2011-05-13T16:03:53-05:00 2010-06-30 Eide Bailly LLP 5601 Green Valley Drive Ste 700 Minneapolis MN 554371145 990 2009-07-01 460225483 Sacred Heart Health Services SACR 6056688000 501 Summit Street Yankton SD 57078 Pamela J Rezac 6056688000 2011-05-12 1 Kim Hunwardsen CPA 9529446166 2011-05-12 2009 2016-02-24 21:20:13Z Avera Sacred Heart Hospital Pamela J Rezac 501 Summit Street Yankton SD 57078 89101633 0 0928 X www.averasacredheart.com X 1911 SD Promotion of Health 12 10 1016 393 0 0 308210 537621 78863712 86234554 1443577 1942062 256350 -371345 80871849 88342892 271095 70550 0 41012497 43438643 0 0 32298762 37746072 73582354 81255265 7289495 7087627 197400958 207545147 27562709 27518006 169838249 180027141 Avera is a health ministry rooted in the Gospel. Our mission is to make a positive impact in the lives and health of persons and communities by providing quality services guided by Christian values. 0 0 63250034 70550 86234554 Avera Sacred Heart Hospital (Sacred Heart Health Services) leads delivery of healthcare to its region through over 932 employees (as well as 63 physicians on its active medical staff) which coordinate care to deliver patient care as an integrated unit. Avera Sacred Heart and its affiliates (referred to collectively as Sacred Heart Health Services) also work seamlessly to meet the needs of the communities they serve in southeast South Dakota and northeast Nebraska. In addition, Avera Sacred Heart includes two nursing homes and a congregate housing facility. It also manages three hospitals and two nursing homes. Avera Sacred Heart operates under the tenets of the Roman Catholic Church and in accordance with the philosophy and values established for Avera Health, a sponsored health ministry of the Benedictine and Presentation Sisters. Avera Sacred Heart engages in activities designed to improve the health of the individuals and communities that it serves in response to a calling to heal the sick, the elderly and the oppressed.Requirements of the IRS community benefit standard for tax-exempt organizations are integral to Avera Sacred Heart Hospital's larger charitable mission of improving health and quality of life. Specifically, Avera Sacred Heart is governed by an independent board including community leaders, business and clinical healthcare experts. The Board has a history of commitment to act with the highest integrity and has been proactively evaluating opportunities to voluntarily adopt governance best practices for the benefit of the community.Avera Sacred Heart makes medical care accessible to the entire community it serves regardless of ability to pay, of which there were 14,938 hospital patient days and 67,553 nursing home resident days in FY'10.Avera Sacred Heart operates a full-time emergency department, which provides emergency care regardless of ability to pay. In August 2006, Avera Sacred Heart opened a new, state-of-the-art Emergency Department, which provides faster service and more privacy for patients. In FY '10, there were 9,864 visits. In 2009, the Avera Sacred Heart Hospital Emergency Department was awarded the Summit Award from Press Ganey & Associates for maintaining patient satisfaction scores at the 99th percentile in the nation over a period of three consecutive years. Avera Sacred Heart provides clinical services needed to operate the Emergency Center and provides on-site emergency medical, rescue and medical transportation services. In addition, Avera Sacred Heart, 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, regardless of ability to pay. Avera Sacred Heart's charity care policy provides discounted and free services to patients who lack the resources to be fully responsible for the health care they receive. The charity care policy is designed to ensure the entire community served by Avera Sacred Heart has access to needed healthcare services. The Avera Sacred Heart Board of Directors oversees services delivered under the charity care policy including assessing community needs, approving eligibility criteria and monitoring the effectiveness of the program in providing community access to medical care. Eligibility for discounted or free services under the charity care policy is based on income levels and family size. In addition, an automatic discount off charges is provided to any patient that is determined to not have insurance of any type. Applications for coverage under the program may be obtained at any Avera Sacred Heart patient registration area or by calling the Avera Sacred Heart Business Office. Avera Sacred Heart maintains records to identify and monitor the level of care provided under the charity care policy. Avera Sacred Heart had charges forgone for charity for the year ended June 30, 2010 of approximately $2,168,699.Avera Sacred Heart 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 health care, respond to them, aiming to make a positive, life-enhancing difference in the community. Avera Sacred Heart takes a strategic, community needs-based approach to delivering benefits to the community. Avera Sacred Heart Hospital demonstrates its commitment to providing community benefit through specific accomplishments:E-Technology: Avera Sacred Heart started with its eICU program three years ago. eICU is a telemedicine-based system that aids in the care of ICU patients at Avera Sacred Heart and across the Avera system. Patients receive constant, around-the-clock monitoring and interventions from a remote care team in addition to the care they receive from their bedside team. In addition, Avera Sacred Heart Hospital, along with St. Michael's Hospital/Avera and Wagner Community Memorial Hospital/Avera, has launched an eStroke program that will enable patients suffering strokes to be more quickly diagnosed and treated through the use of telemedicine. Teaching Hospital: Avera Sacred Heart is a teaching hospital, which reflects a strong commitment to education, research and a high level of care. In the summer of 2007, the hospital opened the new Avera Professional Office Pavilion & Education Center to enhance their commitment to medical education. The Avera Pavilion is the new home of the unique Yankton Ambulatory Program for the third-year medical students of the Sanford School of Medicine of The University of South Dakota. The program challenges medical students to solve clinical problems and experience the doctor-patient relationship through the year. Yankton is only one of three communities in the state where a campus is provided for the Sanford School of Medicine. The office for the Dean of the Yankton Ambulatory Program of the Avera Sacred Heart Yankton Campus is now located on the first floor of the Pavilion. Study space for the medical students is adjacent to the ASHH Medical Library. A unique component to the Pavilion is the expansion and enhancement of educational facilities. Along with a 116-seat auditorium, there are also three conference rooms, all equipped with the latest in audiovisual technology. Residency/Health Professions Training: At any one time, 10 to 15 Sanford School of Medicine of The University of South Dakota medical studentsare in training at Avera Sacred Heart Hospital. In addition, students in nursing, pharmacy, physician assistant programs, radiology and respiratory therapy also affiliate here. Avera Sacred Heart also has a Radiology Technologist School, which graduates 6 to 8 new radiology technologists each year.Preventive Care a Priority: Avera Sacred Heart has taken steps to enhance preventive care for people of all ages through the many educational programs, health screenings and fairs that are held throughout the year. Avera Sacred Heart holds screenings throughout the region at their rural health clinics as well as in Yankton. The hospital is now connected to the Ask-A-Nurse program that provides general information concerning health-related topics. Our web site incorporates the 'ADAM' software that provides a unique level of health-related information to the consumer. In 2009, Avera Sacred Heart Hospital introduced Planet Heart (in conjunction with the Avera Heart Hospital) and an in-house cardiovascular screening package to keep the people we served better informed about their health. Based on community needs, we are continually striving to provide more preventative tools and risk assessments to our population.(continued on page 8 of Schedule O) 63250034 1 1 0 1 0 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 1 1 0 1 0 0 0 0 0 0 1 0 0 0 0 0 0 1 1 0 0 1 119 0 1 1016 1 0 0 0 0 0 0 0 0 0 12 10 1 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 0 0 0 X Jamie A Schaefer 6056688776 501 Summit Yankton SD 57078 Mary Pat Bierle 2.00 X X 0 0 0 Amy Freeburg 2.00 X X 0 0 0 Rob Stephenson 2.00 X 0 0 0 Sr Mary Kay Panowicz 2.00 X 0 0 0 Sr Correne Lemmer 2.00 X 0 0 0 Jim Means 2.00 X 0 0 0 John Nagengast 2.00 X 0 0 0 Michael Schurrer 40.00 X 254913 0 30013 Randy Schapp 2.00 X 0 0 0 Marty Jans 2.00 X 0 0 0 Sr Lucille Welbig 2.00 X 0 0 0 Sr Lynn Marie Welbig 2.00 X 0 0 0 Pamela J Rezac 60.00 X 0 387249 27794 David A Timpe 40.00 X 30720 0 0 Doug Doorn 40.00 X 139413 0 13467 Douglas Ekeren 52.00 X 169590 0 24977 Barbara Larson 52.00 X 167629 0 5150 Michael Peterson 40.00 X 427007 0 29210 Barry A Graham 40.00 X 245544 0 5399 Gregory Erickson 40.00 X 220691 0 27077 Scott Hiltunen 40.00 X 221894 0 27178 Mark Doohen 40.00 X 186964 0 26774 2064365 387249 217039 30 0 1 0 Yankton Anesthesiology PC 1000 W 4th St Suite 13 Yankton SD 57078 Medical Services 1552315 Medicus Radiology Service 7 Industrial Way Unit 5 Salem NY 03079 Medical Services 441609 BWBR Architects Lawson Commons St Paul MN 551021996 Architectural Services 373627 Carol Browning MD 1625 Reading Blvd Wyomissing PA 19610 Medical Services 331237 Thomas J Posch MD 234 Marina Dell Ave Yankton SD 57078 Medical Services 306950 9 92846 444775 537621 Net patient service re 621500 83615978 83615978 Nonmedical outreach 900099 1507994 1507994 Interest in Benedictin 900099 1217707 1217707 Other revenue 900099 458668 458668 Loss from affiliates 900099 -565793 -565793 86234554 1952877 1952877 376581 747926 -371345 -371345 -371345 10815 -10815 -10815 -10815 88342892 86234554 0 1570717 70550 70550 981054 299258 681796 56955 56955 34692227 26940913 7751314 891608 693307 198301 4659390 3588478 1070912 2157409 1650418 506991 2551 2551 24474 24474 9092692 5171967 3920725 481249 7848 473401 7801380 6277701 1523679 12838 12838 1557350 210303 1347047 341532 259372 82160 407658 122038 285620 789251 767942 21309 6603696 6603696 727240 727240 Medical Supplies 7156278 7156278 Bad Debt 2059819 2059819 Miscellaneous 342269 342269 Equipment Lease and Ren 273092 163277 109815 Licenses and Permits 72703 67567 5136 81255265 63250034 18005231 0 604412 297909 12763654 11131387 9070 640002 818832 187953 227877 121440085 72207243 52458781 49232842 10273632 12618837 119022334 131742487 398174 546969 695902 632157 347044 295850 197400958 207545147 8409746 8429251 484638 16083481 15665427 3069482 2938690 27562709 27518006 X 159753003 168717932 9628990 10852413 456256 456796 169838249 180027141 197400958 207545147 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 1 31409 0 0 0 31409 0 1 20906 156561 161870 15597 0 676350 540 41680 2113 716457 721018 11570 -18197 38041 676350 0.36000 0.64000 0 1 1 3433742 3433742 76263665 44889846 31373819 35484589 24414481 11070108 6258089 2902916 3355173 49232842 Interest in net assets of Benedictine Health Foundation 11356112 F Sacred Heart Rural Health Clinics 1813951 C Health Management Services 996283 C Lewis and Clark Health Education and Service Agency 852533 C Valley Health Services 4363103 C Assets limited to use - Avera Pooled Investments 111842155 F Thomas J. Kastle Living Trust 250158 F Alycemae Kastle Trust 268192 F 131742487 Estimated third-party payor settlements 2450000 Market Value of Interest Rate Swap 488690 2938690 88342892 81255265 7087627 4611392 -1510127 3101265 10188892 101326321 4492184 9715208 14207392 87118929 1223963 1223963 88342892 90831665 9576400 9576400 81255265 0 81255265 Part IV, Line 1b: Resident trust funds are held in a bank account and distributed upon request of resident or guardian. The intended use of these funds does not include conducting business on behalf of the organization. Part V, Line 4: Description of Intended Use of Endowment Funds: The Organization's endowment consists of various individual funds established for a variety of purposes. Its endowment represents donor-restricted endowment funds. As required by generally accepted accounting principles, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. Part X: Description of Uncertain Tax Positions Under FIN 48: The Organization has implemented the provisions of FASB Accounting Standards Codification Topic 740-10 (formerly Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes). The Organization undergoes an annual analysis of its various tax positions, assessing the likelihood of those positions being upheld upon examination with relevant tax authorities, as defined by ASC 740-10. For the years ended June 30, 2010 and 2009, the unrecognized tax benefit accrual was zero. Part XI, Line 8 - Other Adjustments: Capital transfers, net: -1390919. Loss on Interest Rate Swap: -119208. Part XII, Line 2d - Other Adjustments: Accumulated Loss Interest Swap: -22247. Revenues of Subsidiaries Consolidated for Financial Statements: 9737455. Part XII, Line 4b - Other Adjustments: Change in interest in Benedictine Health Fdtn in fund balance: 1223963. Part XIII, Line 2d - Other Adjustments: Expenses of Subsidiaries Consolidated For Financial Statements: 9576400. 1 1 X 1 X 1 X 150.000000000000 1 1 1 0 1 1 890449 890449 0.01120 1054622 1012649 41973 0.00050 1945071 1012649 932422 0.01170 4 1319 52041 3480 48561 0.00060 437987 437987 0.00550 493 7853489 5952880 1900609 0.02400 294 45251 13250 32001 0.00040 4 2106 8388768 5969610 2419158 0.03050 4 2106 10333839 6982259 3351580 0.04220 6293 22625 22625 0.00030 6293 22625 22625 0.00030 0 875143 0 25813848 27483056 -1669208 X 1 1 Avera Sacred Heart Hospital

501 Summit Street Yankton SD 57078

X X X Avera Yankton Care Center

1212 W 8th Street Yankton SD 57078

Long-term care Avera Sister James Care Center

2111 W 11th Street Yankton SD 57078

Long-term care Avera Sacred Heart Majestic Bluffs

2111 W 11th Street Yankton SD 57078

Assisted living Avera Sacred Heart Hospital - Rehab Unit

501 Summit Street Yankton SD 57078

Rehabilition Unit Part I, Line 3c: A combination of income and assets test is utilized to determine eligibility for free or discounted care. Points are assigned based on income as a percentage of FPG and net assets owned with points deducted for ongoing medical expenses such as drugs. Patients with the fewest points receive the largest discount. 0-1 points receive 100% discount on bills while remaining discounts range from 10-90% depending on point totals and dollar amount of charges. Part I, Line 6a: Part 1, line 6A: Our community benefit report is contained in a report prepared by Avera Health, a related organization. It is available through the website and requested mailing, and is filed with the Catholic Health Association. Part I, Line 7: Charity care and unreimbursed medicaid was converted to cost using the cost to charge ratio based on prior year medicare cost report. The amounts on lines 7e-i represent expenses reported in the general ledger. Part I, Line 7f: Bad debt expense of $2,059,819 is included on Form 990, Part IX, Line 25, Column (A) but excluded for purposes of calculating this percentage. Part III, Line 4: Bad debt was converted to cost using the cost to charge ratio derived in Medicare cost report. Bad debt expense is reported net of discounts and contractual allowances. A payment on an account previously written off reduces bad debt expense in the current year. Note from Financial Statement:Payments of patient and resident receivables are allocated to the specific claims identified on the remittance advice or, if unspecified, are applied to the earliest unpaid claim.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: Part III, Lines 5, 6, and 7: The Medicare revenues received (line 5), allowable costs (line 6), and the resulting shortfall (line 7) does not include a significant portion of the organization's expenses. These lines require use of the Medicare Cost Report as prepared by the required guidelines which disallows numerous costs of hospitals, particularly if they are part of an integrated system such as Sacred Heart Health Services. In these cases the entity must file a home office cost report which "steps down" overhead to non-cost report entities disproportionately to actual allowable share and essentially removing the costs from the hospitals cost report entirely. Examples of non-cost report entities operated by Sacred Heart Health Services include clinics, home medical equipment store, long-term care facilities, and other health care related businesses. There are also costs completely disallowed by cost report rules such as bad debt expense, marketing, CRNA's, and interest expense. In addition to these disallowed costs within the Hospital, Sacred Heart Health Services operates clinics, home medical equipment store, long-term care facilities, and other health care related businesses which do not file a cost report. Including the Medicare percentage of disallowed costs, entities which don't file a cost report but nevertheless care for Medicare patients, and the impact of the home office cost report, the Medicare shortfall is $4,522,477 as opposed to a shortfall of $1,669,208.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. Sacred Heart Health Services follows the CHA guidelines in reporting community benefits and therefore any Medicare shortfall is excluded from our community benefit report. However, Medicare is the organization's largest payer and patients with Medicare coverage are accepted regardless of whether or not a surplus or deficit is realized from providing the services. This basis therefore means providing Medicare services promotes access to healthcare services which is a key advantage for our community. Part III, Line 9b: If the patient qualifies for the organization's financial assistance policy for low-income, uninsured patients and is cooperating with the organization with regard to efforts to settle an outstanding bill within a reasonable time period, the organization or it's agent shall not send, nor intimate that it will send, the unpaid bill to any outside agency if doing so may negatively impact a patient's credit. At such time as the organization sends the uncollected account to an outside collection agency, the amount referred to the agency shall reflect the reduced-payment level for which the patient was eligible under the organization's financial assistance policy for low-income uninsured patients. Any extended payment plans offered by a hospital in settling the outstanding bills of low income, uninsured patients who qualify for financial assistance shall be interest-free so long as the repayment schedule is met. Part V: The organization also has the following types of facilities other than those required to be licensed as healthcare facilities in the state of South Dakota:1 Surgery center1 Radiation oncology1 Radiology1 HME joint venture1 Adult day care service1 Senior apartments1 Clinic joint venture14 Clinics Part VI, Line 2: Avera Sacred Heart Hospital includes community members on committees, boards and advisory groups to allow community reaction and input in the actions we take. We also review all data provided by the health departments regarding disease rates, mortality, morbidity, population changes, etc. There are also focus groups, consumer perception studies, patient satisfaction surveys, etc. that we do. Thru these groups we identify primary needs of the community and respond with preventative/educational information or activities for the community. Part VI, Line 3: The brochure "Understanding Your Health Care Bills" is provided in visible locations experiencing high volumes of inpatient or outpatient registrations such as the admitting office, the billing/business office, and emergency department as well as the organization website. Patients are also made aware of possible eligibility when given the "Patient Rights and Responsibilies" brochure upon admission. The Patient Advocate works with uninsured/underinsured patients to enroll them in applicable social service programs and/or identify charity, county or risk pool eligibility. Part VI, Line 4: Avera Sacred Heart Hospital primarily serves the city and County of Yankton, SD and the surrounding South Dakota counties of Bon Homme, Charles Mix, Clay and Hutchinson, and Cedar County and Knox in Nebraska. U.S Census statistics indicate that 8.7% of the City of Yankton's individual residents fall below the federal poverty guidelines. For FY 2010, 46% of our revenue came from Medicare and Medicare Advantage plans, and 13% came from Medicaid. Part VI, Line 5: The amounts reported as community building include monetary and in-kind donations to community organizations to support the needs of the community beyond the need for healthcare. These contributions strengthen the community by focusing on underlying causes of health issues. Part VI, Line 6: The Hospital board is comprised of individuals who represent the interests of the community served by the organization. The Hospital offers staff privileges to all qualified physicians in the community. Selected services such as Radiation Oncology, designated Rehabilitation Unit, and Swingbed Services would not be available in our service area unless provided by the organization. The Hospital serves all individuals regardless of their ability to pay, including 24 hour a day emergency services. The facility participates in the education of medical students from The University of South Dakota through their Yankton location. The Hospital also offers a 2 -year Radiation Technologist program that graduates approximately 6 students per year. Sacred Heart Hospital also provides clinical education for Mount Marty College students. Both programs are recognized education programs by the Centers for Medicare and Medicaid Services. The Hospital is also proud of the fact that 393 individuals chose to volunteer at the facility during FY 2010. Part VI, Line 7: Avera is a sponsored ministry of the Benedictine and Presentation Sisters. The communities in which Avera Health operates all have unique health and community benefits needs. In keeping with Catholic Health Association guidelines, each Hospital strives to meet its community's identified needs. The corporate staff of Avera Health advocates for all members regarding community benefit related matters of state, regional and national importance. 1 Avera Health 3900 W Avera Drive Sioux Falls SD 57108 460422673 501(c)(3) 24000 donation 1 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: The organization only makes grants to other organizations which are also tax-exempt. X 1 1 1 0 0 0 0 0 0 0 0 Michael Schurrer 226431 0 27756 0 726 0 12564 0 17449 0 284926 0 0 0 Pamela J Rezac 0 376453 0 0 0 10796 0 12187 0 16387 0 415823 0 0 Doug Doorn 108978 0 0 0 30435 0 0 0 13958 0 153371 0 0 0 Douglas Ekeren 151550 0 10217 0 7823 0 8387 0 16590 0 194567 0 0 0 Barbara Larson 148150 0 12068 0 7411 0 0 0 5150 0 172779 0 0 0 Michael Peterson 416543 0 0 0 10464 0 12564 0 16646 0 456217 0 0 0 Barry A Graham 235956 0 7392 0 2196 0 2997 0 2402 0 250943 0 0 0 Gregory Erickson 177439 0 42420 0 832 0 11432 0 15645 0 247768 0 0 0 Scott Hiltunen 193639 0 27712 0 543 0 11433 0 15745 0 249072 0 0 0 Mark Doohen 165452 0 15000 0 6512 0 9421 0 17353 0 213738 0 0 0 Part I, Line 1a The organization pays travel expenses for companions of board members. The portion of expenses paid for companions is subject to tax and reported on a Form 1099. Part I, Line 4a Doug Doorn received severence payments in the amount of $29,424. Supplemental Information Part III Schedule J, Part I Line 3: The President & CEO's compensation is paid by a related organization, Avera Health. Avera Sacred Heart relied on the related organization for determining the compensation for the President & CEO using the methods described in Part I, Line 3. Janet Jans Spouse of board member 56955 Employee compensation 0 Form 990, Part VI, Section A, line 2 Jim Means and Rob Stephenson have a business relationship. Doug Ekeren, Pamela J. Rezac and Dave Timpe have a business relationship. Form 990, Part VI, Section A, line 6 The sole member of the organization is Avera Health, a nonprofit corporation organized and existing under the laws of the state of South Dakota and exempt under 501(c)(3) of the Internal Revenue Code of 1986, as amended. Form 990, Part VI, Section A, line 7a Avera Health, as the sole member, has the power to appoint and remove, with or without cause, members of the board of directors. Form 990, Part VI, Section A, line 7b Avera Health has the following rights as the Member. 1) To approve the adoption, amendment or repeal of the statements of philosophy, mission and values of Corporation; 2) To initiate the adoption, amendment or repeal of any provision of the Articles of Incorporation or Bylaws of Corporation, and to give final approval of any such action with respect thereto; 3) To approve and act upon the alienation of real property and precious artifacts under the canonical stewardship of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota ("Presentation Sisters") or the Benedictine Sisters of Sacred Heart Monastery ("Benedictine Sisters"), pursuant to the policies established by the Member; 4) To approve any plan of merger, consolidation or dissolution of the Corporation, or the divestiture of a sponsored work or ministry associated with the Corporation; 5) To approve the creation of new sponsored works or ministries to be conducted by or under the authority of the Corporation; 6) To appoint and remove, with or without cause, the Board of Directors of the Corporation. 7) To appoint and/or remove, with or without cause, the President and Chief Executive Officer of the Corporation. 8) To approve operating/capital budgets and strategic plans of the Corporation. 9) To approve expenditures outside of operating and capital budgets exceeding defined thresholds according to policy which may be adopted from time to time by the Member. 10) To approve acquisitions, sales and leases, according to policy which may be adopted from time to time by the Member. 11) To establish and maintain employee benefit programs. 12) To establish and maintain insurance programs. 13) To approve major community fund drives. 14) To approve the appointment of auditors. 15) To adopt policies designed to effectuate the reserved powers of the Member. Form 990, Part VI, Section B, line 11 The Form 990 is reviewed initially by the CEO and CFO. The return is made available to the Board of Directors for review prior to filing. Form 990, Part VI, Section B, line 12c The Conflict of Interest Policy covers Board members,officers and key employees. At each board meeting, a request is made for all Board members to disclose any potential conflict of interest pertaining to any item listed on the agenda or pertaining to any potential item that could be discussed during the course of the meeting. The Declaration of Conflict of Interest is recorded in the meeting minutes. The Board makes a determination of whether there is a conflict of interest and if so, implements the procedure for evaluating the issue or transaction involved. The board member or officer with the conflict must refrain from voting. A statement of conflict of interest disclosure is made on an annual basis by officers and board members. The information is maintained in a database and a report is provided to the Board. The CEO is compensated by Avera Health System. Annually the Compensation Committee of Avera Health, which is comprised of six (6) System Members appointed by the Religious Orders, meets with an independent consultant regarding fair market value of officers and key employees. The Compensation Committee approves all salaries based on comparable data and documents the basis for their decision in meeting minutes. The compensation of other officers, directors, and key employees is reviewed annually. The organization utilizes the resources of an outside independent agency for market comparability. The compensation is approved within the annual budget approved by the Board. Form 990, Part VI, Section C, line 19 The organization's governing documents, conflict of interest policy, and financial statements are not made available to the general public. Form 990, Part III Continuation of Statement of Exempt Purpose Achievements Community Education: Avera Sacred Heart reaches out to people and communities throughout southeastern South Dakota and northeastern Nebraska in a variety of ways. For the past five years, Avera Sacred Heart has partnered with HyVee Foods of Yankton and the Yankton Public School System to promote better eating habits for students and centered on the '5-to-9-a-Day' educational format. Community flu shot clinics are generally held throughout the region. Through well coordinated efforts statewide with other hospitals and state entities, Avera Sacred Heart was able to effectively distribute the vaccine doses it received in a timely and efficient manner. We are proud of our continuing 'To Be Well' health care educational series that provides education to the community on a variety of diseases and chronic conditions. Educational sessions are offered to medical staff, students, employees, health care professionals, students of all levels and the general public. Utilizing the Avera Professional Office Pavilion and Education Center, hundreds of classes involving thousands of people are provided as a community service each year. Other examples of community education include our student/youth mentoring programs and parish nursing. Partnerships with schools, churches, businesses and other organizations make many of these programs possible. One of "Most Wired" and "Most Wireless" Hospitals: Avera and Avera Sacred Heart Hospital was named "Most Wired" by Hospitals & Health Networks magazine for the 12th year in a row. The award recognizes hospitals that successfully use technology to enhance patient care and quality. As an integrated organization, Avera and Avera Sacred Heart are leaders in the implementation of the electronic patient record (EMR). In FY10, several new clinics were added to the ASHH electronic medical record system as the nation moves toward more integrated medicine. Commitment To Quality: Avera Sacred Heart is accredited by the Joint Commission and just received another three-year accreditation in 2008. In FY10, the hospital was named one of a few hospitals in the nation to achieve top decile rankings in three clinical focus areas in the CMS/Premier quality project based on its second-year scores in heart attack, heart failure and pneumonia. Transforming Care at the Bedside: Selected as one of only 68 hospitals in the nation in 2008 to participate in a national study entitled Transforming Care at the Bedside, Avera Sacred Heart nurses focus on spending more time with patients. Avera Sacred Heart Hospital is one of only two South Dakota hospitals participating in the project and continues to come up with innovative ways to provide exceptional quality care. Safety in the Workplace: The South Dakota Safety Council awarded a Governor's Safety Award to Avera Sacred Heart Hospital for excellence in workplace safety and health. Avera Sacred Heart Hospital was one of 49 employers who were recognized at the Governor's Safety Awards luncheon in 2009. Since 1993, the annual Governor's Safety Awards have spotlighted South Dakota employers with above average safety records. Participants submit injury information which is compared with state and national data, as well as the entrant's past performance. Ongoing safety programs and activities are also considered. Avera Sacred Heart's dedication to providing a healthy and safe environment extends to its employees as well as the people of the 15-county region it serves. Hospital 2 Home: Avera Sacred Heart Hospital has been in the planning phase and now will be participating in the Institute for Healthcare Improvement's Hospital to Home (H2H) quality initiative. Currently, in the U.S., nearly 20 percent of Medicare patients are readmitted to the hospital within 30 days of discharge, with heart failure listed as the most common reason for readmission. In 2004 alone, the total cost of these readmissions was $17.4 billion. The focus of the H2H initiative will be on three main domains that provide opportunities for improvement. 1. Medication management post-discharge: Is the patient familiar and competent with their medications and do they have access to them? 2. Early follow-up: Does the patient have a follow-up visit scheduled within a week of discharge and are they able to get there. 3. Symptom management: Does the patient fully comprehend the signs and symptoms that require medical attention and who to contact if they occur. Form 990, Part X, Line 20: The issue price includes the filing organization's share of the entire bond issue, which was issued to Avera Health on behalf of the Avera Obligated Group. The Avera Obligated Group consists of Avera McKennan, Avera St. Luke's, Avera Queen of Peace and Avera Sacred Heart. In accordance with IRS instructions, information related to the tax exempt bond reporting is being reported on Avera Health's tax return (EIN 46-0422673). Schedule R, Part V, line 2 The amounts reported in column c are reported based on a review of general ledger activity in intercompany accounts, and review of equity accounts for contributions and distributions. Form 990, Part VII In addition to time spend serving Sacred Heart Health Services, Pamela J. Rezac and Douglas Ekeren also oversee operations of the related affiliates as board members and officers. Avera Health 3900 West Avera Drive Suite 300 Sioux Falls SD 57108 460422673 healthcare services SD 501(c)(3) 9 N/A Sacred Heart Rural Health Clinics Inc 501 Summit Street Yankton SD 57078 460423930 clinic services SD 501(c)(3) 3 N/A Health Management Services 501 Summit Yankton SD 57078 460399291 adult daycare and homemaking services SD 501(c)(3) 9 N/A Lewis and Clark Health Education and Service Agency 1000 W 4th Street Suite 9 Yankton SD 57078 460337013 healthcare education SD 501(c)(3) 9 N/A Benedictine Health Foundation 1017 West Fifth Street Suite 14 Yankton SD 57078 460370373 support for organizatons providing health care services SD 501(c)(3) 11a N/A Avera Workers' Compensation Trust 3900 West Avera Drive Sioux Falls SD 57108 460407148 economical coverage of workers' compensation claims SD 501(c)(3) 11b N/A Avera Health Foundation 3900 West Avera Drive Suite 300 Sioux Falls SD 57108 460367530 grant making SD 501(c)(3) 7 N/A St Anthony's Hospital 300 N 2nd Street ONeill NE 68763 470463911 healthcare services NE 501(c)(3) 3 N/A Avera Holy Family 826 North 8th Street Estherville IA 51334 420680370 healthcare services IA 501(c)(3) 3 N/A Avera Holy Family Foundation 826 North 8th Street Estherville IA 51334 421317452 fundraising IA 501(c)(3) 9 N/A Avera Marshall 300 S Bruce St Marshall MN 56258 410919153 healthcare services MN 501(c)(3) 3 N/A Avera Marshall Foundation 300 S Bruce St Marshall MN 56258 411784801 fundraising MN 501(c)(3) 7 N/A St Benedict Hospital Inc 401 West Glynn Drive Parkston SD 57366 460226738 healthcare services SD 501(c)(3) 3 N/A St Benedict Health Center Foundation West Glynn Drive PO Box B Parkston SD 57366 460458725 support health related services SD 501(c)(3) 11a N/A Avera McKennan 1325 S Cliff Ave PO Box 5045 Sioux Falls SD 57117 460224743 healthcare services SD 501(c)(3) 3 N/A Avera Queen of Peace Fifth and Foster Mitchell SD 57301 460224604 healthcare services SD 501(c)(3) 3 N/A Surgical Associates Endoscopy Clinic LLC 310 S Pennsylvania St Aberdeen SD 57401 460461429 surgical associates SD N/A Marshall Medical Services LLC 300 S Bruce St Marshall MN 56258 208874448 medical services MN N/A Avera Home Medical Equipment LLC 1325 S Cliff Ave PO Box 5045 Sioux Falls SD 57117 460488198 medical services - home medical equipment SD N/A Midwest Regional Imaging Services LLC 1325 S Cliff Ave PO Box 5045 Sioux Falls SD 57117 470874983 health care - medical imaging SD N/A Mersco Medical Equipment of Pierre LLC 329 E Dakota Pierre SD 57501 460444002 medical services - home medical equipment SD N/A Avera Home Medical Equipment of Floyd Valley Hospital LLC 714 Lincoln St NE Lemars IA 51031 820582350 medical services - home medical equipment IA N/A Avera Home Medical Equipment of Estherville LLC PO Box 5045 Sioux Falls SD 57117 201686097 medical services - home medical equipment IA N/A Avera Home Medical Equipment of Sioux Center LLC 38 19th ST SW Sioux Center IA 51250 753203100 medical services - home medical equipment IA N/A Avera Home Medical Equipment of Marshall LLC 1104 East College Drive Marshall MN 56258 205271924 medical services - home medical equipment MN N/A Avera Home Medical Equipment of Spencer Hospital LLC 2400 S Minnesota Avenue 102 Sioux Falls SD 57117 800619999 medical services - home medical equipment SD N/A Q&M Properties 525 North Foster Mitchell SD 57301 731652049 medical clinic building SD N/A Valley Health Services Inc 501 Summit Street Yankton SD 57078 460357149 medical equipment SD N/A C 160214 4348117 1.00000 Avera Pace 3900 West Avera Drive Sioux Falls SD 57108 460341869 healthcare services SD N/A C Accounts Management Inc 5132 S Cliff Ave Suite 101 Sioux Falls SD 57108 460373021 collection agency SD N/A C Avera Health Plans Inc 3900 West Avera Drive Sioux Falls SD 57108 460451539 health financing and health plan administration SD N/A C Avera Property Insurance Inc 610 W 23rd St Ste 1 PO Box 38 Yankton SD 57078 460463155 insurance SD N/A C Northern Dakota Health Company 305 S State Street Aberdeen SD 57401 460385179 clinics SD N/A C 1 0 0 0 0 1 0 0 0 0 0 0 0 1 1 1 1 0 Sacred Heart Rural Health Clinics Q 625000 Benedictine Health Foundation A 6342 Health Management Services A 21078 Lewis and Clark Health Education and Service Agency A 25872 Sacred Heart Rural Health Clinics N 642212 Lewis and Clark Health Education and Service Agency N 334600 Health Management Services N 70515 Lewis and Clark Health Education and Service Agency O 227236 Sacred Heart Rural Health Clinics P 336644