2012-08-07T08:22:01-05:00 2011-12-31 450250958 EIDE BAILLY LLP 4310 17TH AVE S PO BOX 2545 FARGO ND 581082545 990 2011-01-01 456013474 Pembina County Memorial Hospital Association PEMB 7012658461 301 Mountain ST E Cavalier ND 58220 Everett Butler 7012658461 2012-07-27 1 LISA CHAFFEE CPA P00302874 7012398500 2012-07-27 2011 2016-02-24 21:20:13Z Everett Butler 301 Mountain ST E Cavalier ND 58220 11044667 0 X www.cavalierhospital.com X 1976 ND Provision of acute care, long-term, and elderly congregate housing for the community. 9 6 212 62 0 0 253128 149922 10224826 10878550 3500 -6132 11640 12526 10493094 11034866 0 0 0 0 5785788 5696453 0 0 22089 4496193 5114108 10281981 10810561 211113 224305 4452328 4768279 1700929 1791265 2751399 2977014 X The mission of Pembina County Memorial Hospital and Wedgewood Manor is to provide a family centered approach to the delivery of health services and to promote a healthy lifestyle to those we serve in Cavalier and the surrounding communities. The vision that guides Pembina County Memorial Hospital and Wedgewood Manor is to develop a family centered integrated healthcare organization which provides services that meet the needs of the region, thereby making us their provider of choice. 0 0 9316706 10889926 Pembina County Memorial Hospital Association is a 25 bed acute care hospital, 60 bed nursing home, 20-unit congregate housing project (Country Estates), and clinic located in Cavalier, North Dakota. The facility provides quality medical and long-term care to residents of the surrounding area without regard to the individuals' ability to pay for services received. The Association also provides health education and other services to the community. The Association provides health care services to patients who meet certain criteria under its Charity Care Policy without charge or at amounts less than established rates. Since the Association does not pursue collection of these amounts, they are not reported as patient service revenue. The estimated cost of providing charity care was $57,000 for the year ended December 31, 2011. This was calculated by multiplying the ratio of cost to gross charges for the Association by the gross uncompensated charges associated with providing charity care to its patients. 9316706 1 1 0 0 0 0 0 0 1 0 1 0 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 1 1 0 0 0 0 0 1 0 0 0 0 1 30 0 1 212 1 0 0 0 0 0 0 0 0 0 0 X 9 6 0 1 0 0 1 1 0 1 1 0 0 1 1 1 1 1 1 1 0 0 X Everett Butler CEO 7012658461 301 Mountain St E Cavalier ND 58220 X Tom Ford 1.00 X X 0 0 0 Tom Vaughn 1.00 X X 0 0 0 Lois Coggon 1.00 X X 0 0 0 Dr KS Sumra 1.00 X 0 0 0 Dale O'Hara 1.00 X 0 0 0 Ken Schwandt 1.00 X 21000 0 0 Dean Steinwand 1.00 X 0 0 0 Loretta Bernhoft 1.00 X 0 0 0 Tom O'Toole 1.00 X 0 0 0 Everett Butler 40.00 X 72746 0 0 Tanya Sharp 40.00 X 55813 0 10850 149559 0 10850 0 0 0 1 Park River Clinic PO BOX 380 Cavalier ND 58220 Physician Services 576576 DMS PO Box 8070 Fargo ND 58109 Mobile imaging services 406183 Altru Health System PO BOX 1370 Grand Forks ND 58208 PT & OT Therapy Services 164697 3 123817 25386 719 149922 Patient service revenu 622110 10728040 10728040 Supporting revenue 900099 145454 145454 Auxiliary revenue 900099 5056 5056 10878550 3669 3669 1150 0 1150 1150 1150 9801 -9801 -9801 -9801 Finance Charge Income 900099 11376 11376 11376 11034866 10889926 0 -4982 160409 21000 139409 4422823 3679357 723745 19721 110187 88531 21078 578 692586 590884 101581 121 310448 252815 55964 1669 105 105 27933 27933 1930851 1767935 162916 28350 28350 134567 56594 77973 126155 126155 232475 232475 31958 25104 6854 21329 17507 3822 39066 39066 581768 581768 59867 59867 Medical Supplies 1445029 1445029 Bad Debt Expense 355684 355684 Dues/Subscriptions/Lice 31450 15643 15807 Recruitment 20739 19989 750 46782 39108 7674 10810561 9316706 1471766 22089 113153 206334 1481078 1406227 74509 73830 33642 23922 12598669 9737098 2658167 2861571 77564 115415 14215 80980 4452328 4768279 1312129 1135592 14215 13980 346585 641693 28000 0 1700929 1791265 X 2751399 2977014 2751399 2977014 4452328 4768279 X 224305 1310 X 0 1 0 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 1 8871 5056 6366 7561 1 160304 160304 5621837 4429714 1192123 6350661 5036997 1313664 465867 270387 195480 2861571 11034866 10810561 224305 1310 1310 225615 11029810 0 11029810 5056 5056 11034866 10804195 0 10804195 6366 6366 10810561 Part IV, Line 1b: A small auxiliary operates under the Hospital's EIN. Part IV, Line 2b: The Association holds funds under an agency relationship for the residents of Wedgewood Manor and Country Estates. The funds are shown as cash and a corresponding liability in accounts payable in the accompanying balance sheets. Funds held as of December 31, 2011 and 2010 totaled $13,980 and $14,215. Description of Uncertain Tax Positions Under FIN 48: Part X: The Association believes that it has appropriate support for any tax positions taken affecting its annual filing requirements, and as such, does not have any uncertain tax positions that are material to the financial statements. The Association would recognize future accrued interest and penalties related to unrecognized tax benefits and liabilities in income tax expense if such interest and penalties are incurred. Part XI, Line 8 - Other Adjustments: Change in Auxiliary Assets 1,310. Part XII, Line 4b - Other Adjustments: Auxiliary revenues 5,056. Part XIII, Line 4b - Other Adjustments: Auxiliary expenses 6,366. 1 1 X 1 X 1 X 0 1 1 0 0 57000 57000 0.00550 1804334 1775869 28465 0.00270 1861334 1775869 85465 0.00820 150 150 0.00000 150 150 1861484 1775869 85615 0.00820 0 355684 28455 3578676 3603723 -25047 X 1 1 1 1 Pembina County Memorial Hospital

301 Mountain St E Cavalier ND 58220

X X X X Pembina County Memorial Hospital 1 0 1 1 200.000000000000 1 200.000000000000 1 X X 1 1 X X X 1 0 1 X 0 0 3 Clinicare

301 Mountain St E Cavalier ND 58220

Clinic Services Wedgewood Manor

804 Main Street West Cavalier ND 58220

Long Term Care Services Country Estates

107 Bjornson Drive Cavalier ND 58220

Independent Living Part I, Line 3c: The Organization uses a sliding scale based on family size and the federal poverty income guidelines when determining whether an individual is eligible for discounted or free care. If the individual's family size and income are below the national poverty guidelines then they would be eligible for 100% charity care allowance. Part I, Line 7: The Organization used an overall cost to charge ratio in order to calculate the amount in Part I, line 7, row a. The Medicaid cost report was used to calculate the amounts in Part I, line 7, row b. The cost listed on Part I, line 7, row e is based on actual expenses recorded in the General Ledger. Part I, L7 Col(f): For the purpose of calculating the percentage on Part I, line 7f, $355,684 of bad debt expense was backed out of total operating expenses. Part II: N/A Part III, Line 4: Costing Methodology for Determining Amount of Organization's Bad Debt Expense Attributable to Patients Eligible under the Organization's Charity Care Policy:8.0% of the individuals in Pembina County fall below the federal poverty levels according to the 2010 Census data. Care is given to individuals regardless of their ability to pay and if the individual's family size and income are below the federal poverty guidelines then they would be eligible for 100% charity care allowance. Therefore the Organization estimates that 8.0% of the bad debt expense at cost is attributable to patients eligible under the Organization's charity care policy. This is a community benefit and a reasonable estimate based on the demographics of the area the Organization serves.Financial Statement Footnote for Bad Debt Expense: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.Bad debt expense is reported net of discounts and contractual allowances. A payment on an account previously written off reduces bad debt expense in the current year. Part III, Line 8: All of the Medicare shortfall should be treated as a community benefit. The Organization treats individuals regardless of the ability to pay. Most of the Medicare shortfall comes from the nursing home. The elderly are an underserved population and it is a community benefit to be able to treat them at the local nursing home.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 an outstanding balance remains on a patient's account, steps are followed to ensure proper collection of the remaining balance. A letter is sent to the patient when insurance is processed or immediately if the patient is self pay. The letter gives the patient options of: paying the bill in full, requesting a payment agreement or requesting a charity care application. These statements are sent to the patient monthly. Another letter is sent at 60 days and 90 days. The 90 day letter also states if a signed payment agreement, charity care application or payment in full is not received the Hospital will refer the account to a collection agency. After 120 days, the remaining gross balance is sent to a collection agency to begin the collection process. The steps above are followed prior to referring to the collection agency. If a patient is known to be financially struggling or has filed a charity care application in the past, the charity care application is mailed with their 60 day invoice from the Hospital. If a patient is determined to qualify for financial assistance, all collection practices are stopped. Pembina County Memorial Hospital Part V, Section B, Line 11h: Family size is also used to determine amounts charged to patients. Part VI, Line 2: An annual review of the Rural Healthcare Clinic and Urgent Care is done by the CEO, board members and key medical staff members. The review evaluates services and helps to determine whether to add or remove services. The leaders within the Organization are always available for community members' ideas and opinions. These ideas and opinions are properly brought to the attention of the review committee and evaluated. In addition, the Organization began conducting a Community Health Needs Assessment during 2011. The implementation strategy for the Community Health Needs Assessment is expected to be completed during 2012. Part VI, Line 3: A letter is received by all patients that have had their insurance processed and have the following options for payment of outstanding medical bills: 1. Payment in full2. Payment arrangements3. Charity Care ApplicationAlso a public notification is visible at the main receptionist desk and all business office staff can appropriately answer questions in regards to payment on outstanding medical bills. When a patient inquires about their bill we are able to further discuss if they would meet the criteria and what further steps need to be taken for financial assistance. Part VI, Line 4: Pembina County Memorial Hospital Association is a 25-bed critical access hospital, 50-bed nursing home (Wedgewood Manor), a 20-unit congregate housing project (Country Estates), and clinic located in Cavalier, North Dakota.Our Organization serves Pembina County and the surrounding region (the north east corner of North Dakota). The US census for 2010 showed a population of 7,413 for Pembina County. The median income for a household in Pembina County was $48,502. The per capita income for the county was $27,019. 8.0% of the population is below the poverty line. We are considered a rural area; agriculture is our main industry. We are the only hospital in Pembina County; Cavalier and Walsh Counties (neighboring counties) also have medical facilities. For the year 2011, our medical facility treated 9,351 patients, 47.4% of whom were age 70 and older. Part VI, Line 5: Our organization serves Pembina County and the surrounding regions. It is our responsibility to provide quality healthcare within the community area that we serve. Our key leaders and volunteer board members are residents who live within the areas we service. We extend medical staff privileges to all qualified physicians in the community. If we have surplus funds, these dollars are used to improve patient care in many different areas within the organization. Surplus funds are used to upgrade existing equipment or to purchase new equipment to provide new services. The funds are also used to make improvements to the facility such as renovation of patient areas and departments. These improvements must be approved by upper management and depending upon the improvement, sometimes the Board of Directors must approve it as well. In a rural setting, it is crucial to be involved in the community, so Pembina County Memorial Hospital participates in the annual health fair, diabetic education and other events throughout the year. It is imperative to further our exempt status to continue to promote our services and quality of care within our service area. Part VI, Line 6: N/A X X 0 0 0 0 0 0 0 0 0 Everett Butler 72746 0 0 0 0 0 0 0 0 0 72746 0 0 0 Supplemental Information Part III Part II: Pembina County Memorial Hospital Association does not pay compensation to the CEO directly. The CEO is compensated by an unrelated organization, Christian Unity Hospital Corporation, DBA Unity Medical Center. The Pembina County Memorial Hospital Association's Board of Directors uses the processes described in Part I, Question 3 to determine appropriate compensation for the CEO. Any increase in compensation is communicated to Unity Medical Center. Unity Medical Center sends Pembina County Memorial Hospital Association a monthly bill for his wages earned at Pembina. Rita Vaughn Family member of director Tom Vaughn 20583 Compensation 0 Dr K S Sumra Owner of Park River Clinic 576576 Dr. Sumra owns Park River Clinic. Park River Clinic provides independent contractor physician services to the Organization. 0 Form 990, Part VI, Section A, line 1 An Executive Committee exists which meets on an as needed basis between scheduled Board meetings and it can take action as required on behalf of the Board when it is not feasible to bring the full Board together in time to address an issue. The Committee annually recommends to the Board appropriate compensation for the CEO. The Executive Committee also annually evaluates the performance of the Board and reviews the bylaws and makes recommendations to the Board concerning any necessary or appropriate changes to them. They also perform other duties and delegated responsibilities as the Board may assign to the committee from time to time. Form 990, Part VI, Section A, line 3 The CEO of the Organization is employed by Christian Unity Hospital Corporation, DBA Unity Medical Center, an unrelated party. Form 990, Part VI, Section A, line 6 The Organization has stockholders. There is one class of stockholders. Each stockholder has one vote during the annual meeting. Form 990, Part VI, Section A, line 7a The stockholders/members elect the Board of Directors and the rest of the voting power rests with the Board of Directors. Form 990, Part VI, Section B, line 11 The Form 990 is reviewed by the Board members and Finance Committee before it is filed. This took place at the July 2012 board meeting. Form 990, Part VI, Section B, line 12c The process of disclosing conflicts of interest is gone through annually. Each Board member completes a form and discloses if they have a conflict of interest. The CEO and Board President review the disclosure forms and if a conflict arises as an issue, it is brought to the full Board for discussion on further action (if necessary), which may result in a consultation with an attorney. If the Board is voting on an issue where there is a conflict of interest, the person with the conflict of interest is asked to abstain from the vote. Form 990, Part VI, Section B, line 15a The process for determining compensation includes looking at state salary surveys from the American Hospital Association or North Dakota Hospital Association. For the CEO, the Executive Committee of the Board derives the compensation contract. The CFO's compensation is reviewed annually by the CEO. Changes to the CFO's salary may be based on American Hospital Association Surveys or other industry surveys and also budget approval by the Board of Directors. For others, the Board is not involved in the final compensation decision, but instead the CEO and CFO make the final compensation decisions. This process was last undertaken in 2011. Form 990, Part VI, Section C, line 19 The Organization's governing documents, conflict of interest policy and financial statements are typically only shared with people whom the organization does business with. They are made available upon request for the general public. The financial statements are also attached to the Form 990 and made available to the public through the Form 990. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Change in Auxiliary Assets 1,310. Total to Form 990, Part XI, Line 5: 1,310. Ken Schwandt's compensation Form 990, Part VII, Section A, and Form 990, Schedule L, Part IV Ken Schwandt is not compensated as a member of the board. Ken Schwandt receives compensation from the Organization as an independent contractor for his consultant pharmacist services to the Organization. The transaction does not meet the reporting thresholds of Schedule L, Part IV and accordingly is not reported there. Pembina County Memorial Hospital Foundation 301 Mountain Street E Cavalier ND 58220 300052569 Fundraising for benefit of Pembina Co. Memorial Hospital & Wedgewood Manor ND 501(c)(3) Line 11a, I N/A 0 0 0 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0