2017-10-26T11:16:42-05:00 2016-12-31 410746749 CLIFTONLARSONALLEN LLP 220 SOUTH SIXTH STREET SUITE 300 MINNEAPOLIS MN 55402 990 2016-01-01 410855367 OLMSTED MEDICAL CENTER OLMS 5072883443 210 NINTH STREET SE ROCHESTER MN 55904 TIM WEIR CHIEF EXECUTIVE OFFICER 5072883443 2017-10-05 1 KURT BENNION P01469618 6123764500 67.137.57.251 2017-10-05 09:50:46 PD P 977139128611A4E36F514149905081B6C9A4065F 46F349674EE889A40ED7A1CF827C4699A2F49015 2016 2021-01-29 14:40:06Z KATHRYN LOMBARDO 210 NINTH STREET SE ROCHESTER MN 55904 218256950 0 X HTTP://WWW.OLMMED.ORG X 1949 MN THE DELIVERY OF EXCEPTIONAL PATIENT CARE FOCUSING ON CARING, QUALITY, SAFETY, AND SERVICE. 16 10 1419 92 454520 -28260 1106158 397060 190282864 201908489 1544128 2019980 1418181 943366 194351331 205268895 453803 497803 0 0 110094763 114972841 0 0 687251 68730178 68308885 179278744 183779529 15072587 21489366 236546687 259275114 74674577 75252489 161872110 184022625 X THE DELIVERY OF EXCEPTIONAL PATIENT CARE FOCUSING ON CARING, QUALITY, SAFETY, AND SERVICE. 0 1 160685867 497803 202203450 PATIENT CARE: PERSONAL APPROACH TO CARE THROUGH MORE THAN 25 SPECIALTIES. ALL OF OUR SPECIALTY SERVICES COMPLIMENT PRIMARY CARE AND OFFER PATIENTS GREATER CONVENIENCE AND PEACE OF MIND. WE CONTINUE TO WORK TO POSITION OMC AS A PREFERRED HEALTHCARE PROVIDER FOR PRIMARY AND SECONDARY CARE AMONG SOUTHEASTERN MINNESOTA RESIDENTS. OMC'S 159 CLINICIANS AND 1,090 HEALTHCARE PROFESSIONALS SERVE AT 18 LOCATIONS, INCLUDING TWO MULTI-SPECIALTY CLINICS, PHYSICAL/OCCUPATIONAL THERAPY, SPORTS MEDICINE FACILITIES, A LEVEL VI TRAUMA HOSPITAL WITH 24-HOUR EMERGENCY ROOM AND BIRTHCENTER, TWO WALK-IN FASTCARE RETAIL CLINICS, A WALK-IN SKYWAY CLINIC IN DOWNTOWN ROCHESTER, AND 10 COMMUNITY BRANCH CLINICS. RECENT EXPANSION INCLUDES CURRENT CONSTRUCTION OF A 80,000 SQUARE-FOOT WOMEN'S HEALTH PAVILION ADDITION TO OMC'S HOSPITAL IN SOUTHEAST ROCHESTER OPENED IN 2014, TWO NEW BRANCH CLINIC FACILITIES, A 15,000 SQUARE-FOOT SPORTS MEDICINE AND ATHLETIC PERFORMANCE FACILITY IN NORTHWEST ROCHESTER, AND TWO RETAIL PHARMACIES. IN 2016 OLMSTED MEDICAL CENTER HAD 323,982 PATIENT VISITS SERVING 82,396 UNIQUE PATIENTS. THE HOSPITAL PROVIDED CARE FOR 3,144 PATIENT ADMISSIONS RESULTING IN 7,027 PATIENT DAYS INCLUDING 968 BIRTHS. WE STARTED A JOINT VENTURE OFFERING OUR PATIENTS ACCESS TO COMPREHENSIVE ADVANCED VISION DIAGNOSTIC SERVICES AND TREATMENTS, SPECIALIZING IN LASER EYE SURGERY (LASIK) AND OTHER VISION CORRECTION/ENHANCEMENT PROCEDURES AND WE EXPANDED OUR AFTER-HOURS ACUTE CARE UNTIL 7 PM AT OUR ROCHESTER SOUTHEAST CLINIC. THROUGH A NEW COLLABORATION WITH OLMSTED MEDICAL CENTER AND LAKE CITY FAMILY PHYSICIANS, BEGAN PROVIDING ORTHOPEDIC CARE FOR PATIENTS IN THE LAKE CITY AREA, IN ADDITION TO ROCHESTER. 138190 0 0 COMMUNITY OUTREACH AND SUPPORT ACTIVITIES: OMC WELCOMES ITS MANY OPPORTUNITIES TO BE AN ACTIVE, CONTRIBUTING PARTNER TO SOUTHEASTERN MINNESOTA'S HEALTH AND WELLNESS EFFORTS. AS A 501(C)(3) NON-PROFIT ORGANIZATION, OMC ACTIVELY SUPPORTS SOUTHEASTERN MINNESOTA'S HEALTH AND WELLNESS EFFORTS THROUGH THE CONTRIBUTION OF STAFF TIME/TALENT, IN-KIND RESOURCES, AND FINANCIAL ASSISTANCE. IN 2016, OUR COMMUNITY CONTRIBUTIONS MADE UP 25.18% OF OUR ANNUAL OPERATING EXPENSE - MORE THAN $44,978,000 IN SUPPORT OF OUR COMMITMENT TO BE AN ACTIVE, CONTRIBUTING PARTNER IN THE COMMUNITIES WE SERVE. ANOTHER WAY OMC ACTIVELY SUPPORTS COMMUNITY HEALTH IS THROUGH ITS PARTNERSHIP WITH MAYO CLINIC, OLMSTED COUNTY PUBLIC HEALTH, AND SEVERAL OTHER COMMUNITY-SERVICE ORGANIZATIONS AS TOGETHER WE IMPLEMENTED THE YEAR-TWO ACTION PLAN BASED ON OUR COLLABORATIVE COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA). IN 2016, OMC CONTINUED ITS TRADITION OF WELCOMING HUNDREDS OF SCHOOL-AGED CHILDREN AND COLLEGE STUDENTS FOR ON-SITE SCIENCE, TECHNOLOGY, ENGINEERING, AND MATH (STEM) EDUCATION EXPERIENCES DESIGNED TO CULTIVATE THE NEXT GENERATION OF CAREGIVERS. OUR CAREGIVERS ALSO EXTENDED THEIR COMMUNITY OUTREACH DURING THE YEAR, REPRESENTING OMC AT MORE THAN 50 COMMUNITY HEALTH FAIRS EVENTS IN SOUTHEASTERN MINNESOTA. OVER THE PAST YEAR, WE CONTINUED TO MAKE IT EASIER FOR COMMUNITY MEMBERS TO DONATE THEIR TIME AND TALENT TO OMC. 160824057 1 1 0 0 0 0 0 0 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 1 0 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 1 1 0 0 1 142 0 1419 1 1 1 0 0 0 0 0 0 0 0 0 X 16 10 0 0 0 0 0 1 0 1 1 0 0 1 1 1 1 1 1 1 0 0 MN X KEVIN HIGGINS 5072883443 717 3RD AVE SE ROCHESTER MN 55904 KATHRYN LOMBARDO MD PRESIDENT 40.00 1.00 X X 569051 0 35265 KEN BROWN BOARD CHAIR 1.00 1.00 X X 0 0 0 SRDAN BABOVIC MD TREASURER/SECRETARY 40.00 X X 663509 0 33488 JOSEPH TRICARICO MD TREASURER/SECRETARY 40.00 X X 559285 0 52573 STEVE BORCHARDT PUBLIC TRUSTEE 1.00 X 0 0 0 VIDHAN CHANDRA MD CLINIC TRUSTEE 40.00 X 848720 0 36545 DAN CHRISTIANSON PUBLIC TRUSTEE 1.00 X 0 0 0 ROXANNE FLATEN PUBLIC TRUSTEE 1.00 X 0 0 0 ELAINE GARRY PUBLIC TRUSTEE 1.00 X 0 0 0 HAL HENDERSON PUBLIC TRUSTEE 1.00 X 0 0 0 JAY HESLEY PUBLIC TRUSTEE 1.00 X 0 0 0 GREG HOUSE PUBLIC TRUSTEE 1.00 X 0 0 0 SUSAN KNUTSON PUBLIC TRUSTEE 1.00 X 0 0 0 KIMBERLY MCKEON MD CLINIC TRUSTEE 40.00 X 387355 0 50472 JACK PRIGGEN PUBLIC TRUSTEE 1.00 X 0 0 0 MARK WILBUR MD CLINIC TRUSTEE 40.00 X 346900 0 30125 TIM WEIR CEO 40.00 1.00 X 670088 0 50992 KEVIN HIGGINS CFO 40.00 1.00 X 388359 0 48128 RANDY HEMANN MD MEDICAL VICE PRESIDENT MED SERVICES 40.00 X 421098 0 50172 JAMES HOFFMANN MD MEDICAL VICE PRESIDENT SURG SERVICES 40.00 X 495969 0 44449 JEFFREY BECKENBAUGH MD PHYSICIAN 40.00 X 700233 0 48082 MATTHEW KIRSCH MD PHYSICIAN 40.00 X 919531 0 37457 DAVID LOWE MD PHYSICIAN 40.00 X 618361 0 53318 JAY MYERS MD PHYSICIAN 40.00 X 608065 0 44971 MARCO SANTAMARIA MD PHYSICIAN 40.00 X 594560 0 45436 8791084 0 661473 182 0 1 0 UNIVERSAL HOSPITAL SERVICES INC PO BOX 851313 MINNEAPOLIS MN 55485 MEDICAL EQUIPMENT MAINTENANCE 2096613 AMERICAN EXPRESS 2975 W CORPORATE LAKES BLVD WESTON FL 33331 ELECTRONIC VENDOR PAYMENT SYSTEM 1578169 CERNER COPORATION PO BOX 959156 ST LOUIS MO 63195 COMPUTER SUPPORT 1359250 MAYO COLLABORATIVE SERVICES PO BOX 9146 MINNEAPOLIS MN 55480 MEDICAL SERVICES 994481 THE AFFILIATED GROUP PO BOX 7799 ROCHESTER MN 55903 DEBT COLLECTIONS 852168 108 382503 14557 397060 NET PATIENT SERVICES 621110 199884461 199884461 PHARMACY 446110 2024028 1569508 454520 201908489 1501948 1501948 69446 0 69446 69446 69446 13469079 12859433 91614 609646 -91614 518032 518032 57046 37008 20038 20038 MISC 621990 309148 309148 ELECTRONIC HEALTH RECORDS INCENTI 621990 294961 294961 CAFETERIA 621990 237861 237861 11912 11912 853882 205268895 201748930 454520 2668385 497803 497803 5782543 4322818 1459725 83499952 74770873 8431370 297709 6750286 6109507 609003 31776 13038698 9595503 3354276 88919 5901362 4845248 1035580 20534 404459 264209 140250 180787 180787 89552 89552 85364 85364 8384362 6875484 1508878 401415 401415 2696101 2019974 591363 84764 389921 86382 303539 6040236 5001434 1027664 11138 74712 62019 12693 889799 662948 219130 7721 2084090 2022468 61622 8996830 8996830 849951 849951 MEDICAL SUPPLIES 19057806 19056733 1073 EQUIP/SOFTWARE MAINT 6098266 4372553 1619837 105876 BAD DEBT 5837674 5837674 MN CARE TAX 4108675 4108675 1638885 464971 1135100 38814 183779529 160824057 22268221 687251 79210549 89797688 34709127 40911435 1679514 1805796 1520925 1728908 152480335 64110315 92625250 88370020 26801322 36475225 186042 236546687 259275114 30233675 34882686 57581 71260 32797842 31509357 6314190 4361065 4640691 3721822 630598 706299 74674577 75252489 X 161872110 184022625 161872110 184022625 236546687 259275114 21489366 661149 0 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 5285184 5285184 91321435 26446746 64874689 55836143 37663569 18172574 37573 37573 88370020 THIRD PARTY PAYOR SETTLEMENTS 706299 706299 X PART X, LINE 2: THE MEDICAL CENTER AND THE FOUNDATION ARE EXEMPT FROM FEDERAL INCOME TAXES AS TAX EXEMPT ORGANIZATIONS DESCRIBED IN SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE, EXCEPT FOR INCOME ON CERTAIN UNRELATED BUSINESS INCOME. THERE IS NO MATERIAL UNRELATED BUSINESS INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015. THE MEDICAL CENTER AND THE FOUNDATION ARE ALSO EXEMPT FROM STATE INCOME TAXES UNDER APPLICABLE MINNESOTA STATUTES. THE MEDICAL CENTER AND THE FOUNDATION FILE FEDERAL AND STATE INCOME TAX RETURNS. GENERALLY, THE MEDICAL CENTER AND THE FOUNDATION ARE NO LONGER SUBJECT TO STATE AND FEDERAL INCOME TAX EXAMINATIONS BY TAX AUTHORITIES FOR THE YEAR ENDED DECEMBER 31, 2011, AND PRIOR. OMC RETAIL SERVICES, LLC IS A DISREGARDED LLC UNDER IRS REGULATIONS, AND IT ACHIEVES TAX-EXEMPT TREATMENT BASED ON THE EXEMPT STATUS OF ITS PARENT, OLMSTED MEDICAL CENTER. AT DECEMBER 31, 2016, THERE WERE NO UNCERTAIN TAX POSITIONS. 1 1 X 1 X 300.000000000000 1 X 1 1 0 1 1 1637092 1637092 0.00920 41743136 23075986 18667150 0.10490 816557 828886 0 0.00000 44196785 23904872 20304242 0.11410 138190 138190 0.00080 3795390 1755738 2039652 0.01150 159720 49432 110288 0.00060 92794 92794 0.00050 4186094 1805170 2380924 0.01340 48382879 25710042 22685166 0.12750 1 5837674 18212995 22522747 -4309752 X 1 1 1 1 OLMSTED MEDICAL CENTER - HOSPITAL 1650 4TH ST SE ROCHESTER MN 55904 HTTP://WWW.OLMMED.ORG 376238 X X X OLMSTED MEDICAL CENTER 1 0 0 1 X X X X X X X X X 16 1 1 1 1 X HTTP://WWW.OLMMED.ORG/ABOUT/COMMUNITY-INVOLVEMENT/ X HTTPS://WWW.CO.OLMSTED.MN.US/OCPHS/REPORTS/NEEDS%20ASSESSMENT/DOCUMENTS/201 X 1 16 1 HTTPS://WWW.OLMMED.ORG/APP/FILES/PUBLIC/1344/OMC-CHNA-AND-ACTION-PLAN-2017- 0 1 X 300.000000000000 300.000000000000 X X X X 1 1 X X X 1 X HTTPS://WWW.OLMMED.ORG/APP/FILES/PUBLIC/1222/INFORMATION-SHEET---FINANCIAL- X HTTPS://WWW.OLMMED.ORG/APP/FILES/PUBLIC/1223/INFORMATION-SHEET---PLAIN-LANG X X X X X X 1 X 0 X X X X X 1 X 0 0 OLMSTED MEDICAL CENTER PART V, SECTION B, LINE 5: OLMSTED MEDICAL CENTER LAUNCHED A COLLABORATIVE EFFORT WITH OLMSTED COUNTY, MAYO CLINIC, MANY OF THE COMMUNITY BENEFIT NON-PROFIT ORGANIZATIONS AND THE PUBLIC TO IDENTIFY THE COMMUNITY NEEDS. OLMSTED MEDICAL CENTER PART V, SECTION B, LINE 6A: OLMSTED MEDICAL CENTER COLLABORATED WITH MAYO CLINIC. OLMSTED MEDICAL CENTER PART V, SECTION B, LINE 6B: OLMSTED MEDICAL CENTER COLLABORATED WITH OLMSTED COUNTY HEALTH SERVICES TO PRODUCE THE COMMUNITY NEEDS ASSESSMENT. OLMSTED MEDICAL CENTER PART V, SECTION B, LINE 11: OMC WORKED IN COLLABORATION WITH MAYO CLINIC, OLMSTED COUNTY PUBLIC HEALTH SERVICES, AND OTHER COMMUNITY-BASED ORGANIZATIONS TO CONDUCT A COMMUNITY HEALTH NEEDS ASSESSMENT THAT IDENTIFIED MORE THAN 30 HEALTH ISSUES IN OLMSTED COUNTY IN 2013. THE MOST PRESSING HEALTH ISSUES IDENTIFIED FOR THE SHARED COMPREHENSIVE COMMUNITY HEALTH IMPROVEMENT PLAN WERE OBESITY, DIABETES, MENTAL HEALTH, VACCINE PREVENTABLE DISEASES, AND HOMELESSNESS/FINANCIAL STRESS. BEYOND THE COMMUNITY'S HEALTH IMPROVEMENT PLAN, OMC DEVELOPED ITS OWN PLAN FOR ITS OWN PATIENTS IN THE AREAS OF OBESITY, DIABETES, MENTAL HEALTH, AND VACCINE PREVENTABLE DISEASES. SOME EFFORT WAS MADE FOR HOMELESSNESS AND FINANCIAL STRESS, HOWEVER, THIS ISSUE WAS LARGELY OUT OF THE SCOPE OF OMC'S MISSION.HOMELESSNESS AND FINANCIAL STRESS HAVE BEEN IDENTIFIED AS A SIGNIFICANT NEED IN OUR COMMUNITY-WIDE CHNA. DUE TO LIMITED RESOURCES, PLUS CLARITY FOR OUR OWN MISSION OF HEALTHCARE DELIVERY, WE ARE UNABLE TO ADDRESS THIS NEED IN OUR PLAN EXCEPT TO THE DEGREE THAT WE COMMIT RESOURCES TO COMMUNITY INVESTMENT FOR AGENCIES AND COMMUNITY ORGANIZATIONS THAT ADDRESS THESE PROBLEMS AND WE COMMIT RESOURCES TO CHARITY CARE AND FINANCIAL ASSISTANCE FOR THOSE NEEDING HELP WITH THEIR MEDICAL BILLS. OLMSTED MEDICAL CENTER PART V, SECTION B, LINE 20E: MEETING WITH PATIENTS UPON THEIR REQUEST. 21 1 - OMC - MAIN CLINIC 210 9TH ST SE ROCHESTER MN 55904 OUTPATIENT PHYSICIAN CLINIC 2 - OMC - BYRON CLINIC 846 HIGH POINT DR NE BYRON MN 55920 OUTPATIENT PHYSICIAN CLINIC 3 - OMC - CHATFIELD CLINIC 207 TWIFORD ST SW CHATFIELD MN 55923 OUTPATIENT PHYSICIAN CLINIC 4 - OMC - CANNON FALLS CLINIC 1705 HIGHWAY 200 CANNON FALLS MN 55009 OUTPATIENT PHYSICIAN CLINIC 5 - OMC - PINE ISLAND CLINIC 111 COUNTY ROAD 11 NW PINE ISLAND MN 55963 OUTPATIENT PHYSICIAN CLINIC 6 - OMC - PLAINVIEW CLINIC 20 2ND AVE NE PLAINVIEW MN 55964 OUTPATIENT PHYSICIAN CLINIC 7 - OMC - PRESTON CLINIC 405 KANSAS STREET NW PRESTON MN 55965 OUTPATIENT PHYSICIAN CLINIC 8 - OMC - ST CHARLES CLINIC 403 W FOURTH ST ST CHARLES MN 55972 OUTPATIENT PHYSICIAN CLINIC 9 - OMC - SPRING VALLEY CLINIC 802 MEMORIAL DRIVE SPRING VALLEY MN 55975 OUTPATIENT PHYSICIAN CLINIC 10 - OMC - WANAMINGO CLINIC 217 MAIN STREET SUITE B WANAMINGO MN 55983 OUTPATIENT PHYSICIAN CLINIC 11 - OMC - FASTCARE NORTH CLINIC 3708 HIGHWAY 63 N ROCHESTER MN 55906 OUTPATIENT PHYSICIAN CLINIC 12 - OMC - FASTCARE SOUTH CLINIC 2820 S BROADWAY ROCHESTER MN 55904 OUTPATIENT PHYSICIAN CLINIC 13 - OMC - NW CLINIC 5067 55TH STREET NW ROCHESTER MN 55901 OUTPATIENT PHYSICIAN CLINIC 14 - OMC - SKYWAY CLINIC 318 1ST AVE SW SUITE 203 ROCHESTER MN 55902 OUTPATIENT PHYSICIAN CLINIC 15 - OMC - PHYSICAL THERAPY 102 ELTON HILLS DRIVE ROCHESTER MN 55901 PHYSICAL THERAPY 16 - OMC - RESEARCH DEPT 829 3RD AVE SE KINGS ROW ROCHESTER MN 55904 RESEARCH DEPARTMENT 17 - OMC - SPORTS MED & ATHLETIC PERFORMANCE 5155 55TH STREET NW ROCHESTER MN 55901 PHYSICAL THERAPY/ATHLETIC PERFORMANCE 18 - OMC - STEWARTVILLE CLINIC 208 CENTERTOWN PLAZA STEWARTVILLE MN 55976 OUTPATIENT PHYSICIAN CLINIC 21 - ADVANCED VISION DIAGNOSTIC & LASIK 1544 GREENVIEW DR SW ROCHESTER MN 55902 EYE CARE CENTER 22 - OMC - NW RETAIL PHARMACY 5067 55TH STREET NW ROCHESTER MN 55901 RETAIL PHARMACY 23 - OMC - SE RETAIL PHARMACY 210 9TH ST SE ROCHESTER MN 55904 RETAIL PHARMACY PART I, LINE 3C: ELIGIBILITY IS DETERMINED BY MEASURING INCOME AND HOME EQUITY ASSETS BASED ON THE FEDERAL POVERTY GUIDELINES. BOTH INCOME AND ASSETS (SEPARATELY) HAVE TO FALL BELOW THE ANNUAL GROSS INCOME/ASSET MAXIMUM VALUES IN OMC'S FINANCIAL ASSISTANCE POLICY TO QUALIFY. PART I, LINE 6A: THE OLMSTED MEDICAL CENTER ANNUAL REPORT IS MADE WIDELY AVAILABLE AND IS AVAILABLE ON THE WEBSITE. PART I, LINE 7: THE AMOUNTS REPORTED ON PART I, LINES 7A-C ARE DERIVED USING THE COST TO CHARGE RATIO CALCULATION BASED ON WORKSHEET 2 OF THE IRS INSTRUCTIONS. THE AMOUNTS REPORTED ON PART I, LINES 7E-7I ARE DERIVED USING THE ORGANIZATION'S COST ACCOUNTING SYSTEM. PART I, LINE 7G: SUBSIDIZED HEALTH SERVICES INCLUDED IN PART I, LINE 7G INCLUDE ACTIVITES FROM FIVE OF OMC'S CLINIC LOCATIONS. PART I, LN 7 COL(F): $5,837,674 OF BAD DEBT EXPENSE WAS EXCLUDED IN CALCULATING THE PERCENTAGES REPORTED IN PART I, LINE 7, COLUMN F. PART III, LINE 2: PATIENT ACCOUNTS RECEIVABLE DUE DIRECTLY FROM THE PATIENTS ARE CARRIEDAT THE ORIGINAL CHARGE FOR THE SERVICE PROVIDED, LESS AMOUNTS COVEREDBY THIRD-PARTY PAYORS AND LESS AN ESTIMATED ALLOWANCE FOR DOUBTFULRECEIVABLES. MANAGEMENT DETERMINES THE ALLOWANCE FOR DOUBTFUL ACCOUNTSBY IDENTIFYING TROUBLED ACCOUNTS AND BY HISTORICAL EXPERIENCE APPLIEDTO AN AGING OF ACCOUNTS. PATIENT ACCOUNTS RECEIVABLE ARE WRITTEN OFF WHEN DEEMED UNCOLLECTIBLE. RECOVERIES OF PATIENT ACCOUNTS RECEIVABLEPREVIOUSLY WRITTEN OFF ARE RECORDED WHEN RECEIVED. PART III, LINE 4: SEE THE "PATIENT ACCOUNTS RECEIVABLE NOTE ON PAGE 10 OF THE ATTACHED FINANCIAL STATEMENTS. PART III, LINE 8: THE ORGANIZATION DERIVED ITS COSTING METHODOLOGY USED TO DETERMINE THEMEDICARE ALLOWABLE COSTS REPORTED IN THE ORGANIZATION'S MEDICARE COSTREPORT BY USING COST REPORT WORKSHEETS. MEDICARE COSTS ARE DETERMINEDTHROUGH THE MEDICARE COST FINDING PROCESS WHICH ALLOCATES GENERAL SERVICECENTER COSTS TO REVENUE DEPARTMENTS. THE METHODOLOGY DESCRIBED IN THEINSTRUCTIONS TO SCHEDULE H, PART III, SECTION B, LINE 6 DOES NOT TAKE INTOACCOUNT ALL COSTS INCURRED BY THE HOSPITAL AND DOES NOT REPRESENT THETOTAL COMMUNITY BENEFIT CONFERRED IN THIS AREA.THE REASONS MEDICARE SHORTFALL SHOULD BE TREATED AS A COMMUNITY BENEFITARE: ABSENT THE MEDICARE PROGRAM, IT IS LIKELY MANY OF THE INDIVIDUALSWOULD QUALIFY FOR FINANCIAL ASSISTANCE OR OTHER NEEDS-BASED GOVERNMENTPROGRAMS; BY ACCEPTING PAYMENT BELOW COST TO TREAT THESE INDIVIDUALS, THEBURDENS OF GOVERNMENT ARE RELIEVED WITH RESPECT TO THESE INDIVIDUALS;THERE IS A SIGNIFICANT POSSIBILITY THAT CONTINUED REDUCTION INREIMBURSEMENT MAY ACTUALLY CREATE DIFFICULTIES IN ACCESS FOR THESEINDIVIDUALS; AND THE AMOUNT SPENT TO COVER MEDICARE SHORTFALL IS MONEY NOTAVAILABLE TO COVER FINANCIAL ASSISTANCE AND OTHER COMMUNITY BENEFIT NEEDS. AS REPORTED ON THE AUDITED FINANCIAL STATEMENTS, THE COMMUNITY BENEFIT OF COSTS IN EXCESS OF MEDICARE PAYMENTS WAS $16,449,742. PART III, LINE 9B: PATIENT FINANCIAL HARDSHIP POLICY: TO SUPPORT THE ORGANIZATION'S MISSIONAND PHILOSOPHY IN THAT THE PATIENT COMES FIRST AND PROVIDE A GUIDELINE INIDENTIFYING PATIENT'S WHO HAVE AN EXCEPTIONAL PERSONAL FINANCIAL HARDSHIPAND REQUIRED NEEDED AND NECESSARY MEDICAL CARE AND THERE IS REMOTE ORNEGLIBLE CHANCE THAT THE INDIVIDUAL WILL BE ABLE TO REPAY.PROCEDURE: FACTORS THAT MAY CONTRIBUTE TO EXCEPTIONAL FINANCIAL HARDSHIPINCLUDE:1) UNEMPLOYMENT OR UNDEREMPLOYMENT THROUGH NO FAULT OF THE PATIENT AND/ORFAMILY; 2) THREATENED LOSS OF SHELTER THROUGH FORECLOSURE, ETC; 3) LOSS OFINCOME FROM FEDERAL, STATE OR OTHER GOVERNMENT BENEFITS INCLUDING, BUT NOTLIMITED TO SOCIAL SECURITY, SUPPLEMENTAL SECURITY INCOME, PUBLICASSISTANCE, ETC; 4) LOSS OF INCOME DUE TO DEATH OR DISABILITY; 5)EXCEPTIONAL EXPENSES INCURRED BECAUSE OF UNINSURED PROPERTY DAMAGE ORCOSTLY REPAIRS TO PRINCIPAL RESIDENCE; 6) EXCEPTIONAL EXPENSES DUE TOTEMPORARY OR CHRONIC ILLNESS; 7) EXCEPTIONAL EXPENSES DUE TO INCREASE INLIVING EXPENSES BECAUSE OF A DIVORCE, ABANDONMENT OR SEPARATION FROMSPOUSE OR INCOME EARNER; 8) LOSS OF INCOME DUE TO DECLARATION OFINCOMPETENCE OR IN PROCESS OF BEING DECLARED INCOMPETENT; 9) PATIENT ORFAMILY MEMBER IS CONFINED TO A CONVALESCENT HOME OR OTHER RESIDENCE OTHERTHAN THEIR PRINCIPAL RESIDENCE; 10) NATURAL DISASTERS SUCH AS FLOODS,FIRES, HURRICANES AND EARTHQUAKES; 11) EVICTION, HOMELESSNESS, LOSS OFOWNED RESIDENCE, ARSON, THEFT, ETC; 12) DISCONTINUANCE OF UTILITIES ORHEAT, OR UNSAFE OR UNHEALTHY LIVING CONDITIONS; 13) ANY OTHER CONDITIONCONSIDERED LIFE THREATENING DUE TO EXCEPTIONAL FINANCIAL HARDSHIP.APPLICATION PROCESS: THE FINANCIAL HARDSHIP APPLICATION, UTILIZING OMC'S FINANCIAL ASSISTANCE APPLICATION, CONTAINS THE NECESSARY INFORMATION TODETERMINE ELIGIBILITY FOR THE OMC FINANCIAL HARDSHIP PROGRAM. NO SEPARATEAPPLICATION IS NECESSARY. SUPPORTING DOCUMENTATION REQUIRED TO MAKE ANELIGIBILITY DETERMINATION ARE: 1) MOST RECENT TAX RETURNS, 2) CURRENTFAMILY PAYROLL STUB SHOWING YEAR-TO-DATE INCOME; 3) CURRENT TRANSUNIONCREDIT REPORT AND OTHER FINANCIAL HARDSHIP DOCUMENTATION TO SUPPORTHARDSHIP; 4) EXPLANATION OF HARDSHIP SITUATION/NECESSITY AND RARECOMPLICATIONS.ELIGIBILITY DETERMINATION: BASED UPON PATIENT'S/FAMILY'S INCOME ANDASSETS AND COMPLETED FINANCIAL ASSISTANCE APPLICATION. BASED UPON TAKINGINTO CONSIDERATION ALL PERSONAL FACTORS IN DETERMINING EXCEPTIONALFINANCIAL HARDSHIP. THE BUSINESS SERVICES DEPARTMENT EVALUATES THEAPPLICATIONS MEETING THE CRITERIA AND PRESENTS TO ADMINISTRATION FORAPPROVAL. OMC RESERVES THE RIGHT TO MAKE ADJUSTMENT DETERMINATIONS ON ACASE-BY-CASE BASIS. PART III, SECTION A, LINE 1 THE FILING ORGANIZATION REPORTS BAD DEBT IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP). HFMA STATEMENT 15 IS FOLLOWED TO THE EXTENT THAT IT ALIGNS WITH THE GUIDELINES SET FORTH BY GAAP. PART VI, LINE 2: OMC ACTIVELY WORKS WITH LOCAL GOVERNMENT IN ASSESSING AND ADDRESSINGCOMMUNITY NEEDS THROUGH MEETINGS, WORKSHOPS, AND COMMUNITY INPUT. INADDITION, OMC IS ACTIVELY INVOLVED WITH LOCAL GOVERNMENTS IN EMERGENCYPREPAREDNESS AND DISEASE MANAGEMENT. PART VI, LINE 3: OMC INFORMS PATIENTS OF THE FINANCIAL ASSISTANCE PROGRAMS AVAILABLE ANDASSISTS PATIENTS WHO INDICATE AN INABILITY TO PAY. OMC INFORMS PATIENTSOF THE FINANCIAL ASSISTANCE PROGRAMS BY PROVIDING THE FINANCIAL ASSISTANCEPOLICY ON BROCHURES IN THE NEW PATIENT PACKET AND AT THE FRONT DESK FORALL PATIENTS. THE POLICY IS ALSO PROVIDED ON THE BACK OF THE HOSPITALBILL STATEMENTS, ON THE HOSPITAL WEBSITE AND ON THE HOSPITAL'S ONLINEBILL-PAY SYSTEM.OMC PATIENT FINANCIAL COUNSELORS PROVIDE INFORMATION TO PATIENTS REGARDINGAVAILABLE HEALTHCARE FINANCIAL COVERAGE OPTIONS, SUCH AS: 1) MEDICALASSISTANCE, 2) MINNESOTA CARE, 3) OTHER FINANCIAL SERVICES AVAILABLE FORLOW INCOME FAMILIES IN THE COMMUNITY, 4) OMC'S FINANCIAL ASSISTANCEPROGRAM.THE PATIENT FINANCIAL COUNSELORS ASSIST OMC PATIENTS IN THE APPLICATIONPROCESS. ALL APPLICATIONS ARE PROCESSED IN A TIMELY MANNER. PATIENTAPPLICATIONS ARE CONSIDERED FOR CURRENT PATIENT RESPONSIBLE BALANCES, ASWELL AS NEAR FUTURE SCHEDULED MEDICAL SERVICES. PATIENTS MAY QUALIFY FORFULL OR PARTIAL FINANCIAL ASSISTANCE. PATIENT FINANCIAL COUNSELORS NOTEPATIENT'S ACCOUNT VIA ON-LINE NOTES REGARDING APPLICATIONS SENT,APPLICATIONS IN PROCESS, AND WHETHER APPLICATIONS HAVE BEEN APPROVED,DENIED, OR ADDITIONAL INFORMATION IS REQUIRED. THE PATIENT FINANCIALCOUNSELORS INFORM THE PATIENT VIA A LETTER REGARDING THE DETERMINATION(APPROVED, DENIED, OR PARTIAL COVERAGE APPROVED) OF THE RECEIVED ANDCOMPLETED APPLICATION. PRIOR TO TURNING ACCOUNTS OVER THE THIRD PARTYCOLLECTION, THE ACCOUNT WILL BE REVIEWED FOR POSSIBLE FINANCIAL ASSISTANCEPROGRAM QUALIFICATION THROUGH THE E-BUREAU PROCESS. PART VI, LINE 4: OMC IS A REGIONAL HEALTH CARE FACILITY SERVING PATIENTS WITHIN A SIXTYMILE RADIUS OF ROCHESTER, MN. PART VI, LINE 5: THE FILING ORGANIZATION MAINTAINS AN EMERGENCY ROOM 24 HOURS A DAY, 7 DAYS A WEEK WHICH IS OPEN TO ALL WITHOUT REGARD TO THE ABILITY TO PAY. MEDICAL STAFF PRIVILEGES ARE OPEN TO ALL QUALIFIED PHYSICIANS IN THE AREA. THE ORGANIZATION UTILIZES ITS SURPLUS FUNDS TO INCREASE THE SERVICES OFFERED TO ITS PATIENTS. PART VI, LINE 6: N/A 1 OLMSTED MEDICAL CENTER REGIONAL FOUNDATION 210 9TH STREET SE ROCHESTER MN 55904 260022777 501(C)(3) 420759 PROVIDE FUNDING TO OMC REGIONAL FOUNDATION FOR HEALTHCARE EDUCATION AND COMMUNITY PURPOSES. CENTER CITY HOUSING CORP 105 1/2 WEST FIRST STREET ROCHESTER MN 55902 363485584 501(C)(3) 5000 TO SUPPORT GENERAL OPERATIONS OF THEIR MISSION 2 0 PART I, LINE 2: MOST OF GRANT EXPENDITURES ARE PROVIDED TO OLMSTED MEDICAL CENTER REGIONAL FOUNDATION, A RELATED ORGANIZATION. OMC PROVIDES FUNDS TO THE FOUNDATION FOR HEALTHCARE EDUCATION AND COMMUNITY PURPOSES AS NEEDED. THERE ARE NUMEROUS WAYS TO MONITOR THE USE OF THE GRANT FUNDS. MANY OF THE EVENTS ARE OPEN TO THE PUBLIC AND EASILY VERIFIABLE. STAFF OFTEN ASSIST AS VOLUNTEERS. THE FILING ORGANZATION CONSIDERS REQUESTS FOR FUNDING TO ORGANIZATIONS IN THE COMMUNITY WITH PROGRAMS THAT ENHANCE ITS MISSION. THE FILING ORGANIZATION ONLY CONSIDERS REQUESTS FOR FUNDING TO ORGANIZATIONS IN THE COMMUNITY THAT ADDRESS COMMUNITY NEEDS IN THE HEALTH CARE AREA. NO ADDITIONAL MONITORING IS PERFORMED. X 1 1 X X X X X 0 0 0 0 0 0 0 0 0 KATHRYN LOMBARDO MD PRESIDENT 489953 0 78098 0 1000 0 25175 0 10090 0 604316 0 0 0 SRDAN BABOVIC MD TREASURER/SECRETARY 663109 0 0 0 400 0 25175 0 8313 0 696997 0 0 0 JOSEPH TRICARICO MD TREASURER/SECRETARY 557862 0 1123 0 300 0 25175 0 27398 0 611858 0 0 0 VIDHAN CHANDRA MD CLINIC TRUSTEE 846193 0 2527 0 0 0 25175 0 11370 0 885265 0 0 0 KIMBERLY MCKEON MD CLINIC TRUSTEE 378267 0 8588 0 500 0 25175 0 25297 0 437827 0 0 0 MARK WILBUR MD CLINIC TRUSTEE 325138 0 21762 0 0 0 25175 0 4950 0 377025 0 0 0 TIM WEIR CEO 529395 0 140693 0 0 0 25175 0 25817 0 721080 0 0 0 KEVIN HIGGINS CFO 308255 0 68796 0 11308 0 25175 0 22953 0 436487 0 0 0 RANDY HEMANN MD MEDICAL VICE PRESIDENT MED SERVICES 381371 0 38727 0 1000 0 25175 0 24997 0 471270 0 0 0 JAMES HOFFMANN MD MEDICAL VICE PRESIDENT SURG SERVICES 456242 0 38727 0 1000 0 25175 0 19274 0 540418 0 0 0 JEFFREY BECKENBAUGH MD PHYSICIAN 700233 0 0 0 0 0 25175 0 22907 0 748315 0 0 0 MATTHEW KIRSCH MD PHYSICIAN 919531 0 0 0 0 0 25175 0 12282 0 956988 0 0 0 DAVID LOWE MD PHYSICIAN 613587 0 4774 0 0 0 25175 0 28143 0 671679 0 0 0 JAY MYERS MD PHYSICIAN 607715 0 0 0 350 0 25175 0 19796 0 653036 0 0 0 MARCO SANTAMARIA MD PHYSICIAN 593560 0 0 0 1000 0 25175 0 20261 0 639996 0 0 0 PART I, LINE 1A DR. LOMBARDO, $1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD DR. BABOVIC,$1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD DR. TRICARICO,$1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD DR. CHANDRA,$1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD DR. MCKEON,$1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD DR. HEMANN, $1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD DR. HOFFMANN, $1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD DR. KIRSCH,$1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD DR. MYERS,$1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD DR. SANTAMARIA, $1, GROSS UP TAXES ON YEARS OF SERVICE GIFT CARD A CITY OF ROCHESTER MN 416005494 771902FY4 2010-07-07 20360000 NW CLINIC CONSTRUCTION 0 0 0 B CITY OF ROCHESTER MN 416005494 771902GU1 2013-04-01 17260000 WOMEN'S HEALTH PAVILLION CONSTRUCTION 0 0 0 A 4205000 20202546 1736608 1341608 407200 17968405 275180 2011 0 0 1 1 B 1130000 19290018 490226 286285 18513507 2014 0 0 1 1 A 0 0 0 0 0 0 1 B 0 0 0 0 0 0 1 A 0 0 0 1 0 0 0 0 0 B 0 1 0 0 0 0 0 0 0 A 1 B 1 DATE REBATE COMPUTATION PERFORMED ISSUER NAME: CITY OF ROCHESTER, MN DATE THE REBATE COMPUTATION WAS PERFORMED: 07/01/2015 SCHEDULE K, PART II, LINE 3 THE TOTAL PROCEEDS FOR EACH ISSUANCE DOESN'T MATCH THE ISSUE PRICES LISTED IN PART I, COLUMN E FOR THE FOLLOWING REASONS. 1. THE 2010 BONDS WERE ISSUED AT A DISCOUNT OF $157,424. 2. THE 2013 BONDS WERE ISSUED AT A PREMIUM OF $2,030,000. JUSTIN MCNEILUS STERLING STATE BANK BOARD MEMBER, SON OF MAJORITY OWNER OF STERLING STATE BANK 109667 BANKING RELATIONSHIP, OMC LOAN/INTEREST PAYMENTS 0 FORM 990, PART III, LINE 3 WITH THE RETIREMENT OF DR. BARBARA YAWN IN DECEMBER 2015, OUR RESEARCH ACTIVITIES HAVE BEEN WINDING DOWN. FORM 990, PART VI, SECTION A, LINE 1 THE CORPORATION SHALL HAVE, AND THE BOARD OF TRUSTEES HEREBY ESTABLISHES A BOARD OF GOVERNORS, WHICH SHALL HAVE AND EXERCISE THE AUTHORITY OF THE BOARD OF TRUSTEES IN THE DAY-TO-DAY MANAGEMENT OF THE MEDICAL BUSINESS AND AFFAIRS OF THE CORPORATION, EXCEPT FOR THOSE MATTERS FOR WHICH THE TRUSTEES RESERVES THE POWERS TO APPROVE UNDER THE BYLAWS. THE BOARD OF GOVERNORS SHALL AT ALL TIMES BE SUBJECT TO THE CONTROL AND DIRECTION OF THE BOARD OF TRUSTEES. THE BOARD OF GOVERNORS SHALL ESTABLISH A PLAN TO MONITOR, EVALUATE, AND MAINTAIN THE QUALITY OF PATIENT CARE AND SHALL REPORT AT LEAST ANNUALLY TO THE BOARD OF TRUSTEES. THE BOARD OF GOVERNORS SHALL ALSO REPORT AT LEAST ANNUALLY TO THE BOARD OF TRUSTEES CONCERNING CHARITY CARE, EDUCATION, AND RESEARCH ACTIVITIES. THE BOARD OF GOVERNORS SHALL CONSIST OF AT LEAST SEVEN (7) MEMBERS. FIVE (5) OF THE MEMBERS SHALL AT ALL TIMES BE THE SAME INDIVIDUALS WHO SERVE AS CLINIC TRUSTEES, AND SHALL HAVE TERMS EXPIRING AS OF THE SAME TIME AS THE EXPIRATION OF THEIR TERMS AS CLINIC TRUSTEES. THREE (3) OF THE MEMBERS SHALL BE THE CHIEF EXECUTIVE OFFICER OF THE CORPORATION AND TWO MEDICAL VICE PRESIDENTS, WHO SHALL SERVE AS EX-OFFICIO VOTING MEMBERS. IF THE PRESIDENT OF THE CORPORATION IS NOT A CLINIC TRUSTEE, HE OR SHE SHALL SERVE AS AN EX-OFFICIO VOTING MEMBER. FORM 990, PART VI, SECTION A, LINE 7A THE BOARD OF TRUSTEES SHALL CONSIST OF FIFTEEN (15) MEMBERS. FIVE (5) MEMBERS OF THE BOARD OF TRUSTEES SHALL BE CLINIC TRUSTEES, AND THE REMAINING TEN (10) MEMBERS SHALL BE PUBLIC TRUSTEES. IF THE PRESIDENT OF THE CORPORATION IS NOT AN ELECTED CLINIC TRUSTEE, HE OR SHE SHALL SERVE AS AN EX-OFFICIO VOTING MEMBER. CLINIC TRUSTEES SHALL BE ELECTED AND REMOVED AS FOLLOWS: A NOMINATING COMMITTEE WILL BE ESTABLISHED BY THE BOARD OF GOVERNORS IN ITS SOLE DISCRETION TO SOLICIT CANDIDATES FOR THE POSITION OF CLINIC TRUSTEE. A MEETING OF THE VOTING STAFF SHALL BE HELD ON AN ANNUAL BASIS FOR THE PURPOSE OF ELECTING QUALIFIED SUCCESSORS FOR THOSE CLINIC TRUSTEES WHOSE TERMS HAVE EXPIRED OR ARE DUE TO EXPIRE WITHIN SIX (6) MONTHS AFTER THE DATE OF THE MEETING. AT SUCH MEETING, THE VOTING STAFF SHALL VOTE FOR THAT NUMBER OF CLINIC TRUSTEES WHOSE TERMS ARE EXPIRING FROM THE SLATE OF CANDIDATES PROVIDED BY THE NOMINATING COMMITTEE AND THOSE OTHERWISE QUALIFIED VOTING STAFF MEMBERS WHO MAY HAVE ANNOUNCED THEIR CANDIDACY. PUBLIC TRUSTEES SHALL BE ELECTED AND REMOVED AS FOLLOWS: THE TEN (10) PUBLIC TRUSTEES SHALL BE ELECTED AS FOLLOWS: (I) A NOMINATING COMMITTEE OF THE BOARD OF TRUSTEES CONSISTING OF ONE (1) CLINIC TRUSTEE, AND TWO (2) PUBLIC TRUSTEES SHALL SELECT A CANDIDATE OR SLATE OF CANDIDATES; AND (II) THOSE CURRENTLY SERVING PUBLIC TRUSTEES SHALL ELECT, BY A PLURALITY VOTE, THE PUBLIC TRUSTEES FROM THE CANDIDATE OR SLATE OF CANDIDATES NOMINATED BY THE NOMINATING COMMITTEE. FORM 990, PART VI, SECTION B, LINE 11B THE FORM 990 IS PREPARED BY AN EXTERNAL ACCOUNTANT. A DRAFT OF THE FORM 990 IS REVIEWED IN DETAIL BY THE FINANCIAL SERVICES MANAGER, CONTROLLER AND CFO. ANY NECESSARY CORRECTIONS AND ADJUSTMENTS ARE MADE. THE FORM 990 IS REVIEWED BY THE CEO AND CFO AND PRESENTED TO THE COMPENSATION COMMITTEE. THE FINAL FORM 990 IS MADE AVAILABLE TO THE BOARD MEMBERS FOR THEIR REVIEW PRIOR TO FILING WITH THE IRS FORM 990, PART VI, SECTION B, LINE 12C EACH CLINIC AND PUBLIC TRUSTEE AND PRINCIPAL OFFICER OF ("COVERED MEMBERS") OF THE CORPORATION ANNUALLY SIGNS A STATEMENT WHICH AFFIRMS THAT EACH PERSON HAS RECEIVED AND UNDERSTANDS THE CONFLICTS OF INTEREST POLICY, HAS AGREED TO COMPLY WITH THE POLICY, AND UNDERSTANDS THAT THE CORPORATION IS A CHARITABLE ORGANIZATION AND THAT IN ORDER TO MAINTAIN ITS FEDERAL TAX EXEMPTION IT MUST ENGAGE PRIMARILY IN ACTIVITIES WHICH ACCOMPLISH ONE OR MORE OF ITS TAX-EXEMPT PURPOSES. UNLESS A PREVIOUSLY DISCLOSED AND DOCUMENTED CONFLICT OF INTEREST IS KNOWN TO THE BOARD, ALL CONFLICTS OF INTEREST ARE DISCLOSED TO THE BOARD BY THE COVERED MEMBER WITH THE CONFLICT(S). A COVERED MEMBER HAS DISCLOSED A CONFLICT IF HE OR SHE PROMPTLY PROVIDES A DESCRIPTION OF THE MATERIAL FACTS COMPRISING THE CONFLICT OF INTEREST TO THE BOARD. IF A COVERED MEMBER HAS A CONFLICT OF INTEREST ON ANY MATTER CONSIDERED BY THE BOARD, SUCH MATTER IS APPROVED BY THE BOARD IN A MANNER THAT COMPLIES WITH THE REQUIREMENTS OF THE THIRD RESTATED BYLAWS OF OLMSTED MEDICAL CENTER AND MINNESOTA STATUE SECTION 317A.255. SUCH LAW CURRENTLY STATES THAT A MATTER INVOLVING A CONFLICT OF INTEREST WILL NOT BE VOID OR VOIDABLE IF APPROVED BY ONE OF THE FOLLOWING PROCEDURES: THE CONTRACT OR TRANSACTION WAS, AND THE PERSON ASSERTING THE VALIDITY OF THE CONTRACT OR TRANSACTION HAS THE BURDEN OF ESTABLISHING THAT THE CONTRACT OR TRANSACTION WAS, FAIR AND REASONABLE AS TO THE CORPORATION WHEN IT WAS AUTHORIZED, APPROVED, OR RATIFIED; THE MATERIAL FACTS AS TO THE CONTRACT OR TRANSACTION AND AS TO THE TRUSTEE'S INTEREST ARE FULLY DISCLOSED OR KNOWN TO THE MEMBERS AND THE CONTRACT OR TRANSACTION IS APPROVED IN GOOD FAITH BY TWO-THIRDS OF THE MEMBERS ENTITLED TO VOTE, NOT COUNTING ANY VOTE THAT THE INTERESTED TRUSTEE MIGHT OTHERWISE HAVE, OR THE UNANIMOUS AFFIRMATIVE VOTE OF ALL MEMBERS, WHETHER OR NOT ENTITLED TO VOTE; OR THE MATERIAL FACTS AS TO THE CONTRACT OR TRANSACTION AND AS TO THE TRUSTEE'S INTEREST ARE FULLY DISCLOSED OR KNOWN TO THE BOARD OR A COMMITTEE, AND THE BOARD OR COMMITTEE AUTHORIZES, APPROVES, OR RATIFIES THE CONTRACT OR TRANSACTION IN GOOD FAITH BY A MAJORITY OF THE BOARD OR COMMITTEE, NOT COUNTING ANY VOTE THAT THE INTERESTED TRUSTEE MIGHT OTHERWISE HAVE, AND NOT COUNTING THE TRUSTEE IN DETERMINING THE PRESENCE OF A QUORUM. FORM 990, PART VI, SECTION B, LINE 15A IN ORDER TO ENSURE THAT ALL OLMSTED MEDICAL CENTER (OMC) EXECUTIVE COMPENSATION DECISIONS ARE COMPETITIVE, EQUITABLE, UNIFORMLY ADMINISTERED, AND CONSISTENT WITH MARKET PRACTICES, OMC FOLLOWS RECOMMENDED BEST PRACTICES. THE GOALS OF EXECUTIVE COMPENSATION ARE TO ATTRACT AND RETAIN HIGHLY QUALIFIED PERSONNEL, TO MAINTAIN COMPENSATION LEVELS COMMENSURATE WITH THE SCOPE OF RESPONSIBILITIES FOR EACH POSITION, AND TO REWARD OUTSTANDING PERFORMANCE. OMC WILL SEEK MANAGEMENT TALENT BY CONDUCTING NATIONAL SEARCHES FOR QUALIFIED APPLICANTS FOR ANY VACANCIES AT THE CEO POSITION AS NECESSARY. THE SAME PHILOSOPHY IS APPLICABLE TO THE POSITION OF OMC PRESIDENT. OMC ENGAGES AN EXTERNAL CONSULTANT WHO ANNUALLY COMPILES A PEER GROUP COMPENSATION ANALYSIS AND ON A TWO YEAR BASIS COMPILES A PEER GROUP COMPENSATION AND BENEFITS ANALYSIS. PEER GROUPS FOR EXECUTIVE COMPENSATION, WHICH INCLUDES BASE SALARIES, INCENTIVE AND BENEFITS, WILL BE PROVIDED FOR HEALTH DELIVERY SYSTEMS WITH A MINIMUM OF A HOSPITAL AND AN EMPLOYED PHYSICIAN NETWORK AND NET REVENUES ROUGHLY SIMILAR TO THE REVENUES OF OLMSTED MEDICAL CENTER. MOST RECENTLY A COMPENSATION PEER REVIEW STUDY WAS COMPLETED FOR THE CEO AND PRESIDENT AND PRESENTED TO THE BOARD EXECUTIVE COMPENSATION COMMITTEE. THE BOARD OF GOVERNORS RECEIVES AN EXECUTIVE SUMMARY. THE EXECUTIVE COMPENSATION COMMITTEE RECEIVES A SUMMARY OF EVERYONE'S COMPENSATION TO ENSURE IT IS IN ALIGNMENT WITH THE SAME COMPENSATION METHODOLOGY AND AGREED UPON METHODOLOGY OF THE EXECUTIVE COMPENSATION SYSTEM OF OMC. THE EXECUTIVE COMPENSATION COMMITTEE WILL SET THE COMPENSATION OF THE PRESIDENT AND CEO AND MINUTES ARE KEPT OF THESE DISCUSSIONS. THE BOARD OF TRUSTEES, ACTING THROUGH THE BOARD OF TRUSTEES COMPENSATION COMMITTEE, MUST APPROVE THE EXECUTIVE COMPENSATION POLICY AND PROCESS OF DETERMINING EXECUTIVE COMPENSATION AND BENEFITS. THE SAME PHILOSOPHY DESCRIBED ABOVE IS APPLICABLE FOR ALL OTHER OFFICER AND KEY EMPLOYEE POSITIONS, HOWEVER, THE COMPENSATION AMOUNT IS REVIEWED AND APPROVED BY THE PRESIDENT AND CEO. IN ADDITION, THE PHYSICIAN SALARIES ARE CALCULATED ANNUALLY, USING REGIONAL PHYSICIAN SALARY COMPARISON GUIDES FACTORING IN PRODUCTIVITY AND QUALITY MEASURES, AND REVIEWED ON AN ANNUAL BASIS FOR MARKET REASONABLENESS BY AN INDEPENDANT CONSULTING FIRM. THE PHYSICIANS RECEIVE NO COMPENSATION AS ATTENDING BOARD MEMBERS. THESE DISCUSSIONS ARE NOTED IN THE MINUTES OF THE BOARD OF TRUSTEES COMPENSATION COMMITTEE ANNUAL MEETING. THE BOARD OF TRUSTEES COMPENSATION COMMITTEE REPORTS TO THE FULL BOARD OF TRUSTEES ON AN ANNUAL BASIS THE COMPLETION OF SUCH DUTIES AND ARE ALSO NOTED IN THE MINUTES. FORM 990, PART VI, SECTION C, LINE 19 THE GOVERNING DOCUMENTS AND CONFLICT OF INTEREST STATEMENTS ARE NOT MADE AVAILABLE TO THE PUBLIC. THE ANNUAL FORM 990 & ATTACHED AUDITED FINANCIAL STATEMENT REPORT IS AVAILABLE IN ACCORDANCE WITH THE PUBLIC INSPECTION OF THE RETURN REQUIREMENTS. OMC RETAIL SERVICES LLC 210 9TH STREET SE ROCHESTER MN 55904 460960716 PHARMACY MN 2034557 1095158 OLMSTED MEDICAL CENTER OLMSTED MEDICAL CENTER REGIONAL FOUNDATION 210 9TH STREET SE ROCHESTER MN 55904 260022777 HEALTHCARE EDUCATION AND COMMUNITY PURPOSES MN 501(C)(3) LINE 12A, I OLMSTED MEDICAL CENTER 1 OLMSTED MEDICAL CENTER LASIK LLC 5715 W OLD SHAKOPEE ROAD STE 150 BLOOMINGTON MN 55437 822006285 EYE CARE MN OLMSTED MEDICAL CENTER RELATED -203552 216334 0 0 0.51000 0 1 1 0 0 0 0 0 0 0 0 1 1 1 1 1 1 0 0 OMC REGIONAL FOUNDATION B 420758 GAAP OMC REGIONAL FOUNDATION C 382503 GAAP OMC REGIONAL FOUNDATION O 377035 GAAP SCHEDULE R, PART I, COLUMN D THE $2,034,557 REPRESENTS OMC RETAIL SERVICES, LLC'S TOTAL INCOME INCLUDED IN PART VIII, LINE 12 FOR THE YEAR ENDED DECEMBER 31, 2016. WHEN TOTAL INCOME IS NETTED AGAINST TOTAL EXPENSES, OMC RETAIL SERVICES, LLC RESULTED IN A NET GAIN OF $188,188 FOR THE YEAR ENDED DECEMBER 31, 2016.