2013-11-15T09:53:00-06:00 2012-12-31 450250958 Eide Bailly LLP 800 Nicollet Mall Ste 1300 Minneapolis MN 554027033 990 2012-01-01 810232406 Pondera Medical Center POND 4062713211 805 Sunset Blvd Conrad MT 59425 Wayne Ogburn 4062713211 2013-11-14 1 Kim Hunwardsen CPA P00484560 6122536500 2013-11-14 2012 2016-02-25 16:41:14Z Wayne Ogburn 805 Sunset Blvd Conrad MT 59425 14168683 0 X www.ponderamedical.com X 1975 MT Provide access to quality health care through all life's stages 7 7 291 25 0 0 545298 928120 12205765 13203666 40255 28089 0 8808 12791318 14168683 0 0 0 0 7859666 8206499 0 0 0 4859192 5168154 12718858 13374653 72460 794030 6596738 6666200 3159488 2873767 3437250 3792433 X As an essential member of our regional community, PMC strives to be a progressive healthcare business devoted to providing access to quality healthcare and exceeding the expectations of those we serve through all of life's stages. 0 0 8308608 7997864 Pondera Medical Center is a 25-bed critical access hospital. The Medical Center provided 408 patient days and 70 newborn days along with a 24-hour emergency room that accounted for 2,113 visits for the year. Outpatient services such as lab, x-ray, physical and occupational therapy, wellness center, surgery, ambulance, cardiac rehab, DME, home health and respiratory therapy were provided to members of our rural community so they could receive the services they needed close to home. The services are essential for the survival of our community.The Medical Center maintains records to identify and monitor the level of charity care it provides. These records include the amount of charges foregone for services and supplies furnished under its charity care policy and equivalent service statistics. The amounts of charges foregone for services provided under the Medical Center's charity care policy was $85,632. Total direct and indirect costs related to these foregone charges were approximately $76,000 at December 31, 2012, based on average ratios of cost to gross charges.The Medical Center provides care to patients and residents who meet certain criteria under its charity care policy without charge or at amounts less than its established rates. Because the Medical Center does not pursue collection of amounts determined to qualify as charity care, they are not reported as patient and resident service revenue. 1554205 3439340 Pondera Medical Center's Extended Care Facility is a 59-bed nursing home offering 24-hour care and nursing services provided by licensed, certified and compassionate staff members. The facility had 19,351 total patient days. Staff-to-resident ratio is 1 to 4. Specialized services are also available including those offered by a physical therapist, occupational therapist, registered dietitian, and medical social worker. We have a remarkable activity program directed by a Certified Eden Alternative Associate Manager and a Certified Activity Manager. Activities are offered 7 days a week and include exercise, socials, games, theme parties, pets, gardening, cooking, live music, crafts and outings. We have a 14-bed Special Care Unit designated for residents with pervasive memory loss and confusion, providing an extra touch of attention and supervision. 1490374 1766462 Pondera Medical Center Clinic is a Family Practice Rural Health Clinic dedicated to providing and coordinating comprehensive services to the entire family. Our physicians are Board Certified Family Practitioners, with experience in Obstetrics. Boarded Family Practice Physicians must complete an additional three years of specialized training above and beyond that of medical school. Family Practitioners are trained in all avenues of medicine, so they can provide a full range of care. PMCC Physician Assistants are licensed by the State of Montana and specialize in Family Medicine and Urgent Care. Our Providers promote healthy lifestyles and continually strengthen the relationship between the clinic and community, with excellent, timely, and compassionate patient care. The Clinic has 3 physicians and 2 physician assistants and provided 12,201 total clinic visits, 397 extended care visits and 123 swing bed visits. 11353187 1 1 0 0 0 0 0 0 1 0 1 1 0 1 1 1 1 0 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 0 0 0 0 1 40 0 1 291 1 0 0 0 0 0 0 0 0 0 0 X 7 7 0 0 1 0 0 0 0 1 0 0 0 1 1 1 1 1 1 1 1 0 X Brenda Ries 4062713211 805 Sunset Blvd Conrad MT 59425 Brent Gaylord 1.00 X X 0 0 0 Jayne Gollehon 1.00 X X 0 0 0 Karla Styren 1.00 X X 0 0 0 Bernard Ries 1.00 X X 0 0 0 Ted Kronebusch 1.00 X 0 0 0 Cheryl Bakken 1.00 X 0 0 0 Joe Christiaens 1.00 X 0 0 0 Betty Cooper 1.00 X 0 0 0 Mark Jones 1.00 X 102426 0 12177 Dave Doran 1.00 X 73112 0 6198 Brenda Ries 40.00 X 65637 0 5556 Clifford Davis 40.00 X 136432 0 10302 Ilene Hawkinson 40.00 X 141043 0 6766 Patricia Grena 40.00 X 151847 0 24362 Peter Barran 40.00 X 210276 0 10164 Jay Taylor 40.00 X 226630 0 33953 1107403 0 109478 6 0 1 0 Kalispell Medical Center 310 Sunny View Lane Kalispell MT 59901 Lab management fees 479743 Hill Anesthesia PC PO Box 1006 Conrad MT 59425 Anesthesia services 256500 CPSI 6600 Wall St Mobile AL 36695 Software support services 228381 GE Healthcare Financial Services PO Box 641419 Pittsburgh PA 15264 CT maintenance 115079 4 9895 834919 83306 928120 Patient service revenue 622110 8703403 8703403 Nursing Home 623000 3439340 3439340 EHR Incentive 900099 838658 838658 Bed tax revenue 900099 128348 128348 Supporting revenue 900099 93917 93917 13203666 28089 28089 6400 6400 2408 0 2408 2408 2408 0 9895 0 0 14168683 13203666 0 36897 265106 265106 6734145 6069331 664814 682714 614823 67891 524534 464304 60230 216141 216141 77166 77166 30400 30400 1247432 996755 250677 38778 3244 35534 898595 736646 161949 180654 30758 149896 271921 263403 8518 20661 20395 266 79364 51666 27698 63989 63989 643016 643016 200956 200956 Medical supplies 384774 384774 Bad debt expense 379508 379508 Food 229921 229921 MT bed tax 184513 184513 20365 20365 13374653 11353187 2021466 0 945953 967673 1360050 1165565 162147 135653 70255 67765 12767549 9640177 3175876 3127372 436601 447590 11696 6836 434160 747746 6596738 6666200 1688302 1601933 0 1247481 1081322 89367 223705 101145 3159488 2873767 X 979300 1224869 2457950 2567564 3437250 3792433 6596738 6666200 X 794030 -438847 X X 0 1 X 0 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 1 3341 5377 3218 5500 0 48854 48854 7183132 5551237 1631895 5258271 3940865 1317406 277292 148075 129217 3127372 Investment in perpetual trust 447590 F 447590 Other assets 39752 Estimated third-party payor settlements 285403 Worker's compensation deposit 97069 Other accounts receivable 325522 747746 Compensated absences 101145 101145 X 13187938 1200 -882344 -881144 14069082 99601 99601 14168683 12932356 1200 1200 12931156 443497 443497 13374653 Part IV, Line 1b: The funds are the personal funds of the nursing home residents and are to be used only for specific personal expenditures as requested by the residents. Description of Uncertain Tax Positions Under FIN 48: Part X, Line 2: The Medical Center is organized as a Montana nonprofit corporation and has been recognized by the Internal Revenue Service (IRS) as exempt from federal income taxes under Internal Revenue Code Section 501(c)(3). The Medical Center is annually required to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. The Medical Center believes that it has appropriate support for any tax positions taken affecting its annual filing requirements, and as such, does not have any uncertain tax positions that are material to the financial statements. The Medical Center would recognize future accrued interest and penalties related to unrecognized tax benefits and liabilities in income tax expense if such interest and penalties are incurred. Part XI, Line 2d - Other Adjustments: Bad debt expense recorded in revenue for financial statements -379,508. Interest expense recorded in non-operating revenue for financial statements -63,989. Gain on perpetual trust recorded in non-operating revenue for financial stmt 10,989. Intergovernment transfer recorded in revenue for financial statements -449,836. Part XI, Line 4b - Other Adjustments: Capital grants and restricted contributions recorded in revenue for Form 990 99,601. Part XII, Line 4b - Other Adjustments: Bad debt expense recorded in total expenses for Form 990 379,508. Interest expense recorded in total expenses for Form 990 63,989. 1 1 X 1 X 1 X 175.000000000000 0 1 0 0 76000 76000 0.00580 76000 76000 0.00580 171013 80688 90325 0.00700 6480439 4866052 1614387 0.12420 4703 4703 0.00040 6656155 4946740 1709415 0.13160 6732155 4946740 1785415 0.13740 1 379508 0 2359431 2330852 28579 X 1 1 1 1 Pondera Medical Center

805 Sunset Blvd Conrad MT 59425

www.ponderamedical.com X X X X Provider based rural health clinic Pondera Medical Center 1 0 1 1 100.000000000000 1 175.000000000000 1 X X X 1 1 X 1 0 X X X 1 X 0 1 2 Pondera Med Ctr Extended Care Facility

805 Sunset Blvd Conrad MT 59425

Long term care Pondera Medical Center Eye Clinic PLLC

403 S Delaware St Conrad MT 59425

Eye care and optical Part I, Line 7: Charity care expense was converted to cost based on an overall cost-to-charge ratio addressing all patient segments. Community health improvement services and cash and in-kind contributions to community groups were reported based on actual expenses incurred. The cost for subsidized health services was determined using the Medicare Cost Report. Part I, L7 Col(f): The amount of bad debt expense removed from total expenses to determine the percentage was $379,508. Part III, Line 4: Bad debt expense is reported net of discounts and contractual allowances. We are using the bad debt expense as reported on the financial statements. Payments on accounts previously written off to bad debt expense reduce bad debt expense in the current year. In determining the amount of bad debt attributable to patients eligible under our charity care policy, we used management's best estimate of bad debt expense based on demographic and financial factors of the community. The footnote to the Organization's financial statements can be found on page 8 of the attached audited financial statements. Part III, Line 8: Total revenue received from Medicare is the gross reimbursement plus settlement. Both total revenue received from Medicare and the Medicare allowable costs are reported from the Medicare Cost Report. The Medicare Cost Report is completed based on the rules and regulations set forth by the Centers for Medicare and Medicaid Services. Part III, Line 9b: Patients must complete a financial assistance application to be considered for charity care. Those patients known to qualify for financial assistance or that have contacted the business office and are in the process of completing an application or setting up a payment schedule will not receive additional collection notices. Pondera Medical Center Part V, Section B, Line 12h: Pondera Medical Center utilizes the federal poverty guidelines (FPG) as the primary financial measurement tool. Financial determination is based on family size and income. All forms of income are considered, including but not limited to: workman's compensation payments, social security benefits, unemployment wages, child support payments, etc. Pondera Medical Center Part V, Section B, Line 14g: Patients are informed about their eligibility for financial assistance during conversations at registration and during follow-up on outstanding account balances. Information regarding financial assistance and applications are available at our business office. The financial assistance application is also available on our website. Pondera Medical Center Part V, Section B, Line 20d: The maximum amount charged to a patient under the financial assistance policy for emergency and medically necessary care is 75% of the gross charges. This is based on the lowest discount under the charity care policy of 25%. The hospital will review the proposed methods to determine amounts generally billed to determine its discount under the financial assistance policy meets the requirements of 501(r). Pondera Medical Center Part V, Section B, Line 22: All individuals eligible under the hospital financial assistance policy are provided a discount for emergency and other medically necessary care. The financial assistance policy does not apply to elective procedures. Therefore, FAP-eligible patients without insurance may be charged gross charges on elective procedures. Part VI, Line 2: A community survey was prepared and administered by an independent third party. We also obtained health fair requests and results, physician studies of trends and patient satisfaction surveys. Our community health needs assessment is due December 31, 2013 and will be made widely available before that time. An implementation strategy addressing the needs will also be completed and board approved. Part VI, Line 3: Patients are informed about their eligibility for financial assistance during conversations at registration and during follow-up on outstanding account balances. Financial assistance is offered if a patient is unable to make a payment. Part VI, Line 4: Pondera Medical Center serves the population of Pondera County, Montana. The population of Pondera County in 2012 was 6,165 and is considered rural. The median household income for 2007 - 2011 was $38,852 in which 18.4% of the population was below the poverty guidelines. The racial makeup consists of 83% white, 15% American Indian or Alaska Native with the remainder being other races. The largest income producing segment of Pondera County is agriculture and while there are a couple large employers in the county including Pondera Medical Center, small business, and oil and natural gas producers make up the majority of employers. The nearest hospital is Marias Medical Center, a 20-bed acute care hospital located in Shelby, MT. Marias Medical Center is located approximately 27 miles north of Conrad, MT. Part VI, Line 5: The Board of Directors is comprised of community members throughout Pondera County and all board meetings are open to the public. Surpluses of cash, when available, are invested back into the Hospital for equipment purchases and wage considerations.Pondera Medical Center operates an emergency room available to all regardless of ability to pay, 20 acute care beds for hospital stays, obstetric services and rooms, surgery center, 59 bed extended care center, special care unit, rural health clinic, wellness center, cardiac rehab, home health agency, physical therapy and numerous other services to meet your daily and long-term health care needs. Pondera Medical Center seeks and encourages community members to become involved and volunteer in our Extended Care facility. X 1 0 0 1 0 0 0 0 0 Patricia Grena 151655 0 192 0 0 0 0 0 24362 0 176209 0 0 0 Peter Barran 175276 0 35000 0 0 0 0 0 10164 0 220440 0 0 0 Jay Taylor 166710 0 59920 0 0 0 0 0 33953 0 260583 0 0 0 Part I, Line 4a Dave Doran, CFO, received $18,846.10 in a severance payment for termination of employment on September 14, 2012. Dave received six month's salary, with the final payment being made on March 22, 2013. Part I, Line 5 The physicians are paid bonuses based on their revenue. Revenue tiers are set and if met a specified bonus is paid to that physician. The revenue tiers and bonus amounts are set up on the physician's employment contract therefore the board does not have authority to deny or change an amount. Form 990, Part VI, Section A, line 4 The Organization's Bylaws were amended on January 26, 2012 and September 27, 2012. The role of the CEO/Administrator has the authority to make necessary purchases with limits of $10,000 per purchase. Previously there was no limit stated. The role of the Board of Directors now includes performing other activities permitted by the Articles of Incorporation or state law. The CEO/Administrator shall be hired by and be accountable to the Board. Wording was removed stating the CEO/Administrator be employed by the Board. The Medical Staff is responsible and accountable to the CEO/Administrator for the quality of the medical practice rendered. It was previously stated that the Medical Staff was responsible and accountable to the Board. The composition of the Board of Directors was updated. The January amendment stated the Board of Directors consist of nine persons, seven of whom were appointed by the Pondera Medical Center Board of Directors from an approved candidate or list of approved candidates submitted by the Pondera County Commissioners. The eighth Director shall be a Pondera County Commissioner selected by them from their board. This was amended in September to the Board of Directors shall consist of not fewer than seven or more than eleven member who are appointed by the Board of Directors. One Board Director shall be a member of the Board of Commissioners of Pondera County, and one Board Director shall be the Corporation's Chief of Medical Staff. The Chief of Medical Staff will be a non-voting member of the Board. The January amendment stated each of the eight members shall be appointed to a three-year term, with no more than three director terms ending in any given year. The September amendment stated each member shall be appointed to a three-year term with no more than four directors' terms ending in any given year. Vacancies on the Board were to be filled by the Board of County Commissioners. This has been amended to state vacancies are filled following the process outlined in Article III, Section A of the Bylaws. The September amendment added term limitations for any Board member to be nine consecutive years. For members on December 17, 2009, term limits began at their last appointment prior to that date. The September amendment added a super majority of the Board, which is defined as three quarters of the voting Board of Directors in office immediately before a meeting begins, may remove a Board member. The Organization no longer needs to notify the County Commissioner. A super majority defined as six was removed. The January amendment states a majority of the Directors shall constitute a quorum at any meeting. A majority is defined a five voting members. The September amendment states a majority of the voting Board of Directors in office immediately before a meeting begins shall constitute a quorum at any meeting. If a quorum is present at a meeting when a vote is taken, an affirmative vote of a majority of the voting Board of Directors present is the act of the entire Board unless state law, the Articles of Incorporation or these Bylaws require the vote of a greater number of Board of Directors. The Chairman of the Board of Directors has the principal duties of providing leadership to the Board and to assure effective communication between the Board, Administrator, and Medical Staff. Also providing this to the Members of the Senior Staff was added. It was clarified in the September amendment that management matters are the primary responsibility of the CEO/Administrator. The term limitations for any Board member to serve as an officer of the Board shall be three consecutive years in each officer position was added. Form 990, Part VI, Section A, line 8b The Organization does not have committees with authority to act on behalf of the governing body. Form 990, Part VI, Section B, line 11 The Form 990 is reviewed by the CEO and CFO. After their review a draft copy of the 990 is provided by e-mail to the board members for review. The final copy of the Form 990 is e-mailed to the board prior to filing. Form 990, Part VI, Section B, line 12c Officers and Trustees annually disclose potential conflicts, which are discussed at a Board of Trustees meeting. Segregation of duties is strictly enforced for any potential family or business conflicts of interest. If there is a potential conflict at a board meeting, the board member is not allowed to vote on the conflicting issue. Form 990, Part VI, Section B, line 15 Compensation is determined on an annual basis by the Board of Trustees by using the Montana Hospital Salary Survey for like hospitals in the state and adjusted for budget limitations. Form 990, Part VI, Section C, line 19 Governing documents, conflict of interest policy and financial statements are available to the public upon request. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 9: Gain on perpetual trust 10,989. County pymt to be paid to State of Montana for intergovernmental transfer -449,836. Form 990, Part XII, Line 2c: The Board of Directors is responsible for oversight of the audit of its financial statements and selection of an independent accountant.