2012-11-14T07:35:24-06:00 2011-12-31 990 2011-01-01 420504780 ST LUKE'S METHODIST HOSPITAL STLU 3193697796 1026 A AVENUE NE CEDAR RAPIDS IA 52402 MILTON E AUNAN II 3193697796 2012-11-07 2011 2016-02-24 21:20:13Z ST LUKE'S HOSPITAL THEODORE E TOWNSEND JR 1026 A AVENUE NE CEDAR RAPIDS IA 52402 417927560 0 X WWW.STLUKESCR.ORG X 1903 IA TO GIVE THE HEALTHCARE WE'D LIKE OUR LOVED ONES TO RECEIVE. 24 15 3278 1009 1107250 0 4966346 6315054 340717666 334803685 10308577 5510147 3573151 5439982 359565740 352068868 4858566 5287667 0 0 161754979 169390988 24040 0 0 169272253 158250758 335909838 332929413 23655902 19139455 383358340 396324331 151696353 169168133 231661987 227156198 X THE MISSION OF ST. LUKE'S METHODIST HOSPITAL IS TO GIVE THE HEALTHCARE WE'D LIKE OUR LOVED ONES TO RECEIVE. OUR STRATEGIC FRAMEWORK IS BUILT UPON THESE PILLARS: 1. DEMONSTRABLY BETTER QUALITY IN OUR PATIENT CARE. WE STRIVE TO PROVIDE THE BEST POSSIBLE HEALTHCARE SERVICE TO OUR PATIENTS AND THEIR FAMILIES. OUR SERVICES ARE ACCESSIBLE TO ALL PERSONS REGARDLESS OF RACE, RELIGION, GENDER OR ABILITY TO PAY.2. ST. LUKE'S IS COMMITTED TO BEING THE WORKSHOP OF CHOICE FOR PHYSICIANS WHO PRACTICE IN OUR HOSPITAL.3. ST. LUKE'S IS COMMITTED TO PARTNERING WITH ALL PERSONNEL, WHO TOGETHER MAKE UP THE BOARD OF DIRECTORS, MEDICAL STAFF, VOLUNTEERS, EMPLOYEES AND STUDENTS WHICH RESULTS IN PERSONAL SATISFACTION, RECOGNITION, ACHIEVEMENT AND COMMITMENT.4. ST. LUKE'S IS COMMITTED TO STRENGTHENING OUR CORE SERVICES TO RENDER THE HIGHEST QUALITY OF HEALTHCARE.5. ST. LUKE'S IS COMMITTED TO BEING A REGIONAL RESOURCE FOR EASTERN IOWANS. 0 0 255633066 1333262 338115954 HEALTH-CARE SERVICESST. LUKE'S METHODIST HOSPITAL IS AN IMPORTANT ELEMENT OF THE HEALTH-CARE DELIVERY SYSTEM THAT THE CEDAR RAPIDS COMMUNITIES RELY ON EVERY DAY. IT IS COMMITTED TO PROVIDING QUALITY HEALTH CARE, AND TO USING ITS RESOURCES TO THE GREATEST COMMUNITY BENEFIT.ST. LUKE'S METHODIST HOSPITAL PROVIDES INPATIENT AND OUTPATIENT MEDICAL SERVICES TO TREAT INDIVIDUALS WITH DISEASES, ILLNESS AND INJURIES WITH VARYING COMPLEXITIES. IT PROVIDES SERVICES TO IMPROVE THE HEALTH OF PATIENTS AND TO BETTER THEIR QUALITY OF LIFE. ALL SERVICES ARE PROVIDED REGARDLESS OF AN INDIVIDUAL'S RACE, CREED, SEX, NATIONALITY, HANDICAP, AGE OR ABILITY TO COMPENSATE FOR SERVICES RENDERED. THESE INCLUDE, BUT ARE NOT LIMITED TO, GENERAL ACUTE CARE, SURGERIES, HOME HEALTH, INTENSIVE CARE AND CRITICAL CARE, MENTAL HEALTH CARE, CARDIOLOGY, ONCOLOGY, REHABILITATION, SKILLED NURSING, BEHAVIORAL DISORDER PROGRAMS, MATERNAL/CHILD CARE, LABORATORY, PALLIATIVE CARE, PHARMACEUTICAL DRUGS, EMERGENCY SERVICES, OUTPATIENT CLINICS, CHECK-UPS AND RADIOLOGY. SOME OF THE SERVICES PROVIDED DO NOT GENERATE ENOUGH INCOME TO OFFSET THEIR COST. IN THE FISCAL PERIOD ENDED DECEMBER 31, 2011, ST. LUKE'S METHODIST HOSPITAL ADMITTED 18,947 PATIENTS RESULTING IN A TOTAL OF 84,531 PATIENT DAYS. OUTPATIENT VISITS TOTALED 480,480 AND TOTAL OUTPATIENT SURGERY REGISTRATIONS, INCLUDING THE DIGESTIVE HEALTH CENTER, FOR THE SAME PERIOD WERE 12,814. THERE WERE ALSO 54,953 EMERGENCY ROOM VISITS AND 2,612 BABIES DELIVERED. 29276294 3954405 COMMUNITY BENEFIT, INCLUDING CHARITY CARECHARITY CARE AND MEANS-TESTED PROGRAMS: ST. LUKE'S METHODIST HOSPITAL PROVIDES CHARITY CARE AND OTHER MEANS-TESTED PROGRAMS WITH THE GOAL TO IMPROVE THE COMMUNITY'S OVERALL HEALTH AND ACCESS TO CARE. THIS INCLUDES HEALTH-CARE SERVICES REGARDLESS OF THE PATIENT'S INSURANCE COVERAGE OR FINANCIAL STATUS. CHARITY CARE AND PARTIAL TO FULL FINANCIAL ASSISTANCE IS PROVIDED TO PATIENTS ON A CASE-BY-CASE BASIS. CHARITY CARE WAS MADE AVAILABLE TO PEOPLE AT A VALUE OF $5,082,576 IN 2011. OFTENTIMES, ST. LUKE'S METHODIST HOSPITAL RECEIVES PAYMENTS FROM PAYORS OR PATIENTS THAT ARE LESS THAN IT CHARGES FOR SERVICES. ST. LUKE'S METHODIST HOSPITAL PARTICIPATES IN MEDICAID AND OTHER GOVERNMENT-SPONSORED HEALTH-CARE PROGRAMS. ST. LUKE'S METHODIST HOSPITAL'S NET COST OF PROVIDING CARE FOR WHICH IT RECEIVES PAYMENT BELOW ITS COST IS $10,430,183 FOR 2011. TOTAL CHARITY CARE AND MEANS-TESTED PROGRAMS REPORTED VALUE: $15,512,759.OTHER BENEFITS: ST. LUKE'S METHODIST HOSPITAL PROVIDES SEVERAL OTHER BENEFITS THAT ASSIST THE COMMUNITY. PROGRAMS MAY INCLUDE, BUT ARE NOT LIMITED TO, COMMUNITY HEALTH IMPROVEMENT SERVICES AND COMMUNITY BENEFIT OPERATIONS SUCH AS PREVENTION AND HEALTH SCREENINGS; HEALTH PROFESSIONAL'S EDUCATION; SUBSIDIZED HEALTH SERVICES, AND CASH AND IN-KIND CONTRIBUTIONS TO COMMUNITY GROUPS. ST. LUKE'S METHODIST HOSPITAL COLLABORATES WITH OTHER HOSPITALS, CHURCHES, SCHOOLS, CHAMBERS OF COMMERCE AND DAYCARE CENTERS TO IMPROVE COMMUNITY HEALTH AND EXPAND ACCESS TO HEALTH CARE. ST. LUKE'S METHODIST HOSPITAL HAS DEDICATED STAFF TO ASSIST COMMUNITY BENEFIT EFFORTS. APPROXIMATELY 22,483 PERSONS WERE SERVED THROUGH THESE PROGRAMS. TOTAL OTHER BENEFITS REPORTED VALUE: $13,763,535. 284909360 1 1 0 0 0 0 0 0 0 1 1 0 1 0 1 1 0 1 0 0 0 0 0 1 1 0 1 1 1 0 1 0 0 0 0 0 0 0 1 0 0 0 0 1 1 1 1 0 0 1 152 0 1 3278 1 1 1 0 0 0 0 0 0 0 0 0 X 24 15 1 0 0 0 1 0 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 IA X X MILTON E AUNAN II VP FINANCECFO 3193697796 1026 A AVENUE NE CEDAR RAPIDS IA 52402 STEVE ALLSOP 1.00 X 0 0 0 DUSTIN ARNOLD MD 1.00 X 394085 0 10557 RALPH BECKETT MD 1.00 X 0 0 0 KARL CASSELL 1.00 X 0 0 0 STEVEN CAVES 1.00 X 0 0 0 TERRI CHRISTOFFERSEN 1.00 X 0 16437 0 LEE CLANCEY 1.00 X 0 0 0 RANDY EASTON 1.00 X 0 0 0 KATHY ENO 1.00 X 0 15616 0 SALLY GRAY 1.00 X X 0 0 0 VICTOR HAMRE 1.00 X X 0 0 0 PERCY HARRIS MD 1.00 X 0 0 0 JAMES HOFFMAN 1.00 X 0 16737 0 KEITH KREWER MD 1.00 X 0 0 0 CHRIS LINDELL 1.00 X 0 0 0 ROBIN MIXDORF 1.00 X 0 0 0 RALPH PALMER 1.00 X 0 0 0 WILLIAM PROWELL 1.00 X 0 12688 0 MARCIA ROGERS 1.00 X 0 0 0 BRIAN SCOTT 1.00 X X 0 1711 0 DREW SKOGMAN 1.00 X 0 0 0 MICK STARCEVICH 1.00 X 0 0 0 THEODORE TOWNSEND JR 40.00 X X 607173 0 135676 STEVEN WAHLE MD 1.00 X 0 0 0 MILTON AUNAN II 40.00 X 366174 0 53717 JOHN SHEEHAN 40.00 X 459290 0 81146 MOHIT CHAWLA 40.00 X 561521 0 20732 MIKE EASLEY 40.00 X 172145 0 33908 SUBHI HALAWA 40.00 X 550596 0 25687 RICHARD KETTELKAMP 40.00 X 596989 0 17770 TODD LANGAGER 40.00 X 512427 0 26826 MICHELLE NIERMANN 40.00 X 275318 0 47902 KATHERINE OBERBROECKLING 40.00 X 150293 0 26856 MARY ANN OSBORN 40.00 X 380638 0 74753 CHARLES SCHAUBERGER 40.00 X 343571 0 16653 MARY HLAVIN 40.00 X 897136 0 24498 MOHAMMED KHALIL 40.00 X 544000 0 24471 NASAR PAYVANDI 40.00 X 561478 0 26846 DAVID RATER 40.00 X 537395 0 18974 HISHAM WAGDY 40.00 X 641376 0 21520 8551605 63189 688492 118 0 1 0 GRAHAM CONSTRUCTION CO INC 421 GRAND AVE DES MOINES IA 50309 CONSTRUCTION SERVICES 5097190 MR ASSOCIATES PO BOX 2686 CEDAR RAPIDS IA 52406 MR SERVICES 4813378 ARAMARK SERVICE MASTER FACILITY 24863 NETWORK PL CHICAGO IL 60673 MNGT SERVICES 1577517 MISSISSIPPI VALLEY REGIONAL 5500 LAKEVIEW PARKWAY DAVENPORT IA 52707 BLOOD SERVICES 1159020 EXECUTIVE HEALTH RESOURCES INC 15 CAMPUS BLVD - STE 200 NEWTON SQUARE PA 19073 COMPLIANCE SERVICES 794252 51 2536377 957609 2821068 6315054 NET PATIENT REVENUE 900099 167681441 167681441 PHARMACY REVENUE 446110 84437370 64659747 19777623 LABORATORY SERVICES 621510 67827945 67827945 MGMT & SUPPORT SVCS 561000 6158063 5132841 1025222 SUBS & JOINT VENTURES 900099 5590759 5541174 49585 3108107 3075664 32443 334803685 3314331 3314331 67203251 114098 64260019 861514 2943232 -747416 2195816 2195816 94494 76310 18184 18184 574464 660849 -86385 -86385 MISCELLANEOUS REVENUE 900099 2546098 2546098 CAFETERIA/FOOD SVCS 722210 2195914 2195914 SUBS & JOINT VENTURES 900099 503312 503312 262859 262859 5508183 352068868 317231081 1107250 27415483 5283667 5283667 4000 4000 3225213 3225213 131186643 112877188 18309455 8402123 7229456 1172667 17094654 14750172 2344482 9482355 7896648 1585707 5827079 3821677 2005402 376833 44065 332768 15000 15000 571410 4951 566459 29343904 23642926 5700978 1911034 300819 1610215 76655442 75118006 1537436 16883162 16684445 198717 7571128 6910215 660913 1112134 861246 250888 532474 337043 195431 4015230 4015230 15836253 14615736 1220517 463195 383743 79452 BAD DEBT EXPENSE 151175 151175 INCOME TAXES -43463 -43463 MISCELLANEOUS EXPENSE -2971232 -6007818 3036586 332929413 284909360 48020053 0 1808 10998484 48500763 37226942 116320 79079 38646825 43329833 17334410 19471388 7288250 7477822 1254096 1700796 300059085 162066887 132738482 137992198 97237322 96734646 40165257 41313143 74807 0 383358340 396324331 31863712 32645152 223972 705668 56083 4940786 4330952 114667883 131430278 151696353 169168133 X 202103593 197296359 11488516 11842965 18069878 18016874 231661987 227156198 383358340 396324331 X 19139455 -23645244 X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 4865225 182201 30735 491 5078652 3382526 1499402 16017 686 4865225 3394479 40071 55654 -3630 3382526 4760884 -1291996 74409 3394479 0.92840 0.01490 0.05660 0 1 1 16336684 16336684 115979760 55119234 60860526 160597609 104655550 55942059 7145032 2292103 4852929 137992198 BENEFICIAL INTEREST IN NELLIE SHERWOOD TRUST 129668 F BENEFICIAL INTEREST IN ST. LUKE'S HEALTH CARE FOUNDATION 28962721 F BONE DENSITOMETRY & BREAST BIOPSY SERVICES 39276 C EASTERN IOWA SLEEP CENTER, LLC 213866 C HEALTH ENTERPRISES VENTURES & HEALTH ENTERPRISES OF IOWA 389638 C HEALTHNET CONNECT, LC 100 C IOWA ECHO ULTRASOUND SERVICES 42478 C IOWA HEALTH SYSTEM CONTRACTING SERVICES, LC 5000 C MEDICAL LABORATORIES OF EASTERN IOWA, LC 605347 C MR ASSOCIATES, LLP 647792 C ST. LUKE'S-COE STEAM, INC. 333134 C STL HEALTH RESOURCES CO 4597807 C THE OUTPATIENT SURGERY CENTER OF CEDAR RAPIDS, LLC 3214598 C PCI REGIONAL MEDICAL MALL, LLC 396747 C PCI LENDER, LLC 263880 C HELLEN G NASSIF COMMUNITY CANCER CENTER 678000 C BENEFICIAL INTEREST IN COMMUNITY CANCER CENTER 793091 C 41313143 DUE TO AFFILIATES 11339265 ASBESTOS REMOVAL LIABILITY 1004201 LONG-TERM RETENTION INCENTIVES 2703141 IOWA HEALTH SYSTEM NOTE PAYABLE 77650000 SELF-INSURANCE RESERVE 7350100 INCOME TAXES PAYABLE -33637 HEALTH AND WELFARE BENEFITS RESERVE 1172000 DEFINED BENEFIT RETIREMENT PLAN LIA 30245208 131430278 352068868 332929413 19139455 -5361309 -18283935 -23645244 -4505789 322330000 -5353852 703871 -4649981 326979981 302521 24786366 25088887 352068868 306465000 702991 702991 305762009 302521 26864883 27167404 332929413 DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS: PART V, LINE 4: THE ORGANIZATION RETAINS FUNDS FOR INTENDED FUTURE USES, INCLUDING PURCHASE OF EQUIPMENT, INDIGENT CARE, FUNDING OF MISSION RELATED OPERATIONS, AND HEALTH EDUCATION. IN ADDITION, SOME FUNDS ARE HELD FOR INVESTMENT IN PERPETUITY. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: IOWA HEALTH SYSTEM AND MOST OF ITS SUBSIDIARIES ARE CLASSIFIED AS TAX-EXEMPT ORGANIZATIONS AS DESCRIBED IN SECTIONS 501(C)(3) AND 501(C)(2) OF THE INTERNAL REVENUE CODE (THE CODE). TAX-EXEMPT ORGANIZATIONS ARE NOT SUBJECT TO FEDERAL AND STATE INCOME TAXES ON RELATED INCOME, PURSUANT TO SECTION 501(A) OF THE CODE. THESE ORGANIZATIONS ARE SUBJECT TO FEDERAL AND STATE INCOME TAXES TO THE EXTENT THEY HAVE UNRELATED BUSINESS INCOME AS DESCRIBED UNDER PROVISIONS OF SECTION 511 OF THE CODE. THE HEALTH SYSTEM FILES FORM 990 FOR SUBSTANTIALLY ALL OF ITS OPERATING ENTITIES IN THE U.S. FEDERAL JURISDICTION AND IS NO LONGER SUBJECT TO EXAMINATION BY TAX AUTHORITIES FOR THE YEARS BEFORE 2008. THE HEALTH SYSTEM HAS NO MATERIAL UNCERTAIN TAX POSITIONS. CERTAIN SUBSIDIARIES ARE SUBJECT TO FEDERAL AND STATE INCOME TAXES. SOME OF THESE CORPORATIONS HAVE ACCUMULATED NET OPERATING LOSS CARRYFORWARDS THAT ARE AVAILABLE TO OFFSET FUTURE TAXABLE INCOME DURING THE CARRYFORWARD PERIOD. NO INCOME TAX BENEFIT HAS BEEN RECOGNIZED FOR THE NET OPERATING LOSS CARRYFORWARDS OR OTHER POTENTIAL DEFERRED TAX ASSETS IN THE CONSOLIDATED FINANCIAL STATEMENTS BECAUSE THE HEALTH SYSTEM BELIEVES REALIZATION OF THESE BENEFITS IS UNLIKELY. PART XI, LINE 8 - OTHER ADJUSTMENTS: CHANGE IN BENEFICIAL INTEREST-ST. LUKE'S HEALTH CARE FOUNDATION -1,473,715. CHANGES IN PENSION LIABILITY -16,810,220. TOTAL TO SCHEDULE D, PART XI, LINE 8: -18,283,935. PART XII, LINE 2D - OTHER ADJUSTMENTS: COST OF GOODS SOLD 660,849. EXPENSE REIMBURSEMENTS 42,142. ROUNDING 880. PART XII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES NETTED IN REVENUES 1,000,000. REVENUES IN UNRESTRICTED FUND BALANCE 289,456. REVENUES IN TEMPORARILY RESTRICTED FUND BALANCE 1,782,615. IOWA HEALTH SYSTEM CONTRACTING SERVICES, LC PURCHASE REBATES 1,736,377. PHARMACY RECLASSIFICATION 19,977,918. PART XIII, LINE 2D - OTHER ADJUSTMENTS: COST OF GOODS SOLD 660,849. EXPENSE REIMBURSEMENTS 42,142. PART XIII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES IN UNRESTRICTED FUND BALANCE 4,150,081. EXPENSES NETTED IN REVENUES 1,000,000. IOWA HEALTH SYSTEM CONTRACTING SERVICES, LC PURCHASE REBATES 1,736,377. PHARMACY RECLASSIFICATION 19,977,918. ROUNDING 507. 1 BOOK SALE 71773 71773 62842 BABY PRINTS 6435 6435 6 16286 16286 13468 94494 94494 76310 76310 18184 1 1 X 1 X 1 X 1 1 1 0 1 1 2764 5082576 5082576 0.01530 12978 39504980 29074797 10430183 0.03130 15742 44587556 29074797 15512759 0.04660 17 17401 1501731 21686 1480045 0.00440 4 673 2362020 216387 2145633 0.00640 1 4409 27476880 21901933 5574947 0.01670 8 9252018 4689108 4562910 0.01370 30 22483 40592649 26829114 13763535 0.04120 30 38225 85180205 55903911 29276294 0.08780 2 116860 116860 0.00040 1 12980 12980 0.00000 1 20719 20719 0.00010 4 150559 150559 0.00050 0 3522144 67898375 71345403 -3447028 X 1 1 1 MEDLABS OF EASTERN IOWA LC LABORATORY SERVICES 0.50000 0.50000 2 THE OUTPATIENT SURGERY CENTER OF CEDAR RAPIDS LLC AMBULATORY SURGERY CENTER 0.50000 0.50000 5 CEDAR RAPIDS MEDICAL EDUCATION FOUNDATION ESTABLISH AND MAINTAIN UNDERGRADUATE, GRADUATE AND CONTINUING MEDICAL EDUCA 0.50000 6 ST LUKE'S-COE STEAM INC PROVIDE STEAM HEAT, STERILIZATION, AND OTHER PURPOSES TO ST. LUKE'S HOSPITA 0.50000 7 STL HEALTH RESOURCES CO PROPERTY RENTAL 1.00000 1 1 ST LUKE'S METHODIST HOSPITAL

1026 A AVENUE NE CEDAR RAPIDS IA 524023026

X X X X ST LUKE'S METHODIST HOSPITAL 1 1 X X X X X X X X X 10 1 1 1 X X X X X X X X X 0 1 1 200.000000000000 1 400.000000000000 1 X X X 1 1 X X X 1 X X X X 1 X X X X X X X 1 X 0 1 PART I, LINE 6A: ST. LUKE'S METHODIST HOSPITAL'S COMMUNITY BENEFIT REPORT IS CONTAINED WITHIN THE IOWA HEALTH SYSTEM COMMUNITY BENEFIT REPORT WHICH CAN BE LOCATED AT WWW.IHS.ORG. THIS SYSTEM-WIDE REPORT IS COMPLETED IN ADDITION TO THE COMMUNITY BENEFIT REPORT FOR THE HOSPITAL AND ITS REGIONAL AFFILIATES. PART I, LINE 7: A COST-TO-CHARGE RATIO (FROM WORKSHEET 2) IS USED TO CALCULATE THE AMOUNTS ON LINE 7A. THE AMOUNTS ON LINES 7B-7C (UNREIMBURSED MEDICAID AND OTHER MEANS-TESTED GOVERNMENT PROGRAMS) ARE OBTAINED FROM A COST ACCOUNTING SYSTEM OF APPLICABLE PATIENT SEGMENTS. SEGMENTS NOT PASSED TO COST ACCOUNTING SYSTEM USE SEGMENT SPECIFIC COST-TO-CHARGE RATIO. THE AMOUNTS FOR LINES 7E, F, H, AND I WOULD COME FROM THE BOOKS AND RECORDS OF SPECIFIC SEGMENTS OF THE ORGANIZATION AND ARE BASED ON COST. THE AMOUNTS ON 7G ARE DERIVED FROM A COST ACCOUNTING SYSTEM OF APPLICABLE PATIENT SEGMENTS. SEGMENTS NOT PASSED TO A COST ACCOUNTING SYSTEM USE THE COST-TO-CHARGE RATIO. PART I, LINE 7G: THE NET COMMUNITY BENEFIT COST OF SUBSIDIZED HEALTH SERVICES OF $5,574,947 IS ATTRIBUTED TO A PHYSICIAN CLINIC. PART II: COMMUNITY BUILDING ACTIVITIES ARE ESSENTIAL ROLES FOR HEALTH-CARE ORGANIZATIONS IN THAT THEY ADDRESS MANY OF THE UNDERLYING DETERMINANTS OF HEALTH. RESEARCH HAS CONTINUALLY SHOWN THAT WHEN THE FACTORS INFLUENCING HEALTH ARE EXPLORED, HEALTH CARE ACTUALLY PLAYS THE SMALLEST ROLE PROPORTIONATELY. A REPORT IN THE JOURNAL OF AMERICAN MEDICAL ASSOCIATION AND THE CENTER FOR DISEASE CONTROL (MCGINNIS, 1996) SUGGESTS THAT THE FACTORS IMPACTING HEALTH ARE AS FOLLOWS: LIFESTYLE AND BEHAVIORS, 50%, ENVIRONMENT (HUMAN AND NATURAL), 20%, GENETICS AND HUMAN BIOLOGY, 20%, AND HEALTH CARE, 10%. COMMUNITY BUILDING ACTIVITIES HELP TO ADDRESS THE OTHER INDICATORS OUTSIDE OF THE ROLE TRADITIONALLY PLAYED BY HEALTH-CARE ORGANIZATIONS. THESE ACTIVITIES ARE ALMOST EXCLUSIVELY DONE IN SOME FORM OF PARTNERSHIP IN WHICH THE COMMUNITY OR OTHER ORGANIZATIONS ARE BETTER SUITED TO ADDRESS. HEALTH-CARE ORGANIZATIONS GENERALLY PROVIDE TIMELY AND SPECIFIC RESOURCES TO HELP THESE ISSUES. HEALTH-CARE ORGANIZATIONS CAN BE A RICH AND VALUABLE COMMUNITY RESOURCE IN WAYS NOT TYPICALLY CONSIDERED. OFTEN THE MOST EFFECTIVE WAY TO HELP IMPACT AND IMPROVE THE COMMUNITY HEALTH STATUS IS TO SUPPORT OTHER AGENCIES AND ORGANIZATIONS IN A VARIETY OF WAYS OUTSIDE OF HEALTH SERVICES. THIS IS OFTEN DONE THROUGH CASH OR IN-KIND SERVICES TO SUPPORT OTHER NON-PROFITS, DONATIONS OF DURABLE MEDICAL EQUIPMENT AND SUPPLIES TO CERTAIN AGENCIES, OR THROUGH LEADERSHIP AND EDUCATIONAL EXPERTISE. THE HOSPITAL CONTRIBUTES FINANCIALLY TO A WIDE VARIETY OF COMMUNITY ORGANIZATIONS THAT ADDRESS THE BROADER NEEDS OF THE COMMUNITY. THESE DONATIONS ALLOW OTHER NON-PROFIT ORGANIZATIONS TO FULFILL THEIR MISSIONS TO IMPROVE THE WELL BEING OF THE COMMUNITY AND CONTRIBUTE TO ITS OVERALL HEALTH STATUS IN WAYS THAT MAY DIFFER FROM THE DIRECT SERVICES OF THE HOSPITAL ORGANIZATION AND MAXIMIZE THE RESOURCES THEY HAVE TO WORK WITH. THE HOSPITAL EMPLOYEES ARE ACTIVE IN EDUCATING PARTNERS ON A WIDE VARIETY OF HEALTH SUBJECTS THAT ADVANCE THEIR WORK. FURTHER, THE HOSPITAL EMPLOYEES ARE MEMBERS OF MANY NON-PROFIT BOARDS TO PROVIDE LEADERSHIP OR COLLABORATE TO ADDRESS COMPLEX HEALTH ISSUES.THESE TYPES OF ACTIVITIES SPEAK TO THE BREADTH AND CAPACITY THAT THE HOSPITAL HAS IN IMPACTING THE HEALTH STATUS OF THE COMMUNITY IN A COMPREHENSIVE AND INTENTIONAL APPROACH. PART III, LINE 4: THE HEALTH SYSTEM PROVIDES AN ALLOWANCE FOR DOUBTFUL ACCOUNTS BASED UPON A REVIEW OF OUTSTANDING RECEIVABLES, HISTORICAL COLLECTION INFORMATION AND EXISTING ECONOMIC CONDITIONS. AS A SERVICE TO THE PATIENT, THE HEALTH SYSTEM BILLS THIRD-PARTY PAYERS DIRECTLY AND BILLS THE PATIENT WHEN THE PATIENTS LIABILITY IS DETERMINED. PATIENT ACCOUNTS RECEIVABLE ARE DUE IN FULL WHEN BILLED. ACCOUNTS ARE CONSIDERED DELINQUENT AND SUBSEQUENTLY WRITTEN OFF AS BAD DEBTS BASED ON INDIVIDUAL CREDIT EVALUATION AND SPECIFIC CIRCUMSTANCES OF THE ACCOUNT.THE AMOUNT REPORTED ON LINE 2 WAS CALCULATED USING IRS WORKSHEET 2 'RATIO OF PATIENT CARE COST TO CHARGES' TO CALCULATE THE COST TO CHARGE RATIO FOR ST. LUKES HOSPITAL. THIS RATIO WAS THEN APPLIED AGAINST THE BAD DEBT ATTRIBUTABLE TO PATIENT ACCOUNTS USING IRS WORKSHEET A TO ARRIVE AT THE BAD DEBT EXPENSE AT COST REPORTED ON LINE 2. PART III, LINE 8: AMOUNTS ON LINE 6 WERE CALCULATED USING IRS WORKSHEET B 'TOTAL MEDICARE ALLOWABLE COSTS.' THE MEDICARE ALLOWABLE COSTS WERE OBTAINED FROM THE MEDICARE COST REPORTS AND THEN REDUCED BY ANY AMOUNTS ALREADY CAPTURED IN COMMUNITY BENEFIT EXPENSE IN PART I ABOVE.THE METHODOLOGY DESCRIBED IN THE INSTRUCTIONS TO SCHEDULE H, PART III, SECTION B, LINE 6 DOES NOT TAKE INTO ACCOUNT ALL COSTS INCURRED BY THE HOSPITAL AND DOES NOT REPRESENT THE TOTAL COMMUNITY BENEFIT CONFERRED IN THIS AREA. THE MEDICARE SHORTFALL REFLECTED ON SCHEDULE H, PART III, SECTION B WAS DETERMINED USING INFORMATION FROM THE ORGANIZATION'S MEDICARE COST REPORT. HOWEVER THE MEDICARE COST REPORT DISALLOWS CERTAIN ITEMS THAT WE BELIEVE ARE LEGITIMATE EXPENSES INCURRED IN THE PROCESS OF CARING FOR OUR MEDICARE PATIENTS. EXAMPLES OF THESE ITEMS INCLUDE PROVIDER BASED PHYSICIAN EXPENSE, SELF INSURANCE EXPENSE, HOME OFFICE EXPENSE AND THE SHORTFALL FROM FEE SCHEDULE PAYMENTS. THE ORGANIZATIONS COST ACCOUNTING SYSTEM CALCULATES A MEDICARE SHORTFALL OF $16,685,054. IN ADDITION TO THESE ITEMS THE MEDICARE COST REPORT AND THE COST ACCOUNTING SYSTEM DO NOT INCLUDE MEDICARE PHYSICIAN FEE SCHEDULE EXPENSE OF $5,435,176 AND REVENUE OF $2,190,616. AFTER TAKING THESE ITEMS INTO ACCOUNT WE CALCULATE AN ACTUAL MEDICARE SHORTFALL OF $19,929,614.THE HOSPITAL BELIEVES THE ENTIRE AMOUNT OF THE MEDICARE SHORTFALL SHOULD BE TREATED AS COMMUNITY BENEFIT, MORE SPECIFICALLY, AS CHARITY CARE. THE ELDERLY CONSTITUTE A CLEARLY-RECOGNIZED CHARITABLE CLASS, AND MANY MEDICARE BENEFICIARIES, LIKE THEIR MEDICAID COUNTERPARTS, ARE POOR AND THUS WOULD HAVE QUALIFIED FOR THE HOSPITALS CHARITY CARE PROGRAM, MEDICAID OR OTHER NEEDS-BASED GOVERNMENT PROGRAMS ABSENT THE MEDICARE PROGRAM. BY ACCEPTING PAYMENT BELOW COST TO TREAT THESE INDIVIDUALS, THE BURDENS OF GOVERNMENT ARE RELIEVED WITH RESPECT TO THESE INDIVIDUALS. ADDITIONALLY, THERE IS A SIGNIFICANT POSSIBILITY THAT CONTINUED REDUCTION IN REIMBURSEMENT MAY ACTUALLY CREATE DIFFICULTIES IN ACCESS FOR THESE INDIVIDUALS. FINALLY, THE AMOUNT SPENT TO COVER THE MEDICARE SHORTFALL IS MONEY NOT AVAILABLE TO COVER CHARITY CARE AND OTHER COMMUNITY BENEFIT NEEDS. PART III, LINE 9B: AFTER THE PATIENT MEETS THE QUALIFICATIONS FOR FINANCIAL ASSISTANCE, THE ACCOUNT BALANCE IS PARTIALLY OR ENTIRELY WRITTEN OFF, AS APPROPRIATE. ANY REMAINING BALANCE, IF ANY, WOULD BE COLLECTED UNDER THE NORMAL DEBT COLLECTION POLICY. ST. LUKE'S METHODIST HOSPITAL PART V, SECTION B, LINE 3: A 20-QUESTION COMMUNITY HEALTH PERCEPTUAL NEEDS SURVEY WAS CAREFULLY CONSTRUCTED BASED ON THE SIX OVERARCHING PUBLIC HEALTH GOALS SET FORTH BY THE IOWA DEPARTMENT OF PUBLIC HEALTH. THE SURVEY WAS THEN DISTRIBUTED THROUGH THE USE OF E-MAIL BLASTS. THE E-MAIL WAS DISTRIBUTED TO LINN COUNTY BUSINESS, INDUSTRY, SOCIAL SERVICE, NONPROFIT AND GOVERNMENTAL AGENCIES. LOCAL MEDIA ENCOURAGED PARTICIPATION AND FLYERS WERE POSTED THROUGHOUT THE COUNTY URGING RESIDENTS TO COMPLETE THE SURVEY. ADDITIONALLY VOLUNTEERS DISTRIBUTED THE SURVEYS TO SENIOR CITIZEN DINING SITES THROUGHOUT RURAL AND URBAN LINN COUNTY. TO CAPTURE A BROADER CROSS-SECTION OF OUR POPULATION, PATIENTS FORM A LOCALLY QUALIFIED HEALTH CENTER WERE ASKED FOR THEIR PERCEPTUAL INPUT. A TOTAL OF 1,340 RESPONDENTS TOOK THE PERCEPTUAL NEEDS SURVEY. WOMEN MADE UP 66.9% (864) OF RESPONDENTS WHICH IS TYPICAL OF MANY COMMUNITY-BASED HEALTH SURVEYS THE AGE GROUP WITH THE MOST RESPONDENTS WAS THE 45-54 AGE RANGE AT 27.8% (359) WITH THE 55-64 AGE GROUP CLOSELY SECOND AT 23.5% (304) RACES THAT WERE REPRESENTED CLOSELY MIRRORED THOSE OF LINN COUNTY EFFORT TO CAPTURE INFORMATION REGARDING WHERE PEOPLE LIVE WAS ALSO MADE BY ASKING FOR RESPONDENTS ZIP CODE ST. LUKE'S METHODIST HOSPITAL PART V, SECTION B, LINE 4: IT WAS CONDUCTED WITH MERCY MEDICAL CENTER, THE LINN COUNTY BOARD OF HEALTH AND A VARIETY OF COMMUNITY ORGANIZATIONS. ST. LUKE'S METHODIST HOSPITAL PART V, SECTION B, LINE 7: ST. LUKE'S METHODIST HOSPITAL DID NOT SPECIFICALLY ADDRESS THE AIR QUALITY NEED IN THE COMMUNITY HEALTH NEEDS ASSESSMENT. ST. LUKE'S METHODIST HOSPITAL MAKES TREMENDOUS EFFORTS TO ENSURE OUR FACILITIES ARE ENERGY EFFICIENT AND SAFE FOR THE COMMUNITY, BUT THIS SPECIFIC NEED WAS NOT SOMETHING THE HOSPITAL ADDRESSED. ST. LUKE'S METHODIST HOSPITAL PART V, SECTION B, LINE 15E: GUARANTORS RECEIVE A CYCLE BILL EERY 30 DAYS FOR THE LIFE OF THE ACCOUNT ON A/R. ON DAY 41, 11 DAYS AFTER THE SECOND BILLING CYCLE, A FIRST COLLECTION ATTEMPT IS MADE FROM THE TELEVOX DIALER. THE SECOND COLLECTION ATTEMPT IS MADE BY THE DIALER ON DAY 71, 11 DAYS AFTER THE THIRD AND FINAL BILLING CYCLE. THE THIRD COLLECTION ATTEMPT IS MADE BY THE DIALER ON DAY 87, E DAYS BEFORE THE ACCOUNT IS REVIEWED FOR COLLECTIONS. ACCOUNTS WITH SATISFACTORY PAYMENTS OR PREARRANGED PAYMENT ARRANGEMENTS THAT ARE CURRENT ARE NOT SENT TO THE DIALER. ACCOUNTS WITH A MENTAL HEALTH DIAGNOSIS, WORKERS COMPENSATION ACCOUNTS, ACCOUNTS WITH SKILLED NURSING FACILITIES, AND ACCOUNTS WITH NO PHONE NUMBER ARE ALSO NOT SENT TO THE DIALER. THESE ACCOUNTS ARE ON A MANUAL LIST WHICH THE COLLECTION TEAM REVIEWS AND MAKES CALLS MANUALLY AS DEEMED APPROPRIATE. WHEN THE ACCOUNTS ARE GREATER THAN OR EQUAL TO $5,000, THE COLLECTION TEAM WILL SEND A FINANCIAL ASSISTANCE APPLICATION IF THEY CANNOT MAKE CONTACT WITH THE GUARANTOR AND 10 BUSINESS DAYS LATER, A PAST LETTER. THEY WILL ALSO CHECK FOR MEDICAID ELIGIBILITY FOR THEIR STATE OF RESIDENCE. ST. LUKE'S METHODIST HOSPITAL PART V, SECTION B, LINE 19D: IF THE INDIVIDUAL APPLIES AND QUALIFIES FOR FINANCIAL ASSISTANCE UNDER THE FACILITYS FINANCIAL ASSISTANCE POLICY, THE HOSPITAL FACILITY USES THE AVERAGE OF THE THREE LOWEST NEGOTIATED COMMERCIAL INSURANCE RATES FOR THOSE SERVICES AT THE HOSPITAL FACILITY TO DETERMINE THE AMOUNTS BILLED FOR ALL SERVICES, INCLUDING EMERGENCY OR MEDICALLY NECESSARY CARE. THIS OCCURS REGARDLESS WHETHER THE INDIVIDUAL HAS INSURANCE COVERAGE. ALSO, IF THE INDIVIDUAL HAS INSURANCE COVERAGE AND DOES NOT APPLY OR QUALIFY FOR FINANCIAL ASSISTANCE UNDER THE FACILITYS FINANCIAL ASSISTANCE POLICY, THE HOSPITAL FACILITY USES THE INSURERS NEGOTIATED RATE FOR THOSE SERVICES AT THE HOSPITAL FACILITY. HOWEVER, IF THE INDIVIDUAL DOES NOT HAVE INSURANCE COVERAGE AND EITHER DOES NOT APPLY OR DOES NOT QUALIFY FOR FINANCIAL ASSISTANCE UNDER THE FACILITYS FINANCIAL ASSISTANCE POLICY, THE HOSPITAL FACILITY USES THE GROSS RATES FOR THOSE SERVICES TO DETERMINE THE AMOUNTS BILLED. IF THE UNINSURED INDIVIDUAL AGREES TO PAY THE BILL IN FULL, THE HOSPITAL FACILITY WILL PROVIDE A 20%-30% DISCOUNT FROM THE GROSS RATES FOR THOSE INDIVIDUALS. THE PERCENTAGE OF GROSS CHARGES ON SELF-PAY ACCOUNTS WITH NO DISCOUNT FOR 2011 WAS 1.7%. ST. LUKE'S METHODIST HOSPITAL PART V, SECTION B, LINE 21: AS DESCRIBED IN SCHEDULE H, PART V, LINE 19, IF THE PATIENT DOES NOT APPLY OR QUALIFY FOR FINANCIAL ASSISTANCE AND ALSO IS UNINSURED OR RECEIVES NO BENEFIT FROM THEIR INSURANCE ON A SERVICE PROVIDED BY THE HOSPITAL FACILITY, THEY WOULD BE CHARGED AMOUNTS EQUAL TO GROSS CHARGES FOR THE SERVICES PROVIDED TO THE PATIENT. HOWEVER, IF THE PATIENT AGREES TO PAY IN FULL, THEY WILL RECEIVE A 20%-30% DISCOUNT FROM THE GROSS CHARGES. THE PERCENTAGE OF GROSS CHARGES ON SELF-PAY ACCOUNTS WITH NO DISCOUNT FOR 2011 WAS 1.7%. PART VI, LINE 2: ST. LUKES METHODIST HOSPITAL CONTINUALLY WORKS WITH COMMUNITY PARTNERS IN LINN COUNTY IOWA TO ASSESS THE HEALTH NEEDS OF THE COMMUNITY. SPECIFICALLY, ST. LUKES IS A SPONSORING PARTNER OF THE LINN COUNTY COMMUNITY HEALTH NEEDS ASSESSMENT & HEALTH IMPROVEMENT PLAN (CHNA-HIP) STEERING COMMITTEE WHICH IS A COMMUNITY COLLABORATIVE CONVENED BY ST. LUKES, MERCY MEDICAL CENTER AND THE LINN COUNTY BOARD OF HEALTH TO ASSESS, ADDRESS AND MONITOR THE HEALTH NEEDS OF LINN COUNTY. THROUGH A PLANNED AND ORGANIZED EFFORT, [PROGRAM NAME] DEVELOPS A HEALTH AGENDA BY IDENTIFYING SPECIFIC HEALTH PRIORITIES THAT ARE RELEVANT TO THE COMMUNITY. CHNA-HIP WORKS COLLECTIVELY TO ADDRESS THE PRIORITIES THROUGH LEVERAGING THE RESOURCES OF THE COMMUNITY. ST. LUKES METHODIST HOSPITAL, AS A SPONSORING AGENCY, ACTIVELY CONTRIBUTES TO THIS PROCESS AND ENGAGES IN THE IDENTIFIED PRIORITIES THAT MATCH ITS MISSION AND CAPACITY. EFFORTS ARE MONITORED IN PART BY OTHER PARTNER AGENCIES SUCH AS THE AREA SUBSTANCE ABUSE COUNCIL AND CEDAR RAPIDS COMMUNTY SCHOOL DISTRICT, WHICH MONITOR AND REPORT SPECIFIC INDICATORS TO ASSESS EFFECTIVENESS AND AID IN THE DEVELOPMENT OF NEW PLANS OR REFINING EXISTING ONES. FURTHER, CHNA-HIP HAS DEVELOPED A MEASUREMENT PROCESS TO EVALUATE EFFECTIVENESS AS WELL AS NEED. CHNA-HIP CONVENES 4 MEETINGS ANNUALLY TO SEEK PUBLIC INPUT ON HEALTH INITIATIVES. ST. LUKES METHODIS HOSPITAL IS ALSO A SPONSORING PARTNER IN CHNA-HIP. THIS COLLABORATIVE ALSO COMPLETES A COMMUNITY HEALTH ASSESSMENT. FROM THIS, PRIORITIES AND STRATEGIES HAVE BEEN IDENTIFIED. ST. LUKES METHODIST HOSPTIAL HAS ACTIVELY ENGAGED IN ADDRESSING AND MONITORING HEALTH ISSUES AND NEEDS AS A RESULT OF THIS PROCESS. ST. LUKES METHODIST HOSPITAL ALSO PARTICIPATES AS PART OF THE UNITED WAY COMMUNITY IMPACT COMMITTEE. THIS GROUP ACTIVELY ADDRESSES NEED AND STRATEGIES ASSOCIATED WITH HEALTH. MORE SPECIFICALLY, THIS GROUP OFTEN FOCUSES ON THE SOCIAL DETERMINANTS OF HEALTH AND HOW TO IMPACT THEM IN THE EFFORT TO RAISE THE COMMUNITY HEALTH STATUS. THIS WIDE BASED COLLABORATIVE PROVIDES OPPORTUNITIES FOR ST. LUKES TO ENGAGE IN VARIOUS AREAS OF SERVICE TO THE COMMUNITY THAT MAY BE OUTSIDE OF ITS TYPICAL EXPERTISE BUT WITHIN ITS EXISTING RESOURCES. IN ADDITION TO THESE ORGANIZED COMMUNITY EFFORTS ST. LUKES METHODIST HOSPITAL CONTINUALLY MONITORS COMMUNITY NEEDS SPECIFIC TO ITS SERVICE LINES AND THE RESOURCES IT CAN LEVERAGE TO ADDRESS THEM. INDIVIDUAL DEPARTMENTS OFTEN WORK TO IDENTIFY SPECIFIC NEEDS RELATED TO THEIR SERVICES AND THE POPULATION THEY IMPACT. PART VI, LINE 3: ST. LUKES METHODIST HOSPITAL PERFORMS THE FOLLOWING ACTIVITIES TO COMMUNICATE THE AVAILABILITY OF CHARITY CARE AND FINANCIAL ASSISTANCE TO ALL PATIENTS: 1) PLACES SIGNAGE, INFORMATION, AND/OR BROCHURES IN APPROPRIATE AREAS OF THE HOSPITAL (E.G., THE EMERGENCY DEPARTMENT, AND REGISTRATION AND CHECK-OUT/CASHIER AREAS) STATING THE HOSPITAL OFFERS CHARITY CARE AND DESCRIBES HOW TO OBTAIN MORE INFORMATION ABOUT FINANCIAL ASSISTANCE, 2) PLACES A NOTE ON THE HEALTH-CARE BILL AND STATEMENTS REGARDING HOW TO REQUEST INFORMATION ABOUT FINANCIAL ASSISTANCE, 3) DESIGNATES INDIVIDUALS WHO CAN EXPLAIN THE PROVIDER'S CHARITY CARE POLICY, AND 4) INSTRUCTS STAFF WHO INTERACT WITH PATIENTS TO DIRECT QUESTIONS REGARDING THE CHARITY CARE POLICY TO THE PROPER PROVIDER REPRESENTATIVE. PART VI, LINE 4: ST. LUKES METHODIST HOSPITAL IS A 532-BED COMMUNITY HOSPITAL SERVING AN 8 COUNTY AREA. ST. LUKES METHODIST HOSPITAL IS NONDENOMINATIONAL AND SERVES ALL WHO COME HERE, REGARDLESS OF REASON OR CIRCUMSTANCE.80% OF ST. LUKES METHODIST HOSPITAL MARKET RESIDENTS LIVE WITHIN THE IOWA COUNTIES OF BENTON, BUCHANAN, CEDAR, DELAWARE, IOWA, JOHNSON, JONES AND LINN. ST. LUKES METHODIST HOSPITAL ADMITS APPROXIMATELY 18,513 INPATIENTS AND CARES FOR 55,068 EMERGENCY PATIENTS PER YEAR. ST. LUKES METHODIST HOSPITAL CARES FOR MORE INPATIENTS, OUTPATIENTS, EMERGENCY PATIENTS AND CARDIAC PATIENTS THAN ANY OTHER HOSPITAL IN CEDAR RAPIDS, IOWA. THERE ARE 9 OTHER HOSPITALS WITHIN THE 8-COUNTY SERVICE AREA. MEDIAN HOUSEHOLD INCOMES RANGE FROM $40-60 THOUSAND AND THE AVERAGE POVERTY RATE IS 9%. 54% OF ST. LUKES METHODIST HOSPITAL INPATIENTS ARE ELIGIBLE FOR MEDICARE OR MEDICAID. LINN COUNTY, THE ONLY COUNTY IN THE SERVICE AREA WITH SIGNIFICANT MINORITY POPULATION, IS 93% CAUCASIAN; 3% AFRICAN-AMERICAN, 2% HISPANIC AND 2% ASIAN. PART VI, LINE 5: THE HOSPITAL IS ORGANIZED AND OPERATED EXCLUSIVELY FOR CHARITABLE PURPOSES WITH THE GOAL OF PROMOTING THE HEALTH OF THE COMMUNITIES IT SERVES. THE HOSPITAL SUPPORTS THIS MISSION WITH A COMMUNITY BOARD, OPEN MEDICAL STAFF, AND AN EMERGENCY ROOM AVAILABLE TO PATIENTS REGARDLESS OF ABILITY TO PAY. THE BOARD OF DIRECTORS OF THE HOSPITAL IS COMPOSED OF CIVIC LEADERS WHO RESIDE IN THE SERVICE AREA OF THE HOSPITAL. THE BOARD ACTIVELY DEBATES AND SETS POLICY AND STRATEGIC DIRECTION FOR THE HOSPITAL BUT DOES NOT GET INVOLVED IN ISSUES RELATED TO THE DIRECT OPERATIONS OF THE HOSPITAL. THE BOARD TAKES A BALANCED APPROACH WHEN ADDRESSING COMMUNITY AND BUSINESS/FINANCIAL CONCERNS. THE BOARD IS ALSO THE PRIMARY GROUP FOR DETERMINING THE USE OF HOSPITAL SURPLUS FUNDS, WHICH ARE ALL USED TO FURTHER OUR CHARITABLE PURPOSE. PART VI, LINE 6: THE HOSPITAL IS PART OF IOWA HEALTH SYSTEM. INITIALLY FORMED IN 1995, IOWA HEALTH SYSTEM IS THE STATE'S FIRST AND LARGEST INTEGRATED HEALTH SYSTEM, SERVING NEARLY ONE OF EVERY THREE PATIENTS IN IOWA. THROUGH RELATIONSHIPS WITH 26 HOSPITALS IN METROPOLITAN AND RURAL COMMUNITIES AND MORE THAN 140 PHYSICIAN CLINICS, IOWA HEALTH SYSTEM PROVIDES CARE THROUGHOUT IOWA AND WESTERN ILLINOIS.IOWA HEALTH SYSTEM ENTITIES EMPLOY THE STATE'S LARGEST NONPROFIT WORKFORCE, WITH NEARLY 20,000 EMPLOYEES WORKING TOWARD INNOVATIVE ADVANCEMENTS TO DELIVER THE BEST OUTCOME FOR EVERY PATIENT EVERY TIME. EACH YEAR, THROUGH MORE THAN 2.5 MILLION PATIENT VISITS, IOWA HEALTH SYSTEM HOSPITALS AND CLINICS PROVIDE A FULL RANGE OF CARE TO PATIENTS AND FAMILIES. WITH ANNUAL REVENUES OF $2 BILLION, IOWA HEALTH SYSTEM IS THE SIXTH LARGEST NONDENOMINATIONAL HEALTH SYSTEM IN AMERICA AND PROVIDES COMMUNITY BENEFIT PROGRAMS AND SERVICES TO IMPROVE THE HEALTH OF PEOPLE IN ITS COMMUNITIES. IOWA HEALTH SYSTEM AND ITS AFFILIATES ENGAGE IN COMMUNITY HEALTH PROGRAMS AND SERVICES THROUGHOUT IOWA, AND WORK WITH VOLUNTEER AND CIVIC ORGANIZATIONS, SCHOOLS, BUSINESSES, INSURERS AND INDIVIDUALS TO SUPPORT ACTIVITIES THAT BENEFIT PEOPLE THROUGHOUT THE STATE. IN 2009, IOWA HEALTH SYSTEM AND ITS AFFILIATES PROVIDED MORE THAN $128 MILLION OF COMMUNITY BENEFIT. THE CONTRIBUTIONS TO THEIR COMMUNITIES BY IOWA HEALTH SYSTEM AND ITS AFFILIATES ARE REPORTED IN DETAIL IN STATEMENT OF PROGRAM SERVICE ACCOMPLISHMENTS (PART III) OF THE IRS FORM 990 OF THOSE AFFILIATES. REPORTS FILED WITH STATES PART VI, LINE 7 IA 1 AMERICAN HEART ASSOCIATION PO BOX 4002902 DES MOINES IA 50340 135613797 501(C)(3) 5000 PROGRAM SUPPORT CEDAR RAPIDS COMMUNITY CANCER CENTER FOUNDATION 855 A AVENUE CEDAR RAPIDS IA 52406 452671609 501(C)(3) 1000000 PROGRAM SUPPORT CEDAR RAPIDS MEDICAL EDUCATION FOUNDATION 1026 A AVENUE NE CEDAR RAPIDS IA 52402 391894395 501(C)(3) 1866205 PROGRAM SUPPORT CEDAR RAPIDS SYMPHONY 205 2ND AVE SE CEDAR RAPIDS IA 52401 420772544 501(C)(3) 5000 PROGRAM SUPPORT CITY OF CEDAR RAPIDS 324 3RD ST SE CEDAR RAPIDS IA 52401 426053860 501(C)(3) 10000 PROGRAM SUPPORT ENTREPRENEURIAL DEVELOPMENT CENTER 230 2ND ST SE CEDAR RAPIDS IA 52404 421447565 501(C)(3) 5000 PROGRAM SUPPORT HEALTHY LINN CARE NETWORK 501 13TH STREET NW CEDAR RAPIDS IA 52405 426004338 501(C)(3) 35000 PROGRAM SUPPORT HORIZONS PO BOX 667 CEDAR RAPIDS IA 52406 421135083 501(C)(3) 25000 PROGRAM SUPPORT IOWA HEALTH SYSTEM 1200 PLEASANT STREET DES MOINES IA 50309 421435199 501(C)(3) 2204927 PROGRAM SUPPORT IOWA HOSPITAL ASSOCIATION 100 E GRAND SUITE 100 DES MOINES IA 50309 420706508 501(C)(3) 11200 PROGRAM SUPPORT MILESTONESAGING SERVICES INC 1725 O AVENUE MARION IA 52302 237085316 501(C)(3) 20000 PROGRAM SUPPORT SCIENCE CENTER OF IOWA 401 W MARTIN LUTHER KING JR PARKWAY DES MOINES IA 50309 426097912 501(C)(3) 27098 PROGRAM SUPPORT UNIVERSITY OF IOWA POX BOX 4550 IOWA CITY IA 522444550 420796760 501(C)(3) 10000 PROGRAM SUPPORT VARIETY CLUB OF IOWA PO BOX 1163 CEDAR RAPIDS IA 52406 426077108 501(C)(3) 5000 PROGRAM SUPPORT WAYPOINT 318 FIFTH STREET SE CEDAR RAPIDS IA 52401 420680307 501(C)(3) 25000 EVENT SPONSOR 11 0 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: ST. LUKE'S METHODIST HOSPITAL REQUIRES EACH RECIPIENT OF THE GRANTS MENTIONED IN PARTS II & III (OTHER THAN ASSISTANCE TO RELATED ORGANIZATIONS IN THE FORM OF WORKING CAPITAL) TO APPLY FOR THE GRANT AND OUTLINES A SERIES OF ELIGIBILITY STANDARDS THAT ARE REQUIRED TO BE MET. ST. LUKE'S METHODIST HOSPITAL THEN REVIEWS THESE APPLICATIONS AND, BASED ON NEED AND ELIGIBILITY, A COMMITTEE MAKES THE FINAL DECISION ON ALL GRANT RECIPIENTS. X X X X X 1 1 0 0 0 0 0 0 0 DUSTIN ARNOLD MD 392662 0 0 0 1423 0 10519 0 38 0 404642 0 0 0 THEODORE TOWNSEND JR 413881 0 127527 0 65765 0 112089 0 23587 0 742849 0 0 0 MILTON AUNAN II 258850 0 75067 0 32257 0 42716 0 11001 0 419891 0 0 0 JOHN SHEEHAN 330891 0 87698 0 40701 0 57731 0 23415 0 540436 0 0 0 MOHIT CHAWLA 561491 0 0 0 30 0 9860 0 10872 0 582253 0 0 0 MIKE EASLEY 141826 0 21507 0 8812 0 14500 0 19408 0 206053 0 0 0 SUBHI HALAWA 549432 0 0 0 1164 0 11891 0 13796 0 576283 0 0 0 RICHARD KETTELKAMP 596269 0 0 0 720 0 8731 0 9039 0 614759 0 0 0 TODD LANGAGER 509259 0 0 0 3168 0 12250 0 14576 0 539253 0 0 0 MICHELLE NIERMANN 203181 0 55812 0 16325 0 26867 0 21035 0 323220 0 0 0 KATHERINE OBERBROECKLING 130122 0 19892 0 279 0 7214 0 19642 0 177149 0 0 0 MARY ANN OSBORN 246464 0 100805 0 33369 0 64210 0 10543 0 455391 0 0 0 CHARLES SCHAUBERGER 133769 0 83380 0 126422 0 9057 0 7596 0 360224 0 0 0 MARY HLAVIN 896032 0 0 0 1104 0 9765 0 14733 0 921634 0 0 0 MOHAMMED KHALIL 543520 0 0 0 480 0 12471 0 12000 0 568471 0 0 0 NASAR PAYVANDI 555382 0 0 0 6096 0 12250 0 14596 0 588324 0 0 0 DAVID RATER 535113 0 0 0 2282 0 12081 0 6893 0 556369 0 0 0 HISHAM WAGDY 641251 0 0 0 125 0 13321 0 8199 0 662896 0 0 0 PART I, LINE 1A TAX INDEMNIFICATION AND GROSS-UP PAYMENTS: DR. SCHAUBERGER WAS REIMBURSED BY THE EMPLOYER FOR TAXES PAID. THE REIMBURSEMENT AMOUNT WAS INCLUDED IN TAXABLE INCOME, REPORTED ON FORM W-2, AND TOTAL COMPENSATION WAS WITHIN APPROPRIATE FAIR MARKET VALUE LIMITS. PART I, LINES 4A-B THE FOLLOWING INDIVIDUAL RECEIVED SEVERANCE PAYMENTS DURING THE YEAR THAT WERE INCLUDED IN TAXABLE INCOME: CHARLES SCHAUBERGER $100,117. THE FOLLOWING INDIVIDUALS PARTICIPATED IN A NON-QUALIFIED RETIREMENT PLAN WITH THE FOLLOWING CHANGES TO THEIR ACCOUNTS: MILTON AUNAN II $30,465, MICHELLE NIERMANN $15,746, MARY ANN OSBORN $42,160, JOHN SHEEHAN $45,463, AND THEODORE TOWNSEND, JR. $99,035. CEDAR VALLEY PATHOLOGISTS PC COMMON BOARD MEMBER/OFFICER 595000 PATHOLOGY MEDICAL DIRECTOR 0 EASTERN IOWA SLEEP CENTER LLC COMMON BOARD MEMBER/OFFICER 214000 INVESTMENT 0 HEALTH ENTERPRISES OF IOWA COMMON BOARD MEMBER/OFFICER 107351 ULTRASOUND SERVICES 0 KIRKWOOD COMMUNITY COLLEGE COMMON BOARD MEMBER/OFFICER 131000 RENT, CONTINUING EDUCATION, TRAINING ROOMS/PROGRAMS 0 MEDICAL LABORATORIES OF EASTERN IOWA LC COMMON BOARD MEMBER/OFFICER 1474000 INVESTMENT, PURCHASED SERVICES 0 MR ASSOCIATES LLP COMMON BOARD MEMBER/OFFICER 6101000 RENT, PAYROLL SERVICES/BENEFITS, SUPPLIES, IT LAUNDRY, ETC. 0 PCI LENDER LLC COMMON BOARD MEMBER/OFFICER 256824 INVESTMENT 0 PCI REGIONAL MEDICAL MALL LLC COMMON BOARD MEMBER/OFFICER 457568 INVESTMENT AND DISTRIBUTION OF CAPITAL 0 PHYSICIANS CLINIC OF IOWA PC COMMON BOARD MEMBER/OFFICER 495000 MEDICAL DIRECTOR AND OTHER 0 SHUTTLEWORTH & INGERSOLL PLC COMMON BOARD MEMBER/OFFICER 138000 PROFESSIONAL SERVICES 0 ST LUKE'S DEVELOPMENT COMPANY COMMON BOARD MEMBER/OFFICER 351685 RENT, PERFORMANCE OF SERVICES, SHARE EMPLOYEES, LEASE & PURCHASED ASSETS, ETC. 0 ST LUKE'S - COE STEAM INC COMMON BOARD MEMBER/OFFICER 1006415 PERFORMANCE OF SERVICES 0 STL HEALTH RESOURCES CO COMMON BOARD MEMBER/OFFICER 1143433 INTEREST, PURCHASE/SALE OF ASSETS, LEASES, PERFORMANCE OF SERVICES, AND EXPENSE REIMBURSEMENT 0 THE OUTPATIENT SURGERY CENTER OF CEDAR RAPIDS LLC COMMON BOARD MEMBER/OFFICER/KEY EMPLOYEE 6677000 INVESTMENT, RENT, PAYROLL SERVICES/BENEFITS, SUPPLIES, INFORMATION TECHNOLOGY, LAUNDRY, MAINTENANCE, ETC. 0 TONYA ARNOLD FAMILY MEMBER OF BOARD MEMBER DUSTIN ARNOLD, MD 79628 COMPENSATED EMPLOYEE WHOSE SPOUSE IS DUSTIN ARNOLD, MD WHO IS A BOARD MEMBER OF SEVERAL CR BOARD IN 2011. 0 FORM 990, PART VI, SECTION A, LINE 2 STEVE CAVES, JAMES HOFFMAN, THEODORE TOWNSEND, BUSINESS RELATIONSHIP JAMES HOFFMAN, MARCIA ROGERS, BUSINESS RELATIONSHIP FORM 990, PART VI, SECTION A, LINE 6 ST. LUKE'S HEALTHCARE, A TAX-EXEMPT IOWA NONPROFIT CORPORATION, IS SOLE MEMBER. FORM 990, PART VI, SECTION A, LINE 7B IOWA HEALTH SYSTEM, AS SOLE MEMBER OF ST. LUKE'S HEALTHCARE, APPROVES APPOINTMENT OF BOARD OF DIRECTORS, APPROVES AMENDMENTS TO ARTICLES AND BYLAWS, APPROVES STRATEGIC AND BUSINESS PLAN, SELECTION AND REMOVAL OF CEO, APPROVES INCURRED INDEBTEDNESS, APPROVES MANAGED CARE STRATEGY, APPROVES TRANSFER OF ASSETS, MERGER, ACQUISITION AND DISSOLUTIONS, BUDGETS, AND SIGNIFICANT CORPORATE TRANSACTIONS. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 IS PREPARED INTERNALLY BY THE IOWA HEALTH SYSTEM TAX DEPARTMENT USING INFORMATION GATHERED FROM VARIOUS FUNCTIONAL AREAS OF THE ORGANIZATION. EACH SECTION OF THE RETURN IS REVIEWED BY THE RESPONSIBLE FUNCTIONAL AREA ALONG WITH THE TAX DEPARTMENT. A DRAFT COPY OF THE RETURN IS PROVIDED TO THE CFO FOR REVIEW. A SUBCOMMITTEE OF THE BOARD REVIEWS THE FORM 990 AND REPORTS BACK TO THE FULL BOARD. A FULL COPY OF THE FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO FILING WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C THE ORGANIZATION HAS A CONFLICT OF INTEREST POLICY. ANNUALLY ALL OFFICERS, DIRECTORS, KEY EMPLOYEES AND REPORTING PHYSICIANS ARE REQUESTED TO COMPLETE A QUESTIONNAIRE TO REPORT POTENTIAL CONFLICTS OF INTEREST. PERSONS WHO HAVE NOT RETURNED QUESTIONNAIRES ARE CONTACTED ADDITIONAL TIMES IN AN EFFORT TO RECEIVE COMPLETE AND ACCURATE RESPONSES FROM ALL PERSONS. THE ANNUAL QUESTIONNAIRES INCLUDE AN ACKNOWLEDGEMENT THAT THE OFFICER, DIRECTOR, KEY EMPLOYEE OR REPORTING PHYSICIAN: 1) HAS ACCESS TO A COPY OF THE CONFLICT OF INTEREST POLICY; 2) HAS READ AND UNDERSTANDS THE POLICY; 3) AGREES TO COMPLY WITH THE POLICY; 4) UNDERSTANDS THAT THE POLICY APPLIES TO ALL COMMITTEES AND SUBCOMMITTEES HAVING BOARD-DELEGATED POWERS; AND 5) UNDERSTANDS THAT THE ORGANIZATION IS A CHARITABLE ORGANIZATION AND THAT IN ORDER TO MAINTAIN ITS TAX-EXEMPT STATUS, IT MUST CONTINUOUSLY ENGAGE PRIMARILY IN ACTIVITIES WHICH ACCOMPLISH ONE OR MORE OF ITS TAX-EXEMPT PURPOSES. SENIOR ADMINISTRATIVE STAFF AT ALL RELATED ORGANIZATIONS PROVIDE INFORMATION TO A CENTRAL COORDINATOR RELATED TO THE IDENTIFICATION OF WHICH INDIVIDUALS SHOULD RECEIVE THE QUESTIONNAIRE FOR COMPLETION. THE RESULTS ARE COMPILED CENTRALLY AND REVIEWED BY THE IOWA HEALTH SYSTEM COMPLIANCE OFFICER AND DIRECTOR OF INTERNAL AUDIT. THE DETAIL RESULTS ARE REPORTED TO A COMMITTEE OF THE SYSTEM BOARD. THE RESULTS RELATED TO SPECIFIC REGIONAL PARENT COMPANIES, THEIR HOSPITALS AND RELATED ORGANIZATIONS, ARE DISTRIBUTED IN DETAIL TO THE CHAIRPERSON OF THE REGIONAL PARENT ORGANIZATION, THE CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND COMPLIANCE MANAGER. THESE INDIVIDUALS ARE ALSO REMINDED OF THE APPROPRIATE PROCESS TO BE FOLLOWED DURING THE YEAR TO ADDRESS POTENTIAL CONFLICTS OF INTEREST THAT RELATE TO MATTERS THAT ARE BROUGHT TO THE BOARD OF DIRECTORS FOR ACTION. THE INFORMATION DISCLOSED IS USED TO IDENTIFY POTENTIAL CONFLICTS OF INTEREST AND TO ASSIST IN COMPLETING IRS AND MEDICAID QUESTIONNAIRES. ANY DUALITY OF INTEREST OR POSSIBLE CONFLICT OF INTEREST ON THE PART OF ANY ORGANIZATIONAL OFFICER, DIRECTOR, KEY EMPLOYEE OR REPORTING PHYSICIAN TOGETHER WITH ALL MATERIAL FACTS, SHOULD BE DISCLOSED TO THE BOARD OF DIRECTORS AND MADE A MATTER OF RECORD, EITHER THROUGH AN ANNUAL PROCEDURE OR WHEN THE INTEREST OCCURS OR BECOMES A MATTER OF BOARD ACTION. ANY ORGANIZATIONAL OFFICER, DIRECTOR, KEY EMPLOYEE OR REPORTING PHYSICIAN HAVING A CONFLICT OF INTEREST IN ANY MATTER SHOULD NOT BE PRESENT DURING GENERAL DISCUSSION NOR VOTE OR USE HIS OR HER PERSONAL INFLUENCE ON THE MATTER, AND HE OR SHE SHOULD NOT BE COUNTED IN DETERMINING THE EXISTENCE OF A QUORUM FOR PURPOSES OF THE MATTER OR ITEM AS TO WHICH A CONFLICT EXISTS. THE BOARD SHOULD EXCLUDE THE INDIVIDUAL FROM ANY DISCUSSION OR VOTE IN WHICH THE BOARD DECIDES WHETHER OR NOT A CONFLICT OF INTEREST EXISTS. IN CASES IN WHICH AN OFFICER, DIRECTOR, KEY EMPLOYEE, REPORTING PHYSICIAN OR THE INDIVIDUAL'S HOUSEHOLD MEMBER HAS A CONFLICT OF INTEREST IN AN ARRANGEMENT OR TRANSACTION, THE FOLLOWING ADDITIONAL STEPS MAY BE TAKEN AT THE DIRECTION OF THE BOARD OF DIRECTORS: 1) AFTER DISCLOSURE OF THE FINANCIAL INTEREST AND ALL MATERIAL FACTS, AND AFTER ANY DISCUSSION WITH THE INTERESTED PERSON, HE OR SHE SHALL LEAVE THE BOARD OR COMMITTEE MEETING WHILE THE DETERMINATION OF A CONFLICT OF INTEREST IS DISCUSSED AND VOTED UPON. THE REMAINING BOARD OR COMMITTEE MEMBERS SHALL 1) DECIDE IF A CONFLICT OF INTEREST EXISTS, 2) A DISINTERESTED PERSON OR COMMITTEE MAY BE APPOINTED TO INVESTIGATE ALTERNATIVES TO THE PROPOSED ARRANGEMENT OR TRANSACTION; 3) IN ORDER TO APPROVE THE ARRANGEMENT OR TRANSACTION, THE BOARD MUST FIRST FIND, BY MAJORITY VOTE OF DISINTERESTED MEMBERS, THAT THE ARRANGEMENT OR TRANSACTION IS IN THE ORGANIZATION'S BEST INTEREST, IS FAIR AND REASONABLE TO THE ORGANIZATION, AND, AFTER REASONABLE INVESTIGATION, THE DISINTERESTED MEMBERS HAVE DETERMINED THAT A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT CANNOT BE OBTAINED WITH REASONABLE EFFORTS UNDER THE CIRCUMSTANCES; THE MINUTES OF THE BOARD AND ALL COMMITTEES WITH BOARD-DELEGATED POWERS SHALL CONTAIN: 1) THE NAMES OF THE PERSONS WHO DISCLOSED OR OTHERWISE WERE FOUND TO HAVE A FINANCIAL INTEREST IN CONNECTION WITH AN ACTUAL OR POSSIBLE CONFLICT OF INTEREST, THE NATURE OF THE FINANCIAL INTEREST, ANY ACTION TAKEN TO DETERMINE WHETHER A CONFLICT OF INTEREST WAS PRESENT, AND THE BOARD'S OR COMMITTEE'S DECISION AS TO WHETHER A CONFLICT OF INTEREST IN FACT EXISTED; 2) THE NAMES OF THE PERSONS WHO WERE PRESENT FOR DISCUSSIONS AND VOTES RELATING TO THE TRANSACTION OR ARRANGEMENT, THE CONTENT OF THE DISCUSSION, INCLUDING ANY ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT, AND A RECORD OF ANY VOTES TAKEN IN CONNECTION THEREWITH; IN ORDER TO PROTECT THE ORGANIZATION'S BEST INTERESTS, APPROPRIATE DISCIPLINARY ACTION MAY BE TAKEN WITH RESPECT TO AN OFFICER, DIRECTOR, KEY EMPLOYEE OR REPORTING PHYSICIAN WHO VIOLATES THE CONFLICT OF INTEREST POLICY. FORM 990, PART VI, SECTION B, LINE 15 THE EXECUTIVE COMMITTEE OF THE IOWA HEALTH SYSTEM BOARD OF DIRECTORS ("COMMITTEE") CONDUCTS A COMPREHENSIVE ANNUAL REVIEW OF ALL COMPENSATION AND BENEFITS PROVIDED TO THE ORGANIZATION'S OFFICERS AND KEY EMPLOYEES, INCLUDING THE IHS CHIEF EXECUTIVE OFFICER (THE "CEO"). THIS ANNUAL REVIEW COMPARES THE TOTAL COMPENSATION AND VALUE OF BENEFITS PROVIDED TO EACH EXECUTIVE, ON A POSITION BY POSITION BASIS, TO THAT PROVIDED TO FUNCTIONALLY SIMILAR POSITIONS IN SIMILARLY SITUATED ORGANIZATIONS. THIS REVIEW IS CONDUCTED BY THE COMMITTEE WITH THE ASSISTANCE OF A NATIONAL, INDEPENDENT COMPENSATION CONSULTANT REPORTING DIRECTLY TO THE COMMITTEE. THE COMMITTEE HAS BEEN DELEGATED THE RESPONSIBILITY FOR OVERSIGHT OF EXECUTIVE COMPENSATION AND IS MADE UP ENTIRELY OF INDEPENDENT DIRECTORS WITHIN THE MEANING OF THE "REBUTTABLE PRESUMPTION OF REASONABLENESS" UNDER THE FEDERAL INCOME TAX INTERMEDIATE SANCTIONS RULES. THE COMPENSATION CONSULTANT HOLDS ITSELF OUT TO THE PUBLIC AS A COMPENSATION CONSULTANT, PERFORMS THESE VALUATIONS ON A REGULAR BASIS, IS QUALIFIED TO MAKE THE VALUATIONS OF THE SERVICES INVOLVED, AND HAS SO INDICATED IN A WRITTEN CERTIFICATION TO THE COMMITTEE. BASED UPON THE ADVICE OF THE COMPENSATION CONSULTANT, AND APPLYING THE BOARD'S COMPENSATION PHILOSOPHY, THE COMMITTEE ESTABLISHES THE OVERALL ADJUSTMENT IN COMPENSATION AND BENEFITS FOR APPROXIMATELY THE TOP FIFTY EXECUTIVES IN THE ENTIRE HEALTH SYSTEM (SEVERAL OF WHICH ARE EMPLOYEES OF THE FILING ORGANIZATION) AND DELEGATES TO THE CEO THE AUTHORITY TO MAKE ADJUSTMENTS, CONSISTENT WITH THE COMMITTEE'S DIRECTION, FOR THE OTHER EXECUTIVES. THE COMMITTEE DETERMINES ALL ASPECTS OF THE COMPENSATION AND BENEFITS OF THE CEO. THE COMMITTEE INTENTIONALLY TAKES ALL THE STEPS NECESSARY TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE FEDERAL INCOME TAX LAW INTERMEDIATE SANCTIONS RULES, INCLUDING CONTEMPORANEOUS SUBSTANTIATION OF ALL COMMITTEE MEETINGS AND ACTIONS. THE ORGANIZATION BELIEVES IT IS IN FULL COMPLIANCE WITH SECTION 4958 OF THE IRC, PROVIDES NO MORE THAN REASONABLE AND FAIR MARKET VALUE COMPENSATION AND BENEFITS FOR ITS EMPLOYEES AND DOES NOT PROVIDE ANY EXCESS COMPENSATION OR BENEFITS AS PROHIBITED BY SECTION 4958. THE ANNUAL REVIEW OF COMPENSATION AND BENEFITS WAS LAST PERFORMED IN DECEMBER 2011 FOR THE FOLLOWING INDIVIDUALS: MILTON AUNAN II, MICHELLE NIERMANN, MARY ANN OSBORN, JOHN SHEEHAN, AND THEODORE TOWNSEND, JR. THE COMPENSATION AND BENEFITS OF THE OTHER PERSONS LISTED ON FORM 990, PART VII WAS ESTABLISHED BY AN INDEPENDENT PERSON/COMMITTEE USING AN INDEPENDENT COMPENSATION CONSULTANT AND/OR COMPENSATION SURVEY OR STUDY FOR SIMILARLY QUALIFED PERSONS IN FUNCTIONALLY COMPARABLE POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS. COMPENSATION AND BENEFITS ARE BASED ON THE FAIR MARKET VALUE OF THE SERVICES PROVIDED TO THE ORGANIZATION. FORM 990, PART VI, SECTION C, LINE 19 IOWA HEALTH SYSTEM, OUR PARENT ORGANIZATION, HAS VOLUNTARILY ADOPTED MANY OF OUR INDUSTRY'S GOVERNANCE "BEST PRACTICES." IOWA HEALTH SYSTEM HAS DONE SO TO FURTHER ASSURE OUR STAKEHOLDERS THAT OUR GOVERNANCE AND MANAGEMENT IS CONDUCTED RESPONSIBLY AND WARRANTS THE TRUST YOU PLACE IN US. IN SEPTEMBER 2003, THE IOWA HEALTH SYSTEM BOARD OF DIRECTORS VOLUNTARILY ADOPTED OVER 40 CHANGES TO ITS GOVERNANCE STRUCTURE TO BETTER COMPLY WITH GOVERNANCE BEST PRACTICES AND THE INTENT AND APPLICABLE REQUIREMENTS OF THE SARBANES-OXLEY ACT OF 2003. IN ADDITION, GOVERNANCE POLICIES AND RELATED INFORMATION HAS BEEN ADDED TO THE IOWA HEALTH SYSTEM WEBSITE, WWW.IHS.ORG, INCLUDING BUT NOT LIMITED TO: OVER 130 CORPORATE COMPLIANCE POLICIES, INCLUDING CHARITY CARE AND CONFLICTS OF INTEREST POLICIES; GOVERNANCE BEST PRACTICE POLICIES; THE IDENTIFICATION OF BOARD MEMBERS AND BOARD COMMITTEES; COMPENSATION FOR HOSPITAL CEO'S; AND FINANCIAL INFORMATION FOR THE PAST SEVEN YEARS. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED LOSSES ON INVESTMENTS: -5,361,309. CHANGE IN BENEFICIAL INTEREST-ST. LUKE'S HEALTH CARE FOUNDATION -1,473,715. CHANGES IN PENSION LIABILITY -16,810,220. TOTAL TO FORM 990, PART XI, LINE 5: -23,645,244. 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STL HEALTH RESOURCES E 71000 BASED ON GAAP, CASH, AND/OR FMV. STL HEALTH RESOURCES G 464400 BASED ON GAAP, CASH, AND/OR FMV. STL HEALTH RESOURCES Q 542967 BASED ON GAAP, CASH, AND/OR FMV. SECTION 512(B)(13) CONTROLLED ENTITY SCHEDULE R, PART II, COLUMN (G) THE ORGANIZATION IS A MEMBER OF A CONSOLIDATED HEALTH SYSTEM AND HAS A COMMON PARENT ORGANIZATION, "IOWA HEALTH SYSTEM." FOR ENTITIES THAT ARE PART OF THE CONSOLIDATED HEALTH SYSTEM (WITH COMMON CONTROL) THE ATTRIBUTION RULES OF IRC SECTION 318 APPLY; MEANING THAT ALL ORGANIZATIONS ARE DEEMED TO HAVE CONTROL OF THE ORGANIZATIONS OWNED BY THE CONTROLLING ORGANIZATION. AS SUCH, WE ARE REPORTING ALL RELATED ORGANIZATIONS OF THE HEALTH SYSTEM IN PARTS II, III & IV. FOR PART V REPORTING, THE TRANSACTIONS DISCLOSED ARE THOSE BETWEEN THE DIRECTLY CONTROLLED PARENT-SUBSIDIARY ONLY. THE ORGANIZATION E-FILED A REQUEST FOR AN ADDITIONAL EXTENSION OF TIME TO FILE TO NOVEMBER 15, 2012, ON PART II OF FORM 8868. THE E-FILED EXTENSION WAS ACCEPTED BY THE IRS ON JULY 31, 2012; HOWEVER, THE IRS ISSUED NOTICE CP211A, DATED AUGUST 27, 2012, WITH AN INCORRECT DATE FOR PART II OF AUGUST 15, 2012 INSTEAD OF NOVEMBER 15, 2012. AS SUCH, THE ORGANIZATION RESPECTUFLLY REQUESTS THE ORGANIZATION'S RECORDS BE UPDATED ACCORDINGLY TO SHOW THIS FORM 990 AS BEING EXTENDED TO NOVEMBER 15, 2012, AND TIMELY FILED.