2011-04-05T13:42:41-05:00 2010-06-30 EIDE BAILLY LLP 4310 17TH AVE S PO BOX 2545 FARGO ND 581082545 990 2009-07-01 450308379 Hazen Memorial Hospital Association HAZE 7017482225 510 8th Avenue NE Hazen ND 58545 Darrold Bertsch 7017482225 2011-03-31 1 LISA CHAFFEE CPA 7012398500 2011-03-31 2009 2016-02-24 21:20:13Z Sakakawea Medical Center Senior Sui Darrold Bertsch 510 8th Avenue NE Hazen ND 58545 10329546 0 X www.sakmedcenter.org X 1943 ND Operation of a hospital, clinic, and an elderly care facility. 9 9 167 65 0 0 149759 187816 9059696 10090479 57357 21575 20286 22487 9287098 10322357 2700 2000 0 4769695 5431615 0 0 4375211 4525423 9147606 9959038 139492 363319 5942397 6685642 2302886 2650878 3639511 4034764 Provide high quality care that is measured and continuously improved. Provide individualized care that exceeds expectations of those we serve. Strengthen partnerships with providers to enhance coordination of care and improve system performance. Be a steward of resources. Commit to service excellence. Be a vital contributor to our area communities. Recognize the value of each employee and provide opportunities for personal growth and development that complement the needs of the organization. 1 1 6229439 2000 8045563 Sakakawea Medical Center (SMC) is a 25 bed critical care access hospital providing services in the following areas - acute care, surgery, intermediate and skilled swing bed, emergency room with trauma level IV certification, home health, and hospice. Services provided by the ancillary departments include physical therapy, occupational therapy, radiology, digital mammography, bone density, ultrasound, CT, nuclear med, MRI, laboratory, respiratory therapy, cardiac rehab, EKG, EEG, sleep studies, and thalium stress tests. SMC served 17,365 patients this reporting period.Based on charges foregone Sakakawea Medical Center provided $51,767 in charity care. Sakakawea Medical Center has a charity care policy which provides an 80% discount to patients who qualify financially. Also available to all self pay patients, regardless of financial status, is a 30% discount policy for timely payments. SMC is a participatingProvider for Medicare, Medicaid, Blue Cross Blue Shield and other insurances.Sakakawea Medical Center reaches out to the communities in the service area through programs such as senior day out, grief support groups, smoking cessation classes, occupational health, women's health classes, a Christmas giving tree project, and health career presentations to high schools. Wellness screenings are provided to area schools and businesses. SMC provides community education programs on requested topics free of charge. It is important for Sakakawea Medical Center to serve our communities by providing all of their health care needs. 741820 912467 Senior suites is a basic care facility that was completed in April 1997, it is adjacent to Sakakawea Medical Center. Senior suites can accommodate 34 residents with single or double rooms. It features a licensed beauty shop, activity room, spacious commons areas and an enclosed nurse's station. The rooms are set up like suites, hence the name "senior suites." the facility is available to those in the senior population that requires a minimal amount of supervision, but do not require 24 hour services. The residents are provided with assistance for daily living and medication administration. 1692508 1132449 To insure the need for quality health care is met in SMC's service area, Sakakawea Medical Center began managing two rural health clinics in July 2007. One clinic is located in Beulah and one in Hazen. This provides primary health care for our patients and also space is provided in the clinics for visiting specialists. This saves the patients from having to drive up to 70 miles to receive specialty health care. The clinics are staffed with physicians and mid-level providers. A sliding fee scale charity care program is available to patients who qualify financially. 8663767 1 1 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 1 0 1 0 0 1 0 0 0 1 0 0 0 1 0 0 0 0 1 0 0 0 0 1 14 0 1 167 1 0 0 0 0 0 0 0 0 0 9 9 0 1 0 0 1 1 0 1 0 0 0 1 1 1 1 0 1 1 0 0 X Renae Snyder 7017482225 510 8th Avenue NE Hazen ND 58545 Christie Obenauer 2.00 X X 0 0 0 Jan Rudolf 1.50 X X 0 0 0 Beverly Huber 1.50 X X 0 0 0 Lori Kuschel 1.50 X 0 0 0 Rick Miller 1.50 X 0 0 0 Lynn Oelke 1.50 X 0 0 0 Myria Perry 1.50 X 0 0 0 Sienna Sailer 1.50 X 0 0 0 Fred Stern 1.50 X 0 0 0 Darrold Bertsch 40.00 X 42052 0 3174 Renae Snyder 40.00 X 52166 0 2752 Jim Marshall 40.00 X 76350 0 0 Wayne Martin 40.00 X 182057 0 8995 Melvin Yarlott 24.00 X 125126 0 10020 477751 0 24941 2 0 1 1 St Alexius Medical Center PO Box 5510 Bismarck ND 58506 Management Services 510442 Mondak Imaging 11 South 7th St Suite 241 Miles City MT 59301 MRI Services 210936 DMS Imaging PO Box 86 Minneapolis MN 55486 Medical Imaging 178532 Cypress Health Systems 791 Eastside Road Deer Lodge MT 59722 Management Services 146148 4 187816 187816 Patient and Resident S 621400 9930060 9930060 Other Program Revenue 623000 85582 85582 Education 623000 57859 57859 Cafeteria 623000 16978 16978 10090479 20700 20700 12371 12371 12371 12371 875 875 875 875 17305 7189 10116 10116 10322357 10090479 0 44062 2000 2000 173652 173652 4544625 4262737 281888 117981 21194 96787 254911 63800 191111 340446 307645 32801 15979 15979 560 560 29702 29702 1536023 1442517 93506 20725 206 20519 1165234 1023684 141550 347767 347767 22364 16761 5603 66048 18698 47350 513603 513603 107616 11281 96335 Bad Debt Expense 532809 532809 Miscellaneous 60847 37723 23124 Dues & Subscriptions 55779 41573 14206 Collections Expense 29379 29379 Auxiliary Expenses 19769 19769 1219 1219 9959038 8663767 1295271 0 2086 4410 1069946 1582348 1715067 1610880 221780 268761 32894 35336 8360223 6034607 2329986 2325616 390632 193751 231297 376887 236362 5942397 6685642 731405 1091577 41416 1497625 1481162 32440 78139 2302886 2650878 X 3395760 3753467 193751 231297 50000 50000 3639511 4034764 5942397 6685642 X 0 1 0 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 23092 23092 5255253 4025783 1229470 2968432 1966155 1002277 113446 42669 70777 2325616 Capital Lease Obligations 78139 78139 10322357 9959038 363319 -12107 44041 31934 395253 10232257 0 10232257 90100 90100 10322357 9937269 0 9937269 21769 21769 9959038 Part X: Description of Uncertain Tax Positions Under FIN 48: The Medical Center is organized as a North Dakota nonprofit corporation and has been recognized by the Internal Revenue Service as exempt from federal income taxes under Internal Revenue Code Section 501(c)(3). The Medical Center undergoes an annual analysis of its various tax positions, assessing the likelihood of these positions being upheld upon examination with relevant tax authorities, as defined by the accounting principles generally accepted in the United States of America. The Medical Center believes that it is compliant with all IRS tax regulations and as of June 30, 2010 has not recorded a tax liability for a tax uncertainty. The Medical Center will recognize future interest and penalties related to unrecognized tax benefits in income tax expense if incurred. Under normal circumstances, the Medical Center is no longer subject to Federal and state tax examinations by tax authorities for years before 2007. Part XI, Line 8 - Other Adjustments: Change in interest in Net assets of Sakakawea Medical Center Foundation: 37546. Change in Net assets of Sakakawea Medical Center Auxiliary: 6495. Part XII, Line 4b - Other Adjustments: Auxiliary Revenue: 22463. Special Events Expense Recorded in Revenue on Form 990: -7189. Contributions Recorded in Net Assets for Financial Statements: 10000. Transfer from Related Organization Recorded in Net Assets for Financials: 64826. Part XIII, Line 4b - Other Adjustments: Auxiliary Expenses: 28958. Special Events Expense Recorded in Revenue on Form 990: -7189. Turkey Dinner 14762 14762 6815 3 2543 2543 374 17305 17305 7189 7189 10116 1 1 X 1 X 0 0 1 0 0 51768 51768 0.00550 357275 266262 91013 0.00970 409043 266262 142781 0.01520 12925 12925 0.00140 1942814 1090357 852457 0.09040 1955739 1090357 865382 0.09180 2364782 1356619 1008163 0.10700 0 343334 2000 3055087 3119357 -64270 X 1 1 Sakakawea Medical Center (dba)

510 8th AVE NE Hazen ND 58545

X X Basic Care Facility Sakakawea Hazen Clinic

813 7th St NE Hazen ND 58545

X Clinic Sakakawea Beulah Clinic

1101 3rd Ave NW Beulah ND 58523

X Clinic Senior Suites at Sakakawea

813 7th St NE Hazen ND 58545

X Senior Living Part I, Line 3c: If a patient qualifies for charity care based on family income, $5.00 of their bill is discounted for every $1 paid on their account. There is no policy for discounted care but uninsured patients receive a 30% discount for prompt payments, regardless of family income. In July 2010, the charity care policy was amended. Under the new policy if a patient falls within FPG guidelines (sliding scale) a discount will be applied according to a schedule, before requiring a payment. Part I, Line 7: The cost to charge ratio was taken from the current year's cost report Worksheet S-10. This worksheet includes all patient segments. Part I, Line 7g: Hazen Memorial Hospital Association operates two rural clinics which operate at a loss. If these clinics did not offer their services in each of these communities the service would be limited in the community. Part I, Line 7f: Financial statement footnote describing bad debt expense: The carrying amount of patient and resident receivables is reduced by a valuation allowance that reflects managements 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.For the purposes of calculating the percentage on Part 1, Line F, $343,334 was backed out of total operating expenses. Part III, Line 4: Payments and discounts are posted to patient bills. Any remaining balances are billed to the patient through monthly statements. If no payments are received from the patient at the end of the fifth month, the account is turned over to a collection agency and the balance on the account is written off as a bad debt. The bad debt expense is shown on the monthly financial statements.There is most likely some patients in bad debt who would qualify for charity care, but they have not completed the application and remitted the required payment. SMC requires a payment to receive the benefit of X5 discount for charity care. Using the last three fiscal years' ratios of charity care to overall revenue, the estimated amount would be .0058 percent of bad debt, or approximately $2,000. 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: If a patient has applied for charity care previously, an application is sent with the monthly statement. The application requesting financial information was required each time a new bill was incurred. The new policy effective 7/1/10 requires a new application only every six months. Part VI, Line 2: Sakakawea Medical Center consults with local physicians to see what the community healthcare needs are. The SMC staff participates in local and regional organizations and activities including Chamber of Commerce and economic development boards. The CEO routinely attends city council and county commission meetings to solicit input and engage in dialogue relating to healthcare needs and services. Part VI, Line 3: Charity care information is sent with the monthly statements to all uninsured patients as well as patients that are not making adequate monthly payments. Approximately 100 notices are sent out per month with the statements. Inpatients and surgical patients are informed at time of admission about charity care. A social worker visits with all self pay inpatients to inform them about the charity care, Medicaid (state program), and self pay discount policies. Brochures are being printed that describe our charity care and discount policies. The brochures will be placed in waiting rooms, ER, the clinics and admitting offices. Part VI, Line 4: Hazen Memorial Hospital Association serves the communities in Mercer County and the surrounding area, including the towns of Hazen, Beulah, Stanton, Zap, Golden Valley, Center and Pick City. Sakakawea Medical Center, located in Hazen, is the only hospital in the county. The nearest hospital is located more than 60 away. Attached to the hospital is Senior Suites, a basic care facility. The Association manages two rural health clinics, one in Hazen and one in Beulah. The combined total population of the county is approximately 8,214. The average annual wage in Mercer County for 2009 was $52,384. The current unemployment rate is 3.7%. Sakakawea Medical Center's payer mix for this fiscal year included 10% uninsured patients and 4% Medicaid patients. All patients presenting to the facility are cared for regardless of their ability to pay. Part VI, Line 6: Sakakawea Medical Center provides a variety of health and wellness services to our service area. The organization subsidizes primary care services provided at the Sakakawea Beulah Clinic and the Sakakawea Hazen Clinic, insuring that primary care is available in the local communities. SMC also subsidizes home health services to insure those residents who are homebound have the health care they need. The emergency room is staffed 24 hours a day and is available to all regardless of ability to pay. The board of directors is comprised of county-wide volunteers; two are from Hazen, five from Beulah, one from Pick City and one from Stanton. Medical privileges are extended to all physicians in the county. Surplus funds are invested back into the facility through equipment upgrades. Recent investments include digital mammography, new endoscopy equipment for the OR, electric boilers replaced fuel oil, a 16 slice CT replaced a 2 slice CT, a new chemistry analyzer, OR table, bladder scanner, upgraded telemetry system, a sleep study program, and new flooring and paint throughout the facility. More continuing education is being offered to the staff by means of webinars and workshops. An employee assistance program is available for staff and family members which provides free confidential assessments, counseling, or referral services by trained professionals. X X X 0 0 0 0 0 0 0 0 0 Wayne Martin 182057 0 0 0 0 0 0 0 9297 0 191354 0 0 0 Supplemental Information Part III Compensation for Jim Marshall, Interim Administrator thru 7-24-09, is received from Cypress Health Systems, an unrelated management company. Cypress Health Systems 791 Eastside Road Deer Lodge MT 59722 Jim devoted 40 hours a week to management of Hazen Memorial Hospital Association. Compensation Received from Management Company: Jim Marshall Compensation: $76,350 Union State Bank Bond Refinance X 663689 565311 0 1 1 Union State Bank Software X 350000 213452 0 1 1 Union State Bank New Boilers X 224235 224235 0 1 1 Union State Bank Refinance Equipment X 506000 478164 0 1 1 1481162 Jim Marshall Father-in-law of Jim Marshall owns 50% of Cypress Health Systems 146148 Management Services 0 Form 990, Part III, line 2 New Program Services Sleep studies. Form 990, Part III, line 3 Changes in Program Services Replace mammography machine with digital mammography. Form 990, Part VI, Section A, line 3 The Hospital had a management agreement with Cypress Health Systems, LLC (Manager). The Manager shall have authority and responsibility to conduct, supervise and effectively manage the day-to-day operations of the hospital. The Board of Directors of the hospital shall retain all authority placed in them by law and the hospital's bylaws. This agreement was mutually terminated 7-24-09. Form 990, Part VI, Section A, line 6 Any person, firm, association, or corporation interested in the activities of this organization may become a member thereof, provided that he has first contributed at least $10.00 to the association at some time, and further provided that he has paid the annual membership dues hereinafter specified. It is also agreed in those cases in which a contribution equal to or exceeding $20.00 was given in the name of one individual, if that individual was married at the time of the contribution, both husband and wife shall be considered eligible for membership in the association subject to payment of the membership fee outlined in article I, section 3. Form 990, Part VI, Section A, line 7a The members elect the Board of Directors on an annual basis. Form 990, Part VI, Section A, line 8b All items discussed at committee meetings are brought to the full board for recommendations for board action. The organization does not have any committees that have the authority to act on behalf of the board. Form 990, Part VI, Section B, line 11 Upon receipt of the draft form 990, a copy will be forwarded to the board members for their review and comment. Form 990, Part VI, Section B, line 12c The board of directors is covered by the conflict of interest policy. Only one conflict has been disclosed this fiscal year by a member of the board of directors. The director who has acknowledged the conflict of interest is excused from the board meeting whenever there is discussion about the relevant issue. Form 990, Part VI, Section B, line 15a For purposes of determining both the CEO and the CFO's compensation packages at Sakakawea Medical Center, a variety of resources are used. The organization takes into consideration what is appropriate compensation for those respective positions, based on their market. The organization uses salary surveys from the North Dakota hospital association. They take into consideration what recruiting firms recommend to the organization for typical compensation for those positions. The board of directors evaluates the CEO once per year and uses the above information for determining compensation. The CFO is evaluated by the CEO yearly and the compensation is based on the above information. Form 990, Part VI, Section C, line 19 Available if specifically requested. Hazen Memorial Hospital Auxiliary 510 8th Avenue NE Hazen ND 58545 450308379 Fundraising for Hospital ND 22463 5611 N/A