2014-03-28T10:13:04-05:00 2013-09-30 420714325 MCGLADREY LLP 227 W FIRST ST STE 700 DULUTH MN 558021919 990 2012-10-01 237013497 MEMORIAL MEDICAL CENTER INC MEMO 7156855515 1615 MAPLE LANE ASHLAND WI 54806 KENT DUMONSEAU 7156855515 2014-03-24 1 MARY BETH SANTORI P00023783 2187275025 2012 2015-11-30 17:44:51Z JASON DOUGLAS 1615 MAPLE LANE ASHLAND WI 54806 62007240 0 X WWW.ASHLANDMMC.COM X 1968 WI INPATIENT AND OUTPATIENT MEDICAL SERVICES. 14 13 436 164 0 29170 74083 59392 61164524 61657418 432469 171880 77720 109979 61748796 61998669 0 0 0 0 28735570 28057674 0 0 0 23996908 26066653 52732478 54124327 9016318 7874342 84564268 91772531 19910408 18122456 64653860 73650075 X MEMORIAL MEDICAL CENTER WILL REACH OUT AS A TRUSTED PARTNER PROVIDING THE HEALTHCARE SERVICES PEOPLE NEED TO ACHIEVE INDEPENDENT AND PRODUCTIVE LIVES. COLLABORATING WITH OUR COMMUNITIES, WE WILL PROVIDE LEADERSHIP IN INTEGRATING HEALTH SERVICES FOR THE GREATER SOUTH SHORE REGION OF LAKE SUPERIOR. 0 0 45097391 61767397 MEMORIAL MEDICAL CENTER (MMC) IS A CRITICAL ACCESS HOSPITAL WITH OVER 60 FULL-TIME PHYSICIANS ON STAFF AND OVER 400 EMPLOYEES. LOCATED IN THE CITY OF ASHLAND, MMC SERVES AS A REGIONAL MEDICAL REFERRAL CENTER FOR PATIENTS FROM SEVEN NORTHWESTERN WISCONSIN COUNTIES AND THE NEIGHBORING GOGEBIC COUNTY OF MICHIGAN. MMC OFFERS INPATIENT AND OUTPATIENT SERVICES INCLUDING: MEDICAL-SURGICAL; INTENSIVE CARE; OBSTETRICS INCLUDING LABOR, DELIVERY, POSTPARTUM AND RECOVERY (LDPR) SUITES; BEHAVIORAL HEALTH; AND 24-HOUR EMERGENCY CARE. INPATIENT AND OUTPATIENT SURGERIES INCLUDE: ORTHOPEDIC, UROLOGY, OPHTHALMOLOGY, ENT AND OB/GYN IN ADDITION TO GENERAL SURGERY. SUPPORT DIAGNOSTIC SERVICES INCLUDE: LABORATORY; RADIOLOGY WITH MRI, CT AND DIAGNOSTIC ULTRASOUND; NUTRITIONAL SERVICES; PHARMACY; ENDOSCOPY SUITES AND A SLEEP DISORDER CENTER. REHABILITATION SERVICES INCLUDE: CARDIAC REHABILITATION AND CARDIOPULMONARY REHABILITATION; PHYSICAL THERAPY AND SPORTS MEDICINE. LIFELINE EMERGENCY RESPONSE SYSTEM, HOSPICE SERVICES AND SOCIAL SERVICES ARE ALSO AVAILABLE WITHIN MMC. AN ADDITIONAL BUILDING ON THE MMC CAMPUS HOUSES THE BEHAVIORAL HEALTH SERVICES PROVIDING INPATIENT AND OUTPATIENT AODA AND MENTAL HEALTH CARE AND THERAPIES. MMC OPENED AS A PRIVATE, NOT-FOR-PROFIT HOSPITAL IN 1972, COMBINING THE SERVICES PREVIOUSLY PROVIDED BY TRINITY HOSPITAL AND ASHLAND COMMUNITY HOSPITAL, BOTH LOCATED IN ASHLAND. MMC IS THE ONLY HOSPITAL LOCATED IN ASHLAND, BAYFIELD AND IRON COUNTIES. 45097391 1 1 0 1 0 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 52 0 1 436 1 1 1 0 0 0 0 0 0 0 0 0 X 14 13 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 WI X ART MERTIG 7156855500 1615 MAPLE LANE ASHLAND WI 54806 MATTHEW ANICH 1.00 2.00 X X 0 0 0 SCOTT WARREN MD 1.00 1.00 X 0 0 0 JOHN OUJIRI MD 1.00 0.00 X 0 0 0 ANNE SULLIVAN 1.00 2.00 X X 0 0 0 PATRICIA SCHRAUFNAGEL 1.00 1.00 X X 0 0 0 THOMAS JOKINEN 1.00 0.00 X 0 0 0 CHRISTINE IVERSON 1.00 1.00 X X 0 0 0 T JAY JONES 1.00 0.00 X 0 0 0 WILLIAM SLOAN 1.00 1.00 X 0 0 0 THOMAS CUNNINGHAM MD 1.00 0.00 X 0 0 0 JASON DOUGLAS 37.00 3.00 X X 0 0 0 JAMES LEAN MD 1.00 0.00 X X 0 0 0 MICHAEL MILLER 1.00 0.00 X 0 0 0 STEVE BITZER 1.00 0.00 X 0 0 0 DANIEL HYMANS 37.00 3.00 X 281253 0 37184 DANIEL H ADAMS 40.00 0.00 X 144910 0 28001 LESLIE J WHITEAKER 39.00 1.00 X 210642 0 33933 KAREN HANSEN 40.00 0.00 X 125331 0 31299 KENT DUMONSEAU 23.00 17.00 X 0 0 0 DANIEL GARDNER 40.00 0.00 X 130701 0 29825 WILLIAM MATTILA 40.00 0.00 X 151215 0 35701 PATRICK MARSHALL 40.00 0.00 X 130862 0 29389 KATHRYN TUTTLE 40.00 0.00 X 128661 0 34534 STUART SHEETS 40.00 0.00 X 239208 0 20884 1542783 0 280750 13 0 1 0 SUPERIOR ANESTHESIA ASSOCIATES 301 ELLIS AVENUE SUITE 3 ASHLAND WI 54806 ANESTHESIA SERVICES 1324450 JAMES LEAN MD 1615 MAPLE LANE ASHLAND WI 54806 PSYCH PROF FEES 302478 ESSENTIA HEALTH - ASHLAND 1615 MAPLE LANE ASHLAND WI 54806 ER ON-CALL SERVICES 257733 LAKE SUPERIOR LAUNDRY 1701 NORTH 6TH STREET SUPERIOR WI 54880 LAUNDRY SERVICE 143997 KEITH HENRY 1615 MAPLE LANE ASHLAND WI 54806 PATHOLOGY FEES 130000 5 18892 40500 59392 PATIENT SERV REV 621500 60801275 60801275 MEDICAID EHR INCENTIVE PAYMENTS 524114 612382 612382 CAFETERIA 722210 216053 216053 OTHER OPERATING REVENUE 900099 27708 27708 61657418 177451 177451 109979 0 109979 109979 109979 3000 8571 -5571 -5571 -5571 61998669 61767397 0 171880 800399 800399 20414516 18478193 1936323 877102 790744 86358 4414921 3925980 488941 1550736 1355778 194958 51392 51392 286243 286243 2472546 2472546 1517611 1517611 289349 236863 52486 3509592 2849125 660467 155606 155606 OTHER PROFESSIONAL SERV 6937424 6937424 NURSING SUPPLIES & OTHE 5035153 5035153 PROVISION FOR BAD DEBTS 3882040 3882040 GENERAL SERVICES SUPPLI 1606091 1606091 323606 323606 54124327 45097391 9026936 0 38941649 44663998 7393822 7821237 4242635 3598108 1976249 2160963 153214 124230 67913074 44424129 23705611 23488945 6197730 7609579 1953358 2305471 84564268 91772531 5812271 5407753 13698137 12314703 400000 400000 19910408 18122456 X 64653860 73650075 64653860 73650075 84564268 91772531 7874342 1121873 0 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 4251 4251 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: MEMORIAL MEDICAL CENTER PAYS DUES TO CERTAIN ORGANIZATIONS RELATED TO THE INDUSTRY WHICH HAVE LOBBYING EXPENSES. THE AMOUNT LISTED IS THE PERCENTAGE OF THE DUES PAID THAT WERE USED FOR LOBBYING. 127376 127376 27299909 16980070 10319839 37780188 25099875 12680313 2705601 2344184 361417 23488945 ESTIMATED THIRD-PARTY PAYOR SETTLEMENTS 400000 400000 X 63120542 1121873 1121873 61998669 0 61998669 54124327 0 54124327 0 54124327 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: NOT-FOR-PROFIT ORGANIZATIONS MAY BECOME SUBJECT TO INCOME TAXES IF QUALIFICATION AS A TAX-EXEMPT ENTITY CHANGES, IF UNRELATED BUSINESS INCOME IS GENERATED, AND IN CERTAIN OTHER INSTANCES. NOT-FOR-PROFIT ORGANIZATIONS ARE REQUIRED TO ASSESS THE CERTAINTY OF THEIR TAX POSITIONS RELATED TO THESE MATTERS AND, IN SOME CASES, RECORD LIABILITIES FOR POTENTIAL TAXES, INTEREST AND PENALTIES ACCOMPANIED BY FOOTNOTE DISCLOSURES. THE HOSPITAL HAS NOT IDENTIFIED ANY UNCERTAIN TAX POSITIONS THAT WOULD REQUIRE THE ACCRUAL OF AN INCOME TAX PROVISION. GENERALLY, THE HOSPITAL IS NO LONGER SUBJECT TO INCOME TAX EXAMINATIONS BY THE U.S. FEDERAL OR STATE TAX AUTHORITIES FOR YEARS BEFORE 2010. 1 1 1 X 1 X 1 1 0 1 1 517625 517625 0.01030 10324098 8439706 1884392 0.03750 10841723 8439706 2402017 0.04780 24852 24852 0.00050 9336 9336 0.00020 10236886 8541100 1695786 0.03380 51008 51008 0.00100 10322082 8541100 1780982 0.03550 21163805 16980806 4182999 0.08330 1 3882040 0 17108480 16606817 501663 X 1 0 1 1 MEMORIAL MEDICAL CENTER

1615 MAPLE LANE ASHLAND WI 54806

X X X X MEMORIAL MEDICAL CENTER 1 1 X X X X X X X X X 12 1 0 1 X X X X X X X X X X 0 0 1 1 100.000000000000 1 200.000000000000 1 X X X X X X 1 1 X X X X X X X 1 0 1 0 0 PART I, LINE 7: COSTS ARE CALCULATED USING FINANCIAL DATA AND THE COST TO CHARGE RATIO FROM THE AS FILED 2013 MEDICARE COST REPORT. PART I, LINE 7G: SUBSIDIZED HEALTH SERVICES INCLUDE LABOR & DELIVERY, BLOOD STORING, PHYSICAL THERAPY, IMPLANTABLE DEVICES CHARGED TO PATIENTS, PSYCHIATRIC/PSYCHOLOGICAL SERVICES, CARDIAC REHAB, EMERGENCY, AND OBSERVATION BEDS. PART I, L7 COL(F): BAD DEBT EXPENSE FROM FINANCIAL STATEMENTS IS $3,882,040. PART III, LINE 4: PATIENT RECEIVABLES DUE DIRECTLY FROM THE PATIENTS ARE CARRIED AT ORIGINAL CHARGE FOR THE SERVICE PROVIDED, LESS AMOUNTS COVERED BY THIRD-PARTY PAYORS AND LESS AN ESTIMATED ALLOWANCE FOR DOUBTFUL RECEIVABLES. MANAGEMENT DETERMINES THE ALLOWANCE FOR DOUBTFUL ACCOUNTS BY IDENTIFYING TROUBLED ACCOUNTS AND BY USING HISTORICAL EXPERIENCE APPLIED TO AN AGING OF ACCOUNTS. PATIENT RECEIVABLES ARE WRITTEN OFF WHEN DEEMED UNCOLLECTIBLE. RECOVERIES OF RECEIVABLES PREVIOUSLY WRITTEN OFF ARE RECORDED WHEN RECEIVED.AT MEMORIAL MEDICAL CENTER, INC. BAD DEBT IS CONSIDERED THE UNWILLINGNESS TO PAY, WHILE CHARITY CARE AND FREE CARE ARE INABILITY TO PAY. PART III, LINE 8: MEMORIAL MEDICAL CENTER, INC. IS A CRITICAL ACCESS HOSPITAL THAT IS REIMBURSED AT 101% OF COST (LESS 2% MEDICARE SEQUESTRATION). THE MEDICARE FEES FOR REIMBURSED SERVICES RESULTED IN NET REVENUE OF $444,177 AND ALLOWABLE COSTS OF $991,202 RESULTING IN A SHORTFALL OF $547,025. THE SHORTFALL IS THE RESULT OF UNREIMBURSED PROFESSIONAL CARE.THE HOSPITAL FOLLOWED MEDICARE'S PRESCRIBED METHODS OF DETERMINING COSTS PAYABLE UNDER TITLE XVIII (MEDICARE) IN COMPLETING ITS ANNUAL MEDICARE COST REPORT (COST REPORT) USING DATA AVAILABLE FROM THE INSTITUTION'S BASIC ACCOUNTS, AS USUALLY MAINTAINED, TO ARRIVE AT EQUITABLE AND PROPER PAYMENT FOR SERVICES. THE COST REPORT WAS COMPLETED USING THE HOSPITAL'S TRIAL BALANCE OF EXPENSES, AS WELL AS OTHER STATISTICAL AND FINANCIAL RECORDS MAINTAINED BY THE HOSPITAL. AS REQUIRED BY MEDICARE REGULATIONS, CERTAIN RECLASSIFICATIONS AND ADJUSTMENTS TO COSTS WERE INCLUDED IN THE COST REPORT TO DETERMINE MEDICARE ALLOWABLE COSTS.AFTER MEDICARE ALLOWABLE COSTS ARE DETERMINED, THE COST REPORT PROVIDES FOR THE STEP DOWN METHOD OF COST FINDING. THIS METHOD PROVIDES FOR ALLOCATING THE COST OF SERVICES RENDERED BY EACH GENERAL SERVICE COST CENTER TO OTHER COST CENTERS, WHICH UTILIZE THE SERVICES. ONCE THE COSTS OF A GENERAL SERVICE COST CENTER HAVE BEEN ALLOCATED, THAT COST CENTER IS CONSIDERED CLOSED. ONCE CLOSED, IT DOES NOT RECEIVE ANY OF THE COSTS SUBSEQUENTLY ALLOCATED FROM THE REMAINING GENERAL SERVICE COST CENTERS. AFTER ALL COSTS OF THE GENERAL SERVICE COST CENTERS HAVE BEEN ALLOCATED TO THE REMAINING COST CENTERS, THE TOTAL COSTS OF THESE REMAINING COST CENTERS ARE FURTHER DISTRIBUTED TO THE DEPARTMENTAL CLASSIFICATION TO WHICH THEY PERTAIN, E.G., HOSPITAL GENERAL INPATIENT ROUTINE, SUBPROVIDER, ANCILLARY, ETC.AFTER THE STEP-DOWN PROCESS, THE COST REPORT PROVIDES FOR THE APPORTIONMENT OF COSTS TO THE MEDICARE PROGRAM BASED ON A NUMBER OF DIFFERENT METHODOLOGIES INCLUDING PER PATIENT DAY, PER VISIT, AND PERCENTAGE OF CHARGES, AS MOST PREVALENT. MEDICARE COSTS AS DETERMINED BY THE COST REPORT METHODOLOGIES DESCRIBED PREVIOUSLY WERE UTILIZED TO COMPLETE THE APPLICABLE MEDICARE ALLOWABLE COSTS OF CARE FOR SCHEDULE H (FORM 990) PART III SECTION B LINE 6. MEMORIAL MEDICAL CENTER PART V, SECTION B, LINE 3: AS PART OF THE COMMUNITY HEALTH NEEDS ASSESSMENT PROCESS, COMMUNITY INPUT WAS SOUGHT THROUGH SURVEYING, COMMUNITY LISTENING SESSIONS AND A STAKEHOLDER PRIORITIZING SESSION. OVER 500 RESPONSES WERE RECEIVED FROM THE SURVEYING PROCESS. SIX PUBLIC LISTENING SESSIONS WERE HELD THROUGHOUT THE SERVICE AREA. OVER 50 PEOPLE ATTENDED THE STAKEHOLDER PRIORITIZING SESSION, INCLUDING LAW ENFORCEMENT, SOCIAL SERVICES, NON-PROFIT AGENCIES, HEALTHCARE PROVIDERS, SCHOOL PERSONNEL AND CONCERNED CITIZENS. MEMORIAL MEDICAL CENTER PART V, SECTION B, LINE 5C: THE NEEDS ASSESSMENT IS PROVIDED ON THE TWO COUNTIES WEBSITES AS WELL. MEMORIAL MEDICAL CENTER PART V, SECTION B, LINE 7: THE COORDINATED TEAM OF MEMORIAL MEDICAL CENTER, INC. STAFF AND COUNTY HEALTH PROFESSIONALS FROM THE TWO COUNTIES INVOLVED DETERMINED THAT IT WAS ESSENTIAL TO CONCENTRATE ON THE NUMBER 1 HEALTH ISSUE IDENTIFIED TO REALLY MAKE AN IMPACT ON THE OVERALL COMMUNITY. MEMORIAL MEDICAL CENTER PART V, SECTION B, LINE 14G: THE FINANCIAL ASSISTANCE POLICY IS PUBLISHED IN THE LOCAL NEWSPAPER. PART VI, LINE 2: MEMORIAL MEDICAL CENTER IS WORKING WITH LOCAL ORGANIZATIONS INCLUDING ASHLAND AND BAYFIELD COUNTY AND LOCAL SENIOR CITIZEN GROUPS TO PUT TOGETHER A 3 YEAR COMMUNITY NEEDS ASSESSMENT. THE PROCESS WILL INCLUDE SURVEYS OF AREA GROUPS AND INDIVIDUALS TO GAIN A PERSPECTIVE OF NEEDS THAT LOCAL CITIZENS BELIEVE ARE NECESSARY TO MEET THE HEALTHCARE NEEDS OF THE AREA. PART VI, LINE 3: NOTICES ARE PUBLISHED IN THE LOCAL NEWSPAPER, INTERVIEWS ARE CONDUCTED AT ADMISSION AND FOR THOSE PATIENTS PREADMITTED INFORMATION IS DISTRIBUTED AND INTERVIEWS CONDUCTED TO EXPLORE ALL THE AVENUES AVAILABLE FOR PAYMENT OF THEIR HEALTHCARE SERVICES TO INCLUDE THEIR ELIGIBILITY FOR CHARITY CARE. PART VI, LINE 4: MEMORIAL MEDICAL CENTER SERVES AN AREA THAT EXTENDS 25 MILES WEST, 75 MILES EAST AND 45 MILES SOUTH. OUR PRIMARY SERVICE AREA HAS A POPULATION OF APPROX. 35,000 PEOPLE. THE AVERAGE INCOME OF OUR SERVICE AREA IS WELL BELOW STATE AVERAGES. PART VI, LINE 5: MEMORIAL MEDICAL CENTER DOES HAVE AN OPEN MEDICAL STAFF WITH A BROAD RANGE OF SPECIALTIES. THE MEMBERS OF THE MEDICAL STAFF PROVIDE SERVICES OUT OF TWO LARGER CLINICS AS WELL AS MANY SMALL INDEPENDENT PRACTICES. ALL HAVE EQUAL PRIVILEGES ON THE MEDICAL STAFF. IN ADDITION WE HAVE A BOARD OF DIRECTORS THAT REPRESENT THE LARGER SERVICE AREA. BOARD OF DIRECTORS COME FROM COMMUNITIES 30-40 MILES FROM ASHLAND AS WELL AS REPRESENTATIVES FROM ASHLAND AND WASHBURN (10 MILES AWAY). PART VI, LINE 6: MEMORIAL MEDICAL CENTER IS NOT PART OF AN AFFILIATED HEALTH CARE SYSTEM. REPORTS FILED WITH STATES PART VI, LINE 7 WI 1 X X X X X 0 0 0 0 0 0 0 0 0 DANIEL HYMANS 238528 0 42725 0 0 0 11868 0 25316 0 318437 0 0 0 DANIEL H ADAMS 144910 0 0 0 0 0 7027 0 20974 0 172911 0 0 0 LESLIE J WHITEAKER 178782 0 31860 0 0 0 8729 0 25204 0 244575 0 0 0 KAREN HANSEN 125331 0 0 0 0 0 6247 0 25052 0 156630 0 0 0 DANIEL GARDNER 130701 0 0 0 0 0 6776 0 23049 0 160526 0 0 0 WILLIAM MATTILA 151215 0 0 0 0 0 7536 0 28165 0 186916 0 0 0 PATRICK MARSHALL 130862 0 0 0 0 0 6942 0 22447 0 160251 0 0 0 KATHRYN TUTTLE 128661 0 0 0 0 0 6415 0 28119 0 163195 0 0 0 STUART SHEETS 239208 0 0 0 0 0 10421 0 10463 0 260092 0 0 0 FORM 990, PART VI, SECTION A, LINE 6 REGIONAL ENTERPRISES, INC. IS THE SOLE MEMBER OF MEMORIAL MEDICAL CENTER, INC. FORM 990, PART VI, SECTION A, LINE 7A REGIONAL ENTERPRISES, INC. MAY ELECT ONE OR MORE MEMBERS OF THE GOVERNING BODY. FORM 990, PART VI, SECTION A, LINE 7B IN ADDITION TO DOING ALL THINGS REQUIRED BY LAW, REI, AS THE SOLE MEMBER OF MMC, SHALL HAVE THE FOLLOWING RESERVE POWERS: A) THE POWER TO MAKE, AMEND, OR REPEAL MMC'S BYLAWS AND ARTICLES OF INCORPORATION. B) TO APPROVE ANY CHANGE IN MMC'S PHILOSOPHY, MISSION OR VISION STATEMENTS, AND APPROVE THE LONG-RANGE GOALS AND STRATEGIC PLAN FOR MMC. C) TO APPROVE THE ANNUAL OPERATING AND CAPITAL BUDGET. D) TO APPROVE ALL BUILDING PROGRAMS THAT EXCEED $1,000,000 IN VALUE. E) TO SELECT AND RETAIN AN INDEPENDENT AUDING FIRM. F) TO APPROVE THE PURCHASE, SALE, LEASE, DISPOSITION, OR ALIENATION OF ANY REAL PROPERTY OWNED BY MMC. G) TO APPROVE ANY PLAN OF DISSOLUTION OR MERGER, CONSOLIDATION, ACQUISITION OR DISPOSITION OF REAL PROPERTY OR RELOCATION OF THE FACILITIES OF MMC. H) BASED ON A RECOMMENDATION FROM THE BOARD OF DIRECTORS OF MMC, TO APPOINT AND MONITOR THE PERFORMANCE OF THE PRESIDENT/CEO OF REI, WHO SHALL ALSO SIMULTANEOUSLY SERVE AS THE PRESIDENT/CEO OF MMC. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 MUST GO THROUGH AN ADMINISTRATIVE REVIEW AND THEN BE APPROVED BY THE BOARD OF DIRECTORS BEFORE IT IS FILED. FORM 990, PART VI, SECTION B, LINE 12C A. DEFINITIONS 1. AN "INTERESTED PERSON" MEANS ANY CURRENT DIRECTOR, PRINCIPAL OFFICER OR MEMBER OF A COMMITTEE THAT REPORTS TO THE BOARD OF DIRECTORS. IF A PERSON MEETS THE DEFINITION OF AN INTERESTED PERSON FOR REI OR ANY OF ITS AFFILIATED CORPORATIONS, THAT PERSON SHALL BE CONSIDERED AN INTERESTED PERSON FOR ALL CORPORATIONS WITH THE REI SYSTEM. 2. AN "INSIDER" MEANS ANY PERSON WHO IS IN A POSITION TO EXERCISE SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF REI. FOR PURPOSES OF APPLYING THE PROCEDURES OF THIS POLICY, THE FOLLOWING WILL BE CONSIDERED INSIDERS: ANY INTERESTED PERSON AS DEFINED HEREIN; THE MANAGERS AT REI AND ITS AFFILIATED CORPORATIONS; AND MEMBERS OF THE VARIOUS MEDICAL STAFFS AT MEMBERS' HOSPITALS. FOR PURPOSES OF THIS PROTOCOL, A "MANAGER" INCLUDES ANY PERSON WHO MANAGES A DISCRETE SEGMENT OR ACTIVITY OF REI, OR ANY OF ITS AFFILIATES, THAT REPRESENTS A SUBSTANTIAL PORTION (I.E., 10% OR MORE) OF THE ACTIVITIES, ASSETS, INCOME, OR EXPENSES OF REI OR SUCH AFFILIATE AS COMPARED TO THE ORGANIZATION AS A WHOLE. FINALLY, ANYONE WHO HAS BEEN AN INTERESTED PERSON AT ANY TIME IN THE PAST FIVE (5) YEARS AND ANYONE WHO WAS A MEMBER OF ANY MEDICAL STAFF OF A MEMBER HOSPITAL AT SOME TIME IN THE PAST FIVE (5) YEARS, SHALL BE CONSIDERED AN INSIDER. 3. FOR PURPOSES OF THIS POLICY, "FAMILY" OF AN INSIDER SHALL MEAN: A. SUCH INDIVIDUAL'S SPOUSE AND THE PARENTS AND SIBLINGS OF THE SPOUSE; B. SUCH INDIVIDUAL'S PARENTS, GRANDPARENTS, SIBLINGS (WHOLE OR HALF BLOOD OR BY ADOPTIONS), CHILDREN, GRANDCHILDREN AND GREAT GRANDCHILDREN; AND C. SPOUSES OF SUCH INDIVIDUAL'S GRANDPARENTS, SIBLINGS, CHILDREN, GRANDCHILDREN, AND GREAT GRANDCHILDREN. B. DISCLOSURE 1. EACH DIRECTOR AND OFFICER SHALL DISCLOSE TO THE BOARD OF DIRECTORS, OR TO THE OTHER MEMBERS OF ANY COMMITTEE CONSIDERING A PROPOSED BUSINESS TRANSACTION OR ARRANGEMENT, THE EXISTENCE AND NATURE OF ANY FINANCIAL INTEREST SUCH PERSON OR A MEMBER OF SUCH PERSON'S FAMILY MAY HAVE WITH RESPECT TO SUCH PROPOSED TRANSACTION OR ARRANGEMENT. EACH DIRECTOR AND PRINCIPAL OFFICER SHALL PROMPTLY MAKE DISCLOSURES AS MAY BE NECESSARY TO KEEP THE BOARD OR COMMITTEE FULLY APPRISED OF SUCH PERSON'S FINANCIAL INTERESTS. DISCLOSURE SHALL ALSO BE ACCOMPLISHED ON AN ANNUAL BASIS BY HAVING EACH DIRECTOR AND PRINCIPAL OFFICER EXECUTE AND DELIVER TO REI A CERTIFICATE REGARDING CONFLICTS OF INTEREST IN SUBSTANTIALLY THE FORM ATTACHED TO THIS POLICY. 2. THE REQUIREMENT THAT INTERESTED PERSONS DISCLOSE THEIR FINANCIAL INTERESTS SUBSTANTIALLY REQUIRES EACH DIRECTOR AND PRINCIPAL OFFICER TO DISCLOSE ANY INSIDER TRANSACTION IN WHICH HE OR SHE, HIS/HER FAMILY MEMBERS OR A CONTROLLED ENTITY ARE INVOLVED. THIS OCCURS BECAUSE THE DEFINITION OF A FINANCIAL INTEREST IS BROADER THAN THE DEFINITION OF AN INSIDER TRANSACTION. HOWEVER, NOT ALL FINANCIAL INTERESTS DISCLOSED WILL RESULT IN A CONFLICT OF INTEREST OR AN INSIDER TRANSACTION. A TRANSACTION INVOLVING A DIRECTOR OR OFFICER WILL FALL INTO ONE OF THE FOLLOWING THREE CATEGORIES: (I) IT NEITHER INVOLVES AN INTERESTED PERSON NOR IS AN INSIDER TRANSACTION, (II) IT INVOLVES AN INTERESTED PERSON, BUT IS NOT AN INSIDER TRANSACTION; OR (III) IT INVOLVES AN INTERESTED PERSON AND IS AN INSIDER TRANSACTION. C. RESPONSE TO DISCLOSURES IF ANY DIRECTOR OR PRINCIPAL OFFICER DISCLOSES A POTENTIAL FINANCIAL INTEREST TO THE BOARD OF DIRECTORS OR ANY COMMITTEE REGARDING A PROPOSED TRANSACTION OR ARRANGEMENT, THE BOARD OR COMMITTEE SHALL FIRST DETERMINE WHETHER THE PROPOSED TRANSACTION OR ARRANGEMENT COULD BE CONSIDERED AN INSIDER TRANSACTION. IF THE BOARD OR COMMITTEE IS CERTAIN THAT THE TRANSACTION OR ARRANGEMENT WILL NOT INVOLVE AN INSIDER, THE BOARD OR COMMITTEE SHALL FOLLOW ONLY THE PROCEDURES SET FORTH IN SECTION III(C)(1) BELOW. IF THE TRANSACTION OR ARRANGEMENT INVOLVES OR MAY INVOLVE AN INSIDER, THE BOARD OR COMMITTEE SHALL FOLLOW THE PROCEDURES IN BOTH SECTION III(C)(1) AND SECTION III(C)(2). 1. PROCEDURES FOR DISCLOSURES OF ANY FINANCIAL INTEREST THAT MAY RESULT IN A CONFLICT OF INTEREST ON THE PART OF AN INTERESTED PERSON THAT DOES NOT MEET THE DEFINITION OF AN INSIDER TRANSACTION A. THE INTERESTED PERSON SHALL LEAVE THE BOARD OR COMMITTEE MEETING WHILE THE FINANCIAL INTEREST IS DISCUSSED. THE REMAINING BOARD OR COMMITTEE MEMBERS SHALL DECIDE IF A CONFLICT OF INTEREST EXISTS. IF IT IS DETERMINED NO CONFLICT EXISTS, THE INTERESTED PERSON MAY REJOIN THE MEETING AND PARTICIPATE IN THE DISCUSSIONS AND ACTIONS REGARDING THIS AGENDA ITEM. B. THE BOARD OR COMMITTEE SHALL DETERMINE WHETHER REI CAN OBTAIN A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT WITH REASONABLE EFFORTS FROM A PERSON OR ENTITY THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST. I. IF A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT IS NOT REASONABLY ATTAINABLE, THAT BODY SHALL DETERMINE BY A MAJORITY VOTE OF THE DISINTERESTED DIRECTORS WHETHER THE TRANSACTION OR ARRANGEMENT IS IN REI'S BEST INTEREST AND WHETHER THE TRANSACTION IS FAIR AND REASONABLE TO REI. II. IF THE BOARD OR COMMITTEE BELIEVES AN ALTERNATE TRANSACTION COULD BE CONSIDERED THAT WOULD BE MORE ADVANTAGEOUS TO REI, THE CHAIRPERSON OF THE BOARD OR COMMITTEE SHALL APPOINT A DISINTERESTED PERSON OR COMMITTEE TO INVESTIGATE ALTERNATIVES TO THE PROPOSED TRANSACTION. FURTHER ACTION BY THE BOARD OR COMMITTEE SHALL BE TABLED UNTIL SUCH TIMES AS THE DISINTERESTED PERSON HAS BEEN ABLE TO REPORT HIS OR HER FINDINGS TO THE APPROPRIATE GOVERNING BODY. C. THE BOARD OR COMMITTEE SHALL NOT APPROVE ANY TRANSACTION OR ARRANGEMENT THAT IS NOT IN THE BEST INTERESTS OF REI AND THAT IS NOT FAIR AND REASONABLE TO REI. D. ONCE DISCUSSION AND/OR ACTION REGARDING THE AGENDA ITEM RELATING TO THE DIRECTOR'S FINANCIAL INTEREST HAS BEEN COMPLETED, THE INTERESTED PERSON MAY REJOIN THE BOARD OR COMMITTEE MEETING. 2. PROCEDURES FOR DISCLOSURE OF ANY FINANCIAL INTEREST THAT MAY RESULT IN A CONFLICT OF INTEREST THAT IS ALSO A POTENTIAL INSIDER TRANSACTION A. THE INSIDER SHALL LEAVE THE BOARD OR COMMITTEE MEETING WHILE THE INSIDER TRANSACTION IS DISCUSSED. IN ADDITION, THE REMAINING BOARD OR COMMITTEE MEMBERS SHALL ALSO DECIDE WHETHER THE TRANSACTION OR ARRANGEMENT UNDER CONSIDERATION COULD CONSTITUTE AN INSIDER TRANSACTION. AS A PART OF THIS CONSIDERATION, THE BOARD OR COMMITTEE SHALL ALSO CONSIDER WHETHER THEIR ACTION COULD BE CONSTRUED TO BE AN EXCESS BENEFIT TRANSACTION SUBJECT TO THE INTERMEDIATE SANCTIONS DISCUSSED ABOVE. B. IN DETERMINING WHETHER A TRANSACTION OR ARRANGEMENT IS AN EXCESS BENEFIT TRANSACTION, THE BOARD OR COMMITTEE CONSIDERING THE TRANSACTION OR ARRANGEMENT SHOULD REVIEW APPROPRIATE DATA AS TO COMPARABILITY. THE BOARD OR COMMITTEE MAY RELY ON SUCH INFORMATION OR DATA PROVIDED BY REI'S MANAGEMENT. C. THE BOARD OR COMMITTEE SHALL NOT APPROVE ANY TRANSACTION OR ARRANGEMENT THAT IS AN EXCESS BENEFIT TRANSACTION. D. RECORDS OF PROCEEDINGS 1. THE MINUTES OF THE BOARD AND COMMITTEE MEETINGS SHALL CONTAIN: A. THE NAMES OF PERSONS WHO DISCLOSED OR OTHERWISE WERE FOUND TO HAVE A FINANCIAL INTEREST WITH RESPECT TO ANY PROPOSED TRANSACTION OR ARRANGEMENT WITH REI, THE NATURE OF THE FINANCIAL INTEREST, ANY ACTION TAKEN TO DETERMINE WHETHER A CONFLICT OF INTEREST WAS PRESENT, AND A RECORD OF ANY VOTES TAKEN IN CONNECTION WITH THE BOARD'S OR COMMITTEE'S DECISION AS TO WHETHER A CONFLICT OF INTEREST IN FACT EXISTED. B. THE NAMES OF THE PERSONS WHO DISCLOSED OR OTHERWISE WERE FOUND TO BE A PARTY TO AN INSIDER TRANSACTION, THE NATURE OF THE INSIDERS RELATIONSHIP TO REI, AND A RECORD OF ALL VOTES TAKEN IN CONNECTION WITH THE BOARD'S DECISION AS TO WHETHER THE INSIDER TRANSACTION WAS AN EXCESS BENEFIT TRANSACTION. C. THE NAMES OF THE PERSONS WHO WERE PRESENT FOR DISCUSSIONS AND VOTES RELATING TO ANY TRANSACTION OR ARRANGEMENT, THE CONTENT OF THE DISCUSSION, INCLUDING ANY ALTERNATIVES TO PROPOSED TRANSACTION OR A ARRANGEMENT, AND A RECORD OF ANY VOTES TAKEN APPROVING OR REJECTING ANY PROPOSED TRANSACTION OR ARRANGEMENT. 2. REI SHALL DOCUMENT THE BASIS FOR ITS DETERMINATION REGARDING WHETHER ANY INSIDER TRANSACTION IS AN EXCESS BENEFIT TRANSACTION. E. VIOLATIONS OF THE PROTOCOL 1. IF THE BOARD OR COMMITTEE HAS REASONABLE CAUSE TO BELIEVE THAT A DIRECTOR OR PRINCIPAL OFFICER HAS FAILED TO DISCLOSE A FINANCIAL INTEREST, IT SHALL INFORM THE DIRECTOR OR PRINCIPAL OFFICER OF THE BASIS FOR SUCH BELIEF AND AFFORD THE DIRECTOR OR PRINCIPAL OFFICER AN OPPORTUNITY TO EXPLAIN WHY DISCLOSURE WAS NOT MADE. 2. IF, AFTER HEARING THE RESPONSE OF THE DIRECTOR OR PRINCIPAL OFFICER AND MAKING SUCH FURTHER INVESTIGATION AS MAY BE WARRANTED IN THE CIRCUMSTANCES, THE BOARD OR COMMITTEE DETERMINES THAT THE DIRECTOR HAS IN FACT FAILED TO DISCLOSE A FINANCIAL INTEREST, IT SHALL TAKE APPROPRIATE DISCIPLINARY AND/OR CORRECTIVE ACTION, WHICH MAY INCLUDE, BUT NOT BE LIMITED TO: SUSPENSION OF VOTING RIGHTS, RECISION OF ANY AGREEMENTS, AND TERMINATION OF DIRECTOR OR OFFICER STATUS. FORM 990, PART VI, SECTION B, LINE 15 MMC PARTICIPATES IN SALARY SURVEYS SPECIFIC TO ADMINISTRATOR POSITIONS. THIS INFORMATION IS USED TO DEVELOP SALARY RANGES FOR THE ADMINISTRATIVE STAFF. THE BOARD OF DIRECTORS PARTICIPATES IN DEVELOPMENT OF RANGES AND ESTABLISHMENT OF SALARIES FOR THE THREE SENIOR LEADERS OF THE ORGANIZATION AS DESCRIBED IN CORPORATE BYLAWS AND BOARD POLICIES. ANY CHANGES TO THE BENEFIT PACKAGE MUST BE APPROVED BY THE MMC BOARD OF DIRECTORS. THE BOARD APPROVES ALL COMPENSATION CHANGES FOR THE PRESIDENT AS OUTLINED IN CORPORATE BYLAWS AND BOARD POLICIES. CHANGES IN COMPENSATION FOR THE VICE-PRESIDENTS ARE DETERMINED BY THE PRESIDENT USING RANGES ESTABLISHED AND APPROVED BY THE BOARD. FORM 990, PART VI, SECTION C, LINE 18 THE FORM 1023, 990, AND 990-T ARE AVAILABLE UPON REQUEST FROM ADMINISTRATION. FORM 990, PART VI, SECTION C, LINE 19 THE FINANCIAL STATEMENTS ARE AVAILABLE UPON REQUEST FROM ADMINISTRATION. MEDICAL SERVICES INC 11040 N STATE ROAD 77 HAYWARD WI 54843 391536207 HEALTH CARE WI 501(C)(3) LINE 4 REGIONAL ENTERPRISES INC 0 REGIONAL ENTERPRISES INC 1615 MAPLE LANE ASHLAND WI 54806 391555837 SUPPORT WI 501(C)(3) LINE 11B, II N/A 0 REI MEDICAL CLINICS INC 1615 MAPLE LANE ASHLAND WI 54806 391701306 SUPPORT WI 501(C)(3) LINE 11B, II REGIONAL ENTERPRISES INC 0 TAMARACK PROFESSIONAL GROUP INC 1615 MAPLE LANE ASHLAND WI 54806 391198085 HEALTH CARE WI 501(C)(3) LINE 11B, II REGIONAL ENTERPRISES INC 0 MMC DEVELOPMENT CORP INC 1615 MAPLE LANE ASHLAND WI 54806 391360035 SUPPORT WI 501(C)(3) LINE 8 N/A 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 1 0