2013-04-13T08:14:52-05:00 2012-06-30 232932984 PARENTEBEARD LLC 1650 MARKET STREET SUITE 4500 PHILADELPHIA PA 19103 990 2011-07-01 520607945 UNION HOSPITAL OF CECIL COUNTY INC UNIO 4103984000 106 BOW STREET ELKTON MD 219215596 LAURIE R BEYER CPA 4103984000 2013-04-10 1 JULIUS GREEN CPA P00350393 2159720701 2011 2016-02-25 16:41:14Z KENNETH S LEWIS MD JD 106 BOW STREET ELKTON MD 219215596 180495717 0 X WWW.UHCC.COM X 1903 MD PROVIDE HEALTHCARE SERVICES TO THE RESIDENTS OF CECIL COUNTY, MD, AND THE SURROUNDING AREA. 16 15 1242 310 967123 -487240 667518 358066 139069390 147528194 1179680 -1015994 689865 909475 141606453 147779741 4089347 3652832 0 0 63312190 69543149 0 0 0 72395699 74113793 139797236 147309774 1809217 469967 171527434 185901825 87457012 100850222 84070422 85051603 X UNION HOSPITAL OF CECIL COUNTY'S MISSION IS TO PROVIDE HEALTHCARE SERVICES TO THE RESIDENTS OF CECIL COUNTY, MARYLAND, WESTERN NEW CASTLE COUNTY, DELAWARE, AND SOUTHERN CHESTER COUNTY, PENNSYLVANIA. 0 0 144140497 3652832 146565315 UNION HOSPITAL OF CECIL COUNTY'S MISSION IS TO PROVIDE HEALTH CARE SERVICES TO THE RESIDENTS OF CECIL COUNTY, MARYLAND, WESTERN NEW CASTLE COUNTY, DELAWARE, AND SOUTHERN CHESTER COUNTY, PENNSYLVANIA, THAT REPRESENT QUALITY AND VALUE AND ARE PROVIDED WITH MODERN TECHNOLOGY, COMPASSIONATE NURSES AND STAFF, AND CONVENIENT TO THE CITIZENS OF OUR COMMUNITY. THESE HEALTHCARE SERVICES ARE PROVIDED REGARDLESS OF RACE, CREED, SEX, NATIONAL ORIGIN, HANDICAP, AGE, OR ABILITY TO PAY. ALTHOUGH REIMBURSEMENT FOR SERVICES RENDERED IS VITALLY IMPORTANT TO THE OPERATION, STABILITY, AND VIABILITY OF UNION HOSPITAL OF CECIL COUNTY, WE RECOGNIZE THAT NOT ALL MEMBERS OF OUR COMMUNITY ARE IN THE FINANCIAL POSITION TO PURCHASE ESSENTIAL MEDICAL SERVICES. THEREFORE, CONSISTENT WITH UNION HOSPITAL'S COMMITMENT TO SERVE ALL MEMBERS OF CECIL COUNTY, MARYLAND, FREE CARE AND/OR SUBSIDIZED CARE AND HEALTH ACTIVITIES AND PROGRAMS TO SUPPORT THE COMMUNITY WILL BE CONSIDERED WHERE THE NEED AND/OR AN INDIVIDUAL'S INABILITY TO PAY COEXISTS. THESE ACTIVITIES INCLUDE COMMUNITY EDUCATION, SPECIAL PROGRAMS FOR THE ELDERLY, SPECIAL PROGRAMS FOR THE PHYSICALLY/MENTALLY CHALLENGED, MEDICALLY UNDERSERVED AND A VARIETY OF BROAD COMMUNITY SUPPORT ACTIVITIES.UNION HOSPITAL OF CECIL COUNTY SERVICED 6,346 ADMISSIONS PROVIDING 23,794 PATIENT DAYS TO INPATIENTS IN FISCAL YEAR 2012 OF WHICH:1) PATIENTS COVERED UNDER THE MEDICARE PROGRAM WERE 2,888 ADMISSIONS AND 12,144 PATIENT DAYS2) PATIENTS COVERED UNDER THE MEDICAID PROGRAM WERE 114 ADMISSIONS AND 403 PATIENT DAYS3) PATIENTS COVERED UNDER THE MEDICAID HMO PROGRAM WERE 1,214 ADMISSIONS AND 3,477 PATIENT DAYS4) PATIENTS COVERED UNDER THE MEDICARE HMO PROGRAM WERE 126 ADMISSIONS AND 458 PATIENT DAYSCHARITY CARE IS ALSO PROVIDED THROUGH MANY REDUCED PRICE SERVICES AND FREE PROGRAMS OFFERED THROUGHOUT THE YEAR BASED UPON ACTIVITIES AND SERVICES THAT UNION HOSPITAL OF CECIL COUNTY BELIEVES WILL SERVE A BONA FIDE COMMUNITY NEED. THESE INCLUDE:A) ADULT DAY CARE SERVICES FOR THE ELDERLY AND PHYSICALLY/MENTALLY CHALLENGEDB) SUPPORT GROUPS FOR CANCER PATIENTS AND FAMILIES, DIABETES, ALCOHOLICS ANONYMOUS, OSTOMY AND SMOKELESSC) OFFERING AND CONDUCTING FREE BLOOD PRESSURE, CHOLESTEROL SCREENINGS AND PROSTATE SCREENINGSD) IN CONJUNCTION WITH THE STATE OF MARYLAND AND THE LOCAL DEPARTMENT OF HEALTH, OFFERING AND CONDUCTING A CANCER SCREENING PROGRAM FOR INDIGENT FEMALESE) PROVIDING MEETING FACILITIES FOR A VARIETY OF NONPROFITS AND VOLUNTEER FIRE COMPANIESF) HOSPITAL STAFF VOLUNTEERS ON NONPROFIT ORGANIZATION BOARDS SUCH AS THE AMERICAN CANCER SOCIETYDURING THE YEAR, UNION HOSPITAL OF CECIL COUNTY PROVIDED $16,091,000 IN UNCOMPENSATED CARE. 144140497 1 1 0 0 0 0 0 0 0 0 1 0 0 0 1 1 1 1 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 0 1 169 0 1 1242 1 1 1 0 0 0 0 0 0 0 0 0 X 16 15 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 MD X DERON G BROWN DIRECTOR OF FINANCE 4103984000 106 BOW STREET ELKTON MD 21921 X JACK GOLDSTEIN 0.50 X X 0 0 0 MARTIN J HEALY 0.50 X X 0 0 0 RICHARD GUTTENDORF 0.50 X X 0 0 0 RONALD GRAYBEAL 0.50 X X 0 0 0 MARY BOLT PHD 0.50 X 0 0 0 RON CULLIS 0.50 X 0 0 0 PHILLIP FARMER 0.50 X 0 0 0 RAYMOND HAMM 0.50 X 0 0 0 RAYMOND HEIDEL 0.40 X 0 0 0 MARTHA HOSFORD MD 0.50 X 0 0 0 TARI MOORE 0.50 X 0 0 0 HENRY PASSI 0.50 X 0 0 0 SHEELMOHAN SACHDEV MD 0.60 X 0 0 0 MICHAEL SCIBINICO 0.50 X 0 0 0 RICHARD SZUMEL MD 0.60 X 0 0 0 KENNETH S LEWIS MD JD 28.00 X X 0 966273 145627 LAURIE R BEYER CPA 26.00 X 0 284141 79547 DAVID GIPSON 29.60 X 0 301162 80705 JOSE MA 38.00 X 0 277652 24730 CAREN LEWIS 40.00 X 0 203677 46133 PETER GLOGGNER 40.00 X 207753 0 7514 NADER J DABABNEH MD 40.00 X 536198 0 20620 JORGE URIBE 40.00 X 447175 0 8090 IRFAN M HISAMUDDIN MD 40.00 X 404468 0 19672 JOHN M HEBEKA MD 40.00 X 333639 0 22865 KENNETH HOLLINGSWORTH 40.00 X 338243 0 11079 2267476 2032905 466582 74 0 1 0 RADCAREEMCARE PO BOX 368 PERRY HALL MD 21128 RADIOLOGY PHYSICIAN SERVICES 3237056 RCMD INC 555 FAIRMONT AVENUE BALTIMORE MD 21204 INSURANCE 1681111 CLEARPATH SOLUTIONS GROUP LLC 2465 CENTERVILLE ROAD HERNDON VA 20171 HARDWARE & MAINTENANCE 1230021 DIVERSIFIED CLINICAL SERVICES INC 4500 SALISBURY ROAD 300 JACKSONVILLE FL 32216 STAFFING & SERVICES FOR WOUND CARE CENTE 980521 DIRECT ENERGY BUSINESS PO BOX 70220 PHILADELPHIA PA 19176 ENERGY SALES 784262 15 358066 358066 NET PATIENT SERVICE RE 621990 145234559 145234559 LABORATORY REVENUE 621500 962879 962879 OTHER OPERATING REVENU 621990 830921 830921 ADULT DAY CARE 623990 395313 395313 LIFELINE 900099 104522 104522 147528194 1378128 1378128 144811 36906 107905 107905 107905 30284948 32679070 -2394122 -2394122 -2394122 CAFETERIA/FOOD SERVICE 722210 758995 758995 PURCHASE DISCOUNTS 900099 38331 38331 UBI FROM PARTNERSHIP 541900 4244 4244 801570 147779741 146565315 967123 -110763 3652832 3652832 198878 198878 58938030 58224937 713093 501894 437972 63922 5888217 5798810 89407 4016130 3959634 56496 1658826 829413 829413 284323 284323 59305 59305 164528 164528 20249134 19846024 403110 494747 494747 5947401 5863625 83776 150425 150425 2280534 2280534 243266 185433 57833 19245 5642 13603 3467752 3467752 8666397 8666397 2017918 2017918 MEDICAL SUPPLIES/DRUGS 15370371 15370371 BAD DEBT 8987151 8987151 REPAIRS & MAINTENANCE 2313541 2313541 FOOD/DIETARY SUPPLIES 1070349 1070349 668580 516990 151590 147309774 144140497 3169277 0 149667 298522 6561658 9013704 16239575 18298560 1741983 1158970 1990589 1805445 1797805 1619387 164787478 84842746 80022285 79944732 54102807 63033266 4947666 5060977 3973399 5668262 171527434 185901825 11652633 11415256 71632043 81847367 4172336 7587599 87457012 100850222 X 83217623 84203884 852799 847719 84070422 85051603 171527434 185901825 X 469967 511214 X X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 1134905 1134905 70341786 25040689 45301097 649694 525958 123736 87723020 58299693 29423327 4938073 976406 3961667 79944732 THIRD PARTY ADVANCES 2634757 CAPITAL LEASE OBLIGATIONS 568279 ESTIMATED MEDICAL MALPRACTICE CLAIMS LIABILITY 4384563 7587599 147779741 147309774 469967 552896 -41682 511214 981181 148151911 552896 -41682 511214 147640697 164528 -25484 139044 147779741 147170730 25484 25484 147145246 164528 164528 147309774 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: THE HOSPITAL ACCOUNTS FOR UNCERTAINTY IN INCOME TAXES BY PRESCRIBING A RECOGNITION THRESHOLD OF MORE-LIKELY-THAN-NOT TO BE SUSTAINED UPON EXAMINATION BY THE APPROPRIATE TAXING AUTHORITY. MEASUREMENT OF THE TAX UNCERTAINTY OCCURS IF THE RECOGNITION THRESHOLD HAS BEEN MET. THERE WERE NO TAX UNCERTAINTIES THAT MET THE RECOGNITION THRESHOLD IN 2012 AND 2011. THE HOSPITAL'S FEDERAL EXEMPT ORGANIZATION BUSINESS INCOME TAX RETURNS FOR YEARS AFTER 2008 REMAIN SUBJECT TO EXAMINATION BY THE INTERNAL REVENUE SERVICE. PART XI, LINE 8 - OTHER ADJUSTMENTS: CHANGE IN INTEREST IN NET ASSETS OF FOUNDATION & SUBSIDIARY 124,840. LOSS ON REFINANCING -166,522. TOTAL TO SCHEDULE D, PART XI, LINE 8: -41,682. PART XII, LINE 2D - OTHER ADJUSTMENTS: CHANGE IN INTEREST IN NET ASSETS OF FOUNDATION & SUBSIDIARY 124,840. LOSS ON REFINANCING -166,522. PART XII, LINE 4B - OTHER ADJUSTMENTS: RENTAL EXPENSES -25,484. PART XIII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES 25,484. 1 1 1 X 1 X 0 1 1 0 1 1 2488702 2488702 0.01800 2488702 2488702 0.01800 415849 121533 294316 0.00210 442680 442680 0.00320 10126023 5723599 4402424 0.03180 6778 6778 0.00000 517851 136180 381671 0.00280 11509181 5981312 5527869 0.03990 13997883 5981312 8016571 0.05790 1754 1754 0.00000 3004 3004 0.00000 1343 1343 0.00000 2177 2177 0.00000 1266 1266 0.00000 5023 5023 0.00000 57855 57855 0.00040 24088 24088 0.00020 96510 96510 0.00060 1 7403548 149890 53255975 53255975 X 1 0 1 1 UNION HOSPITAL OF CECIL COUNTY INC

106 BOW STREET ELKTON MD 21921

X X X UNION HOSPITAL OF CECIL COUNTY INC 1 1 X X X X X X X X 11 1 0 1 X X X X X X X X 1 1 1 200.000000000000 1 300.000000000000 1 X X X X X X 1 1 X X X X X X 1 X 1 X X X X X 1 X 0 0 PART I, LINE 7: ALL INFORMATION IS BASED ON ACTUAL COST PLUS OVERHEAD. OVERHEAD IS A HOSPITAL AVERAGE PERCENTAGE OF OVERHEAD TO DIRECT COSTS. DIRECT COSTS EXCLUDE BAD DEBT EXPENSE. PART I, L7 COL(F): THE AMOUNT OF BAD DEBT EXPENSE INCLUDED ON FORM 990, PART IX, LINE 25 BUT SUBTRACTED FOR PURPOSES OF CALCULATING THE PERCENTAGE IN THIS COLUMN IS $8,987,151. PART II: PHYSICAL IMPROVEMENTS/HOUSING UNION HOSPITAL PROVIDED LABOR FOR A HOUSING IMPROVEMENTS PROJECT IN CONJUNCTION WITH CHRISTMAS IN APRIL. CHRISTMAS IN APRIL OF CECIL COUNTY IS A HOME REHABILITATION ORGANIZATION. THEIR MISSION IS TO BUILD PARTNERSHIPS TO REHABILITATE HOMES AND COMMUNITY FACILITIES OF LOW INCOME, ELDERLY AND/OR DISABLED HOMEOWNERS SO THEY CAN LIVE IN WARMTH, SAFETY AND INDEPENDENCE. THROUGH THIS PROGRAM A COMMUNITY MEMBER APPLIES FOR HELP AND A PROJECT IS ASSIGNED TO ENTITIES INTERESTED IN MAKING A DIFFERENCE. IN FISCAL YEAR 2012, HOSPITAL STAFF PARTICIPATED IN BUILDING AND PAVING A DRIVEWAY, RESTORING A DRAIN LINE, BUILDING A NEW HANDICAP RAMP, BUILDING A NEW PORCH, AND FIXING THE FLOOR UNDER THE RESIDENT'S HOUSE. THE RESIDENT HAS MANY PHYSICAL DISABILITIES AND THESE HOUSING IMPROVEMENTS HAVE HELPED HIM BECOME MORE MOBILE, IMPROVING HIS PHYSICAL AND MENTAL WELLBEING. ECONOMIC DEVELOPMENT DR. KEN LEWIS, CEO AND PRESIDENT OF UNION HOSPITAL, PARTICIPATED IN BOARD MEETINGS WITH ELKTON ALLIANCE ON A MONTHLY BASIS IN FISCAL YEAR 2012. ELKTON ALLIANCE WORKS TOGETHER WITH THE LOCAL GOVERNMENT AND THE BUSINESS COMMUNITY TO RESTORE, PROMOTE, AND MAINTAIN THE DIVERSE HISTORIC DOWNTOWN AREA WHILE ATTRACTING NEW ENTERPRISES FOR THE BENEFIT OF THE COMMUNITY'S RESIDENTS, BUSINESSES, AND VISITORS. COMMUNITY SUPPORTIN FISCAL YEAR 2012, UNION HOSPITAL PROVIDED COMMUNITY SUPPORT THROUGH INITIATIVES SUCH AS PROVIDING FREE NOTARY SERVICES TO THE COMMUNITY AND WORKING WITH CECIL COUNTY EMERGENCY MEDICAL SERVICES TO PROVIDE LECTURES ON IMPORTANT EMS TOPICS IN THE COMMUNITY, AS WELL AS PARAMEDIC EVALUATIONS FOR STUDENTS AND HEALTH PROFESSIONALS IN THE COMMUNITY. COMMUNITY SUPPORT PROVIDES AN OUTLET FOR GROWTH AND DEVELOPMENT OF COMMUNITY RESOURCES. THIS CAN IMPACT HEALTH IN A NUMBER OF POSITIVE WAYS -- IN PARTICULAR UNION HOSPITAL CHOSE TO GROW AND DEVELOP ACCESS TO AUTHENTICATION SERVICES AND EMERGENCY SERVICES FOR THE CECIL COUNTY COMMUNITY. ENVIRONMENTAL IMPROVEMENTS IN FISCAL YEAR 2012, TWO GROUPS OF UNION HOSPITAL STAFF CONDUCTED ADOPT-A-HIGHWAY LITTER PICK-UPS TO MAINTAIN A STRETCH OF HIGHWAY THAT THE HOSPITAL HAS ADOPTED. ENVIRONMENTAL MAINTENANCE AND IMPROVEMENTS CAN IMPROVE THE HEALTH OF THE COMMUNITY BY PROVIDING SUSTAINABLE AND RESPONSIBLE STEWARDSHIP OF RESOURCES. LEADERSHIP DEVELOPMENT AND TRAINING FOR COMMUNITY MEMBERSDURING FISCAL YEAR 2012, MARY LYNN DEVLIN, DIRECTOR OF THE UNION HOSPITAL'S AFFINITY HEALTH INSTITUTE, PROVIDED LEADERSHIP DEVELOPMENT TRAINING TO 23 MEMBERS OF THE CECIL COUNTY COMMUNITY IN COLLABORATION WITH THE CECIL LEADERSHIP INSTITUTE -- PART OF A COUNTY-WIDE LEADERSHIP PROGRAM. INCREASED ACCESS TO LEADERSHIP SERVICES CAN IMPROVE THE HEALTH OF A COMMUNITY, ESPECIALLY FOR INDIVIDUALS TASKED WITH MAKING CRITICAL CARE DECISIONS, ALLOCATING RESOURCES AMONG COMMUNITY HEALTH ORGANIZATIONS AND TRAINING AND EDUCATING HEALTH CARE WORKFORCES. COALITION BUILDINGDURING FISCAL YEAR 2012, UNION HOSPITAL'S CANCER PROGRAM AND BREAST HEALTH CENTER HAD MEETINGS WITH THE DELAWARE BREAST CANCER COALITION, AIMED AT CREATING A CHAPTER IN CECIL COUNTY. THE DELAWARE BREAST CANCER COALITION (DBCC) SERVES TO RAISE AWARENESS OF BREAST HEALTH ISSUES IN DELAWARE THROUGH OUTREACH, EDUCATION, AND SUPPORT TO HELP FACILITATE EARLY DETECTION AND TREATMENT OF BREAST CANCER. DBCC HAS TRAINED HEALTH CARE PROVIDERS TO PROVIDE CULTURALLY COMPETENT CARE AND HAS CONDUCTED MANY EDUCATIONAL SESSIONS FOR THE GENERAL PUBLIC THROUGH CORPORATE AND COMMUNITY ORGANIZATIONS. IN ADDITION, DBCC HAS REFERRED THOUSANDS OF UNINSURED ADULTS FOR FREE AND LOW-COST CANCER SCREENINGS, AND HAS REMOVED BARRIERS TO CANCER SCREENINGS AND TREATMENT BY PROVIDING INTERPRETATION, TRANSPORTATION, AND SUPPORT SERVICES. HAVING A CHAPTER IN CECIL COUNTY THAT COULD FACILITATE HEALTH CARE ACCESS AND BREAK DOWN BARRIERS TO CANCER CARE WOULD BE AN IMPORTANT STEP IN IMPROVING THE HEALTH OF CANCER PATIENTS IN CECIL COUNTY. WORKFORCE DEVELOPMENT OVER A SPAN OF EIGHT MONTHS, DURING FISCAL YEAR 2012, HOLLY EMMONS, DIRECTOR OF FOOD SERVICES AT UNION HOSPITAL, AND HER STAFF MENTORED 27 MENTALLY-CHALLENGED HIGH SCHOOL STUDENTS FROM ELKTON HIGH SCHOOL AND PERRYVILLE HIGH SCHOOL AS PART OF UNION HOSPITAL'S AND CECIL COUNTY PUBLIC SCHOOLS' PARTNER PROGRAM: THE HIGH SCHOOL WORK ENRICHMENT PROGRAM. THIS PROGRAM PROVIDES WORK ASSIGNMENTS AND APPROPRIATE TRAINING IN FOOD SERVICE ACTIVITIES, LIKE DEVELOPING CULINARY SKILLS FOR FOOD PREPARATION AND DEVELOPING SANITATION RESPONSIBILITIES THAT INCLUDE DISHWARE WASHING AND SANITIZATION, AS WELL AS TRASH DISPOSAL AND RECYCLING. THE PROGRAM IS AN IMPORTANT FACET OF THE WORK ENRICHMENT EXPERIENCE BECAUSE IT PROVIDES DIRECTION, IMPORTANT LIFE SKILLS AND ALLOWS STUDENTS TO FEEL NEEDED, USEFUL, AND CAPABLE, ESPECIALLY IN A BUSY WORK ENVIRONMENT. STUDENTS ENJOYED THEIR ROLES AND LEARNED THE VALUE OF PRODUCTIVITY AND TASK COMPLETION BOTH WORKING INDIVIDUALLY AND AS PART OF A TEAM. OTHER COMMUNITY BUILDING ACTIVITIES SOME IN-KIND CONTRIBUTIONS INDIRECTLY AFFECT COMMUNITY HEALTH IMPROVEMENT. STAFF AT UNION HOSPITAL MAKES THESE IN-KIND CONTRIBUTIONS BY ATTENDING COMMUNITY BOARD MEETINGS AS HOSPITAL REPRESENTATIVES AND PARTICIPATE IN DISCUSSIONS OR COLLABORATIONS THAT INDIRECTLY AFFECTS COMMUNITY HEALTH IMPROVEMENT. THE FOLLOWING ARE SOME EXAMPLES: -SERVICE ON THE BOYS AND GIRLS CLUB OF CECIL COUNTY'S COMMUNITY BOARD; -SERVICE ON UNITED WAY OF CECIL COUNTY'S COMMUNITY BOARD; AND -SERVICE ON THE CHESAPEAKE HEALTH EDUCATION PROGRAM'S COMMUNITY BOARD. PART III, LINE 4: COSTING METHODOLOGY USED IN DETERMINING BAD DEBT EXPENSE AMOUNTS: THE METHODOLOGY ASSUMES THAT THE PERCENTAGE OF CHARITY CARE TO TOTAL REVENUE CAN BE APPLIED TO THE AMOUNT OF BAD DEBT EXPENSE FOR THE YEAR. OTHER BAD DEBT AMOUNTS ARE NOT INCLUDED IN COMMUNITY BENEFITS.HOW THE ORGANIZATION ACCOUNTS FOR DISCOUNTS AND PAYMENTS ON PATIENT ACCOUNTS IN DETERMINING BAD DEBT EXPENSE: DISCOUNTS AND PAYMENTS ARE OFFSET AGAINST BAD DEBT EXPENSE.METHOD USED TO DETERMINE THE AMOUNT THAT REASONABLY COULD BE ATTRIBUTABLE TO PATIENTS WHO LIKELY WOULD QUALIFY FOR FINANCIAL ASSISTANCE UNDER THE HOSPITAL'S FINANCIAL ASSISTANCE POLICY: THE HOSPITAL USES THE AVERAGE CHARITY CARE WRITE-OFF PER CHARITY CASE MULTIPLIED BY THE NUMBER OF CASES NOT APPROVED DUE TO LACK OF DOCUMENTATION.FOOTNOTE TO THE ORGANIZATION'S FINANCIAL STATEMENTS THAT DESCRIBES BAD DEBT EXPENSE: ACCOUNTS RECEIVABLE, PATIENTS ARE REPORTED AT NET REALIZABLE VALUE. ACCOUNTS ARE WRITTEN OFF WHEN THEY ARE DETERMINED TO BE UNCOLLECTIBLE BASED UPON MANAGEMENT'S ASSESSMENT OF INDIVIDUAL ACCOUNTS. THE ALLOWANCE FOR DOUBTFUL ACCOUNTS IS ESTIMATED BASED UPON A PERIODIC REVIEW OF THE ACCOUNTS RECEIVABLE AGING, PAYOR CLASSIFICATIONS AND APPLICATION OF HISTORICAL WRITE-OFF PERCENTAGES. PART III, LINE 8: COSTING METHODOLOGY USED TO DETERMINE AMOUNT OF MEDICARE ALLOWABLE COSTS: MEDICARE ALLOWABLE COSTS EQUAL MEDICARE REVENUE ADJUSTED FOR THE HOSPITAL TOTAL RATIO OF PATIENT CARE COSTS TO CHARGES DUE TO THE FACT THAT MEDICARE PAYS FULL CHARGES IN MARYLAND.EXTENT TO WHICH MEDICARE SHORTFALL SHOULD BE TREATED AS COMMUNITY BENEFIT: IN THE STATE OF MARYLAND, MEDICARE PAYS FULL CHARGES. THERE IS NO SHORTFALL THAT SHOULD BE TREATED AS A COMMUNITY BENEFIT. UNION HOSPITAL OF CECIL COUNTY, INC. PART V, SECTION B, LINE 19D: MARYLAND IS AN ALL-PAYOR STATE AND THE HEALTH SERVICES COST REVIEW COMMISSION (HSCRC) SETS THE RATES FOR UNION HOSPITAL. PART VI, LINE 2: IMPROVING THE HEALTH OF UNION HOSPITAL'S COMMUNITY BENEFIT SERVICE AREA REQUIRES COLLABORATION AMONG COMMUNITY MEMBERS AND LEADERS, AS WELL AS ACTIVE PARTICIPATION IN THE PLANNING AND IMPLEMENTATION OF HEALTH PROGRAMS. CURRENTLY, UNION HOSPITAL IS CONDUCTING A COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA) WITH THE CECIL COUNTY HEALTH DEPARTMENT, TO ADDRESS HEALTH NEEDS THAT HAVE BEEN IDENTIFIED. THIS PROCESS WILL BE COMPLETE IN FISCAL YEAR 2013. REPORTING OF THE ASSESSMENT PROCESSES WILL BE AVAILABLE IN FISCAL YEAR 2013'S SCHEDULE H NARRATIVES. PART VI, LINE 3: UNION HOSPITAL OF CECIL COUNTY UTILIZES A COMMUNITY FINANCIAL ASSISTANCE (CHARITY CARE) POLICY TO ENSURE THAT THE HOSPITAL'S STAFF FOLLOWS A CONSISTENT AND EQUITABLE PROCESS IN GRANTING CHARITY CARE/FINANCIAL ASSISTANCE TO APPROPRIATE PATIENTS, WHILE RESPECTING THE INDIVIDUAL'S DIGNITY. THE POLICY IS IN AGREEMENT WITH THE ESTABLISHED MARYLAND STATE FINANCIAL ASSISTANCE GUIDELINES REGARDING CHARITY CARE.THE POLICY DESCRIBES THE APPLICATION PROCESS FOR THE FINANCIAL ASSISTANCE PROGRAM, THE INFORMATION REQUIRED TO VERIFY INCOME AND ASSETS, THE TIMELINE FOR APPLICATION REVIEW, AND TIERED ADJUSTMENTS BASED ON FEDERAL POVERTY GUIDELINES.THE APPLICATION FOR FINANCIAL ASSISTANCE IS AVAILABLE TO ALL UNDERINSURED AND UNINSURED PATIENTS OF UNION HOSPITAL. APPLICATIONS AND SIGNAGE ARE LOCATED THROUGHOUT THE HOSPITAL, EMERGENCY ROOM AND OUTPATIENT AREAS. THE FINANCIAL ASSISTANCE APPLICATION AND BROCHURE (IN ENGLISH AND SPANISH) ARE AVAILABLE ON THE HOSPITAL'S WEBSITE: HTTP://WWW.UHCC.COM/ABOUT/PATIENTS-VISITORS/ADMISSION/FINANCIAL-ASSISTANCE. IN ADDITION, THE HOSPITAL PLACES AN ADVERTISEMENT TWICE A YEAR IN THE LOCAL NEWSPAPERS OUTLINING ITS FINANCIAL ASSISTANCE POLICY. ALL FINANCIAL ASSISTANCE APPLICATIONS RECEIVED ARE PROCESSED FOR ELIGIBILITY. PATIENTS WHO ARE NOT ELIGIBLE FOR CHARITY CARE ARE REFERRED TO CECIL COUNTY HEALTH DEPARTMENT TO DETERMINE IF OTHER ASSISTANCE IS AVAILABLE. ANY INDIVIDUAL WHO PRESENTS TO THE BUSINESS OFFICE OF UNION HOSPITAL IN PERSON TO DISCUSS HIS/HER BILL IS PROVIDED WITH A FINANCIAL ASSISTANCE APPLICATION. ALL INPATIENT, SELF-PAY PATIENTS ARE VISITED BY FINANCE STAFF AND SCREENED FOR THE FINANCIAL ASSISTANCE PROGRAM, AS WELL AS FOR MEDICAID AND OTHER STATE AND COUNTY PROGRAMS. FOLLOWING DISCHARGE FROM THE HOSPITAL, EACH PATIENT RECEIVES A SUMMARY OF CHARGES, WHICH INCLUDES NOTICE OF THE FINANCIAL ASSISTANCE PROGRAM AND A DESIGNATED CONTACT TELEPHONE NUMBER. PART VI, LINE 4: UNION HOSPITAL'S COMMUNITY BENEFIT SERVICE AREA (CBSA) INCLUDES THE TOWNS OF ELKTON, ELK MILLS, CHILDS, CHESAPEAKE CITY, EARLEVILLE, WARWICK, CECILTON, NORTH EAST, CHARLESTOWN, PERRYVILLE, AND RISING SUN. UNION HOSPITAL ALSO SERVES TOWNS IN WESTERN CECIL COUNTY: CONOWINGO, COLORA, PORT DEPOSIT, AND PERRY POINT. THERE IS ONLY ONE HOSPITAL IN CECIL COUNTY, AND WITH ITS RURAL LANDSCAPE, ALL CECIL COUNTY TOWNS QUALIFY TO BE A PART OF THE CBSA SERVED BY UNION HOSPITAL. THE MAJORITY OF CECIL COUNTY IS CAUCASIAN: 88.51%, WHILE OTHER MINORITIES ACCOUNT FOR THE FOLLOWING PERCENTAGE MAKE-UP: BLACK/AFRICAN AMERICAN: 6.59%; ASIAN: 1.15%; NATIVE AMERICAN: 0.29%; NATIVE HI/PI: 0.05%. OF THE ENTIRE CECIL COUNTY POPULATION 96.32% IS NOT OF HISPANIC/LATINO ETHNICITY. SINCE CECIL COUNTY IS NOT VERY RACIALLY OR ETHNICALLY DIVERSE, THE HOSPITAL'S INITIATIVES HAVE NOT NECESSARILY BEEN BASED ON RACIAL OR ETHNIC DISPARITIES IN THE RECENT PAST; HOWEVER, ADDRESSING HEALTH NEEDS IN LIGHT OF HEALTH DISPARITIES IS CONTINUING TO BE A MAJOR ISSUE FOR THE STATE OF MARYLAND AS A WHOLE. AS A RESULT, MARYLAND'S HEALTH SERVICES COSTS REVIEW COMMISSION (HSCRC) IS CURRENTLY REQUIRING ALL OF ITS NON-PROFIT HOSPITALS TO PROVIDE DESCRIPTIONS OF HOW IDENTIFIED HEALTH NEEDS IN THE COMMUNITY WILL TAKE INTO ACCOUNT HEALTH DISPARITIES THAT ARE PRESENT. THESE DESCRIPTIONS ARE TO BE INCLUDED IN THE FISCAL YEAR 2012 HSCRC REPORT. UNION HOSPITAL IS CURRENTLY ANALYZING AND REPORTING COUNTY-SPECIFIC DATA CONNECTED WITH HEALTH DISPARITIES IN CECIL COUNTY. AS THE COMMUNITY BENEFITS STRATEGIC PLAN IS DEVELOPED IN FISCAL YEAR 2013, ADDRESSING HEALTH DISPARITIES WILL TAKE SHAPE IN THE STRATEGIES THAT ARE DEVISED. HOUSEHOLDS OF 2.71 PERSONS MAKE-UP 32.99% OF THE POPULATION IN CECIL COUNTY; AND OF THOSE HOUSEHOLDS, 7.57% ARE LIVING IN POVERTY, MAKING LESS THAN $15,000 IN INCOME PER YEAR. HOMELESSNESS AND POVERTY ARE ISSUES THAT UNION HOSPITAL STAFF DEAL WITH ALMOST ON A DAILY BASIS. AS PART OF COMMUNITY BENEFITS IN-KIND SUPPORT, SEVERAL STAFF TAKES THE INITIATIVE TO FEED THE HOMELESS AND PROVIDE OF THEIR TIME TO HELP THOSE WHO ARE DISADVANTAGED IN THE CECIL COUNTY COMMUNITY. PART VI, LINE 5: THE COMMUNITY BENEFITS PROGRAM AT UNION HOSPITAL IS RESPONSIBLE TO CONDUCT A COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA) BY THE END OF FISCAL YEAR 2013 TO MEET THE IRS REPORTING REQUIREMENTS ESTABLISHED IN 2011. INSTEAD OF SOLELY TAKING THIS MASSIVE PROJECT ON, UNION HOSPITAL HAS DECIDED TO COLLABORATE WITH THE CECIL COUNTY HEALTH DEPARTMENT. A TEAM COMPRISED OF STAFF FROM THE CECIL COUNTY HEALTH DEPARTMENT AND STAFF FROM UNION HOSPITAL IS CURRENTLY ENGAGED IN CONDUCTING A CHNA. ALL PROCESSES THEREIN WILL BE REPORTED IN FISCAL YEAR 2013'S SCHEDULE H NARRATIVES. UNION HOSPITAL WOULD LIKE TO PUT FORTH THAT THE CHNA COLLABORATION BEGAN CONDUCTING MEETINGS WITHIN THE COMMUNITY DURING THE LAST 2 QUARTERS OF FISCAL YEAR 2012. HOWEVER, UNION HOSPITAL'S CHNA DID NOT FINISH BY THE END OF FISCAL YEAR 2012; IT WILL CONTINUE INTO FISCAL YEAR 2013, WHERE THE IMPLEMENTATION STRATEGY WILL ALSO BE DEVELOPED AND IMPLEMENTED. THE MEETINGS WITHIN THE COMMUNITY YIELDED THE FOLLOWING HEALTH CONCERNS: ACCESS TO CARE, MENTAL HEALTH ACCESS, SUICIDE PREVENTION, HOMELESSNESS, PRESCRIPTION DRUG AND SUBSTANCE ABUSE, CHILD ABUSE, OBESITY, NUTRITION AND ACCESS TO HEALTHIER FOODS, DIABETES, TOBACCO USE, CANCER, GERIATRIC CARE IMPROVEMENTS, MEDICAL TRANSPORTATION ACCESS, HEALTH COMMUNICATION IMPROVEMENTS, AND ADDRESSING HEALTH DISPARITIES. SECONDARY DATA WAS ALSO ANALYZED DURING FISCAL YEAR 2012 AND WILL CONTINUE TO BE ANALYZED IN FISCAL YEAR 2013 AS IT IS APPLICABLE TO THE CHNA PROCESS. THIS DATA IS TAKEN FROM THE HEALTHY COMMUNITIES INSTITUTE'S (HCI) DATABASE SERVICES THAT UNION HOSPITAL IS CONTRACTED WITH, SPECIFICALLY FOR THE CONDUCTION OF A CHNA. THIS SECONDARY DATA, ALONG WITH THE PRIMARY DATA GATHERED FROM THE COMMUNITY WILL BE USED TO PRIORITIZE HEALTH NEEDS DURING MEETINGS WITH THE INTERNAL COMMUNITY BENEFITS WORKGROUP AT UNION HOSPITAL. THIS WORKGROUP WILL ANALYZE THE DATA, PRIORITIZE THE NEEDS, AND FACILITATE THE PROCESS OF STRATEGIC PLANNING IN FISCAL YEAR 2013. MORE IN DEPTH INFORMATION APPLICABLE TO PART V, SECTION B WILL BE AVAILABLE IN THE FISCAL YEAR 2013 SCHEDULE H NARRATIVES. PART VI, LINE 6: UNION HOSPITAL OF CECIL COUNTY, INC. IS PART OF AN AFFILIATED HEALTH CARE SYSTEM IN WHICH AFFINITY HEALTH ALLIANCE, INC. IS THE PARENT ENTITY. AFFINITY HEALTH ALLIANCE, INC.'S PURPOSE IS TO SUPPORT THE UNION HOSPITAL OF CECIL COUNTY IN PROVIDING HEALTH CARE AND HEALTH CARE RELATED SERVICES THROUGH THE EFFECTIVE MANAGEMENT OF ALL AFFILIATED CORPORATIONS. SPECIFICALLY, THIS INVOLVES COORDINATING SYSTEM WIDE POLICIES, FUNDRAISING AND STRATEGIC PLANNING PROGRAMS TO PROVIDE HEALTH CARE SERVICES IN RESPONSE TO THE MEDICAL, HUMAN AND RELATED SERVICE NEEDS OF THE COMMUNITY.OTHER TAX-EXEMPT ORGANIZATIONS IN THE GROUP INCLUDE THE UNION HOSPITAL OF CECIL COUNTY FOUNDATION, INC., CECIL COUNTY BREEDERS FAIR AND UNION HOSPITAL OF CECIL COUNTY HEALTH SERVICES, INC.THE FOUNDATION CONDUCTS AND SUPERVISES FUNDRAISING ACTIVITIES ON BEHALF OF ITS TAX-EXEMPT AFFILIATES. THE FOUNDATION ENGAGES IN CORPORATE FUNDRAISING, CAPITAL CAMPAIGNS, SPECIAL EVENTS, ACTIVITIES, AND A MULTI-FACETED COMMUNICATION PROGRAM THAT APPEALS TO PRIVATE AND CORPORATE CONTRIBUTORS.CECIL COUNTY BREEDERS FAIR, INC. IS ORGANIZED FOR THE PURPOSE OF SUPPORTING THE UNION HOSPITAL OF CECIL COUNTY THROUGH FUNDRAISING ACTIVITIES CONSISTING OF THE RUNNING OF THE FAIR HILL RACES.UNION HOSPITAL OF CECIL COUNTY HEALTH SERVICES, INC.'S MISSION IS TO OWN, MANAGE AND MAINTAIN PROPERTIES FOR HEALTH RELATED VENTURES TO SERVE CECIL COUNTY AND THE SURROUNDING AREAS. THE ACTIVITIES OF THIS CORPORATION COMPLEMENT AND AUGMENT THE HEALTH CARE ACTIVITIES OF THE HOSPITAL. REPORTS FILED WITH STATES PART VI, LINE 7 MD 1 UNION HOSPITAL OF CECIL COUNTY HEALTH SERVICES INC 106 BOW STREET ELKTON MD 21921 521794553 501(C)(3) 3511536 CHARITABLE ACTIVITIES UNION HOSPITAL OF CECIL COUNTY VENTURES INC 106 BOW STREET ELKTON MD 21921 521793691 141296 CAPITAL CONTRIBUTION PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: THE ORGANIZATION ONLY PROVIDES ASSISTANCE TO ITS AFFILIATED ENTITIES. IT DOES NOT PROVIDE GRANTS TO OTHER ORGANIZATIONS. X X X X 1 1 X X X X X 0 1 0 0 0 1 0 1 0 KENNETH S LEWIS MD JD 0 442158 0 92570 0 431545 0 111675 0 33952 0 1111900 0 110068 LAURIE R BEYER CPA 0 229338 0 42729 0 12074 0 54508 0 25039 0 363688 0 0 DAVID GIPSON 0 236200 0 43710 0 21252 0 55522 0 25183 0 381867 0 0 JOSE MA 0 218543 0 47397 0 11712 0 3316 0 21414 0 302382 0 0 CAREN LEWIS 0 171423 0 13050 0 19204 0 38072 0 8061 0 249810 0 0 PETER GLOGGNER 156685 0 24405 0 26663 0 0 0 7514 0 215267 0 0 0 NADER J DABABNEH MD 488158 0 47828 0 212 0 0 0 20620 0 556818 0 0 0 JORGE URIBE 433173 0 13811 0 191 0 3675 0 4415 0 455265 0 0 0 IRFAN M HISAMUDDIN MD 377677 0 26600 0 191 0 0 0 19672 0 424140 0 0 0 JOHN M HEBEKA MD 325504 0 7816 0 319 0 3675 0 19190 0 356504 0 0 0 KENNETH HOLLINGSWORTH 322510 0 14820 0 913 0 2322 0 8757 0 349322 0 0 0 PART I, LINE 1A THE ORGANIZATION'S PRESIDENT & CEO, DR. KENNETH LEWIS, HAS A DISCRETIONARY SPENDING ACCOUNT FOR FLEXIBLE BENEFITS WHICH INCLUDED: A) LEASED CAR PAYMENTS, GAS, REPAIRS AND INSURANCE B) TAX RETURN PREPARATION C) ATTORNEY REGISTRATION FEE D) SOCIAL CLUB DUES E) MEDICAL LICENSE RENEWAL F) FINGERPRINTING/CRIMINAL INVESTIGATION FOR DELAWARE PHYSICIAN LICENSE G) BJ'S MEMBERSHIP H) CASH CAREN LEWIS, SENIOR VP OF PATIENT CARE SERVICES, WAS GIVEN A HOUSING ALLOWANCE. ALL BENEFITS HAVE BEEN INCLUDED IN TAXABLE WAGES. PART I, LINE 4B THE FOLLOWING PEOPLE PARTICIPATE IN A SUPPLEMENTAL, NON-QUALIFIED RETIREMENT PLAN UNDER SECTION 457(F) OF THE INTERNAL REVENUE CODE: DR. KENNETH LEWIS, PRESIDENT & CEO LAURIE BEYER, SENIOR VP/CFO DAVID GIPSON, SENIOR VP/COO CAREN LEWIS, SENIOR VP OF PATIENT CARE SERVICES THE FOLLOWING PAYMENTS HAVE BEEN CONTRIBUTED TO THE PLAN EACH CALENDAR YEAR SINCE 2007: 12/31/2007 - $90,000 (DR. KENNETH LEWIS) 12/31/2008 - $90,000 (DR. KENNETH LEWIS) 12/31/2009 - $90,000 (DR. KENNETH LEWIS) 12/31/2010 - $90,000 (DR. KENNETH LEWIS) 12/31/2011 - $108,000 (DR. KENNETH LEWIS) 12/31/2011 - $51,431 (LAURIE BEYER) 12/31/2011 - $51,968 (DAVID GIPSON) 12/31/2011 - $35,649 (CAREN LEWIS) THE RIGHT TO RECEIVE PAYMENTS UNDER THE PLAN SHALL BE FORFEITED IN THE EVENT THAT EMPLOYMENT WITH THE HOSPITAL TERMINATES PRIOR TO THE VESTING DATE FOR ANY REASON OTHER THAN INVOLUNTARY TERMINATION WITHOUT CAUSE, DEATH, OR DISABILITY. THE ENTIRE BALANCE OF THE ACCOUNT SHALL VEST AND BE PAID ON OR AFTER JANUARY 1, 2011. DR. KENNETH LEWIS RECEIVED PAYMENTS OF $195,000 AND $110,068 ON JANUARY 7, 2011 AND NOVEMBER 11, 2011, RESPECTIVELY. PART I, LINE 6 A PORTION OF THE BONUSES AND MERIT INCREASE ARE TIED TO EXPENSES PER EQUIVALENT INPATIENT DAY OF UNION HOSPITAL OF CECIL COUNTY. PART I, LINE 7 A PORTION OF THE BONUSES AND MERIT INCREASE ARE TIED TO THE ORGANIZATIONAL GOALS, SUCH AS PATIENT SATISFACTION, QUALITY, EMPLOYEE TURNOVER, ETC. MARYLAND HEALTH & HIGHER EDUCATION FACILITIES AUTHORITY 520936091 5742168A8 2005-07-14 31401189 SEE PART VI 0 0 0 TOWN OF ELKTON 526000790 2012-05-18 10000000 SEE PART VI 0 0 0 TOWN OF ELKTON 526000790 2012-05-18 8662336 SEE PART VI 0 0 0 TOWN OF ELKTON 526000790 2012-05-18 9000000 SEE PART VI 0 0 0 35836388 931786 576473 33640038 2007 0 0 1 1 10000000 10000000 1 0 1 1 8662336 8662336 1 0 1 1 9000000 9000000 1 0 1 1 0 0 1 1 0 0.00000 0.00000 0.00000 1 0 0 1 1 0 0.00000 0.00000 0.00000 1 0 0 1 1 0 0.00000 0.00000 0.00000 1 0 0 1 1 0 0.00000 0.00000 0.00000 1 0 0 1 BANK OF AMERICA NA 35.000000000000 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 0 1 X PART I, COLUMN (F) PURPOSE OF BONDS ISSUE A: THE PURPOSE OF THE ISSUE WAS FINANCING AND REFINANCING THE ACQUISITION, CONSTRUCTION, RENOVATION AND EQUIPPING OF HOSPITAL FACILITIES. ISSUE B: TO REFUND PORTION OF SERIES 2009 BONDS. ISSUE C: TO REFUND REMAINING PORTION OF SERIES 2009 BONDS AND ALL OF SERIES 2000 BONDS. ISSUE D: TO FUND AN ESCROW WHICH REPAYS A PORTION OF THE SERIES 2002 BONDS AND INTEREST THEREON. PART II, LINE 3 DIFFERENCE IN PROCEEDS ISSUE A: THIS NUMBER REPRESENTS SALE PROCEEDS PLUS INVESTMENT EARNINGS IN THE CONSTRUCTION FUND, PLUS INVESTMENT EARNINGS IN THE COST OF ISSUANCE FUND, PLUS INVESTMENT EARNINGS IN THE DEBT SERVICE RESERVE FUND DURING THE CONSTRUCTION PERIOD. PART II, LINE 10 CAPITAL EXPENDITURES FROM PROCEEDS ISSUE A: THIS NUMBER REPRESENTS TOTAL PROCEEDS LESS PROCEEDS DEPOSITED INTO A RESERVE FUND LESS PROCEEDS SPENT ON ISSUANCE COSTS. PART IV, LINES 3(B) AND 3(C) HEDGE ISSUE A: THE ORGANIZATION ENTERED INTO AN INTEREST RATE HEDGE WITH BANK OF AMERICA, N.A. ON MARCH 28, 2005. THE TERM OF THE HEDGE WAS FROM JUNE 22, 2005 THROUGH JULY 1, 2040. THE HEDGE WAS TERMINATED IN CONNECTION WITH THE ISSUANCE OF THE BONDS. FORM 990, PART VI, SECTION A, LINE 6 AFFINITY HEALTH ALLIANCE, INC. ("AHA"), A TAX-EXEMPT ORGANIZATION, IS THE SOLE MEMBER OF THE UNION HOSPITAL OF CECIL COUNTY, INC. FORM 990, PART VI, SECTION A, LINE 7A THE BYLAWS OF THE HOSPITAL PROVIDE THAT ITS DIRECTORS ARE APPOINTED BY ITS SOLE MEMBER, AHA. FORM 990, PART VI, SECTION A, LINE 7B THE BYLAWS OF THE HOSPITAL PROVIDE THAT ITS SOLE MEMBER (AHA) MAY AMEND ITS BYLAWS. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 IS REVIEWED BY THE CHIEF FINANCIAL OFFICER. IT IS THEN PRESENTED TO THE BOARD AT THE NEXT BOARD MEETING PRIOR TO FILING WITH THE INTERNAL REVENUE SERVICE. FORM 990, PART VI, SECTION B, LINE 12C BOARD MEMBERS ARE REQUIRED TO ANNUALLY DISCLOSE ANY POTENTIAL CONFLICT OF INTEREST. THE ORGANIZATION'S CEO REVIEWS THE SIGNED ANNUAL DISCLOSURES. THE CORPORATE COMPLIANCE OFFICER IS MADE AWARE OF ANY DISCLOSED CONFLICT, INVESTIGATES THE CONFLICT, AND REPORTS BACK TO THE BOARD OF DIRECTORS. THE BOARD CONSIDERS THE FACTS AND MAKES AN APPROPRIATE FINDING. ANY BOARD MEMBER WITH A CONFLICT MUST ABSTAIN FROM BOARD DELIBERATIONS AND VOTING ON THE MATTER. ALL VICE PRESIDENTS ANNUALLY RECEIVE A LIST OF THE INDIVIDUALS UNDER THEIR SUPERVISION WHO MAY HAVE A POTENTIAL CONFLICT OF INTEREST. THE LIST IS COMPRISED OF ALL MANAGERS, CERTAIN PROFESSIONAL STAFF WHO MAY HAVE RESPONSIBILITY NEGOTIATING WITH VENDORS, AND ANY OTHER PERSONS THAT HOSPITAL EXECUTIVES DEEM APPROPRIATE. EACH VICE PRESIDENT REVIEWS THE CONFLICT OF INTEREST POLICY WITH THEIR DESIGNATED EMPLOYEES, AND EACH EMPLOYEE IS REQUIRED TO SIGN A FORM STIPULATING WHETHER OR NOT THEY HAVE A CONFLICT. THE FORMS ARE REVIEWED BY THE VICE PRESIDENT OF HUMAN RESOURCES. IF A CONFLICT IS NOTED, IT IS BROUGHT TO THE ATTENTION OF THE APPROPRIATE VICE PRESIDENT AND THE CEO TO DETERMINE WHETHER OPERATIONAL CHANGES NEED TO OCCUR BECAUSE OF THE POTENTIAL CONFLICT. FORM 990, PART VI, SECTION B, LINE 15 THE COMPENSATION COMMITTEE OF THE ORGANIZATION'S BOARD OF DIRECTORS IS RESPONSIBLE FOR SETTING THE OVERALL COMPENSATION PHILOSOPHY OF THE ORGANIZATION, AS WELL AS SETTING, MONITORING AND REVIEWING THE COMPENSATION PACKAGE OF THE ORGANIZATION'S CEO AND OTHER MEMBERS OF THE EXECUTIVE MANAGEMENT TEAM. THE COMMITTEE USES RELEVANT MARKET INFORMATION, INCLUDING THE USE OF AN INDEPENDENT COMPENSATION CONSULTANT AND COMPENSATION STUDIES OR SURVEYS, TO SET COMPENSATION. DURING THE FISCAL YEAR ENDED JUNE 30, 2012, AN INDEPENDENT COMPENSATION CONSULTANT PROVIDED THE FOLLOWING SERVICES: EXECUTIVE COMPENSATION AND PERFORMANCE EVALUATION. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION WILL MAKE ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC UPON REQUEST. AVERAGE HOURS PER WEEK FORM 990, PART VII, SECTION A, LINE 1A, COLUMN (B) AVERAGE HOURS PER WEEK LISTED IN PART VII ARE FOR THIS LEGAL ENTITY ONLY. BOARD MEMBERS, OFFICERS AND CERTAIN KEY EMPLOYEES ALSO DEVOTE TIME TO THE RELATED ORGANIZATIONS LISTED ON SCHEDULE R. TOTAL AVERAGE HOURS PER WEEK FOR THESE INDIVIDUALS FOR ALL RELATED ORGANIZATIONS ARE AS FOLLOWS: PRESIDENT/CEO KENNETH S. LEWIS - 40 HOURS SENIOR VP/CFO LAURIE R. BEYER - 40 HOURS SENIOR VP/COO DAVID GIPSON - 40 HOURS VP OF MEDICAL AFFAIRS JOSE MA - 40 HOURS BOARD MEMBERS - 1 HOUR CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED GAINS ON INVESTMENTS: 552,896. CHANGE IN INTEREST IN NET ASSETS OF FOUNDATION & SUBSIDIARY 124,840. LOSS ON REFINANCING -166,522. TOTAL TO FORM 990, PART XI, LINE 5: 511,214. FORM 990, PART XII, LINE 2C THE BOARD OF DIRECTORS ASSUMES RESPONSIBILITY FOR THE OVERSIGHT OF THE REVIEW OF ITS FINANCIAL STATEMENTS AND SELECTION OF AN INDEPENDENT ACCOUNTANT. THIS PROCESS HAS NOT CHANGED FROM THE PREVIOUS YEAR. UNION HOSPITAL OF CECIL COUNTY FOUNDATION INC 106 BOW STREET ELKTON MD 21921 521794552 FUNDRAISING & SUPPORT MD 501(C)(3) LINE 11C, III-FI AFFINITY HEALTH ALLIANCE INC 0 UNION HOSPITAL OF CECIL COUNTY HEALTH SERVICES INC 106 BOW STREET ELKTON MD 21921 521794553 HEALTHCARE PROPERTY MANAGEMENT MD 501(C)(3) LINE 9 AFFINITY HEALTH ALLIANCE INC 0 CECIL COUNTY BREEDERS FAIR INC 106 BOW STREET ELKTON MD 21921 516018180 FUNDRAISING & SUPPORT MD 501(C)(4) UNION HOSPITAL OF CECIL COUNTY FOUNDATION INC 0 AFFINITY HEALTH ALLIANCE INC 106 BOW STREET ELKTON MD 21921 521794697 MANAGEMENT & SUPPORT MD 501(C)(3) LINE 11C, III-FI N/A 0 UNION HOSPITAL OF CECIL COUNTY VENTURES INC 106 BOW STREET ELKTON MD 21921 521793691 MEDICAL SERVICES MD N/A C CECIL COUNTY ANESTHESIOLOGISTS INC 106 BOW STREET ELKTON MD 21921 521886386 INACTIVE MD N/A C EMERGENCY MEDICAL SPECIALISTS OF CECIL COUNTY 106 BOW STREET ELKTON MD 21921 521881684 INACTIVE MD N/A C 0 1 1 0 0 0 0 0 0 1 0 1 0 1 0 0 1 1