2021-05-12T14:30:42-05:00 2020-06-30 271235638 MCM CPAS & ADVISORS LLP 462 S FOURTH ST SUITE 2600 LOUISVILLE KY 402023445 990 2019-08-01 822577178 ARH TUG VALLEY HEALTH SERVICES INC ARHT 8592262440 2260 EXECUTIVE DRIVE LEXINGTON KY 40505 DANNY HARRIS CFO/VP FISCAL SERVICES 8592262440 2021-04-26 1 ELEANOR A LIVINGSTON CPA MST P00226461 5027491900 2021-04-05 2019 2022-09-23 18:48:47Z X JOSEPH GROSSMAN 2260 EXECUTIVE DRIVE LEXINGTON KY 40505 120061918 0 X WWW.ARH.ORG X 2013 KY TO PROVIDE CENTRAL APPALACHIA AN ABUNDANCE OF HEALTHCARE AND COMMUNITY-ORIENTED SERVICES THROUGH ITS HOSPITAL, CLINICS AND HOME HEALTH OPERATIONS AS WELL AS COMMUNITY OUTREACH SERVICES. 3 0 614 15 2193991 346532 5206256 113792053 268023 542733 119809065 24500 0 39747977 0 0 68681973 108454450 11354615 46450356 24653437 21796919 X TO IMPROVE HEALTH AND PROMOTE WELL-BEING OF ALL PEOPLE IN CENTRAL APPALACHIA IN PARTNERSHIP WITH OUR COMMUNITIES. 0 0 103595694 24500 111804113 HIGHLANDS ARH REGIONAL MEDICAL CENTER SERVES FLOYD, JOHNSON, MARTIN, AND MAGOFFIN COUNTIES AND JOINED THE ARH SYSTEM IN AUGUST OF 2019. HIGHLANDS ARH MEDICAL STAFF CONSISTS OF OVER 225 CREDENTIALED PHYSICIANS AND MEDICAL SPECIALISTS. THESE PHYSICIANS REPRESENT FAMILY MEDICINE, INTERVENTIONAL CARDIOLOGY, INVASIVE CARDIOLOGY, OBSTETRICS/GYNECOLOGY, GENERAL SURGERY, INTERNAL MEDICINE, ORTHOPEDICS, UROLOGY, GASTROENTEROLOGY, HEMATOLOGY/ONCOLOGY NEPHROLOGY, NEUROLOGY, SPORTS MEDICINE AND OTHER FIELDS OF MEDICINE. IN TOTAL, HIGHLANDS EMPLOYS 614 PEOPLE, EACH OF WHOM PLAYS A VITAL ROLE IN PROVIDING COMPASSIONATE CARE TO PEOPLE IN APPALACHIA.IN FY 2019-2020, HIGHLANDS ARH PROVIDED EXTENSIVE OUTREACH AND COMMUNITY BENEFIT TO THE BIG SANDY REGION. IN AN EFFORT TO MEET THE HOSPITAL'S COMMUNITY HEALTH NEEDS ASSESSMENT GOALS, HOSPITAL STAFF HAVE:- PROVIDED 501 FREE HEALTH SCREENINGS AT 14 HEALTH FAIRS AND/OR SCREENING EVENTS. THIS INCLUDES YEARLY EVENTS SUCH AS HIGHLANDS ARH COMMUNITY HEALTH FAIR, MANN'S DAY OUT MAMMOGRAPHY EVENT, COMMUNITY HEALTH FAIRS, AND SIX EMPLOYEE BIOMETRIC SCREENING EVENTS FOR AREA BUSINESSES.- ADMINISTERED 149 FREE SPORTS PHYSICALS FOR AREA STUDENTS.- HOSTED 4 AWARENESS EVENTS WITH 328 ATTENDEES. THESE INCLUDE YEARLY EVENTS FOR BREAST CANCER (HIGHLANDS THINK PINK) AND MULTIPLE EVENTS FOR HEART HEALTH IN FEBRUARY.- HOSTED 26 EDUCATIONAL EVENTS WITH OVER 1,200 ATTENDEES. HIGHLANDS ARH STAFF TEACH SMOKING AND VAPING EDUCATION IN AREA HIGH SCHOOLS, HOST QUARTERLY LUNCH AND LEARNS WITH CHRISTIAN APPALACHIAN PROJECT EMPLOYEES, PROVIDE DIABETES EDUCATION CLASSES MONTHLY, AND TEACH HEALTH EDUCAITON IN ELEMENTARY SCHOOLS THROUGH THE HIGHLANDS ARH/UK MARKEY YOUTH HEALTH AMBASSADOR PROGRAM. OUR DOCTORS AND STAFF HAVE PRESENTED AT EVENTS HIGHLIGHTING HEART HEALTH, DIABETES, COLON CANCER, BREAST CANCER, VAPING AND TOBACCO USE, HEALTH CARE CAREERS, AND MORE. THE ARH OPIOID SUMMIT HELD IN FLOYD COUNTY EDUCATED OVER 700 HIGH SCHOOL STUDENTS ABOUT THE CONSEQUENCES OF DRUG AND ALCOHOL USE. - SPONSORED 8 COMMUNITY BUILDING ACTIVITIES WITH OVER 1,200 ATTENDEES, INCLUDING BACK TO SCHOOL BASHES AND SCHOOL SUPPLY DRIVES, FIRST DAY OPEN HOUSES FOR AREA SCHOOLS, AND FUNDRAISERS FOR THE LOCAL HOMELESS SHELTER.- ADMINISTERED 116 FREE SPORTS INJURY EVALUATIONS DURING FOOTBALL SEASON IN HIGHLANDS ARH BLACK AND BLUE CLINIC.- IN MARCH OF 2019, HIGHLANDS ARH IMPROVED ACCESS TO CARE BY OPENING AN AFTER HOURS CLINIC IN PRESTONSBURG AND A CHRONIC CARE MANAGEMENT CLINIC WITHIN THE HOSPITAL.- THE HOSPITAL HAS INCREASED PARTICIPATION IN COMMUNITY HEALTH INITIATIVES; ARH IS NOW REPRESENTED IN NEARLY TWENTY COUNTY HEALTH COALITIONS, SUBSTANCE ABUSE PREVENTION COUNCILS, EARLY CHILDHOOD COALITIONS, AND OTHERS THAT WORK TO BETTER THE HEALTH AND WELLNESS OF OUR REGION. IN TOTAL, THE HOSPITAL PROVIDED $434,289.21 IN COMMUNITY BENEFIT ACTIVITIES. MORE THAN 12,303 PEOPLE ATTENDED ACROSS 203 EVENTS. 103595694 1 1 0 1 0 0 0 0 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 1 64 0 1 614 1 1 1 0 0 0 0 0 0 0 0 0 0 0 X 3 0 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 KY X DANNY HARRIS 8592262440 2260 EXECUTIVE DRIVE LEXINGTON KY 40505 JOSEPH GROSSMAN PRESIDENT/CEO 5.00 35.00 X X 0 792333 65652 ROBERT N ROYALTY ORTHOPEDIC SURGEON 40.00 X 482496 0 11328 PETER EDGERTON UROLOGIST 40.00 X 447259 0 0 PAUL V MILES COO/VP OPERATIONS 5.00 35.00 X 0 326613 65384 MARIA BRAMAN CMO/VP MEDICAL AFFAIRS 5.00 35.00 X 0 338675 42652 BOBBY RICK KING SECRETARY 5.00 35.00 X 0 301041 57997 DANNY HARRIS TREASURER 5.00 35.00 X X 0 316259 33793 GARY N FRANCIS INTERNAL MEDICINE SPECIALIST 40.00 X 308688 0 8171 HOLLIE P HARRIS VP CORPORATE STRATEGY 5.00 35.00 X 0 264263 48828 ANDREW BURCHETT CARDIOLOGIST 40.00 X 229271 0 13730 TIM HATFIELD CCEO 40.00 X 178263 0 53137 BRETT D AKERS UROLOGIST 40.00 X 228538 0 2613 BESSIE ELLEN WRIGHT VP AND CHIEF NURSING OFFICER 5.00 35.00 X 0 181791 32517 1874515 2520975 435802 17 0 1 0 QUALIVIS LLC 2000 CENTER POINT RD STE 2360 COLUMBIA SC 29210 CONTRACT NURSES 2177300 CARDIOSOLUTION 4675 CORNELL ROAD CINCINNATI OH 45241 CARDIOVASCULAR STAFFING 1836616 CONEXUS MEDSTAFF LLC PO BOX 4652 DEPT 566 HOUSTON TX 77210 CONTRACT NURSES 1750397 CERNER CORPORATION 280 ROCKCREEK PARKWAY KANSAS CITY MO 64117 MANAGED SERVICES 1727179 BEAVER CREEK EMERGENCY GROUP PO BOX 677979 DALLAS TX 75267 EMERGENCY MEDICAL SERVICES 810721 31 5200329 5927 5206256 PATIENT REVENUE 621110 106929888 106929888 PHARMACY AND LAB 812300 5480249 3322777 2157472 HOSPITAL RATE IMPROVEMENT PROGRAM 621110 1377395 1377395 TRANSCRIPT FEES 621110 4521 4521 113792053 257182 257182 284206 252853 31353 31353 31353 10841 0 10841 10841 10841 CAFETERIA INCOME 722210 305329 305329 MISCELLANEOUS 900099 206051 169532 36519 511380 119809065 111804113 2193991 604705 X 24500 24500 231400 231400 30345790 30345790 568571 568571 6388200 6388200 2214016 2214016 22499 22499 8758 8758 15032423 14925624 106799 338737 337529 1208 1286728 1286728 31228 31228 11575 11575 968856 236954 731902 2256710 2256710 994576 916023 78553 BAD DEBT 25072119 25072119 SUPPLIES 16101483 15981248 120235 MISCELLANEOUS EXPENSE 3393225 952702 2440523 PROVIDER TAX 1575232 204454 1370778 1587824 1587824 108454450 103595694 4858756 0 0 2586267 0 2060176 0 2909769 108486285 83944896 0 24541389 0 11780903 0 1511151 0 330229 0 730472 0 46450356 0 5012177 0 473182 0 12520790 0 0 0 6647288 0 24653437 X 0 21796919 0 21796919 0 46450356 X 11354615 -125690 10567994 X X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 8758 8758 0 PART II-B, LINE 1: THE HOSPITAL IS A MEMBER OF THE KENTUCKY HOSPITAL ASSOCIATION AND THE AMERICAN HOSPITAL ASSOCIATION. A PERCENTAGE OF THE MEMBERSHIP DUES THAT ARE PAID TO THESE ORGANIZATIONS ARE USED FOR LOBBYING PURPOSES. THE HOSPITAL PAID DUES OF $16,545 TO KHA, OF WHICH 17.40% WAS USED FOR LOBBYING PURPOSES, AND PAID DUES OF $26,580 TO AHA, OF WHICH 22.12% WAS USED FOR LOBBYING PURPOSES. 742 742 802 60 742 2649827 2649827 56383709 39000064 17383645 827056 827056 0 46049961 42236503 3813458 2575732 1881273 694459 24541389 INTERCOMPANY LIABILITIES 1673471 INTEREST RATE SWAP 1238723 CAPITAL LEASE OBLIGATIONS 1187643 MEDICARE AND MEDICAID ESTIMATED SETTLEMENTS 1300405 REFUNDS DUE TO PATIENTS 1247046 6647288 X PART X, LINE 2: THE CORPORATION IS A NOT-FOR-PROFIT CORPORATION AS DESCRIBED IN SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE (IRC) AND IS EXEMPT FROM FEDERAL INCOME TAXES ON RELATED INCOME PURSUANT TO SECTION 501(A) OF THE IRC. HOWEVER, THE CORPORATION IS SUBJECT TO FEDERAL INCOME TAX ON ANY UNRELATED BUSINESS TAXABLE INCOME. GAAP REQUIRES THE CORPORATION TO EVALUATE ITS TAX POSITIONS AND RECOGNIZE A TAX LIABILITY (OR ASSET) IF IT HAS TAKEN AN UNCERTAIN POSITION THAT MORE LIKELY THAN NOT WOULD NOT BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE (IRS). THE CORPORATION HAS EVALUATED ITS TAX POSITIONS AND HAS CONCLUDED THAT THERE ARE NO UNCERTAIN POSITIONS TAKEN OR EXPECTED TO BE TAKEN THAT WOULD REQUIRE RECOGNITION OF A LIABILITY (OR ASSET) OR DISCLOSURE IN THE CONSOLIDATED FINANCIAL STATEMENTS. THE CORPORATION IS SUBJECT TO ROUTINE AUDITS BY TAXING JURISDICTIONS; HOWEVER, THERE ARE CURRENTLY NO AUDITS FOR ANY TAX PERIODS IN PROGRESS. 1 1 X 1 X 1 X 100.000000000000 1 1 0 1 1 1516119 430319 1085800 0.01000 26089371 25728285 361086 0.00330 27605490 26158604 1446886 0.01330 103 1743 365198 365198 0.00340 322105 322105 0.00300 103 1743 687303 687303 0.00640 103 1743 28292793 26158604 2134189 0.01970 24 7956 30684 30684 0.00030 1 43 307 307 0.00000 14 912 912 0.00000 58 1543 36343 36343 0.00030 3 1018 846 846 0.00000 100 10560 69092 69092 0.00060 1 25072119 664676 15756141 19018914 -3262773 X 1 1 1 1 HIGHLANDS ARH REGIONAL MEDICAL CENTER 5000 KY RT 321 PRESTONSBURG KY 41653 WWW.ARH.ORG 100124 X X X X HIGHLANDS ARH REGIONAL MEDICAL CENTER 1 0 1 1 X X X X X X X X X 18 1 0 0 1 X HTTPS://WWW.ARH.ORG/CHNA/ X 1 18 1 HTTPS://WWW.ARH.ORG/CHNA/ 0 1 X 100.000000000000 200.000000000000 X 1 1 X X X X 1 X HTTPS://WWW.ARH.ORG/FINANCIAL-ASSISTANCE/ X HTTPS://WWW.ARH.ORG/FINANCIAL-ASSISTANCE/ X HTTPS://WWW.ARH.ORG/FINANCIAL-ASSISTANCE/ X X X X X 1 X X 0 X 1 X 0 0 HIGHLANDS ARH REGIONAL MEDICAL CENTER PART V, SECTION B, LINE 2: EFFECTIVE AUGUST 1, 2019, APPALACHIAN REGIONAL HEALTHCARE (ARH) CLOSED ON THE ACQUISITION OF THE ASSETS AND OPERATIONS OF CONSOLIDATED HEALTH SYSTEM (DBA HIGHLANDS HEALTH SYSTEM) AND SUBSIDIARIES ("HIGHLANDS"), PRINCIPALLY VIA THE ASSUMPTION OF LONG-TERM DEBT AND OTHER LIABILITIES. THE AGREEMENT ALSO STIPULATED A GUARANTEE OF FUTURE CAPITAL IMPROVEMENTS TO THE HIGHLANDS SERVICE AREA OVER A PEIOD OF SIX YEARS POST-ACQUISITION. HIGHLANDS ARH REGIONAL MEDICAL CENTER PART V, SECTION B, LINE 5: A COMMUNITY STEERING COMMITTEE PROVIDED GUIDANCE OVER THE COMMUNITY HEALTH NEEDS ASSESSMENT PROCESS IN EACH OF ARH'S COMMUNITIES. THIS STEERING COMMITTEE WAS MADE UP OF REPRESENTATIVES FROM VARIOUS ORGANIZATIONS AND AGENCIES THROUGHOUT EACH HOSPITAL'S SERVICE AREA. IN PARTICULAR, SOME OF THE COMMITTEE MEMBERS REPRESENTED THE LOCAL HEALTH DEPARTMENT, SENIOR SERVICES, SCHOOL SYSTEM, SOCIAL SERVICE ORGANIZATIONS, AND EMERGENCY MANAGEMENT. THESE INDIVIDUALS ASSISTED WITH DISTRIBUTING SURVEYS AND ORGANIZING FOCUS GROUPS THROUGHOUT THE COMMUNITY ENSURING THAT VARIED COMMUNITY INTERESTS AND EXPERTISE WERE REPRESENTED. SPECIAL ATTENTION WAS PAID TO ENSURING THAT REPRESENTATION FROM THE PUBLIC HEALTH SECTOR WAS INCLUDED IN THIS ASSESSMENT PROCESS AND THAT THE SENIOR CITIZEN AND UNDERSERVED POPULATION WERE REPRESENTED. A COMPLETE LIST OF THE COMMUNITY STEERING COMMITTEE MEMBERS FOR EACH ARH FACILITY IS INCLUDED IN EACH ASSESSMENT'S FINAL REPORT. HIGHLANDS ARH REGIONAL MEDICAL CENTER PART V, SECTION B, LINE 11: THE MOST RECENT COMMUNITY HEALTH NEEDS ASSESSMENT WAS COMPLETED BY ARH IN 2018-2019. THIS OFFERED A GOOD OPPORTUNITY TO EXAMINE PROGRESS MADE SINCE THE PREVIOUS CHNA PROCESS WHILE OUTLINING NEW STRATEGIES TO GUIDE ACTIVITIES, OUTREACH, AND AREAS OF IMPROVEMENT FOR RECENTLY IDENTIFIED NEEDS. ALL OF THE NEEDS IDENTIFIED DURING THIS PROCESS WERE REVIEWED AND PRIORITIZED BY EACH FACILITY. SOME NEEDS MAY NOT HAVE BEEN SELECTED AS A HIGH PRIORITY SINCE ANOTHER COMMUNITY AGENCY MAY ALREADY BE ADDRESSING THAT NEED AND REFERRALS JUST NEED TO BE MADE TO THAT PARTNER AGENCY. MEASURES WERE TAKEN TO ENSURE THAT EACH IDENTIFIED NEED WAS EITHER ADDRESSED TO SOME DEGREE BY ARH OR REFERRED TO OTHER APPROPRIATE COMMUNITY ENTITIES. BELOW ARE THE MAIN SYSTEM-WIDE NEEDS IDENTIFIED DURING ARH'S MOST RECENT CHNA. THESE AREAS ARE THE MAIN FOCUS OF THE HOSPITALS' ACTIVITIES:SUBSTANCE ABUSE (DRUGS, ALCOHOL, TOBACCO, AND VAPING)MENTAL HEALTH (SERVICES AND REDUCING STIGMA)OBESITY/DIABETES/PHYSICAL ACTIVITYCOMMUNICATION AND EDUCATIONTHE RESULTS FROM THE MOST RECENT CHNA IDENTIFIED THE NEED FOR ARH'S FACILITIES TO FOCUS ON PROVIDING MORE PREVENTIVE AND EDUCATIONAL SERVICES. FOR SOME COMMUNITIES, THIS ALSO MEANT FURTHER PUBLICIZING THE PREVENTIVE AND EDUCATIONAL SERVICES THAT THEY WERE ALREADY OFFERING TO FURTHER INCREASE COMMUNITY PARTNERSHIPS AND AWARENESS. CHNA RESPONDENTS ALSO REQUESTED INCREASED EDUCATIONAL TOPICS INCLUDING MORE OF A FOCUS ON TOPICS SUCH AS VAPING AND MENTAL HEALTH ALONG WITH THE CHRONIC DISEASE ISSUES OF DIABETES AND HEART DISEASE. AN INCREASE IN THE AVAILABILITY OF SERVICES AND PROVIDERS TO ADDRESS THESE IDENTIFIED HEALTH ISSUES IS ALSO A PROMINENT NEED IN THE REGION, ESPECIALLY THE NEED TO ADD MORE MENTAL HEALTH PROVIDERS. ANOTHER NEED THAT WAS ALSO APPARENT WITH THE MOST RECENT CHNA RESULTS WAS THE NEED TO IMPROVE COMMUNICATIONS. THIS NEED RANGES FROM ENSURING THAT THERE IS FASTER COMMUNICATION REGARDING TEST RESULTS, IMPROVING COMMUNICATION TO THE PUBLIC ON ARH SERVICES AND ACTIVITIES VIA SOCIAL MEDIA, AND PROVIDING MORE PATIENT NAVIGATORS/ADVOCATES TO ASSIST PATIENTS WITH NEGOTIATING THE HEALTHCARE PROCESS. 13 1 - ARH MEDICAL AND SURGICAL ASSOC HIGHLAND 5000 KY ROUTE 321 PRESTONSBURG KY 41653 CLINIC 2 - ARH HOMETOWN FAMILY CARE 400 UNIVERSITY DRIVE PRESTONSBURG KY 41653 CLINIC 3 - ARH MEDICAL & SPECIALTY ASSOC HAROLD 24 LEFT FORK PENHOOK BRANCH RD 1 HAROLD KY 41635 CLINIC 4 - ARH MEDICAL & SPECIALTY ASSOC SALYERSVIL 186 BREANNA BLVD STE 400 SALYERSVILLE KY 41465 CLINIC 5 - ARH MEDICAL & SPECIALTY ASSOC PAINTSVILL 713 BROADWAY STREET PAINTSVILLE KY 41240 CLINIC 6 - ARH MEDICAL & SPECIALTY ARCHER CLINIC 400 UNIVERSITY DRIVE PRESTONSBURG KY 41653 CLINIC 7 - ARH BIG SANDY HOME MEDICAL EQUIPMENT 5080 KY RTE 321 STE A PRESTONSBURG KY 41653 HOME CARE STORE 8 - HIGHLANDS HOME HEALTH 93 DEWEY STREET PRESTONSBURG KY 41653 HOME HEALTH 9 - HIGHLANDS ARH MEDICAL OFFICE PHARMACY 5000 KY ROUTE 321 PRESTONSBURG KY 41653 PHARMACY 10 - HIGHLANDS ARH CLINIC PHARMACY 713 BROADWAY ST SUITE 101 PAINTSVILLE KY 41240 PHARMACY 11 - HIGHLANDS PSYCH UNITY 5000 KY ROUTE 321 PRESTONSBURG KY 41653 PROVIDER-BASED UNIT 12 - HAROLD PRIMARY CARE CENTER 273 OLD HAROLD ROAD HAROLD KY 41653 PROVIDER-BASED RHC 13 - HIGHLANDS PRIMARY CARE 100 BRIANNA DLVD SALYERVILLE KY 41465 PROVIDER-BASED RHC PART I, LINE 3C: THE DISCOUNTS ARE BASED ON A SLIDING FEE SCHEDULE STARTING AT 100% OF FPG QUALIFYING FOR FREE CARE, RANGING UP TO UNLIMITED INCOME LEVELS FOR A 40% DISCOUNT ON ALL UNINSURED CARE PROVIDED. PART III, LINE 2: COSTING METHODOLOGY: TO DETERMINE THE BAD DEBT EXPENSE ON LINE 2, THE BADDEBT EXPENSE PER THE FINANCIAL STATEMENTS, WHICH CONSISTS OF GROSS CHARGESLESS DISCOUNTS, WAS CONVERTED TO COST USING THE GLOBAL COST-TO-CHARGERATIO DEVELOPED IN WORKSHEET 2. PATIENT DISCOUNTS ARE NOT REFLECTED INBAD DEBT. ANY PAYMENTS ON AN ACCOUNT AFTER IT IS WRITTEN OFF TO BAD DEBTRESULT IN A REVERSAL OF THE ENTIRE ACCOUNT OUT OF BAD DEBT, REINSTATEMENTOF THE PATIENT ACCOUNT RECEIVABLE, AND ANY NEGOTIATED DIFFERENCE IN THEFULL AMOUNT OF THE ACCOUNT AND THE PAYMENT MADE IS WRITTEN OFF TOCONTRACTUAL ALLOWANCE. PATIENTS WHO MAY QUALIFY FOR CHARITY CARE BUT DONOT APPLY CANNOT BE ESTIMATES. ALL PATIENTS ARE EDUCATED ABOUT AND GIVENEVERY OPPORTUNITY TO APPLY FOR CHARITY CARE AND, THEREFORE, ARH HAS NOINFORMATION FOR THOSE WHO CHOOSE NOT TO APPLY. PART III, LINE 3: MANAGEMENT CONTINUALLY MONITORS AND ADJUSTS THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS ASSOCIATED WITH CREDIT RISK. THE CORPORATION'S ABILITY TO COLLECT OUTSTANDING RECEIVABLES IS CRITICAL TO ITS RESULTS OF OPERATIONS AND CASH FLOWS. TO PROVIDE FOR ACCOUNTS RECEIVABLE THAT COULD BECOME UNCOLLECTIBLE IN THE FUTURE, THE CORPORATION ESTABLISHES AN ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS TO REDUCE THE CARRYING VALUE OF SUCH RECEIVABLES TO THEIR ESTIMATED NET REALIZABLE VALUE. THE PRIMARY UNCERTAINTY OF SUCH ALLOWANCES LIES WITH UNINSURED PATIENT RECEIVABLES AND DEDUCTIBLES, CO-PAYMENTS OR OTHER AMOUNTS DUE FROM INDIVIDUAL PATIENTS. THE CORPORATION HAS AN ESTABLISHED PROCESS TO DETERMINE THE ADEQUACY OF THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS THAT RELIES ON A NUMBER OF ANALYTICAL TOOLS AND BENCHMARKS TO ARRIVE AT A REASONABLE ALLOWANCE. NO SINGLE STATISTIC OR MEASUREMENT DETERMINES THE ADEQUACY OF THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS. SOME OF THE ANALYTICAL TOOLS THAT THE CORPORATION UTILIZES INCLUDE, BUT ARE NOT LIMITED TO, HISTORICAL CASH COLLECTION EXPERIENCE BY PAYOR, REVENUE TRENDS BY PAYOR CLASSIFICATION ANDAGED ACCOUNTS FROM DATE OF SERVICE BY PAYOR. ACCOUNTS RECEIVABLE ARE WRITTEN OFF AFTER COLLECTION EFFORTS HAVE BEEN FOLLOWED IN ACCORDANCE WITH THE CORPORATION'S POLICIES. PART III, LINE 4: THE CORPORATION HAS AN ESTABLISHED PROCESS TO DETERMINE THE ADEQUACY OF THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS THAT RELIES ON A NUMBER OF ANALYTICAL TOOLS AND BENCHMARKS TO ARRIVE AT A REASONABLE ALLOWANCE. NO SINGLE STATISTIC OR MEASUREMENT DETERMINES THE ADEQUACY OF THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS. SOME OF THE ANALYTICAL TOOLS THAT THE CORPORATION UTILIZES INCLUDE, BUT ARE NOT LIMITED TO, HISTORICAL CASH COLLECTION EXPERIENCE BY PAYOR, REVENUE TRENDS BY PAYOR CLASSIFICATION AND AGED ACCOUNTS FROM DATE OF SERVICE BY PAYOR. ACCOUNTS RECEIVABLE ARE WRITTEN OFF AFTER COLLECTION EFFORTS HAVE BEEN FOLLOWED IN ACCORDANCE WITH THE CORPORATION'S POLICIES. PART III, LINE 9B: THE PROVISIONS IN THE WRITTEN DEBT COLLECTION POLICY ARE THAT CHARITY AND FINANCIAL ASSISTANCE APPLICATIONS ARE VALID FOR 6 MONTHS. AFTER THAT TIME, THE PATIENT MUST REAPPLY AND PRESENT CURRENT FINANCIAL DOCUMENTS AS NECESSARY. PART VI, LINE 2: IN ADDITION TO THE COMMUNITY HEALTH NEEDS ASSESSMENT THAT IS CONDUCTED BY ARH, SYSTEM AFFILIATE TO ARH TUG VALLEY HEALTH SERVICES (TVHS), EVERY THREE YEARS AND REPORTED ELSEWHERE IN THIS DOCUMENT, TVHS ALSO CONTINUALLY ASSESSES COMMUNITY NEEDS IN OTHER FORMS AS WELL. THE NEEDS OF THE COMMUNITIES THAT TVHS SERVES THROUGHOUT EASTERN KENTUCKY ARE ASSESSED BY FOLLOWING EMERGING MEDICAL PRACTICE NEEDS AS A WHOLE ACROSS THE NATION AND SPECIFICALLY IN THE APPALACHIAN REGION. THE HEALTH NEEDS ARE EXAMINED BY LOOKING AT HEALTH STATISTICS AND DISEASE PREVALENCE COMPARED TO SERVICE/PHYSICIAN AVAILABILITY. PATIENT AND COMMUNITY SURVEYS ARE ALSO REGULARLY CONDUCTED TO ASSESS CONSUMER PERCEIVED NEEDS. LOCAL ADVISORY COUNCILS (LACS) ALSO EXIST IN EACH OF ARH'S HOSPITAL COMMUNITIES. THE COUNCILS ARE COMPRISED OF LOCAL CITIZENS WHO VOLUNTEER TO HELP ARH IMPROVE THE HEALTH OF ITS COMMUNITIES THROUGH REGULAR MEETINGS THAT DISCUSS COMMUNITY HEALTH ISSUES AND HELP ARH IDENTIFY AND ADDRESS THEM. MEMBERS ALSO ADVISE ARH ABOUT IMPROVEMENTS NEEDED AND COMMUNITY PERCEPTIONS OF ARH FACILITIES AND THESE INDIVIDUALS SERVE AS EXCELLENT AMBASSADORS FOR ARH AND ITS SERVICES. THESE INDIVIDUALS HAVE DEMONSTRATED THEIR LEADERSHIP IN LOCAL CIVIC AFFAIRS AND REFLECT A CROSS SECTION OF THE COMMUNITY. PART VI, LINE 3: ARH TUG VALLEY HEALTH SERVICES (TVHS) OBSERVES THE FINANCIAL ASSISTANCE POLICY OF ITS SYSTEM AFFILIATE APPALACHIAN REGIONAL HEALTHCARE (ARH). UNDER ARH'S FINANCIAL ASSISTANCE PROGRAM AND POLICY, EACH PATIENT WITHOUT MEDICAL COVERAGE FOR RENDERED SERVICES IS OFFERED A 40% DISCOUNT OF GROSS CHARGES AT TIME OF SERVICE. IF THE PATIENT EXTENDS PAYMENT AT TIME OF SERVICE, THEY ARE GIVEN ANOTHER 10% DISCOUNT, MAKING THEIR LIABILITY 50% OF GROSS CHARGES. ALL OF THESE DISCOUNTS ARE APPLIED AT TIME OF CHARGE AND BILLED AFTER THE DISCOUNT IS TAKEN. IF SAID PATIENT IS UNABLE TO MEET THE FINANCIAL OBLIGATIONS FOR SERVICE, THEY ARE EDUCATED AND SCREENED FOR POTENTIAL FEDERAL AND/OR STATE ASSISTANCE PROGRAMS. BY DOING THIS, THE PATIENT IS REVIEWED AND EDUCATED BY ON-SITE FINANCIAL COUNSELORS AND/OR ELIGIBILITY AGENCY TO GET THE INDIVIDUAL PLACED IN AN ASSISTANCE PROGRAM. BASED ON INCOME AND FAMILY STATUS THE PATIENT IS SCREENED IN CONJUNCTION WITH THE FEDERAL AND STATE POVERTY GUIDELINES. AT THIS TIME, ALL APPLICATIONS ARE COMPLETED WITH THE ASSISTANCE OF ARH PERSONNEL AND SUBMITTED FOR APPROVAL. IN THE EVENT AN AGENCY REQUIRES THE PATIENT/GUARANTOR TO APPLY IN PERSON THE INDIVIDUAL IS ASKED TO MAKE AN APPOINTMENT WITH THAT AGENCY AND FILE THEIR COMPLETED DOCUMENTS. IF THE RESPONSIBLE PARTY IS NOT ELIGIBLE FOR FEDERAL OR STATE ASSISTANCE, THEY ARE ADDITIONALLY SCREENED BY ARH FOR ELIGIBILITY INTO OUR INTERNAL SLIDING FEE SCHEDULE CHARITY PROGRAM FOR ADDITIONAL DISCOUNTS UP TO 100% OF GROSS CHARGES. IF THE PATIENT IS HELD RESPONSIBLE, ADDITIONAL EFFORTS TO ASSIST THE PATIENT ARE MADE BY OFFERING REASONABLE PAYMENT PLANS AND DEFERRED PAYMENTS. IN THE EVENT THE PATIENT/GUARANTOR DOES NOT MAKE A REASONABLE EFFORT TO COMPLETE NECESSARY DOCUMENTATION TO APPLY OR BECOME ELIGIBLE FOR A FINANCIAL ASSISTANCE PROGRAM THEY ARE THEN STILL GIVEN THE INITIAL 40% DISCOUNT AND MOVED THROUGH THE NORMAL COLLECTION PROCESS. PART VI, LINE 4: THE RURAL SERVICE AREA COVERED BY ARH TUG VALLEY HEALTH SERVIES, INC. (TVHS) IN EASTERN KENTUCKY INCLUDES MORE THAN 4 COUNTIES. THIS REGION IS FRAUGHT WITH SOME OF THE HIGHEST CHRONIC HEALTH PREVALENCE RATES IN THE COUNTRY FOR LUNG CANCER, DIABETES, AND HEART DISEASE. TO COMPOUND THESE PROBLEMS, MOST OF TVHS'S FACILITIES ARE LOCATED IN AREAS THAT ARE AT LEAST PARTIALLY CLASSIFIED AS MEDICALLY UNDERSERVED AREAS AND HEALTH PROFESSIONAL SHORTAGE AREAS BY THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES. IN ADDITION, THE AREAS SERVED BY TVHS ALSO FACE UNEMPLOYMENT RATES THAT ARE SUBSTANTIALLY HIGHER THAN STATE AND NATIONAL AVERAGES AND A HIGHER NUMBER OF CITIZENS IN THESE AREAS RANK BELOW THE NATIONAL POVERTY LEVEL. FOR MANY YEARS, TVHS HAS CARRIED A HEAVY LOAD IN CARING FOR THIS POPULATION. IN FISCAL YEAR 2020, TVHS PROVIDED CLOSE TO $17M IN UNCOMPENSATED CARE AND DURING THAT SAME FISCAL YEAR, APPROXIMATELY 80 PERCENT OF TVHS'S INPATIENTS WERE MEDICARE OR MEDICAID BENEFICIARIES. PART VI, LINE 5: ARH TUG VALLEY HEALTH SERVICES (TVHS) PROVIDES FLOYD, JOHNSON, MARTIN, MAGOFFIN AND SURROUNDING COUNTIES AN ABUNDANCE OF HEALTHCARE AND COMMUNITY ORIENTED SERVICES THROUGH ITS MEDICAL FACILITIES AS WELL AS COMMUNITY OUTREACH SERVICES. TODAY, TVHS CONTINUES ITS MISSION IN THE MOUNTAINS BY OFFERING RESIDENTS OF EASTERN KENTUCKY A LOCAL OPTION FOR QUALITY HEALTHCARE SERVICES. TVHS HOLDS STEADFAST TO THE MISSION TO IMPROVE HEALTH AND PROMOTE WELL-BEING OF ALL THE PEOPLE IN CENTRAL APPALACHIA IN PARTNERSHIP WITH OUR COMMUNITIES. TVHS CONSISTS OF A CRITICAL ACCESS HOSPITAL AND RELATED CLINIC, PHARMACY, HOME HEALTH AGENCY, AND HOME CARE STORE SERVICES. ALONG WITH THEIR SYSTEM AFFILIATE, APPALACHIAN REGIONAL HEALTHCARE (ARH), TVHS HAS EVOLVED INTO AN INTEGRATED HEALTHCARE DELIVERY SYSTEM SERVING MORE THAN 60,000 RESIDENTS ACROSS EASTERN KENTUCKY. WHILE PROVIDING THIS REGION WITH QUALITY HEALTHCARE, TVHS REINVESTS ANY EARNINGS BACK INTO OPERATIONS TO FURTHER THE SYSTEM'S EFFORTS IN IMPROVING AND ACCESSING HEALTHCARE SERVICES FOR THE REGION. CREATED TO ADDRESS THE UNMET HEALTH NEEDS OF AN UNDERSERVED REGION, TVHS LEADERSHIP AND STAFF MEMBERS REALIZE THAT SERVING THIS POPULATION IS ABOUT MORE THAN JUST ADDRESSING THE HEALTH NEEDS. IT IS ALSO ABOUT PREVENTING CHRONIC DISEASES. THROUGH PARTNERSHIPS WITH AREA SCHOOLS, BUSINESSES, ORGANIZATIONS AND HEALTH DEPARTMENTS, TVHS IS ONE OF THE PRIMARY SOURCES FOR HEALTH EDUCATION AND DISEASE PREVENTION IN EACH COMMUNITY AND PARTNERS WITH ALL OF THESE VARIOUS COMMUNITY ENTITIES TO FURTHER THESE EFFORTS. MBHS SPONSORS MANY COMMUNITY-WIDE WELLNESS EVENTS THROUGHOUT ITS SERVICE AREAS, INCLUDING HEALTH FAIRS AND VARIOUS SUPPORT GROUPS. EACH YEAR, TVHS PROVIDES FREE OR DISCOUNTED HEALTH SCREENINGS FOR COLORECTAL, BREAST, AND PROSTATE CANCERS AS WELL AS ROUTINE BLOOD PRESSURE, CHOLESTEROL, GLUCOSE, AND BODY MASS INDEX (BMI) SCREENINGS IN EFFORTS TO PREVENT THE ONSET OF ILLNESSES OR CATCH MEDICAL CONDITIONS BEFORE THEY BECOME LIFE THREATENING. TVHS ALSO ACTIVELY UTILIZES ALL FORMS OF MEDIA TO PROMOTE WELLNESS AND EDUCATE THE PUBLIC ON THE SIGNS AND SYMPTOMS OF MANY COMMON HEALTH CONDITIONS. THIS INCLUDES HEALTH EDUCATION NEWSLETTERS THAT ARE MAILED DIRECTLY TO RESIDENTS' HOMES. PART VI, LINE 6: DURING FISCAL YEAR 2020, TVHS'S SERVICES WERE MAINLY ORGANIZED AROUND ITS HOSPITAL SPECIFIC COMMUNITY ACROSS EASTERN KENTUCKY. THE HOSPITAL EXISTS ALONG WITH A COMPLIMENTARY ARRANGEMENT OF OTHER TVHS SERVICES, WHICH MAY INCLUDE CLINICS, HOME HEALTH AGENCIES, PHARMACIES, AND/OR HOME DURABLE MEDICAL EQUIPMENT STORES. AT THE SYSTEM-LEVEL, VARIOUS HEALTH PROMOTION ACTIVITIES ARE ORGANIZED AND PROMOTED ACROSS THE FACILITIES, INCLUDING THE INTRODUCTION OF NEW SERVICE LINES AND NEW TECHNOLOGY. IN EACH OF TVHS'S COMMUNITIES, VARIOUS COMMUNITY OUTREACH PROGRAMS ARE ALSO UNDERWAY AND AGGRESSIVELY ADDRESSING THE HEALTH CONCERNS OF THAT PARTICULAR AREA WHILE STRONG COMMUNITY COLLABORATION IS BEING DEVELOPED. FROM SENIOR CITIZEN WELLNESS PROGRAMS TO PATIENT ASSISTANCE VIA A CANCER NAVIGATOR,TVHS'S COMMUNITIES ARE REAPING THE BENEFITS OF SUCCESSFUL COMMUNITY OUTREACH. 0 FLOYD COUNTY HOMELESS SHELTER INC PO BOX 1746 PRESTONSBURG KY 41653 811936272 501(C)(3) 12500 SUPPORT ONGOING OPERATIONS FLOYD COUNTY BOARD OF EDUCATION 442 KY RT 550 EASTERN KY 41622 616001347 GOVERNMENT 5000 SUPPORT ONGOING OPERATIONS JOHNSON CENTRAL HIGH SCHOOL 257 NORTH MAYO TRAIL PAINTSVILLE KY 41240 454313357 GOVERNMENT 7000 SUPPORT ONGOING OPERATIONS 3 0 X X X X 0 1 0 0 0 1 0 0 0 JOSEPH GROSSMAN PRESIDENT/CEO 0 620318 0 169800 0 2215 0 42000 0 23652 0 857985 0 0 ROBERT N ROYALTY ORTHOPEDIC SURGEON 482496 0 0 0 0 0 5415 0 5913 0 493824 0 0 0 PETER EDGERTON UROLOGIST 447259 0 0 0 0 0 0 0 0 0 447259 0 0 0 PAUL V MILES COO/VP OPERATIONS 0 267397 0 55956 0 3260 0 41732 0 23652 0 391997 0 0 MARIA BRAMAN CMO/VP MEDICAL AFFAIRS 0 279416 0 58365 0 894 0 19000 0 23652 0 381327 0 0 BOBBY RICK KING SECRETARY 0 245448 0 51740 0 3853 0 42320 0 15677 0 359038 0 0 DANNY HARRIS TREASURER 0 259955 0 54141 0 2163 0 18116 0 15677 0 350052 0 0 GARY N FRANCIS INTERNAL MEDICINE SPECIALIST 308688 0 0 0 0 0 2258 0 5913 0 316859 0 0 0 HOLLIE P HARRIS VP CORPORATE STRATEGY 0 218102 0 45631 0 530 0 33151 0 15677 0 313091 0 0 ANDREW BURCHETT CARDIOLOGIST 229271 0 0 0 0 0 5846 0 7884 0 243001 0 0 0 TIM HATFIELD CCEO 176740 0 0 0 1523 0 29485 0 23652 0 231400 0 0 0 BRETT D AKERS UROLOGIST 228538 0 0 0 0 0 0 0 2613 0 231151 0 0 0 BESSIE ELLEN WRIGHT VP AND CHIEF NURSING OFFICER 0 148422 0 31835 0 1534 0 16840 0 15677 0 214308 0 0 PART I, LINE 4B THE RELATED ORGANIZATION, ARH, PROVIDES SENIOR EXECUTIVES A CONTRIBUTION OF SEVEN (7) PERCENT OF PAY (SUBJECT TO DOLLAR CAP) INTO THE TOP HAT 457(B) RETIREMENT PLAN, IF THE EXECUTIVE SIGNS A NON-COMPETE AGREEMENT. THE CONTRIBUTION AND EARNINGS ARE TAX DEFERRED UNTIL ASSETS ARE DISTRIBUTED OR WITHDRAWN. THE MAXIMUM CONTRIBUTION IS SUBJECT TO THE IRS COMPENSATION CAP, WHICH ALLOWS A CONTRIBUTION OF UP TO $19,000 IN 2019. THIS CONTRIBUTION TOTAL IS AN AGGREGATE TOTAL REGARDLESS OF WHETHER ARH OR THE EXECUTIVE MAKES THE CONTRIBUTION. CONTRIBUTION TO THE 457(B) DOES NOT AFFECT THE AMOUNTS THE EXECUTIVE MIGHT CONTRIBUTE TO THE 403(B) THRIFT PLAN. THE EXECUTIVE MAY CONTRIBUTE HIS/HER OWN MONEY TO THE PLAN PRE-TAX, TO THE EXTENT THE IRS CAPS ALLOW ROOM AFTER ARH'S CONTRIBUTION. CATCH UP CONTRIBUTIONS ARE ALLOWED WITHIN IRS LIMITS IN THE LAST THREE YEARS PRIOR TO RETIREMENT (AND, IF 7% OF PAY EXCEEDS THE REGULAR DOLLAR CAP, ARH MAY USE THE BALANCE OF THE 7% TO FUND UP THE CATCH UP LIMIT). BENEFITS ARE SUBJECT TO SOCIAL SECURITY AND MEDICARE TAXES AS THEY ACCRUE. THE FUNDS ARE INVESTED AS DIRECTED BY THE EXECUTIVE, BUT THE ACCOUNT REMAINS A GENERAL ASSET OF ARH. IF ARH BECOMES INSOLVENT, THE EXECUTIVE WILL BE AN UNSECURED CREDITOR AND WILL HAVE NO PREFERRED CLAIM TO ANY ASSETS. TO RECEIVE THE ARH CREDIT TO THE 457(B) PLAN, THE EXECUTIVE MUST SIGN A NON-COMPETE, CONFIDENTIALITY, ETC. AGREEMENT RESTRICTING WORK FOR A COMPETING ORGANIZATION FOR TWO (2) YEARS POST TERMINATION. IF THE FUNDING OF THE 457(B), INCLUDING ANY CATCH UP PROVISIONS, IS LESS THAN 7% OF BASE PAY, THEN ARH WILL CONTRIBUTE THE REMAINDER TO A 457(F) PLAN. INDIVIDUALS PARTICIPATING IN THE 457(F) PLAN AND THE RESPECTIVE EMPLOYER CONTRIBUTIONS FOR EACH INCLUDE: JOE GROSSMAN $23,000; MARIA BRAMAN $539 PART I, LINE 6 THE COMPENSATION AND CONTRACTS COMMITTEE OF THE RELATED ORGANIZATION (ARH) BOARD OF TRUSTEES ADOPTED A SHORT-TERM INCENTIVE COMPENSATION PROGRAM FOR EXECUTIVES IN SEPTEMBER 2002. THE PROGRAM ESTABLISHED INCENTIVES FOR ACHIEVING SYSTEM AND COMMUNITY OBJECTIVES FOR EXECUTIVE LEADERSHIP BY INTEGRATING THE PERFORMANCE MANAGEMENT AND EXECUTIVE COMPENSATION SYSTEMS. THE INCENTIVE THRESHOLDS HAVE BEEN MODIFIED ACROSS TIME TO REFLECT INCREASED PERFORMANCE EXPECTATIONS AS IDENTIFIED IN THE SYSTEM'S STRATEGIC, BUDGET AND OPERATIONS PLAN. THE INCENTIVE AWARDS PROVIDE ADDITIONAL CASH COMPENSATION AS A PERCENTAGE OF BASE SALARY IN RELATION TO LEVELS OF ACHIEVEMENT. THESE ACHIEVEMENT LEVELS RANGE FROM THRESHOLD (LOWEST), TO TARGET (10% ABOVE THE THRESHOLD), AND MAXIMUM (HIGHEST AND 20% ABOVE THE THRESHOLD) AND VARY BASED UPON EXECUTIVE LEVEL. THE EXECUTIVE INCENTIVE PLAN WILL BE ADMINISTERED IN ACCORDANCE WITH THE FOLLOWING GUIDELINES: A. OBJECTIVES AND TARGETS ARE SET THROUGH THE STRATEGIC PLANNING, BUDGETING AND PERFORMANCE MANAGEMENT PROCESSES. B. SYSTEM MARGIN AND CASH BUDGET THRESHOLDS MUST BE MET BEFORE INDIVIDUAL AWARDS WILL BE CONSIDERED. C. AWARDS WILL BE CONSIDERED AS HAVING BEEN EARNED UPON AFFIRMATION BASED ON AUDITED FINANCIAL RESULTS AND ACTUAL OPERATING PERFORMANCE. D. THE PRESIDENT AND CEO WILL RECOMMEND PAYMENT OF INDIVIDUAL AWARDS, IF ANY, TO THE COMPENSATION AND CONTRACTS COMMITTEE FOR CONSIDERATION. E. THE COMPENSATION AND CONTRACTS COMMITTEE MAY ACCEPT, REJECT, OR MODIFY THE PRESIDENT AND CEO'S RECOMMENDATION. FORM 990, PART VI, SECTION B, LINE 11B THE DIRECTOR OF ACCOUNTING AND CFO BOTH REVIEW THE 990 PRIOR TO THE BOARD REVIEW. THE BOARD THEN REVIEWS THE 990 PRIOR TO FILING WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C A SECURE WEBSITE IS PROVIDED TO OFFICERS AND TRUSTEES FOR ANNUAL DISCLOSURES, AND IS MONITORED REGULARLY BY THE VICE PRESIDENT OF LEGAL AFFAIRS AND THE CORPORATE COMPLIANCE OFFICERS. POTENTIAL CONFLICTS OF INTEREST ARE REPORTED DIRECTLY TO THE CHAIRMAN OF THE BOARD. TRUSTEES IDENTIFIED AS HAVING A CONFLICT OF INTEREST IN A PARTICULAR MATTER BEFORE THE BOARD MAY NOT PARTICIPATE IN THE BOARD'S DECISION-MAKING PROCESS. FAILURE TO DISCLOSE IS SUBJECT TO DISCIPLINE, INCLUDING CENSURE, AND IN SOME CASES, REMOVAL FROM THE BOARD. EMPLOYEE OFFICERS ARE SUBJECT TO DISCIPLINE IN ACCORDANCE WITH THE CORPORATION'S HUMAN RESOURCE POLICIES AND THE ARH CODE OF BUSINESS AND PROFESSIONAL CONDUCT. FORM 990, PART VI, SECTION B, LINE 15 APPALACHIAN REGIONAL HEALTHCARE, INC.'S (ARH) BOARD SETS COMPENSATION LEVELS FOR PRESIDENT/CEO AND OTHER ARH EXECUTIVES AND KEY EMPLOYEES THROUGH ITS COMPENSATION AND CONTRACTS COMMITTEE. THE BOARD CONTRACTS WITH A CONSULTING FIRM TO REVIEW THE MARKET FOR THE POSITIONS ON THE SYSTEM OPERATING COUNCIL WHO MAKES RECOMMENDATIONS ON THE SALARY RANGES AND ASSESSES THE COMPETITIVENESS OF THE SALARIES. WITH THAT INFORMATION, THE COMPENSATION AND CONTRACTS COMMITTEE SETS THE RANGES AND THE PRESIDENT'S COMPENSATION. THE BOARD REVIEWS AND RATIFIES COMPENSATION AMOUNTS. THE CONSULTING FIRM FOLLOWS UP WITH A LETTER ATTESTING TO THE REASONABLENESS OF COMPENSATION. FORM 990, PART VI, SECTION C, LINE 19 WHILE ARH HAS NOT YET ADOPTED A POLICY OF SHARING ITS FINANCIAL STATEMETNS WITH THE PUBLIC, IT DOES PROVIDE FINANCIAL INFORMATION THROUGH THE FORM 990 AND ALSO PROVIDES CERTAIN FINANCIAL INFORMATION IN OTHER PUBLIC DOCUMENTS, INCLUDING ITS PERIODIC REPORTS TO THE COMMUNITIES IT SERVES. FORM 990, PART IX, LINE 11G CONTRACT LABOR FEES: PROGRAM SERVICE EXPENSES 3,751,141. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 3,751,141. PROFESSIONAL FEES PHYSICIANS: PROGRAM SERVICE EXPENSES 6,785,452. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 6,785,452. OUTSIDE SERVICES: PROGRAM SERVICE EXPENSES 4,389,031. MANAGEMENT AND GENERAL EXPENSES 106,799. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 4,495,830. FORM 990, PART XI, LINE 9: CHANGE IN FAIR VALUE OF INTEREST RATE SWAP 50,321. HIGHLANDS ACQUISITION 10,517,673. FORM 990, PART XII, LINE 2C: THERE IS A COMMITTEE OF THE BOARD OF DIRECTORS THAT ASSUMES RESPONSIBILITY FOR THE AUDIT OF THE FINANCIAL STATEMENTS AND THE SELECTION OF THE INDEPENDENT ACCOUNTANT. THIS PROCESS HAS NOT CHANGED FROM THE PRIOR YEAR. 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