2013-05-10T14:27:29-05:00 2012-06-30 232932984 PARENTEBEARD LLC 1650 MARKET STREET SUITE 4500 PHILADELPHIA PA 19103 990 2011-07-01 233009874 THE ALLENTOWN SPECIALTY HOSPITAL INC ALLE 6107763303 GOOD SHEPHERD PLAZA 850 S 5TH ST ALLENTOWN PA 181033295 DANIEL C CONFALONE 6107763303 2013-05-09 1 JULIUS GREEN CPA P00350393 2159720701 2011 2016-02-24 21:20:13Z GOOD SHEPHERD SPECIALTY HOSPITAL - ALLENTOWN DANIEL C CONFALONE GOOD SHEPHERD PLAZA 850 S 5TH ST ALLENTOWN PA 181033295 17248229 0 X WWW.GOODSHEPHERDREHAB.ORG X 1999 PA TO ENHANCE LIVES, MAXIMIZE FUNCTION, INSPIRE HOPE, AND PROMOTE DIGNITY AND WELL-BEING. 8 3 0 3 0 0 975 1058 17105804 17247016 0 0 102956 155 17209735 17248229 0 0 0 0 7006361 6745532 0 0 0 8786514 8598637 15792875 15344169 1416860 1904060 11956763 14026817 1210545 1357061 10746218 12669756 X GOOD SHEPHERD'S MISSION IS: "MOTIVATED BY THE DIVINE GOOD SHEPHERD AND THE PHYSICAL AND COGNITIVE REHABILITATION NEEDS OF OUR COMMUNITIES, OUR MISSION IS TO ENHANCE LIVES, MAXIMIZE FUNCTION, INSPIRE HOPE, AND PROMOTE DIGNITY AND WELL-BEING WITH EXPERTISE AND COMPASSION." 0 0 12424892 17247016 THE ALLENTOWN SPECIALTY HOSPITAL, INC. DBA GOOD SHEPHERD SPECIALTY HOSPITAL - ALLENTOWN ("GSSH") IS A 32-BED FACILITY PROVIDING ACUTE CARE FOR MEDICALLY STABLE BUT COMPLEX PATIENTS WHO REQUIRE LONG PERIODS OF HOSPITALIZATION. GSSH WAS THE FIRST LONG-TERM ACUTE CARE HOSPITAL IN THE LEHIGH VALLEY REGION AND WAS ONE OF THE FIRST IN THE COUNTRY TO OFFER PATIENT MONITORING BY TELE-INTENSIVISTS THROUGH STATE-OF-THE-ART TECHNOLOGY. GSSH'S PATIENTS REQUIRE EXTENSIVE NURSING CARE AND ARE OTHERWISE TOO ILL TO BE DISCHARGED TO HOME, A NURSING FACILITY, OR AN ACUTE REHABILITATION HOSPITAL. GSSH'S MAJOR PROGRAMS OF SERVICE ARE THE COMPLEX MEDICAL PROGRAM, TRANSITIONAL REHABILITATION PROGRAM AND THE PULMONARY VENTILATOR PROGRAM, WHICH TYPICALLY EXCEEDS NATIONAL VENT WEANING AVERAGES. IN FISCAL YEAR 2012, GSSH DISCHARGED A TOTAL OF 405 INPATIENTS AND HAD 10,365 TOTAL PATIENT DAYS. 12424892 1 0 0 1 0 0 0 0 0 0 1 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 X 0 0 0 0 0 0 0 0 0 0 0 0 0 X 8 3 0 0 0 0 0 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 PA FL MN X DANIEL C CONFALONE SVP FINANCECFO 6107763303 GOOD SHEPHERD PLAZA 850 SOUTH 5TH ALLENTOWN PA 181033295 X SARA T GAMMON 8.00 X X 0 670551 244647 DANIEL C CONFALONE 15.00 X X 0 363344 26993 SAMUEL A MIRANDA JR 5.00 X X 0 249988 39812 LISA MARSILIO THRU 22812 60.00 X 115170 0 9946 JAMES J DALEY MD 1.00 X 0 203818 19981 PETER T ENDER MD 1.00 X 0 0 0 SUSAN L LAWRENCE 1.00 X 0 0 0 LARRY L LEVIN MD 1.00 X 0 0 0 GREGORY WUCHTER 60.00 X 78544 0 29368 PHILLIP R BRYANT 1.50 X 0 346097 23695 SANDRA E KENTNER 40.00 X 106540 0 5874 ANTHONY R BONGIOVANNI 0.00 X 0 384545 25784 300254 2218343 426100 2 1 1 0 LEHIGH VALLEY HOSPITAL CEDAR CREST I-78 ALLENTOWN PA 18103 MEDICAL SERVICES 1315075 HEALTH NETWORK LABS 2024 LEHIGH STREET ALLENTOWN PA 18103 LABORATORY SERVICES 332249 SODEXHO OPERATIONS LLC 4880 PAYSPHERE CIRCLE CHICAGO IL 60674 DIETARY/FOOD SERVICES 280644 CROTHALL HEALTHCARE INC 1200 SOUTH CEDAR CREST BLVD ALLENTOWN PA 18103 HOUSEKEEPING SERVICES 188640 HCSC LAUNDRY PO BOX 25092 LEHIGH VALLEY PA 18002 LAUNDRY SERVICES 106633 5 1058 1058 NET PATIENT SVC REV 623000 17247016 17247016 17247016 MEDICAL RCRDS ABSTRACT 900099 155 155 155 17248229 17247016 0 155 231026 231026 5200960 4692451 508509 235170 213301 21869 690854 629120 61734 387522 337078 50444 234 234 1434048 1433448 600 330861 312812 18049 690607 690607 17396 2089 15307 5142 1586 3556 208733 208733 CORPORATE ALLOCATION 3906102 2617088 1289014 MEDICAL SUPPLIES 1565622 1565527 95 BAD DEBT EXPENSE 222431 222431 FOOD 168466 164906 3560 48995 24322 24673 15344169 12424892 2919277 0 2881979 2442563 59629 83775 2307459 1593751 799296 713708 8215859 10786771 11956763 14026817 550850 563087 659695 793974 1210545 1357061 X 10746218 12669756 10746218 12669756 11956763 14026817 X 1904060 19478 X X 0 1 1 X 0 X 0 0 0 0 0 0 0 0 1 234 234 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: THE ALLENTOWN SPECIALTY HOSPITAL, INC. HAD LOBBYING EXPENDITURES THROUGH A CERTAIN PERCENTAGE OF MEMBERSHIP FEES PAID TO THE NATIONAL ASSOCIATION OF LONG TERM HOSPITALS (NALTH) DURING THE FISCAL YEAR ENDING JUNE 30, 2012. $234 WAS THE PORTION OF THE MEMBERSHIP FEES THAT WERE DEEMED TO BE USED TOWARDS LOBBYING. 190277 166424 23853 2117182 1427327 689855 713708 AMOUNTS DUE FROM AFFILIATES 10786771 10786771 ESTIMATED THIRD-PARTY PAYOR SETTLEMENTS 793974 793974 17248229 15344169 1904060 19478 19478 1923538 17025798 -222431 -222431 17248229 0 17248229 15121738 0 15121738 222431 222431 15344169 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: GOOD SHEPHERD PRESCRIBES A RECOGNITION THRESHOLD OF MORE-LIKELY-THAN-NOT TO BE SUSTAINED UPON EXAMINATION BY THE APPROPRIATE TAXING AUTHORITY IN RECORDING TAX LIABILITIES IN THE FINANCIAL STATEMENTS. MEASUREMENT AND RECOGNITION OF THE TAX UNCERTAINTY OCCURS IF THE RECOGNITION THRESHOLD HAS BEEN MET. GOOD SHEPHERD'S POLICY IS TO RECOGNIZE INTEREST RELATED TO UNRECOGNIZED TAX BENEFITS IN INTEREST EXPENSE AND PENALTIES IN OPERATING EXPENSES. GOOD SHEPHERD'S FEDERAL INCOME TAX RETURNS FOR THE YEARS ENDED JUNE 30, 2011, 2010, AND 2009 REMAIN SUBJECT TO EXAMINATION BY THE INTERNAL REVENUE SERVICE. PART XII, LINE 2D - OTHER ADJUSTMENTS: BAD DEBT EXPENSE -222,431. PART XIII, LINE 4B - OTHER ADJUSTMENTS: BAD DEBT EXPENSE 222,431. 1 1 X 1 X 0 1 1 0 1 1 3847 3847 0.00030 3847 3847 0.00030 653 653 0.00000 132786 132786 0.00880 1758 1758 0.00010 135197 135197 0.00890 139044 139044 0.00920 1 6391 767 10259713 8945028 1314685 X 1 1 1 1 THE ALLENTOWN SPECIALTY HOSPITAL INC

850 SOUTH 5TH STREET ALLENTOWN PA 181033295

X LONG-TERM ACUTE CARE HOSPITAL THE ALLENTOWN SPECIALTY HOSPITAL INC 1 1 1 200.000000000000 0 1 X X X X X 1 1 X X X X X 1 0 0 X X 0 0 PART I, LINE 3C: GOOD SHEPHERD LONG-TERM ACUTE SERVICES, INC., D/B/A GOOD SHEPHERD SPECIALTY HOSPITAL (THE "SPECIALTY HOSPITAL") HAS A WRITTEN CHARITY CARE POLICY. ALL PATIENTS ARE NOTIFIED OF GOOD SHEPHERD'S CHARITY CARE AVAILABILITY PRIOR TO THE START OF THEIR CARE. GENERALLY, PATIENTS AUTOMATICALLY QUALIFY UNDER THE SPECIALTY HOSPITAL'S CHARITY CARE POLICY IF THEIR INCOME IS LESS THAN 200% OF THE CURRENT FEDERAL POVERTY GUIDELINES. HOWEVER, OTHER FACTORS ARE ALSO USED TO DETERMINE ELIGIBILITY INCLUDING:- SOURCES OF INCOME- LIVING EXPENSES- OTHER PERSONAL ASSETS AND LIABILITIES- DEMOGRAPHIC INFORMATION- ONGOING HEALTHCARE NEEDSQUALIFICATION UNDER THE SPECIALTY HOSPITAL'S CHARITY CARE POLICY ENTITLES PATIENTS TO COMPLETELY FREE CARE. THE SPECIALTY HOSPITAL DOES NOT OFFER A PROGRAM OF DISCOUNTED CHARITY CARE. HOWEVER, PATIENTS THAT DO NOT QUALIFY FOR CHARITY CARE AND HAVE NO INSURANCE ARE OFFERED A DISCOUNTED PRIVATE PAY RATE FOR SERVICES, PAYABLE AT THE TIME OF SERVICE. THE DISCOUNTED PRIVATE PAY RATE IS DETERMINED CONSIDERING THE ESTIMATED COST OF SERVICES PROVIDED. THE SPECIALTY HOSPITAL'S POLICY ALSO PROVIDES FOR CHARITY CARE FOR CERTAIN PATIENTS UNDER UNIQUE CIRCUMSTANCES. THESE CIRCUMSTANCES INCLUDE PATIENTS WHO MAY EXPERIENCE SIGNIFICANT FINANCIAL HARDSHIP OR PERSONAL FINANCIAL LOSS REGARDLESS OF THEIR INCOME, INCLUDING PATIENTS WHO MAY BE CLASSIFIED AS "MEDICALLY INDIGENT." THESE UNIQUE CIRCUMSTANCES ARE REVIEWED BY ADMINISTRATION, PURSUANT TO POLICY. THE GOOD SHEPHERD AUDITED FINANCIAL STATEMENTS PROVIDE THE FOLLOWING DISCLOSURES WITH RESPECT TO CHARITY CARE:"GOOD SHEPHERD PROVIDES A SIGNIFICANT AMOUNT OF CHARITY CARE TO PATIENTS WHO MEET CERTAIN CRITERIA REGARDLESS OF THEIR ABILITY TO PAY. THE CRITERIA FOR CHARITY CONSIDERS FAMILY SIZE, SOURCES OF INCOME, LIVING EXPENSES, NET WORTH, ONGOING HEALTHCARE NEEDS, AS WELL AS OTHER PERTINENT INFORMATION. BECAUSE GOOD SHEPHERD DOES NOT PURSUE COLLECTION OF AMOUNTS DETERMINED TO QUALIFY AS CHARITY CARE, THEY ARE NOT REPORTED AS REVENUES. GOOD SHEPHERD MAINTAINS RECORDS TO IDENTIFY AND MONITOR THE LEVEL OF CHARITY CARE IT PROVIDES. THE COSTS ASSOCIATED WITH THE CHARITY CARE SERVICES PROVIDED ARE ESTIMATED BY APPLYING A COST-TO-CHARGE RATIO TO THE AMOUNT OF GROSS UNCOMPENSATED CHARGES FOR THE PATIENTS RECEIVING CHARITY CARE. THE LEVEL OF CHARITY CARE PROVIDED BY GOOD SHEPHERD AMOUNTED TO APPROXIMATELY $771,000 IN 2012 AND $728,000 IN 2011. GOOD SHEPHERD RECEIVED $38,707 AND $3,951 IN CONTRIBUTIONS RESTRICTED FOR CHARITY CARE DURING 2012 AND 2011, RESPECTIVELY." PART I, LINE 6A: THE SPECIALTY HOSPITAL'S COMMUNITY BENEFIT ACTIVITIES ARE INCLUDED WITHIN AND REPORTED AS PART OF AN ANNUAL REPORT TO THE COMMUNITY, PUBLISHED ON A CONSOLIDATED BASIS BY GOOD SHEPHERD REHABILITATION NETWORK (GSRN). THIS REPORT INCLUDES THE COMMUNITY BENEFIT ACTIVITIES PROVIDED BY GSRN, AS WELL AS BY ITS CONTROLLED ENTITIES (INCLUDING THE SPECIALTY HOSPITAL). THIS REPORT IS DISTRIBUTED AND MADE AVAILABLE TO THE PUBLIC IN SEVERAL MANNERS, INCLUDING BEING AVAILABLE ON THE GSRN WEBSITE. A COMMUNITY BENEFIT REPORT IS NOT REQUIRED TO BE FILED WITH THE COMMONWEALTH OF PENNSYLVANIA AND, ACCORDINGLY, GSRN HAS NOT FILED ONE.IN ORDER TO BETTER UNDERSTAND THE ORGANIZATIONAL, FINANCIAL AND OPERATIONAL COMPLEXITIES OF THE ORGANIZATIONS CONTAINED WITHIN GSRN, THE FOLLOWING INFORMATION IS PROVIDED:THE SPECIALTY HOSPITAL'S FINANCIAL RESULTS ARE REPORTED AS A COMPONENT OF THE CONSOLIDATED AUDITED FINANCIAL STATEMENTS OF GOOD SHEPHERD REHABILITATION NETWORK AND CONTROLLED ENTITIES (GOOD SHEPHERD). SEPARATE AUDITED FINANCIAL STATEMENTS ARE NOT PREPARED FOR THE SPECIALTY HOSPITAL. THE CONSOLIDATED AUDITED FINANCIAL STATEMENTS OF GOOD SHEPHERD INCLUDE THE FOLLOWING CORPORATIONS:- GOOD SHEPHERD REHABILITATION NETWORK (GSRN), THE CONTROLLING PARENT CORPORATION, FORMERLY GOOD SHEPHERD HOME- GOOD SHEPHERD REHABILITATION HOSPITAL (THE HOSPITAL)- GOOD SHEPHERD HOME LONG-TERM CARE FACILITY, INC. (LTC)- GOOD SHEPHERD WORKSHOP/VOCATIONAL SERVICES, INC. (WORK SERVICES)- GOOD SHEPHERD LONG-TERM ACUTE SERVICES, INC., D/B/A GOOD SHEPHERD SPECIALTY HOSPITAL (THE SPECIALTY HOSPITAL)- GOOD SHEPHERD HOUSING DEVELOPMENT CORPORATION (SUPPIL)- GOOD SHEPHERD RECIPROCAL RISK RETENTION GROUP (THE RRG)- GOOD SHEPHERD GROUP, LLC (GS GROUP)GOOD SHEPHERD'S PRIMARY OPERATIONS ARE CONDUCTED WITHIN THE HOSPITAL, WHICH PROVIDES COMPREHENSIVE INPATIENT REHABILITATION SERVICES AND OUTPATIENT REHABILITATION SERVICES AT NUMEROUS LOCATIONS. THE LTC OPERATES TWO SKILLED NURSING FACILITIES WHICH SERVICE THE NEEDS OF SEVERELY DISABLED ADULTS. WORK SERVICES SPECIALIZES IN EMPLOYMENT AND DEVELOPMENT PROGRAMS FOR PERSONS WITH PHYSICAL, EMOTIONAL AND INTELLECTUAL DISABILITIES, HEARING AND SIGHT IMPAIRMENTS AND INDUSTRIAL INJURIES BY PROVIDING SUBCONTRACTING SERVICES. THE SPECIALTY HOSPITAL PROVIDES SERVICES THAT REPRESENT THE FIRST STEP IN THE POST ACUTE CARE PROCESS OF RECOVERY. THE RRG IS A SELF INSURANCE COMPANY THAT PROVIDES PRIMARY LIABILITY INSURANCE AND RISK MANAGEMENT SERVICES. SUPPIL PROVIDES SUPPORTIVE INDEPENDENT HOUSING TO PERSONS WITH DISABILITIES UNDER SECTION 811 OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. GS GROUP WAS ESTABLISHED TO DEVELOP A WHEELCHAIR DEVICE TO ASSIST REHABILITATION PATIENTS.IN ADDITION TO THE ORGANIZATIONS DESCRIBED ABOVE, IN JANUARY 2007, GSRN ENTERED INTO A JOINT VENTURE AGREEMENT WITH THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA (THE UNIVERSITY) TO CREATE PHILADELPHIA POST ACUTE PARTNERS, LLC D/B/A GOOD SHEPHERD PENN PARTNERS (GSPP). GSPP WAS CREATED TO ESTABLISH AND OPERATE A NEW LONG-TERM ACUTE CARE HOSPITAL, TO ASSUME THE OWNERSHIP OF AND CONTINUE TO OPERATE ALL OF THE OUTPATIENT OPERATIONS OF THE UNIVERSITY, TO CARRY OUT THE DAY-TO-DAY OPERATIONS OF THE HOSPITAL OF THE UNIVERSITY OF PENNSYLVANIA'S (HUP'S) INPATIENT REHABILITATION UNIT, AND TO PROVIDE THE UNIVERSITY AND ITS AFFILIATES WITH CERTAIN CLINICAL AND/OR STAFFING SERVICES RELATING TO REHABILITATION. GSRN IS A 70% OWNER OF GSPP; HOWEVER, THE OPERATIONS OF GSPP ARE NOT CONSOLIDATED WITHIN THE CONSOLIDATED FINANCIAL STATEMENTS OF GOOD SHEPHERD AS GSRN IS NOT DEEMED TO HAVE CONTROL OVER GSPP. AS A RESULT, GSRN RECORDS THEIR INVESTMENT IN GSPP UNDER THE EQUITY METHOD OF ACCOUNTING WITHIN THE GSRN CONSOLIDATED FINANCIAL STATEMENTS. PART I, LINE 7: THE SPECIALTY HOSPITAL USED A COST-TO-CHARGE RATIO IN DETERMINING THE FIGURES REPORTED IN THIS TABLE. THIS COST-TO-CHARGE RATIO WAS DERIVED FROM WORKSHEET 2 RATIO OF PATIENT CARE COST-TO CHARGES. 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 $222,431. PART II: WHILE MINIMAL COMMUNITY BUILDING ACTIVITIES ARE PROVIDED DIRECTLY WITHIN THE SPECIALTY HOSPITAL, GSRN, THE SPECIALTY HOSPITAL'S PARENT COMPANY, PROVIDED $18,135 OF SUCH ACTIVITIES DURING THE 2012 FISCAL YEAR. THESE ACTIVITIES TOOK THE FORM OF EXECUTIVE AND GOVERNMENT AND COMMUNITY RELATIONS BOARD MEMBERSHIPS, PARTICIPATION IN THE PARTNERSHIP FOR A DISABILITY FRIENDLY COMMUNITY, AMERICAN MEDICAL REHABILITATION PROVIDERS ASSOCIATION (AMRPA) BOARD AND UNITED WAY BOARD AND COMMITTEE MEMBERSHIPS AS WELL AS VARIOUS WORKFORCE DEVELOPMENT ACTIVITIES.THESE ACTIVITIES WERE NOT PROVIDED FOR PURPOSES OF MARKETING, TO INCREASE REFERRALS OF PATIENTS WITH THIRD-PARTY INSURANCE COVERAGE, IN FULFILLMENT OF REGULATORY REQUIREMENTS OR CURRENT STANDARDS OF CARE, OR TO BENEFIT PERSONS AFFILIATED WITH GSRN. RATHER, THE PRIMARY PURPOSE OF THESE COMMUNITY BUILDING ACTIVITIES IS TO BENEFIT THE COMMUNITY AND SHOULD BE CONSIDERED AS A COMPONENT OF COMMUNITY BENEFIT. FOR EXAMPLE, PARTICIPATION IN THE PARTNERSHIP FOR A DISABILITY FRIENDLY COMMUNITY DIRECTLY BENEFITS THE DISABILITY COMMUNITY. SPECIFICALLY, THE PARTNERSHIP EDUCATES AND EMPOWERS INDIVIDUALS WITH DISABILITIES AND THEIR CAREGIVERS TO BETTER CARE FOR THEMSELVES AND TO IDENTIFY AND UTILIZE RESOURCES THAT ARE ALREADY AVAILABLE TO THEM WITHIN THE COMMUNITY. WITHOUT SUCH EDUCATION AND EMPOWERMENT, THERE IS A RISK THAT THOSE INDIVIDUALS WITH DISABILITIES EITHER DO NOT RECEIVE THE CARE OR ASSISTANCE THEY REQUIRE, OR THEY OVER-RELY ON THE SERVICES OF THE MEDICAL COMMUNITY FOR EVEN THE MOST BASIC OF NEEDS. THE VALUE OF THE COMMUNITY BUILDING ACTIVITIES PROVIDED DURING THE 2012 FISCAL YEAR WAS DETERMINED BASED UPON ACTUAL REPORTED HOURS VALUED AT THE AVERAGE SALARY AND BENEFIT RATE PER HOUR OF ALL GOOD SHEPHERD EMPLOYEES. CONSERVATIVELY, NO APPLICATION OF INDIRECT OR OVERHEAD COSTS WAS APPLIED TO THESE DIRECT COSTS.ALL GSRN COSTS, INCLUSIVE OF THE COSTS ASSOCIATED WITH COMMUNITY BUILDING ACTIVITIES, ARE ALLOCATED TO GSRN'S SUBSIDIARY CORPORATIONS BASED UPON A COMPREHENSIVE ALLOCATION METHODOLOGY WHICH CONSIDERS DEPARTMENTAL RESOURCE UTILIZATION AND RELATIVE NET PATIENT SERVICE REVENUE, AMONG OTHER FACTORS. PART III, LINE 4: THE FOLLOWING IS THE TEXT OF THE FOOTNOTE TO GOOD SHEPHERD'S AUDITED FINANCIAL STATEMENTS (WHICH CONTAIN THE ACCOUNTS OF THE SPECIALTY HOSPITAL) 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. IN EVALUATING THE COLLECTABILITY OF PATIENT ACCOUNTS RECEIVABLE, GOOD SHEPHERD ANALYZES ITS PAST HISTORY AND IDENTIFIES TRENDS FOR EACH OF ITS MAJOR PAYOR SOURCES OF REVENUE TO ESTIMATE THE APPROPRIATE ALLOWANCE FOR DOUBTFUL COLLECTIONS AND PROVISION FOR DOUBTFUL COLLECTIONS. FOR RECEIVABLES ASSOCIATED WITH SERVICES PROVIDED TO PATIENTS WHO HAVE THIRD-PARTY COVERAGE, GOOD SHEPHERD ANALYZES CONTRACTUALLY DUE AMOUNTS AND PROVIDES AN ALLOWANCE FOR DOUBTFUL COLLECTIONS AND A PROVISION FOR DOUBTFUL COLLECTIONS, IF NECESSARY. FOR RECEIVABLES ASSOCIATED WITH SELF-PAY PATIENTS, GOOD SHEPHERD RECORDS A SIGNIFICANT PROVISION FOR DOUBTFUL COLLECTIONS IN THE PERIOD OF SERVICE ON THE BASIS OF ITS PAST EXPERIENCE, WHICH INDICATES THAT MANY PATIENTS ARE UNABLE OR UNWILLING TO PAY THE PORTION OF THEIR BILL FOR WHICH THEY ARE FINANCIALLY RESPONSIBLE. THE DIFFERENCE BETWEEN THE BILLED RATES AND THE AMOUNTS ACTUALLY COLLECTED AFTER ALL REASONABLE COLLECTION EFFORTS HAVE BEEN EXHAUSTED IS CHARGED OFF AGAINST THE ALLOWANCE FOR DOUBTFUL COLLECTIONS.GOOD SHEPHERD'S ALLOWANCE FOR DOUBTFUL COLLECTIONS FOR SELF-PAY PATIENTS INCREASED FROM 61% OF SELF-PAY ACCOUNTS RECEIVABLE AT JUNE 30, 2011, TO 70% OF SELF-PAY ACCOUNTS RECEIVABLE AT JUNE 30, 2012. IN ADDITION, GOOD SHEPHERD'S SELF-PAY ACCOUNT WRITE-OFFS (NET OF RECOVERIES) DECREASED FROM $481,000 IN 2011 TO $209,000 IN 2012. THE DECREASES WERE THE RESULT OF IMPROVEMENTS IN COINSURANCE COLLECTIONS AT THE TIME OF SERVICE. GOOD SHEPHERD HAD NOT CHANGED THEIR FINANCIAL ASSISTANCE POLICY IN 2012. GOOD SHEPHERD DOES NOT MAINTAIN A MATERIAL ALLOWANCE FOR DOUBTFUL COLLECTIONS FROM THIRD-PARTY PAYORS, NOR DID IT HAVE SIGNIFICANT WRITE-OFFS FROM THIRD-PARTY PAYORS."GOOD SHEPHERD ELECTED TO ADOPT NEW AUTHORITATIVE GUIDANCE ON PATIENT SERVICE REVENUE, PROVISION FOR DOUBTFUL COLLECTIONS, AND THE ALLOWANCE FOR DOUBTFUL COLLECTIONS FOR THE YEAR ENDED JUNE 30, 2012. INCLUDED WITHIN THIS GUIDANCE WAS THE REQUIREMENT TO CHANGE THE MANNER IN WHICH THE PROVISION FOR DOUBTFUL COLLECTIONS IS PRESENTED WITHIN GOOD SHEPHERD'S CONSOLIDATED STATEMENT OF OPERATIONS. PREVIOUSLY, THE PROVISION FOR DOUBTFUL COLLECTIONS WAS PRESENTED AS AN OPERATING EXPENSE. NOW IT IS PRESENTED AS A DEDUCTION FROM NET PATIENT SERVICE REVENUE AND RELATED ALLOWANCE FOR DOUBTFUL COLLECTIONS.FOR PURPOSES OF PART III, SECTION A, LINE 2, TOTAL BAD DEBT EXPENSE (AT COST) WAS DETERMINED BY APPLYING THE COST-TO-CHARGE RATIO, DERIVED FROM WORKSHEET 2 RATIO OF PATIENT CARE COST-TO CHARGES TO TOTAL THE NET OF ACTUAL BAD DEBT WRITE-OFF'S AND RECOVERIES PROCESSED DURING THE 2012 FISCAL YEAR. FOR PURPOSES OF PART III, SECTION A, LINE 3, THE FOLLOWING PROCESS WAS USED TO ESTIMATE THE AMOUNT OF THE SPECIALTY HOSPITAL'S BAD DEBT EXPENSE (AT COST) ATTRIBUTABLE TO PATIENTS ELIGIBLE UNDER THE SPECIALTY HOSPITAL'S CHARITY CARE POLICY:TOTAL BAD DEBT EXPENSE (AT COST), PER PART III, SECTION A, LINE 2, WAS USED AS A STARTING POINT. THEN, THE ESTIMATED POVERTY PERCENTAGE (12%), OF THE SPECIALTY HOSPITAL'S 5-COUNTY PRIMARY SERVICE AREA, WAS DETERMINED BASED UPON THE EXAMINATION OF COMMONWEALTH OF PENNSYLVANIA REPORTS, GENERATED FROM THE MOST RECENTLY PUBLISHED US CENSUS DATA. PART III, LINE 8: THE COSTING METHODOLOGY UTILIZED IN THE DETERMINATION OF THE MEDICARE ALLOWABLE COSTS REPORTED IN THE SPECIALTY HOSPITAL'S COST REPORT IS QUITE COMPREHENSIVE. DIRECTLY ALLOCATED COSTS ARE USED AS A STARTING POINT AND OTHER COSTS ARE STEPPED-DOWN TO THE SPECIALTY HOSPITAL BASED UPON INDUSTRY-ACCEPTABLE ALLOCATION METHODOLOGIES. THE SPECIALTY HOSPITAL HAS NOT REPORTED A MEDICARE SHORTFALL IN PART III, SECTION B (MEDICARE), LINE 7. HAD THERE BEEN A SHORTFALL, IT SHOULD BE CONSIDERED AS A COMPONENT OF COMMUNITY BENEFIT BECAUSE THE SPECIALTY HOSPITAL TREATS ALL MEDICALLY NECESSARY PATIENTS, REGARDLESS OF THEIR ABILITY TO PAY AND REGARDLESS OF WHETHER THE EXPECTED REIMBURSEMENT IS ADEQUATE TO COVER ALL RELATED AND NECESSARY EXPENSES. PART III, LINE 9B: THE HOSPITAL HAS A WRITTEN BILLING AND COLLECTION POLICY AND SUCH POLICY COVERS THE PROCEDURES NECESSARY TO BILL AND COLLECT FOR THE MEDICAL SERVICES PROVIDED TO PATIENTS. PATIENTS KNOWN TO QUALIFY FOR FINANCIAL ASSISTANCE UNDER THE HOSPITAL'S CHARITY CARE POLICY (AS EVIDENCED BY A PROPERLY COMPLETED AND APPROVED CHARITY CARE APPLICATION) ARE NOT SUBJECT TO THE COLLECTION PROVISIONS OF THIS POLICY. RATHER, THEIR ACCOUNT BALANCES ARE WRITTEN-OFF FROM THE PATIENT ACCOUNTING RECORDS AS CHARITY CARE. IN INSTANCES WHERE THE HOSPITAL BELIEVES A PATIENT MAY QUALIFY FOR CHARITY CARE AND THE PATIENT DOES NOT OR CAN NOT COMPLETE THE REQUIRED CHARITY CARE APPLICATION, THE HOSPITAL MAKES REASONABLE EFFORTS TO INDEPENDENTLY SUPPORT THE APPROPRIATE WRITE-OFF OF THE PATIENT ACCOUNT BALANCES AS CHARITY CARE. IN INSTANCES WHERE REASONABLE EFFORTS ARE INSUFFICIENT OR INCONCLUSIVE TO SUPPORT THE APPROPRIATE WRITE-OFF OF THE PATIENT ACCOUNT BALANCES AS CHARITY CARE, THE PATIENT ACCOUNT BALANCES BECOME SUBJECT TO THE COLLECTION PROVISIONS OF THE HOSPITAL'S BILLING AND COLLECTION POLICY. THE ALLENTOWN SPECIALTY HOSPITAL, INC. PART V, SECTION B, LINE 10: THE SPECIALTY HOSPITAL HAS A WRITTEN CHARITY CARE POLICY. ALL PATIENTS ARE NOTIFIED OF GOOD SHEPHERD'S CHARITY CARE AVAILABILITY PRIOR TO THE START OF THEIR CARE. GENERALLY, PATIENTS QUALIFY UNDER THE SPECIALTY HOSPITAL'S CHARITY CARE POLICY IF THEIR INCOME IS LESS THAN 200% OF THE CURRENT FEDERAL POVERTY GUIDELINES. THE COMPLETION OF THE CHARITY CARE APPLICATION CONFIRMS THIS PREMISE. HOWEVER, OTHER FACTORS ARE ALSO USED TO DETERMINE ELIGIBILITY INCLUDING:- SOURCES OF INCOME- LIVING EXPENSES- OTHER PERSONAL ASSETS AND LIABILITIES- DEMOGRAPHIC INFORMATION- ONGOING HEALTHCARE NEEDSQUALIFICATION UNDER THE SPECIALTY HOSPITAL'S CHARITY CARE POLICY ENTITLES PATIENTS TO COMPLETELY FREE CARE. THE SPECIALTY HOSPITAL DOES NOT OFFER A PROGRAM OF DISCOUNTED CHARITY CARE. HOWEVER, PATIENTS THAT DO NOT QUALIFY FOR CHARITY CARE AND HAVE NO INSURANCE ARE OFFERED A DISCOUNTED PRIVATE PAY RATE FOR SERVICES, PAYABLE AT THE TIME OF SERVICE. THE DISCOUNTED PRIVATE PAY RATE IS DETERMINED CONSIDERING THE ESTIMATED COST OF SERVICES PROVIDED. THE ALLENTOWN SPECIALTY HOSPITAL, INC. PART V, SECTION B, LINE 11H: THE DISCOUNTED PRIVATE PAY RATE IS BASED ON COST OF SERVICE. THE ALLENTOWN SPECIALTY HOSPITAL, INC. PART V, SECTION B, LINE 18D: THE SPECIALTY HOSPITAL PROVIDES POST-ACUTE MEDICAL CARE. SERVICES PROVIDED ARE NOT CONSIDERED EMERGENCY MEDICAL CARE. WITH RESPECT TO MEDICALLY NECESSARY CARE, THE AMOUNT THAT THE SPECIALTY HOSPITAL BILLS FOR SERVICES PROVIDED TO FINANCIAL ASSISTANCE POLICY-ELIGIBLE INDIVIDUALS IS CHARGES. THEY ARE THE SAME CHARGES AS ARE BILLED TO ALL OTHER INDIVIDUALS OR THIRD-PARTY PAYORS. HOWEVER, PATIENTS THAT DO NOT QUALIFY FOR CHARITY CARE AND HAVE NO INSURANCE ARE OFFERED A DISCOUNTED PRIVATE PAY RATE FOR SERVICES, PAYABLE AT THE TIME OF SERVICE. THE DISCOUNTED PRIVATE PAY RATE IS DETERMINED CONSIDERING THE ESTIMATED COST OF SERVICES PROVIDED. THE ALLENTOWN SPECIALTY HOSPITAL, INC. PART V, SECTION B, LINE 19D: THE SPECIALTY HOSPITAL PROVIDES POST-ACUTE MEDICAL CARE. SERVICES PROVIDED ARE NOT CONSIDERED EMERGENCY MEDICAL CARE. WITH RESPECT TO MEDICALLY NECESSARY CARE, THE AMOUNT THAT THE SPECIALTY HOSPITAL BILLS FOR SERVICES PROVIDED TO FINANCIAL ASSISTANCE POLICY-ELIGIBLE INDIVIDUALS IS CHARGES. THEY ARE THE SAME CHARGES AS ARE BILLED TO ALL OTHER INDIVIDUALS OR THIRD-PARTY PAYORS. HOWEVER, PATIENTS THAT DO NOT QUALIFY FOR CHARITY CARE AND HAVE NO INSURANCE ARE OFFERED A DISCOUNTED PRIVATE PAY RATE FOR SERVICES, PAYABLE AT THE TIME OF SERVICE. THE DISCOUNTED PRIVATE PAY RATE IS DETERMINED CONSIDERING THE ESTIMATED COST OF SERVICES PROVIDED. PART VI, LINE 2: IN 2012, THE HEALTH CARE COUNCIL OF THE LEHIGH VALLEY (HCCLV) WAS FORMED TO MEASURE AND IMPROVE THE BROADLY DEFINED HEALTH OF THE LEHIGH VALLEY. CREATED BY THE NOT-FOR-PROFIT HEALTH CARE SYSTEMS OF THE LEHIGH VALLEY, HCCLV'S OBJECTIVE IS TO COOPERATIVELY DEVELOP A WORLD-CLASS COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA) THAT WILL GALVANIZE ACTION TO PROVIDE A DRAMATIC, DEMONSTRABLE AND SUSTAINED IMPACT ON THE HEALTH OF THE CITIZENS OF THE LEHIGH VALLEY. THE HCCLV INCLUDES REPRESENTATION FROM THE DOROTHY RIDER POOL HEALTH CARE TRUST, GOOD SHEPHERD REHABILITATION NETWORK (GSRN), LEHIGH VALLEY HEALTH NETWORK, SACRED HEART HEALTHCARE SYSTEM, ST. LUKE'S UNIVERSITY HOSPITAL AND HEALTH NETWORK, AND THE KIDSPEACE PSYCHIATRIC HOSPITAL.THE HCCLV'S COMMUNITY NEEDS ASSESSMENT FOCUSED ON THE HEALTH STATUS OF THE ENTIRE LEHIGH VALLEY (LEHIGH AND NORTHAMPTON COUNTIES). SINCE THE FIVE HOSPITALS SERVE THE ENTIRE LEHIGH VALLEY AND SINCE THIS CHNA ALSO REPRESENTS A COOPERATIVE EFFORT AMONG ALL OF THE NON-PROFIT HEALTH CARE SYSTEMS, A BROAD, LEHIGH VALLEY-WIDE NET WAS CAST. WHEN IT CAME TO IDENTIFYING AN AREA WHERE HOSPITALS WOULD SHARE RESOURCES AND WORK TOGETHER, IT WAS DECIDED TO FOCUS THE COORDINATED ACTION AND IMPLEMENTATION PLAN ON A SMALLER GEOGRAPHIC AREA. SINCE ALL FIVE HOSPITALS HAVE A PRESENCE IN THE DOWNTOWN ALLENTOWN AREA, AND SINCE THIS AREA DEMONSTRATED THE GREATEST NEED BASED ON KEY HEALTH DATA AND SOCIAL DETERMINANTS, THIS AREA WAS SELECTED AS THE COMMUNITY BENEFIT SERVICE AREA FOR THE HCCLV.THE HCCLV'S APPROACH TO THE CHNA INCORPORATES BEST PRACTICE STANDARDS RECOMMENDED BY THE AMERICAN PUBLIC HEALTH ASSOCIATION (APHA) AND THE ASSOCIATION FOR COMMUNITY HEALTH IMPROVEMENT (ACHI) AND HAS ACTIVELY PARTNERED WITH MANY STAKEHOLDERS, COMMUNITY BASED ORGANIZATIONS AND COMMUNITY MEMBERS. THE CHNA INCORPORATES SEVERAL HEALTH ASSESSMENT STRATEGIES:1) AN ANALYSIS OF EXISTING COMMUNITY HEALTH MEASURES AND SECONDARY DATA FROM:A) THE CENTERS FOR DISEASE CONTROL'S:I) HEALTHY PEOPLE 2020II) NATIONAL VITAL STATISTICS-2010III) UNDERLYING CAUSES OF DEATH-2010B) US CENSUS BUREAU-2010C) DARTMOUTH ATLAS OF HEALTHCARED) PENNSYLVANIA DEPARTMENT OF HEALTH'S:I) VITAL STATISTICS-2010II) COUNTY PROFILES-2012III) BEHAVIORAL RISK FACTOR SURVEILLANCE SYSTEM-2008-2010E) UNIVERSITY OF WISCONSIN'S COUNTY HEALTH RANKINGS-2012F) NATIONAL CANCER INSTITUTE STATE CANCER PROFILES-2010G) THE INSTITUTE FOR PEOPLE, PLACE AND POSSIBILITY-CHNA.ORG-20122) COMMUNITY INPUT/ENGAGEMENT FROM:A) HEALTH OPINION SURVEYS:I) 2010 CITY OF ALLENTOWN - CONDUCTED BY LEHIGH VALLEY HEALTH NETWORK (843 RESPONSES)II) 2011 LEHIGH VALLEY - COMMISSIONED BY ST. LUKE'S UNIVERSITY HOSPITAL AND HEALTH NETWORK AND CONDUCTED BY THE LEHIGH VALLEY RESEARCH CONSORTIUM (526 RESPONSES)B) 2009 LEHIGH VALLEY DISABILITY COMMUNITY: SURVEY OF NEEDS AND OPPORTUNITIESC) 2012 COMMUNITY BASED PARTICIPATORY RESEARCH COMMUNITY DIALOGUES WITH 170 PARTICIPANTS HELD IN AREAS IN ALLENTOWN AND BETHLEHEM WITH GREAT HEALTH DISPARITIES (CONDUCTED BY THE HCCLV AND FACILITATED BY CBPR EXPERTS)D) 2011 FOCUS GROUPS WITH COMMUNITY REPRESENTATIVES FROM NORTHAMPTON COUNTY CONDUCTED BY ST. LUKE'S UNIVERSITY HOSPITAL AND HEALTH NETWORKE) 2012 SOCIAL RECONNAISSANCE - A BRIEF, INTENSE EXAMINATION OF COMMUNITY DYNAMICS WITH REGARDS TO HEALTH CONDUCTED BY POOL TRUST (84 PARTICIPANTS)F) ONE-ON-ONE DISCUSSIONS WITH KEY HEALTH EXPERTSG) IN ADDITION, VARIOUS SOCIAL MEDIA WAS USED TO NOTIFY PEOPLE OF THE REPORT AND ENCOURAGE PARTICIPATION IN ONGOING COMMUNITY DIALOGUES. AN ELECTRONIC NETWORK OF ALL PARTICIPANTS IN COMMUNITY DIALOGUES WAS CREATED TO:I) CONTINUE COMMUNICATION WITH THE COMMUNITY TO ASSURE THAT INPUT FROM THE COMMUNITY WAS HEARD AND WHENEVER POSSIBLE, WAS UTILIZED AS THE COMMUNITY INTENDEDII) MAKE SURE COMMUNITY MEMBERS AND OTHER HEALTH CARE PROVIDERS ARE AWARE OF ALL RESOURCES AVAILABLE TO IMPROVE HEALTH.THE HCCLV IDENTIFIED AN INFORMATION GAP THAT LIMITED ITS ABILITY TO ASSESS ALL OF THE COMMUNITY'S HEALTH NEEDS. MOST OF THE HEALTH DATA AVAILABLE ARE AT A COUNTY LEVEL AND DID NOT ALLOW THE HCCLV TO CONDUCT SOME OF THE "HOT-SPOTTING" OR CLUSTERING OF POOR HEALTH WHICH WAS DESIRED. HCCLV HAS ADDRESSED THIS CONCERN IN THE COORDINATED ACTION/IMPLEMENTATION PLAN.IN NOVEMBER 2012, THE ROAD TO HEALTH, AN EASY TO NAVIGATE COMMUNITY HEALTH PROFILE (THE WRITTEN REPORT OF THE HCLVV'S FINDINGS) WAS MADE WIDELY AVAILABLE TO THE PUBLIC:- AVAILABLE IN BOTH ENGLISH AND SPANISH- ELECTRONICALLY SENT TO OVER 300 STAKEHOLDERS- ACCESSIBLE ON ALL OF THE HCCLV MEMBERS' WEBSITES- OVER 400 HARD COPIES MADE AVAILABLE THROUGHOUT THE LEHIGH VALLEY- LINKS TO THE REPORT WERE PRINTED ON THE FRONT PAGE OF THE LARGEST NEWSPAPERS IN THE AREA, AS WELL AS ON ELECTRONIC VERSIONS OF THE NEWSPAPERS- THE ROAD TO HEALTH WAS ALSO SENT TO THE ELECTED OFFICIALS SERVING THE LEHIGH VALLEY- COPIES CAN ALSO BE REQUESTED THROUGH A DEDICATED EMAIL ACCOUNT ESTABLISHED EXCLUSIVELY FOR THE HCCLVTHE ROAD TO HEALTH TELLS A STORY OF GOOD HEALTH CARE FOR PEOPLE WITH CHRONIC DISEASE WHO CAN ACCESS THE LEHIGH VALLEY'S HEALTH CARE SYSTEMS, AS DEMONSTRATED BY THE LEHIGH VALLEY'S LOWER THAN AVERAGE MORTALITY RATES. PEOPLE ARE LESS LIKELY TO DIE FROM CANCER, HEART DISEASE, LUNG DISEASE, INJURIES, STROKE AND COMPLICATIONS RELATED TO DIABETES THAN AVERAGE PENNSYLVANIANS OR AMERICANS. THE PROFILE ALSO TELLS THE STORY OF OVERALL POOR HEALTH, AS DEMONSTRATED BY THE LEHIGH VALLEY'S HIGHER THAN AVERAGE MORBIDITY RATES. THE PREVALENCE OF THE HEALTH ISSUES LISTED ABOVE IS GREATER IN THE LEHIGH VALLEY THAN IN PENNSYLVANIA AND UNITED STATES. IN GENERAL, THE LEHIGH VALLEY IS GOOD AT TAKING CARE OF SICK PEOPLE BUT NEEDS TO IMPROVE IN PREVENTING PEOPLE FROM GETTING SICK. FURTHER ANALYSIS SHOWS THAT KEY FACTORS THAT INFLUENCE GOOD HEALTH ARE LAGGING IN THE LEHIGH VALLEY. THESE INCLUDE:1) ACCESS TO WELLNESS AND PREVENTIVE SERVICES2) ACCESS TO PRIMARY CARE SERVICES FOR:A) PHYSICAL HEALTHB) MENTAL HEALTHC) ORAL HEALTH3) HEALTHY BEHAVIORS:A) EATING RIGHTB) EXERCISINGC) MODERATE TOBACCO, ALCOHOL AND OTHER DRUG USE4) SOCIAL DETERMINANTS:A) HIGH SCHOOL GRADUATION RATESB) CHILDREN NOT GROWING UP IN POVERTY5) ENVIRONMENTAL FACTORS:A) AIR QUALITYHCCLV SHARED AND DISCUSSED SECONDARY DATA FINDINGS WITH SEVERAL KEY HEALTH EXPERTS VIA ONE-ON-ONE INTERVIEWS CONDUCTED BETWEEN MARCH AND OCTOBER 2012:- ALBERTO CARDELLE, PHD, MPH CHAIR AND PROFESSOR OF THE DEPARTMENT OF HEALTH STUDIES AT EAST STROUDSBURG UNIVERSITY'S SCHOOL OF PUBLIC HEALTH- VICKY KISTLER, DIRECTOR OF THE ALLENTOWN HEALTH BUREAU- KRISTEN WENRICH, INTERIM DIRECTOR (NOW DIRECTOR) OF THE BETHLEHEM HEALTH BUREAU- DIANE LEUTHARDT, DEVELOPMENT DIRECTOR, LEHIGH VALLEY CHAPTER OF THE AMERICAN LUNG ASSOCIATION- KAREN SCHIAVONE, SENIOR CANCER CONTROL SPECIALIST, AMERICAN CANCER SOCIETY- CARLY HOOD, SENIOR DIVISION DIRECTOR, AMERICAN HEART ASSOCIATION- MOLLY DEMARCO, PHD, MPH, CENTER FOR HEALTH PROMOTION AND DISEASE PREVENTION, UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL- ALEXANDRA LIGHTFOOT, ED.D CENTER FOR HEALTH PROMOTION AND DISEASE PREVENTION, UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL- MELVIN JACKSON, MSPH, COMMUNITY EXPERT CONSULTANT, STRENGTHENING THE BLACK FAMILY, INC.- LISSETTE LAHOZ, EXECUTIVE DIRECTOR OF NEIGHBORHOOD HEALTH CENTERS OF THE LEHIGH VALLEYCOMMUNITY LEADERS AND REPRESENTATIVES ALSO TOOK PART IN ONE-ON-ONE AND SMALL GROUP DISCUSSIONS AND LARGE COMMUNITY DIALOGUES BETWEEN SEPTEMBER AND DECEMBER 2012:- PHYLLIS ALEXANDER-NEIGHBORHOOD COORDINATOR, CITY OF ALLENTOWN- ERNEST PERRY-EXECUTIVE DIRECTOR, PROMISE NEIGHBORHOODS OF THE LEHIGH VALLEY- GARY MILSBAUGH-EXECUTIVE DIRECTOR, ALLENTOWN RESCUE MISSION- PASTOR GREG EDWARDS-CEO, RESURRECTED COMMUNITY DEVELOPMENT CORPORATION- LORNA VELASQUEZ-EXECUTIVE DIRECTOR, HISPANIC CENTER LEHIGH VALLEY- JULIO GURIDY-PRESIDENT, ALLENTOWN CITY COUNCIL- KEVIN EASTERLING-EXECUTIVE DIRECTOR OF THE MARTIN LUTHER AND CORETTA SCOTT KING MEMORIAL- JOSH CHISHOLM-EXECUTIVE DIRECTOR, CONGREGATIONS UNITED FOR NEIGHBORHOOD ACTIONS- JEFF GLAZIER-ALLENTOWN CITY COUNCIL- JOSEPH ROY-SUPERINTENDENT, BETHLEHEM AREA SCHOOL DISTRICT- MARCI RONALD-VICE PRESIDENT, COMMUNITY IMPACT, UNITED WAY OF THE GREATER LEHIGH VALLEY- ANA MARTINEZ-SCHOOL OUTREACH WORKER, ALLENTOWN SCHOOL DISTRICT- ROGER HUDAK-CHAIRMAN, BETHLEHEM'S MAYOR'S SOUTH SIDE TASK FORCE- ROSS MARCUS-NORTHAMPTON COUNTY HUMAN SERVICES DIRECTOR- ANDREW WEISS-ALLENTOWN SCHOOL DISTRICT BOARD OF DIRECTORSEXTENSIVE COMMUNITY-BASED PARTICIPATORY RESEARCH (CBPR) DIALOGUES WERE HELD IN TWO FEDERALLY-DESIGNATED MEDICALLY UNDERSERVED AREAS (MUAS) OF OUR COMMUNITY. FACILITATED BY NATIONAL EXPERT CBP RESEARCHERS, FOUR 3-HOUR DIALOGUES WERE HELD WITH 170 COMMUNITY LEADERS AND MEMBERS TO DISCUSS AND PRIORITIZE HEALTH CARE FINDINGS AND ISSUES. THE FINDINGS FROM THE SECONDARY DATA ANALYSES WERE STRONGLY CORROBORATED BY COMMUNITY MEMBERS AND STAKEHOLDERS, WHO LISTED MENTAL HEALTH, ORAL HEALTH, HEALTH DISPARITIES, RACISM, POVERTY, UNHEALTHY LIFESTYLES, POOR EDUCATION AND LIMITED ACCESS TO CARE AS MAJOR BARRIERS TO HEALTH.ALL EXISTING HEALTH CARE FACILITIES WITHIN THE COMMUNITY AVAILABLE TO MEET THE COMMUNITY HEALTH NEEDS IDENTIFIED THROUGH THE COMMUNITY HEALTH NEEDS ASSESSMENT ARE AVAILABLE IN A RESOURCE INVENTORY AS PART OF THE CHNA. PART VI, LINE 3: 1) GOOD SHEPHERD'S MISSION IS AS FOLLOWS:"MOTIVATED BY THE DIVINE GOOD SHEPHERD AND THE PHYSICAL AND COGNITIVE REHABILITATION NEEDS OF OUR COMMUNITIES, OUR MISSION IS TO ENHANCE LIVES, MAXIMIZE FUNCTION, INSPIRE HOPE AND PROMOTE DIGNITY AND WELL-BEING WITH EXPERTISE AND COMPASSION."GOOD SHEPHERD VIGOROUSLY PURSUES THEIR MISSION REGARDLESS OF A PATIENT'S ABILITY TO PAY.2) IN EACH INPATIENT ROOM, GOOD SHEPHERD PROVIDES A REFERENCE BINDER OF IMPORTANT INFORMATION TO ALL INPATIENTS. THIS BINDER SUPPLEMENTS THE PATIENT'S ADMISSIONS PACKAGE AND INCLUDES A NOTICE OF FINANCIAL AID WHICH INCLUDES THE FOLLOWING WORDING:"IF YOU HAVE LITTLE OR NO HEALTH INSURANCE TO PAY FOR THE SERVICES YOU RECEIVE FROM GOOD SHEPHERD AND WORRY THAT YOU MAY NOT BE ABLE TO PAY FOR PART OR ALL OF YOUR CARE, WE MAY BE ABLE TO HELP. GOOD SHEPHERD PROVIDES CHARITY CARE TO PATIENTS BASED ON THEIR INCOME, ASSETS AND FINANCIAL NEEDS. IN ADDITION, IF YOU DO NOT MEET THE CRITERIA TO BE ELIGIBLE FOR CHARITY CARE, WE WILL HELP YOU ARRANGE FOR AN INTEREST-FREE PAYMENT PLAN TO RESOLVE ANY BALANCES YOU OWE."3) CHARITY CARE INFORMATION IS AVAILABLE ON THE GOOD SHEPHERD WEBSITE. IN PARTICULAR, PATIENTS MAY ACCESS A COPY OF THE NOTICE OF FINANCIAL AID AND A CHARITY CARE APPLICATION.4) GOOD SHEPHERD PUBLISHES AND DISTRIBUTES A NOTICE OF PAYMENT RESPONSIBILITY TO ALL PATIENTS. THE FIRST PARAGRAPH OF THIS FORM STATES THE FOLLOWING:"GOOD SHEPHERD IS A NON-PROFIT CHARITABLE ORGANIZATION THAT PROVIDES HEALTHCARE SERVICES TO ALL MEDICALLY APPROPRIATE PATIENTS WHO SEEK CARE REGARDLESS OF THEIR FUNDS TO PAY FOR SERVICES. THIS INCLUDES THE UNINSURED AND THE UNDER INSURED."THE NOTICE GOES ON TO STATE:"IT HAS BEEN BROUGHT TO OUR ATTENTION THAT YOU POTENTIALLY LACK THE FINANCIAL RESOURCES TO PAY FOR YOUR MEDICAL CARE. YOUR ADMISSION TO GOOD SHEPHERD IS CONTINGENT UPON YOUR ASSISTANCE IN HELPING US SECURE PAYMENT OF YOUR MEDICAL BILL FOR THE CARE BEING PROVIDED TO YOU. TO ADDRESS THE PAYMENT OF YOUR BILL, WE ARE REQUESTING THAT YOU APPLY FOR MEDICAL ASSISTANCE BENEFITS THROUGH THE PENNSYLVANIA MEDICAID PROGRAM AND APPLY FOR GOOD SHEPHERD'S CHARITY CARE PROGRAM."5) EACH PATIENT BILL OR STATEMENT INCLUDES THE FOLLOWING STATEMENT:"THE GOOD SHEPHERD SPECIALTY HOSPITAL IS A NON-PROFIT ORGANIZATION AND OFFERS CHARITY CARE TO THOSE WHO QUALIFY. IF YOU DO NOT HAVE THE FUNDS TO PAY, PLEASE CONTACT US."6) TRANSLATION SERVICES ARE AVAILABLE TO ANY NON-ENGLISH-SPEAKING PATIENT. THESE SERVICES ALSO INCLUDE ASSISTANCE WITH CHARITY CARE ELIGIBILITY AND OTHER FINANCIAL MATTERS. 7) AS PART OF INTERNAL DEPARTMENTAL ORIENTATION AND TRAINING, ADMISSIONS, CARE MANAGEMENT AND PATIENT ACCOUNTING PERSONNEL ARE TRAINED IN GOOD SHEPHERD'S CHARITY CARE POLICIES AND PROCEDURES. PART VI, LINE 4: BASED UPON HEALTH CARE COST CONTAINMENT COUNCIL DATA FOR THE 2011 CALENDAR YEAR, THE SPECIALTY HOSPITAL'S PRIMARY SERVICE AREA IS COMPRISED OF THE FOLLOWING FIVE PENNSYLVANIA COUNTIES. IN ADDITION, THE SPECIALTY HOSPITAL'S MARKET SHARE PERCENTAGE IS INDICATED FOR EACH COUNTY WITHIN ITS PRIMARY SERVICE AREA.- CARBON COUNTY - 53%- LEHIGH COUNTY - 73%- NORTHAMPTON COUNTY - 60%- MONROE COUNTY - 35%- BERKS COUNTY - 46%LEHIGH, NORTHAMPTON AND BERKS COUNTIES ARE A MIX OF URBAN, SUBURBAN AND RURAL COMMUNITIES WHILE CARBON AND MONROE COUNTIES ARE PRIMARILY RURAL. THE FOLLOWING HOSPITALS ARE LOCATED WITHIN EACH OF THESE COUNTIES:CARBON COUNTY- TWO (2) NOT-FOR-PROFIT ACUTE CARE HOSPITALSLEHIGH COUNTY- SEVEN (7) ACUTE CARE HOSPITALS - SIX (6) NOT-FOR-PROFIT, ONE (1) FOR-PROFIT- ONE (1) NOT-FOR-PROFIT INPATIENT REHABILITATION HOSPITAL (THE HOSPITAL)- ONE (1) NOT-FOR-PROFIT LONG-TERM ACUTE CARE HOSPITAL (THE SPECIALTY HOSPITAL)- ONE (1) FOR-PROFIT SPECIALTY GENERAL ACUTE CARE HOSPITALNORTHAMPTON COUNTY - ONE (1) FOR-PROFIT ACUTE CARE HOSPITAL- ONE (1) FOR-PROFIT LONG-TERM ACUTE CARE HOSPITAL- ONE (1) FOR-PROFIT SPECIALTY GENERAL ACUTE CARE HOSPITALMONROE COUNTY- ONE (1) NOT-FOR-PROFIT ACUTE CARE HOSPITALBERKS COUNTY- TWO (2) NOT-FOR-PROFIT ACUTE CARE HOSPITALS- ONE (1) FOR-PROFIT INPATIENT REHABILITATION HOSPITAL- ONE (1) FOR-PROFIT SPECIALTY GENERAL ACUTE CARE HOSPITALTHESE COUNTIES HAVE THE FOLLOWING DEMOGRAPHICS AND CHARACTERISTICS:1) AVERAGE INCOME LEVEL AND POVERTY RATES (US CENSUS 2011 ESTIMATES - MEDIAN HOUSEHOLD INCOME AND POPULATION PERCENTAGE BELOW THE POVERTY LEVEL)CARBON COUNTY $44,139 AND 11.2%LEHIGH COUNTY $50,978 AND 14.8% NORTHAMPTON COUNTY $57,950 AND 9.9%MONROE COUNTY $51,875 AND 14.8%BERKS COUNTY $52,307 AND 13.7%2) RATES OF UNINSURED OR UNDERINSURED PERSONS (US CENSUS 2011 ESTIMATES)CARBON COUNTY 6,226 INDIVIDUALS OR 9.7% OF THE COUNTY POPULATIONLEHIGH COUNTY 40,155 INDIVIDUALS OR 11.5% OF THE COUNTY POPULATIONNORTHAMPTON COUNTY 25,380 INDIVIDUALS OR 8.6% OF THE COUNTY POPULATIONMONROE COUNTY 26,076 INDIVIDUALS OR 15.4% OF THE COUNTY POPULATIONBERKS COUNTY 41,224 INDIVIDUALS OR 10.1% OF THE COUNTY POPULATION3) PERCENT OF FAMILIES WHO ARE ELIGIBLE FOR MEDICAL ASSISTANCE (MA)(COMMONWEALTH OF PENNSYLVANIA - DEPARTMENT OF HEALTH - COUNTY HEALTH REPORTS) CARBON COUNTY DEC 2011 PERCENTAGE ELIGIBLE FOR MA - 14.9%LEHIGH COUNTY DEC 2011 PERCENTAGE ELIGIBLE FOR MA - 17.1%NORTHAMPTON COUNTY DEC 2011 PERCENTAGE ELIGIBLE FOR MA - 12.7%MONROE COUNTY DEC 2011 PERCENTAGE ELIGIBLE FOR MA - 16.1%BERKS COUNTY DEC 2011 PERCENTAGE ELIGIBLE FOR MA - 17.9%4) POPULATION AGE BREAKDOWN (US CENSUS 2011 ESTIMATES) - PENNSYLVANIA POPULATION > AGE 65 IS 15.6%CARBON COUNTY POPULATION > AGE 65 - 18.0%LEHIGH COUNTY POPULATION > AGE 65 - 14.8%NORTHAMPTON COUNTY POPULATION > AGE 65 - 15.9%MONROE COUNTY POPULATION > AGE 65 - 13.1%BERKS COUNTY POPULATION > AGE 65 - 14.7%5) PERCENTAGES OF NON-ENGLISH-SPEAKING POPULATIONS (US CENSUS 20017 - 2011 AMERICAN COMMUNITY SURVEY FIVE-YEAR ESTIMATES)CARBON COUNTY 721 INDIVIDUALS OR 1.2% NOT PROFICIENT IN ENGLISHLEHIGH COUNTY 26,153 INDIVIDUALS OR 8.0% NOT PROFICIENT IN ENGLISHNORTHAMPTON COUNTY 11,063 INDIVIDUALS OR 3.9% NOT PROFICIENT IN ENGLISHMONROE COUNTY 7,199 INDIVIDUALS OR 4.5% NOT PROFICIENT IN ENGLISHBERKS COUNTY 24,599 INDIVIDUALS OR 6.4% NOT PROFICIENT IN ENGLISH6) AREAS DESIGNATED AS FEDERALLY MEDICALLY UNDERSERVED AREAS OR POPULATIONS (US DEPARTMENT OF HEALTH AND HUMAN SERVICES)CARBON COUNTY - COALDALELEHIGH COUNTY - ALLENTOWN SERVICE AREA - CT 0004.00 AND CT 0005.00NORTHAMPTON COUNTY - EASTON SERVICE AREA - CT: 143-147 AND SOUTH BETHLEHEM SERVICE AREA - CT: 109-113MONROE COUNTY - LOW INCOME STROUDSBURGBERKS COUNTY - CITY OF READING SERVICE AREAS - CT: 1, 2, 10, 11, 13, 14, 17, 19, 21, 22, 23 AND 257) SPECIAL POPULATIONS WITHIN THE AREA SERVED, INCLUDING ETHNIC AND CULTURAL GROUPS (US CENSUS 2011 ESTIMATES)CARBON COUNTY - BACHELOR'S DEGREE OR HIGHER, PERCENTAGE OF PERSONS AGE 25+ 15.0% VS. 26.7% IN PALEHIGH COUNTY HISPANIC OR LATINO POPULATION - 19.5% VS. 5.9% IN PANORTHAMPTON COUNTY HISPANIC OR LATINO POPULATION - 10.8% VS. 5.9% IN PAMONROE COUNTY HISPANIC OR LATINO POPULATION - 13.5% VS. 5.9% IN PABERKS COUNTY HISPANIC OR LATINO POPULATION - 16.8% VS. 5.9% IN PA PART VI, LINE 5: WITH RESPECT TO HOW THE SPECIALTY HOSPITAL FURTHERS ITS EXEMPT PURPOSE BY PROMOTING THE HEALTH OF THE COMMUNITY, THE FOLLOWING INFORMATION IS PROVIDED:1) THE GSRN BOARD OF TRUSTEES GOVERNS ALL OF THE ENTITIES DESCRIBED IN PART I, LINE 6A (INCLUDING THE SPECIALTY HOSPITAL). THE GSRN BOARD OF TRUSTEE MEMBERS (BOARD MEMBERS) ALL LIVE IN THE SPECIALTY HOSPITAL'S PRIMARY SERVICE AREA AS DEFINED IN PART VI (SUPPLEMENTAL INFORMATION), LINE 4. THE VAST MAJORITY OF THE BOARD MEMBERS ARE NOT EMPLOYEES OR CONTRACTORS OF THE SPECIALTY HOSPITAL. NONE OF THE BOARD MEMBERS ARE FAMILY MEMBERS.2) THE SPECIALTY HOSPITAL ALSO MAINTAINS A SEPARATE BOARD OF TRUSTEES. ALL OF THE MEMBERS OF THIS SEPARATE BOARD LIVE IN THE SPECIALTY HOSPITAL'S PRIMARY SERVICE AND MOST ARE MANAGEMENT EMPLOYEES OF THE SPECIALTY HOSPITAL.3) THE SPECIALTY HOSPITAL EXTENDS MEDICAL STAFF PRIVILEGES TO ALL QUALIFIED PHYSICIANS IN ITS PRIMARY SERVICE AREA. ALL APPLICANTS ARE APPROVED BY THE SPECIALTY HOSPITAL'S MEDICAL EXECUTIVE COMMITTEE. 4) THE SPECIALTY HOSPITAL PARTICIPATES IN THE MEDICARE, CHAMPUS, TRICARE AND OTHER GOVERNMENT SPONSORED HEALTHCARE PROGRAMS.5) THE COMMONWEALTH OF PENNSYLVANIA DOES NOT RECOGNIZE THE LONG-TERM ACUTE CARE HOSPITAL LEVEL OF SERVICE. ACCORDINGLY, THE SPECIALTY HOSPITAL DOES NOT PARTICIPATE IN THE PENNSYLVANIA MEDICAID PROGRAM. HOWEVER, PATIENTS THAT QUALIFY FOR THE PENNSYLVANIA MEDICAID PROGRAM WOULD ALSO MEET GOOD SHEPHERD'S CHARITY CARE CRITERIA. FINALLY, THE SPECIALTY HOSPITAL ACCEPTS MEDICAID PATIENTS FROM OTHER STATES.6) THE SPECIALTY HOSPITAL OPERATES IN A PRIMARY SERVICE AREA, WHICH INCLUDES ONLY ONE OTHER FREE-STANDING LONG-TERM ACUTE CARE HOSPITAL (A FOR-PROFIT FACILITY).7) TO THE EXTENT THE SPECIALTY HOSPITAL GENERATES SURPLUS OPERATING MARGINS AND/OR FREE CASH FLOW, THE AMOUNTS ARE COMPLETELY REINVESTED WITHIN THE SPECIALTY HOSPITAL AND/OR THE OTHER AFFILIATED CORPORATIONS UNDER THE CONTROL OF GOOD SHEPHERD REHABILITATION NETWORK (GSRN). SUCH REINVESTMENT CAN TAKE THE FORM OF INFRASTRUCTURE IMPROVEMENTS, INVESTMENTS IN MEDICAL EQUIPMENT AND TECHNOLOGY, OR OTHER INVESTMENTS INTENDED TO ENHANCE PATIENT SATISFACTION, IMPROVE THE QUALITY OF CARE, CONFORM WITH SAFETY CODES OR REGULATIONS, ETC.8) THE SPECIALTY HOSPITAL AND OTHER AFFILIATED CORPORATIONS UNDER THE CONTROL OF GOOD SHEPHERD REHABILITATION NETWORK (GSRN) ARE INVOLVED IN HEALTH PROFESSIONS EDUCATION, PARTICULARLY FOR NURSING AND THERAPY. PART VI, LINE 6: WITHIN THE GOOD SHEPHERD REHABILITATION NETWORK AND CONTROLLED ENTITIES (GOOD SHEPHERD), THE GOOD SHEPHERD REHABILITATION HOSPITAL (THE HOSPITAL), PROVIDES "CHARITY CARE AND CERTAIN OTHER COMMUNITY BENEFITS AT COST" AS REPORTED ON THEIR SCHEDULE H TO FORM 990. THESE AMOUNTS AGGREGATE $6,794,359 OR APPROXIMATELY 9% OF THE HOSPITAL'S EXPENSES. THROUGH ITS GOOD SHEPHERD WORKSHOP/VOCATIONAL SERVICES, INC. (WORK SERVICES) SUBSIDIARY, GOOD SHEPHERD REHABILITATION NETWORK AND CONTROLLED ENTITIES (GOOD SHEPHERD), PROVIDES EMPLOYMENT AND DEVELOPMENT PROGRAMS FOR PERSONS WITH PHYSICAL, EMOTIONAL AND INTELLECTUAL DISABILITIES, HEARING AND SIGHT IMPAIRMENTS AND INDUSTRIAL INJURIES BY PROVIDING SUBCONTRACTING SERVICES. THESE PROGRAMS ARE OPERATED AT A LOSS, WHICH TOTALED $737,924 FOR THE FISCAL YEAR ENDED JUNE 30, 2012, AND WHICH WAS FUNDED BY GOOD SHEPHERD. THE LOSS WAS DETERMINED BY REDUCING REVENUES GENERATED BY THE WORK SERVICES PROGRAMS BY DIRECTLY ASSIGNED EXPENSES AND ALLOCATED CORPORATE OVERHEAD COSTS (WHICH WERE ALLOCATED ON THE BASIS OF RELATIVE OPERATING UNIT REVENUE).THROUGH ITS GOOD SHEPHERD HOUSING DEVELOPMENT CORPORATION (SUPPIL) SUBSIDIARY, GOOD SHEPHERD REHABILITATION NETWORK AND CONTROLLED ENTITIES (GOOD SHEPHERD), PROVIDES SUPPORTIVE INDEPENDENT HOUSING TO PERSONS WITH DISABILITIES UNDER SECTION 811 OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. THESE SERVICES WERE OPERATED AT A LOSS, WHICH TOTALED $226,510 FOR THE FISCAL YEAR ENDED JUNE 30, 2012, AND WHICH WAS FUNDED BY GOOD SHEPHERD. THE LOSS WAS DETERMINED AFTER REDUCING SUPPIL RENTAL REVENUE AND OTHER INCOME BY THE DIRECTLY ASSIGNED EXPENSES INCURRED TO OPERATE THE PROGRAM.GSRN IS A 70% OWNER OF GSPP; HOWEVER, THE OPERATIONS OF GSPP ARE NOT CONSOLIDATED WITHIN THE CONSOLIDATED FINANCIAL STATEMENTS OF GOOD SHEPHERD AS GSRN IS NOT DEEMED TO HAVE CONTROL OVER GSPP. AS A RESULT, GSRN RECORDS THEIR INVESTMENT IN GSPP UNDER THE EQUITY METHOD OF ACCOUNTING WITHIN THE GSRN CONSOLIDATED FINANCIAL STATEMENTS. THROUGH ITS OWNERSHIP IN THE GSPP UNCONSOLIDATED AFFILIATE, GSRN PROVIDES THE FOLLOWING COMMUNITY BENEFITS, WHICH TOTAL TO $4,175,000:FINANCIAL ASSISTANCE AT COST $ 648,000UNREIMBURSED MEDICAID 2,343,000COMMUNITY HEALTH IMPROVEMENT SERVICES 12,000HEALTH PROFESSIONS EDUCATION 1,054,000RESEARCH 106,000COMMUNITY BUILDING ACTIVITIES 12,000TOTAL $4,175,000THESE AMOUNTS ARE REPORTED ABOVE AT THEIR FULL COST ALTHOUGH GOOD SHEPHERD HAS A 70% OWNERSHIP INTEREST IN GSPP. PART VI, LINE 7 NONE X 1 1 1 1 0 0 0 0 0 0 0 SARA T GAMMON 0 522390 0 148161 0 0 0 241014 0 3633 0 915198 0 0 DANIEL C CONFALONE 0 308734 0 54610 0 0 0 18363 0 8630 0 390337 0 0 SAMUEL A MIRANDA JR 0 204175 0 45813 0 0 0 31322 0 8490 0 289800 0 0 JAMES J DALEY MD 0 169140 0 34678 0 0 0 10301 0 9680 0 223799 0 0 PHILLIP R BRYANT 0 278866 0 67231 0 0 0 17491 0 6204 0 369792 0 0 ANTHONY R BONGIOVANNI 0 127760 0 144839 0 111946 0 19434 0 6350 0 410329 0 97374 PART I, LINE 1A GOOD SHEPHERD DOES NOT PAY ANY DUES ON BEHALF OF CEO, SARA GAMMON, DIRECTLY TO A SOCIAL CLUB. GOOD SHEPHERD REIMBURSES THE CEO FOR CERTAIN SOCIAL CLUB DUES RELEVANT IN PURSUING THE OVERALL MISSION OF GOOD SHEPHERD. THESE EXPENSES ARE ACCOUNTED FOR UNDER AN ACCOUNTABLE REIMBURSEMENT PLAN. THE AMOUNT OF THIS REIMBURSEMENT IS INCLUDED IN MS. GAMMON'S TAXABLE COMPENSATION. PART I, LINE 3 SARA T. GAMMON IS COMPENSATED BY GOOD SHEPHERD REHABILITATION NETWORK ("GSRN"), AN AFFILIATED TAX-EXEMPT ORGANIZATION. THE ALLENTOWN SPECIALTY HOSPITAL, INC. RELIED ON GSRN'S USE OF ALL CRITERIA SPECIFIED IN LINE 3 TO ESTABLISH MS. GAMMON'S COMPENSATION. PART I, LINES 4A-B ANTHONY BONGIOVANNI IS THE FORMER CPO (KEY EMPLOYEE) OF THE GOOD SHEPHERD REHABILITATION NETWORK AND AFFILIATES. HE RECEIVED $239,706 FOR 52 WEEKS OF SEVERANCE PAY, BEGINNING JULY 15, 2011 THROUGH JUNE 29, 2012. GOOD SHEPHERD REHABILITATION NETWORK PROVIDES SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFITS TO THE FOLLOWING EXECUTIVES: PRESIDENT/CEO SARA GAMMON, CNO SAMUEL MIRANDA, JR. AND FORMER CPO ANTHONY BONGIOVANNI. CONTRIBUTIONS TO THE PLAN ARE DETERMINED ANNUALLY. SARA GAMMON AND SAMUEL MIRANDA, JR. HAVE NOT RECEIVED ANY PAYMENTS FROM THE PLAN. AS PART OF ANTHONY BONGIOVANNI'S SEVERANCE PACKAGE, HE RECEIVED A LUMP SUM BONUS AMOUNT OF $97,374 FROM THIS PLAN AND FORFEITED THE REMAINING AMOUNT ALLOCATED TO HIM UNDER THE PLAN. PART I, LINE 5 GSRN HAS A PERFORMANCE COMPENSATION PROGRAM IN PLACE WHICH IS APPROVED BY THE BOARD. CERTAIN MEMBERS OF MANAGEMENT CAN RECEIVE AN ANNUAL PERFORMANCE PAYMENT ONLY WHEN PRE-DEFINED AND PRE-APPROVED FINANCIAL AND NON-FINANCIAL GOALS ARE ACHIEVED. FOR FISCAL YEAR 2012, A PERFORMANCE PAYMENT WAS NOT ACHIEVED. THIS IS NOT GUARANTEED EACH YEAR. THE BONUSES REPORTED IN SCHEDULE J, PART II, COLUMN (B)(II) REPRESENT THE PERFORMANCE PAYMENT ACHIEVED FOR THE PRIOR FISCAL YEAR WHICH WAS PAID DURING CALENDAR YEAR 2011. PART I, LINE 6 GSRN HAS A PERFORMANCE COMPENSATION PROGRAM IN PLACE WHICH IS APPROVED BY THE BOARD. CERTAIN MEMBERS OF MANAGEMENT CAN RECEIVE AN ANNUAL PERFORMANCE PAYMENT ONLY WHEN PRE-DEFINED AND PRE-APPROVED FINANCIAL AND NON-FINANCIAL GOALS ARE ACHIEVED. FOR FISCAL YEAR 2012, A PERFORMANCE PAYMENT WAS NOT ACHIEVED. THIS IS NOT GUARANTEED EACH YEAR. THE BONUSES REPORTED IN SCHEDULE J, PART II, COLUMN (B)(II) REPRESENT THE PERFORMANCE PAYMENT ACHIEVED FOR THE PRIOR FISCAL YEAR WHICH WAS PAID DURING CALENDAR YEAR 2011. FORM 990, PART V, LINE 1: ACCOUNTS PAYABLE PAYMENTS ARE CONSOLIDATED UNDER A COMMON REPORTING SYSTEM. SINCE TOTALS FOR EACH VENDOR MAY CONTAIN TRANSACTIONS FROM MULTIPLE CORPORATIONS, THE NUMBER OF 1099'S FILED ON BEHALF OF THE ALLENTOWN SPECIALTY HOSPITAL, INC. BY THE COMMON REPORTING AGENT CANNOT BE SEPARATELY IDENTIFIED AND DETERMINED. FORM 990, PART V, LINE 2: THE SALARY AND BENEFIT EXPENSES REPORTED ON FORM 990, PART IX, AND THE EMPLOYEE INFORMATION REPORTED ON FORM 990, PART VII, ARE THE ALLENTOWN SPECIALTY HOSPITAL, INC. D/B/A GOOD SHEPHERD SPECIALTY HOSPITAL - ALLENTOWN'S ("GSSH") ALLOCATED PAYROLL COSTS BASED ON TIME SPENT. ALL INDIVIDUALS WORKING AT GSSH ARE EMPLOYEES OF THE GOOD SHEPHERD REHABILITATION HOSPITAL ("GSRH") AND ARE REPORTED ON ITS FORM W-3 UNDER EIN: 23-1371947. GSRH IS AN AFFILIATED TAX-EXEMPT ORGANIZATION. FORM 990, PART VI, SECTION A, LINE 1 THE EXECUTIVE COMMITTEE CAN ACT ON BEHALF OF THE BOARD OF TRUSTEES IN MOST CASES. HOWEVER, ANY FUNDAMENTAL CHANGES WILL GO TO THE FULL BOARD. THE EXECUTIVE COMMITTEE IS COMPRISED OF THE CHAIRS OF ALL THE BOARD COMMITTEES AS WELL AS THE CHAIR AND VICE CHAIR OF THE BOARD. ALL EXECUTIVE COMMITTEE MEMBERS ARE MEMBERS OF THE BOARD OF TRUSTEES. FORM 990, PART VI, SECTION A, LINE 7A THE SOLE CORPORATE MEMBER OF THE ORGANIZATION IS THE GOOD SHEPHERD LONG TERM ACUTE CARE SERVICES, INC. ("LTACS"). THE SOLE CORPORATE MEMBER OF LTACS IS THE GOOD SHEPHERD REHABILITATION NETWORK ("GSRN"), A RELATED TAX-EXEMPT ENTITY. THE GOVERNING BOARD OF THE ORGANIZATION SHALL BE APPOINTED BY THE BOARD OF GSRN. IN ADDITION, ANY AMENDMENTS TO THE ORGANIZATION'S BYLAWS MUST BE APPROVED BY THE BOARD OF LTACS. FORM 990, PART VI, SECTION A, LINE 7B SEE EXPLANATION FOR FORM 990, PART VI, SECTION A, LINE 7A. FORM 990, PART VI, SECTION B, LINE 11 THE IRS FORM 990 IS PREPARED USING INFORMATION SOLICITED FROM OFFICERS, DIRECTORS, TRUSTEES, BOARD COMMITTEE MEMBERS, AND MANAGEMENT. THIS GROUP OF INDIVIDUALS ARE PROVIDED A DRAFT RETURN BEFORE THE FINAL RETURN IS FILED. QUESTIONS, COMMENTS, AND ADDITIONAL INFORMATION PROVIDED BY THIS GROUP ARE INCORPORATED INTO THE FINAL RETURN. THE FINAL RETURN IS REVIEWED AT A COMMITTEE LEVEL OF THE BOARD PRIOR TO IT BEING FILED. FORM 990, PART VI, SECTION B, LINE 12C THERE IS A SYSTEMATIC PROCESS COORDINATED THROUGH THE GOVERNANCE COMMITTEE WHERE THE CONFLICT OF INTEREST STATEMENTS COMPLETED ANNUALLY BY BOARD MEMBERS AND SENIOR LEADERSHIP TEAM MEMBERS ARE REVIEWED BY THE GOVERNANCE COMMITTEE. WHENEVER THE COMMITTEE FEELS THE CONFLICT STATEMENT IS EITHER INCOMPLETE OR FEELS SOMETHING MAY BE MISSING, THE COMMITTEE WILL ASK MANAGEMENT TO PURSUE FURTHER DUE DILIGENCE. WHEN A BOARD MEMBER DOES HAVE AN INHERENT CONFLICT, THE TRUSTEE IS ASKED TO EITHER ABSTAIN FROM VOTING OR EXCUSE HIMSELF FROM THE ROOM DURING THE DISCUSSION AND VOTING. FORM 990, PART VI, SECTION B, LINE 15 THE GOOD SHEPHERD REHABILITATION NETWORK BOARD DELEGATES RESPONSIBILITY FOR FOLLOWING ALL LEGAL AND REGULATORY REQUIREMENTS AFFECTING EXECUTIVE COMPENSATION TO THE HUMAN RESOURCES/EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD. THIS COMMITTEE IS CHARGED WITH THE ADMINISTRATION OF COMPENSATION PRACTICES FOR OFFICERS AND KEY EMPLOYEES OF THE ORGANIZATION. THIS COMMITTEE SELECTED AND USES AN INDEPENDENT CONSULTING FIRM SPECIALIZING IN HEALTHCARE EXECUTIVE COMPENSATION MATTERS AND USES COMPARABLE COMPETITIVE MARKET DATA IN THEIR ANALYSIS. THE SERVICES OF AN INDEPENDENT COMPENSATION CONSULTANT (IHS) WERE UTILIZED AND THEIR LATEST REPORT TO THE HUMAN RESOURCE COMPENSATION COMMITTEE WAS DATED APRIL 22, 2012. COMMITTEE MEETINGS ARE HELD ON AN ONGOING BASIS AND ARE DOCUMENTED IN DETAIL. FORM 990, PART VI, SECTION C, LINE 19 FINANCIAL STATEMENTS ARE PUBLISHED TO THE ORGANIZATION'S WEBSITE AT LEAST ANNUALLY. THE GOVERNING DOCUMENTS AND POLICIES ARE AVAILABLE UPON REQUEST. FORM 990, PART VII, SECTION A: SARA T. GAMMON, DANIEL C. CONFALONE, PHILLIP R. BRYANT, AND SAMUEL A. MIRANDA, JR. ARE OFFICERS/KEY EMPLOYEES FOR ALL 7 ENTITIES WITHIN THE GOOD SHEPHERD REHABILITATION NETWORK. THEY EACH DEVOTE APPROXIMATELY 60 HOURS PER WEEK TO THE ENTIRE GROUP OF ENTITIES. THE AVERAGE HOURS LISTED IN COLUMN (B) FOR EACH INDIVIDUAL REPRESENTS THE APPROXIMATE PORTION OF 60 HOURS DEVOTED TO THE ALLENTOWN SPECIALTY HOSPITAL, INC. D/B/A GOOD SHEPHERD SPECIALTY HOSPITAL - ALLENTOWN PER WEEK. THE COMPENSATION AND BENEFIT INFORMATION REPORTED IN COLUMNS (E) AND (F) REPRESENTS WHAT EACH INDIVIDUAL EARNS FOR THEIR TIME SPENT ON THE ENTIRE GROUP OF 7 ENTITIES. THE REMAINING BOARD MEMBERS AND HIGHEST COMPENSATED EMPLOYEES ONLY DEVOTE TIME TO THIS ENTITY, WITH THE EXCEPTION OF JAMES DALEY. THE AVERAGE HOURS LISTED IN COLUMN (B) FOR THESE INDIVIDUALS REPRESENTS THE APPROXIMATE PORTION OF HOURS DEVOTED TO THE ALLENTOWN SPECIALTY HOSPITAL, INC. D/B/A GOOD SHEPHERD SPECIALTY HOSPITAL - ALLENTOWN PER WEEK. DR. DALEY IS ALSO A HIGHEST COMPENSATED EMPLOYEE OF THE GOOD SHEPHERD REHABILITATION HOSPITAL WHERE HE DEVOTES APPROXIMATELY 39 HOURS PER WEEK FOR A TOTAL OF 40 HOURS AT BOTH ORGANIZATIONS. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: PRIOR PERIOD ADJUSTMENTS: 19,478. FORM 990, PART XI, LINE 2C: THE PROCESSES USED BY THE COMMITTEE THAT ASSUMES RESPONSIBILITY FOR OVERSIGHT OF THE AUDIT OF THE ORGANIZATION'S FINANCIAL STATEMENTS AND THE SELECTION OF AN INDEPENDENT ACCOUNTANT HAVE NOT CHANGED FROM THE PRIOR YEAR. GOOD SHEPHERD HOME LONG-TERM CARE FACILITY INC GOOD SHEPHERD PLAZA 850 SOUTH 5TH S ALLENTOWN PA 18103 232215800 OPERATES TWO SKILLED NURSING FACILITIES FOR THE SEVERELY DISABLED PA 501(C)(3) LINE 3 GOOD SHEPHERD REHABILITATION NETWORK 0 GOOD SHEPHERD HOUSING DEVELOPMENT CORPORATION GOOD SHEPHERD PLAZA 850 SOUTH 5TH S ALLENTOWN PA 18103 233073390 PROVIDES INDEPENDENT LIVING APTS FOR DISABLED, LOW-INCOME ADULTS PA 501(C)(3) LINE 7 GOOD SHEPHERD REHABILITATION NETWORK 0 GOOD SHEPHERD REHABILITATION HOSPITAL GOOD SHEPHERD PLAZA 850 SOUTH 5TH S ALLENTOWN PA 18103 231371947 PROVIDES COMPREHENSIVE INPATIENT AND OUTPATIENT REHABILITATION SERVICES PA 501(C)(3) LINE 3 GOOD SHEPHERD REHABILITATION NETWORK 0 GOOD SHEPHERD REHABILITATION NETWORK GOOD SHEPHERD PLAZA 850 SOUTH 5TH S ALLENTOWN PA 18103 232216041 PROVIDES MANAGEMENT SERVICES IN SUPPORT OF ITS TAX-EXEMPT AFFILIATES PA 501(C)(3) LINE 7 N/A 0 GOOD SHEPHERD WORKSHOPVOCATIONAL SERVICES INC 1901 LEHIGH STREET ALLENTOWN PA 18103 232215801 PROVIDES EMPLOYMENT DEVELOPMENT PROGRAMS AND VOCATIONAL EVALUATIONS PA 501(C)(3) LINE 11A, I GOOD SHEPHERD REHABILITATION NETWORK 0 PHILADELPHIA POST-ACUTE PARTNERS LLC 1800 LOMBARD STREET PHILADELPHIA PA 19146 208283421 OPERATES INPATIENT REHAB HOSP, ACUTE CARE HOSP & 8 OUTPATIENT FACILITIES PA 501(C)(3) LINE 3 GOOD SHEPHERD REHABILITATION NETWORK 0 GOOD SHEPHERD RECIPROCAL RISK RENTENTION GROUP 7301 RIVERS AVENUE SUITE 230 NORTH CHARLESTON SC 29406 204065112 RISK RETENTION GROUP SC N/A C 0 0 0 0 0 0 0 0 0 0 0 1 0 1 1 1 1 1