2016-11-07T12:56:34-06:00 2015-12-31 450250958 Eide Bailly LLP 800 Nicollet Mall Ste 1300 Minneapolis MN 554027033 990 2015-01-01 410726171 International Falls Memorial Hospital Association INTE 2182835401 1400 Highway 71 International Falls MN 56649 Melissa Marcotte CFO 2182835401 2016-11-07 1 Kim Hunwardsen CPA P00484560 6122536500 2016-11-07 2015 2017-02-10 21:41:12Z Rainy Lake Medical Center Bonnie Erickson 1400 Highway 71 International Falls MN 56649 25581777 0 X www.rainylakemedical.com X 1945 MN To promote and provide health care and wellness services in our region that exceed expectations. 7 6 211 39 2200 -299 924683 287561 22525928 24181150 -2394920 68785 356574 56099 21412265 24593595 14020 17166 0 0 9743493 11236186 0 0 6981 15022400 13336555 24779913 24589907 -3367648 3688 17848517 22730658 3707524 8532384 14140993 14198274 X The Board-adopted mission is to "Provide accessible quality healthcare to our communities" using values of Respect, Integrity, Compassion and Excellence (RICE) in support of the vision comprised of the following elements: provider of choice for our communities, patient-centered culture, expanding services, regional specialty relationships and preferred healthcare employer. 1 0 19911402 17166 24178950 Provided health care services to the community of International Falls. In addition to providing direct patient care and in furtherance of its charitable purpose, Rainy Lake Medical Center (RLMC) provides a wide variety of benefits to the community including offering various community based service programs, cash contributions to non-profit agencies, the donation of space for use by community groups, and staff time of mentoring/job shadowing. Additionally, a number of health related education programs are provided for the benefit of the community, including health enhancements and wellness, classes on specific conditions, and programs designed to improve the general standards of the health of the community. RLMC also actively promotes its community care program, which provides free or reduced cost healthcare to patients who are unable to pay fully for services received. 19911402 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 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 52 0 1 211 1 1 1 0 0 0 0 0 0 0 0 0 X 7 6 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 MN X Melissa Marcotte 2182835431 1400 Highway 71 International Falls MN 56649 Susan Congrave Chair 4.00 0.00 X X 0 0 21 Jon Talsness MD Vice Chair 4.00 0.00 X X 0 0 11 Brian Briggs Secretary 4.00 2.00 X X 0 0 32 Don Billig Treasurer 4.00 0.00 X X 0 0 11 Robert Anderson Member 4.00 0.00 X 0 0 11 Bonnie Erickson Member 4.00 0.00 X 0 0 11 Jay Knaak MD Member/Physician/Chief of Staff 40.00 0.00 X 283567 0 18242 Harold Odegaard CEO 39.00 1.00 X 340047 0 27790 Melissa Marcotte CFO 39.00 1.00 X 129344 0 2492 Heather Cook General Surgeon 40.00 0.00 X 362084 0 9531 Ralf Lukner Physician 40.00 0.00 X 262527 0 3664 Bradley Reiners Physician Assistant 40.00 0.00 X 140920 0 13526 Nancy Burmeister Nurse Practitioner 40.00 0.00 X 148882 0 9432 Katie Chezick Pharmacist 40.00 0.00 X 118808 0 9081 1786179 0 93855 10 0 1 0 Kraus-Anderson Construction Co 206 Beltrami Ave NW Bemidji MN 56601 Construction Contractor 2584394 Acute Care Inc 1609 N Ankeny Blvd Suite 200 Ankeny IA 50023 Physician Fees 1485726 Central MN Diagnostic Inc 150 10th St NW PO Box 158 Milaca MN 56353 CT, Ultrasound, Mammography, MRI Lease 816594 CPSI PO Box 850309 Mobile AL 36685 Computer System Maintenance and Implemen 741256 RC Shefland Anesthesia LTD 27040 Cty Road 9 Bemidji MN 56601 Anesthesiologist Fees 458875 19 25000 195190 67371 287561 Patient Service Revenue 621990 23839543 23839543 Equity in Earnings of JV 621990 250932 250932 90675 88475 2200 24181150 64688 64688 56099 0 56099 56099 56099 985208 7071 985402 2780 -194 4291 4097 4097 24593595 24178950 2200 124884 X 17166 17166 807235 294059 513176 8617829 6664566 1947496 5767 140347 111070 29177 100 1032844 819189 212934 721 637931 472426 165112 393 72171 72171 44943 44943 5700829 4935973 764856 92339 92339 462782 185168 277614 296549 296549 20905 17587 3318 127449 72494 54955 775524 774711 813 100297 100297 Medical Supplies 3600857 3600798 59 Bad Debts 780755 780755 Repairs and Maintenance 586176 246374 339802 MN Care Tax 211985 211985 462994 310235 152759 24589907 19911402 4671524 6981 10600379 9346927 2230170 2602182 340718 420385 127063 249893 17898735 8914512 3430722 8984223 499465 470010 620000 592851 0 64187 17848517 22730658 2579857 3603432 3980752 1127667 948200 3707524 8532384 X 14007209 14127307 133784 70967 14140993 14198274 17848517 22730658 X 3688 -44053 97646 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 87371 87371 7173271 2902080 4271191 650647 167944 482703 7598738 5844488 1754250 2388708 2388708 8984223 Asset Retirement Obligation 40600 Estimated Third-Party Payor Settlements 907600 948200 X 23841642 -44053 -703609 -747662 24589304 4291 4291 24593595 23804861 -4291 -4291 23809152 780755 780755 24589907 Part X, Line 2: The Center is organized as a Minnesota 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). The Center is annually required to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. The Center 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 consolidated financial statements. The Center 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 revenue for financial statement -780,755. Change in recognized pension costs 77,146. Part XI, Line 4b - Other Adjustments: Gain on disposal of Equipment reported in Expenses for Financial Statement 4,291. Part XII, Line 2d - Other Adjustments: Gain on disposal of Equipment reported in Expenses for Financial Statement -4,291. Part XII, Line 4b - Other Adjustments: Provision for Bad Debts included in revenue for financial statement 780,755. 1 1 X 1 X 1 X 1 1 0 1 1 75000 75000 0.00320 1241093 613376 627717 0.02640 1316093 613376 702717 0.02960 9766 9766 0.00040 40481 40481 0.00170 6839820 3432344 3407476 0.14310 4810 4810 0.00020 6894877 3432344 3462533 0.14540 8210970 4045720 4165250 0.17500 206 206 0.00000 32714 32714 0.00140 32920 32920 0.00140 1 780755 0 8130604 8166525 -35921 X 1 1 1 1 Rainy Lake Medical Center 1400 Highway 71 International Falls MN 56649 www.rainylakemedical.com 365894 X X X X Rural Health Clinic/Specialty Provider-Based Clinic Rainy Lake Medical Center 1 0 0 1 X X X X X X X X X 13 1 0 1 1 X See Part V, Section C X X 1 13 1 http://www.rainylakemedical.com/patient-resources/ 0 0 1 X 200.000000000000 300.000000000000 X X X X 1 1 X X 1 X http://rainylakemedical.com/patient-resources/ X X X X X X 1 X 0 X X X X 1 X 0 0 Rainy Lake Medical Center Part V, Section B, Line 5: RLMC worked with the Koochiching County Health Department to complete its Community Health Needs Assessment. A representative of RLMC and the Director of the Koochiching County Health Department met with 34 key community stakeholders representing a broad section of the community including local service providers, members of the religious community, business owners, and citizens from International Falls and the greater county. The agencies represented included those serving the medically underserved and low-income populations of International Falls and Koochiching County. RLMC also conducted key stakeholder meetings throughout its service area, interviewing groups of individuals identified as information community leaders and interested citizenry. Rainy Lake Medical Center Part V, Section B, Line 6b: Koochiching County Health Department Rainy Lake Medical Center Part V, Section B, Line 7d: Hospital Website:http://www.rainylakemedical.com/patient-resources/ Rainy Lake Medical Center Part V, Section B, Line 11: Access to care for the community has been increased with the opening of the rural health clinic in February 2014 with three family-practice providers. An internist has been hired, as well as a surgeon, orthopedic PA and a female OB-GYN. This has allowed expanded specialty services to be offered locally, reducing the need for residents to travel. Both the primary care clinic and specialty clinic were relocated and expanded in 2015 in an effort to enhance patient care. Contracts with specialists from outside the area have allowed for more services to be offered on an outreach basis to the community in an effort to reduce the need to travel 100+ miles for certain services. Telemedicine services have also been installed in the ER; a benefit of which is a lesser need to transfer patients, meaning they can remain closer to home. The following are community needs that were identified but not addressed by RLMC: A) The high cost of healthcare and lack of health insurance (outside of RLMC's mission)B) Lack of mental health practitioners (outside of RLMC's mission)C) Transportation (outside of RLMC's mission)D) Access to health-related services such as meal programs, home care and Alzheimer support programs (duplication of effort with local county health department)E) Smoking rates among teens (duplication of effort with local county health department)F) Overuse of alcohol (outside of RLMC's mission)G) Drug abuse (outside of RLMC's mission)H) The impact of geographic isolation on mental health and the desire to be healthy (outside of RLMC's mission)I) Access to local mental health providers as well as regional treatment facilities (limited resources). Rainy Lake Medical Center Part V, Section B, Line 16i: Work closely with County services and community senior advocate. Rainy Lake Medical Center Part V, Section B, Line 22d: We follow the Minnesota Attorney General agreement for the most favorable non-governmental third party payor that provided the most revenue to the provider during the previous year. Part I, Line 6a: RLMC makes its community benefit data available to the public by including it in their audited financial statements and through the Minnesota Hospital Association Annual Report. Part I, Line 7: Charity care expense was converted to cost on line 7a based on an overallcost-to-charge ratio addressing all patient segments. Community health improvement services, line 7e, Health Professions Education, line 7f and Cash and in-kind contributions, line 7i, are reported based on actual expense amounts recorded in the general ledger. The cost for subsidized health services reported on line 7g was determined using the Medicare Cost Report. Part I, Ln 7 Col(f): The bad debt expense included on Form 990, Part IX, Line 25, Column (A), but subtracted for purposes of calculating the percentage in this column, is $780,755. Part II, Community Building Activities: RLMC invests resources towards emergency preparedness, particularly a "decontamination team" that conducts drills throughout the year. The team is skilled in setting up a portable decontamination tent, dressing in an appropriate level of PPE and practicing decontaminating patients. RLMC also supports efforts to have the safe removal and treatment of garbage and waste products. Part III, Line 2: For receivables associated with self-pay accounts, a provision for bad debts is recorded in the period of service based on past experience. Part III, Line 4: The footnote that describes bad debt expense is found on page 9 and 10 of the attached audit report. Part III, Line 8: RLMC is a critical access hospital. There was a shortfall for 2015due to sequestration. Even though Medicare was at a loss, the Hospitalprovides services to these patients because access to healthcare andindividual's health is important to the Hospital. Therefore, the Medicareshortfall is considered a community benefit.Medicare allowable costs were obtained from the 2015 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: RLMC will not refer an account to a third party debt collection agency unless RLMC has given the patient reasonable opportunity to submit a community care application if the facts and circumstances suggest the patient may be eligible for community care, including for example, if the patient is uninsured or is on Minnesota Care, Medical Assistance, or other relief based on need. If a patient submits an application for community care after an account has been referred for collection activity, RLMC will suspend all collection activity until the patient's application has been processed and the patient has been notified of the decision. Part VI, Line 2: In addition to the Community Health Needs Assessment completed every 3 years, community forums are held as well as health fairs. Both give community members the chance to provide feedback on their health care needs. Part VI, Line 3: RLMC has staff that are Minnesota Community Application Agent (MNCAA) certified, which enables us to assist our patients with the Minnesota Care application process. RLMC communicates to patients our Community Care Program (Charity Care) in the following manner:1. Patients are given a Community Care brochure with a Minnesota Care insert at time of service.2. Statements and letters sent to patients offering Community Care.3. Phone calls are made to patients to discuss and offer Community Care and assistance with the Minnesota Care application process.4. All employees are educated annually about our Community Care program and three employees are educated to complete and submit Minnesota Care applications to the state for processing.5. Upon request, Community Care packets with applications for both our Community Care Program and the Minnesota Care Insurance are sent or given to patients.6. The RLMC website displays payment options where our Community Care Program is discussed. 7. One of the requirements for RLMC Community Care is a denial from the county in regards to financial assistance unless they are enrolled in the MN Senior Program. We offer to assist them with their Medical Assistance application.8. Signage communicating the Program to patients is displayed in many areas of the patient care area of the facility.9. Financial Counselors attend health fairs and other events in the community to promote the Program and answer any questions. Part VI, Line 4: RLMC's primary service area (PSA) is Koochiching County, Minnesota. The county is large and sparsely populated (less than 4.3 persons per square mile) with most of the population centered in International Falls. Other nearby communities includes Littlefork, Big Falls, Ranier, Birchdale and Loman. The PSA has an estimated population of less than 13,000, a decline of 3.5% since 2010. This population decline is projected to continue while the number of persons over 65 is expected to rise even more than the current 22.4% (up from 19.6% in 2010). The median household income is $41,725 (compared to $60,828 in Minnesota) and 15.3% of the PSA is living in poverty. Part VI, Line 5: Representation on the Board of Trustees is 100% local as all trustees are active and involved members of the local community. RLMC has in place an open medical staff model. The organization is investing over $6 million in expansion and renovation of the current facility in order to provide better patient care and more local care, eliminating the need to travel 100+ miles to receive care. The organization has also expanded the breadth of specialty services offered locally on an outreach basis.Emergency services are offered 24/7, 365 days a year to all needing care. 1 Tuition Reimbursement 5 17166 Part I, Line 2: In an effort to encourage personal and professional growth and career development, RLMC provides tuition reimbursement for employer-approved courses of study. Non-contract RLMC employees who meet the requirements of this section are eligible to participate in this program. Employees covered by collective bargaining agreements (CBA) are eligible to participate in the program as defined in their CBA. The course of study or class must be related to the employee's current position or a future position within RLMC for which the employee has a reasonable expectation of advancement. X X 1 0 0 0 0 0 0 0 0 Jay Knaak MD Member/Physician/Chief of Staff 279802 0 3765 0 0 0 4716 0 14870 0 303153 0 0 0 Harold Odegaard CEO 243342 0 69079 0 27626 0 1984 0 28773 0 370804 0 0 0 Heather Cook General Surgeon 357706 0 0 0 4378 0 0 0 10875 0 372959 0 0 0 Ralf Lukner Physician 171385 0 50000 0 41142 0 0 0 5008 0 267535 0 0 0 Bradley Reiners Physician Assistant 105920 0 35000 0 0 0 0 0 14870 0 155790 0 0 0 Nancy Burmeister Nurse Practitioner 113882 0 35000 0 0 0 2912 0 7813 0 159607 0 0 0 Part I, Line 4a Dr. Ralf Lukner voluntarily resigned his employment with RLMC. As a result of his resignation on the separation date, his employment terminated and his clinical privileges and Medical Staff Membership at RLMC also automatically terminated. RLMC agreed to pay Dr. Lukner ninety days' severance pay in the amount of $62,500 less applicable payroll taxes, deductions and withholdings. Specifically in consideration of the separation pay and benefits, Dr. Lukner, for himself and anyone who had or obtains legal rights or claims through him, agree to release and forever discharge RLMC of and from any and all manner of claims, demands, actions, causes of action, administrative claims, liability, damages, claims for punitive or liquidating damages, claims for attorney's fees, costs and disbursements, individual or class action claims or demands of any kind whatsoever. Form 990, Part III, line 2 Our on-campus Rural Health Clinic moved into a newly renovated larger space in February 2015, along with opening a Specialty Clinic. In 2015 RLMC hired a general surgeon, an internal medicine physician and an OB-GYN. RLMC began billing for orthopedic procedures performed at the facility in March 2015 and also begin performing Sleep Studies in the 2nd quarter of 2015. A permanent onsite MRI machine was placed into service in February 2015. Form 990, Part VI, Section A, line 1 The Executive Committee will consist of the Chair, the Vice Chair, the Secretary and the Treasurer elected by the Board of Trustees at its first meeting after election. The Chair shall serve as chair of the Executive Committee. The Executive Committee will have the power to transact all regular business of the Medical Center, as authorized by the full Board, during the interim between meetings of the Board of Trustees, provided any action taken will not conflict with the policies and expressed wishes of the Board of Trustees, and that it will refer all matters of major importance to the Board of Trustees. Form 990, Part VI, Section B, line 11 The Form 990 is prepared by the same accounting firm which prepares the audit and then it is reviewed by the CFO and CEO. In addition, a copy of the return is provided to the Board of Trustees for review before it is filed with the IRS. Form 990, Part VI, Section B, line 12c The Organization's officers, directors, and key employees are reminded of the conflict of interest policy and must sign a conflict of interest statement annually. Disclosures of conflicts for the Board of Trustee members are distributed at every board meeting. When a conflict of interest exists, the interested trustee may be present for discussion to answer questions, but may not advocate for the action to be taken and may be asked to leave the room while a vote is taken. Form 990, Part VI, Section B, line 15 The compensation for the CEO is set by the Board of Directors and is documented in the board minutes and CEO's written contract. To set the CEO's compensation, RLMC uses three external reports for determining and setting salary ranges. These include the Minnesota Hospital Association Salary Survey Report, the "HHRAM" (Healthcare Human Resources Association of Minnesota) Salary Survey Book, and the Medical Group Management Associate (MGMA) Physician Compensation Report Survey. The compensation for other officers and key employees is reviewed and approved by the CEO. HHRAM Salary Survey is used in determining these salaries as well as longevity and performance evaluations. These decisions are documented in the employee's personnel file. All reviews are performed as least annually. Form 990, Part VI, Section C, line 19 The governing documents, financial statements, and conflict of interest policy are not open to the public. Form 990, Part IX, line 11g Contracted Services: Program service expenses 798,812. Management and general expenses 19,987. Fundraising expenses 0. Total expenses 818,799. Purchased Services: Program service expenses 624,002. Management and general expenses 642,109. Fundraising expenses 0. Total expenses 1,266,111. Physician Fees: Program service expenses 2,348,130. Management and general expenses 0. Fundraising expenses 0. Total expenses 2,348,130. Other Fees: Program service expenses 181,096. Management and general expenses 68,108. Fundraising expenses 0. Total expenses 249,204. Equipment Rent: Program service expenses 983,933. Management and general expenses 34,652. Fundraising expenses 0. Total expenses 1,018,585. Form 990, Part XI, line 9: Change in recognized pension costs 77,146. Remove Change in net assets of Foundation 20,500. Falls Memorial Hospital Foundation Inc 1400 Highway 71 International Falls MN 56649 204585807 Support MN 501(c)(3) Line 11a, I Rainy Lake Medical Center 1 0 0 1 0 0 0 0 0 0 0 0 1 0 1 1 0 1 0 0