient is given a financial assistance application to complete and return to the facility. Avera Creighton Hospital Part V, Section B, Line 20e: If a patient is self-pay and has a large balance, an Avera patient advocate will help them apply for other forms of assistance. If they are not eligible for any other coverage, the patient is given a financial assistance application to complete and return to the facility. Avera Sacred Heart Hospital Part V, Section B, Line 24: Individuals eligible for financial assistance are not charged gross charges for emergency or other medically necessary care; however may be charged gross charges for elective care. Avera Creighton Hospital Part V, Section B, Line 24: Individuals eligible for financial assistance are not charged gross charges for emergency or other medically necessary care; however may be charged gross charges for elective care. Avera Sacred Heart Hospital: Schedule H, Part V, Section B, Line 7a: https://www.avera.org/locations/sacred-heart/ Avera Sacred Heart Hospital: Schedule H, Part V, Section B, Line 7b: https://www.avera.org/app/files/public/56357/2015-community-needs-assessment-ash.pdf Avera Sacred Heart Hospital: Schedule H, Part V, Section B, Line 10a: https://www.avera.org/app/files/public/64894/2015-CHNA-Implementation-Plan-Avera-Sacred-Heart.pdf Avera Creighton Hospital: Schedule H, Part V, Section B, Line 7a: https://www.avera.org/locations/profile/avera-creighton-hospital/ Avera Creighton Hospital: Schedule H, Part V, Section B, Line 7b: https://www.avera.org/app/files/public/65600/2016-chna-creighton.pdf Avera Creighton Hospital: Schedule H, Part V, Section B, Line 10a: https://www.avera.org/app/files/public/65601/2016-chna-implementation-plan-creighton.pdf Avera Sacred Heart Hospital: Schedule H, Part V, Section B, Line 16a-c: https://www.avera.org/patients-visitors/charity-patient-assistance-programs/financial-assistance-forms/ Avera Creighton Hospital: Schedule H, Part V, Section B, Line 16a-c: https://www.avera.org/patients-visitors/charity-patient-assistance-programs/financial-assistance-forms/ 5 2 - Avera Sister James Care Center 2111 W 11th Street Yankton SD 57078 Skilled nursing facility 3 - Avera Sacred Heart Majestic Bluffs 2111 W 11th Street Yankton SD 57078 Assisted living 4 - Avera Sacred Heart Hospital-Swing Bed 501 Summit Street Yankton SD 57078 Swing Bed 5 - Avera Creighton Care Centre 1603 Main Street Creighton NE 687292999 Long Term Care 6 - Avera Sacred Heart Hospital-Dialysis 501 Summit Street Yankton SD 57078 Dialysis Unit Part I, Line 3c: The methodology used to determine eligibility for financial assistance takes into consideration income, net assets, family size and resources available to pay for care. In addition, presumptive charity care may be applied in situations where all other avenues have been exhausted. Part I, Line 6a: Our community benefit report is contained in a report prepared by Avera Health, a related organization. It is available through the website and requested mailing, and is filed with the Catholic Health Association. Part I, Line 7: Charity care and unreimbursed Medicaid were converted to cost using the cost-to-charge ratio based on the Medicare Cost Report from the prior year. Unreimbursed Medicaid uses a cost-to-charge ratio that includes other activities beyond hospital inpatient. The amounts on lines 7e-i represent expenses reported in the general ledger and compiled using CBISA software. Part I, Ln 7 Col(f): Bad debt expense of $4,443,178 is included on Form 990, Part IX, Line 25, Column (A) but excluded for purposes of calculating this percentage. Part II, Community Building Activities: Sacred Heart Health Services provided a public school athletic trainer. This helps with the prevention of injuries, recognition of an injury requiring additonal medical attention, post-injury rehabilitation and education. Part III, Line 2: Bad debt expense is reported net of discounts and contractual allowances. A payment on an account previously written off reduces bad debt expense in the current year.Bad debt expense is reported at charges as recorded by the organization. Part III, Line 3: Sacred Heart Health Services does not believe that any portion of bad debt expense could reasonably be attributable to patients who may qualify for financial assistance since evaluations are completed to determine those amounts due and will be reclassified from bad debt expense to charity care within 30 days of the evaluation of the amount. Part III, Line 4: The footnote to the Organization's financial statements that describes bad debt expenses can be found on page 10 of the attached financial statements. Part III, Line 8: Part III, Lines 5, 6, and 7: The Medicare revenues received (line 5), allowable costs (line 6), and the resulting shortfall (line 7) does not include a significant portion of the organization's expenses. These lines require use of the Medicare Cost Report as prepared by the required guidelines which disallows numerous costs of hospitals, particularly if they are part of an integrated system such as Sacred Heart Health Services. In these cases the entity must file a home office cost report which "steps down" overhead to non-cost report entities disproportionately to actual allowable share and essentially removing the costs from the hospital's cost report entirely. Examples of non-cost report entities operated by Sacred Heart Health Services include clinics, long-term care facilities, and other health care related businesses. There are also costs completely disallowed by cost report rules such as bad debt expense, marketing, CRNA's, and interest expense. In addition to these disallowed costs within the Hospital, Sacred Heart Health Services operates clinics, long-term care facilities, and other health care related businesses which do not file a cost report.Medicare allowable costs of care are based on the Medicare cost report. The Medicare Cost Report is completed based on the rules and regulations set forth by Centers for Medicare and Medicaid Services. Sacred Heart Health Services follows the CHA guidelines in reporting community benefits and therefore any Medicare shortfall is excluded from our community benefit report. However, Medicare is the organization's largest payer and patients with Medicare coverage are accepted regardless of whether or not a surplus or deficit is realized from providing the services. This basis therefore means providing Medicare services promotes access to healthcare services which is a key advantage for our community. Part III, Line 9b: If the patient qualifies for the organization's financial assistance policy for low-income, uninsured patients and is cooperating with the organization with regard to efforts to settle an outstanding bill within current self-pay collection policy guidelines and timeframes, the organization or its agent shall not send, nor intimate that it will send, the unpaid bill to any outside collection agency. Avera organizations will allow all individuals 120 days from the first post discharge statement to apply for financial assistance before sending the uncollected account to an outside collection agency. Avera will provide the patient with a statement or final notice that contains a listing of the specific collection action(s) it intends to initiate, and a deadline after which they may be initiated no earlier than 30 days before action is initiated. If the patient qualifies for 100% charity care, no further bills will be sent. A letter will be sent instead indicating that the patient's bill has been completely forgiven. Part VI, Line 2: Avera Sacred Heart Hospital includes community members on committees, boards and advisory groups to allow community reaction and input in the actions we take. We also review all data provided by the health departments regarding disease rates, mortality, morbidity, population changes, etc. The hospital also conducts focus groups, consumer perception studies, and patient satisfaction surveys to identify primary needs of the community and responds with preventative/educational information or activities for the community. Part VI, Line 3: The brochure "Understanding Your Health Care Bill" is provided in visible locations experiencing high volumes of inpatient or outpatient registrations such as the admitting office, the billing/business office, and emergency department as well as the organization website. Patients are also made aware of possible eligibility when given the "Patient Rights and Responsibilities" brochure upon admission. The Patient Advocate works with uninsured/underinsured patients to enroll them in applicable social service programs and/or identify charity, county or risk pool eligibility. Part VI, Line 4: Avera Sacred Heart Hospital primarily serves the city and county of Yankton, SD and the surrounding South Dakota counties of Bon Homme, Charles Mix, Clay and Hutchinson, and Cedar County and Knox in Nebraska. U.S Census statistics indicate that 17.4% of the City of Yankton's individual residents fall below the federal poverty guidelines. For fiscal year 2017, 46.1% of our revenue came from Medicare and Medicare Advantage plans, and 11.5% came from Medicaid and Medicaid Replacement plans. Part VI, Line 5: The Hospital board is comprised of individuals who represent the interests of the community served by the organization. The Hospital offers staff privileges to all qualified physicians in the community. Selected services such as Radiation Oncology and Swingbed Services would not be available in our service area unless provided by the organization. The Hospital serves all individuals regardless of their ability to pay, providing 24 hour a day emergency services. The facility participates in the education of medical students from The University of South Dakota through their Yankton location. The Hospital also offers a 2-year Radiology Technologist program that graduates approximately 6 students per year. Sacred Heart Hospital also provides clinical education for Mount Marty College students. The Hospital is also proud of the fact that 311 individuals chose to volunteer at the facility during fiscal year 2017. Part VI, Line 6: Avera is a sponsored ministry of the Benedictine and Presentation Sisters. The communities in which Avera Health operates all have unique health and community benefits needs. In keeping with Catholic Health Association guidelines, each Hospital strives to meet its community's identified needs. The corporate staff of Avera Health advocates for all members regarding community benefit related matters of state, regional and national importance. 1 Mount Marty College 1105 W 8th Street Yankton SD 57078 460283336 501(c)(3) 240000 Healthcare education 1 0 Educational scholarships 4 20000 Part I, Line 2: The Organization only makes grants to other organizations which are also tax-exempt. Individual scholarship recipients are selected by the University School of Medicine according to its criteria. In fiscal year 2017, 4 medical school students were chosen for $5,000 scholarships. 0 0 0 0 0 0 0 0 0 Michael Peterson MD Board Member & Physician 593576 0 0 0 5423 0 13530 0 24186 0 636715 0 0 0 Douglas Ekeren President & CEO 0 453465 0 0 0 1471 0 21200 0 25736 0 501872 0 0 Jamie A Schaefer Sec/Treas & VP Finance 226233 0 0 0 444 0 11617 0 23592 0 261886 0 0 0 Anthony Erickson Exec Director-Senior Services 164608 0 0 0 730 0 8055 0 26017 0 199410 0 0 0 Gregory Taylor MD Diagnostic Radiology 534734 0 0 0 7456 0 13530 0 25798 0 581518 0 0 0 Steve Gutnik MD FACP Gastroenterology 753059 0 0 0 10541 0 13530 0 24440 0 801570 0 0 0 Matthew G Winkelbauer MD Family Medicine/OB 551836 0 0 0 1746 0 13530 0 23248 0 590360 0 0 0 Ralph Tullo MD Diagnostic Radiology 486702 0 0 0 7456 0 13530 0 26326 0 534014 0 0 0 Wayne Schneidermann MD Orthopedic Surgeon 562425 0 0 0 8365 0 0 0 10181 0 580971 0 0 0 Schedule J, Part I Line 3: The President & CEO's compensation was paid by a related organization, Avera Health. Avera Sacred Heart relied on the related organization for determining the compensation for the President & CEO using the methods described in Part I, Line 3. Allison Diedrichsen Spouse of board member 27223 Employee compensation 0 Mary Loecker Parent of board member 24988 Employee compensation 0 Form 990, Part III, line 2 As part of the purchase of Lewis and Clark Specialty Hospital property on April 1, 2017, Avera Sacred Heart Hospital acquired what has become the 6-bed Avera Surgical Hospital, which has surgery and imaging services; Avera Medical Group Family Medicine, which is a family practice clinic; the Avera Surgical Hospital Lab; and Avera Therapy, which offers physical and occupational therapy services. Form 990, Part VI, Section A, line 2 Sr. Lucille Welbig and Douglas Ekeren have a business relationship. Form 990, Part VI, Section A, line 6 The sole member of the organization is Avera Health, a nonprofit corporation organized and existing under the laws of the state of South Dakota and exempt under 501(c)(3) of the Internal Revenue Code of 1986, as amended. Form 990, Part VI, Section A, line 7a Avera Health, as the sole member, has the power to appoint and remove, with or without cause, members of the board of directors. Form 990, Part VI, Section A, line 7b Avera Health has the following rights as the Member. 1) To approve the adoption, amendment or repeal of the statements of philosophy, mission and values of Corporation; 2) To initiate the adoption, amendment or repeal of any provision of the Articles of Incorporation or Bylaws of Corporation, and to give final approval of any such action with respect thereto; 3) To approve and act upon the alienation of real property and precious artifacts under the canonical stewardship of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota ("Presentation Sisters") or the Benedictine Sisters of Sacred Heart Monastery ("Benedictine Sisters"), pursuant to the policies established by the Member; 4) To approve any plan of merger, consolidation or dissolution of the Corporation, or the divestiture of a sponsored work or ministry associated with the Corporation; 5) To approve the creation of new sponsored works or ministries to be conducted by or under the authority of the Corporation; 6) To appoint and remove, with or without cause, the Board of Directors of the Corporation. 7) To appoint and/or remove, with or without cause, the President and Chief Executive Officer of the Corporation. 8) To approve operating/capital budgets and strategic plans of the Corporation. 9) To approve expenditures outside of operating and capital budgets exceeding defined thresholds according to policy which may be adopted from time to time by the Member. 10) To approve acquisitions, sales and leases, according to policy which may be adopted from time to time by the Member. 11) To establish and maintain employee benefit programs. 12) To establish and maintain insurance programs. 13) To approve major community fund drives. 14) To approve the appointment of auditors. 15) To adopt policies designed to effectuate the reserved powers of the Member. Form 990, Part VI, Section B, line 11b The Form 990 is reviewed initially by the CEO and CFO. The return is made available to the Board of Directors for review prior to filing. Form 990, Part VI, Section B, line 12c The conflict of interest policy covers board members, officers and key employees. At each board meeting, a request is made for all Board members to disclose any potential conflict of interest pertaining to any item listed on the agenda or pertaining to any potential item that could be discussed during the course of the meeting. The declaration of conflict of interest is recorded in the meeting minutes. The board makes a determination of whether there is a conflict of interest and if so, implements the procedure for evaluating the issue or transaction involved. The board member or officer with the conflict must refrain from voting. A statement of conflict of interest disclosure is made on an annual basis by officers and board members. The information is maintained in a database and a report is provided to the Board. Form 990, Part VI, Section B, line 15b The CEO was compensated by Avera Health System. Annually the Compensation Committee of Avera Health, which is comprised of six (6) System Members appointed by the Religious Orders, meets with an independent consultant regarding fair market value of officers and key employees. The Compensation Committee approves all salaries based on comparable data and documents the basis for their decision in meeting minutes. The compensation of the CEO, other officers, directors, and key employees is reviewed annually. The organization utilizes the resources of an outside independent agency for market comparability. The compensation is approved within the annual budget approved by the Board. Form 990, Part VI, Section C, line 19 The organization's governing documents and conflict of interest policy are not made available to the general public. The Organization's financial statements are attached to the Form 990 per IRS instructions and therefore available to the general public. Form 990, Part IX, line 11g Repairs and Maintenance: Program service expenses 1,673,038. Management and general expenses 458,115. Fundraising expenses 0. Total expenses 2,131,153. Consulting: Program service expenses 583,164. Management and general expenses 366,764. Fundraising expenses 0. Total expenses 949,928. ACS Fees: Program service expenses 0. Management and general expenses 9,671,434. Fundraising expenses 0. Total expenses 9,671,434. Other Fees: Program service expenses 4,108,714. Management and general expenses 3,233,800. Fundraising expenses 2,692. Total expenses 7,345,206. Form 990, Part XI, line 9: Capital transfers, net -1,734,901. Change in fair value of interest rate swap 187,466. Form 990, Part XII, Line 2c: The Audit Committee of Avera Health, parent organization, selects the auditor and reviews the audited financial statements for Sacred Heart Health Services. Part III, Line 4a: (Continued from Page 6 of Schedule O) Community education: Avera Sacred Heart reaches out to people and communities throughout southeastern South Dakota and northeastern Nebraska in a variety of ways. Educational sessions are offered to medical staff, students, employees, health care professionals, students of all levels and the general public. Utilizing the Avera Professional Office Pavilion and Education Center, hundreds of classes involving thousands of people are provided as a community service each year. Other examples of community education include our student/youth mentoring programs and parish nursing. Partnerships with schools, churches, businesses and other organizations make many of these programs possible. Avera Sacred Heart Hospital also offers "Live Better, Live Balanced" events, which are occasional free events for the public during which our health care professionals share important health-related information. The Avera Cancer Institute Navigation Center, an immediate and constant source of support and information to patients and their families across Avera's 72,000 mile footprint opened March 1. It can be accessed 24 hours a day, seven days a week, by calling 605-322-3211 or 888-422-1410. Reasons for calling the Navigation Center can range from managing symptoms, to finding resources for emotional support, to getting help for the whole family for issues created by the effects of cancer and treatment. Anyone can call the Navigation Center - they do not need to be an Avera patient. As an integrated organization, Avera and Avera Sacred Heart are leaders in the implementation of the electronic patient record (EMR). Form 990, Part VI, Line 16: There is no written policy or procedure. In the event of any such proposed transaction, the board or a committee with delegated authority reviews all materials, valuations and operational aspects for any proposed transaction. Such transaction would be evaluated in accordance with the exempt status of the organization and its applicable purposes. Any transaction also would be approved by the board and the member. Form 990, Part X, Line 20: The issue price includes the filing organization's share of the entire bond issue, which was issued to Avera Health on behalf of the Avera Obligated Group. The Avera Obligated Group consists of Avera Health, Avera McKennan, Avera St. Luke's, Avera Queen of Peace, Avera Marshall, Avera St. Mary's, and Sacred Heart Health Services. In accordance with IRS instructions, information related to the tax exempt bond reporting is being reported on Avera Health's tax return (EIN 46-0422673). Avera Health 3900 West Avera Drive Suite 300 Sioux Falls SD 57108 460422673 Healthcare services SD 501(c)(3) Line 10 N/A 0 Avera at Home 5116 S Solberg Ave Sioux Falls SD 57108 460399291 Home Services SD 501(c)(3) Line 10 Avera Health 0 Lewis and Clark Health Education and Service Agency 1000 W 4th Street Suite 9 Yankton SD 57078 460337013 Healthcare education SD 501(c)(3) Line 10 Sacred Heart Health Services 1 Avera St Anthony's Hospital 300 N 2nd Street ONeill NE 68763 470463911 Healthcare services NE 501(c)(3) Line 3 Avera Health 0 Avera Holy Family 826 North 8th Street Estherville IA 51334 420680370 Healthcare services IA 501(c)(3) Line 3 Avera Health 0 Avera Holy Family Foundation 826 North 8th Street Estherville IA 51334 421317452 Fundraising IA 501(c)(3) Line 10 Avera Holy Family 0 Avera Marshall 300 S Bruce St Marshall MN 56258 410919153 Healthcare services MN 501(c)(3) Line 3 Avera Health 0 St Benedict Health Center 401 West Glynn Drive Parkston SD 57366 460226738 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 St Benedict Health Center Foundation West Glynn Drive PO Box B Parkston SD 57366 460458725 Support health related services SD 501(c)(3) Line 12a, I St Benedict Health Center 0 Avera McKennan 1325 S Cliff Ave PO Box 5045 Sioux Falls SD 57117 460224743 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 Avera Queen of Peace Hospital 525 N Foster Street Mitchell SD 57301 460224604 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 Avera St Luke's 305 South State Street Aberdeen SD 57401 460224598 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 Avera Gettysburg 606 East Garfield Gettysburg SD 57442 460234354 Healthcare services SD 501(c)(3) Line 3 Avera St Mary's 0 Avera St Mary's 801 East Sioux Avenue Pierre SD 57501 460230199 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 Avera Tyler 240 Willow Street Tyler MN 56178 410853163 Healthcare services MN 501(c)(3) Line 3 Avera Marshall 0 Avera Health Plans Inc 3900 West Avera Drive Suite 101 Sioux Falls SD 57108 460451539 Health financing and health plans admin SD 501(c)(4) Avera Health 0 Surgical Associates Endoscopy Clinic LLC 310 S Pennsylvania St Aberdeen SD 57401 460461429 Surgical associates SD N/A Avera Home Medical Equipment of Floyd Valley Hospital LLC 714 Lincoln St NE Lemars IA 51031 820582350 Medical services - home medical equipment SD N/A Avera Home Medical Equipment of Sioux Center LLC 38 19th ST SW Sioux Center IA 51250 753203100 Medical services - home medical equipment SD N/A Avera Home Medical Equipment of Spencer Hospital LLC 2400 S MN Ave 102 Sioux Falls SD 57117 800619999 Medical services - home medical equipment SD N/A Q&M Properties 525 North Foster Mitchell SD 57301 731652049 Medical clinic building SD N/A Heart Hospital of South Dakota LLC 4500 W 69th Street Sioux Falls SD 57108 562143771 Healthcare services SD N/A Brookings Health System - Avera HME LLC 101 22nd Ave Suite 101 Brookings SD 57006 453204123 Medical Services - Home Medical Equipment SD N/A Valley Health Services Inc 501 Summit Street Yankton SD 57078 460357149 Rental real estate SD N/A C 0 Accounts Management Inc 5132 S Cliff Ave Suite 101 Sioux Falls SD 57108 460373021 Collection agency SD N/A C 0 Avera Property Insurance Inc 610 W 23rd St Ste 1 PO Box 38 Yankton SD 57078 460463155 Insurance SD N/A C 0 Alucent Medical Inc 1325 S Cliff Avenue PO Box 5045 Sioux Falls SD 571175045 471818349 Biotech Research SD N/A C 0 South Dakota State Medical Holding Company Inc 2600 W 49th Street Sioux Falls SD 57105 460401087 Insurance SD N/A C 0 DakotaCare Administrative Services Inc 2600 W 49th Street Sioux Falls SD 57105 460424322 Insurance SD N/A C 0 0 0 0 0 0 0 0 0 0 1 0 1 1 0 1 1 0 0 0 Lewis and Clark Health Education and Service Agency L 107646 Recorded in General Ledger Lewis and Clark Health Education and Service Agency M 112658 Recorded in General Ledger