2012-05-11T15:36:48-05:00 2011-06-30 KPMG LLP Two Central Park Plaza Suite 1501 Omaha NE 681021626 990 2010-07-01 440605373 The Children's Mercy Hospital CHIL 8162343000 2401 Gillham Road Kansas City MO 64108 Sandra AJ Lawrence 8162343000 2012-05-11 1 4023481450 2010 2016-02-24 21:20:13Z Sandra AJ Lawrence 2401 Gillham Road Kansas City MO 64108 817108618 0 X www.childrensmercy.org X 1901 MO Excellence in healthcare for children 14 8 6558 726 -67 -67 52687242 26781980 720080489 772728245 1100651 1839740 13191721 15480791 787060103 816830756 12606043 15992712 0 0 441095079 477094190 0 0 3521782 289513277 310580520 743214399 803667422 43845704 13163334 878174313 915564338 395935037 396259169 482239276 519305169 X To operate a clinical- and hospital-based system that strives to achieve excellence in health care services and medical treatments for children and their families; to build research programs that successfully translate basic science into clinical and bedside practices that improve the effectiveness of pediatric health care everywhere; to serve as an epicenter for pediatric medical and allied health education teaching and training tomorrow's pediatric health care professionals today; fulfilling the health care needs of our community's children regardless of their ability to pay. 1 0 666360355 15992712 772728245 All expenses for program services relate to providing healthcare. There were a total of 319 licensed beds and 79,680 patient days during the year from 14,885 admissions. Interim stays totaled 6,905 and outpatient encounters were 657,579 from 188,624 individual patients.The Children's Mercy Hospital (the Hospital) consists of a 265-bed teaching hospital for children located in Kansas City, Missouri, and a 54-bed hospital for children located in Overland Park, Kansas. The Children's Mercy Hospital provides the highest level of medical care, technology, services, equipment, and facilities promoting the health and well-being of children in the region, from birth through adolescence. Patients and their families are treated with compassion in a family-centered environment that recognizes their physical, emotional, financial, social, and spiritual needs. The comprehensive healthcare environment provided by the Hospital includes clinical services, research, and teaching efforts, which are designed to serve today's and tomorrow's children, and the community in which they live.The Hospital's services are available to all regardless of ability to pay. 666360355 1 1 0 1 0 0 0 0 1 1 0 1 0 1 1 0 1 0 0 1 0 0 0 1 0 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 1 1 0 0 0 1 1 1 1 0 0 1 493 0 6558 1 0 0 0 0 0 1 1 0 0 0 0 X 14 8 0 0 1 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 0 X Sandra AJ Lawrence EVP & CFO 8162343000 2401 Gillham Road Kansas City MO 64108 Page Branton Reed 1.00 X X 0 0 0 John Ovel 1.00 X X 0 0 0 Charles Schellhorn 1.00 X X 0 0 0 Peggy Dunn 1.00 X X 0 0 0 Edward M Connolly Jr 1.00 X 0 0 0 Mary Hunkeler 1.00 X 0 0 0 James B Nutter Jr 1.00 X 0 0 0 David Oliver 1.00 X 0 0 0 Robert Jackson MD 1.00 X 0 0 0 Margi Pence 1.00 X 0 0 0 Jon Zindel 1.00 X 0 0 0 Gerald Woods MD 40.00 X 298007 0 28122 Milton Fowler MD 40.00 X 331987 0 28122 Douglas Blowey MD 40.00 X 220633 0 26805 Randall L O'Donnell 40.00 X X 1362875 0 593271 Charles Roberts MD 40.00 X 514438 0 28122 Sandra AJ Lawrence 40.00 X 579735 0 28122 Karen S Cox RN PhD FAAN 40.00 X 513232 0 24072 Jo Stueve 40.00 X 499527 0 24072 Michael Artman 40.00 X 0 0 0 Gary K Lofland MD 40.00 X 1217775 0 28122 Richard A Hopkins MD 40.00 X 802385 0 28122 James O'Brien Jr MD 40.00 X 798111 0 28122 Walter S Andrews MD 40.00 X 727280 0 28122 Daniel J Ostlie MD 40.00 X 726819 0 28122 8592804 0 921318 1067 0 1 0 Anesthesia Associates 8717 West 110th Street Overland Park KS 66210 Anesthesiologists 20156974 JE Dunn Construction Company 1101 Locust Street Kansas City MO 64106 Construction 11169349 Sodexho - Marriott Services Inc 4880 Paysphere Circle Chicago IL 60674 Food Services 7206733 McCown Gordon Construction 422 Admiral Boulevard Kansas City MO 64106 Construction 6182055 HMN Architects Inc 7400 West 110th Street Overland Park KS 66210 Architecture 3324243 342 1058869 772664 8374311 10624597 5951539 202735 26781980 Net Patient Services 621110 772728245 772728245 772728245 1839740 1839740 193535 772664 277862 -84327 -84327 Reinsurance 524298 4865159 4865159 Cafeteria 722210 4593037 4593037 Transport 621910 2832828 2832828 3274094 3274161 -67 15565118 816830756 788293430 -67 1755413 155532 155532 15837180 15837180 7870325 5213521 2656804 377497575 317569727 57505281 2422567 16777527 14148338 2522905 106284 48069223 38377770 9402807 288646 26879540 22667274 4041986 170280 1148634 1550 1147084 271299 271299 68290480 54667021 13467110 156349 3551162 837257 2627071 86834 10979772 4491994 6451783 35995 5095800 3995105 1084090 16605 15982164 15982164 41404618 20620018 20676940 107660 14362787 12697574 1665213 Medical Supplies 83263984 78565366 4666944 31674 State Medicaid Taxes 31018866 31018866 Bad Debt 15069395 15069395 Food Services 5684254 5433824 239827 10603 Dues & Subscriptions 3054331 1622377 1345329 86625 11402974 7388502 4012812 1660 803667422 666360355 133785285 3521782 36519019 43246010 189701246 145554603 28040710 19704716 117676994 120868360 7061215 7239674 8617098 6690006 729010683 309704013 368940548 419306670 70743424 65113757 28752448 62611787 22121611 25228755 878174313 915564338 102526842 106192809 250406120 245769062 625640 366624 42376435 43930674 395935037 396259169 X 434059687 473375598 48179589 45929571 482239276 519305169 878174313 915564338 X 13163334 23902559 X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 405207 405207 665955148 666360355 1000000 250000 0 0 1000000 1000000 1000000 1000000 4000000 6000000 134632 290191 344415 405207 1174445 250000 250000 250000 250000 1000000 1500000 3000 3000 35713462 695711 6607520 1892495 41124198 33889964 317605 3237589 1731696 35713462 42887302 416385 -7597819 1815904 33889964 0.00000 0.99340 0.00660 0 1 1 13627270 13627270 382937999 128305641 254632358 281645985 181398372 100247613 50799429 50799429 419306670 Lifeflight Eagle Joint Venture 2341493 C Self-Insurance Arrangements 24683028 F Enalaped Joint Venture 219 C Land Held for Sale 1802178 F Construction Bond Fund 33781727 C Construction Bond Fund 3142 F 62611787 Reserve for Self-Insured Risks 34061980 Deferred Lease Incentive 2755556 Postretirement Medical Liability 7113138 43930674 Description of Intended Use of Endowment Funds: Part V, Line 4: Endowment funds are held by The Children's Mercy Hospital Foundation, a supporting organization of The Children's Mercy Hospital. The endowment funds are intended to provide a permanent source of funding for designated activities carried out by The Children's Mercy Hospital, the funds for which are provided from the earnings and principal of these endowment funds. Description of Uncertain Tax Positions Under FIN 48: Part X: FIN 48 Footnote: The Hospital and its affiliates adopted ASC Subtopic 740-10, Income Taxes - Overall. ASC Subtopic 740-10 provides specific guidance on how to address uncertainty in accounting for income tax assets and liabilities, prescribing recognition thresholds and measurement attributes. At June 30, 2011 and 2010, there were no uncertain tax positions. North America 0 0 Program Services Travel for healthcare-related education and information sharing 116665 Central America & the Caribbean 0 0 Program Services Travel for healthcare-related education and information sharing 6121 Europe 0 0 Program Services Travel for healthcare-related education and information sharing 40522 East Asia & the Pacific 0 0 Program Services Travel for healthcare-related education and information sharing 29112 Middle East & North Africa 0 0 Program Services Travel for healthcare-related education and information sharing 75 South America 0 0 Program Services Travel for healthcare-related education and information sharing 3475 South Asia 0 0 Program Services Travel for healthcare-related education and information sharing 1947 Sub-Saharan Africa 0 0 Program Services Travel for healthcare-related education and information sharing 4409 0 0 0 202326 0 202326 0 0 0 0 0 0 Method Used to Acccount for Expenditures: Schedule F, Part I, Line 3: Method Used to Account for Expenditures: Actual expenses for international travel Gala/Auction 966199 772664 193535 3575 172968 10000 91319 966199 772664 193535 3575 172968 10000 91319 277862 -84327 1 1 X 1 X 300.000000000000 1 X 500.000000000000 1 1 0 0 1 6662 15725880 4678291 11047589 0.01400 3 292121 386456709 300021110 86435599 0.10960 3 1939 7448511 4696114 2752397 0.00350 7 300722 409631100 309395515 100235585 0.12710 33 568710 4995899 164296 4831603 0.00610 35 3307 29125150 14381797 14743353 0.01870 7 189438 84996850 73217101 11779749 0.01490 223 2001525 11488024 101395 11386629 0.01440 6 60221 294225 0 294225 0.00040 304 2823201 130900148 87864589 43035559 0.05450 311 3123923 540531248 397260104 143271144 0.18160 6 509 114677 7600 107077 0.00010 3 570 184596 0 184596 0.00020 1 4647 0 4647 0.00000 1 24 15766 0 15766 0.00000 11 1103 319686 7600 312086 0.00030 0 15069395 0 2864211 2732221 131990 X 1 1 2 1 The Children's Mercy Hospital

2401 Gillham Road Kansas City MO 64108

X X X X X X Specialty Clinics; Primary Care Clinics 2 Children's Mercy South

5808 W 110th Overland Park KS 66211

X X X X Specialty Clinics; 24/7 Urgent Care The Children's Mercy Hospital 1 Children's Mercy South 2 31 Children's Mercy Northland

501 NW Barry Rd Kansas City MO 64155

Outpatient Clinics Children's Mercy on College Boulevard

5520 College Boulevard Overland Park KS 66211

Outpatient Clinics Children's Mercy Paseo Teen Clinic

4605 Paseo Kansas City MO 64110

Outpatient Clinics Children's Mercy Clinics on Broadway

3101 Broadway Kansas City MO 64111

Outpatient Clinics Children's Mercy West

4313 State Ave Kansas City KS 66201

Outpatient Clinics CMH Endocrinology - Springfield

1443 N Robberson Suite 308 Springfield MO 65802

Outreach Clinic CMH Gastroeneterolgy - Springfield

1965 S Fremont Ave Springfield MO 65804

Outreach Clinic CMH Endocrinology - St Joseph

902 N Riverside Rd Suite 100 St Joseph MO 64506

Outreach Clinic CMH Endocrinology - Pittsburg

1102 E Centennial Pittsburg KS 66762

Outreach Clinic CMH Endocrinology - Salina

400 S Santa Fe Ave Salina KS 67401

Outreach Clinic CMH Gastroeneterolgy - Wichita

6837 W 37th St North Bldg 1 Wichita KS 67205

Outreach Clinic CMH Endocrinology - Junction City

1106 St Marys Rd Junction City KS 66441

Outreach Clinic CMH Endocrinology - Joplin

2203 W 32nd St Joplin MO 64804

Outreach Clinic CMH Cardiology - St Joseph

902 N Riverside Rd Suite 100 St Joseph MO 64506

Outreach Clinic CMH Cardiology - Joplin

3020 S St Johns Blvd Suite A Joplin MO 64805

Outreach Clinic CMH Gastroeneterolgy - Salina

400 S Santa Fe Ave Salina KS 67401

Outreach Clinic CMH HematologyOncology - Wichita

9211 E 21st St N Wichita KS 67206

Outreach Clinic CMH Endocrinology - Hays

2214 Canterbury Dr Suite 204 Hays KS 67601

Outreach Clinic CMH Cardiology - Junction City

1106 St Marys Rd Junction City KS 66441

Outreach Clinic CMH Gastroeneterolgy - Joplin

3333 McIntosh Dr Suite 6 Joplin MO 64804

Outreach Clinic CMH Urology - Wichita

6837 W 37th St North Bldg 1 Wichita KS 67205

Outreach Clinic CMH Orthopaedic Surgery - Wichita

2778 N Webb Rd Wichita KS 67226

Outreach Clinic CMH Nephrology - Joplin

3333 McIntosh Dr Suite 6 Joplin MO 64804

Outreach Clinic CMH Nephrology - Wichita

818 N Emporia Suite 310 Wichita KS 67214

Outreach Clinic CMH Rheumatolgy - Springfield

1965 S Fremont Ave Springfield MO 65804

Outreach Clinic CMH HematologyOncology - Springfield

1965 S Fremont Ave Springfield MO 65804

Outreach Clinic CMH Orthopaedic Surgery - Salina

520 S Santa Fe Ave Salina KS 67401

Outreach Clinic CMH Endocrinology - Parsons

1902 S US Highway 59 Parsons KS 67357

Outreach Clinic CMH Orthopaedic Surgery - Springfield

3800 S National Ave Suite 200 Springfield MO 65807

Outreach Clinic CMH Genetics - Cillicothe

100 Central Ave Chillicothe MO 64061

Outreach Clinic CMH Hematology - Dodge City

2020 Central Dodge City KS 67801

Outreach Clinic Part I, Line 7: Cost-to-charge ratios were calculated as appropriate and applied to charges. Part I, Line 7g: The Children's Mercy Hospital operates subsidized health services that span across primary care clinics, specialty care clinics, home care, diagnostics, inpatient admissions and emergency services. The organization also operates a clinic within an inner city day care center serving 600 children daily, and a dedicated clinic named Children's Mercy West in the underserved community of Kansas City, KS. Additionally, our physicians and nurses provide outreach specialty clinics in communities throughout our region, making this specialized care more easily accessible to families so they don't have to travel long distances to receive care in Kansas City. In an attempt to further improve access, Children's Mercy has invested in a telemedicine/telehealth infrastructure that will allow the organization to reach a broader patient population. Part I, Line 7, Column (f): The Bad Debt expense included on Form 990, Part IX, Line 25, Column (A), but subtracted for purposes of calculating the percentage in this column is $ 15069395. Part II: The Children's Mercy Hospital has developed a variety of community building activities that allow the organization to connect with the community we serve and promote health. This includes services to address substance abuse (Metro Task Force), gaps created by language barriers (Spanish Bilingual Assistance Education), education (Longfellow Mentoring), employment for individuals with disabilities (Project RISE), childhood obesity (Weighing In Community Collaborative) and psychosocial care needs (Family Advisory Board, Teen Advisory Board and Consejos). In addition to these examples, The Children's Mercy Hospital offers a varity of training and educational outreach programs in local schools and with partner organizations that address health needs on an ongoing basis. Part III, Line 4: There is no financial statement footnote on bad debt. The amount of bad debt reported represents cost of charges. The primary basis of bad debt is the sum of adjustments made to patient accounts that represent non-collectible amounts. The allowance for uncollectible accounts is adjusted to equal the sum of all accounts whose balances are in excess of 365 days and self pay account balances. If the prior period's allowance balance is less than the current month's calculated balance, the allowance is credited and bad debt is increased. If the balance requires a decrease, then bad debt is also decreased by the same amount.Discounts (Gross Charges less Ratio of Cost to Charge applied) and any other adjustments on patient accounts are applied to account balances prior to any bad debt expense determination. Part III, Line 8: The Children's Mercy Hospital follows the regulations governing the preparation of the Medicare Cost Report. In doing so, the Medicare allowable costs are based on the Hospital's audited financial statement amounts adjusted for those costs not allowable, such as costs related to physician and nurse practitioner services, marketing, and physician referrals. Other revenue sources such as for the cafeteria, vending machines, medical records fees, and various miscellaneous operating revenues are offset from total costs to determine allowable costs. Total costs per functional area, or Cost Report line/category, are divided by charges to determine cost-to-charge ratios for each area. Part III, Line 9b: Collection attempts are discontinued once charges are determined to be eligible for charity care or financial assistance; insurance collection attempts continue as appropriate. Part VI, Line 2: Historically, The Children's Mercy Hospital has utilized several departments and organizational functions to assess the health care needs of our community. This includes gathering input and feedback from groups of community stakeholders such as the hospital Board of Directors, Board of Advocates, Family Advisory Board, Consejo's and Children's Mercy Health Network, which is comprised of community primary care providers. In addition, Children's Mercy has several departments that assess health care needs on a regular basis, such as Strategic Planning, Patient Advocacy and the Physician Services Department. Children's Mercy will continue to utilize these departments and functions to assess and improve health care needs. Looking forward, however, Children's Mercy has also implemented a Community Health Needs Assessment Advisory Committee that began meeting in September of 2011, which includes broad representation from the health system (27 current members). The sole purpose of this committee is to regularly identify current and future health care needs and refine strategies for addressing them more effectively. Part VI, Line 3: Financial assistance information is posted on the Hospital's website. Flyers and business cards are available at all access points within the Hospital. All self pay patients and families are contacted by a financial counselor, either in person, or through phone call or letters. Self pay or underinsured patients can also be referred to a financial counselor by an Access Representative, Patient Care Services, Social Work, Patient Financial Servies, or other staff members for screening and assistance. Part VI, Line 4: The Children's Mercy Hospital service area is comprised of counties located in both Missouri and Kansas. Our Primary Service Area is defined as the 18 counties immediately surrounding the Kansas City MSA, while our Secondary Service Area is comprised of the 50 surrounding counties. Of these service areas, the counties that comprise a majority of our patient encounters (73.6% in FY 2011) include Jackson, MO; Clay, MO; Johnson, KS; and Wyandotte, KS. These counties represent 448,781 children under the age of 19 (28% of the total population). Of the counties, the average unemployment rate is 9.5%, with 21.98% of children under the age of 18 living in poverty. The hospital's patient population includes 47.4% who are Medicaid recipients and 5.1% who are uninsured. Children's Mercy Hospital is the only pediatric hospital within the tertiary service area and we provide a number of unique services not available anywhere within a 200-mile radius of Kansas City. In addition, a minority of the pediatric primary care providers in our service area accept Medicaid, so our primary care and dental services see a disproportionate share of uninsured and underinsured patients. The hospital is located in an area designated by HRSA as medically underserved and as a primary care and dental health provider. Part VI, Line 6: The Children's Mercy Hospital is a nonprofit hospital operated to serve a public rather than a private interest and meeting the requirements of Revenue Ruling 69-545. Control of the Hospital rests with its Board, which is primarily composed of members of the community, in addition to a few select employees of the Hospital. The Hospital accepts patients paying with Medicaid and Medicare, and operates an active and generally accessible emergency room open to all children without regard to ability to pay. The Hospital uses any surplus funds to improve the quality of patient care, expand its facilities, and advance its medical training, education, and research programs.Children's Mercy provides many programs that enhance the skills of health professionals in the community. For example, the Clinical Advances in Pediatrics (CAPS) conference and multiple other Continuing Medical Education/Continuing Nursing Education offerings provide advanced training to clinicians that improves services offered to the pediatric population. Other Children's Mercy programs, such as the Social Work Practicum, Dietetic Practicum and Child Life Internship programs provide valuable training to allied health professionals that go on to serve the community in a variety of ways. Part VI, Line 7: The Children's Mercy Hospital is not part of an affiliated health care system.Part VI, Line 7: The Children's Mercy Hospital did not file a community benefit report in any states. 1 American Heart Association 6800 W 93rd Street Overland Park KS 66213 135613797 501(c)3 8650 Promote healthier lives, free of cardiovascular disease and stroke Boys & Girls Club of Greater Kansas City 6301 Rockhill Road Kansas City MO 64131 436072065 501(c)3 6750 Promote development of self-esteem, values, and skills for boys and girls, ages 5-18 Juvenile Diabetes Research Foundation 920 Main Street Ste 280 Kansas City MO 64105 231907729 501(c)3 7400 Support diabetes research and research-related education March of Dimes 4400 College Blvd Ste 180 Overland Park KS 66211 131846366 501(c)3 14950 Support programs that improve the health of mothers and babies Missouri State Medical Association 113 Madison Street Jefferson City MO 65102 431572458 501(c)3 9500 Provide quality continuing medical education for Missouri physicians Ronald McDonald House Charities 2502 Cherry Street Kansas City MO 64108 431190760 501(c)3 40240 Provide comfort and care for families seeking life-saving medical treatment for children 6 0 Medical Residency 35 111300 Patient Financial Assistance 6662 15725880 Cost Charity Care Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: Grants generally go to nonprofit organizations and agencies with which The Children's Mercy Hospital shares a common mission. These are agencies that generally support the health and well-being of children and families. The Children's Mercy Hospital documents the appropriate use of our funds by attending annual events to collaborate with agency board members and their executive leaders about issues related to the achievement of the agency's mission; reviewing web-based annual reports; and requesting and receiving a report from the agency grant recipient confirming the portion of grant dollars that go directly to the agency's mission-critical enterprise. Grants are also provided to the Medical Residents of The Children's Mercy Hospital. X 0 1 X X X X X 0 1 0 0 0 1 0 0 0 Gerald Woods MD 295172 0 0 0 2835 0 14700 0 13654 0 326361 0 0 0 Milton Fowler MD 329697 0 0 0 2290 0 14700 0 13637 0 360324 0 0 0 Douglas Blowey MD 218729 0 0 0 1904 0 13383 0 13582 0 247598 0 0 0 Randall L O'Donnell 1026351 0 250000 0 86524 0 579849 0 13800 0 1956524 0 0 0 Charles Roberts MD 421259 0 68731 0 24448 0 14700 0 13755 0 542893 0 0 0 Sandra AJ Lawrence 448625 0 107269 0 23841 0 14700 0 13800 0 608235 0 0 0 Karen S Cox RN PhD FAAN 389313 0 85683 0 38236 0 14700 0 10746 0 538678 0 0 0 Jo Stueve 388375 0 85678 0 25474 0 14700 0 9686 0 523913 0 0 0 Gary K Lofland MD 1197894 0 0 0 19881 0 14700 0 13800 0 1246275 0 0 0 Richard A Hopkins MD 797762 0 0 0 4623 0 14700 0 13800 0 830885 0 0 0 James O'Brien Jr MD 778902 0 0 0 19209 0 14700 0 13800 0 826611 0 0 0 Walter S Andrews MD 706559 0 0 0 20721 0 14700 0 13800 0 755780 0 0 0 Daniel J Ostlie MD 707880 0 0 0 18939 0 14700 0 13800 0 755319 0 0 0 Part I, Line 1b Social club dues are paid on behalf of the CEO only; the payments are approved by the Compensation Committee of the Board of Directors and such payments are written into the CEO's Employment Agreement. Part I, Line 4b A Supplemental Executive Retirement Plan (SERP) was made available to President & CEO, Randall O'Donnell, Ph.D. $300,028 was deferred into the plan during the year. Part I, Line 6 A portion of the total cash compensation paid to the President/CEO and all Executive Vice Presidents is determined by a performance based plan approved by the Compensation Committee of the Board of Directors. The plan includes Hospital and individual performance goals, one component of which is based in part on net earnings. Health and Educational Facilities Authority of the State of Missouri 431178966 60635RC62 2002-06-13 50000000 See Part V 0 0 0 Health and Educational Facilities Authority of the State of Missouri 431178966 60635RC88 2003-06-05 27500000 Refund 1993 Bonds June 5, 2003 0 0 0 Health and Educational Facilities Authority of the State of Missouri 431178966 60635HH85 2009-11-15 178852416 See Part V 0 0 0 4000 46000000 1225608 2004 1 0 1 1 1950000 25550000 709028 1995 1 0 1 1 178852416 46339739 33781727 1 0 0 1 0 0 0 0 0.00000 0.00000 0.00000 1 0 0 0 0 0.00000 0.00000 0.00000 1 0 0 0 0 0.00000 0.00000 0.00000 1 0 1 1 UBS AG 30.900000000000 0 0 0 0 0 0 1 1 UBS AG 20.900000000000 0 0 0 0 0 0 0 0 0 0 0 Schedule K, Part I, Row A, Column (f) Bond Issue, Description of Purpose A portion of the proceeds of the Bonds will be used to finance and reimburse the Corporation for a portion of the costs of the Project, which consists of (1) the following improvements at the Corporation's Main Campus in Kansas City, Missouri: (a) construction of four new operating rooms designed for cardiac surgery, together with related support facilities and space over the emergency room parking area at the southeast corner of the Main Campus, (b) construction of a fifth floor addition to the existing Henson Tower to house a new 27-bed inpatient unit, (c) construction of a new heliport with two landing surfaces on the roof of the existing Sutherland Tower and (d) construction of a four-story 72,000 square foot clinic and research building over the existing parking garage; and (2) construction of the following improvements at the Corporation's South Campus in Overland Park, Kansas: (a) a new 120,000 square foot building, connected to the existing approximately 50,000 square foot building, to be used to house an urgent care center, new patient beds and additional general support space and (b) the development of 400 new surface parking spaces. Schedule K, Part I, Row C, Column (f) Bond Issue, Description of Purpose $100,000,000: Refinance of Commerce Bank debt which refinanced Series 2007 bonds. $80,002,416: A portion of the proceeds of the Bonds loaned to the Corporation will be used to construct and equip a new six-story bed tower on the Corporation's Main Campus. The tower will provide an additional 42 medical/surgical beds, a maternal fetal medicine unit with four observation beds and a labor and delivery suite, 14 additional pediatric intensive care beds, expansion of radiology and infusion services, expansion of the cafeteria, dock, and storage space and expanded gift shop. The Corporation plans to establish a presence in Independence, Missouri in eastern Jackson County to be known as Children's Mercy East, which will include outpatient pediatric services. The Corporation has purchased the 8.9 acre site and has received a grant for $1 million to pay for the architectural and engineering costs associated with this project. Construction is expected to begin on this facility in 2011 and proceeds of the Bonds are expected to be used to fund $15 million of the costs of this facility. The Corporation will also use a portion of the proceeds of the Bonds for other capital expenditures at its facilities that are part of its ongoing capital improvement plan. Peggy Dunn Director JE Dunn, More than 35% owned by family member 28858799 Construction 0 Margi Pence Director Hallmark Cards, More than 35% owned by family member 570108 Rental Property; Payments made to Kessington/Hunter Mgmt Co and Crown Center Parking 0 John Ovel Director Commerce Bank, Officer of Commerce Trust Company 507178 Banking; Trust charges, analysis charges, credit card fees 0 X 0 N/A X 0 N/A X 7 202735 FMV 0 0 1 0 Non Reporting of Revenue: Part I, Line 33: Books and clothing were received and utilized by patients and families, not resold. New Program Services Form 990, Part III, line 2 Fetal Health Center: Children's Mercy opened this new program so healthy mothers diagnosed with an at-risk fetus could give birth at Children's Mercy, giving the congenitally ill baby immediate access to a team of medical subspecialists for treatment intervention. One of only three such programs in the nation, the Fetal Health Center enlarges the opportunity for better health outcomes. In addition to the better health outcomes that are created through this immediate intervention, the program's existence means it's no longer necessary to expose these babies to the additional risk of ambulance transportation required to give them access to the unique resources of the region's only quaternary care pediatric program. Imaging Radiation Exposure Reduction: Chronically ill children requiring frequent imaging studies can run the risk of developing radiation-caused health disorders in their adult years. The new program launched by the hospital this year aims to reduce that risk through the recalibration of imaging equipment of studies ordered by multiple physicians so unnecessary redundancy can be eliminated. Children's Mercy East: Children's Mercy made a capital commitment and broke ground this year for the opening of a new facility to serve patients in Eastern Jackson County, Missouri. The facility will give those patients greater access to the hospital's various medical subspecialty clinics and will become the location for that community's first, hospital-based pediatric urgent care program. Form 990, Part VI, Section A, line 4 The bylaws of The Children's Mercy Hospital were updated to provide that the budgets of the Hospital shall be subject to the prior approval of the Audit and Corporate Compliance Committee and the Audit and Corporate Compliance Committees shall recommend the budgets for consideration and approval by the Board. Form 990, Part VI, Section B, line 11 The final Form 990, including all required schedules, was provided to each voting member of the Board of Directors prior to its filing with the IRS. Form 990, Part VI, Section B, line 12c Each employee is required to complete an Outside Professional and Commercial Interests Form (Conflict of Interest Form) at the time of employment, at the time of their annual evaluation, and any time their financial interests change. Board members are required to complete a Conflict of Interest Questionnaire at the time of their appointment, at least one time annually, and are required to update their information any time their financial interests change. All Outside Professional and Commercial Interests Forms and Conflict of Interest Questionnaires are reviewed by the Corporate Compliance Manager. Form 990, Part VI, Section B, line 15 The Compensation Committee of the Board of Directors is responsible for approving the compensation of the CEO, which they document in an Employment Agreement between the Board of Directors and the CEO. The Compensation Committee also approves the compensation of the EVP/CFO, the EVP/Chief Medical Officer, two persons with the title EVP/co-Chief Operating Officer, all officers of the Hospital, and the Chair of the Department of Pediatrics, who is a key employee. The Compensation Committee is composed of independent outside directors who receive no compensation for their participation on the Board. The Compensation Committee engages an outside consulting firm, whose practice includes the analysis of compensation for not-for-profit hospitals, to advise the Committee with regard to market data and analysis, which was used to establish compensation. A letter from the compensation consultant opining on the reasonableness of the compensation was provided to the Committee and documentation of the Committee's deliberations and decision are in existence. Form 990, Part VI, Section C, line 19 The organization's governing documents, conflict of interest policy, and audited financial statements are available upon request. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net unrealized gains on investments: 5,862,201. Other changes in unrestricted net assets 17,797,416. Friends of Children's Mercy net income 107,087. Other changes in net assets 135,855. Total to Form 990, Part XI, Line 5: 23,902,559. CMH Insurance Company LLC 1000 Bank Street Suite 100 Burlington VT 05401 Insurance for The Children's Mercy Hospital VT 40821 11122272 N/A Children's Mercy Health Network 2401 Gillham Road Kansas City MO 64108 Managed care contracts MO 0 0 N/A Children's Mercy Hospital Foundation 2401 Gillham Road Kansas City MO 64108 431564302 Investment management for Children's Mercy Hospital MO 501(C)(3) line 11, III-FI N/A 0 Friends of Children's Mercy 2401 Gillham Road Kansas City MO 64108 430961097 Support of Children's Mercy Hospital MO 501(c)(3) line 11, III-FI N/A 0 Children's Mercy's Family Health Partners Inc 2420 Pershing Kansas City MO 64108 431726517 Integrated health insurance benefits care system MO 501(C)(3) line 9 The Children's Mercy Hospital 1 Children's Mercy Hospital Self-Insurance Trust MI Trust Co NA PO Box 2977 Milwaukee WI 53201 436231807 Providing funds for malpractice claims against CMH & employees MO 501(C)(3) line 11, I The Children's Mercy Hospital 1 0 1 1 0 1 0 1 0 1 0 1 0 1 1 1 1 1 1 Children's Mercy's Family Health Partners P 14706191 Book Children's Mercy's Family Health Partners I 502752 Book Children's Mercy's Family Health Partners N 53157 Book Children's Mercy's Family Health Partners K 4624667 Book Children's Mercy's Family Health Partners B 10000000 Cash Children's Mercy Hospital Self-Insurance Trust Q 1000000 Cash