2011-02-03T07:15:06-06:00 2010-06-30 EIDE BAILLY LLP 3999 PENNSYLVANIA AVE SUITE 100 DUBUQUE IA 52002 990 2009-07-01 421231996 Virginia Gay Hospital Inc VIRG 3194726255 502 N 9th Avenue Vinton IA 523492254 Michael Riege 3194726200 2011-01-25 1 Carmen Krantz 5635561790 2009 2016-02-24 21:20:13Z Michael Riege 502 N 9th Avenue Vinton IA 523492254 19912894 0 X www.vghinc.com X 1923 IA Provision for health care services 9 7 284 34 0 0 1077129 1458927 16916577 18396585 69258 55159 0 18062964 19910671 8570 0 0 9157218 10179616 15000 0 42705 7261143 8180769 16441931 18360385 1621033 1550286 22079214 22529722 10546907 9442947 11532307 13086775 Our purpose is to provide quality health care services by using innovative, growth-oriented techniques and maintaining a sound financial base. 0 0 16411503 18396585 Virginia Gay Hospital leads delivery of healthcare to its region through over 225 associates (including 9 Providers) which coordinate care to deliver patient care as an integrated unit. VGH and its affiliates (referred to collectively as VGH) also work seamlessly to meet the needs of the communities they serve. Requirements of the IRS community benefit standard for tax-exempt organizations are integral to VGH's larger charitable mission of improving health and quality of life. Specifically, VGH is governed by an independent board including community leaders, consumer representatives, business experts and clinical healthcare experts. The Board has a history of commitment to acting with the highest integrity and has been proactively evaluating opportunities to voluntarily adopt governance best practices to ensure the organization continues to operate with the highest of integrity for the benefit of the community. VGH also makes medical care accessible to the entire community it serves. VGH operates a full-time emergency room and provides emergency care regardless of ability to pay. VGH had over 2760 Emergency Room visits this year. VGH provides clinical services needed to operate the Emergency Room and provides on-site emergency medical care and medical transportation services through an area ambulance service, van service, and an onsite helipad. In addition, VGH, through its integrated network of providers, provides non-emergency services to the community it serves. It makes these services accessible to the community through participation in government programs like Medicare and Medicaid and by offering assistance through their Financial assistance program. VGH's Financial Assistance Policy provides discounted and free services to patients who lack the resources to be fully responsible for the health care they receive. The Financial Assistance Policy is designed to ensure the entire community served by VGH has access to needed healthcare services. Eligibility for discounted or free services under the Financial Assistance Policy is based on income levels and family size. The Federal Policy Income Guidelines are used to determine levels of discounts. Applications for coverage under the program may be obtained at any VGH patient registration area. VGH maintains records to identify and monitor the level of care provided under the Financial Assistance program. These records include the amount of charges for services and supplies furnished, and the amount of discount applied. VGH takes its mission to improve the health and quality of life of the people it serves a step further by reaching out to meet the broad health needs of the community. It strives to identify community needs beyond basic healthcare, then respond to them, aiming to make a positive, life-enhancing difference in the community. Contributing to Community Education: VGH's Nursing staff and Home Health Agency Nurses participate in county wide community health fairs. These events provide information and guidelines to those in need of Medical information.Preventive Care a Priority: VGH has taken steps to enhance preventive care for people of all ages by ensuring that those who come here for preventive care receive the screenings and recommendations appropriate to their personal and family history.Financial Summary: Charity Care (at cost) $ 9,000 Bad Debt (at cost) 286,896Community Benefit Programs: Community Health Improvement Services 11,556 Financial and in-kind contributions 6,313 Community Benefit Operations 5,000 Health Professions Education 6,467 Subsidized Health Services 287,157Total Community Benefits 612,389 16411503 1 1 0 0 0 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 0 0 1 1 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 1 1 0 0 1 27 0 1 284 1 0 0 0 0 0 0 0 0 0 9 7 1 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 IA X Julia Meadows 3194726255 502 N 9th Avenue Vinton IA 52349 Mark Mossman 0.50 X X 0 0 0 Marie Therese Foth 0.50 X X 0 0 0 David Vermedahl 0.50 X X 0 0 0 John Ketchen 0.50 X X 0 0 0 James Hodgson 0.50 X 0 0 0 Brian W Meeker DO 0.50 X 486580 0 19515 John Yundt 0.50 X 0 0 0 John Watson 0.50 X 0 0 0 Mark Dearden DO 0.50 X 264612 0 15659 Michael Riege 40.00 X 118898 0 22807 Julia Meadows 40.00 X 83114 0 2191 Dr Michelle Elgin 40.00 X 161580 0 16117 Michele Burnes 40.00 X 187733 0 5747 Rita Taylor-Stewart 40.00 X 178817 0 5837 Gene Lariviere 40.00 X 153022 0 11506 Matt Wilden 40.00 X 112084 0 16378 1746440 0 115757 8 0 1 0 Alberici 8800 Page Avenue St Louis MO 63114 Construction Contractor 3725527 Rehab Visions 11623 Arbor Street Omaha NE 68144 PT, OT, ST 826907 Health Enterprises 4250 Glass Road Cedar Rapids IA 524022513 CRNA & Ultrasound 331940 Alliance Healthcare PO Box 96485 Chicago IL 60693 CT/MRI scans 294216 CPSI 6600 Wall Street Mobile IL 36695 Computer software/hardware 165549 25 1354662 104265 1458927 Patient Service Revenu 622110 12552391 12552391 Rural health clinics 621110 3670591 3670591 Resident Service Reven 623000 1993869 1993869 Other supporting reven 900099 145578 145578 Outpatient clinics 621400 34156 34156 18396585 43681 43681 13701 2223 11478 11478 11478 19910671 18396585 0 55159 993149 770801 222348 7769512 7181140 558779 29593 74331 47776 26555 770985 709017 61968 571639 514191 53947 3501 21658 21658 62925 62925 1500 1500 3736897 3494521 242376 4035 2444 1501 90 2089555 1747094 334498 7963 463784 342680 121104 52273 44688 7527 58 23415 17870 5545 202562 27490 175072 991477 990474 1003 Provision for bad debts 481897 481897 Grant expenditures 43875 34504 9371 Miscellaneous expense 4916 4916 18360385 16411503 1906177 42705 2262744 1208448 2136035 2390323 187647 242431 42812 49282 23100414 8598167 10852265 14502247 6472644 3510690 108532 88718 16535 537583 22079214 22529722 1280650 1530899 6522545 6300885 2743712 1611163 10546907 9442947 X 11415647 12970115 116660 116660 11532307 13086775 22079214 22529722 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 116600 2450 2450 116600 116600 116600 0.00000 1.00000 0.00000 0 0 63494 63494 151876 16122651 4960971 11313556 5356366 3343184 2013182 1406027 294012 1112015 14502247 Construction accounts payable 625383 Capitalized lease obligations 985780 1611163 19910671 18360385 1550286 4182 4182 1554468 18513304 -42705 -42705 18556009 1354662 1354662 19910671 18317680 0 18317680 42705 42705 18360385 Part V, Line 4: Description of Intended Use of Endowment Funds: An endowment fund which can be loaned to the general fund for operating needs. Part X: Description of Uncertain Tax Positions Under FIN 48: The Organization has adopted the provisions of FASB Accounting Standards Codification Topic ASC 740-10 (previously Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes) on July 1, 2009. The implementation of this standard had no impact on the financial statements. As of both the date of adoption, and as of June 30, 2010, the unrecognized tax benefit accrual was zero. The Organization will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if incurred. The Organization is no longer subject to Federal or state tax examinations by tax authorities for years before 2006. Part XII, Line 2d - Other Adjustments: Fundraising expenses included in revenue per financial statements: -42705. Part XII, Line 4b - Other Adjustments: Transfers from affiliates included in revenue per Form 990: 1354662. Part XIII, Line 4b - Other Adjustments: Fundraising expenses included in revenue per financial statements: 42705. 1 1 X 1 X 1 X 1 1 0 1 1 9000 9000 0.00050 1586960 1575475 11485 0.00060 1595960 1575475 20485 0.00110 5730 16556 16556 0.00090 27 6467 6467 0.00000 1280295 993138 287157 0.01610 1969 6313 6313 0.00040 7726 1309631 993138 316493 0.01740 7726 2905591 2568613 336978 0.01850 0 286896 115 5526864 5419582 107282 X 1 1 Virginia Gay Hospital Inc

502 N 9th Avenue Vinton IA 523492254

X X X X Virginia Gay Nursing & Rehab

502 N 9th Avenue Vinton IA 52349

Intermediate care facility Virginia Gay Hospital Home Health Agency

309 1st Avenue Vinton IA 52349

Skilled nursing care Part I, Line 7: Charity care expense was converted to cost on line 7a based on an overall cost-to-charge ratio which addresses all patient segments. Unreimbursed Medicaid on line 7b was calculated using the costing methods to prepare the cost reports. Community health improvement services, health professions education, and cash and in-kind contributions to community groups, lines 7e, 7f, and 7i are reported based on actual expenses recorded in the organization's general ledger. The cost for subsidized health services on line 7g was determined using the Medicare cost report.Total community benefit expense as a percentage of total expenses is 15.8%. Part I, Line 7g: The organization did not include as subsidized health services any costs attributable to a physician clinic. Part I, Line 7f: The amount of bad debt expense backed out of total expenses to determine the percentage was $481,897. Part III, Line 4: The organization's bad debt expense was converted to cost using the cost-to-charge ratio derived from Worksheet 2.Prior to any account being classified as bad debt, all payments are applied including contractual allowances and discounts, and every effort is made with the patient in an attempt to collect the outstanding balance. Payments on accounts that were written off as bad debt reduces bad debt expense. Virginia Gay Hospital continues to serve patients even after the patients have generated significant bad debt and does not refuse service to patients that generate bad debt.Virginia Gay Hospital monitors the level of charity care it provides. The estimated amount of the organization's bad debt expense attributable to patients eligible under the organization's charity care policy is calculated based on an estimate of charity care to gross charges. Footnote to financial statements: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. Management also reviews accounts to determine if classification as charity care is appropriate. Part III, Line 8: Virginia Gay Hospital did not have a Medicare shortfall in FY 2010. In years where there is a shortfall this would be treated as a community benefit. The organization provides services to patients under the Medicare program knowing they will not recover all the costs associated with providing these services. Providing these services is essential to these patients and the community and increases their access to healthcare services.Total revenue received from Medicare is the gross reimbursement plus settlement. Both total revenue received from Medicare and the Medicare allowable costs are reported from the Medicare Cost Report. Part III, Line 9b: For patients who are known to qualify for charity care or financial assistance and who qualify for 100% discount, there will be no collection efforts.Virginia Gay Hospital tries to identify patients who are uninsured or under-insured and patients who meet the presumptive eligibility criteria. Acceptable programs are: the Food Stamp program, Mothers and Children (MAC), Iowa Family Planning Network (IFPN), Medically Needy Program, Limited eligibility, County relief programs, and deceased patients with no known estate. Monthly statements are sent to all patients. When the account has had three monthly statements billed to them and no payments are made, a final letter is sent to the patient which tells them the accounts will be turned over to the collection agency if payment is not received or a call made to the Business Office to set up a payment plan within 10 days. Virginia Gay Hospital's policy and procedure for collection practices takes into account the extent to which the patient qualifies for charity. If a patient enters into an extended payment plan, Virginia Gay Hospital will not impose wage garnishments, or liens on primary residences, and will not send unpaid bills to outside collection agencies, and will cease all collection efforts, as long as the patient complies with their payment agreement, or contacts Virginia Gay Hospital with changed financial information. Part V: The organization also has the following types of facilites other than those required to be licensed as healthcare facilities in the state of Iowa:3 rural health clinics Part VI, Line 2: Every three to five years, Virginia Gay Hospital and the Benton County Public Health division meet with other local agencies and business leaders for their opinions on meeting the needs of our community. The intent of this meeting is to assess the needs of the underserved and the most vulnerable populations that would impact their economic, social and health needs. The most recent meeting was held in September of this year. During this assessment meeting, the organizations identified four areas to be focused on. Those areas of concern are educating teens on sex and promiscuity, STD's, teen drinking and the area of educating the citizens of Benton County on public health issues. An area that showed great improvement since the last needs assessment was in the area of identifying and reducing the number of patients with colon cancer. The reduction in colon cancer for this area was in part due to the aggressive plan established through the needs assessment process whereby Virginia Gay Hospital increased the number of colonoscopy screenings. Part VI, Line 3: Virginia Gay Hospital is committed to providing charity care to persons who have healthcare needs and are uninsured, underinsured, ineligible for a government program, or otherwise unable to pay for medically necessary care based on their individual financial situation. Virginia Gay Hospital strives to ensure that the financial capacity of people who need health care services does not prevent them from seeking or receiving care. Patients are expected to cooperate with Virginia Gay Hospital's procedures for obtaining charity care or other forms of payment of financial assistance, and to contribute to the cost of their care based on their individual ability to pay. The charity care policy includes all departments of the facility, including the Vinton Family Medical Clinic, the Urbana Family Medical Clinic, the Van Horne Family Medical Clinic, and the Nursing and Rehab. The Virginia Gay Hospital Home Health Agency has a separate financial assistance procedure, due to their Public Health role in the community.Notification about charity care is available by the publication of notices in patient bills, posting of notices in emergency rooms, admitting and registration departments, the Business Office, and other public places the Hospital may elect. Information is also included on the facility website, and in the patient information packets. A request for charity may be made by the patient or a family member, close friend or associate of the patient, subject to the applicable privacy laws. Part VI, Line 4: Virginia Gay Hospital is a Critical access hospital serving an estimated population of 27,000. Virginia Gay Hospital is located in Vinton, Iowa, the county seat of Benton County. Vinton has a population of approximately 5,000 people. The closest hospitals are located 37 miles away in Cedar Rapids, Iowa. Virginia Gay Hospital currently operates three separate clinics; one clinic is located on the hospital campus in Vinton, another clinic is located in the rural town of Van Horne, Iowa which is 15 miles from Vinton and the other clinic is located in the rural community of Urbana, 13 miles from Vinton. The hospital and clinics serve a large number of Medicare and Medicaid patients that represent admissions and registrations of 65% and 10% respectively. In 2005, Benton County reported that 10.8% of our residents under 65 were uninsured and the poverty level in 2008 was 9.8 with 4.5% living below 50% of the poverty level. Poverty in Vinton is 0.7% higher in Vinton than the state average. The recession has had a heavy impact on Vinton and Benton County and unemployment rates are up as a result. Part VI, Line 6: Virginia Gay Hospital is proudly recognized as having one of the lowest costs per stay rates in the state of Iowa. The hospital offers twenty-five beds in an acute care setting with state of the art technology and professional services. Virginia Gay Hospital also offers 24 hour acute care, short term skilled nursing services, radiology, respiratory care, cardio-pulmonary rehabilitation, physical therapy, occupational therapy, speech therapy, laboratory services, surgical services, outpatient clinics and emergency care. In addition, our staff has contributed multiple hours providing uncompensated time in areas such as family/parenting/sibling education, medical expertise for the schools athletic teams, health fairs, information and referrals to community services, safety classes, sports physicals and many other uncompensated services. Our Board of Trustees is comprised of local business leaders who reside in our primary service area and physicians. To meet the needs of our community, the hospital extends privileges to medical staff that are qualified through licensure in the state of Iowa. Virginia Gay's Home Health Agency offers a variety of services to the aging rural population of Benton County. The hospital also offers such services as skilled service home care, immunization clinics, well child and group teaching classes such as cardiopulmonary resuscitation (CPR), Advanced Life Support (ALS) and Pediatric Advanced Life Support (PALS). Excess funds are reinvested and used for patient care and facility upgrades. IA X X X 0 1 0 0 0 0 0 1 0 Brian W Meeker DO 280312 0 206268 0 0 0 4653 0 14862 0 506095 0 0 0 Mark Dearden DO 192428 0 72184 0 0 0 2518 0 13141 0 280271 0 0 0 Dr Michelle Elgin 108629 0 52951 0 0 0 1353 0 14764 0 177697 0 0 0 Michele Burnes 86113 0 101620 0 0 0 1368 0 4379 0 193480 0 0 0 Rita Taylor-Stewart 73119 0 105698 0 0 0 1488 0 4349 0 184654 0 0 0 Gene Lariviere 153022 0 0 0 0 0 254 0 11252 0 164528 0 0 0 Part I, Line 4a Michael Riege, CEO, has a single premium annuity with an annual purchase of $10,000. Part I, Line 7 Certain members of the medical staff are eligible to receive additional compensation by exceeding predetermined production figures. Only consultations and procedures personally performed by these individuals count toward the bonus. City of Vinton Iowa 426005303 2008-02-28 6800000 New Patient Unit, Emergency, Physical/Occupational Therapy, and Imaging Dept 0 0 6800000 2010 0 0 1 1 0 0 0 0 0 0.00000 0.00000 0.00000 0 0 0 0 0 0 0 Bev Riege Wife of CEO of organization 22509 Salary and benefits as an employee 0 Form 990, Part VI, Section A, line 2 John Ketchen, Treasurer of the board, and Mark Mossman, Chairperson of the board, have a business relationship. Form 990, Part VI, Section B, line 11 The Form 990 is distributed to the board members prior to filing. The 990 is reviewed by the Hospital's CEO and CFO. Form 990, Part VI, Section B, line 12c Any director, officer, key employee, Medical Staff member or committee member having an existing or potential interest in a contract or other transaction presented to the Board of Directors for deliberation, authorization, approval, or ratification, or any such person who reasonably believes such an interest exists in another person should make a prompt, full, and frank disclosure of the interest to the Board or committee prior to its acting on such contract or transaction. The interested party is required to disclose the nature and extent of his/her interest and any relevant and material facts known to him/her about the contract or transaction which might reasonably be construed to be adverse to the organization's interest. The body to which such disclosure is made determines, by majority vote, whether the disclosure shows that the non-voting and non-participation provisions below must be observed. If so, such persons should not vote on, nor use his/her personal influence on, nor participate (other than to present factual information or to respond to questions) in the discussions or deliberations with respect to such contract or transaction. Such persons may not be counted in determining the existence of a quorum at any meeting where the contract or transaction is under discussion or is being voted upon. The minutes of the meeting reflect the disclosure made and, where applicable, the abstention from voting and participation and whether a quorum was present. The Board must adopt duality of interest policies requiring: a. regular annual statements from directors, officers, key employees and key members of the Medical Staff that disclose existing and potential dualities of interest. The board Chair and CEO review the statements and follow up on any potential conflicts. b. corrective and disciplinary action with respect to transgressions of such policies. A person shall be deemed to have an "interest" in a contract or other transaction if he/she is the party (or one of the parties) contracting or dealing with the organization, or if he/she is a director, trustee, or officer of, or has a significant financial or influential interest in the entity contracting or dealing with the organization, or if he is otherwise reasonably likely to gain a significant financial or other personal benefit if the contract or transaction is approved. Form 990, Part VI, Section B, line 15 The Board Wage & Salary Committee reviews compensation increases for the CEO and physicians based on annual evaluations and the IHA Salary Survey. The CEO turns in a compensation packet to the Board outlying all provider's salaries broken down, and comparisons to state averages. This process is completed at the main budget meeting every May. The CEO determines compensation for the CFO and key employees, with approval from the Board Wage & Salary committee, based on annual performance evaluations and the IHA Salary Survey. Contemporaneous substantiation of the deliberation and decision is provided for any actions taken regarding compensation. The process is completed annually and was last completed in May 2010. Form 990, Part VI, Section C, line 19 The organization's governing documents, conflict of interest policy, and financial statements are not available to the public. Financial information is available through the public disclosure copy of the 990. Form 990, Page 7, Part VII The following individuals devoted time providing services to related organizations. Virginia Gay Health Care Foundation Dr. Michelle Elgin .3 hours per week Dr. Mark Dearden .3 hours per week James Hodgson .3 hours per week Michael Riege 2 hours per week Julia Meadows 2 hours per week Virginia Gay Trust Mark Mossman .3 hours per week David Vermedahl .3 hours per week John Ketchen .3 hours per week John Watson .3 hours per week James Hodgson .3 hours per week Dr. Mark Dearden .3 hours per week Marie Therese Foth .3 hours per week Michael Riege 1 hour per week Julia Meadows 1 hour per week Cedar View, Inc. Michael Riege 1 hour per week Form 990, Schedule R, Part V, line 2 The method used to determine the amount on line 2 was cash transfers noted in the audited financial statements. Virginia Gay Trust 502 N 9th Avenue Vinton IA 523492299 426367590 Provide financial support for Virginia Gay Hospital Inc. IA 501(c)(3) 11b N/A Virginia Gay Hospital Health Care Foundation 502 N 9th Avenue Vinton IA 52349 421391891 Develop and extend facilities and services of Virginia Gay Hospital Inc. IA 501(c)(3) 7 N/A Vernon S Flechner Trust 110 E Fourth St Vinton IA 523490508 426351376 Provide income for maint of the Hospital and annex buildings IA N/A T 107338 1504114 1.00000 JW Fry Trust 110 E Fourth St Vinton IA 523490508 426287710 Provide unrestricted and corpus restricted income for Hospital additions IA N/A T 133232 1370807 1.00000 Cedar View Inc 502 N 9th Avenue Vinton IA 52349 421398570 Provide an 18-unit housing alternative for the elderly IA N/A C 150596 1645234 1.00000 0 0 1 1 0 0 0 0 0 0 0 1 1 1 0 0 0 0 Vernon S Flechner Trust C 80000