2012-08-15T13:47:43-05:00 2011-09-30 PARENTEBEARD LLC 400 MARKET STREET WILLIAMSPORT PA 17701 990 2010-10-01 610444716 ASHLAND HOSPITAL CORPORATION ASHL 6064084000 2201 LEXINGTON AVENUE ASHLAND KY 41101 PAUL MCDOWELL 6064084000 2012-08-15 1 JULIUS C GREEN CPA JD 5703236023 2012-08-15 2010 2016-02-24 21:20:13Z KING'S DAUGHTERS MEDICAL CENTER FRED L JACKSON 2201 LEXINGTON AVENUE ASHLAND KY 41101 584498660 0 X WWW.KDMC.COM X 1941 KY TO PROVIDE COMMUNITY HEALTHCARE SERVICES. TO CARE. TO SERVE. TO HEAL. 13 6 4196 363 94778 0 584947 203811 550203300 534999548 1656761 12986750 4459923 3663228 556904931 551853337 141508 113452 0 0 233478751 217826537 0 0 0 300848360 295821871 534468619 513761860 22436312 38091477 778947132 789113026 406709400 394922121 372237732 394190905 X TO CARE. TO SERVE. TO HEAL. 0 0 439727264 113452 529754751 COMMUNITY INFORMATION:KING'S DAUGHTERS ("KDMC") IS NESTLED IN THE FOOTHILLS OF THE APPALACHIAN MOUNTAINS, WHERE THE KENTUCKY, OHIO AND WEST VIRGINIA STATE LINES MEET. KDMC'S PRIMARY SERVICE AREA ENCOMPASSES SIX COUNTIES IN TWO STATES, BOYD, CARTER, GREENUP AND LAWRENCE COUNTIES IN KENTUCKY AND LAWRENCE AND SCIOTO COUNTIES IN OHIO. MORE THAN 272,000 PEOPLE (U.S. CENSUS BUREAU) LIVE IN THE SIX-COUNTY PRIMARY SERVICE AREA. WITH THE EXCEPTION OF TWO CITIES WITH POPULATIONS AROUND 20,000 THE AREA IS VERY RURAL, COVERING NEARLY 2,400 SQUARE MILES WITH A POPULATION DENSITY OF 113 PEOPLE PER SQUARE MILE. MORE THAN 18% OF THE POPULATION LIVES IN POVERTY, WITH CHILDREN IN POVERTY AT MORE THAN 25%. THE POPULATION IS 96% WHITE, 2% BLACK AND ALL OTHER RACES 2%. THE AVERAGE MEDIAN INCOME IS $36,575, WELL BELOW THE LEVELS FOR KENTUCKY, OHIO AND THE NATION. AVERAGE UNEMPLOYMENT IS 10.1% COMPARED TO 8.9% NATIONALLY AND 9.5% FOR KENTUCKY. THE KENTUCKY BEHAVIORAL RISK FACTOR SURVEILLANCE SYSTEM SHOWS THAT IN 2008, IN KDMC'S KENTUCKY MARKET AREA, 18.9% OF THOSE AGED 19-64 YEARS LACKED ANY FORM OF HEALTHCARE COVERAGE, COMPARED TO 14.4% FOR THE STATE AND 14.5% FOR THE NATION. KDMC'S OHIO MARKET AREA SHOWS 17.4% WITHOUT HEALTHCARE COVERAGE COMPARED TO 12.5% IN THE STATE AND 14.5% IN THE NATION.COMMUNITY BUILDING ACTIVITIES:TO REACH OUR COMMUNITIES AND TO PROVIDE THE BEST OUTREACH SERVICES POSSIBLE, WE PARTNERED WITH A DIVERSE GROUP OF BOTH PUBLIC AND PRIVATE ENTITIES. WE HAVE ESTABLISHED PARTNERSHIPS WITH AREA RETAILERS, HEALTH DEPARTMENTS, FACTORIES AND CHEMICAL PLANTS, CITY OF ASHLAND, LOCAL EMS SERVICES, AMERICAN RED CROSS, SUSAN G. KOMEN FOR THE CURE, CARES (LOCAL REFERRAL AGENCY), COMMUNITY KITCHEN, SAFE HARBOR, 16 SCHOOL DISTRICTS AND NEARBY COLLEGES AND UNIVERSITIES, NAACP, ASHLAND FAIR HOUSING, SHELTER OF HOPE, ASHLAND AREA YMCA, KENTUCKY STATE POLICE, OHIO HIGHWAY PATROL, AREA SENIOR CENTERS AND MORE THAN 150 CHURCHES. WE SEND OUR HEALTH TEAMS OUT INTO THE COMMUNITY TO MEET PEOPLE ON THEIR TIME AND IN THE PLACES THAT ARE COMFORTABLE FOR THEM - SCHOOLS, MALLS, LIBRARIES, WORKSITES, GROCERY STORES AND MORE. SERVICES PROVIDED INCLUDE MORE THAN 75 SCREENING AND EDUCATIONAL EVENTS PER MONTH, MOBILE HEALTH SERVICES, COORDINATION OF THE CPR TRAINING CENTER, AND A MEALS ON WHEELS PROGRAM. PATIENTS WITH ABNORMAL RESULTS FROM OUR HEALTH SCREENINGS RECEIVE A FOLLOW-UP LETTER REMINDING THEM OF THE IMPORTANCE OF SHARING THE RESULTS WITH THEIR HEALTHCARE PROVIDER. IDENTIFYING THOSE AT RISK FOR HEART AND VASCULAR DISEASE, EDUCATING THE PUBLIC ABOUT HEART ATTACK AND STROKE SIGNS AND SYMPTOMS, AND REDUCING TOBACCO USE THROUGHOUT THE REGION ARE THREE IMPORTANT AREAS OF FOCUS. OUR REGION HAS A HIGH INCIDENCE OF UNDIAGNOSED OR UNTREATED HEART AND VASCULAR DISEASE. HEALTH CONNECTIONS CONTINUES TO EXPAND SERVICES BY OFFERING FREE COMPREHENSIVE HEALTHY HEART AND VASCULAR SCREENINGS TO HIGH RISK POPULATIONS. THIS SCREENING MAY INCLUDE A FASTING LIPID PANEL, TOTAL CHOLESTEROL, AN ANKLE BRACHIAL INDEX, BLOOD PRESSURE, BLOOD SUGAR AND AN EKG. WE ARE RAISING AWARENESS ABOUT THE CARDIOVASCULAR RISKS AND CATCHING DISEASE THAT HAD NOT BEEN DIAGNOSED SO IT CAN BE TREATED. WE ARE MAKING SURE THE PARTICIPANTS KNOW THEIR HEART RISK NUMBERS. OUR HEART SCREENINGS PROVIDED 6,861 BLOOD PRESSURE (44% ABNORMAL), 5,531 BLOOD SUGAR (14% ABNORMAL) AND 5,271 TOTAL CHOLESTEROL (34% ABNORMAL) SCREENINGS IN 2011. THESE SCREENINGS HAD MORE THAN 2,100 PARTICIPANTS. THE AGE ADJUSTED CARDIOVASCULAR MORTALITY RATE FOR THE SERVICE AREA HAS IMPROVED 22.7% FROM 1998 TO 2006.OTHER INFORMATION:WITH THE EXCEPTION OF TWO CITIES WITH A POPULATION AROUND 20,000, KDMC'S MARKET AREA IS VERY RURAL COVERING NEARLY 2,000 SQUARE MILES WITH A POPULATION DENSITY OF 129 PEOPLE PER SQUARE MILE. BARRIERS TO HEALTHCARE INCLUDE LACK OF TRANSPORTATION, LOW HEALTH LITERACY AND GEOGRAPHIC ISOLATION. IN ADDITION THERE ARE CULTURAL BARRIERS INCLUDING A DISTRUST OF HEALTHCARE PROVIDERS WHICH IMPACTS HEALTH AND HEALTH-RELATED COMMUNICATION. KING'S DAUGHTERS TAKES AN ACTIVE ROLE IN RECRUITING AND RETAINING PHYSICIANS IN THESE RURAL, UNDERSERVED AREAS. EFFORTS ARE MADE TO INTEGRATE THE PHYSICIAN INTO THE NETWORK OF THE COMMUNITY THROUGH FREE SCREENINGS, SPEAKING PRESENTATIONS AND ATTENDANCE AT COMMUNITY EVENTS THUS BUILDING TRUST AND POSITIVE RELATIONSHIPS.FAMILIES THAT LIVE OUTSIDE OUR COMMUNITY WITH LIMITED RESOURCES (FINANCIAL, TRANSPORTATION, FAMILY SUPPORT) WHO HAVE A LOVED ONE IN CRITICAL CARE ARE REFERRED BY KDMC SOCIAL WORKERS TO THE KDMC HOSPITALITY HOUSE. GUESTS OF THE HOSPITALITY HOUSE INCLUDE ADULT FAMILY MEMBERS OR CAREGIVERS OF EITHER CRITICALLY ILL PATIENTS RECEIVING CARE AT KDMC, OR QUALIFYING OUTPATIENTS RECEIVING EXTENDED THERAPEUTIC CARE. IN NEARLY ALL CASES, GUESTS LIVE OUTSIDE A 30-MILE RADIUS OF ASHLAND. THE HOUSE DOES NOT CHARGE FAMILIES TO STAY, HOWEVER A NUMBER OF THE GUESTS MADE A VOLUNTARY CONTRIBUTION.FAMILY CARE CENTERS PROVIDE SAMPLE MEDICATIONS TO INDIGENT PATIENTS. THIS PROGRAM IS PROVIDED AT NO COST TO THE PATIENT. FAMILY CARE CENTER STAFF RECORDS THE MEDICATIONS, LABEL FOR USE AND DOCUMENT THE DISTRIBUTION.THE TOBACCO CESSATION PROGRAM AND LUNG HEALTH PROGRAM OFFER SUPPORT THROUGH TOBACCO CESSATION CLASSES AND ASSISTANCE TO PATIENTS DIAGNOSED WITH LUNG CANCER AT KDMC. THE LUNG HEALTH PROGRAM INCLUDES A CLINICAL NURSE SPECIALIST WHO PROVIDES PATIENT NAVIGATION FOR NEWLY DIAGNOSED LUNG CANCER PATIENTS. THE PROGRAM INCLUDES TWO LUNG HEALTH ADVOCATES THAT PROVIDE TOBACCO CESSATION COUNSELING AND CLASSES. DURING THE FISCAL YEAR, KDMC PROVIDED 811 FREE FLU SHOTS THROUGHOUT THE COMMUNITY. WITH THE FLU SHOT PROGRAM, WE STRIVE TO REACH POPULATIONS THAT ARE AT HIGHER RISK OF CONTRACTING THE FLU. TARGETED POPULATIONS INCLUDE THOSE DESIGNATED HIGH RISK BY THE CENTER FOR DISEASE CONTROL, CAREGIVERS OF VULNERABLE POPULATIONS INCLUDING HOMELESS, INDIGENT, SCHOOL TEACHERS, DAY CARE WORKERS AND CAREGIVERS FOR THE ELDERLY. FLU SHOTS ARE DELIVERED THROUGH A VARIETY OF SETTINGS AND IN MULTIPLE COUNTIES SERVED BY THE MEDICAL CENTER.THE PASTORAL CARE SERVICE DEPARTMENT EMPLOYS FOUR FULL-TIME CHAPLAINS AND AN ADMINISTRATIVE ASSISTANT TO PROVIDE SPIRITUAL AND EMOTIONAL SUPPORT FOR OUR PATIENTS, THEIR FAMILIES AND FRIENDS AND FOR THE STAFF OF KING'S DAUGHTERS MEDICAL CENTER. ONE-ON-ONE COUNSELING AS WELL AS GROUP COUNSELING, WHICH INCLUDES GRIEF SUPPORT AND PALLIATIVE CARE FOR END-OF-LIFE PATIENTS AND THEIR FAMILIES, IS OFFERED BY THE DEPARTMENT.AFFILIATED HEALTH CARE SYSTEM ROLES:KING'S DAUGHTERS MEDICAL CENTER IS PART OF AN AFFILIATED HEALTH CARE DELIVERY SYSTEM. THE SYSTEM PROVIDES PHYSICIAN SERVICES THROUGH TWO AFFILIATES, KENTUCKY HEART INSTITUTE AND KING'S DAUGHTERS MEDICAL SPECIALTIES, INC. BOTH AFFILIATES PROVIDE CHARITY CARE AND PARTICIPATE IN GOVERNMENT PROGRAMS. 439727264 1 1 0 1 0 0 0 0 0 1 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 1 0 0 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 1 0 0 1 384 0 1 4196 1 1 1 0 0 0 0 0 0 0 0 0 X 13 6 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 KY X AUTUMN MCFANN CONTROLLER 6064089631 2201 LEXINGTON AVENUE ASHLAND KY 41101 X ADDINGTON STEPHEN 0.30 X 0 0 0 BLAIR JACK 0.30 X 0 0 0 BORDERS CHARLIE 0.30 X 0 0 0 BOYKIN MAYOLA MD 1.30 X 24000 0 0 BURNETTE TOM 0.30 X 0 0 0 CANTRELL JIM 0.30 X 0 0 0 CASSIDY DAN 0.30 X 0 0 0 HAMMONDS DONALD DO 0.30 X 0 0 0 HILLMAN TRACY 0.30 X 0 0 0 MECCA RAYMOND MD 0.50 X 1000 0 0 STEWART JOHN 0.30 X 0 0 0 JONES DAVID 1.00 X X 0 0 0 JACKSON FRED 40.00 X X 959193 0 419480 MCDOWELL PAUL 40.00 X 497185 0 157130 MAHANEY SHERYL 40.00 X 356898 0 119271 FIORET PHILIP MD 40.00 X 769486 20000 187318 HIGGINS LARRY 40.00 X 414010 0 133907 WHITLATCH KRISTIE 40.00 X 441868 0 138400 BAILIFF ROBERT MD 40.00 X 479916 0 22553 GUIAB ROBIN MD 40.00 X 462710 0 29032 MARCUM JENAWIK M 40.00 X 457342 0 29711 SANCHEZ-VANHOOSE TRACI MD 40.00 X 473508 0 19841 SMITH PAUL DO 40.00 X 466575 0 14494 CORBITT PATRICIA 40.00 X 165192 0 21594 LUCAS ROBERT 40.00 X 288573 0 90673 PARIKH MANISH MD 40.00 X 110071 0 0 6367527 20000 1383404 131 1 1 0 TRI-STATE RADIOLOGY ASSOCIATES POBOX 2408 ASHLAND KY 41105 RADIOLOGISTS 3409530 DELOITTE CONSULTING LLP POBOX 7247-6447 PHILADELPHIA PA 19170 CONSULTANTS 3009242 ASHLAND ANESTHESIOLOGY ASSOCIATES POBOX 986 ASHLAND KY 41105 ANESTHESIOLOGISTS 1565430 STITES & HARBISON PLLC 250 W MAIN ST 2300 LEXINGTON FINAN LEXINGTON KY 40507 LAWYERS 1171267 MARILLIA DESIGN & CONSTRUCTION 259 WEST SHORT STREET SUITE 325 LEXINGTON KY 40507 CONSTRUCTION CONTRACTORS 726364 57 20000 183811 203811 NET PATIENT SERVICE RE 621110 526280764 526280764 MEANINGFUL USE REVENUE 621110 5192214 5192214 PHARMACY 446110 3526570 3473987 52583 534999548 8807188 1659 8805529 2143164 3150 1209069 2520 934095 630 934725 630 934095 34304588 1308708 30042681 1391053 4261907 -82345 4179562 4179562 CAFETERIA 722210 2370667 3099 2367568 MEDICAL RECORDS 561499 105732 105732 VALET REVENUE 561499 88184 88184 163920 36807 127113 2728503 551853337 534946965 94778 16607783 113452 113452 4645342 4645342 165692184 148800577 16891607 6661338 5982548 678790 29017390 26060518 2956872 11810283 10407221 1403062 3262937 133437 3129500 127940 127940 28602 28602 527998 527998 33081902 22105700 10976202 2684140 403 2683737 3044773 1792062 1252711 1160557 1160557 5665007 1646628 4018379 422122 327439 94683 8383 8383 9303730 3931 9299799 36353225 32331430 4021795 4952638 96883 4855755 SUPPLIES 98275427 95104568 3170859 PROVISION FOR BAD DEBTS 52828740 52828740 REPAIR AND MAINTENANCE 13719736 12201907 1517829 PHYSICIAN FEES 13108366 13108366 TAXES (INCLUDING PROVID 7699800 7625008 74792 9565848 7858904 1706944 513761860 439727264 74034596 0 13075 49154674 85534850 27329088 68308397 72959350 3017230 1872493 9517272 10389576 9582091 9769950 652332786 333921987 326386943 318410799 158600089 182075735 9845848 8722251 108141337 108429110 778947132 789113026 62939282 65168270 253307026 248738461 14638476 8212718 15000000 60824616 72802672 406709400 394922121 X 372237732 394190905 372237732 394190905 778947132 789113026 X 38091477 -16138304 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 28602 28602 0 EXPLANATION OF OTHER LOBBYING ACTIVITIES: PART II-B, LINE 1I: $25,409: A PORTION OF THE DUES PAID TO THE KENTUCKY HOSPITAL ASSOCIATION ATTRIBUTABLE TO LOBBYING EXPENSES. $3,193: A PORTION OF THE DUES PAID TO THE AMERICAN MEDICAL REHABILITATION PROVIDERS ATTRIBUTABLE TO LOBBYING EXPENSES. 27831018 27831018 360651204 154164218 206486986 253144160 174916133 78228027 10706404 4841636 5864768 318410799 SELF INSURANCE FUNDS 9708778 TRUSTEED FUNDS 35829320 DEFERRED FINANCING COSTS 2791479 OTHER ASSETS 499383 DUE FROM RELATED PARTIES 59600150 108429110 MALPRACTICE COSTS 12084910 ACCRUED PENSION 21247000 OTHER LONG-TERM LIABILITIES 1940466 DERIVATIVES OBLIGATION 20112124 ESTIMATED THIRD PARTY PAYOR SETTLEMENTS 17418172 72802672 551853337 513761860 38091477 -14501382 -1636922 -16138304 21953173 534284609 -14501382 -4275180 -18776562 553061171 -1207834 -1207834 551853337 514973449 1211589 1211589 513761860 0 513761860 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: THE MEDICAL CENTER, KHF, KBNH, CDC, KHI, KDMT, KDMS, AND THE FOUNDATION HAVE BEEN RECOGNIZED BY THE IRS AS SECTION 501(C)(3) CHARITABLE ORGANIZATIONS. SECTION 501(C)(3) ORGANIZATIONS ARE EXEMPT FROM FEDERAL AND STATE INCOME TAXES ON RELATED INCOME. THESE ORGANIZATIONS DO NOT ENGAGE IN SIGNIFICANT UNRELATED ACTIVITIES AND THEREFORE NO TAX IS RECORDED. PART XI, LINE 8 - OTHER ADJUSTMENTS: PENSION LIABILITY ADJUSTMENT 1,933,904. AMORTIZATION OF SWAP AGREEMENT 79,556. CHANGE IN MARKET VALUE INTEREST RATE SWAP -4,152,944. CHANGE IN MARKET VALUE SELF INSURANCE FUNDS -122,236. TRANSFER FROM AFFILIATE 624,798. PART XII, LINE 2D - OTHER ADJUSTMENTS: CHANGE IN MARKET VALUE INTEREST RATE SWAP -4,152,944. CHANGE IN MARKET VALUE SELF INSURANCE FUNDS -122,236. PART XII, LINE 4B - OTHER ADJUSTMENTS: RENTAL EXPENSES -1,211,589. GIFT FOR CAPITAL ITEM NOT REPORTED AS OPERATING INCOME ON F/S 3,755. PART XIII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES 1,211,589. 1 1 1 X 1 X 1 1 1 0 1 1 17099767 17099767 0.03710 54611607 40155907 14455700 0.03140 71711374 40155907 31555467 0.06850 2145046 2145046 0.00470 328891 328891 0.00070 2350596 2181289 169307 0.00040 575421 462857 112564 0.00020 51417 51417 0.00010 5451371 2644146 2807225 0.00610 77162745 42800053 34362692 0.07460 199074 199074 0.00040 199074 199074 0.00040 1 16682664 3589825 148989304 157958306 -8969002 X 1 1 1 1 ASHLAND HOSPITAL CORPORATION

2201 LEXINGTON AVENUE ASHLAND KY 41101

X X X NOT REQUIRED 1 PART I, LINE 7: KDMC USED WORKSHEET 2 PROVIDED IN THE 2010 SCHEDULE H INSTRUCTIONS (FORM 990) TO CALCULATE A COST OF CHARGE RATIO. THIS RATIO WAS USED TO CALCULATE CHARITY CARE AT COST. ALL OTHER ITEMS WERE REPORTED AT NET EXPENSE. PART I, LINE 7G: THERE ARE NO COSTS ATTRIBUTABLE TO PHYSICIAN CLINICS INCLUDED AS SUBSIDIZED HEALTH SERVICES. PART I, L7 COL(F): THE AMOUNT OF BAD DEBT EXPENSE THAT WAS SUBTRACTED IN ORDER TO CALCULATE THE PERCENT OF TOTAL EXPENSE WAS $52,828,740. PART II: TO REACH OUR COMMUNITIES AND TO PROVIDE THE BEST OUTREACH SERVICES POSSIBLE, WE PARTNER WITH A DIVERSE GROUP OF BOTH PUBLIC AND PRIVATE ENTITIES. WE HAVE ESTABLISHED PARTNERSHIPS WITH AREA RETAILERS, HEALTH DEPARTMENTS, FACTORIES, CITY OF ASHLAND, LOCAL EMS SERVICES, AMERICAN RED CROSS, SUSAN G. KOMEN FOR THE CURE, CARES, COMMUNITY KITCHEN, SAFE HARBOR, 16 SCHOOL DISTRICTS AND NEARBY COLLEGES AND UNIVERSITIES, SHELTER OF HOPE, ASHLAND AREA YMCA, AREA SENIOR CITIZENS CENTERS AND MORE THAN 150 CHURCHES. WE SEND OUR OUTREACH TEAMS OUT INTO THE COMMUNITY TO MEET PEOPLE ON THEIR TIME AND IN THE PLACES THAT ARE COMFORTABLE FOR THEM - SCHOOLS, MALLS, CHURCHES, LIBRARIES, WORKSITES, GROCERY STORES AND MORE. SERVICES PROVIDED INCLUDE MORE THAN 75 SCREENING AND EDUCATIONAL EVENTS EACH MONTH, MOBILE HEALTH SERVICES, COORDINATION OF A REGIONAL CPR TRAINING CENTER AND A MEALS ON WHEELS PROGRAM. PATIENTS WITH ABNORMAL RESULTS FROM OUR HEALTH SCREENINGS RECEIVE A FOLLOW-UP LETTER REMINDING THEM OF THE IMPORTANCE OF SHARING THE RESULTS WITH THEIR HEALTHCARE PROVIDER.IDENTIFYING THOSE AT RISK FOR HEART AND VASCULAR DISEASE, EDUCATING THE PUBLIC ABOUT HEART ATTACK AND STROKE SIGNS AND SYMPTOMS, AND REDUCING TOBACCO USE THROUGHOUT THE REGION ARE THREE IMPORTANT AREAS OF FOCUS. OUR REGION HAS A HIGH INCIDENCE OF UNDIAGNOSED OR UNTREATED HEART AND VASCULAR DISEASE. OUR "HEALTH CONNECTIONS" PROGRAM CONTINUES TO EXPAND SERVICES BY OFFERING FREE COMPREHENSIVE HEALTHY HEART AND VASCULAR SCREENINGS TO HIGH RISK POPULATIONS. THIS SCREENING MAY INCLUDE A FASTING LIPID PANEL, TOTAL CHOLESTEROL, AN ANKLE BRACHIAL INDEX, BLOOD PRESSURE, BLOOD SUGAR OR AN EKG. WE ARE RAISING AWARENESS ABOUT THE CARDIOVASCULAR RISKS AND CATCHING DISEASE THAT HAD NOT BEEN DIAGNOSED SO IT CAN BE TREATED. WE ARE MAKING SURE THE PARTICIPANTS KNOW THEIR HEART RISK NUMBERS. OUR TOTAL HEART SCREENINGS PROVIDED 6,861 BLOOD PRESSURE (44% ABNORMAL), 5,531 BLOOD SUGAR (14% ABNORMAL) AND 5,271 TOTAL CHOLESTEROL (34% ABNORMAL) SCREENINGS IN 2011. OUR "HEALTHY HEART" SCREENINGS HAD MORE THAN 2,100 PARTICIPANTS. THE AGE ADJUSTED CARDIOVASCULAR MORTALITY RATE FOR THE SERVICE AREA HAS IMPROVED 22.7% FROM 1998 TO 2006.WITH THE EXCEPTION OF TWO CITIES WITH A POPULATION AROUND 20,000, KDMC'S MARKET AREA IS VERY RURAL COVERING NEARLY 2,000 SQUARE MILES WITH A POPULATION DENSITY OF 150 PEOPLE PER SQUARE MILE. BARRIERS TO HEALTHCARE INCLUDE LACK OF TRANSPORTATION, LOW HEALTH LITERACY AND GEOGRAPHIC ISOLATION. IN ADDITION THERE ARE CULTURAL BARRIERS INCLUDING A DISTRUST OF HEALTHCARE PROVIDERS WHICH IMPACTS HEALTH AND HEALTH-RELATED COMMUNICATION. KING'S DAUGHTERS TAKES AN ACTIVE ROLE IN RECRUITING AND RETAINING PHYSICIANS IN THESE RURAL, UNDERSERVED AREAS. EFFORTS ARE MADE TO INTEGRATE THE PHYSICIAN INTO THE NETWORK OF THE COMMUNITY THROUGH FREE SCREENINGS, SPEAKING PRESENTATIONS AND ATTENDANCE AT COMMUNITY EVENTS THUS BUILDING TRUST AND POSITIVE RELATIONSHIPS.FAMILIES THAT LIVE OUTSIDE OUR COMMUNITY WITH LIMITED RESOURCES (FINANCIAL, TRANSPORTATION, FAMILY SUPPORT) WHO HAVE A LOVED ONE IN CRITICAL CARE ARE REFERRED BY KDMC SOCIAL WORKERS TO THE KDMC HOSPITALITY HOUSE. GUESTS OF THE HOSPITALITY HOUSE INCLUDE ADULT FAMILY MEMBERS OR CAREGIVERS OF EITHER CRITICALLY ILL PATIENTS RECEIVING CARE AT KDMC, OR QUALIFYING OUTPATIENTS RECEIVING EXTENDED THERAPEUTIC CARE. IN NEARLY ALL CASES, GUESTS LIVE OUTSIDE A 30-MILE RADIUS OF ASHLAND. THE HOUSE DOES NOT CHARGE FAMILIES TO STAY, HOWEVER A NUMBER OF THE GUESTS MADE A VOLUNTARY CONTRIBUTION.FAMILY CARE CENTERS PROVIDE SAMPLE MEDICATIONS TO INDIGENT PATIENTS. THIS PROGRAM IS PROVIDED AT NO COST TO THE PATIENT. FAMILY CARE CENTER STAFF RECORDS THE MEDICATIONS, LABELS FOR USE AND DOCUMENTS THE DISTRIBUTION.THE TOBACCO CESSATION PROGRAM AND LUNG HEALTH PROGRAM OFFER SUPPORT THROUGH TOBACCO CESSATION CLASSES AND ASSISTANCE TO PATIENTS DIAGNOSED WITH LUNG CANCER AT KDMC. THE LUNG HEALTH PROGRAM INCLUDES A CLINICAL NURSE SPECIALIST WHO PROVIDES PATIENT NAVIGATION FOR NEWLY DIAGNOSED LUNG CANCER PATIENTS. THE PROGRAM INCLUDES TWO LUNG HEALTH ADVOCATES THAT PROVIDE TOBACCO CESSATION COUNSELING AND CLASSES. DURING THE FISCAL YEAR, KDMC PROVIDED 811 FREE FLU SHOTS THROUGHOUT THE COMMUNITY. WITH THE FLU SHOT PROGRAM, WE STRIVE TO REACH POPULATIONS THAT ARE AT HIGHER RISK OF CONTRACTING THE FLU. TARGETED POPULATIONS INCLUDE THOSE DESIGNATED HIGH RISK BY THE CENTER FOR DISEASE CONTROL, CAREGIVERS OF VULNERABLE POPULATIONS INCLUDING HOMELESS, INDIGENT, SCHOOL TEACHERS, DAY CARE WORKERS AND CAREGIVERS FOR THE ELDERLY. FLU SHOTS ARE DELIVERED THROUGH A VARIETY OF SETTINGS AND IN MULTIPLE COUNTIES SERVED BY THE MEDICAL CENTER.THE PASTORAL CARE SERVICE DEPARTMENT EMPLOYS FOUR FULL-TIME CHAPLAINS AND AN ADMINISTRATIVE ASSISTANT TO PROVIDE SPIRITUAL AND EMOTIONAL SUPPORT FOR OUR PATIENTS, THEIR FAMILIES AND FRIENDS AND FOR THE STAFF OF KING'S DAUGHTERS MEDICAL CENTER. ONE-ON-ONE COUNSELING AS WELL AS GROUP COUNSELING, WHICH INCLUDES GRIEF SUPPORT AND PALLIATIVE CARE FOR END-OF-LIFE PATIENTS AND THEIR FAMILIES, IS OFFERED BY THE DEPARTMENT. PART III, LINE 4: MANAGEMENT MAINTAINS AN ALLOWANCE FOR DOUBTFUL ACCOUNTS TO RESERVE FOR ESTIMATED LOSSES BASED ON THE LENGTH OF TIME THE ACCOUNT HAS BEEN PAST DUE, THIRD PARTY PAYER CLASSIFICATION, AND HISTORICAL EXPERIENCE. BAD DEBT IS CLASSIFIED AS AN OPERATING EXPENSE WHICH IS CONSISTENT WITH THE HFMA PRINCIPLES AND PRACTICES BOARD STATEMENT NO. 15.KDMC USED WORKSHEET 2 PROVIDED IN THE 2010 SCHEDULE H INSTRUCTIONS (FORM 990) TO CALCULATE A COST TO CHARGE RATIO. THIS RATIO WAS USED TO CALCULATE BAD DEBT EXPENSE AT COST. BAD DEBT EXPENSE IS RECORDED AFTER ANY DISCOUNTS AND PAYMENTS ARE MADE ON PATIENT ACCOUNTS. THE BUSINESS OFFICE ESTIMATED AN AMOUNT BASED ON A NUMBER OF "NO-RESPONSE" APPLICATIONS ANNUALLY. THEY THEN APPLY THIS NUMBER TO A PRO-RATED AVERAGE COST OF IP AND OP CASES TO ESTIMATE THE COST. PART III, LINE 8: THE HOSPITAL CONTINUES TO PROVIDE CARE TO ALL PRESENTING AND ADMITTED PATIENTS, REGARDLESS OF ABILITY OR PAY. NOTWITHSTANDING THE COSTS TO PROVIDE CARE, RECEIVING "LESS" THAN WHAT IT COSTS TO PROVIDE ADEQUATE CARE TO MEDICARE COVERED LIVES DOES THE HOSPITAL A DISSERVICE. THIS SHORTFALL SHOULD COUNT AS A COMMUNITY BENEFIT. THE HOSPITAL USES THE ALLOWABLE COSTS PER THE MEDICARE COST REPORT. PART III, LINE 9B: THE HOSPITAL DOES HAVE A WRITTEN POLICY FOR BAD DEBT. IT IS A SYSTEM PROGRESSION WITH THREE PATIENT STATEMENTS, THREE LETTERS FROM CREDIT COLLECTIONS, INC., AND IF NO PAYMENT ARRANGEMENTS ARE MADE DURING THIS TIME, THERE IS AUTOMATION TO THE COLLECTION AGENCY. EACH BILL THAT A PATIENT RECEIVES HAS A STATEMENT STATING IF THEY ARE UNABLE TO PAY THEIR BILL TO CONTACT THE HOSPITAL'S FINANCIAL ASSISTANCE TEAM WITH A DIRECT LINE NUMBER. ALSO, EACH SELF-PAY PATIENT IS CONTACTED BY THE HOSPITAL'S MEDICAID ELIGIBILITY VENDOR AS WELL AS RECEIVING A FINANCIAL ASSISTANCE APPLICATION. PART VI, LINE 2: WE USE A VARIETY OF RESOURCES TO HELP US MAKE DECISIONS ON HOW TO BEST TARGET OUR ACTIVITIES. WE'VE CONDUCTED INFORMAL NEEDS ASSESSMENTS, ANALYZED STATE AND COUNTY MORTALITY DATA AND TALKED WITH SCHOOL OFFICIALS, NON-PROFIT AGENCIES AND ELECTED OFFICIALS ABOUT TRENDS AND ISSUES. ONCE WE KNOW WHAT ISSUES WE WANT TO TARGET, OUR COMMUNITY HEALTH INITIATIVES ARE BUILT INTO THE MEDICAL CENTER'S THREE-YEAR STRATEGIC PLAN. IN 2011, THE CORPORATE GOAL WAS TO PROMOTE WELLNESS THROUGH AT LEAST 180 COMMUNITY HEALTH SCREENINGS AND EDUCATIONAL PROGRAMS THROUGH THE PARTICIPATION OF NO LESS THAN 2,461 KDMC TEAM MEMBERS, PHYSICIANS AND ALLIED HEALTH PROFESSIONALS AS VOLUNTEERS. THE KDMC TEAM EXCEEDED THIS GOAL BY PROVIDING 289 SCREENINGS AND EDUCATIONAL PROGRAMS WITH 2,663 TEAM MEMBERS AND PROVIDERS VOLUNTEERING MORE THAN 29,000 HOURS. PART VI, LINE 3: THE MEDICAL CENTER'S FINANCIAL ASSISTANCE POLICY PROVIDES DIRECTION FOR FREE OR DISCOUNTED SERVICES TO RESIDENTS OF THE COMMUNITY WHO HAVE INADEQUATE FINANCIAL RESOURCES TO PAY FOR NECESSARY HEALTHCARE SERVICES PROVIDED BY KDMC. THE POLICY STATES THAT THE MEDICAL CENTER WILL NOT DENY CARE TO ANY PATIENT REQUIRING CARE DUE TO THEIR INABILITY TO PAY. THE FINANCIAL ASSISTANCE POLICY PROVIDES GUIDANCE TO PROVIDING ASSISTANCE BASED ON SLIDING SCALE METHODOLOGY AND THE FEDERAL POVERTY GUIDELINES ESTABLISHED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES. PATIENTS REQUIRING CARE WITH INCOME BELOW 300% OF THE FEDERAL POVERTY LEVEL QUALIFY FOR FREE OR REDUCED COST SERVICES. THE FINANCIAL ASSISTANCE PROGRAM IS ON THE KDMC WEBSITE AND THE PHONE NUMBER TO ACCESS INFORMATION IS PROVIDED TO PATIENTS THROUGH THE PATIENT INFORMATION GUIDE AT ADMITTANCE TO THE HOSPITAL. KDMC WORKS TO IDENTIFY PATIENTS THAT MAY HAVE LIMITED RESOURCES AND OFFERS FINANCIAL ASSISTANCE WHEN APPROPRIATE. THERE ARE SIGNS POSTED IN VARIOUS REGISTRATION AREAS INFORMING PATIENTS OF THE PHONE NUMBER TO CALL IF THEY NEED FINANCIAL ASSISTANCE. ON EACH PATIENT STATEMENT THE INFORMATION IS ALSO PRINTED WITH THE PHONE NUMBER. WE ALSO HAVE STAFF IN THE OUTPATIENT IMAGING CENTER, HEART AND VASCULAR CENTER, ADMITTING AND PRE ADMISSION TESTING AREAS. ALL SELF-PAY PATIENTS RECEIVE CORRESPONDENCE AND PHONES CALLS AND INPATIENTS RECEIVE VISITS FROM OUR MEDICAID ELIGIBILITY VENDOR IN REFERENCE TO GOVERNMENT PROGRAMS. PART VI, LINE 4: KDMC IS NESTLED IN THE FOOTHILLS OF THE APPALACHIAN MOUNTAINS, WHERE THE KENTUCKY, OHIO AND WEST VIRGINIA STATE LINES MEET. OUR PRIMARY SERVICE AREA ENCOMPASSES SIX COUNTIES IN TWO STATES, BOYD, CARTER, GREENUP AND LAWRENCE COUNTIES IN KENTUCKY AND LAWRENCE AND SCIOTO COUNTIES IN OHIO. MORE THAN 272,000 PEOPLE (U. S. CENSUS BUREAU) LIVE IN THE SIX-COUNTY AREA. WITH THE EXCEPTION OF TWO CITIES WITH POPULATIONS AROUND 20,000, THE AREA IS VERY RURAL, COVERING APPROXIMATELY 2,400 SQUARE MILES WITH A POPULATION DENSITY OF 113 PEOPLE PER SQUARE MILE. MORE THAN 18% OF THE POPULATION LIVES IN POVERTY, WITH CHILDREN IN POVERTY AT MORE THAN 25%. THE POPULATION IS 97% WHITE, 2% BLACK AND ALL OTHER RACES 1%. APPROXIMATELY 20% OF THE POPULATION DID NOT GRADUATE FROM HIGH SCHOOL. THE AVERAGE MEDIAN INCOME IS $36,695, WELL BELOW THE LEVELS FOR KENTUCKY, OHIO AND THE NATION. AVERAGE UNEMPLOYMENT IS 10.8% COMPARED TO 9.6% NATIONALLY AND 10% FOR KENTUCKY. THE KENTUCKY BEHAVIORAL RISK FACTOR SURVEILLANCE SYSTEM SHOWS THAT IN 2007, IN KDMC'S KENTUCKY MARKET AREA, 15.7% OF THOSE AGE 19-64 YEARS LACKED ANY FORM OF HEALTHCARE COVERAGE, COMPARED TO 14.5% IN THE NATION. PART VI, LINE 6: KING'S DAUGHTERS MEDICAL CENTER ("KDMC") IS A LOCALLY CONTROLLED, NOT-FOR-PROFIT, 465-BED REGIONAL REFERRAL CENTER, COVERING A 150-MILE RADIUS THAT INCLUDES SOUTHERN OHIO, EASTERN KENTUCKY AND WESTERN WEST VIRGINIA. KDMC OFFERS COMPREHENSIVE CARDIAC, MEDICAL, SURGICAL, PEDIATRIC, REHABILITATIVE, PSYCHIATRIC, CANCER, NEUROLOGICAL, PAIN CARE, WOUND CARE AND HOME CARE SERVICES IN ONE CONVENIENT LOCATION.THERE ARE 295 PHYSICIANS ON STAFF, AND APPROXIMATELY 1,900 CLINICAL EMPLOYEES, INCLUDING LAB TECHNICIANS, NURSES, NURSING ASSISTANTS, PHYSICAL, OCCUPATIONAL AND SPEECH THERAPISTS, RADIOLOGY TECHNICIANS, PHLEBOTOMISTS, AND SUPPORT PERSONNEL. EACH ARE HIGHLY TRAINED TO DELIVER QUALITY AND SAFE CARE TO INPATIENTS AND OUTPATIENTS. THE MEDICAL CENTER HAS:1) AN OPEN MEDICAL STAFF WITH PRIVILEGES AVAILABLE TO ALL QUALIFIED PHYSICIANS IN THE AREAS;2) A BOARD OF DIRECTORS WHO GOVERN THE ORGANIZATION. THE BOARD IS COMPRISED OF COMMUNITY AND BUSINESS LEADERS, AND PHYSICIANS REPRESENTING THE GEOGRAPHIC AREA OF OUR REGION;3) AN EMERGENCY DEPARTMENT THAT IS OPEN TO ALL PERSONS IN NEED REGARDLESS OF THEIR ABILITY TO PAY FOR SERVICES;4) PROVIDES FINANCIAL SUPPORT TO OTHER NONPROFIT ORGANIZATIONS FOR THE PURPOSE OF HEALTH PROMOTION AND COLLABORATING TO MEET UNMET NEEDS IN THE COMMUNITY.5) THE MEDICAL CENTER'S COMMUNITY RELATIONS DEPARTMENT IS FUNDED USING MEDICAL CENTER RESOURCES. THE DEPARTMENT INITIATES AND ORGANIZES HEALTH SCREENINGS AND EDUCATIONAL EVENTS DEVELOPED FOR THE SOLE PURPOSE OF IMPROVING THE HEALTH OF THOSE IN OUR REGION. THE COMMUNITY RELATIONS STAFF OFFERS: HEALTH SCREENINGS, HEALTH EDUCATION TO ADULTS AND CHILDREN, SUPPORT GROUPS, FLU SHOTS, AND SAFETY INSPECTIONS. IN FISCAL YEAR 2011, THE COMMUNITY RELATIONS DEPARTMENT PROVIDED NEARLY 300 HEALTH SCREENING EVENTS, 1074 FLU VACCINATIONS AND EDUCATED 19,000 YOUTH ABOUT THE HARMFUL EFFECTS OF TOBACCO USE AND THE IMPORTANCE OF HEALTHY EATING. ANY SURPLUS FUNDS ARE REINVESTED IN THE CAPITAL AND OPERATIONS OF THE HOSPITAL. PART VI, LINE 7: KING'S DAUGHTERS MEDICAL CENTER IS PART OF AN AFFILIATED HEALTH CARE DELIVERY SYSTEM. THE SYSTEM PROVIDES PHYSICIAN SERVICES THROUGH TWO AFFILIATES, KENTUCKY HEART INSTITUTE AND KING'S DAUGHTERS MEDICAL SPECIALTIES, INC. BOTH AFFILIATES PROVIDE CHARITY CARE AND PARTICIPATE IN GOVERNMENT PROGRAMS.PART VI LINE 7: THE COMMUNITY BENEFIT REPORT IS NOT REPORTED WITH ANY STATE BUT IT IS AVAILABLE TO THE PUBLIC. 1 UNITED WAY OF NORTHEAST KENTUCKY 1236 WINCHESTER AVENUE ASHLAND KY 41101 616000060 501(C)(3) 60785 ANNUAL SUPPORT BOYD COUNTY FISCAL COURT DBA BOYD COUNTY SHERIFF'S DEPARTMENT 2900 LOUISA STREET CATLETTSBURG KY 41129 616000733 GOVMT 8856 INVOICE FROM COMPANY 12 TASERS TO PURCHASE TASERS LEXINGTON AFFILIATE OF SUSAN G KOMEN FOR THE CURE 1795 ALYSHEBA WAY SUITE 3104 LEXINGTON KY 40509 752854969 501(C)(3) 5000 SPONSORSHIP FOR THE "I AM THE CURE" WALK IN ASHLAND 3 0 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: ANY REQUEST FOR A GRANT MUST BE SUBMITTED IN WRITING TO THE COMMUNITY SERVICES DEPARTMENT AT KDMC. THIS REQUEST MUST BE SPECIFIC AS TO THE USE OF THE GRANT BY THE REQUESTING ORGANIZATION. ONCE THE GRANT CHECK IS ISSUED, A REPRESENTATIVE FROM THE GRANTEE ORGANIZATION MUST SIGN FOR THE CHECK AND SUBMIT A REPORT ON THE USE OF THE FUNDS AS WELL AS THE NUMBER OF PEOPLE SERVED BY THE GRANT. SINCE THIS IS A SMALL COMMUNITY, KDMC ALSO USUALLY KNOWS SOMEONE WITH CLOSE ASSOCIATION TO THE ORGANIZATION OR WHO REPRESENTS THE MEDICAL CENTER ON THEIR BOARD SO THAT USE OF THE GRANT CAN BE INDIRECTLY MONITORED. X 0 1 X X X X X 0 1 0 0 0 0 0 0 0 JACKSON FRED 700728 0 147441 0 111024 0 402464 0 17016 0 1378673 0 0 0 MCDOWELL PAUL 253783 0 150887 0 92515 0 138914 0 18216 0 654315 0 65236 0 MAHANEY SHERYL 213109 0 95734 0 48055 0 102255 0 17016 0 476169 0 41848 0 FIORET PHILIP MD 465718 20000 172191 0 131577 0 167302 0 20016 0 956804 20000 89622 0 HIGGINS LARRY 209271 0 119662 0 85077 0 118851 0 15056 0 547917 0 51143 0 WHITLATCH KRISTIE 272286 0 109619 0 59963 0 121384 0 17016 0 580268 0 44897 0 BAILIFF ROBERT MD 479658 0 0 0 258 0 7350 0 15203 0 502469 0 0 0 GUIAB ROBIN MD 462572 0 0 0 138 0 7350 0 21682 0 491742 0 0 0 MARCUM JENAWIK M 429628 0 15000 0 12714 0 7350 0 22361 0 487053 0 0 0 SANCHEZ-VANHOOSE TRACI MD 473418 0 0 0 90 0 7350 0 12491 0 493349 0 0 0 SMITH PAUL DO 432437 0 25000 0 9138 0 7350 0 7144 0 481069 0 0 0 CORBITT PATRICIA 144128 0 20370 0 694 0 4976 0 16618 0 186786 0 0 0 LUCAS ROBERT 147981 0 78970 0 61622 0 73149 0 17524 0 379246 0 37432 0 PARIKH MANISH MD 110071 0 0 0 0 0 0 0 0 0 110071 0 0 0 PART I, LINE 1A GROSS-UP PAYMENTS: PAUL MCDOWELL $6,708 (100% TAXABLE); LARRY HIGGINS $3,795 (100% TAXABLE) ARE RELATED TO ANNUAL BONUSES. PART I, LINE 1B THE GROSS-UP PAYMENTS ARE APPROVED BY THE CEO FOR THE VICE-PRESIDENTS. PART I, LINE 4B SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN PAYMENTS: PAUL MCDOWELL - $65,236; SHERYL MAHANEY - $41,848; PHILIP FIORET - $89,622; LARRY HIGGINS - $51,143; KRISTIE WHITLATCH - $44,897; ROBERT LUCAS - $37,432 THE CEO AND VICE PRESIDENTS WHOSE BENEFIT IN THE QUALIFIED TAX SHELTERED ANNUITY PLAN IS LIMITED DUE TO THE IRS COMPENSATION AND BENEFIT LIMITS RECEIVE A BENEFIT RESTORATION CONTRIBUTION UNDER THE DEFERRED ANNUITY PLAN THAT IS PAID AS A TAXABLE DISTRIBUTION TO THE PARTICIPANT ANNUALLY. IN ADDITION, FRED JACKSON WILL BE PROVIDED WITH A LUMP-SUM SUPPLEMENTAL RETIREMENT BENEFIT IF HE REMAINS EMPLOYED UNTIL AGE 62. THE LUMP-SUM PAYMENT, WHEN COMBINED WITH ALL OTHER RETIREMENT BENEFITS, IS ESTIMATED TO PRODUCE A TARGET RETIREMENT INCOME REPLACEMENT EQUAL TO A PERCENTAGE OF FRED JACKSON'S FINAL AVERAGE PAY COMMENCING AT AGE 62. KENTUCKY ECONOMIC DEVELOPMENT AUTHORITY (KEDFA) 610600439 491269CG9 2008-09-24 146580000 REFUND PRIOR BOND ISSUES 0 0 0 KENTUCKY ECONOMIC DEVELOPMENT AUTHORITY (KEDFA) 610600439 491269CX2 2010-04-01 75000000 HEALTHCARE FACILITIES, BUILDING AND EQUIPMENT 0 0 0 CITY OF ASHLAND KENTUCKY 616001775 044293AA6 2010-04-01 32615000 REFUND SERIES 1998 BONDS 0 0 0 145708338 131710005 1423351 12574982 2010 1 0 1 1 73681839 1170837 36847567 35823487 0 0 0 1 33986558 33479012 507546 1 0 1 1 0 0 0 0 1 0.00000 0.00000 0.00000 1 0 0 0 0 1 0.00000 0.00000 0.00000 1 0 0 0 0 1 0.00000 0.00000 0.00000 1 0 1 1 JP MORGAN 22.500000000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 PART II, LINE 3, ISSUE A TOTAL PROCEEDS LISTED ON LINE 3 ARE NOT THE SAME AS THE ISSUE PRICE. SERIES 2008C BOND DISCOUNT $871,662. ALSO, THE BOND ISSUES LISTED ON SCHEDULE K, PART I, LINE A CONSISTED OF THREE SERIES: SERIES 2008A, CUSIP 49126CG9, ISSUE PRICE 50,000,000 VARIABLE RATE ISSUE; SERIES 2008B, CUSIP 401269CH7, ISSUE PRICE 50,000,000, VARIABLE RATE ISSUE; SERIES 2008C, CUSIP 491269CJ3, ISSUE PRICE $46,580,000, FIXED RATE ISSUE. PART II, LINE 3, ISSUE B TOTAL PROCEEDS LISTED ON LINE 3 ARE NOT THE SAME AS THE ISSUE PRICE. SERIES 2010A BOND DISCOUNT $1,318,161.05. PART II, LINE 3, ISSUE C TOTAL PROCEEDS LISTED ON LINE 3 ARE NOT THE SAME AS THE ISSUE PRICE. SERIES 2010B BOND PREMIUM $1,371,558.05 ASHLAND AREA YMCA TOM BURNETTE,BOARD DIRECTOR, IS ON THE BOARD OF ASHLAND AREA YMCA 403956 TOM BURNETTE IS ON THE ASHLAND AREA YMCA BOARD. ASHLAND HOSPITAL CORPORATION PAID THE YMCA $403,956 VIA PAYROLL DEDUCTIONS FOR DUES FOR EMPLOYEES. 0 ASHLAND OFFICE SUPPLY TOM BURNETTE, BOARD DIRECTOR, IS THE OWNER OF ASHLAND OFFICE SUPPLY 2610179 TOM BURNETTE IS OWNER OF ASHLAND OFFICE SUPPLY. THE HOSPITAL PURCHASES OFFICE SUPPLIES & EQUIPMENT FROM ASHLAND OFFICE SUPPLY. 0 FRESENIUS MEDICAL CARE DON HAMMONDS, BOARD DIRECTOR, IS MEDICAL DIRECTOR OF FRESENIUS MEDICAL CARE 1111013 DON HAMMONDS IS MEDICAL DIRECTOR OF FRESENIUS MEDICAL CARE WHICH PROVIDES INPATIENT DIALYSIS TREATMENT TO THE HOSPITAL. 0 SUSAN K SCHNEIDER SISTER OF TRACY HILLMAN, BOARD DIRECTOR 30100 EMPLOYEE PAYROLL COMPENSATION FOR SUSAN SCHNEIDER 0 VAN ART PROPERTIES JOHN STEWART, BOARD DIRECTOR, IS THE OWNER OF VAN ART PROPERTIES 476296 JOHN STEWART IS THE OWNER OF VAN ART PROPERTIES. THE HOSPITAL RENTS OFFICE SPACE FROM VAN ART PROPERTIES. 0 TRI-STATE RADIOLOGY MAYOLA BOYKIN, BOARD DIRECTOR, IS AN EMPLOYEE OF TRI-STATE RADIOLOGY 3435771 MAYOLA BOYKIN IS AN EMPLOYEE OF TRI-STATE RADIOLOGY, WHICH PROVIDES RADIOLOGY SERVICES AND SUPPORT TO THE HOSPITAL. 0 ANN SLOAN SISTER IN LAW OF JOHN STEWART, BOARD DIRECTOR 38823 EMPLOYEE PAYROLL COMPENSATION FOR ANN SLOAD 0 FORM 990, PART VI, SECTION B, LINE 11 THE 990 WILL BE REVIEWED IN DETAIL BY THE CFO AND CONTROLLER, BUT BEFORE IT IS FILED WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C KING'S DAUGHTERS MEDICAL CENTER REQUIRES ALL DIRECTORS, OFFICERS, AND KEY EMPLOYEES TO COMPLY WITH ITS CONFLICTS OF INTEREST POLICY, WHICH TRACKS THE IRS'S RECOMMENDED POLICY WITH RESPECT TO SUCH OFFICERS AND DIRECTORS. MEMBERS OF THE MEDICAL CENTER'S BOARD OF DIRECTORS MUST ANNUALLY IDENTIFY, IN WRITING, ANY INTEREST THAT COULD GIVE RISE TO A CONFLICT, SUCH AS A LEADERSHIP POSITION IN A CONFLICTING ORGANIZATION; DISCLOSURE IS NOT LIMITED TO FINANCIAL CONFLICTS. LEADERSHIP EMPLOYEES MUST ANNUALLY CERTIFY, IN WRITING, THAT NO CONFLICTS OF INTEREST EXIST. IN ADDITION, EMPLOYEES OF THE MEDICAL CENTER MUST CERTIFY THAT NO CONFLICTS OF INTEREST EXIST OR OBTAIN AN ADVANCE WAIVER OF ANY CONFLICTS. THE MEDICAL CENTER'S GENERAL COUNSEL OBTAINS ALL RELEVANT DISCLOSURES AND SIGNATURES. IF A CONFLICT OF INTEREST IS REPORTED, THE VICE PRESIDENT OR SENIOR VICE PRESIDENT TO WHOM THE REPORTING EMPLOYEE DIRECTLY OR INDIRECTLY REPORTS, TOGETHER WITH THE CEO, DETERMINES IF A CONFLICT EXISTS. IF THE REPORTING EMPLOYEE IS A SENIOR VICE PRESIDENT, THE CEO, IN CONSULTATION WITH THE GENERAL COUNSEL, DETERMINES IF A CONFLICT EXISTS. A MEMBER OF THE MEDICAL CENTER'S BOARD OF DIRECTORS REPORTS ANY CONFLICT OR POTENTIAL CONFLICT TO THE CHAIRMAN OF THE BOARD, THE CEO AND/OR THE GENERAL COUNSEL OF THE MEDICAL CENTER, AS APPROPRIATE. IF IT IS DETERMINED THAT A CONFLICT EXISTS, THE EMPLOYEE OR BOARD MEMBER IS REMOVED FROM ANY PART OF THE DECISION-MAKING PROCESS, AND HAS NO ROLE IN THE INSTANCE IN WHICH THE CONFLICT EXISTS. A BOARD MEMBER WHO REPORTS A POTENTIAL OR ACTUAL CONFLICT OF INTEREST MUST ABSTAIN FROM ANY RELEVANT DISCUSSION OR VOTE. IF A CONFLICT OF INTEREST IS DISCOVERED AFTER THE FACT, THE CEO AND VICE PRESIDENT OR SENIOR VICE PRESIDENT, TOGETHER WITH THE GENERAL COUNSEL, IF APPROPRIATE, REVIEWS THE INSTANCE IN WHICH THE CONFLICT OCCURRED. THOSE LEADERS ENSURE THAT THE CONFLICTED INDIVIDUAL DID NOT INFLUENCE DECISION-MAKING OR PROFIT FROM THE CONFLICT. THE CONFLICTED INDIVIDUAL IS REMOVED FROM ANY FURTHER INVOLVEMENT. IN ADDITION, ANY FAILURE TO REPORT CONFLICTS OF INTEREST VIOLATES THE MEDICAL CENTER'S POLICY AND COULD RESULT IN DISCIPLINARY ACTION, UP TO AND INCLUDING TERMINATION OF EMPLOYMENT OR REMOVAL FROM THE MEDICAL CENTER'S BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 15 AT THE DIRECTION OF THE HUMAN RESOURCES & COMPENSATION COMMITTEE OF THE BOARD, KDMC ENGAGES AON HEWITT, A LEADING INDEPENDENT GLOBAL HUMAN CAPITAL AND COMPENSATION CONSULTING COMPANY TO ASSIST IN DETERMINING COMPENSATION OF THE CEO AND VICE PRESIDENTS. THIS IS AN ANNUAL PROCESS AND AON HEWITT'S MOST RECENT EXECUTIVE COMPENSATION REVIEW WAS PERFORMED IN 2011. AON HEWITT IS NOT ENGAGED IN ANY OTHER WORK WITH KDMC. THE PRINCIPLE OBJECTIVE OF THIS STUDY WAS TO ASSEMBLE A DETAILED PROFILE OF THE CURRENT COMPENSATION LEVELS AVAILABLE TO EXECUTIVES MANAGING SIMILAR TASKS AND RESPONSIBILITIES AS MEMBERS OF THE KDMC EXECUTIVE TEAM, AS AON HEWITT SELECTED OTHER KEY EXECUTIVE MANAGEMENT ROLES. MOREOVER, THE OBJECTIVE WAS TO COMPILE MARKET DATA FOR EACH POSITION THAT WAS REFLECTIVE OF THE PAY LEVELS OFFERED BY INDEPENDENT, NOT-FOR-PROFIT HEALTH CARE ORGANIZATIONS OF COMPARABLE SIZE (I.E., $600 MILLION IN ANNUAL REVENUE) WITH OPERATIONS IN THE UNITED STATES. THE AON HEWITT DATA COUPLED WITH THE PERFORMANCE OF THE ORGANIZATION AS WELL AS THE PERSONAL PERFORMANCE OF EACH EXECUTIVE IS THE BASIS FOR KDMC'S HUMAN RESOURCE & COMPENSATION COMMITTEE'S REVIEW AND RECOMMENDATIONS, AND THE BOARD'S REVIEW AND APPROVAL OF ANNUAL COMPENSATION INCREASES. THE PROCESS INCLUDES A REVIEW AND APPROVAL BY INDEPENDENT PERSONS, COMPARABILITY DATA AND CONTEMPORANEOUS SUBSTANTIATION OF THE DELIBERATION AND DECISION. THIS PROCESS WAS USED TO DETERMINE COMPENSATION FOR THE PRESIDENT/CEO AND ALL VICE-PRESIDENTS. FORM 990, PART VI, SECTION C, LINE 19 ON A QUARTERLY BASIS, THE FINANCIAL STATEMENTS ARE REPORTED TO EMMA AND MADE AVAILABLE ON THEIR WEBSITE. GOVERNING DOCUMENTS AND POLICIES ARE AVAILABLE UPON REQUEST. FORM 990, PART VII AVERAGE HOURS PER WEEK FOR ASHLAND HOSPITAL CORPORATION AND ALL RELATED ORGANIZATIONS IS AS FOLLOWS: JACK BLAIR - 0.8 HOURS TOM BURNETTE - 0.8 HOURS JOHN STEWART - 0.6 HOURS DAVID JONES - 5.5 HOURS FRED JACKSON - 47.0 HOURS PAUL MCDOWELL - 46.3 HOURS SHERYL MAHANEY - 46.0 HOURS PHILIP FIORET - 41.0 HOURS LARRY HIGGINS - 41.5 HOURS KRISTIE WHITLATCH - 40.5 HOURS CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED LOSSES ON INVESTMENTS: -14,501,382. PENSION LIABILITY ADJUSTMENT 1,933,904. AMORTIZATION OF SWAP AGREEMENT 79,556. CHANGE IN MARKET VALUE INTEREST RATE SWAP -4,152,944. CHANGE IN MARKET VALUE SELF INSURANCE FUNDS -122,236. TRANSFER FROM AFFILIATE 624,798. TOTAL TO FORM 990, PART XI, LINE 5: -16,138,304. ASHLAND NURSING HOME CORP 2500 STATE ROUTE 5 ASHLAND KY 41102 611386016 NURSING HOME KY 501(C)(3) 11-I ASHLAND HOSPITAL CORPORATION 1 CHILD DEVELOPMENT CENTER CORP 2201 LEXINGTON AVENUE ASHLAND KY 41101 010560598 CHILD CARE KY 501(C)(3) 11-I ASHLAND HOSPITAL CORPORATION 1 KENTUCKY HEART INSTITUTE 2201 LEXINGTON AVENUE ASHLAND KY 41101 611255904 PHYSICIANS KY 501(C)(3) 9 ASHLAND HOSPITAL CORPORATION 1 KENTUCKY HEART FOUNDATION 2201 LEXINGTON AVENUE ASHLAND KY 41101 260791997 MEDICAL RESEARCH KY 501(C)(3) 7 ASHLAND HOSPITAL CORPORATION 1 KENTUCKY MEDICAL LOGISTICS INC 2518 STATE ROUTE 5 ASHLAND KY 41102 264736971 MEDICAL TRANSPORT KY 501(C)(3) 9 ASHLAND HOSPITAL CORPORATION 1 KING'S DAUGHTERS HEALTH FOUNDATION INC 2201 LEXINGTON AVENUE ASHLAND KY 41101 611035701 FUNDRAISING KY 501(C)(3) 11-III-FI ASHLAND HOSPITAL CORPORATION 1 KING'S DAUGHTERS HEALTH SYSTEM INC 2201 LEXINGTON AVENUE ASHLAND KY 41101 274553836 HEALTHCARE KY 501(C)(3) 11-II N/A 1 KING'S DAUGHTERS MEDICAL SPECIALTIES INC 2201 LEXINGTON AVENUE ASHLAND KY 41101 264183569 PHYSICIANS KY 501(C)(3) 9 ASHLAND HOSPITAL CORPORATION 1 PORTSMOUTH HOSPITAL CORP 2201 LEXINGTON AVENUE ASHLAND KY 41101 453215312 HEALTHCARE KY 501(C)(3) 3 ASHLAND HOSPITAL CORPORATION 1 ASHLAND MEDICAL PROPERTIES INC 2201 LEXINGTON AVENUE ASHLAND KY 41101 611079090 RENTALS KY ASHLAND HOSPITAL CORPORATION C 62242 1.00000 1 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 1 1 ASHLAND NURSING HOME CORP Q 806632 ALL TRANSACTIONS BETWEEN ASHLAND NURSING HOME CORP R 847757 COMPANIES ARE CAPTURED CHILD DEVELOPMENT CENTER CORP Q 204125 IN THE DUE TO/FROM KING'S DAUGHTERS HEALTH FOUNDATION INC R 624798 ACCOUNTS. THE TYPES OF KENTUCKY HEART FOUNDATION INC A 28764 TRANSACTIONS THAT HIT THIS KENTUCKY HEART INSTITUTE INC A 504026 ACCOUNT ARE TRACKED MONTHLY. KENTUCKY HEART INSTITUTE INC B 770526 KENTUCKY HEART INSTITUTE INC N 173434 KENTUCKY HEART INSTITUTE INC Q 9971773 KENTUCKY MEDICAL LOGISTICS INC Q 1430069 KENTUCKY MEDICAL LOGISTICS INC R 1000000 KING'S DAUGHTERS MEDICAL SPECIALTIES INC A 270404 KING'S DAUGHTERS MEDICAL SPECIALTIES INC B 1524152 KING'S DAUGHTERS MEDICAL SPECIALTIES INC N 138990 KING'S DAUGHTERS MEDICAL SPECIALTIES INC Q 5905243