2012-03-13T14:41:30-05:00 2011-04-30 EIDE BAILLY LLP 4310 17TH AVE S PO BOX 2545 FARGO ND 581082545 990 2010-05-01 476028103 Cambridge Memorial Hospital CAMB 3086971522 PO Box 488 Cambridge NE 69022 Roger Steinkruger 3086971522 2012-03-12 1 LISA CHAFFEE CPA 7012398500 2012-03-09 2010 2016-02-24 21:20:13Z Tri Valley Health System Roger Steinkruger PO Box 488 Cambridge NE 69022 16026788 0 X www.trivalleyhealth.com X 1955 NE Providing quality, compassionate, local healthcare services. 9 9 235 241 25957 -34748 353557 255075 14437176 15738073 18040 27955 0 0 14808773 16021103 0 0 0 0 7918921 8585467 0 0 0 5685027 8072546 13603948 16658013 1204825 -636910 23211294 33930433 11855076 22632440 11356218 11297993 X Improve the health of our communities by providing quality, compassionate, local healthcare services. We strive to fulfill this mission by:1. Offering convenient and accessible acute care and senior services that exceed expectations.2. Positively impacting regional economic development.3. Building and reinforcing our sense of community, and4. Referring patients to specialists when necessary. 1 0 10831412 10339818 Tri Valley Health System operates a critical access hospital with an attached long-term care unit, three rural health clinics, an Assisted Living Facility, a Home Medical Supply store and an Independent Retirement Center.The Cambridge Memorial Hospital, a 25 bed critical access hospital, operates a full-time emergency room and provides emergency care regardless of the ability to pay. The emergency room had approximately 1,100 emergency center visits this year. Through its integrated network of providers, Tri Valley Health System provides emergency and non-emergency services to the communities it serves. It makes these services accessible to the communities through participation in government programs like Medicare and Medicaid and by offering assistance through the Tri Valley Health System charity program. The Tri Valley Health System charity program provides discounted and free services to patients who lack the resources to be fully responsible for the health care they receive. The Charity Program is designed to ensure the communities served by Tri Valley Health System have access to needed healthcare services. The Tri Valley Health System Board of Directors oversees services delivered under the Charity Care Policy including assessing community needs, approving eligibility criteria and monitoring the effectiveness of the program in providing community access to medical care. Records are maintained to identify and monitor the level of charity care provided. These records include the amount for charges foregone for services and supplies furnished under its Charity Care Policy and equivalent service statistics. The amount of charges foregone during fiscal year ended April 30, 2011, based on established rates was $47,472.During the fiscal year, Tri Valley Health System completed building a replacement hospital and renovating the existing hospital to be a "healthy living center". The programs that are offered in healthy living center include a wellness and rehab center, spa, sleep diagnostic lab services, counseling rooms, nutrition education programs, etc. Tri Valley is committed to promoting Healthy Living through education to the communities it serves. 2012139 3096651 Tri Valley has rural health clinics in Arapahoe, Indianola, and Cambridge, Nebraska. During the year, the clinics had 14,562 visits. The employed physician's are active in the community and provide support services such as attendance at community sport programs and medical directors for EMT groups. They also offer educational programs for the local school systems and people in the community with programs such as our Healthy in the Heartland programs. Yearly the clinic provides "flu clinics" in which flu vaccinations are provided at reduced rates. Also, the clinics annually offer a "health fair" to the communities they serve. Lab testing completed which normally would cost the patient $400 is reduced to a fee of approximately $35 (depending on tests requested). 1755736 2275647 Tri Valley Health System's senior services programs include a Long Term Care Facility, an Assisted Living Facility and an Independent Living Facility. During the fiscal year, Tri Valley averaged over 29 residents a day in the Long Term Care and 17 residents a day in the Assisted Living Facility. By providing a continuum of care from independent, to assisted, to long term care, Tri Valley is encouraging community members to stay as independent as possible and assuring the patients/residents are in the appropriate location based on their level of care needs. Tri Valley launched the "Frog" Program which is a free exercise program for the older generation that meets three times a week. The program is currently offered in Arapahoe and Cambridge and because of the high utilization and by request, Tri Valley is currently looking to offer the program in Indianola as well. 14599287 1 1 0 0 0 0 0 0 0 1 1 0 0 0 1 1 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 33 0 1 235 1 1 1 0 0 0 0 0 0 0 0 0 X 9 9 1 1 0 0 1 1 0 1 0 0 0 1 1 1 1 1 1 0 0 0 X Diana Rippe 3086973329 PO Box 488 Cambridge NE 69022 Randy Heitmann 3.00 X X 0 0 0 Cathy Kubik 3.00 X X 0 0 0 Patrick Horwart 3.00 X X 0 0 0 Troy Westadt 3.00 X X 0 0 0 Eric Eisenhart 3.00 X 0 0 0 Clark Andrews 3.00 X 0 0 0 Reginald Warner 3.00 X 0 0 0 Bill Minnick 3.00 X 0 0 0 Kristy Witte 3.00 X 0 0 0 Roger Steinkruger 40.00 X 133035 0 46838 Diana Rippe 40.00 X 66745 0 19988 Lennie Deaver MD 40.00 X 226963 0 43800 Rachelle Kaspar-Cope MD 40.00 X 210331 0 41366 Paul Shellabarger PA 40.00 X 165953 0 37788 William Malchow PA 40.00 X 114537 0 33982 Bill Duff 40.00 X 163724 0 26811 1081288 0 250573 5 0 1 1 Southwest Nebraska Physical Therapy PO Box 789 McCook NE 690010789 Physical Therapy 672994 HealthTech Management Services Inc PO Box 636426 Cincinnati OH 452636426 Management Services 290338 Connie Hill CRNA 72195 Cross Creek Rd Cambridge NE 69022 Anesthesia 120098 Josh Hill CRNA 404 Prairie Ridge Rd McCook ND 69001 Anesthesia 119548 4 227305 27770 227305 255075 Patient Revenue 621300 15654451 15654451 Other Revenue 900099 57665 57665 Wellness and Rehab Cen 713940 18841 18841 Medical Spa 812900 7116 7116 15738073 21490 21490 12150 5685 12150 -5685 6465 6465 16021103 15712116 25957 27955 270602 270602 6455021 5822671 632350 125018 113487 11531 1734826 1549791 185035 317357 317357 21744 21744 65256 65256 1752679 1735568 17111 164006 164006 2107892 1817149 290743 460703 452981 7722 60845 49698 11147 70722 45765 24957 430695 430695 1432814 1432814 259452 259452 Provision for bad debts 738300 738300 Agency commission 19668 19668 Wellness and Rehab 1375 1375 169038 149541 19497 16658013 14599287 2058726 0 330995 73164 2207359 2637896 298019 317149 74839 750767 34512495 9615285 16057291 24897210 1916138 2108020 2326653 2870227 0 276000 23211294 33930433 5214391 1960569 6595685 20671871 45000 0 11855076 22632440 X 9028506 8426701 1433369 1976949 894343 894343 11356218 11297993 23211294 33930433 X -636910 578685 X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 113289 113289 21447975 3871869 17576106 10352795 5605167 4747628 2598436 138249 2460187 24897210 Interest in Tri Valley Medical Foundation 2870227 F 2870227 16021103 16658013 -636910 35111 543574 578685 -58225 16599788 35111 543574 578685 16021103 0 16021103 16658013 0 16658013 0 16658013 Description of Uncertain Tax Positions Under FIN 48: Part X: The Health System is organized as a Nebraska nonprofit corporation and has been recognized by the Internal Revenue Service (IRS) as exempt from federal income taxes under Internal Revenue Code Section 501(c)(3). The Health System is required annually to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. In addition, the Health System may be subject to income tax on net income that is derived from business activities that are unrelated to its exempt purpose. The Health System believes that it has appropriate support for any tax positions taken affecting its annual filing requirements and, as such, does not have any uncertain tax positions that are material to the consolidated financial statements. The Health System would recognize future accrued interest and penalties related to unrecognized tax liabilities in income tax expense, if such interest and penalties are incurred. Part XI, Line 8 - Other Adjustments: Change in interest in net assets of Tri Valley Medical Foundation 543,574. Part XII, Line 2d - Other Adjustments: Change in interest in net assets of Tri Valley Medical Foundation 543,574. 1 1 X 1 X 1 X 0 1 0 0 32057 32057 0.00200 1026970 1077468 -50498 0.00000 1059027 1077468 -18441 0.00200 9223 9223 0.00060 999507 576874 422633 0.02650 1008730 576874 431856 0.02710 2067757 1654342 413415 0.02910 0 498561 75283 5551576 5509348 42228 X 1 1 1 1 Cambridge Memorial Hospital DBA Tri

Valley Health System 1305 W Hwy 6 34 Cambridge NE 69022

X X X X Long term Care Not required 1 5 Heritage Plaza

1205 Nelson Street Cambridge NE 69022

Independent Living Tri Valley Health System Assisted Living

711 Mousel Ave Cambridge NE 69022

Assisted Living Arapahoe Clinic

305 Nebraska Ave Arapahoe NE 68922

Rural Health Clinic Cambridge Clinic

1305 W Highway 6/34 Cambridge NE 69022

Rural Health Clinic Indianola Clinic

119 S 4th Street Indianola NE 69034

Rural Health Clinic Part I, Line 7: The organization used Worksheet 2 to determine the cost for Part I, Line 7, Row a. Actual expenses were tracked for the programs included in Part I, Line 7, Row e. Rows b and g were determined from costs in the Medicare Cost report. Part I, L7 Col(f): The amount of bad debt expense removed from the denominator is $738,300. Part II: n/a Part III, Line 4: Financial Statement Bad Debt Expense Footnote:The carrying amount of patient and resident receivables is reduced by a valuation allowance that reflects management's estimate of amounts that will not be collected from patients, residents, and third-party payors. Management reviews patient and resident receivables by payor class and applies percentages to determine estimated amounts that will not be collected from third parties under contractual agreements and amounts that will not be collected from patients and residents due to bad debts. Management considers historical write off and recovery information in determining the estimated bad debt provision.The reserve for doubtful accounts is determined by a percentage of the remaining account receivables after discounts and payments are applied based on the age of the account.In Furnas County, Nebraska, the percentage of residents that are at or below poverty level is 15.1%. We can assume that the same percentage of patients would either be eligible for charity care or either did not apply or were denied charity care based on lack of information. Bad debt expense at cost is $498,561. We can assume that 15.1%, or $75,283, of this bad debt was attributable to patients who were eligible for the charity care program. Part III, Line 8: Medicare allowable costs of care are based on the Medicare cost report. The Medicare cost report is completed based on the rules and regulations set forth by CMS. Part III, Line 9b: When self pay balances are determined the accounts are subjected to three policies: The Collection Policy, Budget Pay Policy and the Charity Care Policy. All self pay balances are due within 30 days of issuing the first statement or an acceptable budget or payment plan needs to be established. At the time the budget payment plan is being established, accounts are evaluated for eligibility for Charity Care. Charity care qualification is based on the completion of a financial statement and receipt of supplemental documentation of income and some expenses. Based on a review of the documentation provided, the accounts can quality for a charity care adjustment anywhere from 25% - 100%. Any balance left owing after the review of the charity care application will be set up on a budget/payment arrangement. After 90 days or three statements (Regular and/or Budget), if full payment or payment arrangements have not been made or paid as established in the budget contract, the accounts are referred to the collection agency. In these processes the patient receives our normal monthly statements or budget statements, two letters (slow pay and final demand) and we contact them by phone prior to sending them to collections. Part VI, Line 2: In former years, Brim Healthcare assisted Tri Valley Health System (TVHS) in completing a strategic planning session which included Board of Trustees and Leadership and Department Directors to determine the health care needs of the communities based on statistics. TVHS is currently planning a community needs assessment that will be completed by the TVHS Business Development Executive. Part VI, Line 3: Information on eligibility for available assistance programs is usually communicated on an individual basis. Social services staff discusses with patients the availability of state programs (i.e. Medicaid), and assists them with the necessary paperwork. This is usually done primarily for inpatients and nursing home residents. Social Services contacts patient accounting staff about any other individuals in need of our Charity Care Program. We have financial brochures available for all patients. The same financial brochure information is posted on our website, and we ask all patients having financial hardships to please contact our patient accounting office. After self pay accounts generate a patient statement, they are reviewed by self pay patient accounting staff. When deemed appropriate, an explanatory letter and financial application are mailed to the patient. We provide them with all the necessary contact information and documentation requirements. Numerous attempts are made to obtain the needed information to qualify our patients for either charity care and/or Medicaid, if appropriate. Part VI, Line 4: Tri Valley Health System's primary service area is in Furnas County, Nebraska, consisting of 719 square miles. In 2010, the US Census Bureau estimated the population at 4,959. This was a decline from 2000 of 6.9%. 22.7% of the population is over 65 years old. In 2006-2010, 15.1% of the persons in Furnas County were below poverty level and the median household income was $37,938. There are no other hospitals in Furnas County. Part VI, Line 6: Tri Valley Health System is governed by a nine person Board of Trustees whose members reside within the system's primary service area and have no immediate family ties to any employees. These individuals also do not benefit financially through their businesses by means of contracts or other agreements. Surplus funds, if available, are used to purchase equipment or are re-invested in the facility to improve patient care. Tri Valley Health System extends medical staff privileges to all qualified physicians in the community. Throughout Tri Valley Health System's 2010-2011 fiscal year, strides were made to increase the community outreach and education as well as the health of the communities. In March 2011 Tri Valley opened the Healthy Living Center which includes a Wellness and Rehab Center. Every day people with chronic diseases, such as diabetes and heart failure, are monitored, educated, and cared for by dedicated health care professionals who help them enjoy the best quality of life possible. Healthy Women in the Heartland program provides monthly newsletters and quarterly educational programs at no cost to the members. The programs offered included everything from healthy eating by the hospital's dietician to foot care by a podiatrist. Annually the hospital promotes a Women's Day of Health which includes a full day of activities and educational programs to encourage and educate women on healthy living. The hospital opens its doors to the community to use conference areas for groups such as Alcohol Anonymous, ministerial associations and community volunteer emergency medical technician training. Other improvements to community outreach and education were accomplished through more frequent healthy living lunch lectures, and the development of Fitness Reaching Older Generations (FROG) classes within two communities of the primary service area. Tri Valley is reaching out to the communities through the school system and providing education to students in topics such as smoking cessation, bone health, spinal trauma and thyroid issues. Tri Valley's Wellness and Rehab center reached out to the youth in the communities they serve by providing exercise activities throughout the summer.As a critical access hospital, Tri Valley Health System's Cambridge Memorial Hospital invites specialists throughout the state to conduct weekly or monthly clinics in the specialty clinic. Services offered to patients during the 2010-2011 fiscal year were cardiology, general surgery, mental health, obstetrics/gynecology, orthopedics, ophthalmology, otolaryngology, podiatry, pulmonology, and urology. Tri Valley Health System is also a member of the Nebraska Telehealth Network providing additional services such as neurology and psychiatry. Part VI, Line 7: n/a X X 1 1 0 0 0 1 0 1 0 0 0 Roger Steinkruger 133035 0 0 0 0 0 0 0 46838 0 179873 0 0 0 Lennie Deaver MD 173637 0 52811 0 515 0 13986 0 30455 0 271404 0 0 0 Rachelle Kaspar-Cope MD 166335 0 43329 0 667 0 16500 0 25439 0 252270 0 0 0 Paul Shellabarger PA 89209 0 76279 0 465 0 16500 0 21691 0 204144 0 0 0 Bill Duff 161561 0 403 0 1760 0 0 0 27391 0 191115 0 0 0 Part I, Line 1a Spouses of board members attend one conference up to a maximum of $600. Providers can choose to belong to either a health club or a golf club. Payments are made directly to the health club or golf club. Part I, Line 5 The HealthTech Management Services contract has a set of goals that they give to the CEO. If the goals are met HealthTech Management Services approaches the Tri-Valley Health System board and asks that the bonus be paid to HealthTech. Each provider has an incentive payment schedule written in their contract. Incentive bonus is paid out monthly based on services performed. Part I, Line 6 The CFO is under the employee bonus program offered to all employees which allows for bonuses based on financial indicators and quality indicators. Supplemental Information Part III Part I, Line 3: The compensation paid to the CEO is set by HealthTech Management Services an unrelated management company. Tri Valley Health System has a written contract with HealthTech Management Services that is reviewed and approved by the board. Roger Steinkruger was contracted as CEO during calendar year 2010. Amounts reported are based on the monthly contract fee assuming 70% compensation and benefits of 22.35%. Assumed payroll taxes of 7.65% are not included in the reported amounts. X 1 44761 Fair Market Value X Boiler Replacement 1 182544 Actual Cost of Completed Portion 0 0 0 0 New Program Services Form 990, Part III, line 2 The organization opened Tri Valley Wellness and Rehab Center in March of 2011. The Center offers various exercise equipment which are open to the general public and also provides space for physical therapy patients to complete rehab. Long term care patients are allowed to come to use the exercise equipment without charge. The Center also outreaches to the young community by offering various programs for children throughout the year. Revenues earned from the general public memberships and the expenses in relation to those services to the general public are treated as unrelated business income and properly reported on the Form 990-T. The revenue and expenses associated with the patients of the Hospital are related to the exempt purpose of providing healthcare services. Form 990, Part VI, Section A, line 2 Randy Heitmann and Bill Minnick have a business relationship. Form 990, Part VI, Section A, line 3 The CEO is employed by HealthTech Management Services. Form 990, Part VI, Section A, line 6 Members pay a $5 fee to become a lifetime member. Form 990, Part VI, Section A, line 7a Members select the board of directors at the annual meeting. All members have the same voting rights. Form 990, Part VI, Section A, line 8b There are no committes with the authority to act on behalf of the governing body. Form 990, Part VI, Section B, line 11 The CEO and CFO will review the Form 990. The 990 will then be electronically distributed to the Board Members prior to it being filed. Form 990, Part VI, Section B, line 12c At the October board meeting all board members complete an annual disclosure. The policy covers the board of directors. The CEO reviews the disclosures. Anyone with a conflict must abstain from voting on the issue and is not able to participate in discussions regarding the issue. Form 990, Part VI, Line 15: The CEO's compensation is set by HealthTech Management Services. Annually, the Regional Vice-President from HealthTech Management Services provides a CEO evaluation form to each Board member to complete. After completing the form the Board members return it directly to the Regional Vice-President. He also meets with the Board in a private meeting to review the evaluations and approve the compensation. For the CFO, the Human Resources department participates in the Nebraska Hospital Association Compensation Survey on an annual basis. Once the results are received, they review the staff's years of experience as well as their position responsibilities to determine if the salary range is appropriate. A wage range is recommended to the CEO and the CEO determines the final wage for the CFO. This process is done annually. Market Wage Adjustments are made on an as-needed basis to adjust salaries that fall outside the survey guidelines. Form 990, Part VI, Section C, line 19 The governing documents, conflict of interest policy and financial statements are available upon request. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net unrealized gains on investments: 35,111. Change in interest in net assets of Tri Valley Medical Foundation 543,574. Total to Form 990, Part XI, Line 5: 578,685.