2011-11-15T15:00:50-06:00 2010-12-31 EIDE BAILLY LLP PO BOX 1914 BISMARCK ND 58502 990 2010-01-01 450226700 Medcenter One Inc MEDC 7013236000 300 North 7th Street Bismarck ND 58501 Dr Craig Lambrecht 7013236000 2011-11-15 1 Lisa Chaffee CPA 7012551091 2011-11-15 2010 2016-03-07 17:11:31Z Dr Craig Lambrecht 300 North 7th Street Bismarck ND 58501 280754026 0 X www.medcenterone.com X 1907 ND Committed to caring-one life at a time. 29 13 2933 200 1175586 0 610506 1945656 265080664 278162119 472360 481269 126083 152184 266289613 280741228 34065 21400 0 0 157141473 165107106 0 0 0 93018916 100349209 250194454 265477715 16095159 15263513 145484027 165804928 79956617 85681184 65527410 80123744 X "Committed to caring-one life at a time." Medcenter One is an acclaimed leader in developing and providing scientific and innovative healthcare. We are recognized for easy access and coordination of care. A primary measure of our success is high patient satisfaction. We drive quality through system integration and efficient utilization of resources. Through these efforts performed by knowledgeable, skilled and caring medical and associate staff, Medcenter One is the regional health system of choice. 0 1 212046296 21400 284267788 INTEGRATED HEALTHCARE SYSTEMMedcenter One is a fully integrated healthcare system that consists of six primary care clinics covering western and central North Dakota; a home health/hospice agency, in- and out-patient rehabilitation services, sub-acute hospital, in- and out-patient psychiatric services, two urgent care clinics, three kidney dialysis centers, a MRI center, a women's heath/fitness center, a multi-specialty clinic, a college of nursing and a hospital.The Medcenter One main campus is located in Bismarck, N.D. with additional clinics in Bismarck, Dickinson, Jamestown and Mandan, N.D. Medcenter One is committed to providing professional and personal healthcare. We focus on the relationship between the physician and the patient: the one-to-one relationship that is central to our philosophy of healthcare delivery and mission: Committed to caring--one life at a time. Medcenter One includes a 210-bed hospital, 22-skilled nursing beds, and primary and physician multi-specialty clinic. Medcenter One has 380 credentialed providers including 244 physicians. In 2010, Medcenter One had 10,143 hospital admissions, 717 births, 24,843 emergency department visits, and 391,983 total outpatient visits. 6535460 -9320079 CHARITY CARE AND CARE UNDER PUBLIC INSURANCE PROGRAMSCHARITY CARE:Medcenter One's Community Care brochures are available at each registration desk including the emergency room registration area. Patients who may not have the ability to pay can also meet directly with a financial counselor to determine whether they will qualify for the charity care program. Medcenter One's charity care policy allows patients at 200% FPL to receive free care and patients up to 275% FPL are eligible for discounted care. Financial counselors also meet directly with patients during their in-patient stay to inform them of the charity care program. The program is highlighted on the Medcenter One website.In 2010, Medcenter One provided $9,320,079 in charity care (charges foregone). Medcenter One also provided care to patients who did not pay their bill. In 2010, Medcenter One provided $6,535,460 of care in bad debt. It is estimated that 15% of the care provided was to patients who would have been eligible under the organization's charity care policy . 3232334 2038824 EDUCATION:Medcenter One provides learning environments and financial support for many programs that train healthcare professionals and ensure adequate workforce for our community in the future.PHYSICIAN/MEDICAL STUDENTS:Medcenter One contracted a total of $508,261 to the University of North Dakota School of Medicine at Bismarck.Stipend agreements with physician residents: Physician stipends are offered to individuals who have completed medical school, declared a specialty and have committed to working for Medcenter One following their residency or fellowship experiences. In 2010, $422,700 was paid to physician residents to further their education as part of this program. 221814090 1 1 0 1 0 0 0 0 0 1 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 1 0 1 0 1 0 0 0 0 1 1 1 1 0 0 0 0 0 1 1 0 0 0 1 152 0 1 2933 1 1 1 0 0 0 0 0 0 0 0 0 X 29 13 0 1 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X Paul Morth Vice PresidentCFO 7013236000 300 N 7th Street Bismarck ND 58501 Patrick Durick 1.00 X X 0 0 0 Dr Alan VanNorman 40.00 X X 636410 0 24176 Gerald Willer 1.00 X X 0 0 0 Dr Craig Lambrecht 40.00 X X 656851 0 62682 Dr Biron Baker 40.00 X 423431 0 25638 Dr Kimber Boyko 40.00 X 623237 0 53576 Wes Engbrecht 1.00 X 0 0 0 Dr David Field 40.00 X 364684 0 53576 Richard Hedahl 1.00 X 0 0 0 Claire Ann Holmberg 1.00 X 0 0 0 Ellen Huber 1.00 X 0 0 0 Niles Hushka 1.00 X 0 0 0 Lowell Jensen 1.00 X 0 0 0 George Keiser 1.00 X 0 0 0 James Laducer 1.00 X 0 0 0 Sister Paula Larson 1.00 X 0 0 0 Susan Lundberg 1.00 X 0 0 0 Dr Kent Martin 40.00 X 287734 0 58240 Dr David O'Regan 40.00 X 509103 0 25376 Dr Mark Rodacker 40.00 X 456326 0 22789 Dr Sean Russell 40.00 X 612690 0 56802 Robert Schulte 1.00 X 0 0 0 Dr Larry Skogen 1.00 X 0 0 0 DuWayne Ternes 1.00 X 0 0 0 Jim Volk 1.00 X 0 0 0 Irene Wentz 1.00 X 0 0 0 Jim Wheeler 1.00 X 0 0 0 Dr William Canham 40.00 X 510302 0 27605 Dr David Pengilly 40.00 X 347521 0 20440 Paul Morth 40.00 X 243910 0 57539 Karen Paul 40.00 X 167884 0 33487 John Miller 40.00 X 250587 0 0 Jan Kamphuis 40.00 X 244923 0 17868 Scott Boehm 40.00 X 201157 0 38777 Dr Anthony Tello 40.00 X 448210 0 24176 Dr Douglas Berglund 40.00 X 1039198 0 51980 Dr William Cain 40.00 X 1008975 0 45152 Dr Matthew Iwamota 40.00 X 1017263 0 42389 Dr Michael McIntee 40.00 X 1047285 0 24176 Dr Tarek Dufan 40.00 X 1441599 0 53544 Claudia Eisenmann 40.00 X 240932 0 13549 Evy Olson 40.00 X 141046 0 14135 Pam Hopkins 40.00 X 130867 0 19327 James Cooper 40.00 X 100368 0 0 Dr Guy Connell 40.00 X 0 0 0 Dr Lawrence daSilva 40.00 X 0 0 0 Dr Brenda Miller 40.00 X 0 0 0 13152493 0 866999 185 1 1 0 United Blood Services PO Box 53022 Phoenix AZ 85072 Blood Products 1236941 Capital City Construction PO Box 7337 Bismarck ND 58507 Construction Services 1025366 McKesson PO Box 98347 Chicago IL 606938347 Technology Services 994737 Mayo Medical Labs Inc PO Box 9146 Minneapolis MN 554809146 Lab Services 923052 Weatherby Locums PO Box 972633 Dallas TX 753972633 Physician Services 642333 40 648663 60020 1236973 1945656 Net Patient Service Re 621400 264878459 264878459 Pharmacy Sales 446110 9631358 9433666 197692 Reference Lab 621500 824741 824741 Purchase Discounts 621400 733859 733859 Cafeteria Revenue 722320 709177 606556 102621 1384525 1333993 50532 278162119 456214 456214 160237 8053 152184 152184 152184 29800 4745 25055 25055 25055 280741228 276986533 1175586 633453 21400 21400 7424610 5126967 2297643 134374347 118082056 16292291 4867379 3369123 1498256 10131444 8169101 1962343 8309326 7040189 1269137 219993 219993 79377 79377 14282649 10023535 4259114 916665 37359 879306 51344892 48287310 3057582 1834224 418505 1415719 5255412 4417758 837654 144087 137495 6592 1076708 823034 253674 1226042 1226042 6563340 3815954 2747386 2126496 2126496 Provision for Bad Debts 6535460 6535460 Equipment Rental & Main 3441725 3184589 257136 Repairs and Maintenance 2536394 1817557 718837 2765745 506698 2259047 265477715 221814090 43663625 0 40239311 48330920 35786460 36934689 4358208 4582145 1576004 1697942 165507309 108618292 46655489 56889017 11853165 11719996 2850143 3007761 2165247 2642458 145484027 165804928 28877540 31385217 704746 21149826 16748072 545546 446666 992000 6702565 28391705 29693918 79956617 85681184 X 64039801 78703635 1487609 1420109 65527410 80123744 145484027 165804928 X 15263513 -667179 X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 1 0 0 0 1 42378 1 75330 0 0 117708 0 1297510 7038321 8335831 82730030 60489569 22240461 62278510 46547535 15730975 12162938 1581188 10581750 56889017 Pension Plans 11762952 Advances for Student Loans 228587 Estimated Third Party Settlements 12825299 Due to Related Parties 53919 Capitalized Lease Obligation 4823161 29693918 280741228 265477715 15263513 12114 -679293 -667179 14596334 280690127 12114 -63215 -51101 280741228 0 280741228 265414500 0 265414500 63215 63215 265477715 Description of Uncertain Tax Positions Under FIN 48: Part X: MCO 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). MCO 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 generally accepted accounting principles. MCO believes they are compliant with all IRS tax regulations and as of December 31, 2010 and 2009 has not recorded liabilities for income taxes. MCO will recognize future accrued interest and penalties related to unrecognized tax liabilities in income tax expense if incurred. MCO is no longer subject to federal or state tax examinations by tax authorities for years before 2008. Part XI, Line 8 - Other Adjustments: Pension-related changes other than net periodic pension cost -611,793. Change in interest in net assets of Medcenter One Foundation -67,500. Part XII, Line 2d - Other Adjustments: Related party rental expenses recorded in revenues for financial statements -63,215. Part XIII, Line 4b - Other Adjustments: Related party rental expenses recorded in revenues for financial statements 63,215. 1 1 X 1 X 1 X 275.000000000000 0 1 1 0 0 5301966 0 5301966 0.02050 20644120 20482118 162002 0.00060 25946086 20482118 5463968 0.02110 4417390 2159481 2257909 0.00870 19062815 16673547 2389268 0.00920 180661 0 180661 0.00070 23660866 18833028 4827838 0.01860 49606952 39315146 10291806 0.03970 5280 5280 0.00000 14460 14460 0.00010 42500 42500 0.00020 62240 62240 0.00030 0 3717152 557573 66222358 68113097 -1890739 X 1 1 1 1 Medcenter One Inc

300 N 7th St Bismarck ND 58501

X X X X X Not Required 1 20 MCO - Q&R Clinic

222 N 7th St Bismarck ND 58501

Provider-based clinic MCO - Bone Spine Sports Clinic

225 N 7th ST Bismarck ND 58501

Hospital outpatient physical therapy and provider-based clinics MCO - OP Surgery Center

414 N 7th St Bismarck ND 58501

Provider-based clinics, pre-op and post-op surgical care MCO - College of Nursing

512 N 7th St Bismarck ND 58501

College of Nursing and Support MCO - Bismarck Family Clinic North

2830 N Washington St Bismarck ND 58501

Provider-based clinic MCO - Tom & Frances Leach Dialysis Cente

201 N 7th St Bismarck ND 58501

Outpatient Dialysis services & support services MCO - Dickinson Clinic

938 2nd Ave W Dickinson ND 58601

Ambulatory physician office based clinic MCO - MRI Center

500 E Broadway Ave Bismarck ND 58501

MRI services for inpatients and outpatients MCO - Walk-In Clinic North

3318 N 14th St Bismarck ND 58501

Provider-based clinic MCO - Jamestown Clinic

300 2nd Ave NE Jamestown ND 58401

Ambulatory physician office based clinic MCO - Northbrook Hearing Center

1929 N Washington St Bismarck ND 58501

Audiology services MCO - Bismarck Family Clinic South

1040 Tacoma Ave Bismarck ND 58504

Provider-based clinic MCO - Women's Health Center

1100 College Drive Bismarck ND 58501

Physical Therapy & fitness facility MCO - Mandan Family Clinic East

102 Mandan Ave Mandan ND 58554

Provider-based clinic MCO - Mandan Family Clinic North

910 N 18th St NW Mandan ND 58554

Provider-based clinic & administrative support for home health and hospice s MCO - Occupational Health Clinic

1833 East Bismarck Expressway Bismarck ND 58504

Employer based occupational health services & chiropractic services MCO - Occupational Health Clinic

1531 W Villard St Dickinson ND 58601

Employer based occupational health services MCO - Walk-In Clinic Downtown

715 E Broadway Ave Bismarck ND 58501

Provider-based clinic MCO - Dialysis - Ft Yates

10 N River Rd Ft Yates ND 58538

Outpatient Dialysis services Dialysis - Jamestown

419 5th St NE Jamestown ND 58401

Outpatient Dialysis services Part I, Line 3c: Medcenter One does use the FPG to help determine financial assistance eligibility if the information is available. However, if an application is not completed and the guarantor/patient has a recovery credit score of 500 or less with no available credit they may be eligible for a discount up to 100%. The recovery score is the measurement of the ability of the guarantor/patient's ability to repay current and past due balances. Part I, Line 7: Community health improvement services and community benefit operations as well as cash and in-kind contributions were determined using actual costs in the general ledger or specific detail in subledgers. Health professions education was determined using the medicare cost report total cost of these programs and offsetting reimbursement from the medicare cost report.The cost to charge ratio used for bad debt, charity care, and public programs was based on the ratio of operating costs for the clinic and hospital operations based on the 2010 audited financial statements divided by the gross patient charges posted during the year to our four patient account receivable systems for the hospital, clinic, home health, and occupational health. Operating costs were reduced by non-operating revenue and the community health improvement, community benefit operations, and health professional education costs reported above.The costs and net patient care revenues associated with subsidized health services were calculated based on a study of inpatient and outpatient (including clinic services) costs and reimbursements attributed to the performing or attending physician at the patient account level. Physicians and non-physician providers were categorized into service categories, i.e. infectious disease, based on their primary specialty area.Direct patient care costs for hospital inpatient and outpatient care were allocated to the physician based on separate cost to charge ratios for supply and non-supply charges on the patient account. Overhead costs were stepped down to the revenue producing departments based on the statistics used for the Medicare Cost Report.Direct patient care costs for physician clinic services are maintained in the physicians cost center in the general ledger. Departmental expenses were allocated to the individual physicians based on various statistics depending on the type of expense. Statistics used included clinic visits, work RVU's, malpractice RVU's, lines transcribed, FTE status, and salary expense. Overhead expenses were also allocated to the individual physicians based on these statistics.Offsetting inpatient and outpatient patient care revenue were those reimbursements for the account attributed to the attending physician. Offsetting professional reimbursements were those reimbursements for which the physician or non-physician provider was the billing provider. Part I, Line 7g: The organization included $5,854,558 of costs attributable to physician clinics as part of subsidized health services. Part I, L7 Col(f): Bad debt expense reported on Form 990, Part IX, Line 25, Column (A) of $6,535,460 was removed from the denominator prior to the calculation. Part II: COMMUNITY SUPPORT:Medcenter One operates the Dakota Children's Advocacy Center, which is a program that is committed to improving the response to child abuse. The Advocacy Center is a community partnership that utilizes a comprehensive multidisciplinary team approach to investigating child abuse. Professionals from social services, law enforcement, prosecution, victim advocacy and the medical and mental health communities come together under one roof, so that a child only has to tell of his or her abuse one time.Medcenter One staff members also participate on local violence prevention councils, promote and train community members in self-defense and work closely with local law enforcement to ensure victim rights. COALITION BUILDING:Medcenter One is active in the local Chamber of Commerce, North Dakota Chamber of Commerce, Bismarck-Mandan Development Association, YMCA, North Dakota Department of Health programs, University of North Dakota Medical School, local and statewide disaster and flu response planning, Bis-Man Transit and other health advisory councils.Medcenter One is the local Meals on Wheels provider and is active on its board of directors.Disaster readiness: Medcenter One takes disaster readiness very seriously and has responded to this call beyond what is required for licensure. Our staff actively participates in local, regional and statewide readiness planning and activities. In 2009, we made the following changes related to prospective disasters: * Provided man hours for emergency planning * Improved lockdown capabilities, enhanced security measures * Added disaster-related communication equipment * Purchased additional personal protective equipment (PPE) for stockpiles * Participated in community preparedness drills and exercises * Purchased medical, surgical and pharmaceutical supplies * Conducted specialized emergency training for staff * Volunteered storage space for statewide stockpiled suppliesCOMMUNITY HEALTH IMPROVEMENT ADVOCACY:Medcenter One works with the North Dakota Department of Health, North Dakota Rural Healthcare Association, North Dakota Nurses Association, North Dakota Medical Association and other North Dakota health advocacy groups to impact public policy to improve the health of the community. Medcenter One will also provide vouchers and financial assistance to low-income families for transportation and lodging expense to facilitate medical treatment and safe travel conditions home when necessary.Due to small operating margins, Medcenter One has limited reinvestment even in its own plant and equipment. The average age of plant for Medcenter One is 17.1 years as compared to 11.93 for North Dakota hospitals. This reduced margin has also limited financial support of community building activities over the last 10 years.OTHERMedcenter One is leasing land with a Fair Market Value of $768,000 to UND Family Practice Center (UND FPC). UND FPC is constructing, and will own, a building on the land. The lease is for 50 years with a total lease payment of $1.00. The land size is Lots 1-24 of Block 98, which equals 34,000 square feet. Using a comparative lease value for similar land in the the local Bismarck market the comparative lease value equaled $42,500 for the annual lease that Medcenter One is providing to UND FPC. Part III, Line 4: Medcenter One posts payments and discounts to individual patient accounts. For every patient account, a guarantor or finacially responsible party is determined. Accounts with the same guarantor are aggregated when determining bad debt expense.Worksheet 2 was used to determine line 2.To determine if the amount of bad debt expense that we reasonably believe would qualify as charity care if we had received the proper documentation, we performed the following calculation. For accounts sent to collection agency and therefore initially determined to be bad debt, we calculated the ratio of the collection agency's average collection recovery percentage and the number of accounts with payment arrangements and/or in legal compared to the total. Accounts without recovery or without payment arrangements we felt would have qualified for Community Care. For 2010 the percentage is 15%. This 15% was applied to line 2 to calculate line 3. The notes to the organization's audited financial statements state: "Management reviews patient 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 due to bad debts. Management considers historical write off and recovery information in determining the estimated bad debt provision." Part III, Line 8: Medicare cost report step-down methodology resulting in cost to charge ratio applied to appropriate revenue codes. Part III, Line 9b: Statements for patient balances due are sent to patients on a monthly basis. If the individual contacts Medcenter One and provides information that they are eligible for charity care, the account balance is written off immediately and no further collection action is taken. If the account was already turned over to a third party collection agency, the agency is notified, the account is written off and no further collection action is taken. Patient contact and communication is recorded in the patient accounting system for customer account representatives and collection representatives to view and keep current. Part VI, Line 2: Medcenter One employs a variety of tools and vehicles to assess the healthcare needs of the communities it serves. Medcenter One's Board of Directors and Strategic Planning Committee continually review the organization's subsidized programs and the needs of the community. Information is gathered from Medcenter One data as well as external data sources including North Dakota Department of Health, North Dakota Department of Human Services, North Dakota Courts and Law Enforcement, North Dakota State Data Center, North Dakota Vital Statistics, North Dakota Center for Rural Health, United Way, United States Census Bureau and the Centers for Disease Control and Prevention. Data from each agency is used to determine the healthcare-related needs and changes in the community. Information from these various sources is compiled and shared with the Senior Management Team and the Strategic Planning Committee. The Senior Management Team reviews volume of services provided to determine if there are changes in volume that impact access. To ensure access to healthcare services that experience increased demand, Medcenter One strives to add new access points and increased staffing. Part VI, Line 3: The Medcenter One Community Care brochures are distributed at each Medcenter One registration desk including the emergency room registration area. Patients who may not have the ability to pay may also meet directly with a financial counselor to determine whether they will qualify for the charity care program. Additionally, financial counselors meet directly with patients during their in-patient stay to inform them of the charity care program. A recently added online credit scoring process to determine eligibility has allowed Medcenter One to better capture eligible charges that patients are unable to pay. Intake and financial staff also discuss the availability of various government benefits such as Medicaid, SCHIP and state high-risk insurance programs. Medcenter One contracts with an external agency to provide assistance for patients when completing eligibility form; this service helps low-income patients qualify for government medical aid programs which can otherwise be intimidating to patients. Part VI, Line 4: POPULATION SERVED: Medcenter One serves residents of central and western North Dakota. The service area is approximately 2/3 of the 68,976 square miles of the state's land mass. The service area includes 35 counties of which 28 have a frontier designation (less than 6 people per square mile). The population is 93 percent white and 7 percent Native American. The leading causes of death are heart disease and cancer. Native Americans experience health disparities especially related to diabetes, obesity and substance abuse. According to county-specific data available through the North Dakota Data Center, the population of Medcenter One's primary service area is expected to remain fairly stable through 2020. Recent oil industry growth, however, has altered predictions towards a trend of growth. The counties with the strongest oil development may see population jumps as great as 20 percent. Overall, the Medcenter One's service area may jump from the current 240,000 to as many as 300,000 by 2012. MIGRATION TO URBAN AREAS, LOSS OF POPULATION IN RURAL AREAS: Even though the total population of the Medcenter One service area is stable with pockets of growth, studies conducted by the US Census Bureau and the North Dakota Data Center show the population will continue to migrate from smaller communities toward the urban centers. This movement into Bismarck will further limit access to primary care and hospital services in rural/frontier areas in the future.AGE: Besides migration of the population, the North Dakota Data Center population estimates show an aging of the population of the service area. From 2005 to 2020, it is anticipated that the Medcenter One service area will see a decrease of 12 percent in the number of residents age zero to 64 and a 32 percent increase in those people 65 years of age and older. This shifting will have an impact on the healthcare needs of the population. It is anticipated that the types of services and the volume of services required by the population will change with the aging of the population in the Medcenter One service area.Elderly patients experience more healthcare issues and have statistically higher healthcare spending than other age categories. When age categories are compared in a relative spending grid, people ages 0-24 have a relative spending of 0.5, whereas, elderly aged 75 years and older have a relative spending of 5.5. So as a population ages, there is a statistically significant increase in the amount of healthcare services demanded, including intensive care services. RACE: Native Americans comprise 7 percent of the population of North Dakota, but Medcenter One has a higher percent of hospitalized patients from the Native American race than is seen in the general population. Because Native Americans experience health disparities, this race makes up 14.9 percent of Medcenter One's inpatient stays and 17.3 percent of all ICU admissions. SOCIO-ECONOMIC STATUS: The socioeconomic status of the service area residents is fairly stable but lower than the national median. According to information from National Council on State Legislatures (NCSL), it is estimated that 50.1 percent of North Dakota residents are at or below 300 percent FPL. According to the NCSL data specific to adults with incomes up to 133 percent FPL, 23 percent have employer coverage, 17 percent have individual coverage, 23 percent are on Medicaid, and 38 percent are uninsured. Single adults in North Dakota do not qualify for Medicaid unless they are elderly or disabled. The 2009 US Census indicates that the median income for a North Dakota household was $47,898 as compared to $50,221 median household income in the United States. The 2009 annual per capita income was $24,978; the national per capita income was $27,041. Statewide, it is estimated that 11.7 percent of persons are below the poverty level. Native Americans in the service area have higher unemployment and lower median incomes than those of their white counterparts. The socio-economic status of Native Americans further complicates their ability to access health services.PAYER MIX: The largest segment of Medcenter One's payer mix is Medicare with 40.9 percent, Blue Cross Blue Shield is at 34.1 percent and commercial and other governmental payers (Workforce Safety and Insurance, CHAMPUS-North Dakota high risk insurance program, and Public Health System) at 12.6 percent. Medicaid makes up 8.8 percent, and self-pay accounts for only 3.6 percent.PRESENCE OF FEDERALLY-DESIGNATATED UNDERSERVED AREAS:Most of the counties in Medcenter One's service area are designated as health professional shortage areas (HPSA) except parts of Morton and Burleigh counties, where the Medcenter One hub resides, and portions of Stutsman and Barnes counties. Primary care physicians are in short supply throughout the state; specialty care physicians including psychiatrists, urologists and neurologists are in short supply across the state including the communities with the state's largest healthcare systems. OTHER HOSPITALS:There is only one other level II trauma center that serves the same service area. Medcenter One and the other facility serve as tertiary care centers for 13 critical access hospitals in the service area. Part VI, Line 6: Medcenter One furthers its exempt status purpose by working to promote the health and well-being of the patients it serves. Medcenter One's broad-based, volunteer Board of Directors consists of 29 members. Membership includes 11 employees (the Medcenter One CEO and 10 physicians) and 18 community members who are not employed by Medcenter One. All 29 Board members reside in the Medcenter One service area. The board's size, diversity and geographic representation enable Medcenter One to say in touch with the needs of the vast service area. The volunteer board is also effective in monitoring the changing needs of the population and working to ensure that health needs are met. Medcenter One reinvests any profit back into the corporation, so Medcenter One can continue to provide the highest quality and broadest array of services available in western and central North Dakota.Safety net services provided by Medcenter One include: -Level II trauma services and emergency care-Neonatal intensive care unit-Only pediatric intensive care unit and oncology services in western North Dakota-Children's advocacy center-Home care/hospice-Kidney dialysis (3 sites)-Only kidney transplant program in western North Dakota-Mental Health - outpatient and inpatient-College of Nursing-Outpatient services in audiology and diabetes care-Rehabilitation services-Wound care servicesMany of the safety net services listed above need to be subsidized to continue their existence. Subsidized health services that are a substantial cost to Medcenter One include: nephrology/diabetes care center, mental health, trauma and critical care services, acute rehabilitation, infectious disease, and wound care.NURSING/NURSING STUDENTS:Medcenter One College of Nursing: Medcenter One was one of the first healthcare organizations in the country to operate a single purpose school. It has owned, operated and financially supported its own college of nursing since 1908. Medcenter One's College of Nursing is a fully accredited, upper-division institution awarding its graduates a four-year bachelor of science degree in nursing. Forty-three students graduated from the Medcenter One College of Nursing in spring 2010. The net cost of this program in 2010 was $1.5 million. OTHER HEALTH PROFESSION EDUCATION:Radiologic Technology Program subsidy: Medcenter One operates a School of Radiography. This program graduated four students in 2010. The net loss of this program is estimated at $74,634 in 2010. Professional healthcare training: Medcenter One supports medical education programs for pharmacists, radiologists and laboratory technicians. Medcenter One works in coordination with other state institutions to offer laboratory training for North Dakota students. In 2010, there was two phlebotomy student (technical) and seven students in the medical laboratory technologist program (2-year) from Bismarck State College and three medical technology students (4-year) from the University of North Dakota in Grand Forks. Medcenter One has 29 clinical affiliation agreements with ND colleges/universities and 27 agreements with out-of-state programs. During the 2009-2010 school term (August 2009 to July 2010), 289 students acquired increase knowledge and healthcare skills from staff on the Medcenter One campuses.Emergency medical services (EMS) education: Medcenter One EMS education is responsible for training emergency personnel from western and central North Dakota. Classes in CPR (certification and recertification), use of automatic external defibrillators (AED), first aid, pediatric first aid, advanced cardiac life support, pediatric advanced life support, American Heart Association instructor, first responder, emergency medical technician-basic/intermediate, paramedic, international trauma life support, nebulizer and EPI-pen training are offered. In 2010, 1,399 community participants were trained by Medcenter One EMS staff. Net cost of the program for 2010 community outreach was $68,288.COMMUNITY HEALTH IMPROVEMENT SERVICES, COMMUNITY BENEFIT OPERATIONS, DONATIONS/SPONSORSHIPS AND IN-KIND SUPPORTHealth information and screening programs are promoted through a monthly publication sent to 150,000 households within Medcenter One's community area. The publication includes a calendar that highlights health information and screening programs available for the coming month and feature stories that focus on new treatments available in our service area. Medcenter One also produces and distributes Trauma Times to service area emergency personnel and critical access hospital staff yearly. Health promotional events such as presentations, health fairs and educational events are offered on a regular basis. One program called Doc Talk features a free educational session for the general public led by a Medcenter One physician. Participants are encouraged to ask health questions following the presentation. In 2010, Medcenter One hosted 12 Doc Talks with a total of 439 community members in attendance. Other health educational events and classes highlight topics such as prepared childbirth, sibling adjustment, breastfeeding, infant massage and nurturing. Some of the classes charge a nominal fee for participation.Support groups: Medcenter One sponsors support groups with a donation of space and/or leadership. Medcenter One offers several support groups for patients and families dealing with Alzheimer's disease, cancer, diabetes, gastric bypass surgery, hepatitis, infant death, multiple sclerosis, sleep disturbances, prostate cancer and stroke and brain injury. Safety and prevention services: Staff within the trauma services department at Medcenter One work closely with the North Dakota Safety Council to provide two week-long educational camps for 5 and 6-year-old children in the Bismarck-Mandan area. Activities include games and songs that emphasize safety risks and appropriate responses, so that children understand how to maintain their safety in various environments. Children take turns driving pedal cars to learn traffic rules for drivers and walking across intersections to adopt safe practices for pedestrians. Playground and bike safety are also highlighted. Medcenter One provides instruction and materials on safety to each student. Other Trauma Services community outreach programs include:* Trauma services staff promote bike helmet use and conduct car seat safety checks in coordination with other local agencies. * Participate in a special program entitled Teen Maze that promotes safety with middle school children.* In 2010, Trauma Services began work on adult fall prevention programs. Western North Dakota has an above-average elderly population and so addressing critical health risks like falling down have become increasingly important. Women's Health Center: A medically sound fitness and exercise program where physical therapists provide free injury screenings and make recommendations for personal workout routines. Physical fitness and healthy lifestyles are promoted to women at every stage of their lives. Educational and promotional events are scheduled on a regular basis and the Center hosts the regional Breast Cancer Walk/Run event annually, which includes a multipurpose health fair. Parish Nurse Program: Parish nurses minister to the physical, spiritual and emotional needs of the congregation through health education, health screenings, making referrals, serving as a personal health counselor, offering flu shot clinics and visiting people who are homebound, hospitalized or in a nursing home. The parish nurses program partners with eight congregations that represent three denominations. Medcenter One provided $17,323 of support in 2010.Screenings include Well Baby Clinic, prostate cancer, hearing and athletic screenings throughout the year. The Well Baby Clinics are held weekly, and parents can bring their baby to be weighed and measured by a registered nurse who also answers any questions parents may have. Speech therapy partners with the Scottish Rite to provide free speech screening and therapy services to children with speech issues. Sponsorships and donations: In 2010, Medcenter One provided $10,825 of donations and sponsorships for community non-profit agencies.Additional in-kind support and services: In 2010, Medcenter One College of Nursing faculty and students spent 6,114 hours providing school and community nursing, presentations and health career information to elementary and junior high students providing in-kind services valued at $127,721.Statement continued on Sch H, Other Information... Part VI, Line 7: Medcenter One is a division of Medcenter One Health Systems. A complete continuum of care is provided under the Medcenter One Health Systems umbrella agency. Long-term care services, laboratory (including histocompatibility services for organ transplant surgery) and radiology services, a joint owned air ambulance service and laundry service, and a durable medical equipment service are a few of the supporting services provided by Medcenter One Health Systems. The living centers division provides care to long-term care residents who occupy 339 nursing home beds. The nursing homes operate at a 98% occupancy rate. The division also operates 77 assisted living apartments.Joint ownership of air ambulance and laundry services are cost-effective ways to support other Medcenter One operations. The laboratory and radiology services provide technical support to the physicians and patients served by Medcenter One and allow Medcenter One to be the only facility in western North Dakota that provides transplant services. Profits from the laboratory and radiology division support subsidized programs of Medcenter One. Sch H, Part VI, Line 5: OTHER INFORMATIONcontinued from Sch H, Part VI, Line 5:Besides providing space for many support groups and community events, Medcenter One allows the local police and sheriff departments to use the Medcenter One security training facility and equipment for their training needs. In 2010, 610 hours of facility meeting and training space was provided to these groups. Medcenter One provides free food and beverages for many of the support groups and community meetings hosted at our facility as well as door prizes and other giveaways to promote non-profit and other fundraising activities.In-kind support includes the value of medical supplies that are donated to other non-profits, area ambulance and firefighting organizations and healthcare providers. 1 God's Child 721 Memorial Highway Bismarck ND 58504 450459314 501(c)(3) 15000 FMV Medical supplies & scrubs Overstock and nearing outdate, the supplies were donated to a charitable mission. Univeristy of North Dakota School of Medicine 515 East Broadway Bismarck ND 58501 456002491 Government 6400 FMV Medical supplies & scrubs Overstock and nearing outdate, the supplies were donated to the residency program. 2 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: The organization only makes charitable distributions to other 501(c)(3) organizations. Once funds are distributed no further monitoring is done. X 1 1 X X X X 1 0 0 0 0 0 0 1 0 Dr Alan VanNorman 617588 0 0 0 18822 0 9800 0 16393 0 662603 0 0 0 Dr Craig Lambrecht 517023 0 77454 0 62374 0 45900 0 25711 0 728462 0 0 0 Dr Biron Baker 178546 0 238075 0 6810 0 9800 0 17475 0 450706 0 0 0 Dr Kimber Boyko 517082 0 104913 0 1242 0 39200 0 17216 0 679653 0 0 0 Dr David Field 245405 0 101537 0 17742 0 39200 0 16177 0 420061 0 0 0 Dr Kent Martin 239074 0 38766 0 9894 0 39200 0 20730 0 347664 0 0 0 Dr David O'Regan 507861 0 0 0 1242 0 9800 0 17593 0 536496 0 0 0 Dr Mark Rodacker 385110 0 70406 0 810 0 9800 0 15006 0 481132 0 0 0 Dr Sean Russell 595380 0 0 0 17310 0 39200 0 19619 0 671509 0 0 0 Dr William Canham 490238 0 0 0 20064 0 9800 0 19822 0 539924 0 0 0 Dr David Pengilly 230056 0 116925 0 540 0 9800 0 12876 0 370197 0 0 0 Paul Morth 182075 0 37741 0 24094 0 44435 0 21552 0 309897 0 0 0 Karen Paul 122886 0 33227 0 11771 0 19490 0 21282 0 208656 0 0 0 John Miller 250587 0 0 0 0 0 0 0 0 0 250587 0 0 0 Jan Kamphuis 182313 0 37282 0 25328 0 8442 0 17894 0 271259 0 0 0 Scott Boehm 153120 0 29581 0 18456 0 31261 0 15428 0 247846 0 0 0 Dr Anthony Tello 372252 0 74716 0 1242 0 9800 0 17856 0 475866 0 0 0 Dr Douglas Berglund 849178 0 172278 0 17742 0 39200 0 15623 0 1094021 0 0 0 Dr William Cain 713457 0 276696 0 18822 0 39200 0 10161 0 1058336 0 0 0 Dr Matthew Iwamota 734262 0 280500 0 2501 0 29400 0 15006 0 1061669 0 0 0 Dr Michael McIntee 743208 0 286767 0 17310 0 9800 0 16393 0 1073478 0 0 0 Dr Tarek Dufan 417592 0 1013521 0 10486 0 29400 0 14144 0 1485143 0 0 0 Claudia Eisenmann 194799 0 40281 0 5852 0 8056 0 9039 0 258027 0 0 0 Evy Olson 107220 0 23900 0 9926 0 4861 0 15536 0 161443 0 0 0 Pam Hopkins 93842 0 21561 0 15464 0 14791 0 10236 0 155894 0 0 0 James Cooper 100368 0 0 0 0 0 0 0 0 0 100368 0 0 0 Part I, Line 1a Companion travel was provided for Craig Lambrecht's (CEO) wife. These amounts were reported as taxable income on his W-2. Part I, Line 4a Claudia Eisenmann, key employee/Vice President, received severance compensation from April through the end of the year and into FY 2011. The amount of severance from April through December included $139,435 in compensation and $15,061 in benefits (including Social Security, Medicare, Health Insurance, and 401 (a) money purchase pension contributions). Part I, Line 7 Medcenter One, Inc. has a senior management incentive compensation plan. There are various payout levels, depending on where the bottom line is at, using the consolidated total margin percentage as the measurement. Actual payment is subject to recommendation by the CEO to the chairman of the board and may not be made even if minimum thresholds are met. Supplemental Information Part III Part II: John Miller provides project management services to Medcenter One, Inc., but is compensated by an independent management company for those services. John Miller II Son of John Miller, Key Employee 18000 Educational stipend Jessica Miller Daughter-in-law of John Miller, Key Employee 18000 Educational stipend Stephanie Miller Daughter of John Miller, Key Employee 18000 Educational stipend Associated Land Development Partnership of which a board member has more than a 5% ownership 290740 MCO, Inc. leases property for Bismarck South Clinic from Associated Land Development of which Mr. Ternes is a 33 1/3% owner. 0 Information Technologies Inc Entity owned more than 35% by a key employee 617565 Mr. Miller is owner of Information Technologies Inc. which is contracted by Medcenter One to provide the CIO and other information services employees and expertise. 0 Kimberly A VanNorman Family of board member - Alan VanNorman 23335 Employment Compensation 0 Megan J Suchy Family of officer - Paul Morth 50252 Employment Compensation 0 Brenda Miller Wife of officer - John Miller 385999 Employment Compensation 0 Susan K Boehm Wife of key employee - Scott Boehm 37862 Employment Compensation 0 John Durick Brother of key employee - Patrick Durick 97893 Employee Compensation 0 Cheryl Page Family of board member - Robert Schulty 58944 Employee Compensation 0 Lisa Clairmont Daughter of board member - Irene Wentz 71674 Employee Compensation 0 Allison Sadowski Family of key employee - Anthony Telo 39997 Employee Compensation 0 John Miller II Son of key employee - John Miller 36821 Contracted physician services 0 Laura Boehm Family of key employee - Scott Boehm 12454 Employee Compensation 0 Changes in Program Services Form 990, Part III, line 3 Medcenter One's charity program enrollment was altered to capture a greater percentage of eligible charges. In addition to the written application process, Medcenter One added an online credit checking program which streamlines the Charity Care process for qualified patients' unpaid charges. The net result was a 55% increase in charity care ($9.3 million in 2010 versus $6 million in 2009) based on charges foregone. Form 990, Part VI, Section A, line 1 The Hospital has an Executive Committee that can make a decision on the Board of Directors behalf in an emergency. The Executive Committee consists of the Chair, Vice Chair, Secretary/Treasurer, CEO, and eight board members. Form 990, Part VI, Section A, line 3 Project management services are provided by John Miller, who is compensated by an independent management company for those services. Form 990, Part VI, Section A, line 6 The sole member of the organization is Medcenter One Health Systems. Form 990, Part VI, Section A, line 7a The sole member, Medcenter One Health Systems, has the powers and rights to fix the number of, elect, appoint, fill vacancies in and remove, with or without cause, the directors of the corporation; and elect, appoint, and remove the chair of the Board of Directors of the corporation. Form 990, Part VI, Section A, line 7b The member, Medcenter One Health Systems, approves all governing decisions of the board. Form 990, Part VI, Section B, line 11 The draft Form 990 is reviewed by the CFO and Controller. A high-level overview of the return activity was presented to the Executive Committee. Comments and questions are addressed and the final draft is available for the Board in the administration office for review prior to the filing date. However, occasionally the timing of the filing deadline and finalizing the draft does not allow appropriate time for presentation to the governing body before the filing. The finance committee and board members will be notified of a filed copy to review in administration. If requests are made for changes an amended return will be sent. The Board was given a presentation regarding the current Form 990 by an Eide Bailly representative and our CFO. Form 990, Part VI, Section B, line 12c Annually a letter is distributed explaining our conflict of interest policy with examples of what may be considered a conflict of interest. Officers, directors or trustees, and key employees are asked to complete a survey which would disclose any conflicts. These surveys are to be signed and returned to the finance department. Any individuals who do not return the survey in a reasonable time are contacted again to return the survey. Officers and directors with a conflict of interest are asked to remove themselves from applicable discussions and voting. Form 990, Part VI, Section B, line 15 The CEO's compensation is determined by the board's Executive Committee. They receive input on salary survey information which is documented in the minutes of the Executive Committee. Any adjustment that the Board determines is then documented on an internal compensation change form in which the Chairman of the Board signs off. Compensation consultants are used once a year for the CEO, VP's and Medical Director. This process is done on an annual basis. Compensation for other officers and key employees (non-physicians) is based on salary survey information. The CEO makes a recommendation to the Chairman of the Board and the Chairman approves and signs off. A Bonus system is in place and is approved by the Executive Committee. This process is done on an annual basis. Compensation of top highly compensated employees, who are physicians, is determined by a compensation committee that considers compensation plans and uses guidelines from the Executive Committee. The Board votes on the compensation plans (minus the physicians on the board). Legal counsel also reviews compliance with board guidelines and reasonable market rates. The last full review was completed four years ago. In 2010 a consultant was hired to do a fair market value comparison. Medcenter One is currently waiting to receive the final report on that assessment. Form 990, Part VI, Section C, line 19 Documents are not available for public disclosure; however the financial statements will become part of the documents available at GuideStar.org. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net unrealized gains on investments: 12,114. Pension-related changes other than net periodic pension cost -611,793. Change in interest in net assets of Medcenter One Foundation -67,500. Total to Form 990, Part XI, Line 5: -667,179. Form 990, Page 7, Part VIII, Column B: Hours reported on Part VII are for services performed for the organization. The following individuals also devoted time to Mecenter One Living Centers (MCOLC), Medcenter One Foundation (FDTN), and Medcenter One Health System (SYSTEM). Approximate number of hours per week devoted to each entity are as follows: MCOLC FDTN SYSTEM Total Patrick Durick 1.0 0.0 1.0 2.0 Dr. Alan VanNorman 0.0 0.0 1.0 1.0 Gerald Willer 0.0 0.0 1.0 1.0 Dr. Craig Lambrecht 0.0 1.0 1.0 2.0 Dr. Biron Baker 0.0 0.0 1.0 1.0 Wes Engbrecht 0.0 0.0 1.0 1.0 Claire Anne Holmberg 0.0 0.0 1.0 1.0 Ellen Huber 0.0 0.0 1.0 1.0 Lowell Jensen 0.0 0.0 1.0 1.0 George Keiser 1.0 0.0 1.0 2.0 James Laducer 0.0 0.0 1.0 1.0 Sister Paula Larson 0.0 0.0 1.0 1.0 Susan Lundberg 1.0 0.0 1.0 2.0 Dr. Kimber Boyko 0.0 0.0 1.0 1.0 Dr. David Field 0.0 0.0 1.0 1.0 Dr. Sean Russell 0.0 0.0 1.0 1.0 Dr. Mark Rodacker 0.0 0.0 1.0 1.0 Robert Schulte 0.0 0.0 1.0 1.0 Dr. Larry Skogen 0.0 0.0 1.0 1.0 Richard Hedahl 0.0 0.0 1.0 1.0 Niles Hushka 0.0 0.0 1.0 1.0 Duwayne Ternes 0.0 0.0 1.0 1.0 Jim Volk 0.0 0.0 1.0 1.0 Jim Wheeler 0.0 0.0 1.0 1.0 Dr. Kent Martin 0.0 0.0 1.0 1.0 Dr. David O'Regan 0.0 0.0 1.0 1.0 Dr. David Pengilly 0.0 0.0 1.0 1.0 Irene Wentz 0.0 0.0 1.0 1.0 Dr. William Canham 0.0 0.0 1.0 1.0 Paul Morth 0.0 1.0 1.0 2.0 Medequip One LLC 300 North 7th Street Bismarck ND 58501 450452639 Provide durable medical equipment to patients ND 4062424 3184822 Medcenter One Health Systems Medcenter One Health Systems 300 North 7th Street Bismarck ND 58501 450397195 Promotion of Health ND 501(c)(3) 3 N/A 0 Medcenter One Foundation 300 North 7th Street Bismarck ND 58501 450397196 Promotion of Health Through Fundraising ND 501(c)(3) 7 Medcenter One Health Systems 0 Medcenter One Living Centers 1000 18th ST NW Suite 1 Mandan ND 58554 450416454 Long-term Care Facility ND 501(c)(3) 9 Medcenter One Health Systems 0 Bismarck Cancer Center 500 North 8th Street Bismarck ND 58501 450454363 Theraputic Radiation Treatment of Cancer and Other Diseases ND 501(c)(3) 9 Medcenter One Health Systems 0 Central Dakota Hospital Laundry 1300 Industrial Drive Bismarck ND 58501 450317366 Laundry Service Cooperative ND 501(e) Medcenter One Health Systems 0 Bismarck Air Medical 2940 N 19TH ST Bismarck ND 58503 721538378 Air ambulance service ND N/A Medcenter One Affiliated Services Inc 300 North 7th Street Bismarck ND 58501 450403146 investment activity ND N/A C 0 0 1 0 0 1 0 0 0 1 1 1 0 1 0 0 1 0