2011-07-25T09:19:31-05:00 2010-09-30 EIDE BAILLY LLP 4310 17TH AVE S PO BOX 2545 FARGO ND 581082545 990 2009-10-01 410724034 KITTSON MEMORIAL HOSPITAL KITT 2188433612 PO BOX 700 HALLOCK MN 56728 RICK FAILING 2188433612 2011-07-18 1 LISA CHAFFEE CPA 7012398500 2011-07-18 2009 2016-02-24 21:20:13Z KITTSON MEMORIAL HEALTHCARE CENTER Rick Failing PO BOX 700 HALLOCK MN 56728 11771449 0 X n/a X 1919 MN To provide hospital services to the sick and injured and to provide nursing care and social activities for the aged in the community. 8 7 271 25 8771 -3954 66615 68042 10766684 10725366 32387 966436 3636 3756 10869322 11763600 11433 8251 0 5990859 6496286 0 3231 4548346 4504547 10550638 11009084 318684 754516 8653676 9113015 4513454 4208153 4140222 4904862 Caring for friends and neighbors, Kittson Memorial Healthcare Center provides and cooperates with others to ensure that residents have access to services necessary to maintain their health and well-being. 0 0 9771536 8251 10716595 Kittson's exempt purpose is to provide inpatient and outpatient services to individuals residing in the Kittson County area. In addition, the nursing home provides for the physical and social needs of the aged in the community. Services are provided regardless of an individual's ability to pay. The hospital includes a 15-bed acute care hospital and a 70-bed nursing facility. Community benefits provided by the hospital include free physicals to areawide county firemen on an as needed basis. The hospital provided $36,001 of charity care based on the amount of charges foregone. 9771536 1 0 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 0 1 0 1 0 1 1 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 1 28 0 1 271 1 1 1 0 0 0 0 1 1 0 0 0 8 7 1 0 0 0 1 1 1 1 1 0 0 1 1 1 1 0 1 1 0 0 MN X Jeni Schwenzfeier 2188433612 PO BOX 700 Hallock MN 56728 Cedric Gustafson 2.00 X X 810 0 0 Janelle Craigmile 2.00 X X 771 0 0 Lee Pemberton 2.00 X X 843 0 0 Todd Johnson 2.00 X X 670 0 0 Heidi Olsonawski 1.00 X 400 0 0 Judy Bahr 1.00 X 400 0 0 Marlene Pearson 1.00 X 300 0 0 Jon Blomquist 1.00 X 530 0 0 Sandie Nelson 1.00 X 0 0 0 Richard Failing 40.00 X 38674 0 3243 Jeni Schwenzfeier 40.00 X 500 0 0 Sandra Gjervold 40.00 X 40040 0 10362 Paul Anderson 40.00 X 142300 0 21222 Dr Thomas Lohstreter 40.00 X 214500 0 4860 Julie Johnson 32.00 X 101407 0 14410 Alyas Masih 40.00 X 212960 0 10810 755105 0 64907 4 0 1 0 DMS PO BOX 86 Minneapolis MN 554862208 Mobile Imaging 255335 Altru Rehab Services 1300 S Columbia Road Grand Forks ND 58201 Therapy Services 229233 2 20690 17749 29603 68042 Patient & Resident Ser 622110 10608884 10608884 Miscellaneous 900099 64607 64607 Cafeteria Income 722320 24716 18597 6119 Ambulance Revenue 621910 19259 19259 Auxiliary Revenue 900099 5248 5248 2652 2652 10725366 52726 52726 8361 8361 8361 8361 915173 1463 -1463 915173 913710 913710 1781 20690 6386 -4605 -4605 11763600 10716595 8771 970192 8251 8251 242849 242849 5090438 4924753 165685 127849 122263 5586 584072 401675 182397 451078 355672 95406 93591 93591 993759 970665 23094 62733 37223 25510 1934612 1548075 386537 79598 79598 154853 152748 2105 187974 180797 7177 40504 38174 2330 221780 221780 542809 542809 79284 79284 Bad Debt Expense 89039 89039 Disaster Expense 16190 16190 Other Expenses 6016 735 2050 3231 Auxiliary Expenses 1805 1805 11009084 9771536 1234317 3231 1348056 1345980 1095170 1120752 70056 49069 78046 82392 32883 31174 12383967 7145932 4469701 5238035 1433892 1185644 83333 16666 42539 43303 8653676 9113015 779388 698280 98904 37029 5243 5433 3190207 3034133 175000 150000 264712 283278 4513454 4208153 X 4140222 4904862 4140222 4904862 8653676 9113015 X 0 1 1 X 0 X 1 5866 5248 1805 9309 1 12985 12985 8507967 4836783 3671184 2549539 2173918 375621 1313476 135231 1178245 5238035 Deferred compensation 283278 283278 11763600 11009084 754516 13567 -3443 10124 764640 11771919 13567 13567 11758352 5248 5248 11763600 11007279 0 11007279 1805 1805 11009084 Part IV, Line 1b: A small auxiliary operates under the hospital's EIN. Part IV, Line 2b: The Center holds funds under an agency relationship for the residents of the nursing facility. The resident trust funds totaled $5,433 and $5,243 at September 30, 2010 and September 30, 2009, respectively. Part X: Description of Uncertain Tax Positions Under FIN 48: The Center is organized as a Minnesota 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 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 generally accepted accounting principles. The Center believes that it is compliant with all IRS tax regulations and as of September 30, 2010 and 2009 has not recorded liabilities for income taxes. The Center will recognize future accrued interest and penalties related to unrecognized tax liabilities in income tax expense if incurred. The Center is no longer subject to federal tax examinations by tax authorities for years before 2007 and state examination for years before 2007. Part XI, Line 8 - Other Adjustments: Auxiliary Net Income: -3443. Part XII, Line 4b - Other Adjustments: Auxiliary Revenue: 5248. Part XIII, Line 4b - Other Adjustments: Auxiliary Expenses: 1805. Golf Tournament 20220 18439 1781 5778 1 2251 2251 608 22471 20690 1781 6386 6386 -4605 1 1 X 1 X 1 X 1 1 1 0 1 1 23 31311 31311 0.00290 816477 885193 -68716 0.00000 23 847788 885193 -37405 0.00290 385 385 0.00000 703317 222250 481067 0.04410 1225 1225 0.00010 704927 222250 482677 0.04420 23 1552715 1107443 445272 0.04710 1487 1487 0.00010 1487 1487 0.00010 0 77438 7744 2307580 2277284 30296 X 1 1 Kittson Memorial Healthcare Center

1010 South Birch Avenue Hallock MN 56728

X X X X Kittson Memorial Clinic of Karlstad

First Roosevelt PO Box 199 Karlstad MN 56732

Rural Health Clinic Part I, Line 3c: Although each application for charity care is dealt with on an individual basis, the following Federal guidelines as to annual income signify a starting point in the eligibility process for discounted care:Poverty Guidelines = Charges reduced to zero150% = 75% reduction in charges200% = 50% reduction in charges250% = 25% reduction in charges Part I, Line 6a: The annual community benefit report is made available upon request. Part I, Line 7: The organization used the following methods to determine the costs for Part I, Line 7:Row a: Charity care was converted to cost using the cost to charge ratio in worksheet 2.Row b: Medicaid amounts reported reflect amounts calculated from internal records. Row e & i: Community health improvement services and contributions are amounts based on the actual dollars spent in the activities. Row g: Subsidized health services reported are amounts based off of Medicare Cost Report figures. Part I, Line 7f: The amount of bad debt expense removed from the denominator is $89,039. Part III, Line 4: Financial Statement Bad Debt Expense Footnote: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.Bad debt expense was converted to cost using the ratio of patient care cost to charges calculated using Worksheet 2.The organization estimates that 10% of the bad debt expense at cost is attributable to patients who would be eligible under the organization's charity care policy. Approximately 10% of population which the organization services is below federal poverty levels and so it is reasonable to assume that 10% of the bad debt could be attributable to patients who would be eligible for charity care. Part III, Line 8: Medicare allowable costs 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: Collection efforts are made by contacting the patient through written correspondence and via phone. If throughout these conversations, the collector and patient discuss that the patient is not able to afford payments as required by our policy, the patient is encouraged to apply for charity care. An application and policy is sent to the patient to complete. According to federal poverty guidelines, the patient may qualify for all or a percent of charges written off their account. Patients must apply for MA prior to qualifying for charity care. Additional information is offered to help them apply for state funded programs. Part VI, Line 2: Satisfaction surveys are sent to patients who have had an encounter/visit within the year; community assessments are done every 3-5 years by an independent third party. Part VI, Line 3: If a patient is unable to pay their bill, a charity care application is sent to them to complete (a notice is included in their monthly statement to contact us regarding charity care if they are unable to pay their bill). A prerequisite to qualify for charity care is that they have to have applied and been denied by Medical Assistance. We are able to offer them contact information at the County for qualification/application information. Information regarding charity care is also available in the admission area of the clinic. Part VI, Line 4: Kittson Memorial Healthcare Center is the sole provider of healthcare services in Kittson County. We are very rural and struggle with a declining and aging population. The 2010 census shows a population of 4,552. Per capita income is an estimated $24,679, and the median household income is $45,404. Approximately 10% of the population is below the federal poverty level. Part VI, Line 5: The organization is involved in various community building activities in which they provide community support. The organization donates to the local school for education sessions, to the Hallock Fire Departments for education sessions, to Fair booths and Health Fairs. Part VI, Line 6: The governing body consists of residents in our service area who are not employees, contractors, or family members of the organization. The organization continually invests in capital equipment to better the patient experience and services offered. This is difficult to do with limited funds, but every effort is made to continually improve the facility, equipment, and services offered. Medical staff privileges are extended to all qualified physicians in the community.KMHC operates an ER and treats all ER patients, regardless of ability to pay. KMHC also offers scholarship for educational assistance of employees wishing to further enhance their education/career. Part VI, Line 7: N/A MN 1 Scholarships/Educational Assistance 10 8251 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: Four scholarships per year are given to one senior in each of the schools located in Kittson County. Educational assistance is provided for employees who choose to further their education in a field that is needed by Kittson Memorial. This eligibility is determined on a case by case basis. X X X 0 0 0 0 0 0 0 0 0 Paul Anderson 114855 0 14537 0 12908 0 5000 0 16254 0 163554 0 0 0 Dr Thomas Lohstreter 214500 0 0 0 0 0 0 0 6187 0 220687 0 0 0 Alyas Masih 212960 0 0 0 0 0 0 0 12137 0 225097 0 0 0 Cheryl Gustafson Spouse of board member 20433 Wages and benefits 0 FORM 990, PART VI, SECTION A, LINE 1 Committees with authority to act on behalf of governing board: The Executive Committee has the authroity to act on behalf of the governing board. The committee consists of three individuals: the President, Secretary and Treasurer. The committee did not make any decision on behalf of the full board during the fiscal year. Form 990, Part VI, Section A, line 2 Jon Blomquist and Todd Johnson have a business relationship. Form 990, Part VI, Section A, line 6 There is only one class of members. Stock is purchased for $50/share to obtain membership. Form 990, Part VI, Section A, line 7a Members elect the board of directors at the annual meeting. All members have the same voting rights. Form 990, Part VI, Section A, line 7b Changes to the bylaws must be approved by the Hospital membership. Form 990, Part VI, Section B, line 11 The CEO and CFO will review the Form 990 prior to presenting it at the July 2011 board meeting. Form 990, Part VI, Section B, line 12c Only board members are covered by the policy. At the annual January meeting board members are asked to disclose any potential conflicts. The CEO reviews the disclosures and determines if there is a conflict. If a board member is determined to have a conflict they are required to abstain from voting on that particular issue. Form 990, Part VI, Section B, line 15a The CEO compensation is determined by state salary survey data and is subject to board approval. The CEO contract was reviewed in 2010 and compared to the compensation data from Minnesota Hospital Association (MHA), which resulted in an increase made effective October 2010. The CEO reviews and approves the CFO compensation based on the state salary survey, as well as a performance evaluation. This process was last reviewed and approved in October 2010. Form 990, Part VI, Section C, line 19 The governing documents, conflict of interest policy and financial statements are available upon request.