2011-05-10T14:23:02-05:00 2010-06-30 Moss Adams LLP 805 SW Broadway 1200 Portland OR 97205 990 2009-07-01 931213059 Ashland Community Healthcare Services ASHL 5412014000 280 Maple Street Ashland OR 97520 MARK MARCHETTI 5412014000 2011-05-02 1 Paul Waldram 5032421447 2009 2016-02-24 21:20:13Z ASHLAND COMMUNITY HOSPITAL MARK MARCHETTI 280 Maple Street Ashland OR 97520 52518849 0 X www.ashlandhospital.org X 1996 OR OUR MISSION IS TO PROVIDE COMPASSIONATE, HIGH QUALITY CARE THAT IMPROVES THE OVERALL HEALTH OF OUR PATIENTS, THEIR FAMILIES AND THE COMMUNITY BY WORKING IN PARTNERSHIP WITH OUR PHYSICIANS AND OTHER REGIONAL HEALTHCARE PROVIDERS. 13 10 508 512 0 0 452062 303011 51226323 49776569 17753 52803 627861 1318233 52323999 51450616 0 0 27119436 24502551 0 0 27560887 24935366 54680323 49437917 -2356324 2012699 40807444 42770823 16702569 16648939 24104875 26121884 Our mission is to provide compassionate, high quality care that improves the overall health of our patients, their families and the community by working in partnership with our physicians and other regional healthcare providers. 0 0 33938399 49776569 PROVISION OF HEALTHCARE SERVICES TO RESIDENTS WITHIN OUR GEOGRAPHIC region, INCLUDING A SIGNIFICANT PORTION OF SERVICES TO MEDICARE/MEDICAID PATIENTS ($54 MILLION GROSS) and charity care ($1.4 MILLION GROSS). 33938399 1 1 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 89 0 1 508 1 0 0 0 0 0 0 0 0 0 13 10 1 0 1 0 1 1 0 1 1 0 0 1 1 1 1 1 1 1 1 1 1 OR X Arebi Garsa 5412014004 280 Maple StREET ASHLAND OR 97520 MARIE DONOVAN 8.00 X X 0 0 0 DOUGLAS DIEHL MD 6.00 X X 0 0 0 REV HARVEY RAY 6.00 X X 0 0 0 DOUGLAS GENtry 2.00 X X 0 0 0 LINDA BUTLER 2.00 X 0 0 0 CAROL CHRISTLIEB 2.00 X 0 0 0 STEVE MINER 3.00 X 0 0 0 DOUGLAS MORRISON MD 2.00 X 0 0 0 MARTIN LENK 3.00 X 0 0 0 ANNE GOLDEN 3.00 X 0 0 0 VALRI WILLIAMS 3.00 X 0 0 0 DAVE BERNARD 2.00 X 0 0 0 TOM REID 3.00 X 0 0 0 Mark Marchetti 40.00 X X 200705 0 25130 AREBI GARSA 40.00 X 0 0 0 PAMELA ATOR MD 40.00 X 197033 0 9735 BETH LEONE MD 40.00 X 172982 0 11741 DAVID CANDELARIA MD 40.00 X 169808 0 19637 KARIN KUHL MD 40.00 X 143183 0 7245 MOLLY GRAMLEY MD 40.00 X 140016 0 7126 1023727 0 80614 13 0 1 0 WELLSPRING PARTNERS 123 N WACKER STE 100 CHICAGO IL 60606 CONSULTANTS 771282 PRINCIPLE PHARMACY GROUP INC TWO PERIMETER PARK SOUTH STE 230 EA BIRMINGHAM AL 35243 PHARMACY MANAGEMENT 521649 Ashland Emergency PHYSICIANS 1370 Lithia Way Talent OR 97540 ER PHYSICIANS 494612 BE SMITH INC 9777 RIDGE DR Ste 300 LENEXA KS 66219 RECRUITING SERVICES/INERM MGMT/CONSULTIN 493476 DIVERSIFIED CLINICAL SERVICES 4500 SALISBURY Rd Ste 300 JACKSONVILLE FL 32216 WOUND CLINIC MANAGEMENT SERVICES 433880 14 34809 268202 303011 Hospital Services 621990 27615927 27615927 medicare/medicaid 621990 22160642 22160642 49776569 36562 36562 42288 78187 42288 78187 120475 120475 1084474 1068233 16241 16241 16241 OTHER REVENUE 900099 730010 730010 NONPATIENT FOOD SALES 722210 225726 225726 PASSTHROUGH INCOME 621990 137153 137153 104869 104869 1197758 51450616 49776569 0 1371036 216213 183781 32432 19416010 16503609 2912401 1102103 936788 165315 1895337 1611036 284301 1872888 1591955 280933 168582 8429 160153 76140 76140 8300792 602629 7698163 69187 69187 729996 510997 218999 196529 137570 58959 957530 818627 138903 163225 114258 48967 442019 442019 2694047 1347024 1347023 602482 602482 Supplies 8204568 7384111 820457 Bad Debt 1854655 1854655 Other Operating Expense 475614 332930 142684 49437917 33938399 15499518 0 3811172 4499082 144635 1856343 6283697 6414797 386607 291486 1214737 1277086 452332 459814 46164111 20471372 27216815 25692739 375218 201484 922231 2077992 40807444 42770823 5609268 6406903 9742249 9187372 1351052 1054664 16702569 16648939 X 24104875 26121884 24104875 26121884 40807444 42770823 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 306412 306412 509382 243852 265530 26137169 5454427 20682742 16890128 12719717 4170411 2321020 2053376 267644 25692739 Estimated Medical Malpractice liability 541000 CAPITAL LEASE OBLIGATIONS 513664 1054664 51450616 49437917 2012699 6236 -1926 4310 2017009 49600271 6236 -1854655 -1848419 51448690 1926 1926 51450616 47583262 0 47583262 1854655 1854655 49437917 Part X: Description of Uncertain Tax Positions Under FIN 48: The Hospital adopted the provisions of FASB Accounting Standards Codification (ASC) 740-10, Income Taxes, relating to accounting for uncertain tax positions on July 1, 2009, which had no financial statement impact to the Hospital. The Hospital recognizes the tax benefit from uncertain tax positions only if it is more likely than not that the tax positions will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Hospital recognizes interest and penalties related to income tax matters in administrative expense. The Hospital had no unrecognized tax benefits, which would require an adjustment to the July 1, 2009 beginning balance of net assets and had no unrecognized tax benefits at June 30, 2010. No interest and penalties have been accrued upon adoption or for the year ended June 30, 2010. The Hospital files an exempt organization return in the U.S. federal jurisdiction and with the Oregon charities division. The Hospital is no longer subject to income tax examinations by taxing authorities for years before 2006 for its federal and state filings. Part XI, Line 8 - Other Adjustments: DIFFERENCE IN LOSS ON LLCS PER BOOKS AND ACTUAL PER K-1S: -1926. Part XII, Line 2d - Other Adjustments: bad debt expense netted with revenue on financial statements: -1854655. Part XII, Line 4b - Other Adjustments: DIFFERENCE IN LOSS ON LLCS PER BOOKS AND ACTUAL PER K-1S: 1926. Part XIII, Line 4b - Other Adjustments: bad debt expense netted with revenue on financial statements: 1854655. 1 1 1 X 1 X 1 1 0 1 1 4 395 762487 383837 378650 0.00800 1 389 4172250 4050385 121865 0.00260 5 784 4934737 4434222 500515 0.01060 4 6582 273305 78400 194905 0.00410 4 9 27974 27974 0.00060 4 7234142 6346946 887196 0.01860 5 13023 13023 0.00030 17 6591 7548444 6425346 1123098 0.02360 22 7375 12483181 10859568 1623613 0.03420 1 1 1 2252 2252 0.00000 3 2252 2252 0 1854655 946235 8602062 9515193 -913131 X 1 0 ASHLAND COMMUNITY HOSPITAL

280 MAPLE STREET ASHLAND OR 97520

X X X Part III, Line 4: THE COST-TO-CHARGE RATIO AS PROVIDED BY MEDICARE WAS USED TO DETERMINE THE AMOUNT OF COST RELATED TO GROSS CHARGES WRITTEN OFF.PAYMENTS RECEIVED ON BAD DEBT ACCOUNTS ARE SUBTRACTED FROM BAD DEBT EXPENSE.CURRENTLY NO PROCESS IS IN PLACE TO DETERMINE IF A PATIENT WOULD LIKELY QUALIFY FOR FINANCIAL ASSISTANCE UNDER THE HOSPITAL'S CHARITY CARE POLICY.PATIENT ACCOUNTS RECEIVABLE ARE REPORTED NET OF ESTIMATED UNCOLLECTIBLE ACCOUNTS AND CONTRACTUAL ADJUSTMENTS. THE HOSPITAL MANAGES RECEIVABLES BY REGULARLY REVIEWING ITS ACCOUNTS AND CONTRACTS AND BY PROVIDING APPROPRIATE ALLOWANCE ACCOUNTS FOR UNCOLLECTIBLE AMOUNTS BASED ON A HISTORY OF PAST WRITE-OFFS AND COLLECTIONS. THE HOSPITAL DETERMINES PAST DUE ACCOUNTS BASED UPON CONTRACT TERMS. Part III, Line 8: OVER THE PAST 20 YEARS, THE POPULATION OF ASHLAND HAS AGED CONSIDERABLY AS THE CITY HAS GAINED THE REPUTATION AS A DESIRABLE "RETIREMENT" COMMUNITY. THIS IS EVIDENCED BY THE CLOSURE OF TWO OF THE CITY'S FIVE ELEMENTARY SCHOOLS WITHIN THE PAST TEN YEARS AND THE SIGNIFICANT INCREASE IN THE PERCENTAGE OF THE HOSPITAL'S REVENUE THROUGH THE MEDICARE PROGRAM FROM 40% IN 2003-2004 TO 55% TODAY. THIS SHIFT IN PAYOR MIX HAS HAD A SIGNIFICANT NEGATIVE IMPACT ON THE HOSPITAL'S FINANCIAL PERFORMANCE, RESULTING IN A NEGATIVE OPERATING MARGIN OF APPROXIMATELY 2.5% YEAR-TO-DATE AS OF FEBRUARY 2011.WHILE THE INCREASED RELIANCE ON REIMBURSEMENT THROUGH THE MEDICARE PROGRAM HAS CREATED FINANCIAL STRESS FOR THE ORGANIZATION, THE HOSPITAL REMAINS COMMITTED TO ITS MISSION OF MEETING THE HEALTH CARE NEEDS OF ITS COMMUNITY. IN 2008, THE HOSPITAL CREATED THE ACH CENTER FOR INTERNAL MEDICINE, A PROVIDER-BASED INTERNAL MEDICINE CLINIC, TO ADDRESS THE LACK OF ACCESS TO PRIMARY CARE FOR MEDICARE RECIPIENTS. DESPITE THE ENHANCED REIMBURSEMENT FROM MEDICARE AS A PROVIDER-BASED MODEL, THE CLINIC OPERATES AT A LOSS. SIMILARLY, THE HOSPITAL PROVIDES HOME HEALTH AND HOSPICE SERVICES, BOTH AT NEGATIVE MARGIN, YET BOTH VALUABLE SERVICES TO THE COMMUNITY. OTHER OF THE HOSPITAL'S SERVICES HEAVILY DEPENDENT ON REIMBURSEMENT THROUGH THE MEDICARE PROGRAM, SUCH AS ORTHOPEDIC JOINT REPLACEMENT AND RETINA SURGERY, RESULT IN NEGATIVE MARGINS BUT CONTINUE TO BE PROVIDED BY THE HOSPITAL BECAUSE THEY ARE CONSIDERED VITAL TO "THE OVERALL HEALTH OF PATIENTS, THEIR FAMILIES AND THE COMMUNITY" CONSISTENT WITH THE HOSPITAL'S MISSION. Part VI, Line 2: Ashland Community Hospital assesses the health care needs of the community it serves through its planning processes, including the long-range strategic plan, medical staff development plan, marketing plan and program/business planning. Planning inputs include:- service area demographics including population and age projections- medical staff interview findings- medical staff composition, practice patterns and age to project provider needs by specialty- current and historical service volumes and trends- community perception survey data- market share analysis - competitor positions- patient survey data- community input through the Board of Directors- focus groups of former patients and community members Part VI, Line 3: Ashland Community Hospital educates patientS whom might be eligible for financial assistance in a number of ways. There are signs posted in admitting areas that advise patients of our charity care policy. OHP applications are given to anyone under the age of 18 WHO processES through our E.R. BILLING Statements advise patients that they may be eligible for financial assistance and the phone number to contact for further information. Meetings are held at local physician offices to inform them of our financial assistance programs so they may pass the information along to their patients. Patients are also notified of financial options when speaking with our Patient Accounts Office. Part VI, Line 4: Ashland Community Hospital is a 49-bed acute care community hospital located in Ashland, Oregon, a community of approximately 20,000 residents located in the southern-most part of the state, approximately 15 miles from the California border. Founded in 1907, Ashland Community Hospital exists today as a private, non-profit 501(C)(3) corporation. Governance of the organization is provided by a 13-member Board of Directors, appointed by the Ashland City Council, who volunteer their time and expertise on behalf of the community. The Hospital is accredited by DNV Healthcare Inc and is certified for participation in the Medicare Program.Ashland Community Hospital provides a wide range of health care and related services as deemed appropriate in accordance with the hospital's mission, vision and strategic plans, available resources, community need, federal and state law and regulation, and professional practice standards. These services include inpatient and outpatient care, emergency care, diagnostic and treatment services, home health and hospice care, and health outreach services. Ashland Community Hospital defines its primary service areas as the communities of Ashland and Talent and areas south to the California border, comprised of postal zip codes 97520 and 97540, with a population of approximately 35,000. The secondary service area includes the communities of Phoenix and Medford north of Ashland, with postal zip codes 97504, 97501 and 97535 and a population of approximately 92,000. The hospital draws from a broader geographic area for certain specialty services not widely available, including comprehensive wound care and retina surgery.The population of the hospital's primary service area is projected to increase by approximately 6.3% over the five year period 2009-2014. Similarly, the population of the secondary service area is projected to increase by 6.7% over the same period. Almost 50% of the population growth in both the primary and secondary service areas is projected to occur in the 65+ age cohort. The significant increase in the portion of the hospital's total revenue deriving from the Medicare Program, from approximately 40% of gross revenue in 2004 to 52% in 2011, supports these projections. Part VI, Line 5: -ECONOMIC DEVELOPMENT: IN LATE 2009, THE CITY OF ASHLAND CREATED AN ECONOMIC DEVELOPMENT COMMITTEE TO BRING TOGETHER BUSINESS LEADERS AND COMMUNITY REPRESENTATIVES FOR THE PURPOSE OF CREATING A COMPREHENSIVE DEVELOPMENT STRATEGY FOR THE CITY. MEMBERS OF THE COMMITTEE WERE APPOINTED BY THE MAYOR. THE COMMITTEE IS CHAIRED BY A MEMBER OF ASHLAND CITY COUNCIL, AND STAFF SUPPORT IS PROVIDED BY CITY PLANNING DEPARTMENT STAFF.THE CHARGE TO THE ECONOMIC DEVELOPMENT COMMITTEE INCLUDED: REVIEW OF CURRENT COUNCIL GOALS RELATED TO ECONOMIC DEVELOPMENT; CONSIDERATION OF CITY GOVERNMENT'S ROLE IN ECONOMIC DEVELOPMENT; IDENTIFICATION OF OVERALL GOALS FOR ECONOMIC DEVELOPMENT; AND IDENTIFICATION OF SPECIFIC ACTIONS/TACTICS TO REACH IDENTIFIED GOALS.THE ECONOMY OF ASHLAND IS LARGELY DRIVEN BY TOURISM, BASED ON THE PRESENCE OF THE OREGON SHAKESPEARE FESTIVAL, AND TO A LESSER EXTENT BY THE AVAILABILITY OF A WIDE RANGE OF OUTDOOR ACTIVITIES SUCH AS SKIING, WHITE WATER RAFTING AND FISHING. THESE ARE SEASONAL ACTIVITIES SUPPORTING RELATIVELY LOW-PAID, SEASONAL, SERVICE SECTOR JOBS. THE GOAL OF CITY ECONOMIC DEVELOPMENT EFFORTS IS TO DIVERSIFY THE ECONOMY, REDUCE SEASONAL FLUCTUATION IN ECONOMIC ACTIVITY, AND CREATE A STABLE BASE OF HIGHER-WAGE PROFESSIONAL AND TECHNICAL JOBS.ASHLAND COMMUNITY HOSPITAL IS THE CITY'S THIRD LARGEST EMPLOYER. THE HOSPITAL IS BOTH A SIGNIFICANT CONTRIBUTOR TO AND RELIANT ON THE CITY'S ECONOMIC WELL BEING. SINCE A HEALTHY AND SUSTAINABLE ECONOMY IS CRITICAL TO THE HEALTH AND WELL BEING OF ANY COMMUNITY, THE HOSPITAL CONTRIBUTES TO THE CITY'S COMMUNITY DEVELOPMENT EFFORTS AS PART OF ITS LARGER MISSION OF IMPROVING THE OVERALL HEALTH OF THE COMMUNITY.-COMMUNITY SUPPORT: BEREAVEMENT SUPPORT GROUPS ARE OFFERED TO THE MEMBERS OF OUR COMMUNITY THAT HAVE SUFFERED THE LOSS OF A LOVED ONE THROUGH DEATH. THE GOAL OF THIS TYPE OF SUPPORT IS TO ASSIST THEM TO RECONCILE THEIR LOSS, PROCESS THEIR GRIEF AND GENTLY RESUME THEIR NORMAL DAILY ACTIVITIES.-COALITION BUILDING: THE JEFFERSON REGIONAL ALLIANCE IS A COLLABORATION OF REGIONAL COMMUNITY LEADERS FROM ALL SECTORS ACTING IN A LEADERSHIP ROLE TO IMPROVE THE HEALTH AND HEALTH CARE RESOURCES OF SOUTHERN OREGONIANS. Part VI, Line 6: As a non-profit, mission driven organization, Ashland Community Hospital is committed to the provision of compassionate, high-quality care that improves the overall health of patients, their families and the community and to the furtherance of its exempt purpose. 1. The Hospital maintains a current Strategic Plan to guide the long-term strategic direction of the hospital to best meet the needs of the community. 2. The Hospital's Medical Staff is open to any physician or allied health provider who is licensed in the State of Oregon and able to demonstrate current competence.3. The Hospital has created a Medical Staff Development Plan to define the number and types of physicians needed to meet community need. The Plan is updated on a regular basis. 4. The Hospital's Physician Recruitment Support Program provides financial assistance for new physicians establishing practices within the community, within the constraints of federal law and regulation.5. In 2008, the Hospital established the Ashland Center for Internal Medicine to address access issues for Medicare patients. Additional physicians were added to the clinic in 2010 and 2011.6. The Hospital maintains a physician hospitalist program to support the availability of in-patient care, at a net cost of approximately $600,000 per year. 7. Hospital governance is provided by a 13-member Board of Directors, appointed by the Ashland City Council. Directors are members of the hospital's service area and receive no compensation for their services.8. Through the Hospital and its Foundation, funds are used to support a variety of health and related community organizations and activities including La Clinica Del Valle, Community Health Center, the Children's Advocacy Center, and the Hearts and Vines Foundation.9. The Hospital operates health clinics in middle schools and high schools in Ashland and Talent.10. Through funding, in-kind contributions, and/or staff participation the Hospital supports a variety of community activities such as the 4th of July Celebration and Holiday Festival of lights.11. Through its Employee Volunteer Recognition Program, the Hospital provides grants to non-profit organizations with which employees volunteer.12. The Hospital's Tuition Reimbursement Program provides employees up to $2,500 per school year for tuition, books and fees, thereby supporting the development of needed health care professionals.13. The Hospital supports a monthly Medical Education Program for members of the Medical Staff.14. The Hospital's charity care program provides financial assistance to assist with medical expenses.15. The Hospital participates in the VOLPACT Program, a patient financial aide program sponsored by the Jackson County Medical Society. OR X X 0 0 0 0 0 0 0 0 0 Mark Marchetti 197923 0 0 0 2782 0 8946 0 16184 0 225835 0 0 0 PAMELA ATOR MD 172853 0 0 0 24180 0 9466 0 269 0 206768 0 0 0 BETH LEONE MD 171312 0 0 0 1670 0 4995 0 6746 0 184723 0 0 0 DAVID CANDELARIA MD 168845 0 0 0 963 0 7489 0 12148 0 189445 0 0 0 KARIN KUHL MD 141520 0 0 0 1663 0 7044 0 201 0 150428 0 0 0 ASHLAND ANESTHESIA ASSOCIATES (AAA) AAA IS OWNED 1/3 BY DOUGLAS DIEHL, MD, A HOSPITAL BOARD MEMBER 560073 AAA PROVIDES ANESTHESIA SERVICES TO THE HOSPITAL. 0 HILLVIEW PROPERTIESHULL PROPERTIES ENTITIES OWNED BY LINDA BUTLER, A HOSPITAL BOARD MEMBER 62347 THE HOSPITAL RENTS PROPERTY FROM THESE ENTITIES. 0 AREBI GARSA OFFICER AND INDEPENDENT CONTRACTOR 420760 MR. GARSA IS THE HOSPITAL CFO AS A CONTRACT EMPLOYEE. TRANSACTION AMOUNT REPRESENTS FEES PAID TO MR. GARSA DURING THE TAX YEAR FOR SERVICES PERFORMED IN THE CAPACITY OF CFO. 0 Form 990, Part VI, Section A, line 2 STEVE MINER AND DAVE BERNARD, BOTH BOARD MEMBERS, HAVE A BUSINESS RELATIONSHIP. Form 990, Part VI, Section A, line 4 THE HOSPITAL'S BYLAWS WERE REVISED IN DECEMBER 2009. SIGNIFICANT CHANGES INCLUDE INCREASING THE NUMBER OF BOARD MEMBERS FROM 12 TO 13; MAKING THE CEO AND PAST CHIEF OF STAFF VOTING MEMBERS OF THE BOARD; PUTTING IN A BOARD MEETING ATTENDANCE REQUIREMENT; AND ADJUSTING SOME COMMITTEES. Form 990, Part VI, Section A, line 6 THE ORGANIZATION HAS ONE MEMBER. Form 990, Part VI, Section A, line 7a THE ORGANIZATION'S MEMBER HAS THE AUTHORITY AND RESPONSIBILITY TO APPOINT, AND REMOVE FOR CAUSE, THE ORGANIZATION'S DIRECTORS. Form 990, Part VI, Section B, line 11 The Finance committee reviews Form 990 and a copy is sent out to the full board prior to filing. Form 990, Part VI, Section B, line 12c THE ORGANIZATION ENFORCES COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY BY DOING AN ANNUAL REVIEW OF THE POLICY AND OBTAINING NEW ACKNOWLEDGEMENT SIGNATURES ON THE POLICY. THE ORGANIZATION FOLLOWS UP ON ANY POTENTIAL CONFLICT AS NEEDED. Form 990, Part VI, Section B, line 15 The CEO's compensation is determined by the Board of Directors. The VP of Human Resources gathers wage and benefit data from the Oregon Hospital Association salary survey (wage watch) and the Northwest Hospital Executive Survey conducted by Olney Associates, Inc. The data is provided to the Board Chair and reviewed by the Executive Committee. The Board then determines the compensation for the CEO. Compensation for the organization's officers and key employees is based on the Oregon Hospital Association salary survey (wage watch) and local surveys. The VP of Human Resources makes a recommendation to the CEO for all adjustments to salary ranges. Form 990, Part VI, Section C, line 19 THE ORGANIZATION'S GOVERNING DOCUMENTS AND FINANCIAL STATEMENTS ARE MADE AVAILABLE UPON REQUEST. THE CONFLICT OF INTEREST POLICY IS NOT AVAILABLE TO THE PUBLIC.