2013-05-03T13:36:35-05:00 2012-06-30 ERNST & YOUNG US LLP 41 S HIGH ST 1100 HUNTINGTON CTR COLUMBUS OH 43215 990 2011-07-01 200360007 Essentia Health % ROBERT NORMAN ESSE 2187868376 502 E 2nd St Duluth MN 55805 Robert Norman 2013-05-01 6142327414 2011 2016-03-07 17:11:31Z Peter Person MD 502 E 2nd St Duluth MN 55805 76671369 false X www.essentiahealth.org X 2003 MN We are called to make a healthy difference in people's lives. 18 11 0 0 -756 -1274 0 978146 20534336 73839952 2840532 1849953 468647 0 23843515 76668051 13850 231318 0 0 314600 2349470 0 0 0 22364718 57199457 22693168 59780245 1150347 16887806 100741801 128318534 56417384 70276715 44324417 58041819 X WE ARE CALLED TO MAKE A HEALTHY DIFFERENCE IN PEOPLE'S LIVES. false false 13504289 231318 73839952 See schedule O 13504289 true true false true false false false false false false true true true false true true false true false false true false false false false false false true false true true false false false false false false false false false false false false false false false true true true false false true X 589 0 true 0 false true CJ false false false false false false false false X 18 11 false false false false false false true true true false false true true true true true true true true false MN X ROBERT NORMAN 2187863178 502 E 2ND ST Duluth MN 55805 X Richard Blair 4.0 X X 40000 0 0 Laura Boehlke-Bray MD 60.0 X 31300 275713 30461 Terrence Clark MD 60.0 X 0 196788 41201 Lori Collard 2.0 X X 25600 0 0 Joel Haugen MD 60.0 X 11350 292006 39177 Neal Hessen 2.0 X 37750 1600 0 Sister Kathleen Hofer 60.0 X X 0 0 0 Lauren Larsen 2.0 X 25000 0 0 Walter Leino MD 2.0 X 15000 0 0 Sister Beverly Raway 1.0 X 0 0 0 James Seitz 2.0 X 15000 0 0 Sister Clare Marie Trettel 2.0 X 0 0 0 Sister Claudia Riehl 1.0 X 0 0 0 Dean Ager 2.0 X 25000 0 0 James Anderson 2.0 X X 15600 0 0 Peter Dunphy MD 60.0 X 15000 321194 19636 Theresa Gunnarson MD 60.0 X 15000 477967 55917 Michael Sheldon MD 60.0 X 18850 297372 40559 SISTER LOIS ECKES 1.0 X 0 0 0 DAVID GADDIE 2.0 X 8200 0 0 RICHARD ZIEGLER PHD 2.0 X 0 0 0 Peter Person MD 60.0 X 0 1439889 751215 Robert Norman 60.0 X 0 626789 135575 Gregory Glasner MD 60.0 X 0 612656 96602 Carl Heltne MD 60.0 X 0 585454 46223 Daniel McGinty 60.0 X 0 555436 125720 Kevin Pitzer 60.0 X 0 484748 72246 John Smylie 60.0 X 0 781020 113712 Michael Mahoney 60.0 X 0 286234 57651 Teresa O'Toole 60.0 X 0 540240 35223 Thomas Prusak 60.0 X 0 457351 116645 David Boran MD 60.0 X 0 284394 27265 Thomas Patnoe MD 60.0 X 0 712273 104333 DANIEL NIKCEVICH MD 60.0 X 600 686865 50198 Maribeth Olson 0.0 X 0 395008 31385 Rocklon Chapin 0.0 X 0 444640 59943 Michael Metcalf 60.0 X 0 526817 88755 299250 11282454 2139642 0 true true false EPIC SYSTEMS CORPORATION PO BOX 88314 MILWAUKEE WI 53288 SOFTWARE MAINT SRVCS 6858875 HY TEC CONSTRUCTION OF BRAINERD INC PO BOX 621 BRAINERD MN 56401 CONSTRUCTION/DESIGN 6143836 MAX GREY CONSTRUCTION INC PO BOX 689 HIBBING MN 55746 CONSTRUCTION SERVICE 3068416 LAKE SUPERIOR LAUNDRY PO BOX 488 SUPERIOR WI 54880 LAUNDRY SERVICES 2338745 H T KLATZKY ASSOCIATES 1511 E SUPERIOR ST DULUTH MN 55812 HLTHCARE MKTG SRVCS 1833465 103 478146 500000 978146 SUPPORT REVENUE 541610 73839952 73839952 73839952 993125 -756 993881 0 0 860146 3318 -3318 860146 856828 856828 0 0 0 0 76668051 73839952 -756 1850709 X 231318 231318 0 0 0 1192926 1192926 0 758062 758062 141597 36 141561 189954 139109 50845 66931 139 66792 0 378806 378806 686680 686680 10000 10000 0 202250 202250 8487232 1821165 6666067 672231 627176 45055 335594 79164 256430 508000 262718 245282 0 20866 20866 414750 180931 233819 0 263794 118317 145477 1310620 1310620 0 41566 41566 0 AFFILIATE EXPENSES ALLOCATION 42369810 9225354 33144456 RECRUITMENT 790011 752041 37970 PROVISION FOR DOUBTFUL ACCTS 477925 477925 UBI TAXES 5518 5518 223804 61303 162501 59780245 13504289 46275956 0 913056 3181787 6172989 34414171 0 0 3254977 818886 0 0 0 0 0 0 0 0 602578 1048044 36246 1807 4350 34439 447891 433939 26273093 29215617 62412552 58532818 0 0 660315 638833 100741801 128318534 19799766 37870567 0 0 0 0 31264154 30572760 0 0 0 0 5235000 0 0 0 118464 1833388 56417384 70276715 X 44324417 58041819 0 0 0 0 44324417 58041819 100741801 128318534 X 16887806 -3170404 X false true true X false X X X false false false BRAINERD LAKES INTEGRATED HEALTH SYSTEM 371532145 0 false true true 0 BRAINERD MEDICAL CENTER INC 371532148 03 false true true 1397962 BRIDGES MEDICAL CENTER 200479568 03 false true true 251559 CLEARWATER VALLEY HOSPITAL & CLINICS INC 820497771 03 false true true 682118 CRITICAL ACCESS GROUP 261219624 0 true true true 812193 ST BENEDICT'S FAMILY MEDICAL CENTER THRU 10111 820227163 03 false true true 0 ST JOSEPH'S MEDICAL CENTER 410695602 03 false true true 5603238 ST MARY'S EMS 411805811 09 false true true 72340 ST MARY'S HOSPITAL & CLINICS INC 820226453 03 false true true 680233 ST MARY'S REGIONAL HEALTH CENTER 411620386 03 false true true 2741160 INNOVIS HEALTH LLC 261175213 03 true true true 9743491 MIDWEST MEDICAL EQUIPMENT & SUPPLY INC 411674021 09 false true true 337717 SMDC MEDICAL CENTER 411878730 03 false true true 13146834 PINE MEDICAL CENTER 411884597 03 false true true 670688 POLINSKY MEDICAL REHABILITATION CENTER 410691275 03 false true true 326253 ST MARY'S DULUTH CLINIC HEALTH SYSTEM 411836633 0 true true true 0 ST MARY'S HOSPITAL OF SUPERIOR 411811073 03 false true true 1624981 ST MARY'S MEDICAL CENTER 410695604 03 false true true 13133659 THE DULUTH CLINIC LTD 410883623 03 false true true 6248140 DIVINE MEDICAL SERVICES THRU 10111 202773717 03 false true true 0 DL SURGERY CENTER 263837203 03 false true true 4472 ST MARY'S INNOVIS HEALTH 262861321 03 false true true 132570 MINNESOTA VALLEY HEALTH CENTER INC 410837659 03 false true true 451390 FIRST CARE MEDICAL SERVICES 410706143 03 false true true 764441 ESSENTIA INSTITUTE OF RURAL HEALTH 271291124 04 false true true 118438 ESSENTIA HEALTH FOUNDATION 271984704 07 false true true 120985 GRACEVILLE HEALTH CENTER 410726173 03 false true true 294738 NORTHERN PINES MEDICAL CENTER 410841441 03 false true true 420645 28 59780245 The supported organizations listed in Part I Line 11h that have a "No" box checked are not specifically listed in Essentia's articles of incorporation Article XI. However, Essentia's articles state that Essentia is organized and shall be operated exclusively for charitable, educational, scientific and religious purposes exclusively for the benefit of, to perform the functions of, or to carry out the purposes of the tax-exempt entities identified as supported organizations in their respective articles of incorporation. The amount of support includes Essentia Health's functional expenses which are incurred for the benefit of Essentia Health's supported organizations. RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED false true false true 0 false false true 132241 false true 10000 142241 false Schedule C, Part II-B Lobbying Activity Explanation: Essentia Health employs one full-time in-house public policy individual and during 2012 contracted with one consultant firm to monitor state legislative activities of interest dealing fully with Health and Human Services issues. Essentia Health's public policy activities occur on a multi state and national level. Essentia Health public policy activities included in person, telephonic, electronic communication and information relay with legislators and staff, administrative officials, government agencies and departments on both the state and federal levels. The primary issues of interest and concern include: Critical Access Hospital designation Physician and Hospital Services Reimbursement Medicare and Medicaid Reimbursement Policies Disproportionate Share Hospital Funding Sole Community Hospital Status and Funding Graduate Medical Education/Indirect Medical Education Funding Health Information Technology Funding and Privacy Issues State and Federal Health Care Reform State and Federal Shared Savings Demonstration Projects Medicare Reimbursement for Rehab Facilities Medicare 340B Prescription Drug Discount Program Nurse Licensure Compact Nurse Staffing Ratios Electronic Medical Record Interoperability Medicare Recovery Audit Contractor Audits (RAC) Health Information Exchange Medical Education and Research Costs (MERC) State Children's Health Insurance Program Workforce Issues Public Health Initiatives Community Benefits 10880 664 10216 25366 1143 24223 34439 3264659 F POOLED INVESTMENT FUND 25950958 F 29215617 INVESTMENT IN TAX-EXEMPT ORG 58532818 F 58532818 0 NON CURRENT SWAP LIABILITY 1513726 GRANTS PAYABLE TO RELATED ORGS 319662 1833388 Schedule D, Part X ASC 740 footnote: Essentia Health has adopted Accounting Standards Codification 740, Income Taxes (formerly known as FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Tax - an interpretation of FASB Statement No. 109, Accounting for Income Taxes). The adoption of this interpretation had no material impact on the consolidated financial statements and therefore, Essentia Health's consolidated financial statements for fiscal year ended June 30, 2012 no longer includes an ASC 740 footnote. Central America and the Caribbean Investments 77291620 Europe (Including Iceland and Greenland) Investments 19452256 Europe (Including Iceland and Greenland) Program Services SELF INDEMNITY 7760 Central America and the Caribbean Program Services SELF INDEMNITY 5161650 101913286 101913286 true false true false true false true SMDC MEDICAL Center 502 E 2ND ST Duluth MN 55805 411878730 501(c)(3) 112671 Program Support INNOVIS HEALTH LLC 3000 32ND AVE FARGO ND 58103 261175213 501(C)(3) 45813 Program Support MILLER DWAN FOUNDATION 502 E 2ND ST DULUTH MN 55805 237396466 501(c)(3) 30000 Program Support AMERICAN HEART ASSOCIATION 208 S LASALLE ST CHICAGO IL 60604 135613797 501(C)(3) 15000 Program Support AMERICAN CANCER SOCIETY 8317 ELDERBERRY RD MADISON WI 53717 410724036 501(C)(3) 14500 Program Support 5 0 Schedule I, Part I, Line 2 Procedures for monitoring grants: Essentia Health's management reviews the grant activity by reviewing and documenting each expenditure request and approving the expense. X true true X X X X X true true false false false false false false false Gregory Glasner MD 0 544870 0 64264 0 3522 0 71162 0 25440 0 709258 0 0 Carl Heltne MD 0 583474 0 0 0 1980 0 24500 0 21723 0 631677 0 0 Daniel McGinty 0 362304 0 126001 0 67131 0 99559 0 26161 0 681156 0 65442 Peter Person MD 0 898669 0 305760 0 235460 0 714204 0 37011 0 2191104 0 231933 Robert Norman 0 407163 0 141928 0 77698 0 79658 0 55917 0 762364 0 75455 Kevin Pitzer 0 361792 0 118227 0 4729 0 69786 0 2460 0 556994 0 0 John Smylie 0 576400 0 197084 0 7536 0 82569 0 31143 0 894732 0 0 Laura Boehlke-Bray MD 31300 272506 0 2600 0 607 0 24500 0 5961 31300 306174 0 0 Terrence Clark MD 0 195488 0 0 0 1300 0 20003 0 21198 0 237989 0 0 Joel Haugen MD 11350 269688 0 22060 0 258 0 21235 0 17942 11350 331183 0 0 Michael Mahoney 0 215004 0 49057 0 22173 0 45364 0 12287 0 343885 0 21236 Teresa O'Toole 0 376736 0 118272 0 45232 0 24500 0 10723 0 575463 0 41650 Thomas Prusak 0 341993 0 106548 0 8810 0 91747 0 24898 0 573996 0 0 David Boran MD 0 278305 0 0 0 6089 0 12250 0 15015 0 311659 0 0 Maribeth Olson 0 120443 0 41278 0 233287 0 20135 0 11250 0 426393 0 30589 Thomas Patnoe MD 0 536822 0 174761 0 690 0 72023 0 32310 0 816606 0 0 Rocklon Chapin 0 35986 0 0 0 408654 0 41008 0 18935 0 504583 0 0 Peter Dunphy MD 15000 314643 0 0 0 6551 0 12250 0 7386 15000 340830 0 0 Theresa Gunnarson MD 15000 471894 0 5713 0 360 0 24500 0 31417 15000 533884 0 0 Michael Sheldon MD 18850 293433 0 3849 0 90 0 21334 0 19225 18850 337931 0 0 Michael Metcalf 0 393711 0 128521 0 4585 0 60619 0 28136 0 615572 0 0 DANIEL NIKCEVICH MD 600 679751 0 6244 0 870 0 24500 0 25698 600 737063 0 0 Schedule J, Part I, Line 1a Benefits provided: During tax year 2011, charter travel was used on occasion by two board directors, one officer and six key employees for travel between Essentia Health's Corporate office in Duluth, MN and Essentia Health's supported organizations. Many of Essentia Health's supported organizations are located in rural areas which do not have direct commercial flights available. Charter travel ensures efficient use of Essentia Health's board directors' and employees' time. The use of charter travel is not treated as taxable compensation to these individuals as all travel was business related. Schedule J, Part I, Line 4a Severance payment: Former key employee, Maribeth Olson, a former employee of related organization Essentia Health St. Mary's Medical Center, received payment totaling $169,344 in tax year 2011 related to her termination. The termination terms are from May 7, 2011 until May 7, 2012. Ms. Olson will receive pay totaling $302,031 related to her termination. Former key employee, Rocklon Chapin, a former employee of related organization Essentia Health Duluth, received payment totaling $274,800 in tax year 2011 related to his termination. The termination terms are from January 31, 2011 until July 31, 2012. Mr. Chapin will receive pay totaling $501,019 & benefits totaling $10,009 related to his termination. The other individual listed as former in Form 990, Part VII, Section A, Line 1a remains employed within Essentia Health and its subsidiaries and is not receiving a termination payment. Schedule J, Part I, Line 4b Supplemental nonqualified retirement plan: Amounts related to participating in a supplemental nonqualified retirement plan are reported in Schedule J, Part II, Column C, and amounts related to receiving payment from a supplemental nonqualified retirement plan are reported in Schedule J, Part II, Column B (iii). The following individuals listed in Form 990, Part VII, Section A, Line 1a received payment from a supplemental nonqualified retirement plan during the year: Peter Person, MD (Essentia Health East) $231,933 Robert Norman (Critical Access Group) $75,455 John Smylie (Essentia Health East) $0 Teresa O'Toole (Essentia Health East) $41,650 Daniel McGinty (Critical Access Group) $65,442 Thomas Prusak (Critical Access Group) $0 Gregory Glasner, MD (Essentia Health West) $0 Kevin Pitzer, (Essentia Health West) $0 Michael Mahoney (Essentia Health East) $21,236 Thomas Patnoe, MD (Essentia Health East) $0 Michael Metcalf (Essentia Health East) $0 Maribeth Olson (Essentia Health East) $30,589 Rocklon Chapin (Essentia Health East) $0 Critical Access Group's nonqualified retirement plan is offered to Critical Access Group executives. There is a minimum two year vesting date, benefits are subject to income taxes upon vesting, and benefits are payable from Critical Access Group's general assets. Essentia Health East's nonqualified retirement plan is offered to designated Essentia Health East's executives. There is a minimum two year vesting date, benefits are subject to income taxes upon vesting, and benefits are payable from Essentia Health East's general assets. Essentia Health West's nonqualified retirement plan is offered to designated Essentia Health West's executives. There is a minimum two year vesting date, benefits are subject to income taxes upon vesting, and benefits are payable from Essentia Health West's general assets. CASS COUNTY NORTH DAKOTA 456002205 148047AU7 2010-02-25 59573111 2008A REOFFERED BONDS (SEE SCH O) false false false WI HEALTH AND EDUCATION FACILITIES AUTHORITY 391337855 97710BSD5 2010-02-25 12854722 2008B REOFFERED BONDS (SEE SCH O) false false false MN AGRICULTURAL AND ECONOMIC DEVELOPMENT BOARD 416007162 6049202H0 2010-02-25 165717405 2008C REOFFERED BONDS (SEE SCH O) false false false MN AGRICULTURAL AND ECONOMIC DEVELOPMENT BOARD 416007162 6049202M9 2010-06-25 109535000 2010 BONDS (SEE SCH O) false false false 0 0 3872252 0 0 0 0 0 0 0 3872252 0 2010 true false true true 0 0 835557 0 0 0 0 0 0 0 835557 0 2010 true false true true 396825 0 10771632 0 0 0 123454 0 0 0 10648178 0 2010 true false true true 849254 0 16377291 0 0 0 63167 0 0 5747832 10566292 0 2011 true false false true false false false false 0.00000 0.00000 0.00000 true false false false false 0.00000 0.00000 0.00000 true false false false false 0.00000 0.00000 0.00000 true false false false false 0.00000 0.00000 0.00000 true false false false 0 false 0 false false false false false 0 false 0 false false false false false 0 false 0 false false false true false 0 false 0 false false See Schedule O 0 Form 990, Part III, Line 4 Program service accomplishments: Essentia Health is organized and shall be operated exclusively for charitable, educational, scientific and religious purposes exclusively for the benefit of, to perform the functions of, or to carry out the purposes of Critical Access Group, a Minnesota nonprofit corporation, Brainerd Lakes Integrated Health System dba Essentia Health Central, a Minnesota nonprofit corporation, St. Mary's Duluth Clinic Health System dba Essentia Health East, a Minnesota nonprofit corporation, and Innovis Health dba Essentia Health West, a Delaware limited liability company and in support of Critical Access Group, Essentia Health Central, Essentia Health East, and Essentia Health West and each of the tax-exempt entities identified as supported organizations in their articles of incorporation all of which are organizations described in Section 501(c)(3) of the Internal Revenue Code of 1986. Essentia Health supports regional leaders in the development and advancement of business, clinical and financial models for the delivery of high-quality and cost-effective health care. The regional leaders provide integrated health care delivery through their physician group practices, ambulatory and outpatient centers, acute care hospitals and community, rural and critical access hospitals. The organizations Essentia Health supports (the "Supported Organizations") include 16 hospitals and more than 60 clinics in Minnesota, Wisconsin, North Dakota, and Idaho with several located in rural areas that have limited access to other healthcare options. These Supported organization file separate Form 990's. At fiscal year ended June 30, 2012, Essentia Health's Supported Organizations' consolidated total revenue was $1,545,086,000 and consolidated income from operations was $31,726,000. These hospitals and clinics employ over 10,200 full time equivalents. The hospitals have a total of 1,098 licensed beds which provided over 177,000 hospital patient days and over 502,000 outpatient visits during the fiscal year ended June 30, 2012. The clinics had over 1.7 million encounters during the same time period. During the fiscal year ended June 30, 2012, Essentia Health's Supported Organizations provided total community benefits of over $94.7 million which included costs of providing charity care, costs in excess of Medicaid payments, Medicaid surcharge, MinnesotaCare tax, community services, subsidized health services, education, research, and cash and in-kind donations. Form 990, Part V, Line 1a 1099 Reporting: Beginning in 2011, vendor payments and Form 1099's were processed through Essentia Health on behalf of certain supported organizations. Form 990, Part V, Line 1c No Gaming (Gambling) Winnings Form 990, Part VI, Line 7b Member with right to approve governing body decisions: The Benedictine Sisters Benevolent Association ("BSBA") also has certain reserved powers over all Catholic facilities within Essentia Health. BSBA's reserved powers are as follows: Mission. Authority to approve the mission, purpose and vision statements for Catholic facilities and entities within the System. Adherence to Ethical Religious Directives (ERDs). Authority to approve the methods, policies and procedures pertaining to the adherence of Catholic facilities and entities within the System to the ERDs, and to require the use of religious symbols, distinguishing elements and prayers. Official Catholic Directory. Authority to request the listing of qualified entities and facilities within the System in The Official Catholic Directory, subject to the approval of applicable Catholic authorities. Catholic Health Association. Authority to require Catholic facilities and entities within the System to join the membership of the Catholic Health Association of the United States. Alienation of Stable Patrimony or Ecclesiastical Goods. Authority to approve alienation of either stable patrimony or other ecclesiastical goods in the System if such goods involved in a specific transaction approved by Essentia Health pursuant to Section 2.8(g) or 2.8(h) of the Affiliation Agreement have a dollar value equal to or greater than 70% of the amount established from time to time that requires approval from the Holy See. Amendments. Authority to approve any amendments to the Articles of Incorporation or Bylaws of this corporation that would alter the number of Benedictine Sisters of St. Scholastica Monastery of Duluth or Benedictine Sisters Benevolent Association board of director members serving as members of this corporation's board of directors; authority to approve any amendments to the Articles of Incorporation or Bylaws of the Supported Organizations, as well as the Catholic Subsidiaries (as defined in the Affiliation Agreement), which could materially affect such entity's identity as a Catholic institution, including without limitation any amendment that would alter the number of Benedictine Sisters of St. Scholastica Monastery of Duluth or Benedictine Sisters Benevolent Association board of director members serving as members of such entity's board of directors; and authority to cause Essentia Health to make amendments to the Articles of Incorporation or Bylaws of the Supported Organizations, as well as the Catholic Subsidiaries, which amendments Benedictine Sisters Benevolent Association in good faith are necessary to preserve such entity's identity as a Catholic institution. Mission Effectiveness. Authority to approve annual plans and evaluations relating to mission effectiveness and chaplaincy for the Catholic facilities and entities within the System. Mergers and Dissolution. Subject to the approval of the Benedictine Sisters of St. Scholastica Monastery of Duluth, authority to approve a proposed merger, consolidation, liquidation, dissolution, or the disposition of all or substantially all the assets. Form 990, Part VI, Line 11a Form 990 review process: The 2011 Form 990 including all schedules was reviewed by Essentia Health's management and governing body on March 13th, 2013 prior to filing with the Internal Revenue Service. Each current director of the governing body received a copy of the 2011 Form 990. Essentia Health's Chief Financial Officer led the review of the form and schedules and any questions were discussed. Form 990, Part VI, Line 12c Monitoring and enforcing Conflict of Interest policy: Interested persons annually disclose relationships which might lead to a conflict of interest by completing a conflict of interest disclosure form. Interested persons include any person in a position to exercise substantial influence over the organization. It includes but is not limited to any director, officer, management, employee, or committee member of Essentia Health or any of its affiliates. Essentia is responsible for the annual distribution of conflict of interest forms and review of disclosures for the governing bodies of Essentia and Essentia Operating Members and for senior management employees of Essentia. Transactions with parties with whom a conflict of interest exists may be undertaken only if all of the following are observed: the conflict of interest is fully disclosed; the interested person with the conflict of interest doesn't participate in the approval of such transactions; if practical or appropriate, a competitive bid or comparable valuation is obtained; and the board or committee of the board has determined that the transaction is in the best interest of the organization. Disclosure by any interested person other than a board or committee member should be made to the Chief Executive Officer (or if she/he is the one with the conflict, then to the board chair), who will bring the matter to the attention of the board or an appropriate committee of the board. Disclosure involving board or committee members should be made to the board chair (or if she/he is the one with the conflict, then to the board vice chair), who will bring these matters to the board or an appropriate committee of the board. The board or committee of the board will determine whether a conflict exists and if so, whether the contemplated transaction may be authorized as just, fair, and reasonable to Essentia or its affiliate(s). The decision of the board or a duly constituted committee of the board on these matters will be at its sole discretion, and its concern must be the welfare of Essentia and its affiliate(s) and the advancement of its purposes. The decision of the board is final. If the board determines a conflict does not exist, the interested person may proceed with the transaction; however, he/she will not be eligible to vote on related issues should they arise. If the board determines a conflict does exist, the interested person will be notified of the decision regarding whether the contemplated transaction will be authorized as just, fair, and reasonable. Form 990, Part VI, Line 15 A&B Process for determining compensation: The Executive Compensation Committee of Essentia Health's board of directors is authorized to fulfill the board's responsibilities regarding executive compensation consistent with Essentia's mission, values and tax-exempt status, and the Executive Compensation Committee's Charter. The Executive Compensation Committee meets at least twice annually to carry out its responsibilities, which include, but are not limited to, establishing, reviewing and modifying, as appropriate, reasonable compensation and benefits for Essentia's Chief Executive Officer and his direct reports which are paid by related organizations. The Executive Compensation Committee engages qualified independent compensation advisors to provide objective and impartial comparative data and to express opinions on total compensation reasonableness. The Executive Compensation Committee may request its independent advisors to: monitor comparability data and marketplace trends; make appropriate recommendations regarding salary ranges; and periodically review the market competitiveness of Essentia executive compensation packages. Prior to establishing or adjusting executive compensation, the Executive Compensation Committee will obtain and rely upon appropriate data as to comparability of the proposed compensation or adjustments. The Executive Compensation Committee will adequately document the basis for its determination concurrently with making those determinations. The Executive Compensation Committee minutes will include: the terms of the approved compensation and the date approved; the Executive Compensation Committee members present during the review, discussion and approval of the proposed compensation and those who voted on the proposed compensation; identification of the comparability data obtained and relied upon by the Executive Compensation Committee and how the data was obtained; any actions by a member of the Executive Compensation Committee having a conflict of interest; and documentation of the basis for the determination. The year this process was last undertaken for Essentia's Chief Executive Officer, Chief Financial Officer, Senior Vice President, Development, Chief Operating Officer, Vice President, Public Policy and Chief Administrative Officer/Chief Legal Officer; East Region's President/Chief Medical Officer; West Region's President/Chief Medical Officer and Chief Administrative Officer; and Central Region's President and Chief Medical Officer was 2010. Form 990, Part VI, Line 19 Availability of governing documents, conflict of interest policy, and financial statements to the public: Essentia Health makes its governing documents, conflict of interest policy, and financial statements available to the public upon request. Essentia Health is part of Essentia Health's consolidated financial statements which are included in Essentia Health's annual report posted on Essentia Health's web site. Form 990, Part VII, Section A, Line 1a, Column B Hours Devoted to related organizations: The following individuals listed in Form 990, Part VII, Section A, Line 1a also devoted time each week to related organizations: Lori Collard: approximately 5 hours Neal Hessen: approximately 16 hours James Anderson: approximately 8 hours David Gaddie: approximately 10 hours Peter Person, MD is employed by Essentia Health Duluth as Essentia Health's Chief Executive Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Laura Boehlke-Bray, MD is employed by The Duluth Clinic, Ltd. 100% of her time is spent furthering the purpose of Essentia Health East and related organizations. Terrance Clark, MD is employed by The Duluth Clinic, Ltd. 100% of his time is spent furthering the purpose of Essentia Health East and related organizations. Joel Haugen, MD is employed by Essentia Health West. 100% of his time is spent furthering the purpose of Essentia Health West and related organizations. Sister Kathleen Hofer is employed by Essentia Health St. Mary's Medical Center as Essentia Health's Senior Vice President, Benedictine Sponsorship. 100% of her time is spent furthering the purpose of Essentia Health and related organizations. Peter Dunphy, MD is employed by Essentia Health Brainerd Specialty Clinic. 100% of his time is spent furthering the purpose of Essentia Health Central and related organizations. Theresa Gunnarson, MD is employed by The Duluth Clinic, Ltd. 100% of her time is spent furthering the purpose of Essentia Health East and related organizations. Michael Sheldon, MD is employed by Essentia Health West. 100% of his time is spent furthering the purpose of Essentia Health West and related organizations. Robert Norman is employed by Critical Access Group as Essentia Health's Chief Financial Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Teresa O'Toole is employed by Essentia Health Duluth as Essentia Health's Chief Administrative Officer and Chief Legal Officer. 100% of her time is spent furthering the purpose of Essentia Health and related organizations. John Smylie is employed by Essentia Health Duluth as Essentia Health's Chief Operating Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Gregory Glasner, MD is employed by Essentia Health West as the Essentia Health West's President and Chief Medical Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Carl Heltne, MD is employed by The Duluth Clinic, Ltd. as Essentia Health's Chief Medical Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Daniel McGinty is employed by Critical Access Group as Essentia Health's Senior Vice President, Development. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Kevin Pitzer is employed by Essentia Health West as Essentia Health West's Chief Administrative Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Michael Mahoney is employed by Essentia Health Duluth as Essentia Health's Vice President, Public Policy. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Thomas Patnoe, MD is employed by Essentia Health Duluth as Essentia Health's East's President and Chief Medical Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Thomas Prusak is employed by Critical Access Group as Essentia Health Central's President. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. David Boran, MD is employed by Essentia Health Brainerd Specialty Clinic as Essentia Health Central's Chief Medical Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Daniel Nikcevich, MD is employed by The Duluth Clinic, Ltd. as Essentia Health's Associate Chief Medical Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Michael Metcalf is employed by Essentia Health Duluth as Essentia Health East's Chief Administrative Officer. 100% of his time is spent furthering the purpose of Essentia Health and related organizations. Form 990, Part IX, Line 24a Other Expenses: Affiliate expenses allocation of $42,369,810 represents the portion of Critical Access Group, Essentia Health Central, Essentia Health West and Essentia Health East compensation ($42,305,405) and miscellaneous operating expenses ($64,405) related to Essentia Health, a supporting organization of Critical Access Group, Essentia Health Central, Essentia Health West, and Essentia Health East and allocated directly to Essentia. Form 990, Part XI, Line 5 Other Changes in Net Assets: The total amount of other changes in net assets includes: Net Asset transfer with related organizations; reallocated Balance Sheet items to more appropriate companies $2,182,963 Note Receivable Write-Off ($500,000) Unrealized gain on trading securities and swaps ($4,533,705) Deferred Grant Revenue from Related Organization ($319,662) Total amount of other changes in net assets: ($3,170,404) Schedule K Additional information/comments relating to the reporting of liabilities by related organizations: Essentia Health has an Obligated Group created under the Master Indenture which is composed of the following Members: Essentia Health, Critical Access Group, Essentia Health East, Essentia Health St. Joseph's Medical Center, Essentia Health St. Mary's-Detroit Lakes, Essentia Health St. Mary's Medical Center, Essentia Health Duluth, Essentia Health Polinsky Medical Rehabilitation Center, Essentia Health St. Mary's Hospital-Superior, Essentia Health Brainerd Specialty Clinic, Essentia Health Central, St. Mary's Innovis Health, The Duluth Clinic, Ltd. and Essentia Health West (the "Obligated Group Members" or the "Members of the Obligated Group"). The Members of the Obligated Group are jointly and severally obligated on all indebtedness evidenced or secured by Notes issued under the Master Indenture. The Series 2008A reoffered bonds are secured by Notes issued under the Master Indenture. Essentia Health is the conduit borrower of the Series 2008A reoffered bonds and has recorded a portion of the bond liability on its balance sheet. The Obligated Group Members, Essentia Health West, The Duluth Clinic, Ltd., and Essentia Health St. Mary's-Detroit Lakes, are indirect beneficiaries of the Series 2008A reoffered borrowing and have recorded the bond liability on their balance sheets which are consolidated with Essentia Health. The Series 2008B reoffered bonds are secured by Notes issued under the Master Indenture. The Obligated Group Members: The Duluth Clinic, Ltd., Essentia Health and Essentia Health St. Mary's Hospital-Superior are the conduit borrowers of the Series 2008B reoffered bonds. The conduit borrowers, The Duluth Clinic, Ltd. and Essentia Health, have recorded a portion of the bond liability on their balance sheets which are consolidated with Essentia Health. The Obligated Group Members, Essentia Health West and Essentia Health St. Mary's-Detroit Lakes, are indirect beneficiaries of a portion of the Series 2008B reoffered borrowing and have recorded a portion of the bond liability on their balance sheets which are consolidated with Essentia Health. The Series 2008C reoffered bonds are secured by Notes issued under the Master Indenture. The Obligated Group Members: Essentia Health East, Essentia Health St. Joseph's Medical Center, Essentia Health St. Mary's-Detroit Lakes, The Duluth Clinic, Ltd., Essentia Health, and Essentia Health St. Mary's Medical Center, Inc. are the conduit borrowers of the Series 2008C reoffered bonds. The conduit borrowers, Essentia Health St. Mary's-Detroit Lakes, Essentia Health, and The Duluth Clinic, Ltd., have recorded a portion of the bond liability on their balance sheets which are consolidated with Essentia Health. The Obligated Group Member, Essentia Health West is an indirect beneficiary of a portion of the Series 2008C reoffered borrowing and has recorded a portion of the bond liability on its balance sheet which is consolidated with Essentia Health. The Series 2010 bonds are secured by Notes issued under the Master Indenture. The Obligated Group Members: The Duluth Clinic, Ltd., Essentia Health, Essentia Health St. Joseph's Medical Center, Essentia Health East, Essentia Health St. Mary's Medical Center and Essentia Health St. Mary's-Detroit Lakes are the conduit borrowers of the Series 2010 bonds. The conduit borrowers, The Duluth Clinic, Ltd., Essentia Health, Essentia Health St. Joseph's Medical Center, and Essentia Health St. Mary's-Detroit Lakes, have recorded a portion of the bond liability on their balance sheets which are consolidated with Essentia Health. The Obligated Group Member, Essentia Health West is an indirect beneficiary of a portion of the Series 2010 borrowing and has recorded a portion of the bond liability on its balance sheet which is consolidated with Essentia Health. SCHEDULE K, PART I, COLUMN (F) DESCRIPTION OF PURPOSE: SERIES 2008A REOFFERED: Reoffer Series 2008 A-1 and A-2 bonds issued March 4, 2008 to refinance a portion of the acquisition of certain assets of Essentia Health West in connection with the affiliation of Essentia Health with Essentia Health West. SERIES 2008B REOFFERED: Reoffer Series 2008 B-1 bonds issued March 4, 2008 to refund Series 1999B bonds issued May 18, 1999 for construction projects and equipment purchases in Superior, WI and various Duluth Clinic locations in northwestern Wisconsin. SERIES 2008C REOFFERED: Reoffer Series 2008 C-5 and 2008 C-4A bonds issued March 4, 2008 to refund Series 2004 bonds issued March 19, 2004 for various acquisitions, construction projects, capital improvements and equipment purchases in Duluth, Brainerd, and Detroit Lakes, MN and refund Series 1999A bonds issued May 18, 1999 for various acquisitions, construction projects, capital improvements and equipment purchases in Brainerd, Detroit Lakes and Duluth, MN and various Duluth Clinic sites in northern Minnesota. SERIES 2010: Refund Series 1993C and 1993E bonds issued January 15, 1993 and refund Series 2008 C-3 and 2008 C-4B bonds issued March 4, 2008 to partially refund Series 2004 bonds issued March 19, 2004 for various acquisitions, construction projects, capital improvements and equipment purchases in Duluth, Brainerd, and Detroit Lakes, MN and various Duluth Clinic sites in northern Minnesota and finance various construction projects, capital improvements and equipment purchased in Brainerd, Detroit Lakes and Duluth, MN and various Duluth Clinic sites in northern Minnesota. SCHEDULE K, PART II, LINE 3 Issue Price: Series 2008A Reoffered, Series 2008B Reoffered, Series 2008C Reoffered, and Series 2010 were issued by the Essentia Health Obligated Group. The issue price listed in Essentia Health Schedule K Part I Column (e) represents the Essentia Health Obligated Group's total borrowing. SCHEDULE K, Part II, Lines 3 through 12 Proceeds: Series 2008A Reoffered, Series 2008B Reoffered, Series 2008C Reoffered, and Series 2010 were issued by the Essentia Health Obligated Group. A portion of the Series 2008A Reoffered, Series 2008B Reoffered, Series 2008C Reoffered, and Series 2010 borrowing were allocated to Essentia Health, an Essentia Health Obligated Group Member. The proceeds listed in Essentia Health Schedule K Part II Lines 3 through 12 represent Essentia Health's allocated portion of the proceeds. SCHEDULE K, Part V Procedures to undertake corrective action: Written procedures to ensure that violations of federal tax requirements are timely identified and corrected through the voluntary closing agreement program have been subsequently adopted. Brainerd Lakes Integrated Health System 2024 S 6th St Brainerd MN 56401 371532145 Support ORG MN 501(C)(3) 11 II Essentia true Brainerd Medical Center Inc 2024 S 6th St Brainerd MN 56401 371532148 Clinic MN 501(C)(3) 3 BLIHS true Bridges Medical Center 201 9th St W Ada MN 56510 200479568 Clinic/Hosp MN 501(C)(3) 3 Innovis true Clearwater Valley Hospital & Clinics INC 301 Cedar Orofino ID 83544 820497771 Clinic/Hosp ID 501(C)(3) 3 CAG true Divine Medical Services THRU 10111 709 N Lincoln Jerome ID 83338 202773717 Emerg SrVCS ID 501(C)(3) 3 SBFMC true DL Surgery Center 1027 Washington Ave Detroit Lakes MN 56501 263837203 ASC MN 501(C)(3) 3 CAG true Critical Access Group 503 E 3rd St Ste 400 Duluth MN 55805 261219624 SUPPORT ORG MN 501(C)(3) 11 II Essentia true St Benedict's Fam Med CNTR THRU 10111 709 N Lincoln Jerome ID 83338 820227163 Clinic/Hosp ID 501(C)(3) 3 CAG true St Joseph's Medical Center 523 N 3rd St Brainerd MN 56401 410695602 CLINIC/HOSP MN 501(C)(3) 3 BLIHS true St Mary's EMS 1027 Washington Ave Detroit Lakes MN 56501 411805811 EMERG SRVCS MN 501(C)(3) 9 SMRHC true St Mary's Hospital & Clinics Inc PO Box 137 Cottonwood ID 83522 820226453 CLinic/Hosp ID 501(C)(3) 3 CAG true St Mary's Innovis Health 1027 Washington Ave Detroit Lakes MN 56501 262861321 Clinic MN 501(C)(3) 3 Innovis true St Mary's Regional Health Center 1027 Washington Ave Detroit Lakes MN 56501 411620386 Clinic/Hosp MN 501(C)(3) 3 Innovis true Innovis Health LLC 3000 32ND AVE Fargo ND 58103 261175213 Clinic/Hosp DE 501(C)(3) 3 Essentia true Midwest Medical Equipment & Supply Inc 4418 Haines Rd Duluth MN 55811 411674021 Medical Equip MN 501(C)(3) 9 SMMC true SMDC Medical Center 502 E 2nd St Duluth MN 55805 411878730 Clinic/Hosp MN 501(C)(3) 3 SMDCHS true Pine Medical Center 109 Court Ave S Sandstone MN 55072 411884597 Hospital/Nurs MN 501(C)(3) 3 SMDCHS true Polinsky Medical Rehabilitation Center 530 E 2nd St Duluth MN 55805 410691275 Clinic MN 501(C)(3) 3 SMMC true St Mary's Duluth Clinic Health System 407 E 3rd St Duluth MN 55805 411836633 Support ORG MN 501(C)(3) 11 II Essentia true St Mary's Hospital of Superior 3500 Tower Ave Superior WI 54880 411811073 Clinic/Hosp WI 501(C)(3) 3 SMMC true St Mary's Medical Center 407 E 3rd St Duluth MN 55805 410695604 Hospital MN 501(C)(3) 3 SMDCHS true The Duluth Clinic Ltd 400 E 3rd St Duluth MN 55805 410883623 Clinic MN 501(C)(3) 3 SMDCHS true First Care Medical Services 900 Hilligross Blvd SE Fosston MN 56542 410706143 Clinic/Hosp MN 501(C)(3) 3 Innovis true Minnesota Valley Health Center 621 S 4th St Le Sueur MN 56058 410837659 Hospital/Nurs MN 501(C)(3) 3 CAG true Essentia Institute of Rural Health 502 E 2nd St Duluth MN 55805 271291124 Research MN 501(C)(3) 4 Essentia true Essentia Health Foundation 502 E 2nd St Duluth MN 55805 271984704 Foundation MN 501(C)(3) 7 ESSENTIA true Northern Pines Medical Center 5211 Hwy 110 Aurora MN 55705 410841441 Hospital/Nurs MN 501(C)(3) 3 SMDCHS true Graceville Health Center 115 West Second St Graceville MN 56240 410726173 Clinic/Hosp MN 501(C)(3) 3 Innovis true PMC-Gateway Imaging LLC 109 Court Ave S Sandstone MN 55072 261634764 Imaging ServiCES MN NA N/A 0 0 0 0.00000 Essentia Health Insurance Services SPC Buckingham Sq 720 W Bay Rd PO 69 Grand Cayman Cayman Islands CJ KY1-1102 000000000 Insurance CJ NA Foreign Corp -1437343 42267648 1.00000 East Range Clinics Ltd 910 6th Ave N Virginia MN 55792 410909915 Clinics MN NA C CORP 0.00000 false true true false false false false false false false true false false true true true true true Critical Access Group O 705244 actual costs Critical Access Group R 1992326 actual costs Brainerd Medical Center Inc P 449396 actual costs St Joseph's Medical Center P 1418466 actual costs Bridges Medical Center K 343476 actual costs Bridges Medical Center P 103133 actual costs Clearwater Valley Hospital and Clinics Inc p 256485 actual costs St Mary's Hospital & Clinics Inc p 254809 actual costs FIRST CARE MEDICAL SERVICES p 101269 actual costs GRACEVILLE HEALTH CENTER K 389556 actual costs GRACEVILLE HEALTH CENTER P 63123 actual costs MINNESOTA VALLEY HEALTH CENTER P 200613 actual costs ST BENEDICT'S FAMILY MEDICAL CENTER p 197343 actual costs ST BENEDICT'S FAMILY MEDICAL CENTER q 502496 actual costs ST MARY'S REGIONAL HEALTH CENTER K 3413688 actual costs ST MARY'S REGIONAL HEALTH CENTER P 2922298 actual costs ST MARY'S REGIONAL HEALTH CENTER Q 169520 actual costs Innovis Health LLC O 24955250 actual costs Innovis Health LLC P 5016829 actual costs Northern Pines Medical Center R 3229734 actual costs SMDC Medical Center R 256804 actual costs ESSENTIA HEALTH INSURANCE SERVICES SPC C 478146 actual costs ESSENTIA HEALTH INSURANCE SERVICES SPC P 3608478 actual costs ESSENTIA HEALTH INSURANCE SERVICES SPC Q 5161650 actual costs CRITICAL ACCESS GROUP P 314999 actual costs CRITICAL ACCESS GROUP N 354390 actual costs ESSENTIA INSTITUTE OF RURAL HEALTH P 74940 actual costs SMDC MEDICAL CENTER P 11099806 actual costs SMDC MEDICAL CENTER O 7573532 actual costs SMDC MEDICAL CENTER K 17236884 actual costs SMDC MEDICAL CENTER Q 517684 actual costs SMDC MEDICAL CENTER N 36617537 actual costs SMDC MEDICAL CENTER B 112671 actual costs ST MARY'S MEDICAL CENTER P 1322664 actual costs ST MARY'S MEDICAL CENTER O 429101 actual costs ST MARY'S MEDICAL CENTER K 16539036 actual costs ST MARY'S MEDICAL CENTER Q 915405 actual costs ST MARY'S MEDICAL CENTER N 1024956 actual costs THE DULUTH CLINIC P 621629 actual costs THE DULUTH CLINIC O 351892 actual costs THE DULUTH CLINIC K 7743672 actual costs THE DULUTH CLINIC Q 91364 actual costs THE DULUTH CLINIC N 393432 actual costs PINE MEDICAL CENTER P 100225 actual costs PINE MEDICAL CENTER K 576888 actual costs ST MARY'S HOSPITAL OF SUPERIOR P 133811 actual costs ST MARY'S HOSPITAL OF SUPERIOR K 1977888 actual costs ST MARY'S HOSPITAL OF SUPERIOR Q 79557 actual costs NORTHERN PINES MEDICAL CENTER P 94288 actual costs NORTHERN PINES MEDICAL CENTER K 319848 actual costs POLINSKY MEDICAL REHABILITATION CENTER K 388740 actual costs MIDWEST MEDICAL EQUIPMENT AND SUPPLY K 268944 actual costs INNOVIS HEALTH LLC K 12291960 actual costs INNOVIS HEALTH LLC Q 494144 actual costs INNOVIS HEALTH LLC N 3011503 actual costs ST JOSEPH'S MEDICAL CENTER O 102616 actual costs ST JOSEPH'S MEDICAL CENTER K 6779544 actual costs ST JOSEPH'S MEDICAL CENTER Q 238892 actual costs ST JOSEPH'S MEDICAL CENTER N 853199 actual costs BRAINERD MEDICAL CENTER Inc O 3004912 actual costs BRAINERD MEDICAL CENTER Inc K 670104 actual costs BRAINERD MEDICAL CENTER Inc Q 50644 actual costs SCHEDULE R, PART 11, COLUMN (A) Name: In 2011, many Essentia entities adopted a doing business as name as part of a system-wide rebranding strategy using the Essentia brand. Legal Name; Doing Business As Name: Brainerd Lakes Integrated Health System; Essentia Health Central Brainerd Medical Center, Inc.; Essentia Health Brainerd Specialty Clinic Bridges Medical CenteR; Essentia Health Ada First Care Medical ServiceS; Essentia Health Fosston Graceville Health Center; Essentia Health Holy Trinity Hospital Innovis Health, LLC; Essentia Health West Midwest Medical Equipment & Supply Inc.; Essentia Health Medical Equipment and Supplies Northern Pines Medical Center; Essentia Health Northern Pines Pine Medical Center; Essentia Health Sandstone Polinsky Medical Rehabilitation Center; Essentia Health Polinsky Medical Rehabilitation Center SMDC Medical Center; Essentia Health Duluth St. Joseph's Medical Center; Essentia Health St. Joseph's Medical Center St. Mary's Duluth Clinic Health System; Essentia Health East St. Mary's Hospital of Superior; Essentia Health St. Mary's Hospital-Superior St. Mary's Medical CenteR; Essentia Health St. Mary's Medical Center St. Mary's Regional Health Center; Essentia Health St. Mary's-Detroit Lakes