2023-05-15T15:53:36-05:00 2022-06-30 450250958 Eide Bailly LLP 1730 Burnt Boat Loop Ste 100 Bismarck ND 585030886 990 2021-07-01 770637498 McKenzie County Healthcare Systems Inc MCKE 7018423000 709 4th Avenue NE Watford City ND 58854 Peter Edis CEO 7018423000 2023-05-15 1 Peter Edis 999009999 Lisa Chaffee CPA P00193453 7012551091 2023-05-13 3 AAL1 IAL1 2021 2023-04-26 12:10:37Z Peter Edis 709 4th Avenue NE Watford City ND 58854 42773061 0 X www.mckenziehealth.com X 2004 ND Health care service provider. 8 8 304 8 384699 0 10682104 4576103 32566482 37708352 21571 -34891 -425969 -434822 42844188 41814742 1000 0 0 0 18974597 19164181 0 0 0 24520454 25820880 43496051 44985061 -651863 -3170319 109663436 103424427 75439565 72370875 34223871 31053552 X Mckenzie County Healthcare Systems is a faith-based organization dedicated to professional, compassionate and quality healthcare. 0 0 27192786 28142704 McKenzie County Healthcare Systems provides 24 hour x 7 days a week services. MCHS provided in-patient, observation, and swing bed services - hospital - total inpatient/observation days - 1031. Total swing bed days - 836. MCHS offers various other services. They offer endoscopic exams once a month by a contracted provider. Total Outpatient Surgeries - 529. The emergency room is open 24 hours a day, 7 days a week. Total Emergency Room visits - 4,980, The laboratory is located within the Hospital facility. Birthday lab screenings are available to the community at the hospital at a reduced rate. Number of members taking advantage of Birthday Screenings - 1223. Total outpatient procedures - 26,146. 3509738 5065702 The McKenzie County Healthcare System (MCHS) Good Shepherd Home (GSH) is a 47-bed skilled nursing home with an attached 9-bed basic care unit. The GSH offers Day Care and/or Respite Care for those caring for a loved one in their home. A Dementia Support Group is offered to families. They maintain regular Resident Family Council Meetings. Along with qualified nursing care and staff, social services, physical therapy, occupational therapy, restoration nursing, laundry, housekeeping, beautician services, and activity programs are offered (beautician and activities held when COVID conditions allow). Visitors are welcome when COVID conditions allow; regular electronic "visits" are arranged otherwise. Pastoral care and chapel are offered 7 days a week. Activities include birthday parties, musical groups, baking, and bus trips. The Skilled Nursing total percent of occupancy has been 89%. 6107473 3711787 The MCHS Clinic (Rural Health Clinic) maintains the same mission as the Hospital. It provides care Monday through Friday. The RHC recently started conducting Telehealth visits as rendering providers due to COVID. A full-time contracted locum physician group provide Emergency Room Coverage at the hospital 24 hours a day x 7 days a week as well as 7 day a week Urgent Care coverage from 8a to 8p utilizing mid-level providers. An RHC provider offered regular visits to the Good Shepherd Home. Both the Value Based Program involvement as well as our Visiting Nurse Program have been a great asset to the clinic, providing care to homebound patients within our community. After the onset of the COVID-19 pandemic the RHC developed point-of-care services and rapid testing for the community. 360466 394541 Horizon Assisted Living provides assisted and independent living services. It consists of 15 apartments that provide a 24 hour call system to health care personnel. The staff is dedicated to helping seniors live at their highest level of independence and ability. Its percent of occupancy is currently at 90.6%. 360466 394541 37170463 1 1 0 1 0 0 0 0 1 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0 0 1 0 0 0 0 0 0 1 1 1 0 0 1 89 0 1 304 1 1 1 0 0 0 0 0 0 0 0 0 0 0 X 8 8 0 1 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 0 0 X Peter Edis 7018423000 709 4th Avenue NE Watford City ND 58854 Gary Brown Chair 1.00 1.00 X X 0 0 0 Neal Shipman Vice Chair 1.00 X X 0 0 0 Justin Voll Treasurer 1.00 X X 0 0 0 Jan Dodge Secretary 1.00 1.00 X X 0 0 0 Virginia Ceynar Director 1.00 X 0 0 0 Tammy James Director 1.00 X 0 0 0 Randy Quale Director 1.00 1.00 X 0 0 0 Monty Bulzomi Director 1.00 X 0 0 0 Daniel Kelly CEO (thru Dec)/Fdtn President 40.00 5.00 X 415551 0 19511 Peter Edis CEO (Start Jan 2022) 40.00 X 0 0 0 Micheal Curtis CAO (left July 2, 2021) 40.00 X 165362 0 25719 Greta McKenzie Interim CFO (Jan thru Jun 2021) 40.00 X 78369 0 11468 Cheryl Batchelor Interim CFO (Start Aug 2021) 38.00 2.00 X 0 0 0 Cheryl Faulkner CNO 40.00 X 130765 0 26667 Gary Ramage Medical Director, Physicia 32.00 X 353613 0 46452 Ravindra Joshi Orthopedic Surgeon 40.00 X 856039 0 21406 Lucinda Mundorf Internal Medicine 40.00 X 258405 0 24816 Torfi Hoskuldsson General Surgeon 40.00 X 221317 0 45177 Maria Marchenko Pediatrician 40.00 X 259510 0 37325 Craig Smith Anesthesiologist 40.00 X 264778 0 3532 3003709 0 262073 28 0 1 0 Acute Care Inc 1609 N Ankeny Blvd Ankeny IA 50023 Contract Physicials 2504200 Guardian Healthcare Providers PO Box 306098 Nashville TN 37230 Contract Workers 1614635 Equalize RCM Services PO Box 679005 Dallas TX 75267 Accounts Receivable Management 1391143 American Consultants 9359 W 75th St Overland Park KS 66204 Contract Workers 1247498 Sanford Health Lawson Building 5074 Sioux Falls SD 57117 Health Services 1004538 15 2568265 1520897 486941 4576103 Hospital Patient Service Revenue 621110 27803605 27803605 Nursing Home Service Revenue 623000 5065702 5065702 Clinic Service Revenue 621110 3711787 3711787 Assisted Living Rental 623000 394541 394541 340B Pharmacy Revenue 446110 -182217 -182217 914934 521316 393618 37708352 17635 17635 470971 905793 -434822 -434822 -8919 -425903 52526 -52526 -52526 -52526 41814742 37314734 384699 -460794 X 1274717 299842 974875 161901 161901 14056534 12999290 1057244 457589 421396 36193 2172153 1732481 439672 1041287 899075 142212 3480 3480 4100 4100 12050223 9765593 2284630 176009 23272 152737 592129 359872 232257 538298 19196 519102 536366 524213 12153 83892 70284 13608 64207 37133 27074 1456419 1221160 235259 6204584 5212998 991586 373095 144916 228179 Medical Supplies 1985407 1984943 464 Pharmaceuticals 837733 837733 Food Service Supplies 429670 424084 5586 Repairs and Maintenance 134207 130426 3781 351061 62556 288505 44985061 37170463 7814598 0 1812686 3567178 8368923 6695536 4962343 6470547 1011275 1017730 459133 318722 115661518 39662492 82247757 75999026 10656259 9284832 145060 70856 109663436 103424427 2908410 3349923 61517 60813 70923675 68925139 1545963 35000 75439565 72370875 X 34223871 31053552 34223871 31053552 109663436 103424427 -3170319 0 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 1654 1654 0 Part II-B, Line 1: The Organization is a member of North Dakota Hospital Association and North Dakota Long Term Care Association. A portion of membership dues to the above listed associations is used for lobbying. These associations advocate on behalf of its members for improving efficiency and accessibility of the healthcare delivery systems and the health status of North Dakota's population. 0 1 X 1144947 1144947 55569792 15367116 40202676 52297873 22735002 29562871 6648906 1560374 5088532 75999026 Postretirement Benefit Obligation 35000 35000 X 42720535 0 42720535 -905793 -905793 41814742 45890854 905793 905793 44985061 0 44985061 Part IV, Line 2b: The Organizations holds security deposits, as well as resident trust funds. Part X, Line 2: The Health System believes it has appropriate support for any tax positions taken affecting the annual filing requirements, and as such, does not have any uncertain tax positions that are material to the consolidated financial statements. The Health System would recognize future accrued interest and penalties related to unrecognized tax liabilities in income tax expense if such interest and penalties are incurred. Part XI, Line 4b - Other Adjustments: Rental Expenses Included in Expenses on Financials -905,793. Part XII, Line 2d - Other Adjustments: Rental Expenses Included in Revenue on Form 990 905,793. 1 1 X 1 X 1 X 1 1 1 0 1 0 124000 124000 0.00280 4028129 3952707 75422 0.00170 4152129 3952707 199422 0.00450 13562561 4842111 8720450 0.19390 13562561 4842111 8720450 0.19390 17714690 8794818 8919872 0.19840 1 754788 56609 7784544 7723937 60607 X 1 1 1 1 McKenzie County Healthcare Systems Inc 709 4th Ave NE Watford City ND 58854 http://mckenziehealth.com/ 5051A X X X X Swing bed unit, Urgent care, PT/OT McKenzie County Healthcare Systems Inc 1 0 0 1 X X X X X X X X X 21 1 0 0 1 X https://mckenziehealth.com/chna/ X 1 21 1 https://mckenziehealth.com/chna/ 0 1 X 100.000000000000 250.000000000000 X X X 1 1 X X X X 1 X https://www.mckenziehealth.com/about/billing/ X https://www.mckenziehealth.com/about/billing/ X https://www.mckenziehealth.com/about/billing/ X X X X X X 1 X 0 X X X X 1 X 0 0 McKenzie County Healthcare Systems Inc. Part V, Section B, Line 5: Residents of the area were given the opportunity to participate in a survey. One hundred twenty-nine MCHS service area residents completed the survey. Additional information was collected through seven key informant interviews with community members. The input from the residents, who primarily reside in McKenzie County, represented the broad interests of the communities in the service area. Together with secondary data gathered from a wide range of sources, the survey presents a snapshot of the health needs and concerns in the community. A steering committee was responsible for planning and implementing the process. The committee consisted of the McKenzie County Courthouse Job Development Authority, a local bank Public Relations representative, the Chief of Ambulance at McKenzie County Ambulance, the Interim Director of Operations at MCHA, and the school Superintendent. McKenzie County Healthcare Systems Inc. Part V, Section B, Line 11: The most recent CHNA conducted in fiscal year 2022 identified the following significant needs:1. Availability of Primary Care Providers2. Availability of Specialists3. Not enough Affordable Housing4. Wellness and Disease PreventionThe organization will not be addressing the following needs identified due to limited financial and other resources:1. Not enough Affordable Housing2. Having enough childcare services3. Drug and Alcohol abuseDue to the timing on the completion of the fiscal year 2022 CHNA, the organization was not able to address any of the newly identified needs. The needs identified in the prior CHNA are as follows:1. Attracting and retaining a viable workforce and qualified medical providers2. Affordable Housing 3. Bullying/Cyber-bullying 4. Traffic Safety (speeding, road safety, drunk/distracted driving, seatbelt use) 5. Land Quality/Environmental Respect (litter, illegal dumping) 6. Domestic/Spouse Violence 6. Obesity/ Being OverweightActions taken during the current tax year to address the needs identified in the prior CHNA:1. The hospital is in the final negotiations for the hiring of a Family Medicine Physician2. The hospital has hired two general surgeons increasing general surgery capacity to 3+ weeks/month.3. The hospital has added ENT services one week per month.4. The hospital has opened an Obstetrics and Birthing unit.Actions taken in prior years to address the fiscal year 2019 CHNA needs that continued in the current tax year:1. We work collaboratively with the local domestic violence agency and have disseminated information to patients on how to get help. 2. Obesity is addressed through educating our patients on diabetes and healthy eating (we have a diabetic educator on staff). Our dietary department provides healthy, well-balanced meals to patients and staff. 3. Our organization allows staff to work flexible schedules and remotely when feasible to help lessen the need for costly childcare for our staff. We do not have resources outside of our internal staff.As the community's healthcare system, we support addressing health-related needs, but we will not have an active role in addressing Bullying/Cyber-bullying, Traffic Safety, or Land Quality/Environmental Respect as these are not within our purview as a health system. McKenzie County Healthcare Systems Inc. Part V, Section B, Line 16j: In addition to providing the full policy upon request, a summary of the policy is posted in the emergency rooms, waiting rooms, and admissions office. Upon admission, the patients receive a brochure in a packet referencing the financial assistance policy. The patients also receive information in their first billing invoice regarding the financial assistance policy. 5 1 - Good Shepherd Home 709 4th Ave NE Watford City ND 58854 LT Care and Basic Care 2 - McKenzie County Clinics 709 4th Ave NE Watford City ND 58854 Rural Health Clinic 3 - McKenzie County Urgent Care Clinic 525 N Main St Watford City ND 58854 Urgent Care Clinic 4 - Connie Wold Wellness Center 200 8th St NE Watford City ND 58854 Wellness Center 5 - Horizon Assisted Living 705 4th Ave NE Watford City ND 58854 Assisted Living Facility Part I, Line 7: Charity care for Part I, line 7a was converted to cost by multiplying the ratio of cost to gross charges by the gross uncompensated charges associated with providing charity care to its patients.The costs for Medicaid in Part I, line 7b and Subsidized Health Services in Part I, line 7g were determined based on costs allocated to the relevant cost centers on the Medicare Cost Report. Part I, Line 7g: Subsidized health services includes costs of $2,409,223 from a provider based clinic, and $4,332,899 from a rural health clinic. Part III, Line 2: The amount reported on line 2 represents implicit price concessions. The Hospital determines its estimate of implicit price concessions based on its historical collection experience with this class of patients. Part III, Line 3: The organization calculated Line 3 by multiplying the implicit price concessions by the percent of the population in the community that is below the Federal Poverty Guidelines. The percent of the population in the community that is below the Federal Poverty Guidelines is 7.5%. Part III, Line 4: The footnote to the Organization's financial statements can be found on pages 10 and 11 of the attached audited financial statements. Part III, Line 8: Medicare allowable costs of care are based on the Medicare cost report. The Medicare cost report is completed based on the rules and regulations set forth by Centers for Medicare and Medicaid Services. Part III, Line 9b: The Organization does not collect on accounts that, at any point, have a financial assistance application in review or that has been approved. This is the practice even if the patient applies after the 240 days period after the date of the first invoice for the service. If the account is not completely written off (based on the sliding fee schedule), and they do not follow through on their payment plan for the balance, that would be the only time the account was outsourced to collections. Self pay patients are identified at the point of registration and receive a 35% write off.The Organization provides a copy of the plain language summary of the financial assistance policy with all billing statements and communications that occur within the first 120 days following the first billing statement. Part VI, Line 2: Separate evaluations are completed annually for the Critical Access Hospital and the Rural Health Clinic. At this time, services and statistics are reviewed. Each report is presented to the medical staff members and Board of Directors. Current services are discussed along with the needs not currently being met. Managers of each department annually review their services with the budgeting process and discuss possible projection of new services. Once a need is determined, it is discussed on a departmental level, and information is gathered and presented to the CEO/CFO for approval. MCHS holds their annual meeting for the public in the fall of each calendar year. This is an open meeting allowing the public to voice concerns and suggestions. Part VI, Line 3: The MCHS charity care policy is posted in the hospital and clinic admissions areas and emergency room. Copies of the policy and applications are available in each reception area of the hospital and clinic. Information is sent out to all patients with their first statement. If a bill is unpaid, after two statements have been sent, a billing employee will attempt to reach the responsible party by phone to discuss installment plans, charity care, and/or discuss various government benefits such as Medicaid. The MCHS business offices also have the applications at all times. The business office staff counsel anyone who presents themselves with overdue balances and present the above options. Part VI, Line 4: McKenzie County Healthcare Services serves McKenzie County. McKenzie County is the largest county in the state of North Dakota. It is very rural and includes part of the Fort Berthold Reservation. McKenzie County Hospital is the only healthcare system within a 45 mile radius. The McKenzie County Healthcare Systems, Inc. County's population was estimated in 2021 at 13,819. The median household income in 2021 was reported at $75,238. 7.5% of the population was reported below the poverty level in 2021. The rugged terrain, winter conditions, increased oil activity, and recreational activities have all added to the increased number of emergency room visits. With the recent oil activity in the state, McKenzie County is experiencing a rapid increase in population, new businesses, housing projects, and improved wage scales. With this rapid growth, MCHS is experiencing an influx in emergency room services, shortage of physicians and nurses, as well as growing bad debt expenses related to medical services provided to uninsured workers and patients that do not have a permanent residence to send bills to. Part VI, Line 5: The McKenzie County Board of Directors is made up of volunteer members from the local community of Watford City and the surrounding areas. MCHS does extend privileges to all physicians in the area. Specialists will also visit the local hospital and clinic to expand the present services. Surplus funds are applied for the purposes education, increasing patient services, wellness, and preventative care to its clients. MCHS is also a part of a worksite wellness North Dakota program. It allows their cardiac wellness manager (RN) to work closely in the state-wide program that can greatly improve the health of employees, resulting in lower health care costs, and increased productivity and morale. McKenzie County Healthcare Systems and the McKenzie County Healthcare Systems Benefit Fund together engaged in the building and funding of a wellness center. The wellness center opened in March 2013. The wellness center houses a physical therapy department to better utilize a therapy pool and has increased the present square footage of the hospital. Prevention is a key word today. The wellness center provides education and exercise to its members. It helps improve or prevent diseases like diabetes, high blood pressure, obesity, depression, and many not listed. In an effort to enhance services in the rural areas, McKenzie County Healthcare participates in several programs. The Rural Accountable Care Organization is intended to better serve our population by improving healthcare, patient satisfaction, and reducing costs while improving financial performance and sustainability. The Frontier Community Healthcare Integration Project (FCHIP) is a demonstration program that assists our Organization with providing telemedicine services to our population in order to provide access to more specialty services to the residents of our communities. These programs are aimed at increasing the integration and coordination of care amongst providers and improve the overall quality of care for our healthcare community.Our hospital provides charity care and other community benefits as defined by the IRS. But in addition, we believe that we provide a critically important community benefit which is not quantified. Our hospital, like most rural hospitals, was created and is maintained in order to provide local access to many health services: birthing center, diagnostics, emergency services and urgent care, home care, hospice, infusion services, inpatient care, laboratory services, occupational health, rehabilitation services, specialty medicine, speech and audiology, surgical services, and women's health. Part VI, Line 6: MCHS is an affiliate of Sanford Healthcare which assists the healthcare system with software and integrated equipment, ultimately streamlining healthcare across multiple states who use the same E.H.R. and other Sanford resources. X 0 0 X X X 1 0 0 0 0 0 0 0 0 Ravindra Joshi Orthopedic Surgeon 854934 0 625 0 480 0 7489 0 13917 0 877445 0 0 0 Daniel Kelly CEO (thru Dec)/Fdtn President 302074 0 113477 0 0 0 17400 0 2111 0 435062 0 0 0 Gary Ramage Medical Director, Physicia 347226 0 6387 0 0 0 17400 0 29052 0 400065 0 0 0 Maria Marchenko Pediatrician 258885 0 625 0 0 0 15360 0 21965 0 296835 0 0 0 Lucinda Mundorf Internal Medicine 257780 0 625 0 0 0 15023 0 9793 0 283221 0 0 0 Craig Smith Anesthesiologist 264528 0 250 0 0 0 2944 0 588 0 268310 0 0 0 Torfi Hoskuldsson General Surgeon 221067 0 250 0 0 0 14434 0 30743 0 266494 0 0 0 Micheal Curtis CAO (left July 2, 2021) 120362 0 0 0 45000 0 7594 0 18125 0 191081 0 0 0 Cheryl Faulkner CNO 129660 0 625 0 480 0 8195 0 18472 0 157432 0 0 0 Part I, Line 1a Dan Kelly, CEO, received gross-up payments for bonuses. Part I, Line 4a Michael Curtis received a severance payment of $45,000 in calendar year 2021. Leslie Kelly Spouse of CEO 80543 Employee salary 0 Samuel Kelly Son of CEO 81358 Employee salary 0 Form 990, Part VI, Section A, line 3 The Interim CFO, Cheryl Batchellor, is paid by an unrelated management company, American Consultants, for her services to both the Benefit Fund of McKenzie County Healthcare Systems and McKenzie County Healthcare Systems (MCHS). In calendar year 2021, MCHS paid $291,200 for her services. Form 990, Part VI, Section B, line 11b The MCHS CEO and CFO review and approve the Form 990. The Board of Directors recieve a copy of the final Form 990 before it is filed with the IRS. Form 990, Part VI, Section B, line 12c An interested person is defined as any director, principal officer, and anyone who has a direct or indirect financial interest with respect to all entities in the healthcare system. An interested person must disclose the existence of the financial interest and will be given the opportunity to disclose all material facts to the Directors. The conflict will be reviewed by the remaining Board and will determine if a conflict exists. If a conflict exists, the interested person must abstain from voting on the issue and the remaining Board members will determine if the transaction is in the hospital's best interest, for its own benefit, and if it is fair and reasonable. This is accomplished through annual review and a signed statement stating that the interested person has obtained a copy of the policy and has read and understands the policy, and has agreed to comply with the policy. Form 990, Part VI, Section B, line 15a Members of the Board of Trustees review state-wide salary survey information and other Form 990s when determining any wage changes. The CEO has an annual evaluation completed. The CEO has the opportunity to give a proposal to the Board at their evaluation. Any change or revision is recorded in the Board minutes. An addendum to the terms of employment is signed by the Board President and CEO for the personnel file. The CEO approves other officer compensation based upon survey data on an annual basis. The results are documented in the officer's annual evaluation paperwork. Form 990, Part VI, Section C, line 19 The governing documents, conflict policy, and financial statements are available upon request. Form 990, Part IX, line 11g Service Contracts: Program service expenses 720,255. Management and general expenses 120,094. Fundraising expenses 0. Total expenses 840,349. Staffing Purchased Services: Program service expenses 7,606,905. Management and general expenses 0. Fundraising expenses 0. Total expenses 7,606,905. Consulting: Program service expenses 69,070. Management and general expenses 0. Fundraising expenses 0. Total expenses 69,070. Contracted Physician and Medical: Program service expenses 525,989. Management and general expenses 0. Fundraising expenses 0. Total expenses 525,989. Other Purchased Services: Program service expenses 843,374. Management and general expenses 1,690,893. Fundraising expenses 0. Total expenses 2,534,267. Collection Agency: Program service expenses 0. Management and general expenses 306,490. Fundraising expenses 0. Total expenses 306,490. Consulting Services: Program service expenses 0. Management and general expenses 167,153. Fundraising expenses 0. Total expenses 167,153. Benefit Fund of McKenzie County Healthcare Systems 709 4th Ave NE Watford City ND 58854 363431210 To support the McKenzie County Healthcare Systems ND 501(c)(3) Line 7 McKenzie County Healthcare Systems Inc 1 McKenzie County Healthcare Systems Properties 709 4th Ave NE Watford City ND 58854 462905447 Property Management ND McKenzie County Healthcare Systems Inc C 19650 563108 1.00000 1 0 0 1 0 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 Benefit Fund of McKenzie County Healthcare Systems C 2568265 Accrual