2014-08-05T09:16:30-05:00 2013-09-30 390758449 WIPFLI LLP 3703 OAKWOOD HILLS PARKWAY EAU CLAIRE WI 54701 990 2012-10-01 390806404 VERNON MEMORIAL HEALTHCARE INC VERN 6086372101 507 SOUTH MAIN STREET VIROQUA WI WI 54665 MARY KOENIG 6086372101 2014-08-04 1 HOLLY POKRANDT CPA P00449155 7158323407 2014-08-04 2012 2015-11-30 17:44:51Z MARY KOENIG 507 SOUTH MAIN STREET VIROQUA WI WI 54665 70984883 0 X WWW.VMH.ORG X 1946 WI VERNON MEMORIAL HEALTHCARE, INC. HAS BEEN COMMITTED TO PROVIDING THE HIGHEST QUALITY CARE AND TREATMENT TO THE INJURED, AFFLICTED AND WELL PEOPLE WHO NEED THE RESOURCES WE HAVE AT OUR COMMAND, WITHOUT REGARD TO RACE, CREED, COLOR, SEX, HANDICAP, NATIONAL ORIGIN, OR ABILITY TO PAY. IT IS OUR INTENTION TO INSURE THAT IN EACH AND EVERY CASE OUR PATIENTS SHALL BE TREATED WITH COMPASSION, UNDERSTANDING AND DIGNITY. FURTHER, THE RIGHTS AND PRIVILEGES OF THE PEOPLE WE SERVE SHALL ALWAYS BE HELD IN THE HIGHEST REGARD, AND THEIR WELL-BEING MUST ALWAYS HAVE FIRST CONSIDERATION. VERNON MEMORIAL HEALTHCARE IS COMMITTED TO PROVIDING MODERN FACILITIES AND EQUIPMENT CONSISTENT WITH NEW AND CONTEMPORARY MEDICAL TECHNOLOGY. WE WILL FOSTER, STIMULATE, ENCOURAGE AND PROMOTE CONTINUING HEALTHCARE EDUCATION FOR EMPLOYEES AND THE COMMUNITY WE SERVE. ALL THIS, WE MOST SOLEMNLY AND SINCERELY PLEDGE TO THE PEOPLE WHO NEED US, RECOGNIZING FULLY, THAT SERVICE TO HUMANITY IS THE GREATEST SERVICE OF ALL. 11 11 549 200 3616699 -723206 949517 211948 66908887 67757409 648129 512560 245357 -55574 68751890 68426343 317912 242467 0 0 31463148 33591002 0 0 0 30241849 29003399 62022909 62836868 6728981 5589475 86595072 92268973 31338140 30517300 55256932 61751673 X VERNON MEMORIAL HEALTHCARE, INC. WILL STRIVE TO HAVE THE VISION TO CONTINUALLY PROVIDE THE HIGHEST STANDARD OF CARE TO OUR PATIENTS AND THEIR FAMILIES WHILE BEING 'CLOSE TO HOME.' OUR MISSION IS TO PROVIDE COST-EFFECTIVE, ACCESSIBLE CARE AND SERVICE USING PROFESSIONALLY EDUCATED STAFF AND SUPERIOR TECHNOLOGY TO MEET THE HEALTH CARE NEEDS OF OUR COMMUNITY. OUR CARING AND COMMITMENT TO THE COMMUNITY WILL BE DEMONSTRATED BY OUR EMPHASIS ON HEALTH PROMOTION AND DISEASE PREVENTION THROUGH EDUCATION. 0 0 43497349 242467 52670642 WHILE THERE IS A GROWING AGREEMENT IN THE UNITED STATES ABOUT WHAT CONSTITUTES A NON-PROFIT HEALTHCARE ORGANIZATION'S COMMUNITY BENEFIT, THIS IS A WORK IN PROGRESS. OUR ORGANIZATION PROVIDES SIGNIFICANT CHARITY CARE AND OTHER COMMUNITY BENEFITS AS DEFINED BY THE IRS. BUT IN ADDITION, WE BELIEVE THAT WE PROVIDE A CRITICALLY IMPORTANT COMMUNITY BENEFIT WHICH CANNOT BE QUANTIFIED. OUR ORGANIZATION WAS CREATED AND IS MAINTAINED IN ORDER TO PROVIDE CARE LOCALLY-CARE THAT WITHOUT THE PRESENCE OF OUR ORGANIZATION, WOULD NOT BE AVAILABLE TO THE PEOPLE IN OUR SERVICE AREA.BEYOND MEDICAL, OBSTETRICAL, NEWBORN AND SURGICAL INPATIENT HOSPITALIZATIONS, WE PROVIDE LOCAL ACCESS TO MANY OTHER HEALTH SERVICES INCLUDING A BIRTHING CENTER, A DIALYSIS CENTER, DIAGNOSTIC SERVICES-LABORATORY, IMAGING AND CARDIAC TESTING, 24-HOUR EMERGENCY SERVICES, URGENT CARE SERVICES, INFUSION SERVICES, GASTROINTESTINAL SERVICES, HOME HEALTH CARE, HOSPICE, INPATIENT AND OUTPATIENT CARE, REHABILITATION SERVICES-PHYSICAL, OCCUPATIONAL, RESPIRATORY AND SPEECH THERAPY, SPECIALTY MEDICINE, AND PRIMARY CARE CLINICS. SLEEP STUDY SERVICES WERE ADDED DURING THE 2013 FISCAL YEAR.IN FISCAL YEAR 2013, HOSPITAL INPATIENT SERVICES INCLUDED 3,487 ACUTE CARE PATIENT DAYS, 13 SWING BED PATIENT DAYS, AND 372 NEWBORN PATIENT DAYS. THERE WERE 1,396 SURGERY CASES, 8,029 EMERGENCY ROOM/URGENT CARE VISITS, AND 6,344 VISITS TO THE SPECIALTY CLINIC. 11077711 10785998 VERNON MEMORIAL HEALTHCARE, INC. OPERATES FOUR RURAL HEALTH CLINICS LOCATED IN VIROQUA, LAFARGE, SOLDIERS GROVE, AND WESTBY. TOGETHER, THE RURAL HEALTH CLINICS STRIVE TO MEET THE HEALTH CARE NEEDS OF PATIENTS AND FAMILIES WHO LIVE AND WORK IN THE COMMUNITIES THEY SERVE. A TOTAL OF 41,837 CLINIC VISITS OCCURRED IN FISCAL YEAR 2013. 1410711 684070 VERNON MEMORIAL HEALTHCARE, INC. ALSO PROVIDES HOME HEALTH AND HOSPICE SERVICES. THE HOME CARE AGENCY PROVIDES QUALITY HEALTH CARE TO PATIENTS IN THE COMFORT OF THEIR OWN HOME. THE HOME CARE TEAM WORKS TOGETHER TO PROVIDE INSTRUCTION, CARE AND SUPPORT. DURING FISCAL YEAR 2013, A TOTAL OF 1,783 HOME HEALTH VISITS WERE MADE TO 105 INDIVIDUALS. VERNON MEMORIAL HEALTHCARE HOSPICE OFFERS CARE, COMFORT AND SUPPORT WHEN IT IS NEEDED MOST. HOSPICE IS FOR PATIENTS, FAMILIES, FRIENDS AND CAREGIVERS DEALING WITH THE END OF LIFE. THIS SUPPORT BRINGS COMFORT, HOPE AND REASSURANCE. VERNON MEMORIAL HEALTHCARE HOSPICE SERVES PATIENTS AT HOME, IN LONG-TERM CARE FACILITIES, OR AT VERNON MEMORIAL HOSPITAL. HOSPICE CARE WAS PROVIDED TO 83 INDIVIDUALS IN FISCAL YEAR 2013. 55985771 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 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 45 0 549 1 1 1 0 0 0 0 0 0 0 0 0 X 11 11 0 0 0 0 1 1 1 1 1 0 0 1 1 0 0 1 1 1 1 0 WI X MARY KOENIG 6086372101 507 SOUTH MAIN STREET VIROQUA WI WI 54665 PHYLLIS MALIN 1.00 X 0 0 0 TIM GASKELL 1.00 X 0 0 0 JERRY MORAN 1.00 X 0 0 0 JUDY SCHMIRLER 1.00 X 0 0 0 LEE CUNNINGHAM 1.00 X 0 0 0 TRUDY WALLIN 1.00 X 0 0 0 BONNIE RATH 1.00 X 0 0 0 RON MOILIEN 1.50 X X 0 0 0 ROGER JOHNSON 1.00 X X 0 0 0 ENID NEUBAUER 1.00 X X 0 0 0 ROBERT KNADLE 1.00 X X 0 0 0 KYLE BAKKUM 40.00 X 233952 0 34133 MARY KOENIG 40.00 X 327290 0 28498 DR JEFFREY MENN 40.00 X 508853 0 37944 DR ANTHONY MACASAET 40.00 X 283622 0 24393 ARNOLD NOMANN 40.00 X 411613 0 29086 DR DEBORAH PRIOR 40.00 X 264046 0 33341 BRIAN MILLER 40.00 X 349443 0 35193 GARITH STEINER 40.00 X 963292 0 40588 3342111 0 263176 36 1 1 0 GUNDERSEN HEALTH SYSTEM 1900 SOUTH AVE LA CROSSE WI 54601 LAB/RADIOLOGY 2116387 MARKET & JOHNSON 2350 GALLOWAY STREET EAU CLAIRE WI 54702 CONSTRUCTION 1001036 GPS ANESTHESIA SERVICES N2685 POTATO RIDGE ROAD LA CROSSE WI 54601 ANESTHESIA SERVICES 433760 SHARED MEDICAL SERVICES 209 LIMESTONE PASS COTTAGE GROVE WI 53527 MRI SERVICES 227683 CLINICAL ULTRASOUND SERVICES PO BOX 7 POSTVILLE IA 52162 ULTRASOUND SERVICES 218175 13 75570 136378 211948 HOSPITAL 621990 50289595 50289595 CLINIC 621110 10785998 10785998 RETAIL PHARMACY 446110 5809936 2270596 3539340 HOME HEALTH & HOSPICE 621610 684070 684070 MEALS AND DIETARY 722210 187810 110451 77359 67757409 636933 636933 242158 297732 -55574 -55574 -55574 2112347 24088 1991494 269314 120853 -245226 -124373 -124373 68426343 64140710 3616699 456986 242467 242467 1057812 1057812 24131519 21991587 2139932 1016282 926337 89945 5764720 5253517 511203 1620669 1430738 189931 117124 117124 80088 80088 5049585 4131425 918160 74091 74091 264471 263056 1415 286177 286177 2334298 2334298 71160 59902 11258 2522346 1783627 738719 241444 241444 SUPPLIES 13212355 13182703 29652 EQUIPMENT RENTAL & MAIN 2243787 2110062 133725 BAD DEBT EXPENSE 1935723 1935723 DUES AND SUBSCRIPTIONS 489787 300180 189607 80963 40149 40814 62836868 55985771 6851097 0 1665824 1836274 16736254 20145362 1268945 640924 6984111 6910634 2108047 2253123 208553 288325 62603333 26555926 35440303 36047407 18397003 20041801 12180 12180 2126386 2133896 583646 550840 1063820 1408207 86595072 92268973 6896857 6715814 22874705 22100761 76662 66045 1489916 1634680 31338140 30517300 X 53900077 61024325 1356855 727348 55256932 61751673 86595072 92268973 X 5589475 970527 -65261 X X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 4222 4222 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: VERNON MEMORIAL HEALTHCARE, INC. PAYS ANNUAL ASSOCIATION MEMBERSHIPS TO THE WISCONSIN HOSPITAL ASSOCIATION AND RURAL WISCONSIN HEALTH COOPERATIVE. THESE DUES ARE PRIMARILY FOR ACCESS TO EDUCATIONAL MATERIALS AND STAFF TRAINING AND DEVELOPMENT. A SMALL PORTION OF THE ANNUAL DUES WERE USED IN CONJUCTION WITH LOBBYING ACTIVITIES WITH THE GOAL OF IMPROVING THE OVERALL HEALTHCARE ENVIRONMENT. 1446916 1446916 47186205 17741529 29444676 13003171 8814397 4188774 967041 967041 36047407 DEFERRED COMPENSATION PLAN LIABILITY - FUNDED 1530809 POSTRETIREMENT BENEFIT OBLIGATION 103871 1634680 X 67434307 970527 297732 1268259 66166048 2260295 2260295 68426343 60874305 297732 297732 60576573 2260295 2260295 62836868 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: THE ORGANIZATION IS A NONPROFIT CORPORATION AS DESCRIBED IN SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE (THE "CODE") AND IS EXEMPT FROM FEDERAL TAXES ON RELATED INCOME PURSUANT TO SECTION 501(A) OF THE CODE. THE ORGANIZATION IS ALSO EXEMPT FROM STATE INCOME TAXES ON RELATED INCOME. THE ORGANIZATION IS ALSO ENGAGED, TO A LIMITED EXTENT, IN CERTAIN ACTIVITIES SUBJECT TO TAXATION AS UNRELATED BUSINESS INCOME (UBI). UBI IS NOT SIGNIFICANT. IN ORDER TO ACCOUNT FOR ANY UNCERTAIN TAX POSITIONS, THE ORGANIZATION ASSESSES WHETHER IT IS MORE LIKELY THAN NOT THAT A TAX POSITION WILL BE SUSTAINED UPON EXAMINATION OF THE TECHNICAL MERITS OF THE POSITION, ASSUMING THE TAXING AUTHORITY HAS FULL KNOWLEDGE OF ALL INFORMATION. IF THE TAX POSITION DOES NOT MEET THE MORE LIKELY THAN NOT RECOGNITION THRESHOLD, THE BENEFIT OF THAT POSITION IS NOT RECOGNIZED IN THE FINANCIAL STATEMENTS. THE ORGANIZATION HAS NOT RECORDED ANY ASSETS OR LIABILITIES RELATED TO UNCERTAIN TAX POSITIONS OR UNRECOGNIZED TAX BENEFITS AS OF SEPTEMBER 30, 2013 AND 2012. FEDERAL TAX RETURNS FOR TAX YEARS ENDED SEPTEMBER 30, 2010, AND BEYOND REMAIN SUBJECT TO EXAMINATION BY THE INTERNAL REVENUE SERVICE. PART XI, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES NETTED AGAINST REVENUE 297,732. PART XI, LINE 4B - OTHER ADJUSTMENTS: EXPENSES NETTED AGAINST REVENUE 324,572. BAD DEBT EXPENSE NET AGAINST REVENUE 1,935,723. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES NETTED AGAINST REVENUE 297,732. PART XII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES NETTED AGAINST REVENUE 324,572. BAD DEBT EXPENSE NET AGAINST REVENUE 1,935,723. 1 1 1 X 300.000000000000 1 X 1 1 0 1 1 933593 933593 0.01530 6812592 4714596 2097996 0.03440 7746185 4714596 3031589 0.04970 233247 19574 213673 0.00350 267180 267180 0.00440 249150 249150 0.00410 749577 19574 730003 0.01200 8495762 4734170 3761592 0.06170 638 638 0.00000 7393 7393 0.00010 90931 935 89996 0.00150 98962 935 98027 0.00160 0 1064364 851491 10911999 11295771 -383772 X 1 0 1 1 VERNON MEMORIAL HOSPITAL INC

507 SOUTH MAIN ST VIROQUA WI 54665

X X X X VERNON MEMORIAL HOSPITAL INC 1 1 X X X X X X X X X X 12 1 1 1 X X X X X X X X X X 0 0 1 1 300.000000000000 1 300.000000000000 1 X X X X X X 1 1 X X X X X 1 0 1 X 0 0 9 HIRSCH CLINIC

407 S MAIN ST SUITE 400 VIROQUA WI 54665

PROVIDER BASED RURAL HEALTH CLINIC VERNON MEMORIAL HEALTHCARE PHARMACY

407 S MAIN ST SUITE 400 VIROQUA WI 54665

PHARMACY LAFARGE MEDICAL CLINIC

111 W SNOW ST LAFARGE WI 54639

PROVIDER BASED RURAL HEALTH CLINIC SOLAR TOWN PHARMACY

104 SUNSET AVE SOLDIERS GROVE WI 54655

PHARMACY BLAND CLINIC

100 MELBY ST WESTBY WI 54667

PROVIDER BASED RURAL HEALTH CLINIC KICKAPOO VALLEY MEDICAL CLINIC

102 SUNSET AVE SOLDIERS GROVE WI 54655

PROVIDER BASED RURAL HEALTH CLINIC VERNON MEMORIAL PHARMACY - WESTBY

115 W STATE STREET WESTBY WI 54667

PHARMACY VERNON MEMORIAL HEALTHCARE INC

507 S MAIN ST VIROQUA WI 54665

HOSPICE VERNON MEMORIAL HEALTHCARE INC

507 S MAIN ST VIROQUA WI 54665

HOME HEALTH AGENCY PART I, LINE 7: THE COSTING METHOD USED ON FORM 990 IS BASED ON A COST-TO-CHARGE RATIO WHICH IS DEVELOPED BASED ON THE HOSPITAL'S TOTAL OPERATING EXPENSES LESS THE PROVISION FOR BAD DEBTS DIVIDED BY GROSS PATIENT SERVICE REVENUE. THIS COST-TO-CHARGE RATIO IS APPLIED AGAINST HOSPITAL REVENUE AND EXPENSE CATEGORIES TO COMPUTE THE ESTIMATED COMMUNITY BENEFIT EXPENSE UNDER IRS COSTING METHODS FOR THE FORM 990. PART I, L7 COL(F): MANAGEMENT PROVIDES FOR PROBABLE UNCOLLECTIBLE AMOUNTS, PRIMARILY UNINSURED PATIENTS AND AMOUNTS PATIENTS ARE PERSONALLY RESPONSIBLE FOR, THROUGH A CHARGE TO OPERATIONS AND A CREDIT TO A VALUATION ALLOWANCE BASED ON ITS ASSESSMENT OF HISTORICAL COLLECTION LIKELIHOOD AND THE CURRENT STATUS OF INDIVIDUAL ACCOUNTS. BALANCES THAT ARE STILL OUTSTANDING AFTER MANAGEMENT HAS USED REASONABLE COLLECTION EFFORTS ARE WRITTEN OFF THROUGH A CHARGE TO THE VALUATION ALLOWANCE AND A CREDIT TO ACCOUNTS RECEIVABLE. MANY TIMES PATIENTS ARE UNABLE TO COMPLETE THE REQUIRED CHARITY CARE APPLICATION AND ARE TRANSFERRED TO COLLECTION SERVICES EVEN THOUGH THE HOSPITAL PROVIDES THIS INFORMATION TO ALL PATIENTS AND ASSISTANCE WITH THE APPLICATIONS. DUE TO NO RESPONSES FROM SOME PATIENTS, A SIGNIFICANT AMOUNT OF BAD DEBTS COULD BE CONSIDERED AS CHARITY CARE. PART II, WHILE THERE IS A GROWING AGREEMENT IN THE UNITED STATES ABOUT WHAT CONSTITUTES A NON-PROFIT HOSPITAL'S COMMUNITY BENEFIT, THIS IS A WORK IN PROGRESS. OUR HOSPITAL PROVIDES CHARITY CARE AND OTHER COMMUNITY BENEFITS AS DEFINED BY THE IRS. BUT IN ADDITION, WE BELIEVE THAT WE PROVIDE A CRITICALLY IMPORTANT COMMUNITY BENEFIT WHICH IS NOT QUANTIFIED. OUR HOSPITAL, LIKE MOST RURAL HOSPITALS, WAS CREATED AND IS MAINTAINED IN ORDER TO PROVIDE LOCAL ACCESS TO MANY HEALTH SERVICES: BIRTHING CENTER, DIAGNOSTICS, EMERGENCY SERVICES AND URGENT CARE, HOME CARE, HOSPICE, INFUSION SERVICES, INPATIENT CARE, LABORATORY SERVICES, OCCUPATIONAL HEALTH, REHABILITATION SERVICES, SPECIALTY MEDICINE, SPEECH AND AUDIOLOGY, SURGICAL SERVICES, AND WOMENS HEALTH. PART III, LINE 4: ACCOUNTS RECEIVABLE AND CREDIT POLICY: IN EVALUATING THE COLLECTABILITY OF ACCOUNTS RECEIVABLE, THE ORGANIZATION ANALYZES PAST RESULTS AND IDENTIFIES TRENDS FOR EACH OF ITS MAJOR PAYOR SOURCES OF REVENUE TO ESTIMATE THE APPROPRIATE ALLOWANCE FOR DOUBTFUL ACCOUNTS AND PROVISION FOR BAD DEBTS. MANAGEMENT REGULARLY REVIEWS DATA ABOUT THESE MAJOR PAYOR SOURCES OF REVENUE IN EVALUATING THE SUFFICIENCY OF THE ALLOWANCE FOR DOUBTFUL ACCOUNTS. SPECIFICALLY, FOR RECEIVABLES ASSOCIATED WITH SERVICES PROVIDED TO PATIENTS WHO HAVE THIRD-PARTY COVERAGE, THE ORGANIZATION ANALYZES CONTRACTUALLY DUE AMOUNTS AND PROVIDES AN ALLOWANCE FOR DOUBTFUL ACCOUNTS AND A PROVISION FOR BAD DEBTS FOR EXPECTED UNCOLLECTIBLE DEDUCTIBLES AND COPAYMENTS ON ACCOUNTS FOR WHICH THE THIRD-PARTY PAYOR HAS NOT YET PAID, OR FOR PAYORS AND PATIENTS WHO ARE KNOWN TO BE HAVING FINANCIAL DIFFICULTIES THAT MAKE THE REALIZATION OF AMOUNTS DUE UNLIKELY. FOR RECEIVABLES ASSOCIATED WITH SELF-PAY PATIENTS (WHICH INCLUDES BOTH PATIENTS WITHOUT INSURANCE AND PATIENTS WITH DEDUCTIBLE AND COPAYMENT BALANCES DUE FOR WHICH THIRD-PARTY COVERAGE EXISTS FOR PART OF THE BILL), THE ORGANIZATION RECORDS A SIGNIFICANT PROVISION FOR BAD DEBTS IN THE PERIOD OF SERVICE ON THE BASIS OF ITS PAST EXPERIENCE, WHICH INDICATES THAT MANY PATIENTS ARE UNABLE OR UNWILLING TO PAY THE PORTION OF THEIR BILL FOR WHICH THEY ARE FINANCIALLY RESPONSIBLE. THE DIFFERENCE BETWEEN THE STANDARD RATES (OR THE DISCOUNTED RATES IF NEGOTIATED) AND THE AMOUNTS ACTUALLY COLLECTED AFTER ALL REASONABLE COLLECTION EFFORTS HAVE BEEN EXHAUSTED IS CHARGED OFF AGAINST THE ALLOWANCE FOR DOUBTFUL ACCOUNTS. THE AUDITED FINANCIAL STATEMENTS DO NOT INCLUDE A SEPARATE FOOTNOTE REGARDING BAD DEBT EXPENSE. PART III, LINE 8: VERNON MEMORIAL HEALTHCARE, INC. IS DESIGNATED AS A CRITICAL ACCESS HOSPITAL AND AS SUCH A PORTION OF ITS REVENUES ARE PAID UNDER A COST REIMBURSEMENT SYSTEM. BASED ON THE INSTRUCTIONS, THE TOTAL MEDICARE REVENUE SHOWN ON THIS FORM 990 INCLUDES ONLY A PORTION OF THE GROSS MEDICARE REVENUE THAT IS ACTUALLY RECEIVED BY THE HOSPITAL FROM THE MEDICARE PROGRAM. THE AMOUNTS LISTED FOR MEDICARE DO NOT INCLUDE PHYSICIAN AND MID-LEVEL PRACTITIONER SERVICES FOR THE COVERAGE OF THE EMERGENCY DEPARTMENT. PHYSICIAN COVERAGE IS REIMBURSED PRIMARILY ON A FEE SCHEDULE REIMBURSEMENT METHODOLOGY AT RATES THAT ARE OFTEN BELOW THE COSTS OF CARING FOR PATIENTS. EMERGENCY SERVICES PROVIDED TO MEDICARE PATIENTS ARE VITAL TO THE WELL-BEING OF THE COMMUNITY AND AS SUCH THESE COSTS AND SHORTFALLS SHOULD ALSO BE CONSIDERED AS AN ADDITIONAL BENEFIT THAT VERNON MEMORIAL HEALTHCARE, INC. PROVIDES TO THE COMMUNITY AND SURROUNDING AREA. THE COSTING METHOD USED ABOVE FOR IRS FORM 990 COMPLIANCE REPORTING IS ALSO BASED ON AN OVERALL AVERAGE COST TO CHARGE RATIO AND DOES NOT CONSIDER MEDICARE NON-ALLOWABLE EXPENSES AS IT IS BASED ON TOTAL HOSPITAL PATIENT SERVICE REVENUES (IGNORING CONTRACTUAL ADJUSTMENTS ON FEE SCHEDULE REIMBURSED ITEMS AND NON-ALLOWABLE MEDICARE EXPENSES AS NOTED ABOVE) DIVIDED BY TOTAL OPERATING EXPENSES LESS THE PROVISION FOR BAD DEBT EXPENSE. THIS RATIO IS THEN MULTIPLIED BY THE TOTAL MEDICARE SERVICES WHICH ARE REIMBURSED ON A COST METHODOLOGY EXCLUDING THE FEE SCHEDULE ITEMS LIKE PHYSICIAN AND MID-LEVEL PRACTITIONER SERVICES WHICH THE HOSPITAL WOULD SHOW A LARGE LOSS ON THESE SERVICES.WHETHER THERE IS A SHORTFALL OR SURPLUS FROM SERVICES PROVIDED TO MEDICARE BENEFICIARIES, THE RECIPIENTS ARE TYPICALLY ELDERLY AND/OR DISABLED MEMBERS OF THE COMMMUNITY AND ARE AN UNDERSERVED POPULATION WHO EXPERIENCE ISSUES WITH ACCESS TO HEALTHCARE SERVICES. WITHOUT TAX-EXEMPT HOSPITALS PROVIDING MEDICARE PATIENT SERVICES, THE CENTERS FOR MEDICARE AND MEDICAID (CMS) WOULD BEAR THE BURDEN OF DIRECTLY PROVIDING SERVICES TO THE ELDERLY AND DISABLED MEMBERS OF THE COMMUNITY. VERNON MEMORIAL HOSPITAL, INC. PART V, SECTION B, LINE 1J: THE COMMUNITY HEALTH NEEDS ASSESSMENT ("COMPASS NOW 2012") PROCESS INCLUDED A VARIETY OF DATA COLLECTION METHODS USED TO CREATE AN OVERALL DESCRIPTION OF THE ISSUES FACING OUR COMMUNITIES. THESE METHODS INCLUDE A RANDOM HOUSEHOLD SURVEY, FOCUS GROUP DISCUSSIONS HELD WITH COMMUNITY MEMBERS, AN EXTENSIVE REVIEW OF SOCIO-ECONOMIC INDICATORS, AND AN INVENTORY OF COMMUNITY RESOURCES. THE DATA COLLECTED GUIDED THE DEVELOPMENT OF 4 PILLAR PROFILES. WE REFER TO THEM AS PILLARS SINCE THEY CREATE THE BUILDING BLOCKS TO A BETTER LIFE. THE PILLARS OF THE COMPASS NOW REPORT ARE: HEALTH, INCOME, EDUCATION, AND COMMUNITY. VERNON MEMORIAL HOSPITAL, INC. PART V, SECTION B, LINE 3: EIGHT KEY STAKEHOLDER MEETINGS WERE HELD. EACH COUNTY FOCUS GROUP TEAM IDENTIFIED KEY COMMUNITY LEADERS REPRESENTING A BROAD RANGE OF COMMUNITY INTERESTS TO PARTICIPATE IN THESE MEETINGS. TWO-HUNDRED FORTY COMMUNITY LEADERS REPRESENTING BUSINESS, CLERGY, HEALTHCARE PROVIDERS AND STAFF, ELECTED OFFICIALS, LAW ENFORCEMENT, EDUCATION, SCHOOL COUNSELORS, UNITED WAY PARTNER AGENCIES, FARMERS, AND COUNTY OFFICIALS FROM THE FIVE COUNTY AREA ATTENDED THE KEY STAKEHOLDER MEETINGS. VERNON MEMORIAL HOSPITAL, INC. PART V, SECTION B, LINE 4: THE COMPASS NOW 2012 PARTNERSHIP WAS CONDUCTED IN JOINT EFFORT WITH THE FOLLOWING OTHER HOSPITALS:1. GUNDERSEN LUTHERAN2. MAYO CLINIC HEALTH SYSTEM3. TOMAH MEMORIAL HOSPITAL4. TRI-COUNTY MEMORIAL HOSPITAL VERNON MEMORIAL HOSPITAL, INC. PART V, SECTION B, LINE 5C: THE CHNA IS AVAILABLE ON THE HOSPITAL'S WEBSITE: HTTP://WWW.VMH.ORG/CONTENT/COMMUNITY-NEEDS-ASSESSMENT VERNON MEMORIAL HOSPITAL, INC. PART V, SECTION B, LINE 7: THERE WERE ITEMS IDENTIFIED IN THE CHNA WHICH WERE NOT ADDRESSED BY VERNON MEMORIAL HEALTHCARE, INC.; HOWEVER, ALL ITEMS WERE CONSIDERED IF A NEED WAS BROUGHT TO THE ATTENTION OF THE GROUP DURING THE INFORMATION GATHERING PHASE OF THE CHNA PROCESS. THE ITEMS THAT WERE NOT ADDRESSED PRIMARILY WERE NOT ADDRESSED DUE TO THE FINANCIAL CONSTRAINT OF PROVIDING A NEW SERVICE FOR A LIMITED POPULATION OF PEOPLE WITHIN THE PRIMARY SERVICE AREA. VERNON MEMORIAL HOSPITAL, INC. PART V, SECTION B, LINE 14G: FORMS AND INSTRUCTIONS ARE AVAILABLE AT ALL REGISTRATION AREAS, INCLUDING THE MAIN HOSPITAL, EMERGENCY ROOM AND OUTLYING CLINICS. SIGNS REGARDING THE COMMUNITY CARE PROGRAM ARE POSTED AT ALL REGISTRATION LOCATIONS. PART VI, LINE 2: IN ADDITION TO THE COMMUNITY HEALTH NEEDS ASSESSMENT RECENTLY CONDUCTED IN CONJUNCTION WITH AREA HEALTH CARE FACILITIES, THE GREAT RIVERS UNITED WAY AND COUNTY HEALTH DEPARTMENTS, VERNON MEMORIAL HEALTHCARE CONTINUALLY GATHERS AND REVIEWS DATA RELATED TO COMMUNITY NEEDS BY UTILIZING MORE INFORMAL FOCUS AND ADVISORY GROUPS, DISCUSSIONS WITH AREA EMPLOYERS, AND WEB SURVEYS, AS WELL AS THROUGH SERVING ON LOCAL AND STATE BOARDS AND COMMITTEES. THE ORGANIZATION COLLABORATES WITH COMMUNITY ORGANIZATIONS, CHURCHES, BUSINESSES, AGENCIES, AND LOCAL COLLEGES AND UNIVERSITIES TO DETERMINE THE NEEDS OF THE COMMUNITIES SERVED. BOARD MEMBERS REPRESENT NOT ONLY THE CITY OF VIROQUA, BUT COME FROM THE DIFFERENT AREAS SERVED BY THE ORGANIZATION. THESE BOARD MEMBERS REGULARLY MEET WITH THE PEOPLE IN THEIR AREAS TO UTILIZE THE SERVICES OFFERED BY THE ORGANIZATION AND BRING BACK THEIR ISSUES AND CONCERNS. PART VI, LINE 3: VERNON MEMORIAL HEALTHCARE MAKES EVERY EFFORT TO EDUCATE PATIENTS ABOUT CHARITY CARE AND OTHER DISCOUNT PROGRAMS AVAILABLE AT THE TIME OF REGISTRATION AND FOLLOWING DISCHARGE. FORMS AND INSTRUCTIONS ARE AVAILABLE AT ALL REGISTRATION AREAS, INCLUDING THE MAIN HOSPITAL, EMERGENCY ROOM AND OUTLYING CLINICS. FINANCIAL COUNSELORS ARE AVAILABLE DURING DAYTIME HOURS TO ASSIST PATIENTS WITH COMPLETION OF FORMS, EITHER IN PERSON OR OVER THE PHONE. INFORMATION ABOUT CHARITY AND DISCOUNT PROGRAMS IS ALSO AVAILABLE ON THE ORGANIZATION'S WEBSITE AND E-NEWSLETTER. SIGNS REGARDING THE COMMUNITY CARE PROGRAM ARE POSTED AT ALL REGISTRATION LOCATIONS. PART VI, LINE 4: VERNON MEMORIAL HEALTHCARE SERVES THE CITY OF VIROQUA AND THE SURROUNDING AREA. OTHER TOWNS IN THE PRIMARY SERVICE AREA INCLUDE WESTBY, READSTOWN, SOLDIERS GROVE, CASHTON, AND LAFARGE. THE SECONDARY SERVICE AREA EXTENDS TO THE CITIES OF DESOTO, FERRYVILLE, HILLSBORO, COON VALLEY, RICHLAND CENTER, GAYS MILLS AND ONTARIO. THE COMMUNITIES AND SURROUNDING RURAL AREAS IN THE PRIMARY SERVICE AREA HAVE AN APPROXIMATE POPULATION OF 22,000. THE SECONDARY SERVICE AREA INCLUDES AN ADDITIONAL 25,000 PERSONS. THE ENTIRE ARE IS RURAL WITH AN AGING POPULATION AND RELATIVELY LOW INCOME LEVELS. PART VI, LINE 5: VERNON MEMORIAL HEALTHCARE PROVIDES A FULL RANGE OF INPATIENT AND OUTPATIENT SERVICES TO THE PEOPLE IN THE COMMUNITIES IT SERVES. SERVICES ARE PROVIDED WITHOUT REGARD TO RACE, COLOR, CREED, RELIGION, GENDER ORIENTATION, DISABILITY, AGE OR NATIONAL ORIGIN. VERNON MEMORIAL HOSPITAL OPERATES A 24/7 EMERGENCY ROOM THAT IS OPEN TO SERVE ALL IN NEED, REGARDLESS OF ABILITY TO PAY. THE ORGANIZATION OWNS AND OPERATES FOUR RURAL HEALTH CLINICS LOCATED IN THE CITIES OF VIROQUA, WESTBY, SOLDIERS GROVE AND LAFARGE, AS WELL AS THREE RETAIL PHARMACIES LOCATED IN VIROQUA, WESTBY AND SOLDIERS GROVE. HOME HEALTH AND HOSPICE SERVICES (INPATIENT AND OUTPATIENT) ARE ALSO PROVIDED. VERNON MEMORIAL HEALTHCARE COLLABORATES WITH COMMUNITIES, CHURCHES, BUSINESSES AND OTHER HEALTH CARE ORGANIZATIONS IN THE REGION TO FACILITATE AND STRENGTHEN ACCESSIBILITY OF QUALITY COMPREHENSIVE HEALTHCARE SERVICES. THE ORGANIZATION SUPPORTS THE LOCAL COMMUNITIES BY PROVIDING CONVENIENT LOCATIONS FOR PRIMARY CARE AND PHARMACY SERVICES. THE BOARD OF DIRECTORS IS COMPRISED OF INDEPENDENT COMMUNITY MEMBERS WHO REPRESENT THE MAKE-UP OF THE AREAS SERVED BY THE ORGANIZATION. VERNON MEMORIAL HEALTHCARE HAS AN OPEN MEDICAL STAFF MADE UP OF QUALIFIED PHYSICIANS WHO WORK WITH THE HOSPITAL TO PROVIDE CARE TO THE COMMUNITIES SERVED. ALL QUALIFIED PHYSICIANS AND AFFILIATED STAFF WHO ARE GRANTED PRIVILEGES UNDERGO A THOROUGH AND COMPREHENSIVE CREDENTIALING AND ORIENTATION PROCESS. ANY SURPLUS FUNDS GENERATED THROUGH OPERATIONS ARE USED TO CONTINUE TO MEET THE NEEDS OF THE PEOPLE THAT ARE SERVED THROUGH THE ADDITION OF NEW FACILITIES AND EQUIPMENT, OR THE ADDITION OR EXPANSION OF NEEDED SERVICES. REPORTS FILED WITH STATES PART VI, LINE 7 WI 1 VIROQUA AREA SCHOOLS 115 N EDUCATION AVE VIROQUA WI 54665 396004944 GOV'T ORGANIZATION 59813 SUPPORT OF BIGLEY POOL, ATHLETIC EQUIPMENT, STUDENT COUNCIL, AFTER PROM PARTY YOUTH INITIATIVE HIGH SCHOOL 500 EAST JEFFERSON ST VIROQUA WI 54665 391906073 501(C)(3) 15000 MATCHING FUNDS FRIENDS OF THE LAWTON LIBRARY 118 N BIRD ST LA FARGE WI 54639 205596172 501(C)(3) 10000 LIBRARY EXPANSION WESTBY AREA SCHOOL DISTRICT 206 WEST AVE SOUTH WESTBY WI 54667 396005143 GOV'T ORGANIZATION 45885 GARDEN PROJECT, SOFTBALL FIELD, MUSICAL INSTRUMENTS, STUDENT COUNCIL WESTERN TECHNICAL COLLEGE 400 7TH STREET NORTH LA CROSSE WI 54602 396002842 501(C)(3) 35000 PARTIAL COMPENSATION OF NURSING CLINICAL INSTRUCTOR PLEASANT RIDGE WALDORF 431 E COURT ST VIROQUA WI 54665 391357578 501(C)(3) 5600 SCIENCE PROGRAM VERNON COUNTY TREASURER 400 COURTHOUSE SQUARE VIROQUA WI 54665 396005749 GOV'T ORGANIZATION 7200 BIKE PATH MAINTENANCE VERNON COUNTY SHERIFF'S OFFICE 1320 BAD AXE COURT VIROQUA WI 54665 396005749 GOV'T ORGANIZATION 10000 K-9 PROJECT MATCHING FUNDS WESTBY FOOTBALL CLUBNORSEMEN BOOSTER CLUB W2693 CTY RD N COON VALLEY WI 54623 392041425 501(C)(3) 10400 GOALPOST INSTALLATION, EQUIPMENT, APPAREL 9 0 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: ALL DONEES ARE REQUIRED TO SUBMIT THEIR DONATION REQUESTS TO THE CEO OR MARKETING MANAGER OF VERNON MEMORIAL HEALTHCARE, INC. REQUESTS SUBMITTED TO THE MARKETING MANAGER ARE FORWARDED TO THE CEO FOR FINAL APPROVAL. THE REQUESTS MUST INCLUDE A DETAILED DESCRIPTION OF WHAT THE FUNDS WILL BE USED FOR AND HOW THEY WILL BENEFIT THE COMMUNITY. DONEES ARE ASKED TO PROVIDE CONFIRMATION OF RECEIPT AND AN EXPLANATION OF HOW THE FUNDS WERE USED, EITHER VERBALLY OR IN WRITING, TO THE CEO. IF THE REQUESTS ARE DEEMED BENEFICIAL TO THE NEEDS OF THE COMMUNITY, THE FUNDS ARE AWARDED TO THE APPLYING ORGANIZATION. X X X 0 0 0 0 0 0 0 0 0 KYLE BAKKUM 211948 0 8500 0 13504 0 31563 0 2570 0 268085 0 0 0 MARY KOENIG 215708 0 8320 0 103262 0 25435 0 3063 0 355788 0 0 0 DR JEFFREY MENN 500533 0 8320 0 0 0 33263 0 4681 0 546797 0 0 0 DR ANTHONY MACASAET 275122 0 8500 0 0 0 24191 0 202 0 308015 0 0 0 ARNOLD NOMANN 403612 0 8001 0 0 0 27691 0 1395 0 440699 0 0 0 DR DEBORAH PRIOR 255546 0 8500 0 0 0 31837 0 1504 0 297387 0 0 0 BRIAN MILLER 336946 0 6529 0 5968 0 29373 0 5820 0 384636 0 0 0 GARITH STEINER 415258 0 8500 0 539534 0 36226 0 4362 0 1003880 0 0 0 SUPPLEMENTAL INFORMATION PART III PART III: IN ADDITION TO THE COMPENSATION REPORTED IN PART II, THE ORGANIZATION ACCRUED ADDITIONAL PAID LEAVE TIME THAT IS RECOGNIZED AS UNFUNDED DEFERRED COMPENSATION FOR TWO INDIVIDUALS. THE UNFUNDED DEFERRED COMPENSATION EXPENSED IN FISCAL YEAR 2013 WAS AS FOLLOWS: MARY KOENIG $7,431 KYLE BAKKUM $24,858 THE ORGANIZATION HAD ALSO INSTITUTED A POLICY WHEREBY EXECUTIVES (GARITH STEINER AND MARY KOENIG) WERE ABLE TO ACCRUE VACATION TIME THAT WAS NOT LIMITED BY THE ORGANIZATION'S STANDARD POLICY. THIS POLICY HAS SINCE BEEN DISCONTINUED. IN 2012, GARITH STEINER AND MARY KOENIG USED A SIGNIFICANT PORTION OF THIS VACATION WHICH IS RECOGNIZED ON SCHEDULE J ($501,422 AND $103,262, RESPECTIVELY). A WISCONSIN HEALTH AND EDUCATIONAL FACILITIES AUTHORITY 391337855 97710VXQ6 2005-05-19 22894672 FINANCE CONSTRUCTION OF FACILITY EXPANSION 0 0 0 A 1670000 22894672 1846325 457893 20590454 2006 0 0 1 1 A 0 0 0 0 0.00000 0.02990 0.02990 0 0 0 A 0 0 0 1 0 0 0 0 0 A 0 SCHEDULE K, PART IV, LINE 2C, ARBITRAGE: THE REBATE COMPUTATION WAS PERFORMED AS OF MARCH 31, 2010. THE REBATE AMOUNT CALCULATED IN ACCORDANCE WITH TREAS. REG. SECTION 1.148-3(B) FOR THE BONDS WAS $0. FORM 990, PART VI, SECTION A, LINE 6 ANY PERSON WHO IS EIGHTEEN YEARS OF AGE OR OLDER AND A BONA FIDE RESIDENT OF VERNON COUNTY, WISCONSIN, OR THE AREA WITHIN A RADIUS OF TWENTY-FIVE MILES OF THE CITY OF VIROQUA, WISCONSIN, AND WHO HAS THE HERETOFORE OR MAY HEREAFTER CONTRIBUTE TEN DOLLARS OR MORE TO THE CORPORATION SHALL BE A MEMBER THEREOF. ALL MEMBERS OF THE CORPORATION SHALL BE VOTING MEMBERS. EACH MEMBER SHALL HAVE ONE VOTE ON ANY MATTER SUBMITTED TO A VOTE OF THE MEMBERS OF THE CORPORATION. FORM 990, PART VI, SECTION A, LINE 7A THE DUTIES OF THE MEMBERS OF THE VERNON MEMORIAL HEALTHCARE, INC ("THE CORPORATION") SHALL BE: THE ELECTION OF MEMBERS OF THE BOARD OF DIRECTORS OF THE CORPORATION, THE REMOVAL OF MEMBERS OF THE BOARD OF DIRECTORS OF THE CORPORATION, AND THE CHANGING OF THE NUMBER OF DIRECTORS CONSTITUTING THE BOARD OF DIRECTORS OF THE CORPORATION. FORM 990, PART VI, SECTION A, LINE 7B THE DUTIES OF THE MEMBERS OF THE VERNON MEMORIAL HEALTHCARE, INC ("THE CORPORATION") SHALL ALSO INCLUDE: THE AMENDMENT, RESTATEMENT, OR MODIFICATION OF THE ARTICLES OF INCORPORATION OR BYLAWS OF THE CORPORATION; AND THE APPROVAL OF THE SALE, LEASE, OR OTHER DISPOSITION OF ALL, OR SUBSTANTIALLY ALL OF THE ASSETS AND PROPERTY OF THE CORPORATION, THE DISSOLUTION OF THE CORPORATION, OR ITS MERGER WITH ANOTHER CORPORATION. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 IS REVIEWED BY THE BOARD OF DIRECTORS OF VERNON MEMORIAL HEALTHCARE, INC. AT THEIR REGULARLY SCHEDULED BOARD MEETING PRIOR TO FILING THE RETURN. FORM 990, PART VI, SECTION B, LINE 12 ALL BOARD MEMBERS OF VERNON MEMORIAL HEALTHCARE, INC. ARE REQUIRED TO DISCLOSE ALL POSSIBLE CONFLICTS OF INTEREST WHEN FIRST ELECTED TO THE BOARD OF DIRECTORS. DURING THEIR TERMS, IF ANY BUSINESS RELATIONSHIPS ARE ENTERED INTO WHICH MAY AFFECT THEIR INDEPENDENCE AS A MEMBER, THE MEMBER MUST IMMEDIATELY DISCLOSE THESE RELATIONSHIPS. FORM 990, PART VI, SECTION B, LINE 15 TO DETERMINE APPROPRIATE SALARY RANGES FOR UPPER MANAGEMENT POSITIONS, VERNON MEMORIAL HEALTHCARE, INC. UTILIZES BENCHMARK DATA FROM SURVEYS CONDUCTED BY RELEVANT TRADE ORGANIZATIONS. THE CEO HAS THE RIGHT TO AMEND THE DETERMINED AMOUNT FOR THE CFO AND COO. THE BOARD HAS THE RIGHT TO AMEND THE AMOUNT FOR THE CEO. THE EXECUTIVE COMMITTEE OF THE BOARD REVIEWS THE DATA FOR THE CEO ANNUALLY TO DETERMINE THE AMOUNT OF HIS COMPENSATION AND ANY CHANGES IN COMPENSATION ARE MAINTAINED IN THE PERSONNEL FILE. THE CEO REVIEWS THE DATA FOR THE CFO AND COO ANNUALLY TO DETERMINE THE AMOUNT OF COMPENSATION AND ANY CHANGES ARE MAINTAINED IN THE PERSONNEL FILE. FORM 990, PART VI, SECTION C, LINE 19 VERNON MEMORIAL HEALTHCARE, INC. MAKES ITS FINANCIAL STATEMENTS AND GOVERNING DOCUMENTS AVAILABLE TO THE PUBLIC ON A PER REQUEST BASIS. THE FORM 990 IS ALSO AVAILABLE TO THE PUBLIC ON A THIRD PARTY WEBSITE CALLED GUIDESTAR. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: NET ASSETS RELEASED FROM RESTRICTION FOR OPERATIONS -65,261. OVERSIGHT OF AUDIT FORM 990, PART XI, LINE 2C VERNON MEMORIAL HEALTHCARE, INC. DOES NOT HAVE A SPECIFIC COMMITTEE WHICH ASSUMES THE RESPONSIBILITY FOR OVERSIGHT OF THE AUDIT. THE ENTIRE BOARD OF DIRECTORS IS RESPONSIBLE FOR SELECTION OF THE INDEPENDENT ACCOUNTANT. NO CHANGES HAVE BEEN MADE IN THE PAST YEAR REGARDING THIS OVERSIGHT FUNCTION OF THE GOVERNING BODY. VERNON MEMORIAL HEALTHCARE FOUNDATION INC 507 SOUTH MAIN STREET VIROQUA WI 54665 391515716 FUNDRAISING WI 501(C)3 11 C - III - FI N/A 0 0 0 1 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 0