2012-08-09T12:58:43-05:00 2011-09-30 BAKER NEWMAN & NOYES BOX 507 PORTLAND ME 04112 990 2010-10-01 030177161 Carlos G Otis Health Care Center Inc CARL 8023657920 PO Box 216 Townshend VT 053530216 Stephen A Brown 8023657920 2012-08-08 1 Timothy R Hepburn CPA 2078792100 2012-08-08 2010 2016-02-24 21:20:13Z Michael L Brant PO Box 216 Townshend VT 053530216 20071305 0 X www.gracecottage.org X 1949 VT Provision of health care services 11 9 213 95 0 0 431034 750710 19239545 18985022 1262 -954 392060 334281 20063901 20069059 50000 50000 0 0 11966938 12296999 0 0 299659 8002170 8209644 20019108 20556643 44793 -487584 12117111 12689832 4651223 5767927 7465888 6921905 The Otis Health Care Center promotes excellence in healthcare and well being, putting people first. It aims to be the standard for patient care. 0 0 17698552 50000 19319303 Grace Cottage Hospital is a critical access hospital offering 24-hour emergency services, inpatient acute and skilled care, 24 hour diagnostic imaging services, a full-service laboratory, a pharmacy, a variety of outpatient medical care services, including physical therapy, occupational therapy, and speech therapy, and a rural health clinic providing primary care and psychiatric services. 17698552 1 1 0 1 0 0 0 0 0 1 1 0 0 1 0 1 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 0 0 0 1 15 0 1 213 1 0 0 0 0 0 0 0 0 0 0 X 11 9 1 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 X Stephen A Brown 8023653601 185 Grafton Road Townshend VT 05353 X Deborah Boyle 1.00 X X 0 0 0 Kathleen Ballantine 1.00 X X 0 0 0 Kevin Meyer 1.00 X X 0 0 0 Gail Ann Fisher 1.00 X X 0 0 0 Roger Allbee 1.00 X 0 0 0 Robert W Backus MD 44.00 X 158686 0 19685 Effie Chamberlin part year 1.00 X 420 0 13 J Walter Corcoran 1.00 X 0 0 0 Edward Elliott MD 1.00 X 0 0 0 Stanley Holt 1.00 X 0 0 0 Stephan Morse 1.00 X 0 0 0 John Nopper 1.00 X 0 0 0 Jane Robinsom 1.00 X 0 0 0 Timothy P Shafer MD 57.50 X 206010 0 26477 Michael L Brant 41.80 X 169208 0 20326 Stephen A Brown 44.60 X 178665 0 25657 Evan Ginsberg 45.00 X 202345 0 19210 Maurice Geurts MD 55.00 X 195007 0 26022 Carol Blackwood 45.00 X 188693 0 533 Moss J Linder MD 50.00 X 169896 0 21295 James S Heal 40.90 X 132577 0 27077 1601507 0 186295 17 1 1 0 CPSI PO Box 850309 Mobile AL 366850309 Computer hardware/software support, bill 144661 MBA Health Group 55 Community Drive Suite 201 South Burlington VT 05403 Practice Management Services 115448 Southern VT Health Services Corp 17 Belmont Avenue Brattleboro VT 05301 VP Quality/Patient Safety 111037 3 536946 30437 183327 750710 Patient service revenu 900099 15439564 15439564 Pharmacy revenue 900099 3545458 3545458 18985022 1292 1292 2246 -2246 -2246 -2246 GCF administration & o 900099 255428 255428 Miscellaneous revenue 900099 78853 78853 334281 20069059 19319303 0 -954 50000 50000 798966 382653 416313 9023864 7815966 997425 210473 152991 129543 18041 5407 1633823 1341225 241541 51057 687355 557802 114569 14984 24975 24975 96118 96118 276028 226589 49439 125250 125250 742849 623965 112404 6480 345907 115601 229946 360 391417 383601 7816 67107 44066 20474 2567 112284 72885 39399 624609 620588 4021 261836 159720 102116 Pharmacy & lab exp 3826923 3813819 13104 Medicaid tax 546257 546257 Provision for bad debts 462866 462866 Dues & subscriptions 130876 87782 42579 515 Equipment repair expens 75881 75881 98461 62493 35968 20556643 17698552 2558432 299659 255907 251107 135354 122754 1491822 1574273 28694 22295 852236 769304 156620 150364 11999501 6986658 3896522 5012843 5299956 4786892 12117111 12689832 1307516 1971996 1625000 1530000 1718707 2265931 4651223 5767927 X 5022863 4285101 211191 482676 2231834 2154128 7465888 6921905 12117111 12689832 X -487584 -56399 X X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 5850 5850 0 Explanation of Other Lobbying Activities: Part II-B, Line 1i: Carlos G. Otis Health Care Center is a member of the Vermont Association of Hospitals and Health Systems and the American Hospital Association. A portion of the dues paid to these organizations is available for lobbying expenditures on behalf of Carlos G. Otis Health Care Center in furtherance of its exempt purpose. Carlos G. Otis Health Care Center does not directly perform any lobbying activities. AHA, portion of dues available for lobbying: $512 VAHHS, portion of dues available for lobbying: $5,338 2443026 186971 25839 19032 2636804 2298260 104897 39869 2443026 2513056 24191 -75026 163961 2298260 0.16690 0.81690 0.01620 0 1 1 30549 30549 5732596 3608612 2123984 4860628 3305896 1554732 1375728 72150 1303578 5012843 Deferred financing costs & bond fees, net 44226 Estimated third-party payor settlements 158813 Beneficial interest in net assets of GCF 4526863 Bond interest reserve 56990 4786892 20069059 20556643 -487584 -56399 -56399 -543983 19606193 0 19606193 462866 462866 20069059 20093777 0 20093777 462866 462866 20556643 Description of Intended Use of Endowment Funds: Part V, Line 4: Assist in the provision of health care. Description of Uncertain Tax Positions Under FIN 48: Part X: The verbatim paragraph pertaining to FIN 48 in the consolidated audited financial statements for Carlos G. Otis Health Care Center, Inc. and Subsidiary ("The Organization") is as follows: The Organization adopted FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109, effective October 1, 2007. The Organization has evaluated its tax positions taken in accordance with FIN 48 and has determined that there is no impact on the Organization's current tax-exempt status, or financial position or results of operations for the years ended September 30, 2011 and 2010. With few exceptions, the Organization is no longer subject to income tax examination by the U.S. federal or state tax authorities for years prior to 2008. Part XI, Line 8 - Other Adjustments: Decrease in beneficial interest & unrestricted net assets of GCF -56,399. Part XII, Line 4b - Other Adjustments: Bad debt provision 462,866. Part XIII, Line 4b - Other Adjustments: Bad debt provision 462,866. 1 1 1 X 1 X 1 1 1 0 1 1 247067 247067 0.01230 2338315 1028095 1310220 0.06520 2585382 1028095 1557287 0.07750 151148 21015 130133 0.00650 73713 73713 0.00370 224861 21015 203846 0.01020 2810243 1049110 1761133 0.08770 60 50000 50000 0.00250 60 50000 50000 0.00250 1 403046 25051 9731506 9551193 180313 X 1 0 1 1 Grace Cottage Hospital

185 Grafton Road Townshend VT 05353

X X X X Grace Cottage Hospital 1 1 X X X X X X 10 1 0 0 X 1 1 1 100.000000000000 1 200.000000000000 0 1 1 X X 0 0 1 X 0 1 2 Messenger Valley Pharmacy

170 Grafton Road Townshend VT 05353

Pharmacy Grace Cottage Family Health

185 Grafton Road Townshend VT 05353

Rural health clinic Part I, Line 3c: N/A Part I, Line 6a: N/A Part I, Line 7: The amounts reported for Charity Care and Means-Tested Government Programs were calculated using a cost-to-charge ratio derived from Worksheet 2, Ratio of Patient Care Cost-to-Charges. Part I, Line 7g: N/A Part I, Line 7, Column (f): The Bad Debt expense included on Form 990, Part IX, Line 25, Column (A), but subtracted for purposes of calculating the percentage in this column is $ 462866. Part II: Grace Cottage Hospital provided an operating subsidy of $50,000 to an Assisted Living Facility, Valley Cares, in Townshend. Part III, Line 4: The cost of the Bad Debt expense reported on line 2 was calculated by applying the Ratio of Patient Care Cost-to-Charges (calculated on Worksheet 2) to the total Bad Debt expense. The amount of Bad Debt expense for accounts written off as bad debt is the account balance after all charity care discounts, contractual allowances, and insurance/patient payments have been applied. Any cash collected on accounts previously written off is included as an offset to bad debt expense.The amount of bad debt expense (at cost) attributable to patients eligible under our charity care policy reported on line 3 was estimated based on a review of accounts written off and identifying those that had charity care eligibility and/or Medicaid eligibility for dates of service in close proximity to the dates of service that were written off as bad debt. We feel that this estimate should actually be much higher because though we work hard to educate our patients regarding the charity care policy, including having a Resource Advocate to help them complete applications if they require assistance, many of the applications we distribute to patients are not returned. Knowing our patient population as we do, we feel it is primarily attributable to patients not wanting to share the income information. Footnote 1 to the Audited Consolidated Financial Statements of the Hospital contains the following to address bad debt: Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to operations and a credit to the allowance for doubtful accounts based on its assessment of individual accounts and historical experience. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable. Part III, Line 8: Medicare allowable costs reported in the Medicare Cost Report are reported in accordance with CMS Guidelines using the cost-to-charge ratio methodology. Part III, Line 9b: N/A Grace Cottage Hospital Part V, Section B, Line 3: Grace Cottage Hospital conducts a community health needs assessment every three years, as required by Vermont statute. The 2010 survey was conducted by trained volunteers who made telephone calls to randomly selected members of communities in Grace Cottage Hospital's service area. The results of the survey showed that the community felt that Grace Cottage was on the right track towards providing improved access to diagnostic imaging services (X-ray, CT scan, ultrasound and bone density testing) and was doing well in providing improved access to wellness programs (osteoporosis prevention and exercise classes being the most needed) by the rapidly aging population/patients in rural, southern Vermont. Grace Cottage Hospital used this information in strategic planning during FY 2011. Grace Cottage Hospital Part V, Section B, Line 6i: In 2011, Grace Cottage purchased and installed a 40-slice CT scanner, replacing the 4-slice CT scanner that had been purchased, used, in 2005. In order to provide more patient privacy and comfort, Grace Cottage added a 40' x 20' Diagnostic Imaging Suite, which included separate rooms for the bone densitometer, ultrasound, and digital X-ray, plus a patient bathroom and waiting room. In response to the community's request for an increased number and variety of wellness offerings, classes were added at Grace Cottage's Community Wellness Center, which is used extensively by a wide array of individuals of varying ages. Many of the classes held at the Community Wellness Center address the health needs of the elderly population in this rural, medically underserved area. The goal is to reduce the incidence of falls and broken bones, thereby potentially decreasing the incidence of institutionalization of this vulnerable population. Grace Cottage Hospital provides the health and wellness classes and events free of charge in some cases, or at a nominal cost. Grace Cottage Hospital Part V, Section B, Line 19d: The Hospital charged standard facility rates as billed to all patient and insurers. Patients were eligible to apply for financial assistance based on policy. Grace Cottage Hospital Part V, Section B, Line 21: As stated on line 19d, all charges billed were standard facility charges. Part VI, Line 2: Grace Cottage Hospital is such a small hospital in a rural, relatively sparsely populated area, so our community leaders, patients, and members of the public are quick to inform our administrators and our medical staff about how Grace Cottage serves the healthcare needs of the public. Because of Grace Cottage's small size, we can be responsive to community requests made via our website, e-mails to members of our staff, or informal face-to-face meetings with people in the communities we serve. Part VI, Line 3: Although we are Vermont's smallest Critical Access Hospital, Grace Cottage Hospital believes that quality health care should be available to all, and that we all have a responsibility to help others in need, regardless of their ability to pay. Posters and brochures detailing the availability of help with billing, public programs and charity care are posted in high traffic areas throughout the hospital, rural health clinic and pharmacy, as well as listed on the Hospital's website. The staff reaches out to patients in a variety of ways to ensure that they are aware that help is available. The Hospital employs a Resource Advocate to help uninsured and underinsured patients locate and procure services for which they may qualify. The Resource Advocate's services are free of charge for community members between the ages of 18-64 years (those 65 and older are encouraged to contact Senior Solutions, formerly Southeastern Vermont Council on Aging, located on the Hospital premises). The Hospital's Resource Advocate has helped many people with a wide variety of resource issues, including helping to fill out necessary forms and making connections for patients with other federal, state and local resources. This employee is an expert in filling out reduced fee applications, finding sources for reduced-cost or free prescription medications, and locating other avenues of support. Part VI, Line 4: Grace Cottage Hospital plays a vital role in this rural, mountainous community. Its federal designation as a Critical Access Hospital recognizes its importance in providing health care to an otherwise medically underserved community. The Hospital's Emergency Department is especially vital to members of the community, who would otherwise have to travel many miles on winding mountainous highways to reach emergency medical care at another hospital. Grace Cottage Hospital is located in Windham County, in southeastern Vermont. According to the U.S. Census Bureau, Windham County has an estimated total of 44,513 residents. Grace Cottage Hospital's patient base is approximately 26,000 residents, mostly from 21 surrounding towns. The median household income of Windham County, Vermont, is $46,912, below the national average of $50,221 (U.S. Census Bureau "Quick Facts," updated 6-3-11). Income statistics for the total population served by Grace Cottage Hospital are not available because Grace Cottage only requires income information from patients requesting reduced fees or free care. Part VI, Line 6: Grace Cottage Hospital is a Critical Access Hospital located in rural, mountainous Townshend, Vermont. The Hospital is served by a Board of Trustees consisting of local citizens active in community businesses and organizations. Only one of the eleven trustees, a physician, is a hospital employee. All trustees reside in the Hospital's service area and bring a wealth of community input to the Hospital's strategic planning process. The Hospital extends medical staff privileges to all qualified physicians in the community.Despite its small size, Grace Cottage Hospital is committed to giving back to the community to the greatest extent possible. Grace Cottage Hospital applies all surplus funds towards improving its ability to provide quality patient care and being an integral part of assuring the health and well being of the communities we serve. Area non-profit organizations providing health-related and emergency preparedness-related services to the community are provided with meeting and training space at the Hospital. In response to the last Community Health Needs Assessment, the Hospital has worked collaboratively with local schools and organizations to promote healthy, fun activities and provides opportunities that make the most of staying as healthy as possible. Community Wellness: In 2011, 682 people attended activities in the Community Wellness Center at Grace Cottage Hospital, with a total of 5,615 wellness visits. In 2011, wellness activities included Arthritis Support, Belly Dancing, Exercise for Better Balance, Meditation Circle, Relaxed Living, Strong Bones, Tobacco/Smoking Cessation Classes, Weight Control Programs, Yoga and Zumba. For the third year in a row, Grace Cottage Hospital employees organized and implemented a Community Health Fair. Over 30 area non-profit organizations and more than 300 members of the community attended the Health Fair on May 14, 2011. Grace Cottage also assisted in coordinating two community blood drives in conjunction with the American Red Cross.Grace Cottage Hospital plays a pivotal role in Emergency/Disaster Preparedness in this rural, mountainous area of Windham County, Vermont. The Hospital works collaboratively with:- the local town volunteer fire and first responder rescue departments; - the regional ambulance service, Rescue Inc.;- Windham County Regional Commission - the Local Emergency Planning Committee covering the towns that Grace Cottage serves;- The local Citizens Emergency Response Team (CERT); - The local Radio Amateur Civil Emergency Service (RACES) - West River Radio Club meets and stores equipment at Grace Cottage Hospital; - Vermont Association of Hospitals and Health Systems; - Vermont Department of Health. Grace Cottage Hospital houses the local non-profit transport ambulance service, Rescue Inc., free of charge, on the Hospital grounds. Rescue Inc. is based in Brattleboro, VT, 18 miles away. The branch that is located at Grace Cottage operates 24 hours a day, 365 days a year, and is known as Rescue Inc. Division Two. In 2011, this area had 582 Emergency Calls to 9-1-1; of these calls, 236 patients were transported to Grace Cottage Hospital's Emergency Department. Grace Cottage Hospital staff participates in onsite training for disaster preparedness as well as offsite training with other hospitals.On August 28, 2011 Tropical Storm Irene hit Vermont with 11" of rain that caused major flooding and infrastructure damage throughout the entire state. The Incident Command Center for the Town of Townshend was located at Grace Cottage Hospital. Grace Cottage never closed during Tropical Storm Irene, and remained fully staffed. Part VI, Line 7: N/A Reports Filed With States Part VI, Line 7 VT 0 Valley Cares Inc PO Box 341 Townshend VT 05353 201980713 501(c)(3) 50000 Operating subsidy for elderly housing/assisted living project X X 0 0 0 0 0 0 0 1 0 Robert W Backus MD 132774 0 19106 0 6806 0 4435 0 15250 0 178371 0 0 0 Timothy P Shafer MD 202665 0 0 0 3345 0 6180 0 20297 0 232487 0 0 0 Michael L Brant 166400 0 0 0 2808 0 5076 0 15250 0 189534 0 0 0 Stephen A Brown 161027 0 0 0 17638 0 5360 0 20297 0 204322 0 0 0 Evan Ginsberg 200000 0 0 0 2345 0 0 0 19210 0 221555 0 0 0 Maurice Geurts MD 186362 0 6000 0 2645 0 5725 0 20297 0 221029 0 0 0 Carol Blackwood 185000 0 0 0 3693 0 0 0 533 0 189226 0 0 0 Moss J Linder MD 166986 0 0 0 2910 0 998 0 20297 0 191191 0 0 0 James S Heal 128006 0 0 0 4571 0 3780 0 23297 0 159654 0 0 0 Part I, Line 7 Physician contracts are being re-written at renewal to be productivity based. Contracts provide the opportunity for physicians to receive additional payments for productivity above minimum thresholds. For the period reported, two physicians listed in Part VII were under such a contract: Dr. Maurice Geurts, who received an incentive compensation payment of $6,000 and Dr. Robert Backus, who received an incentive compensation payment of $19,106. Edward Elliott MD Trustee who is also President of Windham Radiology Associates, Inc. 13079 Windham Radiology Associates, Inc. was reimbursed a total of $13,079 in the fiscal year ended 9/30/11 for the amounts they paid on OHCC'S behalf to Virtual Radiologic Corporation. 0 Laura D Brant Spouse of CEO 40714 Ms. Brant is the spouse of Michael L. Brant, who is OHCC'S CEO and listed in Part VII. Ms. Brant is compensated as an employee of OHCC (as the Director of Diagnostic Imaging through May, 2011 and then as a per diem radiology technician through the end of the fiscal year). The W-2 compensation paid is in accordance with OHCC'S standard employment practices and policies. 0 Form 990, Part VI, Section A, line 2 Deborah Boyle is married to Kathleen Ballantine's brother. Form 990, Part VI, Section B, line 11 A draft of the Form 990 is initially reviewed in detail by Carlos G. Otis Health Care Center's key finance employees. Thereafter, the final draft is provided to the full Board for review prior to filing with the IRS. Form 990, Part VI, Section B, line 12c A copy of the conflict of interest policy is distributed annually to the Board of Trustees and each trustee signs to confirm that they have thoroughly read, understand and agree to comply with the conflict of interest policy. Form 990, Part VI, Section B, line 15 CEO's Compensation: The CEO's compensation and benefits are reviewed, adjusted and voted on by the full board annually. The Board used external market compensation data to determine the CEO's initial compensation when hired and annually uses such data to compare OHCC's CEO compensation with that of other hospital executives in the Northeast region. The CEO is excused from Board discussion and voting on issues surrounding CEO compensation and benefits. Compensation of other hospital employees: The CEO reviews the salaries of employees annually and determines compensation based on performance and salary ranges, using regional salary range data for comparison. Form 990, Part VI, Section C, line 19 Upon request, Carlos G. Otis Health Care Center, Inc. makes its governing documents, conflict of interest policy, or financial statements available to the public. Reportable compensation for services as employees Form 990, Part VII, Section A, Column D The 2010 compensation reported for Effie Chamberlin, Dr. Robert Backus, and Dr. Timothy Shafer was for their services as a per diem employee in the quality department, full-time physician, and full-time physician respectively. They were not compensated for their services as members of OHCC's Board of Trustees. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Decrease in beneficial interest & unrestricted net assets of GCF -56,399. Total to Form 990, Part XI, Line 5: -56,399. Audit Review Process Form 990, Part XI, Line 2C The Finance and Audit Committee oversees the audit process for the Carlos G. Otis Health Care Center, Inc. and Grace Cottage Foundation, Inc. The audit process for the financial statements did not change from the prior year. Independent accountants performed the audit for both fiscal years. Grace Cottage Foundation Inc PO Box 1 Townshend VT 05353 030343282 Solicit contributions for the funding of health care services by OHCC VT 501(c)(3) 509(a)(3) Type I 1 0 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 Grace Cottage Foundation Inc P 255428 Actual per books Grace Cottage Foundation Inc C 536946 Actual per books