2018-07-16T17:42:16-05:00 2017-08-31 346565596 Ernst & Young US LLP 1900 Scripps Center 312 Walnut Street Cincinnati OH 45202 990 2016-09-01 610444707 Baptist Healthcare System Inc BAPT 5028965000 2701 Eastpoint Parkway Louisville KY 40223 Stephen R Oglesby VP, Treasurer, CFO 5028965000 2018-07-16 1 Tricia M Johnson P00627205 5136121400 2016 2022-09-23 18:48:47Z Stephen R Oglesby 2701 Eastpoint Pkwy Louisville KY 40223 2060078675 0 X www.baptisthealth.com X 1918 KY Provide quality healthcare services & enhance the health of the people & communities we serve. 15 12 17304 1025 4070191 333242 1919191 2832365 1681616461 1970810662 25012615 53052638 18872257 33383010 1727420524 2060078675 2599445 2130955 0 0 797188743 919820653 0 0 0 713835164 909642871 1513623352 1831594479 213797172 228484196 2444199286 2796627084 934018886 1256742387 1510180400 1539884697 X See Schedule O.The mission of Baptist Healthcare System, Inc., (BHS), is to exemplify our Christian heritage of providing quality healthcare services by enhancing the health of the people and the communities we serve. The vision of BHS is to be nationally recognized as the healthcare leader in Kentucky and Indiana. BHS will live out its Christ-centered mission and achieve its vision guided by integrity, respect, stewardship, excellence and collaboration. 0 0 1603583013 2130955 1990504418 See Schedule O 1603583013 1 1 0 1 0 0 0 0 0 1 1 0 0 1 1 0 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 1 0 0 0 0 0 0 0 0 1 1 0 0 0 0 1 1 1 1 0 0 1 994 0 1 17304 1 1 1 0 0 0 0 0 0 0 X 15 12 1 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 1 KY IN X Stephen R Oglesby 5028965000 2701 Eastpoint Parkway Louisville KY 40223 X Aaron Thompson PHD Director 1.00 0.00 X 3000 0 0 Thomas O Davis Director 1.00 0.00 X 3000 0 0 Diane Dalton Evans Director 1.00 0.00 X 3000 0 0 Brenda Hammons Director (Through 12/31/16) 1.00 0.00 X 3000 0 0 R Christion Hutson Director 1.00 0.00 X 3000 0 0 Dr Terry T Lester Director 1.00 0.00 X 3000 0 0 Frank R Purdy III Director (Through 12/31/16) 1.00 0.00 X 3000 0 0 Steven Reed Director (Through 12/31/16) 1.00 0.00 X 3000 0 0 Glenn Leveridge Director 1.00 0.00 X 3000 0 0 Marcia Milby Ridings Director 1.00 0.00 X 3000 0 0 Randy Owen MD Director 1.00 0.00 X 3000 0 0 Allen Rudd Director 1.00 0.00 X 3000 0 0 Victoria Buster Director 1.00 0.00 X 3000 0 0 Brent Cooper Director 1.00 0.00 X 3000 0 0 Ramsey Nassar MD Director 1.00 0.00 X 3000 0 0 Judge Eugene Siler Jr Director 1.00 0.00 X 0 0 0 Kerry M Stemler Director (Effective 1/1/17) 1.00 0.00 X 0 0 0 Robert L Hook Jr Director (Effective 1/1/17) 1.00 0.00 X 3000 0 0 William A Brown Vice President 40.00 0.00 X 650013 0 50301 David Gray Vice President 40.00 0.00 X 691820 0 162346 Stephen C Hanson President & CEO (Through 3/21/17) 40.00 0.00 X 1080344 0 269953 Carl Herde Treasurer, CFO, VP (Through 8/31/16) 40.00 0.00 X 687401 0 46265 Janet Norton Secretary & VP & Interim Co-CEO 40.00 0.00 X 806859 0 48374 Stephen R Oglesby CFO,Treas,VP(9/1/16), Interim Co-CEO 40.00 0.00 X 399453 0 61365 William G Sisson Vice President 40.00 0.00 X 1325603 0 53719 Isaac Myers MD Chief Health Integration Officer 40.00 0.00 X 623212 0 145034 Timothy Jahn MD Chief Clinical Officer 40.00 0.00 X 600975 0 129988 Kenneth Anderson MD VP & Chief Medical Officer 40.00 0.00 X 663328 0 43977 Dennis Johnson Hospital President 40.00 0.00 X 445346 0 45086 Stephen Toadvine VP of Physician Integration 40.00 0.00 X 461472 0 47684 8483826 0 1104092 573 0 1 0 EPIC Systems Corporation PO Box 88314 Milwaukee WI 53288 Software Support 2947671 Siemens Medical Solutions USA Inc 51 Valley Stream Parkway Malvern PA 19355 Service Contract 2256319 Logans PO Box 643958 Cincinnati OH 45264 Service Contract 1958949 RelayHealth Inc PO Box 98347 Chicago IL 60693 Software Maintenance 1786195 Workday Inc PO Box 396106 San Francisco CA 94139 Software 1700000 122 1963814 868551 2832365 Insurance & Patient Pa 621300 1101614694 1098534711 3079983 Medicare & Medicaid Pa 621300 777617502 777617502 Management Fees-Exempt 561000 62654541 62654541 Exempt & MOB Rent 900099 13658793 13658793 Other Program Service 900099 12505559 12505559 2759573 2759573 1970810662 14463312 14463312 38589326 0 38589326 38589326 38589326 Cafe & Coffee Shops 722514 8846089 8846089 Purchasing Partnership 900099 3746833 3633706 113127 Day Care Centers 624410 3102446 1003331 2099115 17687642 15069842 -126250 2744050 33383010 2060078675 1986434227 4070191 66741892 2130955 2130955 6166865 6166865 656376 656376 738783961 619658818 119125143 22002051 18781722 3220329 98594380 82770683 15823697 53617020 46510812 7106208 3308085 3083085 225000 2957871 298568 2659303 881100 881100 111493 111493 46311431 38239802 8071629 9029503 28366 9001137 77897859 63851982 14045877 57517569 49809565 7708004 31070952 27480996 3589956 4671129 2057120 2614009 164744 93142 71602 25827348 25827348 104177286 101764028 2413258 15537933 7543449 7994484 Medical Supplies 422992223 422158631 833592 Purchased Svcs-Non-Med 56920703 45774516 11146187 Provider Tax 35680935 35680935 Miscellaneous 10247070 8697411 1549659 4337637 684703 3652934 1831594479 1603583013 228011466 0 36898 260569 60099800 312457447 268825597 301627553 32035008 36963480 29098837 34899305 2343900588 1205748889 1023424292 1138151699 797774262 752466592 8932293 14317256 13871793 17360947 210100506 188122236 2444199286 2796627084 241506550 244401988 587125362 995160198 50000000 0 55386974 17180201 934018886 1256742387 X 1508084038 1538292707 2096362 1591990 1510180400 1539884697 2444199286 2796627084 X 228484196 9682707 -208462606 X 0 1 X 1 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 1 51000 0 1 60493 111493 0 Part II-B, Line 1: Fees and related expenses paid for lobbyist. Part II-B, Line 1i Lobbying portion of Kentucky Hospital Association and American Hospital Association dues. 799870635 61040747 59495543 164068546 2279797 754058582 808699955 33990776 56256745 96524337 2552504 799870635 857141112 22188064 -704296 67115064 2809861 808699955 762097721 8449636 99265139 9949063 2722321 857141112 706444672 9233782 72369664 23559813 2390584 762097721 0.99800 0.00000 0.00200 0 0 143305788 143305788 889117948 399649881 489468067 1282950199 806099008 476851191 28526653 28526653 1138151699 Other Current Assets 13251370 Due From Affiliate 52919260 Trustee Funds-Malpractice 67052764 Trustee Funds-Workers Comp 20560000 Trustee Funds-Under Bond Indenture 16482283 Other Investments 5762308 Other Assets 12094251 188122236 Malpractice Liability 106921899 Workers Comp Liability 18860000 Post-Retirement/Miscellaneous 22999172 Third Party Payable 7895702 Intercompany -139496572 17180201 Part V, Line 4: The endowment funds are used to support and enhance patient care at the hospitals, finance capital improvements and provide educational and financial assistance to hospital employees. 1 1 X 1 X 1 X 1 1 0 1 1 17579 38397158 8289529 30107629 0.01640 250820 246699733 217229803 29469930 0.01610 268399 285096891 225519332 59577559 0.03250 267068 4671799 30685 4641114 0.00250 75000 75000 0.00000 33733 101777766 92803782 8973984 0.00490 1518935 1518935 0.00080 300801 108043500 92834467 15209033 0.00820 569200 393140391 318353799 74786592 0.04070 1 16663375 4635334 508413102 594487504 -86074402 X 1 1 6 1 Baptist Health Louisville 4000 Kresge Way Louisville KY 40207 www.BaptistHealth.com 100451 X X X A 2 Baptist Health Lexington 1740 Nicholasville Road Lexington KY 40503 www.BaptistHealth.com 100101 X X X A 3 Baptist Health Paducah 2501 Kentucky Avenue Paducah KY 42003 www.BaptistHealth.com 100313 X X X A 4 Baptist Health Corbin 1 Trillium Way Corbin KY 40701 www.BaptistHealth.com 100417 X X X A 5 Baptist Health LaGrange 1025 New Moody Lane LaGrange KY 40031 www.BaptistHealth.com 100575 X X X A 6 Baptist Health Floyd 1850 State Street New Albany IN 47150 www.BaptistHealth.com 17-005040-1 X X X A Facility Reporting Group - A 0 0 1 X X X X X X X X X 14 1 0 0 1 X www.baptisthealth.com X 1 14 1 www.baptisthealth.com 0 1 X 200.000000000000 400.000000000000 X X X X X 1 1 X X X X 1 X www.baptisthealth.com X www.baptisthealth.com X www.baptisthealth.com X X X X X X 1 X 0 X X X X X 1 X 0 0 Part V, Section B Facility Reporting Group A Facility Reporting Group A consists of: - Facility 1: Baptist Health Louisville, - Facility 2: Baptist Health Lexington, - Facility 3: Baptist Health Paducah, - Facility 4: Baptist Health Corbin, - Facility 5: Baptist Health LaGrange, - Facility 6: Baptist Health Floyd Group A-Facility 1 -- Baptist Health Louisville Part V, Section B, line 5: Contact was made with the health departments responsible for the counties in the service area. There are four health departments responsible for the counties BHLOU serves: Louisville Metro Public Health & Wellness (Jefferson County); the Bullitt County Health Department; the Oldham County Public Health Department; and the North Central District Health Department, which serves both Shelby and Spencer counties. Through these contacts, the public meetings that were held, and public surveys conducted in Jefferson and Oldham counties, BHLOU solicited primary feedback on the health issues confronting its service area. Group A-Facility 1 -- Baptist Health Louisville Part V, Section B, line 11: Based on the data analyzed through this assessment, three main issues were identified that the hospital will focus on over the next three years. They are: health literacy, cancer & cardiovascular disease. The other five areas of focus are the aging population, mental health, substance abuse, obesity & diabetes. The consensus of the team conducting the assessment is that many of these issues are related & efforts to combat one will result in improvements in one or more of the others. Health literacy was defined as an increased awareness of the public to their overall healthcare environment, including knowledge of how & when to access care, understanding their personal health status, & the necessity of compliance with medicine & lifestyle regimens assigned by their physicians. Only through the combined efforts of medical professionals, schools, churches & government agencies will we be successful in educating & engaging individuals in caring for themselves. Kentucky has some of the highest rates in the nation for preventable health conditions & for behaviors that have been identified as unhealthy. The committee felt that continued focus on health literacy & personal responsibility would improve the general health of the population more than any other activity. As cancer continues to be a leading cause of death in this service area, the committee ranked it as their second priority in terms of public health issues. Although Jefferson County mortality levels are better than the state average they are still higher than the national average. The committee acknowledged the continued need for board certified oncologists & easy access to cancer related services such as chemotherapy & radiation therapy. Cardiovascular disease ranked as the committee's third priority & encompasses coronary artery disease, heart attack, arrhythmias, heart failure, cardiomyopathy & vascular disease. The discussion focused on education, prevention & treatment. The goal is to expand public awareness of disease root causes & common associated conditions to increase compliance with standard of care protocols. It is not within the scope of BHLOU's services, expertise or resources to be able to address all of the risk factors that have been identified as influencers of our community's health status. But it is through networking & partnerships with other community stakeholder organizations & agencies that these issues are being addressed. BHLOU works collaboratively with other community resources to provide support & serve as a referral source to address the additional identified health needs that fall below the significant prevalence level for our service area. Impact issues such as unemployment & uninsured populations are being dealt with by economic development groups, the Kentucky Chamber of Commerce, city & county governments, & county health departments. Group A-Facility 1 -- Baptist Health Louisville Part V, Section B, line 20e: Billing and Collections:Prior to referring individuals to a collection agency, BHS processes all self-pay accounts through an external scoring application to determine additional eligibility for financial assistance. Group A-Facility 2 -- Baptist Health Lexington Part V, Section B, line 5: To assess the needs of the greater community of the Lexington-Fayette County area in which Baptist Health Lexington resides, the hospital partnered with the Lexington-Fayette County Health Department as a participant in the MAPP process (Mobilizing for Action through Planning and Partnerships). The MAPP framework is a process designed to assess the community health status and needs, prioritize health issues and identify resources to address them. This is a community-driven process which engages the community and develops partnerships. Group A-Facility 2 -- Baptist Health Lexington Part V, Section B, line 11: After compiling & analyzing all of the data in this assessment, BHLEX will pursue benchmarking, identifying targets & ideas & implementing strategies. Some of the strategies will address multiple needs. These lists are not intended to be exhaustive & do not imply there is only one way to address the identified health needs. Obesity, cardiovascular disease & cancer, including breast, colorectal & lung were the health needs of the community with the highest priority. Obesity issues will be addressed through education, prevention & community-based initiatives to decrease the no exercise rate in Fayette County as measured by the BRFSS, (Behavioral Risk Factor Surveillance System), which collects data through the CDC, by 2018. Efforts will continue to expand the program directory for physical activity venues & identify mechanisms of assistance for participation in programs. The identification of, & increase in the number of organizations in Fayette County that offer worksite wellness programs should produce measurable results & a healthier lifestyle. BHLEX works collaboratively with other community resources to provide support & to serve as a referral source to address the additional identified health needs that fall below the significant prevalence level for our service area. It is not within the scope of BHLEX's services, expertise or resources to be able to address all of the risk factors that have been identified as influencers of our community's health status. But it is through networking & partnerships with other community stakeholder organizations & agencies that these issues are being addressed. Impact issues such as unemployment & uninsured populations are being dealt with by economic development groups, the Kentucky Chamber of Commerce, city & county governments, & county health departments. Group A-Facility 2 -- Baptist Health Lexington Part V, Section B, line 20e: Billing and Collections:Prior to referring individuals to a collection agency, BHS processes all self-pay accounts through an external scoring application to determine additional eligibility for financial assistance. Group A-Facility 3 -- Baptist Health Paducah Part V, Section B, line 5: The Purchase District Coalition for Health is a group comprised of representatives from the Purchase District Health Department, which serves Ballard, Carlisle, Fulton, Hickman, and McCracken counties in the Purchase Area Development District; the City of Paducah; the University of Kentucky County Extension offices; United Way of Paducah-McCracken County; Lourdes Hospital and Baptist Health Paducah. Bringing these groups together helps avoid duplication of efforts in data collection and resource allocation. Through these contacts and public surveys, BHPAD collected primary data and feedback on the health issues confronting its service area. Secondary data from demographic and socioeconomic sources, Kentucky vital statistics, disease prevalence and health indicators and statistics were collected from national, state and local sources. Group A-Facility 3 -- Baptist Health Paducah Part V, Section B, line 11: The committee identified & prioritized community needs for the service area that BHPAD can address & affect by implementing programs, educational programs & preventive screenings. Obesity prevention & illnesses related to obesity are a primary concern. Plans are being implemented to increase the awareness of obesity as a health threat to our service area residents & to encourage healthier living through diet, exercise & other means. The hospital is providing additional support to meet this need through its new bariatric surgery & metabolic disease management program; Project Fit America fitness programs in area elementary schools & internal programs to improve employees' health. The ability of individuals in a community to access health care resources to preserve or improve health is essential. Efforts are underway through education & the availability of additional resources to remove the potential barriers to receiving necessary health care services. It is not within the scope of BHPAD's services, expertise or resources to be able to address all of the risk factors that have been identified as influencers of our community's health status. But it is through networking & partnerships with other community stakeholder organizations & agencies that these issues are being addressed. Impact issues such as unemployment & uninsured populations are being dealt with by economic development groups, the Kentucky Chamber of Commerce, city & county governments, & county health departments. The use of illicit drugs or the abuse of prescription or over-the-counter medications for purposes other than those for which they are indicated or in a manner or in quantities other than directed is a growing problem in McCracken County. This particular issue presents a need that cannot be met by BHPAD, but is better met by services already in the community including those at Four Rivers Behavioral Health. Group A-Facility 3 -- Baptist Health Paducah Part V, Section B, line 20e: Billing and Collections:Prior to referring individuals to a collection agency, BHS processes all self-pay accounts through an external scoring application to determine additional eligibility for financial assistance. Group A-Facility 4 -- Baptist Health Corbin Part V, Section B, line 5: Primary data was obtained by Baptist Health Corbin through electronic surveys targeting the community considered in the assessment. The survey data was obtained over a two month time period. Surveys were also conducted through the Whitley County Health Department and Laurel County Health Department/St. Joseph Hospital of London. The broad surveys were intended to gather information regarding the overall health of the community. Group A-Facility 4 -- Baptist Health Corbin Part V, Section B, line 11: Baptist Health Corbin will work to increase the awareness of the importance of early detection & prevention of cardiovascular diseases including stroke, hypertension & CHF through screening & educational programs for residents of Whitley, Knox & Laurel counties. The development of community partnerships to educate local residents on healthy lifestyles & ways to manage cardiovascular diseases, diabetes & cancer are primary objectives. Increased availability to preventive screenings will provide benefits for these & additional health issues. It is not within the scope of BHCOR's services, expertise or resources to be able to address all of the risk factors that have been identified as influencers of our community's health status. But it is through networking & partnerships with other community stakeholder organizations & agencies that these issues are being addressed. Impact issues such as unemployment & uninsured populations are being dealt with by economic development groups, the Kentucky Chamber of Commerce, city & county governments, & county health departments. Group A-Facility 4 -- Baptist Health Corbin Part V, Section B, line 20e: Billing and Collections:Prior to referring individuals to a collection agency, BHS processes all self-pay accounts through an external scoring application to determine additional eligibility for financial assistance. Group A-Facility 5 -- Baptist Health LaGrange Part V, Section B, line 5: There are three health departments responsible for the counties BHLAG serves: the Oldham County Public Health Department; the North Central District Health Department, which serves both Henry and Trimble counties and the Three Rivers District Health Department, which serves Carroll County. Public feedback via Surveymonkey, used to assess what the public views as their top three (3) health related issues for 2016 and forward, were reviewed. Public surveys by the other health departments were also used to collect relevant data. Group A-Facility 5 -- Baptist Health LaGrange Part V, Section B, line 11: Based on the data analyzed through this assessment, three main issues were identified that the hospital will focus on over the next three years. They are: health literacy, cancer & cardiovascular disease. The other five areas of focus are the aging population, mental health, substance abuse, obesity & diabetes. The consensus of the team conducting the assessment is that many of these issues are related & efforts to combat one will result in improvements in one or more of the others. Health literacy was defined as an increased awareness of the public to their overall healthcare environment, including knowledge of how & when to access care, understanding their personal health status, & the necessity of compliance to medicine & lifestyle regimens assigned by their physicians. Only through the combined efforts of medical professionals, schools, churches & government agencies will we be successful in educating & engaging individuals in caring for themselves. Kentucky has some of the highest rates in the nation for preventable health conditions & for behaviors that have been identified as unhealthy. A continued focus on health literacy & personal responsibility will improve the general health of the population more than any other activity. As cancer continues to be a leading cause of death in this service area, the committee ranked it as their second priority, acknowledging the continued need for board certified oncologists & easy access to cancer related services & therapy. Cardiovascular disease ranked as the committee's third priority & encompasses coronary artery disease, heart attack, arrhythmias, heart failure, cardiomyopathy & vascular disease. The discussion focused on education, prevention & treatment. The goal is to expand public awareness of the root causes & commonly associated conditions of the diseases to increase compliance with standard of care protocols. It is not within the scope of BHLAG's services, expertise or resources to be able to address all of the risk factors that have been identified as influencers of our community's health status. But it is through networking & partnerships with other community stakeholder organizations & agencies that these issues are being addressed. BHLAG works collaboratively with other community resources to provide support & serve as a referral source to address the additional identified health needs that fall below the significant prevalence level for our service area. Impact issues such as unemployment & uninsured populations are being dealt with by economic development groups, the Kentucky Chamber of Commerce, city & county governments, & county health departments. Group A-Facility 5 -- Baptist Health LaGrange Part V, Section B, line 20e: Billing and Collections:Prior to referring individuals to a collection agency, BHS processes all self-pay accounts through an external scoring application to determine additional eligibility for financial assistance. Group A-Facility 6 -- Baptist Health Floyd Part V, Section B, line 5: The methods used to collect data included written surveys, online surveys and focus groups. Secondary information was gathered via our Healthier Community Initiative platform located on our website. The purpose was to involve the community in gaining local perspectives on the health needs in Floyd and surrounding counties. Group A-Facility 6 -- Baptist Health Floyd Part V, Section B, line 11: With the knowledge gained during the health assessment, BHF has identified current health problems of the community and has developed plans that Baptist Health Floyd and other community partners can use to improve the overall health of the residents we serve.The primary concerns identified were related to dietary habits, heart disease and diabetes, transportation, drug use, HIV and obesity. Additional needs identified were related to lack of physical activity, smoking, cancer, homelessness and child abuse and neglect. Strategies to address these needs include a Nutrition Coalition to encourage the consumption of fruits and vegetables and the promotion of healthy eating habits; a Physical Activity Coalition to encourage increased levels of physical activity, and a Tobacco Cessation Coalition to aid in the awareness of the dangers of smoking and to promote cessation classes and lung cancer screenings. Additional screenings focusing on heart disease, diabetes, stroke and hypertension are in place, including monthly screenings at the YMCA and a blood pressure kiosk at the hospital.It is not within the scope of BHF's services, expertise or resources to be able to address all of the risk factors that have been identified as influencers of our community's health status. But it is through networking and partnerships with other community stakeholder organizations and agencies that these issues are being addressed. BHF works collaboratively with other community resources to provide support and serve as a referral source to address the additional identified health needs that fall below the significant prevalence level for our service area. Impact issues such as unemployment, homelessness, child abuse and uninsured populations are being dealt with by economic development groups, city and county governments, local authorities and county health departments. Group A-Facility 6 -- Baptist Health Floyd Part V, Section B, line 20e: Billing and Collections:Prior to referring individuals to a collection agency, BHS processes all self-pay accounts through an external scoring application to determine additional eligibility for financial assistance. Part I, Line 7: COSTING METHODOLOGY:BHS utilizes a sophisticated cost accounting system that identifies the cost of delivering care at the individual procedure and item (supply) level for direct costs and a detailed step-down methodology to allocate overhead costs as accurately as possible. Costs are determined for each patient based upon the specific procedures performed and items used for each patient. Patients are also categorized by: 1. Patient type (inpatient and outpatient), 2. Payer plan (42 unique categories of payer plans. Charity, state-sponsored charity and the uninsured are among the uniquely identified payer plans), and 3. Clinical service (53 unique clinical services). The cost of care for uninsured patients who qualify for "full" charity care (under a State-sponsored or BHS sponsored charity program) is determined by calculating the cost of each uninsured charity patient (at the procedure and item level) and accumulating the cost of each patient. For insured patients who also qualify for partial charity under the BHS sponsored charity program, costs are allocated to each portion (insurance, partial charity, patient payments and bad debt) using the patient's payer plan cost-to-charge ratio (CCR). For example, this CCR is multiplied by the charges covered by insurance to determine the cost of insurance, multiplied by charges covered by partial charity to determine the cost of partial charity, multiplied by patient payments to determine the cost of paid services and multiplied by unpaid charges to determine the cost of bad debt.The cost of care for uninsured patients who do NOT qualify for charity care (full or partial bad debt accounts) are allocated to each portion (patient paid portion and unpaid portion) using the patient's uninsured payer plan CCR. For example, this CCR is multiplied by patient payments to determine the cost of paid services and multiplied by unpaid charges to determine the cost of bad debt. Much care is taken to ensure that costs used for community benefit reporting are directly related to exempt-purpose patient care (excluding physician-related costs) and that costs are reported accurately. For example, the cost of charity and Medicaid are removed from the calculation of the loss on subsidized services. Part I, Line 7g: No physician clinic costs are included in the costs of subsidized health services. Form 990, Part I, Line 6A Each hospital within Baptist Healthcare System, Inc. (BHS), (61-0444707), prepares a Community Benefit Report. In addition, a summary Community Benefit Report is prepared on a consolidated basis for all entities. Part II, Community Building Activities: COMMUNITY CARE: To help Baptist Health accomplish its mission to transform the health of our communities, the entire organization is embracing a new way of thinking. Our providers remain focused on helping people get well and stay well, and the system is investing in new ways to provide quality, personalized care that is both efficient and proactive, preventing individuals from becoming sick in the first place. WELLNESS: Baptist Health's Wellness team is constantly seeking creative new opportunities to change the health of our communities for the better, one individual at a time. The team strives to create a culture of health and accountability, effectively engaging participants to help them reach their health and wellness goals. Baptist's innovative, award-winning wellness programs include smoking-cessation classes, weight-management programs, diabetes prevention, nutritional health, stress management and fitness/physical activity. Partnerships with other like-minded organizations within the community further enhance, support and promote these successful initiatives and programs.COLLABORATIONS: Improving the health of those in the communities we serve at the grassroots level takes partnerships. Baptist Health is a founding member of Shaping Our Appalachian Region (SOAR), which aims to improve the quality of life in Eastern Kentucky. In Paducah and Corbin, a Congregational Health Network links those just released from the hospital to trained fellow church members willing to help with their care needs. Physically fit youngsters is the goal of the Project Fit America partnership, bringing funding, equipment, teacher training and a curriculum to 33 elementary and middle schools in 21 communities. Baptist Health is among 10 health systems that founded the Kentucky Health Collaborative to share best practices for improving the health of the Commonwealth's citizens.ADVOCACY: Baptist Health is working with community and state leaders, local schools, health departments and other partners to improve the health of our communities. Our efforts focus on the passage of smoke-free legislation to help children breathe clean air; tort reform, which can lower the cost of healthcare; telehealth to make healthcare more accessible; and opportunities to combat substance abuse and addiction. RESEARCH:In addition to Baptist Health's Cancer Research Network now offering clinical trials statewide, some 300 research studies are ongoing at Baptist Health hospitals, focusing on oncology, cardiology, orthopedics, neuroscience, pulmonary conditions, gynecology, nursing and allied health, among others, involving more than 2,200 patients to date. Additionally, Baptist Health is partnering with the Guardian Research Network to provide even more patients with an opportunity to participate in clinical trials more quickly. Part III, Line 3: Rationale for including other bad debt amount in community benefit:No other bad debt amounts have been included as community benefit. The hospital educates patients with limited ability to pay regarding financial assistance and for this reason, the organization believes it accurately captures all charity care deductions provided according to the financial assistance policy, and the amount of bad debt expense attributable to patients eligible under the organization's charity care policy is negligible. Part III, Line 4: BAD DEBT EXPENSE FOOTNOTE:A separate footnote for bad debt expense is not included in the audited financial statements. However, beginning in 2012 BHS reported the provision for uncollectible accounts related to patient service revenue as a deduction from patient service revenue. The costing methodology of bad debt is outlined in Schedule H, Part VI, Line 1. The estimated amount of bad debt expense attributable to patients eligible under the organization's FAP was determined using a historical percent to total of net amounts written off as bad debt for those patients with a low propensity to pay or low income to total net amounts written off as bad debt. Part III, Line 8: MEDICARE COSTING METHODOLOGYMedicare revenues and allowable costs were taken from the "as filed" Medicare cost report. Much care is taken to ensure that all adjustments to remove non-allowable costs are taken. Due to the fact that Medicare rates are non-negotiable and are established by the government, all of the shortfall for Medicare should be included as a community benefit. Part III, Line 9b: COLLECTION PRACTICES:Patients and guarantors who qualify for a "full" charity discount will not be billed once the charity determination is made. Patients and guarantors who qualify for a "partial" charity discount will be billed only for the non-discounted portion of their account. Guarantors who have an ability to pay for services will be billed based on the following guidelines: - Patients or guarantors may be asked to pay an estimated patient liability at point of service. - BHS facilities will accept and file claims for all insurances assigned to the organization with adequate proof of coverage. This assignment does not relieve the guarantor of responsibility for payment if the insurer fails to pay as prescribed by regulation, statute or patient-insurance contract. Deductibles, co-payments and non-covered services will be the responsibility of guarantors. - Statements will be sent to guarantors once patient liability is determined for insured or uninsured patients and necessary billing follow-up calls will be made by BHS Patient Financial Services and/or a designated external early out vendor over a period of time averaging from 90 to 120 days. All statements will contain information regarding the availability of financial assistance. If applicable, effort will be made to assist uninsured patients to secure coverage through any governmental or other assistance programs. - Patients requesting detailed charge information will be provided an itemized bill. - BHS Patient Financial Services will provide all patients the same information concerning services and charges. - Patient accounts not resolved at the end of this cycle will be considered for placement with external collection agencies. Collection agencies will continue to pursue patient balances while maintaining compliance with the Fair Debt Collection Practices Act and the ACA International's Code of Ethics and Professional Responsibility. Part VI, Line 2: NEEDS ASSESSMENT:BHS conducts a tri-annual planning process that is driven by the strategic vision to be the health care leader in Kentucky. Key industry and community issues (such as prominent health conditions present within each community, underserved areas and underprovided clinical services) are considered and analyzed for their impact on BHS and the five hospitals. Frequently, outside experts reaffirm the assessment and assist in the development of plans to address the community need. A course of action, including key strategies and goals, is shared with and approved by the BHS Board and the Hospital's administrative boards. Part VI, Line 3: PATIENT EDUCATION OF ELIGIBILITY FOR ASSISTANCE:The following is a list of various methods/processes used to inform/educate patients on the availability of financial assistance: - Financial counselors advise and/or screen uninsured patients before or during hospital services, - A third party vendor advises and/or screens uninsured patients during hospital services, - Financial counselors provide follow-up contact for patients missed during services, - The State-sponsored DSH form is provided to all ED uninsured patients, - Telephone calls and in-person visits are handled by staff trained to discuss financial assistance, - Information regarding financial assistance is included in patient statements. - The BHS sponsored charity care program policy is posted in key areas of each hospital. - The BHS sponsored charity care program policy is posted on the website of each hospital and the System. Part VI, Line 4: COMMUNITY INFORMATION:BHS is comprised of six regional hospitals. Each one serves a unique and separate geographic area within Kentucky and Indiana: Baptist Health Louisville (BHLOU) opened in 1975 and is located in St. Matthews, approximately five miles east of downtown Louisville. BHLOU is strategically located near Interstate 64, a main access to downtown, and Interstate 264, a main beltway around Louisville. The primary geographic service area for BHLOU consists of Jefferson, Oldham, Shelby, Spencer and Bullitt counties in Kentucky. BHLOU serves as a general acute care facility, specializing in services such as cardiovascular services, cancer care and comprehensive rehabilitation services that are much needed in the area. In addition, BHLOU operates one of the busiest emergency departments in the state of Kentucky. Approximately 15.2% of the population of the local area surrounding the hospital is over 65 and the unemployment rate is 4.4%, as compared to the national average of 4.9%. Baptist Health Corbin (BHCOR) opened in 1986 in Corbin, Kentucky. It is located one-half mile off of Interstate 75, approximately three miles from downtown Corbin and near U.S. Highway 25, which is a main access to several of the surrounding communities. The primary geographic service area for BHCOR consists of the counties of Knox, Laurel and Whitley in Kentucky. BHCOR serves as a general acute care facility, specializing in services such as psychiatric, substance abuse, comprehensive rehabilitation and emergency care services. The psychiatric program at BHCOR has grown over the past several years and BHCOR has plans to continue its growth. Approximately 17.6% of the population of the local area surrounding the hospital is over 65 and the unemployment rate is 7.6%, as compared to the national average of 4.9%. Baptist Health Lexington (BHLEX) opened in 1954 in Lexington, the second largest city in Kentucky. It is located approximately five miles from Interstate 75 and Interstate 64 which provide access for the immediate Lexington metro area patients as well as patients from other areas of central and eastern Kentucky which the hospital serves. The primary geographic service area for BHLEX consists of the Kentucky counties of Bourbon, Clark, Fayette, Franklin, Jessamine, Madison, Scott and Woodford. In addition, BHLEX serves as a regional referral center with approximately 42% of its discharges coming from Kentucky counties outside of the primary service area. As such, BHLEX provides tertiary care services not offered by many hospitals in the surrounding areas including specialty cardiovascular, orthopedic and intensive care services. Approximately 12.3% of the population of the local area surrounding the hospital is over 65 and the unemployment rate is 4.9%, as compared to the national average of 4.9%. Baptist Health Paducah (BHPAD) was opened in 1953 in Paducah, Kentucky, the largest city in BHPAD's service area. The hospital is located approximately one and one-half miles from Interstate 64. BHPAD is one of only two hospitals located in Paducah. The primary geographic service area for BHPAD consists of Ballard, Carlisle, Graves, Livingston, Lyon, Marshall and McCracken counties in Kentucky and Massac County in Illinois. BHPAD draws nearly 80% of its discharges from the primary service area. BHPAD serves as a general acute care facility, specializing in services such as cardiovascular services, cancer care and skilled nursing that are much needed in the area. Approximately 19% of the population of the local area surrounding the hospital is over 65 and the unemployment rate is 6.1%, as compared to the national average of 4.9%. Baptist Health LaGrange, (BHLAG) became part of the BHS system in 1992. Baptist Health LaGrange can serve all of the primary healthcare needs of its service area. BHLAG defines its service area by looking at where the majority of its inpatients reside. Approximately 85% of BHLAG's inpatients come from Oldham, Henry, Trimble, and Carroll counties. Oldham County is a shared service area between Baptist Health Louisville and BHLAG. Approximately 12.5% of the population of the local area surrounding the hospital is over 65 and the unemployment rate is 3.5%, as compared to the national average of 4.9%.Baptist Health Floyd, (BHF) became a member of the Baptist Health system after its acquisition in October of 2016. Since its inception in 1953, Baptist Health Floyd has grown to be an outstanding regional healthcare provider serving the needs of a seven county region, including Floyd, Clark, Crawford, Harrison, Orange, Scott and Washington counties in southern Indiana. One-third of the patients served come directly from Floyd County. BHF serves as a general acute care facility, specializing in services such as cardiovascular services, cancer care and comprehensive rehabilitation services. Approximately 14.7% of the population of the local area surrounding the hospital is over 65 and the unemployment rate is 3.6%, as compared to the national average of 4.9%. Part VI, Line 5: PROMOTION OF COMMUNITY HEALTH:The BHS Board of Directors is comprised of local representatives who, along with the hospital's management and employees, understand that they are responsible for providing high quality health care services to the communities they serve. Operating healthcare facilities in today's environment requires a delicate balance between producing a sufficient margin to allow for adequate staffing and investment in new technologies, while also providing enough resources to absorb the cost of care for those patients who do not have the ability to pay for the services. In 2017, Baptist was able to re-invest over $100 million into the communities in new technology, construction, renovation and systems improvement. BHS hospitals reach out to the community in many ways through: - Conducting health fairs for local schools, businesses and churches. - Participating in fund-raising and other events to help local agencies such as the American Heart Association, Metro United Way, American Cancer Society, Big Brothers and Big Sisters and the American Red Cross. - Donating hospital space for community group meetings. - Participating on community health assessment teams that are dedicated to identifying and addressing local health needs in each of the counties we serve. - Hosting educational programs, including our pre-natal classes and safe sitter program. - Maintaining necessary, but unprofitable services that meet community needs. - Helping to recruit physicians to underserved areas. - Helping patients coordinate services with other healthcare providers. - Providing resources for support groups, such as cancer recovery groups. - Promoting and providing preventive care services. - Monitoring clinical outcomes in order to ensure quality care. - Committing resources to improving safety and processes of care. - Providing services conveniently accessible by patients. In addition, BHS employees volunteer thousands of hours in community services and leadership. BHS's support for community activities underscores its commitment to improving the lives of those served. Because BHS and its employees contribute so much of their time, talent and resources to serve others, communities served by BHS are better places to live and work. Quantification of many of the community benefits is detailed elsewhere in this schedule. However, what the quantifiable amount doesn't measure is the economic benefit derived by the community from BHS being one of the major employers in the area. The economic impact of the wages paid to BHS employees is significant considering the dollars they spend on food, housing, services, and other products. The Internal Revenue Service Revenue Ruling 69-545 provides that a hospital can demonstrate it has met the community benefit standard by having a full-time emergency room open to the public regardless of ability to pay for services received. BHS hospitals operate emergency departments that are open 24 hours a day, 365 days a year and treated over 293,000 emergency patients during fiscal year 2017. BHS and its emergency departments post policies stating that patients will be treated regardless of their ability to pay. Depending on the severity of a patient's condition, as a service to the patient BHS may verify insurance prior to rendering services in the emergency department. Under no circumstances is emergency care delayed by discussions regarding insurance coverage or ability to pay for services. In addition, BHS does not convey or intimate in any way to any emergency medical transportation service an unwillingness to treat any particular patient in need of medical attention. Part VI, Line 6: AFFILIATED HEALTH CARE SYSTEM:Baptist Healthcare System, Inc., (BHS), is a nonprofit, tax-exempt organization that owns and operates six hospitals. Baptist Health Richmond, Inc. is a nonprofit, tax-exempt affiliate that owns and operates a hospital in Richmond, KY. Baptist Health Madisonville, Inc. is a nonprofit, tax-exempt affiliate that owns and operates a hospital in Madisonville, KY. Baptist Community Health Services, Inc. is a nonprofit, tax-exempt affiliate that owns and operates rehabilitation centers, urgent care centers, and occupational and physical therapy clinics within the regions surrounding the hospitals. Baptist Health Medical Group, Inc. is a nonprofit, tax-exempt affiliate that owns and operates physician practices and other healthcare facilities. Baptist Healthcare Foundation, Inc., Baptist Health Foundation of Greater Louisville, Inc., Baptist Health Foundation Corbin, Inc., Baptist Health Foundation Richmond, Inc., Baptist Health Foundation Madisonville, Inc., Baptist Health Foundation Lexington, Inc., and Baptist Health Foundation Paducah, Inc. are nonprofit, tax-exempt affiliate corporations. Baptist Health Plan, Inc., (BHP), is a nonprofit, taxable affiliate health maintenance organization. Baptist Ventures, Inc. is an affiliate corporation. Baptist Physicians' Surgery Center is a limited liability corporation, of which Baptist Community Health Services, Inc. owns 55%. Baptist Eastpoint Surgery Center, LLC is a limited liability company of which Baptist Community Health Services, Inc. owns 84%. Baptist Health Employer Solutions, INC. (BHES), formed in 2010 and dissolved in 2016, was a non-profit corporation in which BHS was the sole member. BHES was a network of healthcare providers, hospitals and physicians. BHES's activities and purposes served to support the charitable activities and operations of BHS. Baptist Health Network Partners, LLC. (BHNP), (formerly known as Purchase Health Quality Collaborative, LLC "PHQC"), formed in 2011, is a non-profit limited liability company whose sole member is BHS. BHNP was formed to support a physician/hospital network established by PHP, working with BHPAD to engage in clinical integration activities. Baptist Health Care Partners, LLC. (BHCP), formed in 2015, is a non-profit limited liability company whose sole member is BHS. BHCP was formed to participate in the CMS Medicare Shared Savings Program, (MSSP), as an Accountable Care Organization (ACO).Mercy Regional Emergency Medical System, LLC ("MREMS"), formed in 1996, is a non-profit taxable corporation, which owns and operates an ambulance service in McCracken County, Kentucky in the service area of BH Paducah. BHS owns a 50% interest in MREMS and the remaining 50% interest is owned by Mercy Health System, Inc. D.B.A. Lourdes Hospital. All related entities are located in the Commonwealth of Kentucky or the state of Indiana. All entities described in Schedule H, Part VI, Line 6 contributed a combined community benefit amount as follows: Charity Care at Cost $30,108,000 Unreimbursed Medicaid 29,470,000 Community Health Improvement 4,641,000 Health Professions Education 75,000 Subsidized Health Services 8,974,000 Cash and In-Kind Contributions 1,519,000 Total Community Benefit $74,787,000 Part VI, Line 7, Reports Filed With States KY,IN 0 Alzheimer's Association 6100 Dutchmans Lane Suite 401 Louisville KY 40205 133039601 501 (c)(3) 7500 General Support American Cancer Society 1504 College Way Lexington KY 40502 131788491 501 (c)(3) 32850 General Support American Heart Association 240 Whittington Parkway Louisville KY 40222 135613797 501 (c)(3) 50500 General Support American Red Cross 1450 Newtown Pike Lexington KY 40507 530196605 501 (c)(3) 10000 General Support Arthritis Foundation 2908 Brownsboro Road Suite 117 Louisville KY 40206 042113261 501 (c)(3) 7000 General Support Baptist Health Foundation Corbin 1 Trillium Way Corbin KY 40701 473033550 501 (c)(3) 5000 General Support Baptist Health Foundation Lexington 1740 Nicholasville Road Lexington KY 40503 611480774 501 (c)(3) 10750 General Support Be Their Difference Inc 704 Capital Avenue Frankfort KY 40601 812316399 501 (c)(3) 10000 General Support Bluegrass Community & Technical College 470 Cooper Drive Lexington KY 40506 760826082 501 (c)(3) 25000 General Support Center for Women and Families PO Box 2048 927 South Second St Louisville KY 40201 610444846 501 (c)(3) 5500 General Support Childrens Hospital Foundation 234 E Gray Street Suite 450 Louisville KY 40202 616027530 501 (c)(3) 33000 General Support City of Paducah PO Box 2267 Paducah KY 42002 610965156 Government 15000 General Support Commerce Lexington Inc 3300 E Main Street Lexington KY 40507 610258800 501 (c)(3) 7500 General Support Fine Arts Assoc of Southeastern Kentucky Inc 320 Pine Street Williamsburg KY 40769 310884971 501 (c)(3) 6000 General Support Floyd Memorial Foundation 1850 State Street New Albany IN 47150 310933781 501 (c)(3) 5000 General Support Four Rivers Center Inc 100 Kentucky Avenue Paducah KY 42001 611293428 501 (c)(3) 52500 General Support Fund for the Arts 623 W Main Street Louisville KY 40202 610479626 501 (c)(3) 30000 General Support GPEDC Inc PO Box 1155 Paducah KY 42002 611181577 501 (c)(6) 40000 General Support Hope Center Inc PO Box 6 Lexington KY 40588 611107296 501 (c)(3) 55000 General Support Ivy Tech Foundation Inc 50 W Fall Creek Parkway North Indianapolis IN 46208 237073977 501 (c)(3) 10000 General Support Kentucky and Southern Indiana Stroke Association 3425 Stony Brook Circle Louisville KY 40220 611335267 501 (c)(3) 5000 General Support Kentucky CancerLink 2425 Regency Road Lexington KY 40503 262704188 501 (c)(3) 5000 General Support Kentucky Educational Television 600 Cooper Drive Lexington KY 40502 610722558 501 (c)(3) 5000 General Support Kentucky-Southeast Indiana MS Society 1201 Story Avenue Suite 200 Louisville KY 40206 135661935 501 (c)(3) 13200 General Support KY Baptist Convention 13420 Eastpoint Center Drive Louisville KY 40223 610549873 501 (c)(3) 40995 General Support Leadership Southern Indiana 8204 Highway 311 Sellersburg IN 47172 351644080 501 (c)(3) 5000 General Support Lexington Cancer Foundation 1504 College Way Lexington KY 40502 562472701 501 (c)(3) 10000 General Support Lincoln Heritage Council 12001 Sycamore Station Place Louisville KY 40299 610445839 501 (c)(3) 6993 General Support March of Dimes 196 W Lowry Lane Lexington KY 40503 131846366 501 (c)(3) 50000 General Support Market House Theater 132 Market House Square Paducah KY 42001 310994059 501 (c)(3) 10000 General Support McCracken County High School 6530 Old Highway 60 Paducah KY 42001 463183133 501 (c)(3) 15600 General Support Metro United Way 334 E Broadway Louisville KY 40202 610444680 501 (c)(3) 35000 General Support Mission Lexington 230 S MLK Boulevard Lexington KY 40508 202824933 501 (c)(3) 25000 General Support Oldham County Board of Education 6165 W Highway 146 Crestwood KY 40014 000000000 501 (c)(3) 10000 General Support Oldham County Chamber of Commerce & Economic Development 112 S 1st Avenue LaGrange KY 40031 611243293 501 (c)(6) 6450 General Support Paducah Board of Education 800 Caldwell Street Paducah KY 42003 000000000 501 (c)(3) 8298 General Support Project Fit America PO Box 308 Boyes Hot Springs CA 95416 363730823 501 (c)(3) 49500 General Support Refuge Clinic 2349 Richmond Road 220 Lexington KY 40502 371547506 501 (c)(3) 75000 General Support Richmond Chamber of Commerce 201 E Main Street Richmond KY 40475 610397625 501 (c)(3) 7000 General Support Rotary Foundation of New Albany Inc PO Box 141 New Albany IN 47151 263946335 501 (c)(3) 5000 General Support Shaping Our Appalachian Region 137 Main Street Pikeville KY 41501 371760426 501 (c)(3) 51000 General Support St Nicholas Family Clinic Foundation 1733 Broadway Paducah KY 42001 611260945 501 (c)(3) 28000 General Support Susan G Komen Kentucky 207 N Upper Street Suite D Lexington KY 40507 751835298 501 (c)(3) 10000 General Support United Way of McCracken County 333 Broadway Suite 502 Paducah KY 42001 610444680 501 (c)(3) 13000 General Support YMCA of Greater Louisville 545 South 2nd Street Louisville KY 40202 610444843 501 (c)(3) 5800 General Support 43 2 Part I, Line 2: Baptist Healthcare System provides only direct contributions and other general support; therefore, no monitoring of charitable contributions is performed. X X X X X X 0 1 0 0 0 0 0 0 0 William A Brown Vice President 518388 0 37428 0 94197 0 7950 0 42351 0 700314 0 0 0 David Gray Vice President 636693 0 46697 0 8430 0 116156 0 46190 0 854166 0 0 0 Stephen C Hanson President & CEO (Through 3/21/17) 1041011 0 0 0 39333 0 211366 0 58587 0 1350297 0 0 0 Carl Herde Treasurer, CFO, VP (Through 8/31/16) 629796 0 48792 0 8813 0 7950 0 38315 0 733666 0 0 0 Janet Norton Secretary & VP & Interim Co-CEO 475888 0 38194 0 292777 0 7950 0 40424 0 855233 0 211104 0 Stephen R Oglesby CFO,Treas,VP(9/1/16), Interim Co-CEO 377505 0 15577 0 6371 0 26991 0 34374 0 460818 0 0 0 William G Sisson Vice President 657397 0 546849 0 121357 0 7950 0 45769 0 1379322 0 0 0 Isaac Myers MD Chief Health Integration Officer 563303 0 46138 0 13771 0 101957 0 43077 0 768246 0 0 0 Timothy Jahn MD Chief Clinical Officer 551276 0 44773 0 4926 0 98301 0 31687 0 730963 0 0 0 Kenneth Anderson MD VP & Chief Medical Officer 385162 0 272622 0 5544 0 7950 0 36027 0 707305 0 0 0 Dennis Johnson Hospital President 410200 0 25423 0 9723 0 7950 0 37136 0 490432 0 0 0 Stephen Toadvine VP of Physician Integration 399922 0 52618 0 8932 0 7950 0 39734 0 509156 0 0 0 Part I, Line 4b Five officers and executives who participated in the Supplemental Executive Retirement Plan accrued amounts for 2016 which is a portion of the amount reported as deferred compensation in Schedule J, Column C. Other retirement and deferred compensation reported in Schedule J, Column C include amounts for the Retirement Accumulation Plan and Thrift Plan. The following individuals participate in and accrued amounts from the Supplemental Executive Retirement Plan: David Gray $108,206 Stephen Hanson $203,416 Isaac Myers, MD $94,007 Timothy Jahn, MD $90,351 Stephen R. Oglesby $19,041 The following individuals received a payout from the Supplemental Executive Retirement Plan, a nonqualified deferred compensation plan, as they are fully vested in the plan: William Brown $79,207 William Sisson $102,885 Janet Norton $279,199 A KY Economic Development Finance Authority 610600439 49126KFM8 2009-02-09 502227848 See Part VI 0 0 0 B KY Economic Development Finance Authority 610600439 49126KHR5 2011-12-14 136101238 See Part VI 0 0 0 C KY Economic Development Finance Authority 610600439 2015-12-15 18682500 See Part VI 0 0 0 D KY Economic Development Finance Authority 610600439 49126KLD1 2017-05-31 234927003 See Part VI 0 0 0 A 502247678 4753545 661234 99994925 396837974 2010 1 0 1 1 B 136716070 13542795 1482800 121712708 1617 2015 0 0 1 1 C 18682500 18682500 1 0 1 1 D 234927003 2108234 212763739 20055030 0 0 0 0 A 0 0 1 1 0 0.00100 0.00100 0 0 1 B 0 0 0 0 0 0 1 C 0 1 1 0 0 0.02190 0.02190 0 0 1 D 0 0 1 1 0 0 0 1 A 0 1 0 0 1 0 0 0 1 B 0 1 0 0 0 0 0 0 1 C 0 1 0 0 1 0 0 0 1 D 0 1 0 0 0 0 0 0 1 A 1 B 1 C 1 D 1 Schedule K, Part I, Line A Description of Purpose: Series 2009A and 2009B revenue bonds were issued to redeem the 1/99, 1/05, and 12/05 bonds, and for the costs of acquiring and constructing hospital facilities, and for the purchase of equipment. Schedule K, Part I, Line B Description of Purpose: Series 2011 fixed rate hospital revenue bonds were issued for the costs of certain hospital projects, including a portion of the costs of constructing and equipping a new medical structure connected to the existing hospital building at Baptist Health Lexington, (fka Central Baptist Hospital). Schedule K, Part I, Line C Description of Purpose: The Series 2015A bonds were issued to refinance the Series 2010 Variable Rate Demand Hospital Revenue Bonds issued by Baptist Health Madisonville. Schedule K, Part I, Line D Description of Purpose: The Series 2017A bond was issued primarily for the purpose of refinancing a portion of the bridge loan used as a component of the financing of the Baptist Health Floyd acquisition and to pay all or a portion of the costs of issuance. The Series 2017B bond was issued primarily for the purpose of paying and reimbursing the costs of construction, acquisition, installation, renovation and equipping health care and health related properties and facilities, and to pay all or a portion of the costs of issuance. Schedule K, Part II, Line 3, Column A The difference between Part I, Column (E), and Part II, Line 3, is due to investment earnings of $19,830. Schedule K, Part II, Line 3, Column B The difference between Part I, Column (E), and Part II, Line 3, is due to investment earnings of $614,833. Schedule K, Part II, Column A, Line 7-8 The amounts reported on the 8308 represented estimates of the issuance costs and the credit enhancement fees. The amounts reported here are actual amounts paid from the proceeds. Schedule K, Part II, Column B, Line 7-8 The amounts reported on the 8308 represented estimates of the issuance costs and the credit enhancement fees. The amounts reported here are actual amounts paid from the proceeds. Susan D White Family of Director 136875 Wages 0 Nicole Jackson-Gary Family of Director 42080 Wages 0 Juanita Baker Family of Director 64794 Wages 0 Clark Lester Family of Director 412627 Wages 0 Baptist Physicians Surgery Center Board Member 1095858 Lease Agreement 0 Form 990, Part III, Line 4a Since its inception in 1924, Baptist Healthcare System, Inc. ("Baptist") has been dedicated to providing accessible, quality healthcare to all patients regardless of their ability to pay. The hospitals owned and operated by Baptist under tax identification number 61-0444707 include: Baptist Health Louisville, located in Louisville, Kentucky; Baptist Health Corbin, located in Corbin, Kentucky; Baptist Health Lexington, located in Lexington, Kentucky; Baptist Health Paducah, located in Paducah, Kentucky; Baptist Health LaGrange, located in LaGrange, Kentucky, and Baptist Health Floyd, located in New Albany, Indiana. VISION: The vision of Baptist is to be the healthcare leader in Kentucky and Indiana. Having earned a reputation of providing high quality patient care and utilizing the latest in medical technology, patients seek out Baptist facilities for their care. According to state statistics in 2017, Baptist is one of the largest healthcare providers in the state of Kentucky. KENTUCKY 2017 HOSPITAL STATISTICS: LICENSED BEDS: 2,168 beds - the second largest number of beds of any health system in Kentucky. EMPLOYEES: 17,304 employees at end of the fiscal year - one of the top employers in Kentucky. INPATIENT CARE: 94,083 admissions/428,691 days - the largest number of admissions in Kentucky at a system-owned or managed hospital. One out of every eight inpatients receiving care in Kentucky received care at a system-owned or managed hospital. OBSTETRIC (DELIVERIES): 11,821 babies - the largest number of babies delivered in Kentucky at a system-owned or managed hospital. Almost one in four babies in Kentucky was delivered at a Baptist owned or managed hospital. EMERGENCY VISITS: 293,122 registrations - the second largest number of emergency visits in Kentucky at a system-owned or managed hospital. One in thirteen ER patients was treated at a system-owned or managed hospital. OUTPATIENT VISITS: 1,565,284 hospital visits - one in eleven outpatients in Kentucky receiving care in an acute-care setting was seen at a system-owned or managed hospital. MISSION: As indicated by its mission statement, Baptist strives to continue its "Christian heritage of service and to enhance the health of the people and the communities we serve." Baptist is organized and operated exclusively for the benefit of each community and each hospital is considered a valuable community asset. The Baptist Boards of Directors are comprised of local representatives who, along with the hospitals' management and employees, understand that they are responsible to the communities for providing high quality health care services. Over the years, Baptist has gained a reputation for providing compassionate, high quality, cost efficient, patient friendly care. RESPONSIVE TO COMMUNITY NEEDS: Operating healthcare facilities in today's environment requires a delicate balance between producing a sufficient margin to allow for adequate staffing and investment in new technologies, while also providing enough resources to absorb the cost of care for those patients who do not have the ability to pay for the services. In 2017, Baptist was able to re-invest over $95 million into the communities in new technology, construction, renovation and systems improvement. Because of the need to generate a modest margin while caring for all patients, Baptist strives to fulfill its community responsibility of collecting appropriate reimbursement from all patients who have the necessary resources while providing a generous, yet accountable charity care policy to assist those patients who do not have the means to pay for the services rendered. (See "Charity Care Policy" later in this section for further discussion). From a broad perspective, Baptist hospitals consistently provide a high level of quality care to every patient and enhance the health of the people it serves through health promotions, health screenings, medical research, and training of health professionals. OTHER COMMUNITY BENEFITS INCLUDE: - Maintaining necessary, but unprofitable services that meet community needs - Helping to recruit physicians to underserved areas - Helping patients coordinate services with other healthcare providers - Providing resources for support groups - Promoting and providing preventive care services - Monitoring clinical outcomes in order to ensure quality care - Committing resources to improving safety and processes of care - Providing services conveniently accessible by patients. In addition, Baptist employees volunteer thousands of hours in community services and leadership. Baptist's support for community activities underscores its commitment to improving the lives of those served. Because Baptist and its employees contribute so much of their time, talent and resources to serve others, communities served by Baptist are better places to live and work. Quantification of many of the community benefits is detailed later in this section. However, what the Statement of Program Service Accomplishments doesn't measure is the economic benefit derived by each community from Baptist being one of the largest employers in the state. The economic impact of the wages paid to Baptist employees is significant considering the dollars they spend on food, housing, services, and other products. Continued: CHARITY CARE POLICY: To further the mission of enhancing the health of the people and communities it serves, Baptist provides medically necessary inpatient and outpatient care to patients regardless of race, religion, sex, national origin, disability, age or their ability to pay. Recognizing that not all patients have the ability to pay, Baptist has a charity care policy to accurately evaluate a patient's ability to pay for services received. Baptist relies solely on the physician order to determine whether treatment is medically necessary and whether the patient is treated on an inpatient or outpatient basis. Neither the patient's financial condition nor their ability to pay for services has any bearing upon whether, or how, the patient is treated in a Baptist facility. Patients are transferred only when Baptist does not provide the specialized service that is required, or by specific request of the patient. Baptist has notices posted throughout the hospital that clearly communicate Baptist's charity care policy. Baptist employees are instructed in the application of the charity care policy and are trained to recognize situations that indicate the financial resources of a patient may be inadequate. These employees freely and willingly volunteer information regarding the charity care policy to any patient who may express a concern regarding the ability to pay for services. The policy provides that: 1. Patients/guarantors with resources of less than 200% of the Poverty Guideline for their family size will receive full charity. 2. Patients/guarantors with resources of 200% but less than 400% of the Poverty Guideline for their family size will qualify for partial charity. The ratio of resources up to 400% of the Poverty Guideline determines the percentage of the bill that will be the responsibility of the applicant. However, the liability is capped at 10% of the resources. 3. Patients/guarantors with resources of 400% of the Poverty Guideline for their family size but no more than 1200% of the Poverty Guideline for their family of one will qualify for partial charity if the liability exceeds 20% of their resources. In these situations, the patient/guarantor will be responsible for an amount not to exceed 20% of their resources. 4. If eligible for a charity discount, a patient will receive the discount regardless of whether they pay the balance on the bill. If necessary, payment arrangements may be made on the balance of the patient's bill in accordance with hospital procedures. If charity care eligibility cannot be determined, good stewardship requires that the hospital initially begin the collection process. However, immediately upon determining that the guarantor is eligible for charity care, collection efforts on the balance eligible for charity will cease and the appropriate balance will be designated as charity. TAX-EXEMPT STATUS REQUIREMENTS: The Internal Revenue Service Revenue Ruling 69-545 provides that a hospital can demonstrate it has met the community benefit standard by having a full-time emergency room open to the public regardless of ability to pay for services received. Baptist operates Emergency Departments that are open 24 hours a day, 365 days a year and treated 293,122 emergency patients during fiscal year 2017. Baptist facilities and emergency departments post policies stating that patients will be treated regardless of their ability to pay. Depending on the severity of a patient's condition, as a service to the patient, Baptist may verify insurance prior to rendering services in the emergency department. Under no circumstances is emergency care delayed by discussions regarding insurance coverage or ability to pay for services. In addition, Baptist does not convey or intimate in any way to any emergency medical transportation service an unwillingness to treat any particular patient in need of medical attention. ACCOUNTABILITY TO THE BROADER COMMUNITY: As previously noted, the Baptist Board of Directors embraces its responsibility to represent the broader community in guiding Baptist in its provision of healthcare services. The Board meets periodically to provide oversight as to how best to continue to serve each community. Regularly scheduled meetings of the full Board and its Committees are described below: Board of Directors Quarterly Audit Committee Quarterly Executive Committee As needed Compensation Committee As needed Finance Committee Monthly Governance Effectiveness Committee Quarterly Enterprise Risk Committee Quarterly Quality and Mission Effectiveness Committee Quarterly Continued: One of the key functions of the Board is to ensure Baptist not only utilizes sound financial management, but also embraces a culture of compliance that permeates throughout the healthcare system. This is best demonstrated by Baptist's commitment of resources for compliance activities including the designation of a Compliance Officer. The compliance function reports to the Audit Committee (established in 1994) which is comprised of three independent members of the Board who are not members of either the Executive or Finance Committees. Additionally, at least one member has the expertise to be considered a financial expert in the public sector. Another key function of the Board is to ensure that compensation paid to executives is reasonable and meets the guidelines set forth by the Internal Revenue Service. Through the Compensation Committee, (CC), the Board ensures that: 1) members of the CC do not have any conflicts of interest, i.e., they are not employed or receive compensation subject to approval by the executives, 2) the compensation is approved in advance by the CC, 3) the CC obtains and relies upon appropriate comparability data in making decisions, 4) every form of compensation and benefit is included in the comparisons, 5) the CC documents the basis for its decision concurrently with making the decision, and 6) based upon the data, the compensation is reasonable. The following is a summary of Baptist's community service for the year ended August 31, 2017, in terms of services to the poor and indigent and the benefits provided to the communities it serves. QUANTIFIABLE COMMUNITY BENEFIT: Baptist is fully committed to its responsibility as a charitable organization and commits extensive resources to fulfill that obligation to the community. To the extent possible, Baptist has quantified the benefits provided to the communities it serves: Description Amount Benefits for the Poor and Indigent: Unreimbursed Cost of Charity Care $ 30,108,000 Unreimbursed Cost of Medicaid 29,470,000 -------------- Total Benefits for the Poor and Indigent $ 59,578,000 Benefits for the Broader Community: Net Loss on Subsidized Health Services 8,974,000 Community Health Improvement Services 4,641,000 Health Professions Education 75,000 Financial & In-Kind Contributions 1,519,000 --------------- Total Benefits for the Community 15,209,000 ---------------- Total Quantifiable Community Benefit $ 74,787,000 See the glossary below for definitions of the terms used above. GLOSSARY OF COMMUNITY BENEFIT TERMS: BENEFITS FOR THE POOR AND INDIGENT: Describes services provided to persons who cannot afford healthcare because of inadequate resources and/or who are uninsured or underinsured. This includes those patients that qualify for Charity, Medicaid, Kentucky's Children Health Insurance Program (KCHIP), Kentucky Hospital Care Program (KHCP) and other citizens whose income is inadequate (based on each patient's individual circumstances). 1. Unreimbursed cost of charity care describes the services provided to persons who cannot afford to pay. It also includes the Health Care Provider Tax (Kentucky Revised Statutes 142.303) that is assessed on all hospital patient revenues received for the purpose of funding state Medicaid, KHCP and KCHIP programs. The amounts reflect the net cost of these services after reducing the costs for contributions and other revenues received by Baptist as direct assistance for the provision of care. 2. Unreimbursed cost of Medicaid reflects costs of treating Medicaid beneficiaries not reimbursed by government programs. BENEFITS FOR THE BROADER COMMUNITY: Describes services provided to other needy populations that may not qualify as indigent but that need special services and support. The benefits include the cost of health promotion and education, health clinics and screenings, and medical research that benefits the community. 1. Net loss on subsidized health services reflects the loss from services that would be discontinued if the decision were based on profit motives only. 2. Other community benefit includes costs incurred by Baptist in providing support and coordination of health education and awareness events as well as the cost of employees paid time to attend, staff, and coordinate these activities. 3. Baptist makes cash and in-kind donations on behalf of the poor and needy to community agencies and to special funds used for charitable purposes. Form 990, Part VI, Section A, line 2 The Board of Directors is made up of executives from related organizations. The following individuals have a business relationship in that they serve on the Board of Directors of the organization and are officers and/or directors of a related organization: Carl Herde, Janet Norton, David Gray, Stephen Hanson and Victoria Buster. Form 990, Part VI, Section B, line 11b A copy of the IRS Form 990 is provided to the Board of Directors prior to the filing of the return. Any questions or comments are addressed by explanation or a change to the form. Form 990, Part VI, Section B, line 12c DESCRIPTION OF PROCESS TO MONITOR TRANSACTIONS FOR CONFLICTS OF INTEREST: Annually the Secretary of BHS sends out a Conflict of Interest questionnaire to each of the directors and officers serving on the Board of BHS. After completion, they are returned to the Secretary and reviewed by the Board or the Governance Effectiveness Committee for any potential conflicts. A conflict of interest is any circumstance, relationship (financial or otherwise), activity or decision (made in the course of governance, management or professional responsibilities or otherwise) that adversely influences or appears to adversely influence the ability of a covered person to: 1) make objective decisions on behalf of BHS and/or 2) act in the best interests of BHS in a manner consistent with the tax-exempt purposes of BHS. The Board or Committee will determine by a majority vote of disinterested directors whether the disclosed financial or special interest may result in a conflict of interest. Form 990, Part VI, Section B, line 15 COMPENSATION DETERMINATION PROCESS: Annually in September, the BHS Compensation Committee reviews the compensation, including base compensation and incentive compensation, for the CEO and all officers and key employees of BHS. The BHS Compensation Committee is comprised of independent Board Members. The Committee retains a Compensation Consultant to advise the Committee and who provides data as to comparable compensation for similarly qualified persons in functionally comparable positions at similarly situated healthcare organizations. The Committee reviews this information in approving annual base and incentive compensation and other items of reportable compensation described on Schedule J of the IRS Form 990. The decisions of the Committee regarding compensation are contemporaneously documented in the minutes of the Committee. Annually, the Committee Chairperson and the Compensation Consultant provide a report on executive compensation to the full Board of Directors of BHS. Form 990, Part VI, Section C, line 19 AVAILABILITY OF GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, & FINANCIAL STATEMENTS TO GENERAL PUBLIC: In adherence to the Master Trust Indenture among BHS and U.S. Bank National Association, as Master Trustee, dated as of February 1, 2009, BHS reports its financial results on a quarterly basis to the Master Trustee who in turn makes them available through Electronic Municipal Market Access. Additionally, the organization will provide any documents open to public inspection upon request. Form 990, Part VII HOURS WORKED FOR RELATED ORGANIZATION: Officers for BHS provide services to BHS and its subsidiaries. Hours worked are not tracked on an entity by entity basis. Therefore, all officers' hours reported on Form 990, Part VII, Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors represent aggregate hours worked per week for all entities. Form 990, Part XI, line 9: MIS Funding 5,208,900. Capitalized Interest -25,169. Transfer JV Fund 1,350,000. Physician Entity Funding -188,957,038. PHQC Funding -1,480,632. Other Changes -340,298. IS Depreciation -8,329,266. Post Retirement Charge 1,407,902. Balance Sheet Transfer -17,297,005. Baptist Health Network Partners LLC 2501 Kentucky Avenue Paducah KY 42001 454290974 Physician Network KY -132196 0 BHSI Baptist Health Care Partners LLC 2701 Eastpoint Parkway Louisville KY 40223 474067700 ACO KY 0 0 BHSI Baptist Community Health Services Inc 2701 Eastpoint Parkway Louisville KY 40223 611141242 Medical Services KY 501(c)(3) Line 12a, I BHSI 1 Baptist Health Medical Group Inc 2701 Eastpoint Parkway Louisville KY 40223 205497203 Physician Services KY 501(c)(3) Line 3 BHSI 1 Baptist Health Richmond Inc PO Box 1600 Richmond KY 40476 610461940 Hospital KY 501(c)(3) Line 3 BHSI 1 Baptist Health Madisonville Inc 900 Hospital Drive Madisonville KY 42431 610654587 Hospital KY 501(c)(3) Line 3 BHSI 1 Mercy Regional Emergency Medical Systems 126 Lone Oak Road Paducah KY 42001 611310466 Ambulance Service KY 501(c)(3) Line 12a, I BHSI 1 Medical Center Ambulance Services Inc 629 Lafoon Street Madisonville KY 42431 610946210 Ambulance Service KY 501(c)(3) Line 10 N/A 1 Baptist Health Foundation Richmond Inc 2701 Eastpoint Parkway Louisville KY 40223 311506378 Fundraising KY 501(c)(3) Line 12a, I BHSI 1 Baptist Health Foundation Madisonville Inc 2701 Eastpoint Parkway Louisville KY 40223 472893430 Fundraising KY 501(c)(3) Line 12a, I BHSI 1 Baptist Health Foundation Corbin Inc 2701 Eastpoint Parkway Louisville KY 40223 473033550 Fundraising KY 501(c)(3) Line 12a, I BHSI 1 Baptist Health Foundation Lexington Inc 1740 Nicholasville Road Lexington KY 40503 611480774 Fundraising KY 501(c)(3) Line 12a, I BHSI 1 Baptist Health Foundation Paducah Inc 2501 Kentucky Avenue Paducah KY 42003 264057759 Fundraising KY 501(c)(3) Line 12a, I BHSI 1 Baptist Health Foundation Greater Louisville Inc 4000 Kresge Way Louisville KY 40207 200292291 Fundraising KY 501(c)(3) Line 12a, I BHSI 1 Baptist Healthcare Foundation Inc 2701 Eastpoint Parkway Louisville KY 40223 311122867 Fundraising KY 501(c)(3) Line 12a, I BHSI 1 Lexington Cardiac Research Foundation Inc 1740 Nicholasville Road Lexington KY 40503 204242792 Medical Research KY 501(c)(3) Line 12a, I BHSI 1 Pattie A Clay Hospital Auxiliary PO Box 1600 Richmond KY 40476 510172717 Hospital Support KY 501(c)(3) Line 12a, I BHSI 0 Baptist East Milestone Fitness Center 750 Cypress Station Road Louisville KY 40207 611355065 Fitness Center KY BVI Excluded 0 0 Baptist Physicicans Surgery Center 1720 Nicholasville Road Lexington KY 40503 043665929 Ambulatory Surgery Center KY BCHS Related 0 0 Baptist Eastpoint Surgery Center 2400 Eastpoint Parkway Louisville KY 40223 260834852 Ambulatory Surgery Center KY BCHS Related 0 0 Medical Associates of Middletown 4000 Kresge Way Louisville KY 40207 200399400 Medical Office Building KY BHSI Related 0 0 Baptist Health Performance Training 2701 Eastpoint Parkway Louisville KY 40223 473567887 Sports Training KY BVI Related 0 1 Cumberland Valley Surgical Center LLC 1850 State Street New Albany IN 47150 611348280 Ambulatory Surgery Center IN BCHS Related 0 0 Baptist Ventures Inc 2701 Eastpoint Parkway Louisville KY 40223 611217018 Management KY BHSI C 1.00000 1 Baptist Health Plan Inc 651 Perimeter Park Lexington KY 40517 611241101 Insurance KY BHSI C 1.00000 1 Baptist Health Employer Solutions Inc 2701 Eastpoint Parkway Louisville KY 40223 272939694 ACO KY BHSI C 1.00000 1 Baptist Medical Management Services Inc 900 Hospital Drive Madisonville KY 42431 371519513 HC MSO KY BHSI C 1.00000 1 MS Community Health Inc 2701 Eastpoint Parkway Louisville KY 40223 611303514 Health Clinic KY BHMG C 1.00000 1 Hopkins County Credit Services Inc 2701 Eastpoint Parkway Louisville KY 40223 610660705 Collections KY BHSI C -328152 66348 1.00000 1 1 1 1 0 0 0 0 0 0 1 0 0 0 0 1 1 0 1 1 Baptist Community Health Services Inc J 1872659 Cost Baptist Community Health Services Inc O 109569 Cost Baptist Community Health Services Inc Q 216842 Cost Baptist Community Health Services Inc S 238751 Cost Baptist Health Employer Solutions Inc Q 60000 Cost Baptist Health Employer Solutions Inc R 427127 Cost Baptist Health Foundation Corbin Inc C 440926 Cost Baptist Health Foundation Corbin Inc S 179168 Cost Baptist Health Foundation Corbin Inc B 51767 Cost Baptist Health Foundation Madisonville Inc R 64546 Cost Baptist Health Foundation of Greater Louisville Inc C 718251 Cost Baptist Health Foundation of Greater Louisville Inc R 127007 Cost Baptist Health Foundation of Greater Louisville Inc B 340429 Cost Baptist Health Foundation Paducah Inc C 801311 Cost Baptist Health Foundation Paducah Inc R 80995 Cost Baptist Health Foundation Paducah Inc B 390162 Cost Baptist Health Madisonville Inc B 249321 Cost Baptist Health Madisonville Inc R 12468542 Cost Baptist Health Madisonville Inc Q 24421140 Cost Baptist Health Medical Group Inc J 6692666 Cost Baptist Health Medical Group Inc Q 27053407 Cost Baptist Health Medical Group Inc R 31599873 Cost Baptist Health Medical Group Inc P 7318415 Cost Baptist Health Plan Inc B 300822 Cost Baptist Health Plan Inc Q 1101710 Cost Baptist Health Plan Inc R 465249 Cost Baptist Health Richmond Inc B 918073 Cost Baptist Health Richmond Inc Q 10712712 Cost Baptist Health Richmond Inc R 8610599 Cost Baptist Healthcare Foundation Inc B 197250 Cost Baptist Ventures Inc S 646604 Cost Lexington Cardiac Research Foundation S 64038 Cost Mercy Regional Emergency Medical Systems Inc R 192186 Cost