2014-12-23T16:32:19-06:00 2014-06-30 450250958 EIDE BAILLY LLP 4310 17TH AVE S PO BOX 2545 FARGO ND 581082545 990 2013-07-01 450308379 Hazen Memorial Hospital Association HAZE 7017482225 510 8th Avenue NE Hazen ND 58545 Darrold Bertsch CEO 7017482225 2014-12-23 1 LISA CHAFFEE CPA P00193453 7012398500 2014-12-23 2013 2015-11-30 17:44:51Z Sakakawea Medical Center Darrold Bertsch 510 8th Avenue NE Hazen ND 58545 12302795 0 X www.sakmedcenter.org X 1943 ND Operation of a hospital, clinic, and an elderly care facility. 10 9 157 80 0 0 237672 481595 11068985 11780020 19403 -23593 26737 31048 11352797 12269070 2000 4500 0 0 5928198 6188086 0 0 0 4728377 5074890 10658575 11267476 694222 1001594 7179795 7805109 1910110 1459004 5269685 6346105 X Provide high quality care that is measured and continuously improved. Provide individualized care that exceeds expectations of those we serve. Strengthen partnerships with providers to enhance coordination of care and improve system performance. Be a steward of resources. Commit to service excellence. Be a vital contributor to our area communities. Recognize the value of each employee and provide opportunities for personal growth and development that complement the needs of the organization. 0 0 7475863 4500 9686886 Sakakawea Medical Center (SMC) is a 25 bed critical care access hospital providing services in the following areas - acute care, surgery, intermediate and skilled swing bed, emergency room with trauma level IV certification, home health, and hospice. Services provided by the ancillary departments include physical therapy, occupational therapy, radiology, digital mammography, bone density, ultrasound, CT, nuclear med, MRI, laboratory, respiratory therapy, cardiac rehab, EKG, EEG, sleep studies, and thallium stress tests. Based on charges foregone Sakakawea Medical Center provided $84,148 in charity care. Also available to all self-pay patients, regardless of financial status, is a 30% discount policy for timely payments. SMC is a participating provider for Medicare, Medicaid, Blue Cross Blue Shield and other insurances.Sakakawea Medical Center reaches out to the communities in the service area through programs such as falls prevention classes, CPR education, ACLS classes, PALS classes, grief support groups, smoking cessation classes, occupational health, free blood pressure checks, a Christmas giving tree project, and health career presentations to high schools. Wellness screenings are provided to area schools and businesses. SMC provides community education programs on requested topics free of charge. It is important for Sakakawea Medical Center to serve our communities by providing all of their health care needs. 830996 1108804 Senior Suites is a basic care facility that was completed in April 1997, it is adjacent to Sakakawea Medical Center. Senior Suites can accommodate 34 residents with single or double rooms. It features a licensed beauty shop, activity room, spacious commons areas and an enclosed nurse's station. The rooms are set up like suites, hence the name "Senior Suites." the facility is available to those in the senior population that requires a minimal amount of supervision, but do not require 24 hour services. The residents are provided with assistance for daily living and medication administration. Resident care census days totaled 9,855 this year. 1329063 984330 To insure the need for quality health care is met in SMC's service area, Sakakawea Medical Center began managing a rural health clinic in July 2007. The clinic is located directly across the street from the hospital. This provides primary health care for our patients and also space is provided in the clinic for visiting specialists. This saves the patients from having to drive up to 70 miles to receive specialty health care. The clinic is staffed with two physicians and two mid-level providers. A sliding fee scale charity care program is available to patients who qualify financially. 9635922 1 1 0 0 0 0 0 0 0 1 1 0 1 1 1 1 1 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 18 0 1 157 1 0 0 0 0 0 0 0 0 0 0 X 10 9 0 0 0 0 1 1 1 1 0 0 0 1 1 0 1 1 1 1 0 0 X Renae Snyder 7017482225 510 8th Avenue NE Hazen ND 58545 X Christie Obenauer President 2.00 X X 0 0 0 Fred Stern Vice President 1.50 X X 0 0 0 Myria Perry Secretary/Treasurer 1.50 X X 0 0 0 Don Lyn Erickson Director 1.50 X 0 0 0 Mark Gerde Director 1.50 X 0 0 0 Robin Richter Director 1.50 X 0 0 0 Sienna Sailer Director 1.50 X 0 0 0 Beverly Huber Director 1.50 X 0 0 0 Kimberly Kessler Director 1.50 X 0 0 0 Todd Lindquist Director 1.50 X 0 0 0 Darrold Bertsch CEO 40.00 X 134396 0 5938 Renae Snyder CFO 40.00 X 67418 0 3404 Robert Volk Midlevel 40.00 X 116918 0 21330 Ronald Schmitz CRNA 40.00 X 209118 0 13182 Rodney Zimmerman Physician 40.00 X 252253 0 26057 780103 0 69911 4 0 1 1 0 104163 377432 481595 Patient and Resident Services 621400 11362027 11362027 Other Program Revenue 623000 334512 334512 Education 623000 62865 62865 Cafeteria 623000 20616 20616 11780020 8789 8789 23209 0 23209 23209 23209 32382 -32382 -32382 -32382 8042 973 7069 7069 1140 370 770 770 12269070 11780020 0 7455 X 4500 4500 163797 163797 5112152 4834858 277294 179586 45056 134530 361815 99474 262341 370736 337883 32853 115606 115606 12763 12763 42754 42754 2048033 1851742 196291 15394 61 15333 282215 132880 149335 404198 404198 45133 31835 13298 19606 7174 12432 466685 466685 88197 12797 75400 Medical Supplies 787782 787782 Bad Debt Expense 403299 403299 Food 126035 126035 Dues & Subscriptions 79835 50462 29373 137355 39201 98154 11267476 9635922 1631554 0 4417 5581 2206796 2238611 1514503 1391256 305899 324678 30709 41385 8874629 7129732 1724744 1744897 466254 870054 383892 465182 542581 723465 7179795 7805109 955281 952950 223169 0 690004 492690 41656 13364 1910110 1459004 X 4820810 5815518 398875 480587 50000 50000 5269685 6346105 7179795 7805109 X 1001594 74826 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 64983 422 65405 63893 1090 64983 62933 960 63893 61518 1415 62933 0.76000 0.24000 0 0 23092 23092 5652320 4632857 1019463 2989022 2430953 558069 210195 65922 144273 1744897 Interest in Net Assets of Sakakawea Medical Center Foundation 465182 F 465182 Patronage Credit Asset 571065 Estimated Third Party Payor Settlements 152400 723465 Capital Lease Obligations 13364 13364 X 11933960 -322009 -322009 12255969 13101 13101 12269070 10857540 1343 1343 10856197 411279 411279 11267476 Part V, Line 4: The Medical Center's policy is to maintain sufficient financial stability for the operations of Medical Center. Interest income is to be transferred to the temporarily restricted endowment funds until the Board determines how the funds are to be used. In establishing this policy, the Medical Center considered the long-term expected return on its endowments. The spending policy states that distributions of earnings can be made if the Board of Directors deems it prudent to do so taking into account certain statutory factors included in the UPMIFA. Distributions may be made at least annually, but do not need to be done. Part X, Line 2: The Medical Center is organized as a North Dakota nonprofit corporation and has been recognized by the Internal Revenue Service (IRS) as exempt from federal income taxes under Internal Revenue Code Section 501(c)(3). The Medical Center is annually required to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. In addition, the Medical Center is subject to income tax on any net income that is derived from business activities that are unrelated to its exempt purpose. The Medical Center has determined it is not subject to unrelated business income tax and has not filed an Exempt Organization Business Income Tax Return (Form 990-T) with the IRS. The Medical Center believes that it has appropriate support for any tax positions taken affecting its annual filing requirements, and as such, does not have any uncertain tax positions that are material to the financial statements. The Medical Center would recognize future accrued interest and penalties related to unrecognized tax benefits and liabilities in income tax expense if such interest and penalties are incurred. Part XI, Line 2d - Other Adjustments: Provision for Bad Debts Reported in Revenue on Financial Statements -403,299. Change in Interest in Net Assets of Sakakawea Medical Center Foundation 81,290. Part XI, Line 4b - Other Adjustments: Auxiliary Revenue Not Included for Financial Statement Purposes 14,444. Fundraising Expense Reported in Revenue -973. Gaming Expense Reported in Revenue -370. Part XII, Line 2d - Other Adjustments: Fundraising Expense Reported in Revenue 973. Gaming Expense Reported in Revenue 370. Part XII, Line 4b - Other Adjustments: Auxiliary Expenses Not Included for Financial Statement Purposes 7,980. Provision for Bad Debts Reported in Revenue on Financial Statements 403,299. 1 1 X 1 X 125.000000000000 1 X 0 1 0 0 59000 59000 0.00540 414966 400737 14229 0.00130 473966 400737 73229 0.00670 18609 2500 16109 0.00150 52754 19029 33725 0.00310 1403613 925035 478578 0.04410 150 150 0.00000 1475126 946564 528562 0.04870 1949092 1347301 601791 0.05540 6 9966 9966 0.00090 6 9966 9966 0.00090 0 403299 25005 3763513 3840810 -77297 X 1 1 1 1 Sakakawea Medical Center 510 8th Ave NE Hazen ND 58545 www.sakmedcenter.org 5024A X X X X Hazen Memorial Hospital Association 1 1 X X X X X X X X X 12 1 1 1 X www.sakmedcenter.org X X X X X 1 0 1 1 125.000000000000 1 200.000000000000 1 X X X 1 1 X X 1 0 X X X 1 X 0 0 Hazen Memorial Hospital Association Part V, Section B, Line 3: A community survey, focus group, providers, representatives from public health, and individual interviews. Hazen Memorial Hospital Association Part V, Section B, Line 4: Also included were Custer Public Health Unit, Coal Country Community Health Centers, Knife River Care Center, and Mercer County Ambulance. Hazen Memorial Hospital Association Part V, Section B, Line 6i: The Implementation Strategy is located on the facilities website url www.sakmedcenter.org. Hazen Memorial Hospital Association Part V, Section B, Line 12i: Sakakawea Medical Center offers two separate programs for discounted care. The self-pay discount policy is available for uninsured patients regardless of income. A discount of 30% is allowed if regular monthly payments are remitted in a specified time frame. The charity care program provides discounted care to patients based on family income according to FPG guidelines. The sliding fee scale allows discounts from 20% to 100% of charges. Charges are discounted by 30% before the sliding fee scale is applied (for uninsured applicants only.) The program is available for uninsured patients as well as co-pays and deductibles for insured patients.The self-pay discounts program cannot be combined with the charity care program. However, the Hospital counsels all self-pay individuals to determine if their potential charity care discount would result in a better discount if they apply for charity care. The patients that use the self-pay discount are typically the patients that do not want to submit their financial information or patients that would not qualify under the charity care policy. Hazen Memorial Hospital Association Part V, Section B, Line 14g: In addition to the full FAP being available upon request, information referencing the FAP is provided in summary format on the clinic's website, attached to the billing invoices, as well as posted in the admissions office, emergency rooms and waiting rooms. 2 Sakakawea Hazen Clinic 813 7th St NE Hazen ND 58545 Clinic Senior Suites at Sakakawea 813 7th St NE Hazen ND 58545 Basic Care Facility Part I, Line 3c: Sakakawea Medical Center offers two separate programs for discounted care. The self pay discount policy is available for uninsured patients regardless of income. A discount of 30% is allowed if regular monthly payments are remitted in a specified time frame. This program cannot be combined with the Charity Care program.The charity care program provides discounted care to patients based on family income according to FPG guidelines. The sliding fee scale allows discounts from 20% to 100% of charges. The program is available for uninsured patients as well as co-pays and deductibles for insured patients. Part I, Line 7: Charity care is based on the total direct and indirect costs related to providing services to patients and based on average ratios of cost to charges. Unreimbursed Medicaid was converted to cost using the cost-to-charge ratio derived from the relevant cost center on the Medicare cost report. Community health improvement services, health professionals education and contributions reflect actual expenses recorded to the general ledger. Subsidized health services costs were calculated based on information from the Medicare cost report. Part I, Line 7g: Hazen Memorial Hospital Association operates a rural clinic which operates at a loss. The costs included in subsidized health services attributable to clinics are $1,258,300. Part I, Ln 7 Col(f): For the purposes of calculating the percentage on Part 1, Line F, $403,299 of bad debt was backed out of total operating expenses. Part II, Community Building Activities: The CEO is involved in five boards that promote the health of the communities: NDHA, NDRHA, AHEC, CHAD, and TASC . The director of patient care serves on the Bismarck State College Advisory Committee for the nursing program. Part III, Line 4: The footnote to the Organization's financial statements can be found on page 9 of the attached audited financial statements.Part III, Line 2:Bad debt expense is reported at charges. Payments and discounts are posted to patient bills. Any remaining balances are billed to the patient through monthly statements. If no payments are received from the patient at the end of the fourth month, the account is turned over to a collection agency and the balance on the account is written off as a bad debt. The bad debt expense is shown on the monthly financial statements.Part III, Line 3:There are most likely some patients in bad debt who would qualify for charity care, but they have not completed the application and remitted the required payment. Based on the poverty level of the service area, 6.2%, the estimated amount of bad debt expense that is attributable to patients eligible under the organization's financial assistance policy would be approximately $25,005. Part III, Line 8: Medicare allowable costs of care are based on the Medicare cost report. The Medicare cost report is completed based on the rules and regulations set forth by Centers for Medicare & Medicaid Services. The costs themselves are a community benefit as the community would not receive these services if we did not provide them. Part III, Line 9b: If a patient has applied for charity care previously, an application is sent with the monthly statement. Once determined the patient is eligible, the charity care discount portion is written off. The remaining patient portion then falls under the same collection practices of all other accounts. Our policy requires a new charity care application every six months. Part VI, Line 2: Sakakawea Medical Center consults with local physicians to identify community healthcare needs. The SMC staff participates in local and regional organizations and activities including Chamber of Commerce and economic development boards. The CEO routinely attends city council and county commission meetings to solicit input and engage in dialogue relating to healthcare needs and services.Sakakawea Medical Center has collaborated with other local providers to conduct a community health needs assessment which will inventory service delivery assets, identify needs and create a foundation for undertaking strategic initiatives. Part VI, Line 3: Charity care information is sent with the monthly statements to all uninsured patients as well as patients that are not making adequate monthly payments. Approximately 100 notices are sent out per month with the statements. Inpatients and surgical patients are informed at time of admission about charity care. A social worker visits with all self pay inpatients to inform them about the charity care, Medicaid (state program), and self pay discount policies. Brochures have been printed that describe our charity care and discount policies. The brochures are available in waiting rooms, ER, the clinics and admitting offices. Part VI, Line 4: Hazen Memorial Hospital Association serves the communities in Mercer County and the surrounding area, including the towns of Hazen, Beulah, Stanton, Zap, Golden Valley, Center and Pick City. Sakakawea Medical Center, located in Hazen, is the only hospital in the county. The nearest hospital is located more than 60 miles away. Attached to the hospital is Senior Suites, a basic care facility. The Association manages one rural health clinic in Hazen. The combined total population of the county is approximately 8,592. The average annual wage in Mercer County for 2013 was $60,060. The current unemployment rate is 3.6%. Sakakawea Medical Center's payer mix for this fiscal year included 11% uninsured patients and 4% Medicaid patients. All patients presenting to the facility are cared for regardless of their ability to pay. Part VI, Line 5: As a critical access hospital, Sakakawea Medical Center provides a variety of health and wellness services to our service area. The organization subsidizes primary care services provided at the Sakakawea Hazen Clinic, ensuring that primary care is available in the local communities. SMC also subsidizes home health services to ensure those residents who are homebound have the health care they need. The emergency room is staffed 24 hours a day and is available to all regardless of ability to pay. The Board of Directors is comprised of county-wide volunteers; three are from Hazen, six from Beulah, and one from Stanton. The directors have various occupations including power plant manager, bank vice president, accounting supervisor, engineer, chiropractor, and business owner. The directors are not employed by SMC nor are they family members of employees.Medical privileges are extended to all physicians in the county.Sakakawea Medical Center's Hospice staff is assisted by 57 volunteers from the area communities. The staff at Senior Suites, the basic care facility, is served by 23 community volunteers. Surplus funds are invested back into the facility through equipment upgrades and building improvements. Recent investments include the purchase of an e-emergency telemed system, an ultrasound machine, and servers for the computer system. In addition, more continuing education is being offered to the staff by means of webinars and workshops. An employee assistance program is available for staff and family members which provides free confidential assessments, counseling, or referral services by trained professionals.Sakakawea Medical Center is investing in the future of healthcare professionals by implementing a nursing program. We are partnering with other health care providers in the county, a community health center and a nursing home, to offer Interactive Video Network (IVN) classes in our facility. Hands-on skill work and clinicals are taught by registered nurses employed by our organization. Upon completion of an 11 month program, students will receive a certificate in practical nursing. An additional 9 month program enables the students to receive an Associate Degree in Nursing and become eligible to test for their registered nurse license. Sakakawea Medical Center also supports state universities and high schools by offering rural medical experiences to area students. Throughout the year, students are provided with practice opportunities in nursing, lab, PT or the emergency room. X X X X X 0 0 0 0 0 0 0 0 0 Darrold Bertsch CEO 134396 0 0 0 0 0 3124 0 2833 0 140353 0 0 0 Ronald Schmitz CRNA 209118 0 0 0 0 0 8365 0 4856 0 222339 0 0 0 Rodney Zimmerman Physician 252253 0 0 0 0 0 10126 0 15978 0 278357 0 0 0 Schedule J, Part II: Darrold Bertsch, CEO, was an employee of Sakakawea Medical Center (SMC) through 5/31/13 where he provided services to both SMC and Coal Country Community Health Center (CCCHC), an unrelated organization. As of 6/1/2013, Darrold became an employee of CCCHC and still provides services to both SMC and CCCHC. However, as an employee of CCCHC, Darrold now receives his W-2 from CCCHC. The compensation reported in Part VII of the core form and Part II of Schedule J reflects total compensation Darrold received from SMC for his services to both SMC and CCCHC which were reported on his 2013 Form W-2 from SMC (for January 2013 thru May 2013), as well as the amount of compensation he received solely from CCCHC for his services to SMC when he was an employee of CCCHC (for June 2013 thru December 2013). In the calendar year 2013 Darrold received $56,700 in base salary from CCCHC. The remainder of his compensation reported in Part II was as an employee of SMC. Union State Bank (USB) Board Pres. C. Obenauer constructively owns >35% of USB Bond Refinance X 663689 339695 0 1 1 Union State Bank (USB) Board Pres. C. Obenauer constructively owns >35% of USB Refinance Equipment X 506000 152995 0 1 1 492690 Form 990, Part VI, Section A, line 1 There were 10 board of directors at fiscal year end, but the board president only votes to break a tie. The Executive Committee shall consist of the President, Vice President and Secretary/Treasurer of the Board. The CEO of the corporation shall serve without voting powers. The Executive Committee shall have the power to transact all business of the corporation during the interim between meetings of the Board of Directors, provided that any action so taken shall not conflict with the policies and express wishes of the Board of Directors, and that it shall refer all matters of major importance to the full Board of Directors. This committee shall meet as required. In the current fiscal year, the Executive Committee did not meet to make any decisions on behalf of the full governing board. Form 990, Part VI, Section A, line 6 Any person, firm, association, or corporation interested in the activities of this organization, and residing in the service area, may become a member thereof, provided that he has first made a contribution to the association at some time. Each member has one voting right. Form 990, Part VI, Section A, line 7a The members elect the Board of Directors on an annual basis. Form 990, Part VI, Section A, line 7b The members must also approve/disapprove the dissolution of the organization or the merger or consolidation of the organization with another corporation. Form 990, Part VI, Section A, line 8b All items discussed at committee meetings are brought to the full board for recommendations for board action. The organization did not have any committees that acted on behalf of the board. Form 990, Part VI, Section B, line 11 Upon receipt of the draft Form 990, a copy will be forwarded to the board members for their review and comment. Form 990, Part VI, Section B, line 12c The Board of Directors is covered by the conflict of interest policy. Only one conflict has been disclosed this fiscal year by a member of the Board of Directors. The director who has acknowledged the conflict of interest is excused from the board meeting whenever there is discussion about the relevant issue. Although the written policy as of June 30, 2014 did not address the officers of the organization, the officers do review and comply with the policy and disclose to the board of directors if a conflicts does exist. After the conflict is self-reported that officer abstains completely from the decision process of the issue at hand. Form 990, Part VI, Section B, line 15a For purposes of determining the CFO's compensation package at Sakakawea Medical Center, a variety of resources are used. The Organization takes into consideration what is appropriate compensation for that respective position, based on their market. The Organization uses salary surveys from the North Dakota Hospital Association and also refers to the public 990 information from similar sized hospitals in North Dakota. The CFO is evaluated by the CEO annually and the compensation is based on the above information. In fiscal year 2014, the CEO was paid by an unrelated organization that used comparability data to review and determine his compensation. Form 990, Part VI, Section C, line 19 The Organization's governing documents, conflict of interest policy, and financial statements are available if specifically requested. Form 990, Part VII: Darrold Bertsch, CEO, was an employee of Sakakawea Medical Center (SMC) through 5/31/13 where he provided services to both SMC and Coal Country Community Health Center (CCCHC), an unrelated organization. As of 6/1/2013, Darrold became an employee of CCCHC and still provides services to both SMC and CCCHC. However, as an employee of CCCHC, Darrold now receives his W-2 from CCCHC. The compensation reported in Part VII of the core form and Part II of Schedule J reflects total compensation Darrold received from SMC for his services to both SMC and CCCHC which were reported on his 2013 Form W-2 from SMC (for January 2013 thru May 2013), as well as the amount of compensation he received solely from CCCHC for his services to SMC when he was an employee of CCCHC (for June 2013 thru December 2013). Form 990, Part IX, line 11g Medical Purchased Services: Program service expenses 1,725,736. Management and general expenses 0. Fundraising expenses 0. Total expenses 1,725,736. Other Purchased Services: Program service expenses 126,006. Management and general expenses 196,291. Fundraising expenses 0. Total expenses 322,297. Form 990, Part XI, line 9: Change in interest in Net assets of Sakakawea Medical Center Foundation 81,290. Change in Net assets of Hazen Memorial Hospital Auxiliary -6,464.