2017-11-14T15:51:28-06:00 2016-12-31 450250958 EIDE BAILLY LLP 1730 BURNT BOAT LOOP STE100 BISMARCK ND 585030886 990 2016-01-01 450458242 Southwest Healthcare Services SOUT 7015233214 802 2nd St NW Bowman ND 58623 John Osse Interim CEO 7015233214 2017-11-14 1 Lisa Chaffee CPA P00193453 7012551091 2017-11-14 216.147.180.201 2017-11-14 15:38:06 CS P 6C9B1A35775087DBDB8A6D25ECA509C7F6C27838 38C0D8FF55FA272924E83028D6B9FABEF20E0653 2016 2017-02-10 21:41:12Z John Osse 802 2nd St NW Bowman ND 58623 38923645 0 X www.swhealthcare.net X 2000 ND Southwest Healthcare Services is organized to provide quality health care services. 9 7 221 55 0 0 3598317 1621850 11546989 10652043 49639 30419 -252 -12246 15194693 12292066 0 0 0 0 8416203 7296290 0 0 1975 4901408 6317733 13317611 13614023 1877082 -1321957 42523618 46770135 31598793 37145368 10924825 9624767 X Guided by faith-based leadership, we are a family of specialists, each performing a unique service. With a spirit of compassion, we provide excellence in healthcare to those we are privileged to serve. 0 0 11819567 10655853 Southwest Healthcare Services (Southwest) consists of a 23-bed acute care hospital, 40-bed nursing facility, 14-unit apartment complex, 12-unit assisted living facility, visiting nurse service agency, clinic, and ambulance service located in Bowman, North Dakota.Southwest Healthcare Services is organized to provide quality health care services for individuals in the surrounding community. Southwest Healthcare Services operates an acute care hospital, nursing facility, rural health clinic, ambulance service, outpatient therapy services and elderly living facilities. Southwest operates a full time emergency room and provides emergency care regardless of ability to pay. Southwest also provides clinical services needed to operate the emergency center and provides on-site emergency medical, rescue and medical transportation services.Southwest Healthcare Services provides non-emergency services to the community making these services accessible to the community through participation in government programs like Medicare and Medicaid and our own charity care program. Services are provided to all individuals regardless of individual status. Southwest Healthcare Services charity care program provides discounted and free services to patients that are unable to be fully responsible for the cost of the health care they receive. Southwest Healthcare Services is committed to responding to the increasing number of patients who are under-insured or without insurance and who need to seek healthcare services at our facility. To fulfill its mission of community service, Southwest provides care to these patients who meet certain criteria under its charity care policy without charge or at amounts less than its established rates. Because Southwest does not pursue collection of amounts determined to qualify as charity care, they are not reported as patient and resident service revenue. The estimated cost of providing charity care for the year ended December 31, 2016 was $81,000, which was calculated by multiplying the ratio of cost to gross charges by the gross uncompensated charges associated with providing charity care to patients.Southwest Healthcare Services reaches out to people and communities throughout southwestern North Dakota, northwestern South Dakota and eastern Montana through specific health events and health education, for example: reduced rate sports physicals for students, health fairs, and skin cancer screenings. 11819567 1 1 0 0 0 0 0 0 1 1 1 0 0 0 1 1 1 0 0 0 0 0 0 0 1 0 1 1 0 0 1 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 1 30 0 1 221 1 0 0 0 0 0 1 1 0 0 0 0 X 9 7 0 0 1 0 0 0 0 1 0 0 0 1 1 1 1 1 1 1 1 0 X Sasha Ruggles CFO 7015233214 802 2nd St NW Bowman ND 58623 Gary Brennan President 1.00 X X 0 0 0 Roger Walter Vice President 1.00 X X 0 0 0 Jackie Lambourn Secretary 1.00 X X 0 0 0 Jean Tennant Trustee 1.00 X 0 0 0 Julie Lockert Trustee 1.00 X 0 0 0 Bruce Bowman Trustee 1.00 X 0 0 0 Lynn Peterson Trustee 1.00 X 0 0 0 Dan Powell Trustee 1.00 X 0 0 0 Shonda Schwartz Trustee 1.00 X 0 0 0 Becky Hansen CEO 40.00 X 162048 0 20411 Sasha Ruggles CFO 40.00 X 84945 0 7995 Jennifer Jahner Physical Therapist 40.00 X 104319 0 0 Christine Peterson Nurse Practitioner 40.00 X 163411 0 0 514723 0 28406 3 0 1 0 Northland Family Physicians 1451 44th Ave S Unit F Grand Forks ND 58201 Contract Physicians 1241700 Dakota Travel Nurse 1200 Collins Ave Mandan ND 58554 Contract Nursing 312069 Avant Healthcare Professionals LLC 1211 Semoran Blvd Suite 226 Casselberry FL 32707 Contract Nursing 290251 Prime Time Healthcare LLC PO Box 3544 Omaha NE 68103 Contract Nursing 153675 Avera Health 3900 West Avera Drive Sioux Falls SD 57108 ePharmancy & eEmergency 125500 5 29178 1592672 1621850 Patient & Resident Service Revenu 622110 10553995 10553995 Supporting Revenue 900099 98048 98048 10652043 26607 26607 26622954 279 26619421 0 3533 279 3812 3812 42448 29178 12158 30290 30290 3810 0 3810 3810 Loss on Refinancing 900099 -46346 -46346 -46346 12292066 10655853 0 14363 X 284147 284147 240310 240310 5707706 5123208 584498 595475 528838 66637 468652 408631 60021 3520 3520 55386 55386 2815730 2656736 158994 73235 15 73220 312869 153222 159647 212303 212303 208700 207700 1000 127083 113453 13630 2053 2053 51436 51436 1233740 1233740 92272 92272 Medical Supplies 544964 544964 Bad Debts 352244 352244 Dietary Food and Supple 174190 174190 Dues Licensing & Subscr 56033 30880 25153 1975 1975 13614023 11819567 1792481 1975 556408 566927 965610 713625 2068134 1480881 201110 201695 88044 33022 49778048 15252062 12080468 34525986 25410299 7676539 160686 160686 992859 1410774 42523618 46770135 1556629 1658161 13541 12436 25786623 4424 3957 3165421 31861257 1072155 3609557 31598793 37145368 X 6443792 5140574 4353921 4357081 127112 127112 10924825 9624767 42523618 46770135 X -1321957 22800 -901 X 0 1 X 1 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 1 19415 2876 1975 20316 1 X 127112 7275 7275 127112 127112 725 725 127112 127112 2164 2164 127112 127112 3695 3695 127112 115112 6976 6976 115112 0.00000 1.00000 0.00000 1 0 75488 75488 9571268 7929298 1641970 8890420 7322764 1567656 31240872 31240872 34525986 Construction Payable 3609557 3609557 X 11971904 22800 -352244 -329444 12301348 -9282 -9282 12292066 13271962 12158 12158 13259804 354219 354219 13614023 Part IV, Line 1b: Southwest Healthcare Services has an auxiliary that operates under the same EIN as Southwest Healthcare Services. Part IV, Line 2b: Southwest acts as custodian for the funds of the residents. These funds are included in cash and accounts payable in the financial statements. Resident trust funds totaled $3,957 and $4,424 at December 31, 2016 and 2015. Part V, Line 4: Endowments held and administered by Southwest Healthcare Services: The earnings from the $127,112 are for hospital operations and to support assisted living, as necessary. The principal of $127,112 is permanently restricted. Schedule D, Part V: The organization is reporting a change in the beginning of year endowment fund balance in Schedule D, Part V, column (d), line 1a, due to a restatement of the balances in the permanently restricted net assets included as endowment funds on the audited financial statements. Part X, Line 2: Southwest is organized as a North Dakota nonprofit corporation and has been recognized by the Internal Revenue Service (IRS) as exempt from federal income taxes under Internal Revenue Code Section 501(c)(3). Southwest is annually required to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. In addition, Southwest is subject to income tax on net income that is derived from business activities that are unrelated to its exempt purpose. Southwest has determined it is not subject to unrelated business income tax and has not filed an Exempt Organization Business Income Tax Return (Form 990-T) with the IRS. Southwest believes that it has 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. Southwest 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. Part XI, Line 2d - Other Adjustments: Provision for Bad Debts included in Expenses on Form 990 -352,244. Part XI, Line 4b - Other Adjustments: Auxiliary Revenue 2,876. Fundraising Expenses reported in Revenue on Form 990 -12,158. Part XII, Line 2d - Other Adjustments: Fundraising Expenses reported in Revenue on Form 990 12,158. Part XII, Line 4b - Other Adjustments: Auxiliary Expenses 1,975. Provision for Bad Debts included in Expenses on Form 990 352,244. Celebrity Waiter 71626 29178 42448 430 7875 750 3103 71626 29178 42448 430 7875 750 3103 12158 30290 1 1 X 1 X 1 X 1 1 0 1 1 81000 81000 0.00610 2841069 2749262 91807 0.00690 2922069 2749262 172807 0.01300 8246 984 7262 0.00050 2661224 1616334 1044890 0.07880 2669470 1617318 1052152 0.07930 5591539 4366580 1224959 0.09230 14234 14234 0.00110 14234 14234 0.00110 0 352244 70449 2706391 2818690 -112299 X 1 1 1 1 Southwest Healthcare Services 14 6th Ave SW Bowman ND 58623 5006 X X X X Rural Health Clinic Southwest Healthcare Services 1 0 0 1 X X X X X X X X 16 1 0 0 1 X http://swhealthcare.net/events/chna.html X See Part V, Section C, Line 7d for URL X X 1 16 1 http://swhealthcare.net/events/chna.html 0 1 X 100.000000000000 200.000000000000 X X X X X 1 1 X X X X 1 X See Part V, Section C, line 16i X See Part V, Section C, line 16i X swhealthcare.net/patient/financials/assistance.html X X X X X X 1 X 0 X X X X 1 X 0 0 Southwest Healthcare Services Part V, Section B, Line 5: A Community Advisory Committee was organized with specific individuals from the community served. Personal invitations were sent to organizations representing various community, business, educational and religious groups. Representatives from the local healthcare providers and the county public health department were included to bring in additional professional perspective. Southwest Healthcare Services Part V, Section B, Line 7d: Ruralhealth.und.edu/projects/flex/hospitals#bowman Southwest Healthcare Services Part V, Section B, Line 11: The organization is addressing the significant needs in its most recently conducted CHNA in the following ways:Ability to recruit and retain primary care providers: We are advertising jobs in print and social media, working with UND Center for Rural Health for Recruitment efforts, reviewing all 3RNet Candidate referrals and working with Inline group for physician recruitment. We are also looking at proposed activities in collaboration with others such as: Work with West River on recruiting efforts, Work with Sanford health on recruiting efforts, work with UND school of Medicine to begin resident programs at SWHS. A recruitment/retention committee will also be created. In 2017, 1 full time physician was recruited with another in the works.Mental/Behavior Health and Drug/Alcohol Use and Abuse: Lack of addiction and mental health services are a major challenge facing the community - SHS would like to add mental health services. At this time we are working on a contract with Aurora to provide mental health services in our community.Attracting and retaining young families: the community cannot grow business if people are retiring. Young families need to be brought in. Southwest Healthcare is working on recruiting staff which includes young families. The Bowman County EDC is reviewing different areas for economic growth which will attract young families. They are working to support local businesses to provide quality of life for our community. They also continue to work with different businesses in the recruitment of staff. Southwest Healthcare will work with Bowman County EDC, Bowman County school and other businesses to work on staff recruitment. Southwest Healthcare Services Part V, Section B, Line 13h: Soft credit check Southwest Healthcare Services Part V, Section B, Line 16j: The FAP application form can be found on our website at: http://swhealthcare.net/patient/financials/financial_assistance_form.htmlA summary of the financial assistance policy and financial assistance contact information can be found at the admissions desk in the hospital, clinic, and online. The financial assistance application is also summarized on the back of our billing invoices. 5 1 - Southwest Healthcare Services 802 2nd St NW Bowman ND 58623 Independent Living and LTC 2 - Bowman Ambulance Services 111 Highway 12 W Bowman ND 58623 Ambulance Services 3 - Sunrise Village 203 11th Ave NW Bowman ND 58623 Assisted Living and Home Care 4 - Southwest Healthcare Clinic 12 6th Ave SW Bowman ND 58623 Rural Healthcare Clinic 5 - Southwest Healthcare Services 705 3rd St NW Bowman ND 58623 Outpatient Therapy Part I, Line 3c: There are instances when a patient may appear eligible for financial assistance but the patient has failed to submit a Financial Assistance Application or an Application has been submitted but a proper determination cannot be made due to the lack of adequate information or supporting documentation. Often there is adequate information provided by the patient through other sources which could provide sufficient evidence to provide the patient with assistance. In the event there is no evidence to support a patient's eligibility for financial assistance, Southwest Healthcare Services could use outside agencies in determining estimate income amounts for the basis of determining financial assistance eligibility and potential discount amounts. Presumptively eligibility may be determined on the basis of individual life circumstances that may include:1. State funded prescription programs;2. Homeless or received care from a homeless clinic;3. Participation in Women, Infants and Children programs (WIC);4. Food stamp eligibility;5. Subsidized school lunch program eligibility;6. Eligibility for other state or local assistance program that are unfunded (e.g. Medicaid spend-down);7. Low income/subsidized housing is provided as a valid address; and8. Patient is deceased with no known estate. Part I, Line 6a: The Organization's Community Benefit Report is contained in their annual meeting booklet. The annual meeting booklets are available at our facilities. Part I, Line 7: Charity care expense was converted to cost on line 7a based on an overall cost-to-charge ratio addressing all patient segments. Community health improvement services, line 7e, are reported based on actual expenseamounts recorded from the events in the general ledger. The costs for Medicaid reported on line 7b and for subsidized health services reported on line 7g were determined using the Cost Report. Part I, Ln 7 Col(f): The amount of bad debt expense removed from total expenses reported on Form 990 was $352,244. Part II, Community Building Activities: Southwest Healthcare Services provides EMS staff support at public sporting events such as Motocross races, rodeos, and school sport activities. Support is also provided to the high school in the form of sports medicine for their sports activities. Southwest Healthcare Services also provides pastorial care and support in the form of medication for mission trips. Part III, Line 2: Bad debt is reported as charges on the financial statements. Part III, Line 3: Patient accounts are written off to bad debt after every effort is made to collect the balance and patients are given opportunities to complete charity care applications or set up payment plans. All discounts and contractual adjustments are applied to accounts before they are written off to bad debt. Payments on accounts are first applied to any current portion due and then applied to any amount previously written off to bad debt. If an account has no current portion due and has been written off to bad debt, any payments made would reduce bad debt expense.We review accounts on an individual basis before turning them over to bad debt. Based on our review, it is safe to reasonably estimate that 20% of bad debt expense is attributable to patients eligible under our charity care policy. If these individuals would have completed the paperwork required to obtain charity care, they may have qualified. Southwest Healthcare Services does not refuse service to patients that generate bad debt. This is evidence that the care is given for community benefit motivations. Part III, Line 4: The footnote to the Organization's financial statements can be found on page 8 and 9 of the attached audited financial statements. Part III, Line 8: IRS Rev. Rul. 69-545, which established the community benefit standard for nonprofit hospitals, states that if a hospital serves patients with government health benefits, including Medicare, then this is an indication that the hospital operates to promote the health of the community. In some communities, Medicare is the largest payer, and hospitals must accept these patients regardless of whether they make a surplus or deficit from providing such services. If the Medicare participation is premised on this fact, then providing Medicare services promotes access to healthcare services which is a community benefit. Also, the elderly are often an underserved population who experience issues with access to healthcare services. Without tax-exempt hospitals like Southwest Healthcare Services providing Medicare services, the government would bear the burden of directly providing services to the elderly.Medicare allowable costs were obtained from the 2016 Medicare cost report. The Medicare Cost Report is completed based on the rules and regulations set forth by the Centers for Medicare and Medicaid Services. Part III, Line 9b: Southwest Healthcare Services will not engage in extraordinary collection actions (ECA) before it makes a reasonable effort to determine whether a patient is eligible for financial assistance.Reasonable efforts shall include:1. Validating that the patient owes the unpaid bills and that all sources of third party payment have been identified and billed by the hospital;2. Documentation that the patient has been offered a payment plan but has not honored the terms of that plan;3. Documentation that Southwest Healthcare Services has offered and has attempted to offer the patient the opportunity to apply for financial assistance and that the patient has not complied with the hospital's application requirements;4. Documentation that Southwest Healthcare Services has exerted efforts to notify patients about an impending ECA. These efforts should include:a. Providing patients with a 30-day written notice before initiating collection activities. This 30-day written notice shall include a copy of the Financial Assistance Policy Plain Language Summary;b. Making oral attempts to contact patients, using their contact information on file, about an impending ECA as well as informing patients about the availability of Southwest Healthcare's Financial Assistance Policy;5. Providing for a Notification Period of 120 days from the date of the first post-discharge billing statement during which Southwest Healthcare is required to notify the patient of the availability of FinancialAssistance. ECAs may only start after this Notification Period has elapsed and no Financial Assistance has been submitted by the patient;6. Providing for an Application Period of 240 days from the date of the first post-discharge billing statement during which Southwest Healthcare is required to accept and deliberate on a Financial Assistanceapplication that a patient may submit, while taking into consideration the following:a. If a patient submits an incomplete application during the Application Period, Southwest Healthcare must:i. Suspend any ECAs already initiated;ii. Inform the patient by way of a written notice what additional information or documentation is required;iii. Provide the contact information of the Financial Counselor who may assist the patient in completing the Financial Assistance application;If the patient fails to provide the additional information or documentation after 30 days from notification, Southwest Healthcare may resume ECAs.b. If a patient submits a complete application during the Application Period, Southwest Healthcare must:i. Suspend any ECAs already initiated;ii. Determine whether the application meets the eligibility criteria for Financial Assistance.iii. Inform the patients within 30 days by way of a written notice of the result of the determination and the basis for the decision. Part VI, Line 2: In addition to a Community Health Needs Assessment completed in 2016, Southwest Healthcare assesses health care needs of the community in the following ways: Satisfaction surveys are sent to patients and residents. Our department heads get together once a month to discuss issues or opportunities within their departments. Certain department heads also meet with the Board of Directors to discuss their departments and community health needs within the community. Health fairs are held within our service area. If any feedback is given from patients attending the health fair, it is brought to the attention of the administrator. Part VI, Line 3: A summary of our financial assistance policy and financial assistance contact information can be found at the admissions desk in the hospital, clinic, online, and on the back our statements. Financial assistance contact information is included in patient bills and is discussed with patients as well as the availability of various government benefits, such as Medicaid or state programs. Patients are assisted with qualification for such programs where applicable. Employees who are responsible for registering patients are asked to consider/screen patients who may appear to qualify or who have asked about financial assistance. The registration clerk is to give the patient a brochure explaining the Financial Assistance program which contains information on how to access the Patient Financial Services Representative (PFS) to obtain assistance. Part VI, Line 4: The community is largely agricultural based but in recent years the oil and gas industry has grown extensively. We anticipate that this will increase at an even greater pace in the next several years thus increasing the patient base that our organization will serve. The city we reside in is located at an intersection of two main highways in the state of North Dakota. Southwest Healthcare Services is the largest employer in the city and serves an area that extends approximately 45 miles in all directions, North, South, East and West. There is one other rural health clinic in our city limits that is operated by another healthcare facility which is 40 miles from our city.Southwest Healthcare Services serves over 5,300 people in rural counties of Bowman and Slope, North Dakota and Harding County in South Dakota. We have been very fortunate to have an unemployment rate in 2015 of 2.4% in Bowman County, 2.4% in Slope County and 2.3% in Harding County and a median income in 2014 of $59,000 for our service area. In 2015, approximately 13% of the residents in our community were uninsured. Southwest Healthcare Services is the only hospital in our service area with no medically underserved areas. Part VI, Line 5: Southwest Healthcare Services extends medical privileges to all providers in the community, and has a community board. Any surplus funds are used for investments in both capital assets, and medical equipment which improve services available as well as the quality of care that we give to the patients in our service area.Southwest Healthcare Services operates an emergency room available to all regardless of ability to pay. The Hospital participates in education and training of healthcare professionals and serves as a vehicle to attract and effectively use donated funds. Southwest Healthcare Services also participates in the Vision West strategic planning process for our region and community and leads the healthcare focus group.Southwest Healthcare Services provides EMS staff support at public sporting events such as Motocross races, rodeos, and school sport activities. Support is also provided to the high school in the form of sports medicine for their sports activities. We do health fairs in 6 communities across our service area. We provide CPR and first aid classes to local coaches. We participate in job shadow events and career fairs. X X X 0 0 0 0 0 0 0 0 0 Becky Hansen CEO 162048 0 0 0 0 0 0 0 25079 0 187127 0 0 0 Christine Peterson Nurse Practitioner 163411 0 0 0 0 0 0 0 4080 0 167491 0 0 0 Shannon Bowman Shannon is the daughter-in-law of board member Bruce Bowman 59087 Compensation 0 Christine Peterson Christine is the sister of CFO Sasha Ruggles 167491 Compensation 0 Susan Powell Susan is the wife of board member Dan Powell 13732 Compensation 0 Form 990, Part VI, Section A, line 1 The Board of Trustees may designate an Executive Committee composed of the President, Vice President and at least one other trustee designated by the Board of Trustees. Subject to the limitations prescribed by the North Dakota Century Code, the Executive Committee has the authority of the Board of Trustees in the management of the business of this corporation in the interval between meetings of the Board of Trustees and the Executive Committee is at all times subject to the control and direction of the Board of Trustees. Form 990, Part VI, Section A, line 4 The bylaws were amended to allow for Board of Trustee vacancies to be filled on an interim basis, to allow for electronic or other means of meeting, and for the Board of Trustees to vote electronically. Form 990, Part VI, Section A, line 8b The Organization has an Executive Committee, however no action was taken. Recommendations were taken to the full board of directors. Form 990, Part VI, Section B, line 11b The return is reviewed initially by the CEO, CFO, and Accountant. The return is then emailed to the Board of Trustees for review and approval prior to being filed with the IRS. Form 990, Part VI, Section B, line 12c All officers, directors, and key employees are required to complete a conflict of interest form annually. The forms are reviewed initially by the CEO for potential conflicts. Any actual conflicts are reviewed by the Board of Directors. A person with a conflict is restricted from voting on related matters. Form 990, Part VI, Section B, line 15 A review of current salary surveys for CEOs provided by state associations is reviewed and a performance evaluation is completed by the Board of Directors. A fair compensation is set within the salary survey ranges supplied and as determined by the evaluation review by the Board of Directors. For the CFO, compensation is based on a performance evaluation as well as a review of current market rates through salary surveys for comparable sized facilities. The CEO completes the performance evaluation which is reviewed by Human Resources and if there is a need for a market rate adjustment, this is reviewed at the board level with discussion and data and then approved at that time. These processes take place on an annual basis and are documented in the board minutes. Form 990, Part VI, Section C, line 19 The Organization makes its governing documents, conflict of interest policy, and financial statements available to the public upon request. Form 990, Part IX, line 11g Repairs, Maintenance and Service Contracts and Fees: Program service expenses 397,006. Management and general expenses 60,144. Fundraising expenses 0. Total expenses 457,150. Purchased Services and Recruitment: Program service expenses 162,646. Management and general expenses 67,479. Fundraising expenses 0. Total expenses 230,125. Professional Fees and Consulting: Program service expenses 2,097,084. Management and general expenses 31,371. Fundraising expenses 0. Total expenses 2,128,455. Form 990, Part XI, line 9: Auxiliary Net Income -901.