2016-11-03T13:54:29-05:00 2015-12-31 990 2015-01-01 810231785 ST JAMES HEALTHCARE STJA 4067232500 400 SOUTH CLARK STREET BUTTE MT 59701 CHARLES WRIGHT CEO 4067232500 2016-11-03 2015 2017-02-10 21:41:12Z CHARLES WRIGHT 400 SOUTH CLARK STREET BUTTE MT 59701 122003854 0 0928 X WWW.STJAMESHEALTHCARE.ORG X 1976 MT WE REVEAL AND FOSTER GOD'S HEALING LOVE BY IMPROVING THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE, ESPECIALLY THOSE WHO ARE POOR AND VULNERABLE. 15 14 687 32 1389767 378941 3134519 1394931 119502823 118127746 243464 445756 1383304 1468370 124264110 121436803 225046 186948 0 0 47202958 40164771 0 0 0 63560847 63164939 110988851 103516658 13275259 17920145 76508129 91464202 11075457 7906336 65432672 83557866 X WE REVEAL AND FOSTER GOD'S HEALING LOVE BY IMPROVING THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE, ESPECIALLY THOSE WHO ARE POOR AND VULNERABLE. 0 0 85470624 186948 118567055 ST. JAMES HEALTHCARE HAS PLAYED AN IMPORTANT ROLE IN THE HISTORY OF BUTTE. FOUNDED IN 1881 BY THE SISTERS OF CHARITY OF LEAVENWORTH, ST. JAMES HAS BEEN KNOWN FOR GENERATIONS FOR ITS MISSION OF COMPASSIONATE CARE AND SERVICE TO THE POOR. FOR MORE THAN 130 YEARS, ST. JAMES HAS PROVIDED CARE FOR THE SICK AND SERVED THE POOR AND THE VULNERABLE. ST. JAMES HEALTHCARE IS ONE OF MONTANA'S LARGEST COMPREHENSIVE HOSPITALS, SERVING THE HEALTH CARE NEEDS OF PEOPLE IN A SEVEN-COUNTY REGION.MISSIONWE REVEAL AND FOSTER GOD'S HEALING LOVE BY IMPROVING THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE, ESPECIALLY THOSE WHO ARE POOR AND VULNERABLE.VISIONINSPIRED BY OUR FAITH,WE WILL BE DISTINGUISHED AS THE PREMIER PERSON-CENTERED HEALTH SYSTEM AND TRUSTED PARTNER.WE WILL ENGAGE PATIENTS IN THEIR CARE DECISIONS AND SHARE ACCOUNTABILITY WITH CLINICIANS AND OTHER STAKEHOLDERS TO COORDINATE CARE ACROSS ALL SETTINGS AND IMPROVE ACCESS, QUALITY, HEALTH OUTCOMES AND AFFORDABILITY.WE WILL GROW AS COMMUNITY-BASED HEALTH NETWORKS IN PARTNERSHIP WITH OTHERS WHO SHARE OUR VISION AND VALUES AND ALIGN WITH US TO BE AN ESSENTIAL PROVIDER TO THOSE WE SERVE.VALUES CARING SPIRIT - WE HONOR THE SACRED DIGNITY OF EACH PERSON. EXCELLENCE - WE SET AND SURPASS HIGH STANDARDS. GOOD HUMOR - WE CREATE JOYFUL AND WELCOMING ENVIRONMENTS. INTEGRITY - WE DO THE RIGHT THING WITH OPENNESS AND PRIDE. SAFETY - WE DELIVER CARE THAT SEEKS TO ELIMINATE ALL HARM FOR PATIENTS AND ASSOCIATES. STEWARDSHIP - WE ARE ACCOUNTABLE FOR THE RESOURCES ENTRUSTED TO US.ST. JAMES HEALTHCARE OFFERS A WIDE RANGE OF SERVICES ACROSS MANY DEPARTMENTS:CANCER TREATMENT, DIABETES EDUCATION, EMERGENCY/LEVEL III TRAUMA CENTER, HEART HEALTH, INTENSIVE CARE UNIT, IMAGING SERVICES, JOINT SURGERY & REPLACEMENT CENTER, LAB SERVICES, OCCUPATIONAL THERAPY, PAIN CENTER, PHYSICAL THERAPY, LABOR DELIVERY NURSERY, AND SPORTS MEDICINE.A NEW WOUND CARE CENTER WAS OPENED IN NOVEMBER OF 2015 TO SERVE THE COMMUNITY.ST. JAMES HEALTHCARE STATISTICAL DATA FOR 2015 INCLUDED THE FOLLOWING RESULTS:TOTAL ADMISSIONS - 3,231TOTAL OUTPATIENT, CLINIC, AND HOME HEALTH VISITS - 98,716TOTAL EMERGENCY DEPARTMENT VISITS - 17,264BIRTHS - 314TOTAL SURGERIES - 2,137TOTAL LABORATORY TESTS - 207,596 85470624 1 1 0 1 0 0 0 0 0 0 1 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 0 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 1 103 0 1 687 1 1 1 0 0 0 0 0 0 0 0 0 X 15 14 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 0 1 1 1 X KYLE ENGMAN 3038135543 500 ELDORADO BLVD SUITE 4200 BROOMFIELD CO 80021 FRANCENE ARCHIBALD DIRECTOR 1.00 0.00 X 0 0 0 MARILYN CAMERON DIRECTOR 1.00 0.00 X 0 0 0 TAMMY COX SECRETARY-TREASURER 2.00 0.00 X X 0 0 0 SISTER MARGARET HOGAN DIRECTOR 1.00 0.00 X 0 0 0 BRETT KAMRUD DIRECTOR 1.00 0.00 X 0 0 0 MICHAEL LEWIS DIRECTOR 1.00 0.00 X 0 0 0 MARKO LUCICH DIRECTOR 1.00 0.00 X 0 0 0 BERNARD MCCARTHY CHAIRPERSON 2.00 0.00 X X 0 0 0 THERESE MCCLAFFERTY DIRECTOR 1.00 0.00 X 0 0 0 BILL MCGLADDERY DIRECTOR 1.00 0.00 X 0 0 0 TIM MCHUGH DIRECTOR 1.00 0.00 X 0 0 0 SISTER MARY JO QUINN DIRECTOR 1.00 0.00 X 0 0 0 RITA SPEAR VICE CHAIRPERSON 2.00 0.00 X X 0 0 0 CHARLES WRIGHT PRESIDENT & CEO 50.00 0.00 X X 0 387788 195291 MARK ZORA DIRECTOR 1.00 0.00 X 0 0 0 JAMES DOYLE VP & CFO 1/1-7/13 50.00 0.00 X 0 261615 54104 TRAVIS SCHEVING VP & CFO 7/14-12/31 50.00 0.00 X 0 177884 33814 JEREMY BLANCHARD CHIEF PHYSICIAN EXECUTIVE 50.00 0.00 X 0 325137 55714 KEVIN DENNEHY VP STRATEGY-BUS DEVELOP-SJB 50.00 0.00 X 0 201967 50274 SHANNON HOLLAND VP PATIENT CARE SERVICES - SJB 50.00 0.00 X 0 233971 36354 DENNIS SALISBURY PSO VP CMO HEALTH NET 50.00 0.00 X 396655 0 64534 MARC NASH MD PHYSICIAN RADIATION ONCOLOGIST 50.00 0.00 X 506749 0 45235 MOHAN NANDALUR MD PSO PHYSICIAN 50.00 0.00 X 478780 0 21200 JAMES HUEFTLE MD PHYSICIAN 50.00 0.00 X 445253 0 42251 ALLEN NICHOLS MD PSO PHYSICIAN 50.00 0.00 X 438505 0 14534 MICHAEL ZEHNPFENNIG MD PSO PHYSICIAN 50.00 0.00 X 409657 0 44203 2675599 1588362 657508 61 0 1 0 INPATIENT SERVICES PC 1515 WYNKOOP STREET STE 360 DENVER CO 80202 MEDICAL SERVICES 1672618 MONTANA INTERVENTIONAL & DIAG 2969 AIRPORT RD STE 1C HELENA MT 59601 RADIOLOGY 1491580 MONTANA ORTHOPEDICS 435 SOUTH CRYSTAL STE 400 BUTTE MT 59701 MEDICAL SERVICES 680163 ATS FACILITY SYSTEMS 450 SHATTUCK AVE S RENTON WA 98057 TECHNOLOGY CONSULTING 298544 BANGTAIL ANESTESIA PC 4190 SOURDOUGH RD BOZEMAN MT 59715 MEDICAL SERVICES 280850 16 1050472 344459 1394931 PATIENT CARE 622110 118127746 117372635 755111 118127746 632659 632659 774553 380148 394405 394405 394405 186903 -186903 -186903 -186903 SUMMIT SURGERY CTR 621400 559908 559908 CAFETERIA REVENUE 722310 514057 439309 74748 1073965 121436803 117811944 1389767 840161 186948 186948 2475104 742531 1732573 29199289 28143991 1055298 2314651 1974447 340204 3996950 3996950 2178777 2007056 171721 2757 2757 2007 2007 6632845 5945301 687544 139418 139418 101057 98184 2873 1647152 1647152 280629 179433 101196 28713 22623 6090 407638 407638 3880855 3880855 1701631 1701631 MEDICAL SUPPLIES 19342022 19342022 SYSTEM ALLOCATION 12859607 12859607 BAD DEBT EXPENSE 7415606 7415606 SERVICE CONTRACTS 6405411 5563394 842017 2317591 2075444 242147 103516658 85470624 18046034 0 350 351 684853 7378 18789411 18440595 34757 20682 171818 40865 3206902 3419315 1696640 1378587 119743735 66997348 47253097 52746387 2268530 2481367 153407 0 2248364 12928675 76508129 91464202 10217141 7906336 858316 0 11075457 7906336 X 65357808 83479752 74864 78114 65432672 83557866 76508129 91464202 X 17920145 205049 X 0 1 X 1 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 2007 2007 0 PART II-B, LINE 1: LOBBYING EXPENSES WERE DERIVED AS A PERCENTAGE OF DUES PAID TO THE MONTANA HOSPITAL ASSOCIATION. 4146731 4146731 75448016 41251450 34196566 1996959 1900828 96131 35102238 23845070 11257168 3049791 3049791 52746387 INTERCOMPANY RECIEVABLE 11284588 SETTLEMENT RECEIVABLES 1644087 12928675 1 1 X 1 X 1 X 1 1 0 1 1 3951540 3951540 0.04110 11352383 7658492 3693891 0.03840 256635 577530 0.00000 15560558 8236022 7645431 0.07950 965678 187333 778345 0.00810 301758 301758 0.00310 3194459 1296629 1897830 0.01970 76741 76741 0.00080 4538636 1483962 3054674 0.03170 20099194 9719984 10700105 0.11120 94658 94658 0.00100 227094 227094 0.00240 321752 321752 0.00340 1 7415606 0 29297891 43901110 -14603219 X 1 1 1 SUMMIT SURGERY CENTER OUTPATIENT SURGERY CENTER 0.50000 0.50000 2 MONTANA PHYSICIAN HOSPITAL ORGANIZATION PHYSICIAN HOSPITAL ORGANIZATION 0.50000 0.50000 1 1 ST JAMES HEALTHCARE 400 SOUTH CLARK ST BUTTE MT 59701 WWW.STJAMESHEALTHCARE.ORG 13287 X X X SKILLED NURSING & PHYSICIAN CLINIC ST JAMES HEALTHCARE 1 0 0 1 X X X X X X X X X 14 1 0 1 1 X STJAMESHEALTHCARE.ORG/ABOUT-US X 1 15 1 STJAMESHEALTHCARE.ORG/ABOUT-US 0 0 1 X 200.000000000000 400.000000000000 X X X 1 1 X X X X 1 X STJAMESHEALTHCARE.ORG X STJAMESHEALTHCARE.ORG X STJAMESHEALTHCARE.ORG X X X X X 1 X 0 X X X X 1 X 0 0 ST. JAMES HEALTHCARE PART V, SECTION B, LINE 5: THE ASSESSMENT CONDUCTED FOR ST. JAMES HEALTHCARE (SJH) WAS CONDUCTED BY PROFESSIONAL RESEARCH CONSULTANTS, INC. (PRC) ON BEHALF OF SJH, IN COOPERATION WITH THE BUTTE-SILVER BOW PUBLIC HEALTH DEPARTMENT AND SOUTHWEST MONTANA COMMUNITY HEALTH CENTER. PRC IS A NATIONALLY RECOGNIZED HEALTHCARE CONSULTING FIRM WITH EXTENSIVE EXPERIENCE CONDUCTING COMMUNITY HEALTH NEEDS ASSESSMENTS (CHNA) SUCH AS THIS IN HUNDREDS OF COMMUNITIES ACROSS THE UNITED STATES SINCE 1994.THE CHNA INCORPORATED DATA FROM BOTH QUANTITATIVE AND QUALITATIVE SOURCES. QUALITATIVE DATA INPUT INCLUDES PRIMARY RESEARCH GATHERED THROUGH AN ONLINE KEY INFORMANT SURVEY. TO SOLICIT INPUT FROM KEY INFORMANTS, INDIVIDUALS WHO HAVE A BROAD INTEREST IN THE HEALTH OF THE COMMUNITY WERE SURVEYED AND MANY ALSO PARTICIPATED IN THE CHNA TEAM. A LIST OF RECOMMENDED PARTICIPANTS WAS PROVIDED BY SJH AND THE LIST INCLUDED NAMES AND CONTACT INFORMATION FOR PUBLIC HEALTH, PHYSICIANS, PUBLIC HEALTH REPRESENTATIVES, OTHER HEALTH PROFESSIONALS, SOCIAL SERVICE PROVIDERS, AND A VARIETY OF OTHER COMMUNITY LEADERS. POTENTIAL PARTICIPANTS WERE CHOSEN BECAUSE OF THEIR ABILITY TO IDENTIFY PRIMARY CONCERNS OF THE POPULATIONS WITH WHOM THEY WORK, AS WELL AS THE COMMUNITY OVERALL. ST. JAMES HEALTHCARE PART V, SECTION B, LINE 6B: THE ST. JAMES HEALTHCARE (SJH) CHNA WAS CONDUCTED WITH THE FOLLOWING ORGANIZATIONS: 2ND JUDICIAL DISTRICT YOUTH COURT PROBATION, A-1 AMBULANCE, AARON M. SHEARMAN DDS - BUTTE DENTISTRY, ACADIA MONTANA ADULT PROTECTIVE SERVICES, ANDERSON ZURMUEHLEN & COMPANY, AWARE INC./AWARE EARLY HEAD START, BELMONT SENIOR CENTER, BIG BROTHERS BIG SISTERS, BIG SKY SENIOR LIVING ON WATERFORD WAY BSW, INC., BUTTE 4-C'S, BUTTE BROADCASTING, BUTTE CARES INC., BUTTE CENTRAL CATHOLIC HIGH SCHOOL, BUTTE CHAMBER OF COMMERCE, BUTTE COMMUNITY HEALTH CENTER, BUTTE EMERGENCY FOOD BANK, BUTTE RESCUE MISSION, BUTTE SCHOOL DISTRICT, BUTTE-SILVER BOW COMMUNITY DEVELOPMENT, BUTTE-SILVER BOW COUNCIL OF COMMISSIONERS, BUTTE-SILVER BOW DISASTER/EMERGENCY SERVICES, BUTTE-SILVER BOW HEALTH DEPARTMENT, CCCS, INC., EASTER SEALS-GOODWILL FAMILY OUTREACH INC., FRONTIER HOME HEALTH & HOSPICE, HEAD START, HOMEWARD BOUND, HRC DISTRICT XII, LOWNEY DENTAL, MARQUIS ASSISTED LIVING, MERCURY STREET MEDICAL, MONTANA DEPARTMENT OF FAMILY SERVICES, MONTANA INDEPENDENT LIVING PROJECT, MONTANA MENTAL HEALTH OMBUDSMAN, MONTANA ORTHOPEDICS, MONTANA RESOURCES, INC., MONTANA TECH, PUBLIC HOUSING AUTHORITY OF BUTTE, RSVP, SAFE SPACE, SOUTHWEST MONTANA AGING & DISABILITY SERVICES, ST. JAMES COMMUNITY BOARD, ST. JAMES HEALTHCARE, ST. JAMES HEALTHCARE FOUNDATION, ST. JAMES MEDICAL GROUP, SUMMIT FINANCIAL ADVISORS, TOWN PUMP INC., U.S. BANKRUPTCY COURT, UNITED WAY OF BUTTE & ANACONDA, AND THE UNIVERSITY OF MONTANA YOUTH DYNAMICS. ST. JAMES HEALTHCARE PART V, SECTION B, LINE 11: IN OCTOBER 2014, APPROXIMATELY 40 REPRESENTATIVES OF VARIOUS COMMUNITY ORGANIZATIONS MET TO EVALUATE, DISCUSS AND PRIORITIZE HEALTH ISSUES FOR THE ST. JAMES HEALTHCARE (SJH) COMMUNITY. BASED ON FINDINGS OF THE CHNA, REPRESENTATIVES OF SJH, BUTTE-SILVER BOW HEALTH DEPARTMENT AND SOUTHWEST MONTANA COMMUNITY HEALTH CENTER PROVIDED GUIDANCE TO THE GROUP DESCRIBING EXISTING ACTIVITIES, INITIATIVES AND RESOURCES RELATING TO AREAS OF OPPORTUNITY. IN ORDER TO ASSIGN PRIORITY TO THE IDENTIFIED HEALTH NEEDS, PARTICIPANTS WERE ASKED TO EVALUATE EACH HEALTH ISSUE ALONG TWO CRITERIA: SCOPE & SEVERITY AND ABILITY TO IMPACT. THIS PROCESS YIELDED THE FOLLOWING PRIORITIZED LIST OF COMMUNITY HEALTH NEEDS: 1) MENTAL HEALTH 2) NUTRITION, PHYSICAL ACTIVITY & WEIGHT 3) SUBSTANCE ABUSE 4) INJURY & VIOLENCE 5) DIABETES 6) ACCESS TO HEALTHCARE SERVICES 7) HEART DISEASE & STROKE 8) DISABILITY & CONDITIONS OF AGING 9) TOBACCO USE 10) CANCER BASED ON THIS LIST, THE HOSPITAL FACILITY SELECTED THE FOLLOWING TOP NEEDS TO BE ADDRESSED IN THE HOSPITAL IMPLEMENTATION PLAN: 1) MENTAL HEALTH 2) NUTRITION, PHYSICAL ACTIVITY & WEIGHT 3) SUBSTANCE ABUSE: TOBACCO USETO ADDRESS THESE NEEDS, THE HOSPITAL IS USING BOTH INTERNAL AND EXTERNAL COMMUNITY RESOURCES INCLUDING THE MONTANA QUIT LINE, ST. PETE'S BEHAVIORAL HEALTH, WESTERN MONTANA MENTAL HEALTH CENTER, SOUTHWEST MONTANA MENTAL HEALTH SERVICES, SOUTHWEST MONTANA COMMUNITY HEALTH CENTER, LOCAL PEDIATRICIANS AND FAMILY PHYSICIANS, HEAD START, AND FIT KIDS PROGRAM.EACH OF THE HEALTH NEEDS IDENTIFIED IN THE CHNA ARE IMPORTANT TO SJH. BECAUSE NUMEROUS PARTNERS THROUGHOUT THE COMMUNITY ARE ADDRESSING THESE NEEDS THROUGH INNOVATIVE PROGRAMS AND INITIATIVES, THE SJH IMPLEMENTATION PLAN FOCUSES ON PRIORITIES IN ORDER TO ALLOCATE APPROPRIATE TIME AND RESOURCES TO SUCCESSFUL TACTICS AND ACTIONS. 5 1 - ST JAMES CARDIAC INTERPRETATIONS 400 S CLARK ST BUTTE MT 59701 CARIDAC CLINIC 2 - ST JAMES EMERGENCY PHYSICIANS 400 S CLARK ST BUTTE MT 59701 EMERGENCY CLINIC 3 - ST JAMES PAIN CLINIC 400 S CLARK ST BUTTE MT 59701 PAIN CLINIC 4 - ST JAMES RADIATION ONCOLOGY 400 S CLARK ST BUTTE MT 59701 ONCOLOGY CLINIC 5 - SUMMIT SURGERY CENTER LLC 434 S CLARK STREET BUTTE MT 59701 OUTPATIENT SURGERY CENTER PART I, LINE 6A: THIS ORGANIZATION IS PART OF SCL HEALTH SYSTEM WHICH PREPARES AN ANNUAL COMMUNITY BENEFIT REPORT ON A CONSOLIDATED BASIS. THE REPORT IS PREPARED BY THE PARENT COMPANY, SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC. PART I, LINE 7: THE AMOUNTS REPORTED ON FORM 990, SCHEDULE H, PART I, LINE 7A, 7B AND 7C WERE DETERMINED USING THE COST TO CHARGE RATIO DERIVED FROM WORKSHEET 2, IN THE SCHEDULE H, FORM 990 INSTRUCTIONS. FORM 990, SCHEDULE H, PART I, LINES 7E, 7F, 7G, 7H AND 7I ARE REPORTED AT COST AS REPORTED IN THE ORGANIZATION'S FINANCIAL STATEMENTS. PART I, LINE 7, COLUMN (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 $ 7,415,606. PART II, COMMUNITY BUILDING ACTIVITIES: ST. JAMES HEALTHCARE (SJH) CONTINUES TO WORK WITH COMMUNITY ORGANIZATIONS THAT SUPPORT ACTIVITIES AND POLICY IN ITS COMMUNITY. IN 2015, SJH CONTINUED ITS COMMITMENT TO HOMELESS POPULATION BY PROVIDING WARM MEALS AND ONGOING DONATIONS TO THE LOCAL FOOD BANK. A LARGE PART OF OUR COMMUNITY BUILDING EFFORT IS FOCUSED ON PHYSICIAN RECRUITMENT AS WE ARE THE ONLY HOSPITAL IN A 6 COUNTY AREA. HAVING PHYSICIANS OF ALL SPECIALTY TYPES ENSURES THE COMMUNITY HAS ACCESS TO NEEDED SERVICES AND PROVIDES A CONSISTENT PLATFORM OF HEALTHCARE SO INDIVIDUALS CAN THEN FOCUS ON OTHER NEEDS THEY MAY HAVE. OUR ADMINISTRATORS HAVE BEEN PROVIDING VOLUNTEER TIME ON BOARDS IN THE COMMUNITY TO ENSURE THESE OTHER NEEDS CAN BE ADDRESSED: FOOD SECURITY, MENTAL HEALTH, HOUSING, AND FAMILY SERVICES, AMONG OTHERS. WE BELIEVE OUR PARTICIPATION WILL ENSURE THE SOCIAL DETERMINANTS OF HEALTH ARE BEING ADDRESSED IN OUR COMMUNITY.PART III, LINE 1THE ORGANIZATION REPORTS BAD DEBT IN ACCORDANCE WITH HEALTHCARE FINANCIALMANAGEMENT ASSOCIATION (HFMA) STATEMENT NO. 15 TO THE EXTENT THAT HFMASTATEMENT NO. 15 FOLLOWS THE GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(GAAP) FOR THE REPORTING OF BAD DEBT. PART III, LINE 2: THE BAD DEBT EXPENSE REPORTED ON PART III, LINE 2 IS AT CHARGES AS RECORDED IN THE ORGANIZATION'S FINANCIAL STATEMENTS. THE ALLOWANCE FOR BAD DEBT IS BASED UPON MANAGEMENT'S ASSESSMENT OF HISTORICAL AND EXPECTED NET COLLECTIONS CONSIDERING THE BUSINESS AND GENERAL ECONOMIC CONDITIONS IN ITS SERVICE AREA, TRENDS IN HEALTH CARE COVERAGE, AND OTHER COLLECTION INDICATORS.THE BAD DEBT ALLOWANCE IS CALCULATED AS A PERCENTAGE OF PATIENT RECEIVABLES AFTER DEDUCTIONS FOR ESTIMATED PROVISIONS FOR CONTRACTUAL ADJUSTMENTS (DISCOUNTS) ON SERVICES PROVIDED TO ENROLLEES OF MEDICARE, MEDICAID, THIRD-PARTY PAYOR PROGRAMS, CHARITY CARE, UNINSURED DISCOUNTS, AND OTHER ADMINISTRATIVE ADJUSTMENTS. PART III, LINE 4: THE ALLOWANCE FOR BAD DEBT IS BASED UPON MANAGEMENT'S ASSESSMENT OF HISTORICAL AND EXPECTED NET COLLECTIONS CONSIDERING THE BUSINESS AND GENERAL ECONOMIC CONDITIONS IN ITS SERVICE AREA, TRENDS IN HEALTH CARE COVERAGE, AND OTHER COLLECTION INDICATORS.THE BAD DEBT ALLOWANCE IS CALCULATED AS A PERCENTAGE OF PATIENT RECEIVABLES AFTER DEDUCTIONS FOR ESTIMATED PROVISIONS FOR CONTRACTUAL ADJUSTMENTS (DISCOUNTS) ON SERVICES PROVIDED TO ENROLLEES OF MEDICARE, MEDICAID, THIRD-PARTY PAYOR PROGRAMS, CHARITY CARE, UNINSURED DISCOUNTS, AND OTHER ADMINISTRATIVE ADJUSTMENTS.THE ORGANIZATION HAS A FINANCIAL ASSISTANCE PROGRAM THAT PROVIDES PATIENTS OPPORTUNITIES TO APPLY FOR FREE OR DISCOUNTED CARE OR TO BE ENROLLED IN A GOVERNMENT SPONSORED MEDICAL CARE PROGRAM. THE PROCESS INCLUDES IDENTIFYING PATIENTS WITH A FINANCIAL CONCERN AND PROVIDING FINANCIAL COUNSELING AND ASSISTANCE IN APPLYING FOR THE ORGANIZATION'S CHARITY CARE AND OTHER FINANCIAL ASSISTANCE PROGRAMS.CERTAIN PATIENT ACCOUNTS ARE WRITTEN OFF TO BAD DEBT BECAUSE THE ORGANIZATION DOES NOT HAVE SUFFICIENT INFORMATION TO DETERMINE IF THE PATIENT WOULD QUALIFY FOR FREE CARE OR FINANCIAL AID. THEREFORE, IT IS POSSIBLE THAT SOME BAD DEBT IS ACTUALLY CHARITY CARE. HOWEVER, IF A PATIENT ACCOUNT IS WRITTEN OFF TO BAD DEBT AND THE COLLECTION AGENCY LATER DETERMINES THAT THE PATIENT WOULD HAVE QUALIFIED FOR FREE CARE OR FINANCIAL AID, THEN THE BAD DEBT EXPENSE IS RECLASSIFIED TO CHARITY CARE. THE FOLLOWING IS THE TEXT OF THE FOOTNOTE TO THE ORGANIZATIONS FINANCIAL STATEMENTS THAT DESCRIBE THE BAD DEBT ALLOWANCE AND BAD DEBT EXPENSE: THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS IS BASED UPON MANAGEMENT'S ASSESSMENT OF HISTORICAL AND EXPECTED NET COLLECTIONS CONSIDERING THE BUSINESS AND GENERAL ECONOMIC CONDITION IN ITS SERVICE AREA, TRENDS IN HEALTH CARE COVERAGE, AND OTHER COLLECTION INDICATORS. THROUGHOUT THE YEAR, MANAGEMENT ASSESSES THE ADEQUACY OF THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS BASED UPON HISTORICAL COLLECTION EXPERIENCE BY PAYOR CATEGORY AND OTHER FACTORS. THE RESULTS OF THESE REVIEWS ARE THEN USED TO MAKE MODIFICATIONS TO THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS. THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS INCLUDES A RESERVE FOR BOTH UNINSURED PATIENTS AND BALANCES DUE FROM PATIENTS AFTER INSURANCE. PART III, LINE 8: THE ORGANIZATION BELIEVES THAT AT LEAST SOME PORTION OF THE COSTS WE INCUR IN EXCESS OF PAYMENTS RECEIVED FROM THE FEDERAL GOVERNMENT FOR PROVIDING MEDICAL SERVICES TO MEDICARE ENROLLEES AND BENEFICIARIES UNDER THE FEDERAL MEDICARE PROGRAM (SHORTFALL OR MEDICARE SHORTFALL) CONSTITUTES A COMMUNITY BENEFIT. PROVIDING THESE SERVICES CLEARLY LESSENS THE BURDENS OF THE GOVERNMENT BY ALLEVIATING THE FEDERAL GOVERNMENT FROM HAVING TO DIRECTLY PROVIDE THESE MEDICAL SERVICES. AS DEMONSTRATED AND CALCULATED ON FORM 990, SCHEDULE H, PART III, LINES 5, 6 AND 7, OUR MEDICARE "ALLOWABLE COSTS" CLEARLY EXCEED THE PAYMENTS WE RECEIVE FOR PROVIDING THESE MEDICAL SERVICES UNDER THE MEDICARE PROGRAM. BY ABSORBING THE MEDICARE SHORTFALL COSTS WE ARE PROVIDING A COMMUNITY BENEFIT AS WELL AS EASING THE BURDEN OF THE FEDERAL GOVERNMENT HAVING TO COVER THESE COSTS.TO ARRIVE AT THE FORM 990, SCHEDULE H, PART III, LINE 6 AMOUNT, WE USED ACTUAL MEDICARE CHARGES FROM INTERNAL RECORDS AND APPLIED AN ESTIMATED COST TO CHARGE RATIO TO DETERMINE THE MEDICARE ALLOWABLE COSTS. THE ESTIMATED MEDICARE COST TO CHARGE RATIO IS THE PRIOR PERIOD MEDICARE COST REPORT COST TO CHARGE RATIO. PART III, LINE 9B: AN INTEGRAL COMPONENT OF OUR MISSION IS TO BE GOOD FINANCIAL STEWARDS. THIS REQUIRES US TO DETERMINE WHICH PATIENTS ARE IN NEED OF CHARITY CARE AND WHICH ARE ABLE TO CONTRIBUTE SOME PAYMENT FOR CARE RECEIVED. WEMAINTAIN A BALANCE THAT ENABLES US TO CONTINUE TO PROVIDE CHARITY CARE TOTHOSE WHO NEED IT MOST AND ENSURE THAT WE MANAGE OUR RESOURCES SOWE CAN CONTINUE TO BE HERE WHEN PEOPLE NEED US MOST. THE ORGANIZATION NOTIFIES PATIENTS OF FINANCIAL ASSISTANCE POLICY UPON ADMISSION AND DISCHARGE. IN ADDITION, THE PATIENTS RECEIVE INFORMATION ABOUT THE FINANCIAL ASSISTANCE POLICY WITH THEIR PATIENT BILLS. PATIENTS ARE CONTACTED MULTIPLE TIMES ABOUT UNPAID BALANCES PRIOR TO INITIATING ANY COLLECTION ACTION. IF A PATIENT IS DETERMINED TO BE ELIGIBLE FOR FINANCIAL ASSISTANCE AT ANY TIME DURING THE COLLECTION PROCESS, THE ACCOUNT IS RECLASSIFIED AS FINANCIAL ASSISTANCE AND DEBT COLLECTION EFFORTS ARE CEASED. PART VI, LINE 2: ST. JAMES HEALTHCARE (SJH) USES THE COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA) PROCESS TO ASSESS THE HEALTH CARE NEEDS OF THE COMMUNITY IT SERVES. THE CHNA WAS A SYSTEMATIC, DATA-DRIVEN APPROACH TO DETERMINING THE HEALTH STATUS, BEHAVIORS AND NEEDS OF RESIDENTS IN THE SERVICE AREA OF SJH. SUBSEQUENTLY, THIS INFORMATION WAS USED TO INFORM DECISIONS AND GUIDE EFFORTS TO IMPROVE COMMUNITY HEALTH AND WELLNESS.THE CHNA HAD THREE BASIC GOALS: 1) TO IMPROVE RESIDENTS' HEALTH STATUS, INCREASE THEIR LIFE SPANS, AND ELEVATE THEIR OVERALL QUALITY OF LIFE. 2) TO REDUCE THE HEALTH DISPARITIES AMONG RESIDENTS. 3) TO INCREASE ACCESSIBILITY TO PREVENTIVE SERVICES FOR ALL COMMUNITY RESIDENTS. THE ASSESSMENT WAS CONDUCTED BY PROFESSIONAL RESEARCH CONSULTANTS, INC. (PRC) ON BEHALF OF SJH, IN PARTNERSHIP WITH THE BUTTE-SILVER BOW PUBLIC HEALTH DEPARTMENT AND SOUTHWEST MONTANA COMMUNITY HEALTH CENTER. PRC IS A NATIONALLY RECOGNIZED HEALTHCARE CONSULTING FIRM WITH EXTENSIVE EXPERIENCE CONDUCTING COMMUNITY HEALTH NEEDS ASSESSMENTS SUCH AS THIS IN HUNDREDS OF COMMUNITIES ACROSS THE UNITED STATES SINCE 1994.THE CHNA INCORPORATED DATA FROM BOTH QUANTITATIVE AND QUALITATIVE SOURCES. QUANTITATIVE DATA INPUT INCLUDES PRIMARY RESEARCH AND PUBLIC HEALTH DATA SOURCES (CENTERS FOR DISEASE CONTROL AND PREVENTION BEHAVIORAL RISK FACTOR SURVEILLANCE SYSTEM (BRFSS), HEALTHY PEOPLE 2020), WHICH ALLOWS FOR COMPARISON TO BENCHMARK DATA AT THE STATE AND NATIONAL LEVELS. QUALITATIVE DATA INPUT INCLUDES PRIMARY RESEARCH GATHERED THROUGH AN ONLINE KEY INFORMANT SURVEY. PART VI, LINE 3: THE ORGANIZATION NOTIFIES PATIENTS ABOUT THE FINANCIAL ASSISTANCE POLICY UPON ADMISSION AND PRIOR TO DISCHARGE. NOTICES ABOUT THE FINANCIAL ASSISTANCE POLICY ARE DISPLAYED THROUGHOUT THE HOSPITAL. IN ADDITION, PATIENTS RECEIVE INFORMATION ABOUT THE FINANCIAL ASSISTANCE POLICY WITH THEIR PATIENT BILLS. THE FINANCIAL ASSISTANCE POLICY AND APPLICATION ARE POSTED ON THE HOSPITAL'S WEBSITE. THE POLICY AND APPLICATION ARE ALSO AVAILBLE UPON REQUEST. THE ORGANIZATION HAS A FINANCIAL ASSISTANCE PROGRAM THAT PROVIDES PATIENTS OPPORTUNITIES TO APPLY FOR FREE OR DISCOUNTED CARE OR TO BE ENROLLED IN A GOVERNMENT SPONSORED MEDICAL CARE PROGRAM. THE PROCESS INCLUDES IDENTIFYING PATIENTS WITH A FINANCIAL CONCERN, PROVIDING FINANCIAL COUNSELING AND ASSISTANCE IN APPLYING FOR THE ORGANIZATION'S CHARITY CARE AND OTHER FINANCIAL ASSISTANCE PROGRAMS. PART VI, LINE 4: ST. JAMES HEALTHCARE (SJH) SERVES THE COMMUNITIES OF BUTTE, MONTANA AND THE SOUTHWESTERN REGION OF MONTANA. SJH IS LOCATED IN BUTTE AND IS THE SOLE ACUTE CARE PROVIDER IN BOTH THE CITY OF BUTTE AS WELL AS SILVER BOW COUNTY WHICH ENCOMPASSES BUTTE. SJH PROVIDES OVER THREE-QUARTERS OF THE INPATIENT CARE DELIVERED TO PATIENTS WITHIN SILVER BOW COUNTY. SJH'S PRIMARY SERVICE AREA IS DEFINED AS SILVER BOW COUNTY WHICH IS LOCATED IN SOUTHWESTERN MONTANA IN A MEDICALLY UNDERSERVED AREA. IT IS THE EIGHTH LARGEST COUNTY IN THE STATE. THIS GEOGRAPHIC AREA INCLUDES APPROXIMATELY 75% OF SJH INPATIENT DISCHARGES.ST. JAMES IS THE ONLY ACUTE CARE PROVIDER IN ITS PRIMARY SERVICE AREA. PATIENTS FROM THE PRIMARY SERVICE AREA REQUIRING SPECIALIZED TERTIARY/QUATERNARY CARE WILL TYPICALLY TRAVEL TO MISSOULA (120-MILE TRIP), BILLINGS, (225-MILE TRIP), AS WELL AS OTHER MAJOR METROPOLITAN AREAS OUT OF THE STATE. MOUNTAINOUS PASSES BETWEEN BUTTE AND THESE LARGER CITIES CAUSE ISOLATION ESPECIALLY DURING THE WINTER IN OUR MEDICALLY UNDERSERVED REGION. WE ARE A DESIGNATED HEALTH PROFESSIONAL SHORTAGE AREA (HPSA) AND A MEDICALLY UNDERSERVED AREAS/POPULATIONS (MUA/P) BY THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES HEALTH RESOURCES AND SERVICES ADMINISTRATION (HRSA). BUTTE-SLIVER BOW (BUTTE), THE COUNTY SEAT, IS THE STATE'S FIFTH LARGEST CITY, BUT THE POPULATION HAS DECREASED BY 5.0% SINCE 2000. STATE GOVERNMENT, WHICH INCLUDES HIGHER EDUCATION INSTITUTIONS, IS THE LARGEST EMPLOYER IN SILVER BOW COUNTY WITH 22.3% OF THE TOTAL EMPLOYMENT. HEALTH CARE IS THE TOP PRIVATE SECTOR EMPLOYER AT 13%.THE COMMUNITY SERVED BY SJH AND FOR PURPOSES OF THE COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA) STUDY AREA & SURVEY IS DEFINED AS EACH OF THE RESIDENTIAL ZIP CODES COMPRISING THE SERVICE AREA, INCLUDING 59701, 59702, 59703, 59727, 59743, 59748, AND 59750. THIS COMMUNITY DEFINITION, DETERMINED BASED ON THE ZIP CODES OF RESIDENCE OF RECENT PATIENTS OF SJH, INCLUDES THE CITY OF BUTTE AND TOWN OF WALKERVILLE. THE AREAS SURROUNDING BUTTE ARE PRIMARILY RURAL, AS DEFINED BY THE US CENSUS BUREAU. PART VI, LINE 5: AT ST. JAMES HEALTHCARE (SJH), WE EXTEND OUR CARE BEYOND OUR HOSPITAL'S WALLS TO IMPROVE THE HEALTH OF OUR COMMUNITY. IN 2015, SJH PROVIDED COMMUNITY BENEFITS TOTALING $11,021,858. THIS AMOUNT INCLUDES TRADITIONAL CHARITY CARE, UNPAID COST OF MEDICAID AS WELL AS COMMUNITY BUILDING ACTIVITIES, HEALTH PROFESSIONS EDUCATION (MENTORING OF PROFESSIONAL STUDENTS IN OUR HOSPITAL) AND COMMUNITY HEALTH PROGRAMS. OUR COMMUNITY BUILDING ACTIVITIES DEMONSTRATE THIS COMMITMENT. IN 2015, MOST OF OUR ACTIVITIES IN PROMOTING COMMUNITY HEALTH ARE IN THE CATEGORYOF COMMUNITY SUPPORT. THESE ACTIVITIES TOUCH THE COMMUNITY IN A NUMBER OF WAYS. WE FREQUENTLY PROVIDE FOOD AND FREE MEALS TO AGENCIES SUCH AS THE BUTTE RESCUE MISSION, HIGHLAND VIEW ASSISTED LIVING CENTER, AND THE BUTTE FOOD BANK THAT SUPPORT THE POOR AND INDIGENT. THIS IS TO ENSURE THAT OUR POOR POPULATION HAS ACCESS TO NUTRITIOUS FOOD THAT ENABLES THEM TO MAINTAIN BETTER HEALTH.OUR EMPLOYEES LEND THEIR EXPERTISE TO MANY ORGANIZATIONS AND COMMUNITY EVENTS ENCOURAGING AND EDUCATING THE PROMOTION OF COMMUNITY HEALTH. OUR EMPLOYEES VOLUNTEER IN MANY CAPACITIES AND LEVELS INCLUDING PARTICIPATING IN COMMUNITY FLU SHOT CLINICS, BLOOD DRIVES AND FUNDRAISING FOR THE YOUTH PROGRAM AT THE YMCA. SERVICE CLUBS THROUGHOUT THE COMMUNITY ARE FOCUSED ON PROMOTING HEALTHY LIFE STYLES FOR BOTH CHILDREN AND ADULTS. SJH STAFF ACTIVELY PARTICIPATES IN CLUBS SUCH AS KIWANIS, BUTTE CHAMBER OF COMMERCE, ROTARY, AND EXCHANGE CLUB.IN THE AREA OF COMMUNITY HEALTH IMPROVEMENT ADVOCACY, WE PARTNER WITH THE PUBLIC HEALTH DEPARTMENT AND SERVE ON THE BOARDS AND COMMITTEES OF AGENCIES THAT ARE FOCUSED ON IMPROVING THE HEALTH OF THE COMMUNITY. WE UNDERSTAND THE VALUE OF NETWORKING AND PARTICIPATING IN COMMUNITY ACTIVITIES WITH ORGANIZATIONS TO BEST SERVE THE COMMUNITY. OUR PARTNERS INCLUDE THE BUTTE SILVER-BOW GOVERNMENT AND THE NORTH AMERICAN INDIAN ALLIANCE.WE LEAD EFFORTS SUCH AS DIABETES MANAGEMENT AND PREVENTION WITH OUR DIABETES OUTREACH PROGRAM. AS A HEALTH PROFESSIONAL SHORTAGE AREA WITH A SCORE OF 18 ON A SCALE OF 0 TO 25 (25 BEING HIGHEST NEED) SJH ACTIVELY RECRUITS PHYSICIANS TO THE AREA TO FULFILL THE NEED FOR ADDITIONAL PHYSICIANS. OUR COMMUNITY BOARD OF DIRECTORS INCLUDES MEDICAL AND BUSINESS PROFESSIONALS. THE DIRECTORS PROVIDE HOURS OF SERVICE IN SUPPORT OF OUR HOSPITAL. THEY RESIDE IN BUTTE AND WERE SELECTED BECAUSE THEY ARE RESPECTED LEADERS WITHIN THE COMMUNITY. THE BOARD POSITIONS ARE UNPAID. THE BOARD MEMBERS ARE INVOLVED IN OUR COMMUNITY HEALTH NEEDS ASSESSMENT PROCESS, BUILDING PROGRAMS AND SERVICES AND COMMUNITY OUTREACH TO ENSURE THAT PEOPLE KNOW ABOUT THE SERVICES AVAILABLE TO THEM THROUGH OUR HOSPITAL. MEDICAL PRIVILEGES ARE EXTENDED TO QUALIFIED PHYSICIANS IN THE COMMUNITY STRENGTHENING THE NETWORK AMONG COMMUNITY HEALTH CARE PROFESSIONALS. WHEN SJH HAS EXCESS REVENUE OVER OPERATING EXPENSES, WE USE THOSE FUNDS TO OBTAIN CURRENT HEALTH CARE TECHNOLOGIES AND EQUIPMENT, IMPROVE PATIENT CARE, PROVIDE MEDICAL TRAINING EDUCATION AND RESEARCH, AND TO EXPAND ACCESS TO POINTS OF CARE. THESE INVESTMENTS ENSURE WE'LL BE HERE TO CARE FOR FUTURE GENERATIONS. SJH ALSO CONTRIBUTES TO THE ECONOMY AS A PURCHASER OF GOODS AND SERVICES AND IS A MAJOR PRIVATE EMPLOYER IN THE COMMUNITY. WE ENCOURAGE OUR EMPLOYEES TO VOLUNTEER WITH COMMUNITY ORGANIZATIONS, INCLUDING SERVING ON COMMUNITY BOARDS SUCH AS THE LOCAL YMCA, BIG BROTHERS AND SISTERS, BUTTE-SILVER-BOW HEALTH DEPARTMENT, HOME HEALTH, MCDONALD FAMILY PLACE, BUTTE EMERGENCY FOOD BANK, THE BUTTE RESCUE MISSION, SAFE SPACE AND THE BREAST AND CERVICAL CANCER COALITION. WE ARE GOOD CITIZENS AND PARTNER WITH OTHER ORGANIZATIONS AND AGENCIES TO SUPPORT A THRIVING COMMUNITY. WE EITHER PROVIDE SUPPORT TO OR PARTICIPATE AS MEMBERS OF THE BUTTE-SILVER BOW CHAMBER OF COMMERCE, BUTTE-SILVER BOW LOCAL DEVELOPMENT CORPORATION, KIWANIS, EXCHANGE CLUB, 4-H, BUTTE EDUCATION FOUNDATION, ROTARY, AND ATHLETIC PROGRAMS FOR CHILDREN AND YOUNG ADULTS. WE ALSO PARTNER WITH COMMUNITY AGENCIES INVOLVED IN SAFETY AND DISASTER PREPAREDNESS. IN ADDITION, SJH PROVIDES HEALTH EDUCATION TO THE COMMUNITY AT A NUMBER OF EVENTS AND LOCATIONS THROUGHOUT THE YEAR RANGING FROM WOUND CARE TO LIVING WILLS.SJH ALSO PROMOTES AND ENHANCES THE HEALTH OF THE OVERALL COMMUNITY IT SERVES BY SUPPORTING ATHLETIC PROGRAMS IN THE COMMUNITY. WE WORK WITH THE PUBLIC AND PRIVATE HIGH SCHOOLS THROUGHOUT SOUTHWEST MONTANA AND THE PUBLIC COLLEGE IN BUTTE TO PROVIDE ATHLETIC SERVICES THAT OTHERWISE WOULD NOT BE AVAILABLE TO AREA STUDENTS. SJH PAYS A SIGNIFICANT PORTION OF THE SALARIES AND BENEFITS (50% TO 80% OR MORE) FOR SEVEN ATHLETIC TRAINERS WHO ARE EMPLOYED BY SJH BUT WORK IN THE SCHOOLS WITH STUDENT ATHLETES THROUGHOUT THE SCHOOL YEAR. SJH PARTNERS WITH OTHER PHYSICIANS AND CLINICS TO PROVIDE VERY LOW-COST ($5) PHYSICALS FOR STUDENTS WISHING TO PARTICIPATE IN ATHLETIC ACTIVITIES. THESE DOLLARS ARE THEN DONATED BACK TO EACH PARTICIPATING SCHOOL'S ATHLETIC DEPARTMENT. PART VI, LINE 6: ST. JAMES HEALTHCARE IS A CONTROLLED ENTITY OF THE SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC. (SCLHS). SCLHS AND ITS AFFILIATED ENTITIES HAVE A COMMON CALLING AND MISSION: "WE REVEAL AND FOSTER GOD'S HEALING LOVE BY IMPROVING THE HEALTH OF THE PEOPLE AND COMMUNITIES WE SERVE, ESPECIALLY THOSE WHO ARE POOR AND VULNERABLE." WE STRIVE TO PROVIDE HIGH-QUALITY, COMPASSIONATE AND AFFORDABLE HEALTHCARE IN EACH OF OUR HOSPITAL SITES AND THEIR RESPECTIVE COMMUNITIES, AS WELL AS IN A VARIETY OF OUTPATIENT SETTINGS AND IN THE HOME. SCLHS IS A FAITH-BASED, NONPROFIT HEALTHCARE ORGANIZATION THAT OPERATES NINE HOSPITALS, TWO SAFETY NET CLINICS, ONE CHILDREN'S MENTAL HEALTH CENTER AND MORE THAN 190 AMBULATORY SERVICE CENTERS IN THREE STATES - COLORADO, KANSAS AND MONTANA. THE HEALTH SYSTEM INCLUDES MORE THAN 15,000 FULL-TIME ASSOCIATES AND MORE THAN 500 EMPLOYED PROVIDERS.AS OUR HEALTH SYSTEM GROWS, WE'RE LEVERAGING THAT GROWTH TO ACHIEVE BENEFITS OF SCALE - IDENTIFYING COST AND OTHER ADVANTAGES THAT WE GAIN DUE TO OUR SIZE. WE'RE ALSO WORKING TO STREAMLINE AND UNIFY OUR SYSTEMWIDE PROCESSES TO ELIMINATE COSTLY DUPLICATION OF EFFORT. WE ACTIVELY ENCOURAGE OUR PEOPLE TO PURSUE CREATIVE IDEAS THAT IMPROVE EFFICIENCY, SERVICE AND THE OVERALL CARE EXPERIENCE. WHEN OUR ASSOCIATES OR LEADERSHIP TEAMS IDENTIFY BEST PRACTICES IN ANY AREA OF CARE, WE RAPIDLY REPLICATE THOSE ACROSS ALL CARE SITES.ST. JAMES HEALTHCARE PROMOTES THE HEALTH OF THE COMMUNITY BY DELIVERING DIRECT HIGH QUALITY HEALTHCARE SERVICES THAT ARE RESPONSIVE TO THE NEEDS OF ITS PATIENTS AND THEIR FAMILIES. THIS INCLUDES COORDINATING COMMUNITY BENEFIT PROCESSES, PROVIDING GUIDANCE WITH COMMUNITY NEEDS ASSESSMENTS, AND ESTABLISHING CONSISTENT FINANCIAL ASSISTANCE AND CHARITY CARE POLICIES AND PROCEDURES. ADDITIONALLY, SCLHS BENEFITS AFFILIATES THROUGH QUALITY IMPROVEMENT AND PERFORMANCE EXCELLENCE INITIATIVES; SYSTEM-WIDE INFORMATION TECHNOLOGY IMPLEMENTATION AND INFRASTRUCTURE; STRATEGIC AND OPERATIONS DIRECTION AND OVERSIGHT; SUPPLY CHAIN MANAGEMENT AND PURCHASING; FINANCE ADMINISTRATION AND REVENUE CYCLE SUPPORT, BENEFITS ADMINISTRATION, RISK MANAGEMENT; DISASTER PLANNING AND CRISIS ASSISTANCE, CENTRAL CASH MANAGEMENT AND INVESTMENT, INTERNAL AUDIT, LEGAL SERVICES,TAX SERVICES AND MISSION INTEGRATION. 1 ST JAMES HEALTHCARE FOUNDATION 400 SOUTH CLARK ST BUTTE ME 59701 651202190 501(C)(3) 173920 SUPPORT FOR MISSION 1 PART I, LINE 2: PROCESS FOR MONITORING GRANTS AND AWARDS THE ORGANIZATION KEEPS RECORDS TO SUPPORT THE AMOUNTS PROVIDED OR REASON FOR SUCH SUPPORT. ELIGIBILITY FOR FUNDING IS DETERMINED ON AN INDIVIDUAL BASIS, CONSIDERING THE USE OF THE FUNDS AND HOW THE USE RELATES TO THE ORGANIZATION'S MISSION. 0 1 0 0 0 0 0 1 0 CHARLES WRIGHT PRESIDENT & CEO 0 295767 0 68044 0 23977 0 177906 0 17385 0 583079 0 0 JAMES DOYLE VP & CFO 1/1-7/13 0 191585 0 29199 0 40831 0 33066 0 21038 0 315719 0 0 TRAVIS SCHEVING VP & CFO 7/14-12/31 0 135589 0 9655 0 32640 0 16631 0 17183 0 211698 0 0 JEREMY BLANCHARD CHIEF PHYSICIAN EXECUTIVE 0 287134 0 35954 0 2049 0 38131 0 17583 0 380851 0 0 KEVIN DENNEHY VP STRATEGY-BUS DEVELOP-SJB 0 171409 0 27141 0 3417 0 30769 0 19505 0 252241 0 0 SHANNON HOLLAND VP PATIENT CARE SERVICES - SJB 0 200747 0 31344 0 1880 0 35568 0 786 0 270325 0 0 DENNIS SALISBURY PSO VP CMO HEALTH NET 258281 0 41610 0 96764 0 46336 0 18198 0 461189 0 78845 0 MARC NASH MD PHYSICIAN RADIATION ONCOLOGIST 504306 0 0 0 2443 0 21200 0 24035 0 551984 0 0 0 MOHAN NANDALUR MD PSO PHYSICIAN 478780 0 0 0 0 0 21200 0 0 0 499980 0 0 0 JAMES HUEFTLE MD PHYSICIAN 285300 0 147276 0 12677 0 21200 0 21051 0 487504 0 0 0 ALLEN NICHOLS MD PSO PHYSICIAN 438505 0 0 0 0 0 14534 0 0 0 453039 0 0 0 MICHAEL ZEHNPFENNIG MD PSO PHYSICIAN 356469 0 2301 0 50887 0 21200 0 23003 0 453860 0 0 0 PART I, LINE 3 THE ORGANIZATION'S OFFICERS AND SENIOR MANAGEMENT ARE PAID BY A RELATED ORGANIZATION, SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC. (SCL HEALTH). COMPENSATION FOR THE OFFICERS AND SENIOR MANAGEMENT IS MANAGED BY THE SCL HEALTH BOARD COMPENSATION COMMITTEE (COMMITTEE) ON BEHALF OF SCL HEALTH AND ALL OF ITS AFFILIATES. THE COMMITTEE REVIEWS AND APPROVES COMPENSATION ARRANGEMENTS OF THE OFFICERS AND SENIOR MANAGEMENT AND MAKES RECOMMENDATIONS TO SCL HEALTH'S BOARD FOR APPROVAL OF ANY CHANGES TO COMPENSATION FOR THE OFFICERS AND SENIOR MANAGEMENT. THE COMMITTEE'S REVIEW IS CONDUCTED IN A MANNER THAT IS INTENDED TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE INTERMEDIATE SANCTIONS RULES OF INTERNAL REVENUE CODE SECTION 4958. THE COMMITTEE CONDUCTS THE REVIEW WITH THE ASSISTANCE OF AN EXPERIENCED AND INDEPENDENT COMPENSATION CONSULTING FIRM THAT HAS DEEP NATIONAL EXPERTISE IN HEALTH SYSTEMS' EXECUTIVE COMPENSATION PROGRAMS AND LEVELS. THE COMMITTEE OBTAINS AND RELIES UPON CURRENT, COMPARABLE MARKET DATA FOR PEER ORGANIZATIONS PRIOR TO MAKING COMPENSATION RELATED DECISIONS. THE INFORMATION REVIEWED INCLUDES COMPENSATION LEVELS PAID BY SIMILARLY SITUATED ORGANIZATIONS FOR FUNCTIONALLY COMPARABLE POSITIONS, THE AVAILABILITY OF SIMILAR SERVICES IN THE GEOGRAPHIC AREA SERVED BY SCL HEALTH AND CURRENT COMPENSATION SURVEYS COMPILED BY AN INDEPENDENT FIRM. CONSISTENT WITH THE PAY PHILOSOPHY SET BY SCL HEALTH'S BOARD, THE COMMITTEE EMPHASIZES THE IMPORTANCE OF ENSURING TOTAL REMUNERATION IS REASONABLE AND APPROPRIATE WHEN REVIEWING AND MAKING RECOMMENDATIONS WITH RESPECT TO COMPENSATION PACKAGES FOR THE OFFICERS AND SENIOR MANAGEMENT. AS PART OF THE REVIEW PROCESS, SCL HEALTH USES THE FOLLOWING IN ESTABLISHING THE COMPENSATION OF OFFICERS AND SENIOR MANAGEMENT. 1) COMPENSATION COMMITTEE 2) INDEPENDENT COMPENSATION CONSULTANT 3) FORM 990 OF OTHER ORGANIZATIONS 4) WRITTEN EMPLOYMENT CONTRACTS 5) COMPENSATION SURVEYS AND STUDIES 6) APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE THE ITEMS LISTED ABOVE SUPPORT THE COMPENSATION COMMITTEE'S EFFORTS TO ENSURE THAT THE LEVEL OF COMPENSATION PROVIDED TO ITS OFFICERS AND SENIOR MANAGEMENT IS REASONABLE, APPROPRIATE AND CONSISTENT WITH THE PAY PHILOSOPHY SET BY THE BOARD. PART I, LINE 4B PAYMENTS FROM NONQUALIFIED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN A RELATED ORGANIZATION PROVIDES NONQUALIFIED DEFERRED COMPENSATION PLANS (NQDC) KNOWN AS SUPPLEMENTAL EXECUTIVE RETIREMENT PROGRAM (SERP) FOR EXECUTIVES (SENIOR MANAGEMENT) TO COMPENSATE FOR REGULATORY IMPOSED LIMITATIONS IN QUALIFIED RETIREMENT PLANS AND TO PROVIDE A BENEFIT CONSISTENT WITH OTHER NOT FOR PROFIT HEALTH SYSTEMS. THESE PLANS ENABLE THE EXECUTIVE TO EARN BENEFITS DURING EACH YEAR THAT THEY PARTICIPATE. IN 2014, IN AN EFFORT TO REDUCE LONG-TERM COST AND HAVE GREATER CONTROL OVER FINANCIAL RISK, THE SERP WAS CONVERTED FROM A DEFINED BENEFIT (DB) TO A DEFINED CONTRIBUTION (DC) DESIGN. CERTAIN MEMBERS OF SENIOR MANAGEMENT WHOSE BENEFITS WERE CONVERTED FROM DB TO DC WOULD HAVE BEEN DISPROPORTIONATELY AND NEGATIVELY AFFECTED BY THE CHANGE, SO THE COMMITTEE DETERMINED IT WOULD BE APPROPRIATE TO GRANT "TRANSITION CREDITS" IN ORDER TO MITIGATE THE NEGATIVE IMPACT OF THE CHANGE ON THEIR RETIREMENT BENEFITS. THIS IS A COMMON APPROACH EMPLOYED BY OTHER ORGANIZATIONS UNDERGOING A SIMILAR TRANSITION. THE TRANSITION CREDITS VEST IN ACCORDANCE WITH THE TERMS OF THE DC SERP (I.E., AFTER THREE YEARS) AND ARE PAID TO THE EXECUTIVE UPON VESTING. NQDC SERP PLANS PRIOR TO 2014 PRIOR TO 2014, THE RELATED ORGANIZATION'S NQDC SERP PLAN PROVIDED A BENEFIT TO ELIGIBLE PARTICIPANTS BASED ON A PERCENTAGE OF THEIR BASE COMPENSATION. THE VESTING PERIOD IS 5 YEARS OR WHEN THE PARTICIPANT IS AGE 65 OR OLDER. THERE WERE NO CONTRIBUTIONS TO THIS PLAN AFTER DECEMBER 31, 2013. THE RELATED ORGANIZATION HAS DETERMINED THAT THESE BENEFITS SHOULD BE SUBJECT TO TAXATION AS THE AMOUNTS ARE VESTED RATHER THAN WHEN THEY ARE RECEIVED. AS A RESULT, THE TOTAL NONQUALIFIED RETIREMENT PLAN BENEFITS, WHICH WERE VESTED IN THE CURRENT YEAR, ARE CONSIDERED TAXABLE AND THUS WERE TAXED TO THE PARTICIPANTS. FOR SOME OF THE PARTICIPANTS, AN AMOUNT EQUAL TO THE PARTICIPANT'S EXPECTED INCOME TAX LIABILITY WAS WITHDRAWN FROM THE PARTICIPANT'S ACCOUNT AND REMITTED TO THE FEDERAL AND STATE GOVERNMENTS AS WITHHOLDING ON THE TAXABLE BENEFIT. NO CASH PAYMENT IS MADE DIRECTLY TO THE PARTICIPANT AND THE REMAINING BENFIT AMOUNT STAYS IN THE RETIREMENT PLAN. THE AMOUNTS WITHDRAWN FROM THE PLAN FOR TAXES IN 2015 WERE: DENNIS SALISBURY - $36,672. FOR AMOUNTS CONTRIBUTED TO THE NQDC SERP PLAN PRIOR TO 2014, VESTED AMOUNTS ARE PAYABLE UPON THE END OF EMPLOYMENT. THE VESTED AMOUNTS WITHDRAWN INCLUDE AMOUNTS PREVIOUSLY TAXED TO THE RECIPIENT AND AMOUNTS TAXABLE TO THE RECIPIENT IN THE CURRENT YEAR. THE TAXABLE AMOUNTS ARE INCLUDED ON THE RECIPIENT'S W-2. ANY DISTRIBUTIONS FROM THIS PLAN ARE REPORTED BELOW. NQDC SERP PLANS STARTING IN 2014 STARTING IN 2014, THE RELATED ORGANIZATION'S NQDC SERP PLAN PROVIDED A BENEFIT TO ELIGIBLE PARTICIPANTS BASED ON A PERCENTAGE OF THEIR BASE COMPENSATION. THE VESTING PERIOD IS ROLLING 3 YEARS OR WHEN THE PARTICIPANT IS AGE 65 OR OLDER. THERE WERE NO CONTRIBUTIONS TO THIS PLAN BEFORE JANUARY 1, 2014. ANY DISTRIBUTIONS FROM THIS PLAN ARE REPORTED BELOW. STARTING IN 2014, FOR CONTRIBUTIONS TO THE NQDC SERP PLAN, CERTAIN PARTICIPANTS ARE VESTED OR BECAME VESTED IN THE PLAN DURING 2015. VESTED AMOUNTS ARE PAYABLE TO THE RECIPIENT. THE VESTED AMOUNTS ARE TAXABLE TO THE RECIPIENT IN THE CURRENT YEAR. THE TAXABLE AMOUNTS ARE INCLUDED ON THE RECIPIENT'S W-2. THE AMOUNTS WITHDRAWN FROM THE NQDC SERP PLANS IN 2015 WERE: NONE. IN ACCORDANCE WITH THE REQUIREMENTS OF SCHEDULE J, DEFERRED COMPENSATION EARNED OVER THE VESTING PERIOD IS REPORTED IN COLUMN C AND ANY AMOUNTS VESTED/PAID FROM A DEFERRED COMPENSATION PLAN ARE REPORTED IN COLUMN B(III). THUS, THE SAME AMOUNT WOULD BE REPORTED TWICE (FIRST WHEN IT ACCRUED DURING THE VESTING PERIOD AND AGAIN WHEN IT IS VESTED/PAID). THIS RESULTS IN THE APPEARANCE OF CERTAIN EXECUTIVES RECEIVING MORE THAN THEY ARE ACTUALLY PAID FROM THE DEFERRED COMPENSATION PLANS. COLUMN F IS INTENDED TO RECONCILE THIS DUPLICATION (BY REPORTING AMOUNTS INCLUDED IN COLUMN B(III) THAT HAD BEEN REPORTED AS DEFERRED COMPENSATION ON A SCHEDULE J FOR A PREVIOUS YEAR). HOWEVER, THE SIGNIFICANCE OF THE AMOUNTS LISTED IN COLUMN F IS OFTEN OVERLOOKED AND GIVEN THE COMPLEXITY OF THE SCHEDULE J REPORTING REQUIREMENTS, THE AMOUNTS SHOWN ARE EASILY MISUNDERSTOOD. TO DETERMINE TOTAL AMOUNT EARNED (RATHER THAN THE AMOUNT VESTED/PAID OUT) DURING THE YEAR, SUBTRACT THE AMOUNT IN COLUMN F FROM COLUMN E. PART I, LINE 7 THE AT RISK COMPENSATION PLAN WAS ESTABLISHED TO ENABLE THE HEALTH CARE SYSTEM AND ITS CARE SITES TO ATTRACT AND ENGAGE QUALIFIED LEADERS AND TO PROVIDE SUCH LEADERS WITH AN ADDITIONAL PERFORMANCE COMPENSATION OPPORTUNITY TO PROMOTE AND FURTHER ITS CHARITABLE MISSION, VISION, STRATEGIC PRIORITIES AND KEY INITIATIVES. THE PLAN OPERATES ON A CALENDAR-YEAR BASIS AND IS FUNDED EACH YEAR BY MEETING THRESHOLD LEVELS OF OPERATING INCOME. TARGET AWARD AMOUNTS ARE A PERCENTAGE OF LEADERS' BASE PAY AS DETERMINED BY THEIR SPECIFIC ROLE AT THE HEALTH CARE SYSTEM. ACTUAL AWARDS ARE PAID OUT BASED ON ATTAINMENT OF BOARD APPROVED GOALS, INCLUDING OPERATING INCOME, STEWARDSHIP, PATIENT EXPERIENCE, EMPLOYEE SAFETY AND COMMUNITY BENEFIT/MISSION TARGETS. AWARDS ARE BASED ON THE BOARD'S DETERMINATION ON HOW WELL THE HEALTH CARE SYSTEM PERFORMS RELATIVE TO THE PLAN'S STATED PERFORMANCE STANDARDS AND THE WEIGHT GIVEN TO EACH OF THE PERFORMANCE MEASURES AS DEFINED FOR THAT PLAN YEAR. THE AT RISK COMPENSATION PLANS ARE BASED ON A COMBINATION OF PERFORMANCE MEASURES. PERFORMANCE MEASURES INCLUDE OPERATING INCOME, STEWARDSHIP, PATIENT EXPERIENCE, EMPLOYEE SAFETY AND COMMUNITY BENEFIT/MISSION TARGETS. THE AT RISK COMPENSATION PLAN SHALL BE INTERPRETED, APPLIED AND ADMINISTERED AT ALL TIMES IN ACCORDANCE WITH CODE SECTION 409A AND GUIDANCE ISSUED THEREUNDER. THE HEALTH CARE SYSTEM RESERVES THE RIGHT TO AMEND OR TERMINATE THIS PLAN AT ANY TIME FOR ANY REASON. ADDITIONAL OFFICER AND BOARD DISCLOSURES THE SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC. (SCLHS) AND RELATED TAX EXEMPT ORGANIZATIONS CONSISTS OF NINE HOSPITALS, NINE FOUNDATIONS, TWO SAFETY-NET CLINICS, ONE CHILDREN'S MENTAL HEALTH CENTER AND MORE THAN 190 AMBULATORY SERVICE CENTERS IN THREE STATES. SCLHS AND RELATED TAX EXEMPT ORGANIZATIONS ADHERE TO GOVERNANCE EXCELLENCE STANDARDS INCLUDING TRANSPARENCY AND ACCOUNTABILITY. IN KEEPING WITH SCLHS' CORE VALUE OF STEWARDSHIP, NO BOARD MEMBER SERVING ON THE BOARD OF DIRECTORS (BOARD) IS COMPENSATED FOR THAT SERVICE. SCLHS' BOARD COMPENSATION COMMITTEE (COMMITTEE) HAS RETAINED THE SERVICES OF AN INDEPENDENT COMPENSATION ADVISOR. THE COMPENSATION ADVISOR IS RESPONSIBLE FOR ADVISING THE COMMITTEE ON ALL MATTERS RELATING TO EXECUTIVE COMPENSATION INCLUDING SUPPORTING THE COMMITTEE'S EFFORTS TO ENSURE THAT THE LEVEL OF COMPENSATION PROVIDED OFFICERS AND SENIOR MANAGEMENT IS REASONABLE, APPROPRIATE AND CONSISTENT WITH THE PAY PHILOSOPHY SET BY THE BOARD. THE SISTERS WHO SERVE AS OFFICERS AND/OR BOARD MEMBERS ARE MEMBERS OF THE SISTERS OF CHARITY OF LEAVENWORTH (A RELIGIOUS ORDER OF WOMEN). THE SISTERS HAVE TAKEN VOWS OF POVERTY AND RECEIVE NO COMPENSATION, EXPENSE ACCOUNT ALLOWANCE, OR CONTRIBUTIONS TO BENEFIT PLANS FOR THEIR SERVICES TO THE HEALTH CARE SYSTEM. HOWEVER, A PAYMENT IS MADE DIRECTLY TO THE SISTERS OF CHARITY OF LEAVENWORTH FOR THE SERVICES OF THOSE WHO PERFORM PROFESSIONAL, ADMINISTRATIVE, AND OTHER SUCH SERVICES. MICHAEL ZEHNPFENNIG MD HIGHEST PAID EMPLOYEE RETENTION LOAN X 100000 20682 0 1 1 20682 FORM 990, PART VI, SECTION A, LINE 6 MEMBERS OR STOCKHOLDERS SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC. (SCLHS) IS THE SOLE MEMBER OF ST. JAMES HEALTHCARE. FORM 990, PART VI, SECTION A, LINE 7A POWER TO ELECT OR APPOINT MEMBERS SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC., THE SOLE MEMBER OF ST. JAMES HEALTHCARE, APPOINTS MEMBERS OF ST. JAMES HEALTHCARE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION A, LINE 7B DECISIONS RESERVED TO MEMBERS OR STOCKHOLDERS SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC. (SCLHS) HAS CERTAIN RESERVE POWERS TO APPROVE CHANGES TO THE ARTICLES OF INCORPORATION AND THE BYLAWS INCLUDING THE APPOINTMENT OR REMOVAL OF BOARD MEMBERS AND THE PRESIDENT/CEO. SCLHS ALSO HAS CERTAIN RESERVE POWERS OVER ANY CHANGE IN OWNERSHIP OF THE CORPORATION, CHANGE IN MISSION, ACQUISITION OF ASSETS, DISPOSAL OF ASSETS, LEASING OF ASSETS, INCURRENCE OF DEBT, MERGER OR DISSOLUTION, APPROVAL OF STRATEGIC PLANS AND BUDGETS, APPOINTMENT OF AUDITORS AND OVERSIGHT AND APPROVAL OF COMPENSATION AND BENEFITS FOR DIRECTORS, OFFICERS, KEY EMPLOYEES AND PHYSICIANS. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 IS PREPARED BY THE TAX DEPARTMENT OF THE PARENT ORGANIZATION, SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC. (SCLHS). THE FORM 990 IS REVIEWED BY CERTAIN MEMBERS OF SENIOR MANAGEMENT. A COPY OF THE FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO THE FILING OF THE FORM 990 WITH THE INTERNAL REVENUE SERVICE. ANY QUESTIONS ARE ADDRESSED TO THE TAX DIRECTOR OF SCLHS PRIOR TO FILING THE FORM 990 WITH THE INTERNAL REVENUE SERVICE. FORM 990, PART VI, SECTION B, LINE 12C MONITORING AND ENFORCEMENT OF COMPLIANCE WITH CONFLICT OF INTEREST POLICY ST. JAMES HEALTHCARE AND THE PARENT ORGANIZATION, SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC. (COLLECTIVELY REFERRED TO AS SCL HEALTH), REGULARLY AND CONSISTENTLY MONITORS AND ENFORCES ITS CONFLICT OF INTEREST POLICY BY PROVIDING EDUCATION AND TRAINING FOR ITS EMPLOYEES, STAFF, OFFICERS AND DIRECTORS. PERSONS CONSIDERED TO BE IN AN INFLUENTIAL POSITION, SUCH AS BOARD MEMBERS, OFFICERS, PHYSICIANS, EXECUTIVES AND MANAGERS ARE ALL REQUIRED TO COMPLETE A CONFLICT OF INTEREST STATEMENT ON AN ANNUAL BASIS TO DISCLOSE ANY POTENTIAL CONFLICT ISSUES. THESE STATEMENTS ARE CAREFULLY REVIEWED BY THE SCL HEALTH INTEGRITY AND COMPLIANCE DEPARTMENT AND APPROPRIATE LEADERSHIP. A REPORT IS PROVIDED TO SCLHS' PRESIDENT/CEO AND THE BOARD OF DIRECTORS. THE BUSINESS AND AFFAIRS OF SCL HEALTH WILL AT ALL TIMES BE CONDUCTED IN A MANNER THAT IS SOLELY IN THE BEST INTERESTS OF SCL HEALTH AND NOT BE INFLUENCED BY CONFLICTING INTERESTS OF PERSONS RESPONSIBLE FOR ADMINISTERING THOSE AFFAIRS. THE EXISTENCE OF ANY CONFLICTS OF INTEREST WILL BE DISCLOSED AND THE PROCEDURES SET FORTH HEREIN WILL BE FOLLOWED. CERTAIN TRANSACTIONS SUGGESTIVE OF A CONFLICT OF INTEREST ARE PROHIBITED. ANY PERSON IN A POSITION TO EXERCISE SUBSTANTIAL INFLUENCE OVER SCL HEALTH IS CONSIDERED AN INTERESTED PERSON. THIS TERM INCLUDES, BUT IS NOT LIMITED TO THE FOLLOWING: - BOARD MEMBERS, BOARD COMMITTEE MEMBERS, OFFICERS AND DIRECTORS; - SENIOR LEADERS AND EXECUTIVES (CEO, PRESIDENT, SVP, VP, EXECUTIVE DIRECTORS); - EMPLOYED PHYSICIANS AND PHYSICIANS IN MEDICAL STAFF LEADERSHIP ROLES (E.G., DEPARTMENT CHAIRS, MEMBERS OF MEDICAL STAFF COMMITTEES); - MEDICAL DIRECTORS OF CLINICAL PROGRAMS THAT ASSESS, REVIEW, RECOMMEND OR REQUEST PURCHASE OF ANY SPECIFIC PHARMACEUTICAL PRODUCTS, MEDICAL DEVICES, SUPPLIES AND/OR EQUIPMENT; - DEPARTMENT DIRECTORS AND MANAGERS; AND - OTHER SELECT INDIVIDUALS IDENTIFIED BY LEADERSHIP WHICH MAY INCLUDE, BUT IS NOT LIMITED TO, SUPPLY CHAIN AND FINANCE. UPON BECOMING AN INTERESTED PERSON AND ON AN ANNUAL BASIS, INTERESTED PERSONS ARE REQUIRED TO DISCLOSE ANY RELATIONSHIPS THAT CONSTITUTE OR MIGHT LEAD TO A CONFLICT OF INTEREST BY COMPLETING THE CURRENT CONFLICT OF INTEREST AND GIFT DISCLOSURE STATEMENT ("STATEMENT") AS APPROVED BY THE CHIEF INTEGRITY AND COMPLIANCE OFFICER. THE CHIEF INTEGRITY AND COMPLIANCE OFFICER WILL OVERSEE THE REVIEW OF THE STATEMENTS AND THE RESOLUTION OF ANY IDENTIFIED CONFLICTS OF INTEREST AND ALERT THE SCL HEALTH CEO AND/OR THE CHAIR OF THE SCL HEALTH BOARD OF DIRECTORS TO ANY ITEMS OF CONCERN. WHEN AN INTERESTED PERSON BECOMES AWARE OF A CONFLICT OF INTEREST WHICH HAS NOT BEEN DISCLOSED ON A STATEMENT, HE OR SHE SHALL CONTACT THE LOCAL COMPLIANCE AND PRIVACY OFFICER OR THE CHIEF INTEGRITY AND COMPLIANCE OFFICER, OBTAIN A STATEMENT FORM, COMPLETE AND RETURN IT TO THE SCL HEALTH INTEGRITY AND COMPLIANCE DEPARTMENT. WHENEVER AN INTERESTED PERSON BECOMES AWARE THAT AN ARRANGEMENT WITH RESPECT TO WHICH HE OR SHE HAS A CONFLICT OF INTEREST IS BEING CONSIDERED, THE INTERESTED PERSON MUST DISCLOSE ALL MATERIAL FACTS CONCERNING THE EXISTENCE AND NATURE OF THE CONFLICT OF INTEREST TO HIS OR HER SUPERVISOR (IF AN EMPLOYEE OTHER THAN THE ORGANIZATIONS SCL HEALTH CEO) OR TO THE APPLICABLE BOARD OR COMMITTEE CHAIR (IF THE SCL HEALTH CEO OR A BOARD OR COMMITTEE MEMBER), EVEN IF THE CONFLICT OF INTEREST HAS BEEN PREVIOUSLY DISCLOSED. WITH REGARD TO EMPLOYEES OTHER THAN THE SCL HEALTH CEO, THE INTERESTED PERSON'S SUPERVISOR WILL DETERMINE WHETHER A CONFLICT OF INTEREST EXISTS. WITH REGARD TO THE SCL HEALTH CEO AND BOARD OR COMMITTEE MEMBERS, THE REMAINING MEMBERS OF THE BOARD OR COMMITTEE WILL DETERMINE WHETHER A CONFLICT OF INTEREST EXISTS. PERSON(S) RESPONSIBLE FOR THE DETERMINATION SHOULD OBTAIN FURTHER GUIDANCE FROM THE SCL HEALTH INTEGRITY AND COMPLIANCE OR LEGAL DEPARTMENTS. UPON MAKING HIS OR HER DISCLOSURE, THE INTERESTED PERSON WILL LEAVE THE MEETING OR OTHERWISE REMOVE HIM OR HERSELF FROM THE DELIBERATIONS OR OTHER DECISION-MAKING PROCESS UNTIL SUCH TIME AS A DETERMINATION IS REACHED. IF A DETERMINATION HAS BEEN MADE THAT NO CONFLICT OF INTEREST EXISTS, THE INTERESTED PERSON MAY BE PRESENT AND PARTICIPATE IN THE DELIBERATION REGARDING THE TRANSACTION OR ARRANGEMENT. HOWEVER, IF AN INTERESTED PERSON HAS BEEN DETERMINED TO HAVE A CONFLICT OF INTEREST, HE OR SHE MAY NOT PARTICIPATE IN THE DELIBERATION OR DECISION REGARDING THE TRANSACTION OR ARRANGEMENT; BE PRESENT DURING THE DELIBERATION OR DECISION-MAKING; OR BE ALLOWED TO MAKE A PRESENTATION PRIOR TO THE DELIBERATION AND DECISION-MAKING ACTIVITIES. WHEN AN INTERESTED PERSON HAS A CONFLICT OF INTEREST, THE DECISION-MAKER/DECISION-MAKING BODY CONSIDERING THE TRANSACTION OR ARRANGEMENT WILL TAKE REASONABLE MEASURES, PRIOR TO APPROVING OR ENTERING INTO THE TRANSACTION OR ARRANGEMENT, TO ENSURE THAT THE PROPOSAL IS IN SCL HEALTH'S BEST INTERESTS. THE PROPOSED TRANSACTION OR ARRANGEMENT MAY PROCEED IF THE DECISION-MAKER/DECISION-MAKING BODY, AFTER HAVING BEEN FULLY INFORMED OF THE MATERIAL FACTS ESTABLISHING THE CONFLICT OF INTEREST, DETERMINES THAT THE TRANSACTION OR ARRANGEMENT IS IN SCL HEALTH'S BEST INTERESTS AND IS FAIR AND REASONABLE. A MAJORITY VOTE OF THE DISINTERESTED DECISION-MAKERS IS REQUIRED WHEN A DETERMINATION IS MADE BY A BOARD, COMMITTEE OR OTHER DECISION-MAKING BODY. MANAGEMENT OF POTENTIAL CONFLICTS IS DONE BY THE CHIEF INTEGRITY AND COMPLIANCE OFFICER AND/OR CARE SITE COMPLIANCE AND PRIVACY OFFICERS AND REPORTED ANNUALLY TO THE CARE SITE LEADERSHIP COMMITTEES AND/OR EXECUTIVE INTEGRITY AND COMPLIANCE COMMITTEE, THE AUDIT COMMITTEE, ORGANIZATIONAL INTEGRITY AND COMPLIANCE COMMITTEE OF THE SCL HEALTH BOARD OF DIRECTORS. ANY REPORTED CONFLICTS OR POTENTIAL CONFLICTS WILL ALSO BE REPORTED TO AND REVIEWED BY THE SCL HEALTH TAX DIRECTOR FOR COMPLIANCE WITH THE FORM 990 TAX RETURN. FORM 990, PART VI, SECTION B, LINE 15B THE ORGANIZATION'S OFFICERS AND SENIOR MANAGEMENT ARE PAID BY A RELATED ORGANIZATION, SISTERS OF CHARITY OF LEAVENWORTH HEALTH SYSTEM, INC. (SCL HEALTH). COMPENSATION FOR THE OFFICERS AND SENIOR MANAGEMENT IS MANAGED BY THE SCL HEALTH BOARD COMPENSATION COMMITTEE (COMMITTEE) ON BEHALF OF SCL HEALTH AND ALL OF ITS AFFILIATES. THE COMMITTEE REVIEWS AND APPROVES COMPENSATION ARRANGEMENTS OF THE OFFICERS AND SENIOR MANAGEMENT AND MAKES RECOMMENDATIONS TO SCL HEALTH'S BOARD FOR APPROVAL OF ANY CHANGES TO COMPENSATION FOR THE OFFICERS AND SENIOR MANAGEMENT. THE COMMITTEE'S REVIEW IS CONDUCTED IN A MANNER THAT IS INTENDED TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE INTERMEDIATE SANCTIONS RULES OF INTERNAL REVENUE CODE SECTION 4958. THE COMMITTEE CONDUCTS THE REVIEW WITH THE ASSISTANCE OF AN EXPERIENCED AND INDEPENDENT COMPENSATION CONSULTING FIRM THAT HAS DEEP NATIONAL EXPERTISE IN HEALTH SYSTEMS' EXECUTIVE COMPENSATION PROGRAMS AND LEVELS. THE COMMITTEE OBTAINS AND RELIES UPON CURRENT, COMPARABLE MARKET DATA FOR PEER ORGANIZATIONS PRIOR TO MAKING COMPENSATION RELATED DECISIONS. THE INFORMATION REVIEWED INCLUDES COMPENSATION LEVELS PAID BY SIMILARLY SITUATED ORGANIZATIONS FOR FUNCTIONALLY COMPARABLE POSITIONS, THE AVAILABILITY OF SIMILAR SERVICES IN THE GEOGRAPHIC AREA SERVED BY SCL HEALTH AND CURRENT COMPENSATION SURVEYS COMPILED BY AN INDEPENDENT FIRM. CONSISTENT WITH THE PAY PHILOSOPHY SET BY SCL HEALTH'S BOARD, THE COMMITTEE EMPHASIZES THE IMPORTANCE OF ENSURING TOTAL REMUNERATION IS REASONABLE AND APPROPRIATE WHEN REVIEWING AND MAKING RECOMMENDATIONS WITH RESPECT TO COMPENSATION PACKAGES FOR THE OFFICERS AND SENIOR MANAGEMENT. AS PART OF THE REVIEW PROCESS, SCL HEALTH USES THE FOLLOWING IN ESTABLISHING THE COMPENSATION OF OFFICERS AND SENIOR MANAGEMENT. 1) COMPENSATION COMMITTEE 2) INDEPENDENT COMPENSATION CONSULTANT 3) FORM 990 OF OTHER ORGANIZATIONS 4) WRITTEN EMPLOYMENT CONTRACTS 5) COMPENSATION SURVEYS AND STUDIES 6) APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE THE ITEMS LISTED ABOVE SUPPORT THE COMPENSATION COMMITTEE'S EFFORTS TO ENSURE THAT THE LEVEL OF COMPENSATION PROVIDED TO ITS OFFICERS AND SENIOR MANAGEMENT IS REASONABLE, APPROPRIATE AND CONSISTENT WITH THE PAY PHILOSOPHY SET BY THE BOARD. FORM 990, PART VI, SECTION C, LINE 19 AVAILABILITY OF GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC THE ORGANIZATION MAKES ITS CONFLICT OF INTEREST POLICY, FINANCIAL STATEMENTS, AND GOVERNING DOCUMENTS AVAILABLE UPON REQUEST. FORM 990, PART XI, LINE 9: ADJUSTMENT TO JOINT VENTURE INCOME 205,049. 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