2017-10-19T07:48:29-05:00 2016-12-31 450250958 Eide Bailly LLP 800 Nicollet Mall Ste 1300 Minneapolis MN 554027033 990 2016-01-01 454165628 United Hospital District Inc UNIT 5075263273 515 S Moore Street Blue Earth MN 56013 Patrick Justin CFO 5075263273 2017-10-16 1 Kim Hunwardsen CPA P00484560 6122536500 2017-10-16 2016 2022-09-23 18:48:47Z Richard Ash 515 S Moore Street Blue Earth MN 56013 31863397 0 X www.uhd.org X 2011 MN Provision of health care services 9 7 273 45 0 0 27488275 110490 28917256 31693147 60330 57410 2735 2350 56468596 31863397 1800 4701 0 0 15132010 15434067 0 0 0 13929042 16223349 29062852 31662117 27405744 201280 40091033 39731237 12685289 12124213 27405744 27607024 X At United Hospital District, we exist to provide and promote appropriate health care services to the communities we serve, doing so in a safe and healing environment which supports our patient-centered care philosophy. 1 0 28205328 4701 31693147 United Hospital District, Inc. operates a 25-bed critical access hospital in Blue Earth, Minnesota. The Hospital also operates medical clinics in Blue Earth, Wells, Winnebago and Fairmont, Minnesota as well as a 24-bed adolescent treatment center in Winnebago, Minnesota. In 2016, United Hospital District, Inc. provided $41,000 worth of financial assistance based on established rates of charges foregone. The estimated costs of the charges forgone was $22,000 based upon an overall cost-to-charge ratio calculation. 28205328 1 1 0 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 86 0 1 273 1 0 0 0 0 0 0 0 0 0 0 X 9 7 0 0 0 0 0 1 0 1 1 0 0 1 1 1 1 1 1 1 0 0 X Patrick Justin 5075267907 515 S Moore Street Blue Earth MN 56013 Melanie Humburg Chairman 1.00 X X 1548 0 0 Larry Anderson Vice President 1.00 X X 2410 0 0 Barbara Hanson Secretary 1.00 X X 1376 0 0 Jeanette Eichorn Treasurer 1.00 X X 1027 0 0 Roger Hanson Board Member 1.00 X 2227 0 0 Douglas Johanson Board Member 1.00 X 1078 0 0 Aaron Johnson MD Board Member/Physician 40.00 X 319019 0 17964 Bobby Karp MD Board Member/Physician 40.00 X 404876 0 33298 Cheryl Keithahn Board Member 1.00 X 1125 0 0 Richard Ash CEO 40.00 X 205091 0 32010 Patrick Justin CFO 40.00 X 98914 0 10096 Candance Arends CNO 40.00 X 131181 0 26731 Alex Wong Surgeon 40.00 X 460307 0 33686 Joanne Roehr Physician (Jan-June) 40.00 X 184631 0 6000 Mary Trites Physician 40.00 X 208694 0 7155 Shawna Barnett CRNA 40.00 X 204970 0 32742 Carmelle McHarge CRNA 40.00 X 216180 0 17649 2444654 0 217331 17 0 1 0 Acute Care Inc 1609 N Ankeny Blvd Ankeny IA 50023 ED MD Coverage 1196634 Staff Care Inc 8840 Cypress Waters Blvd 300 Coppell TX 75019 Locums MD Coverage 396364 Orthopaedic & Fracture Clinic 1431 Premier Drive Mankato MN 56001 Ortho MD's 320064 Cloudwave 100 Crowley Dr Marlborough MA 01752 Computer host 306567 CMDI 150 10th St NW Milaca MN 56353 CT & Mammography Srvcs 306481 10 9051 101439 110490 Patient Service Revenue 621110 30203341 30203341 340B Program Revenue 621110 1172048 1172048 Other Supporting Revenue 900099 196371 196371 Equity in Net Income of JV 900099 84000 84000 Electronic Health Records 900099 37387 37387 31693147 56645 56645 2350 0 2350 2350 2350 765 0 765 765 765 31863397 31693147 0 59760 X 4701 4701 1272349 740790 531559 10924874 10042957 881917 459888 427035 32853 1975233 1777355 197878 801723 711609 90114 58578 58578 76846 76846 4727247 3968658 758589 14047 1758 12289 850553 606415 244138 511982 24833 487149 733888 725132 8756 211678 187913 23765 96286 74421 21865 398225 398225 2483739 2483739 161420 153342 8078 Medical Supplies 3738912 3738912 Bad Debt 1279101 1279101 MN Care Tax 238883 238883 Equipment Rental/Repair 159173 154897 4276 482791 464652 18139 31662117 28205328 3456789 0 10352510 10570138 4097706 4515086 169917 71429 7501 172250 825220 861631 246350 91128 45050465 24406869 21611037 20643596 2324142 2402900 456650 403079 40091033 39731237 2035132 2434456 10362129 9468757 288028 221000 12685289 12124213 X 27391841 27607024 13903 0 27405744 27607024 40091033 39731237 201280 0 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 632000 632000 29860879 13619377 16241502 835933 389792 446141 13695761 10397700 3298061 25892 25892 20643596 Estimated 3rd Party Payor Settlements 221000 221000 X 30584296 -1279101 -1279101 31863397 0 31863397 30383016 0 30383016 1279101 1279101 31662117 Part X, Line 2: The Hospital is organized as a Minnesota nonprofit corporation and has been recognized by the Internal Revenue Service (IRS) as exempt from federal income taxes under Internal Revenue Code Section 501(c)(3). The Hospital is annually required to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. In addition, the Hospital is subject to income tax on net income that is derived from business activities that are unrelated to its exempt purpose. The Hospital believes that they have appropriate support for any tax positions taken affecting its annual filing requirements, and as such, does not have any uncertain tax positions that are material to the financial statements. The Hospital would recognize future accrued interest and penalties related to unrecognized tax benefits and liabilities in income tax expense if such interest and penalties are incurred. Part XI, Line 2d - Other Adjustments: Bad debt expense included in revenue for financial statements -1,279,101. Part XII, Line 4b - Other Adjustments: Bad debt expense included in revenue for financial statements 1,279,101. 1 1 X 1 X 1 X 225.000000000000 0 0 0 22000 22000 0.00070 5825741 3992563 1833178 0.06030 5847741 3992563 1855178 0.06100 3980051 1429604 2550447 0.08390 3980051 1429604 2550447 0.08390 9827792 5422167 4405625 0.14490 0 1279101 319775 8150360 8198452 -48092 X 1 1 1 1 United Hospital District 515 S Moore Street Blue Earth MN 56013 www.uhd.org 375736 X X X X 3 Provider based clinics, 1 Fee for service clinic United Hospital District 1 1 1 0 0 1 X 150.000000000000 225.000000000000 X 1 1 X X X X X 1 X www.uhd.org/billing.php X www.uhd.org/billing.php X X X X X 1 X 0 X X X X 1 X 0 0 United Hospital District Part V, Section B, Line 2: Effective January 1, 2015, United Hospital District, Inc. (the Hospital) entered into a lease agreement with United Hospital District (the District). In connection with the Lease Agreement, the District contributed the operations and certain assets of the 25-bed hospital, medical clinics in Blue Earth, Wells and Winnebago, Minnesota and a 24-bed adolescent treatment center in Winnebago, Minnesota, to the Hospital and certain liabilities were assumed by the Hospital. The Hospital agreed to lease from the District all land, buildings, and fixed equipment associated with these operations (receivable, supplies, equipment, furniture, fixtures, prepaid expenses, operating fund investments, and depreciation funds). The Hospital began operations as a tax-exempt hospital on January 1, 2015. United Hospital District Part V, Section B, Line 13h: Documents that may be reviewed include completed application, recent tax statements, bank denial and MA denial. The Organization also follows the state agreement. United Hospital District Part V, Section B, Line 15e: We have certified staff who assist with the MN State Exchange and MA. They also provide guidance with every patient's insurance carrier where needed. Schedule H, Part V, Section B, line 16b: The Organization did not have their Financial Assistance Application posted on their website as of 12/31/16. The Organization had thought the Financial Assistance Application was included with and attached to the Financial Assistance Policy on their website, however they recently became aware that the actual Financial Assistance Application was missing. The Application was referenced in their Financial Assistance Policy, however it was not published to their website. The Financial Assistance Application has been subsequently published to the website as of August 31st, 2017. It is separate from the previously published Financial Assistance Policy and Plain Language Summary. It is located at www.uhd.org/billing.php. During 2016 all registration staff had copies of the Financial Assistance Application available. There were also signs posted at registration desks indicating Financial Assistance was available. 2 1 - UHD Home Health and Hospice 125 South Main Street Blue Earth MN 56013 Comprehensive home care Hospice Program 2 - Adolescent Treatment Center 620 1st Avenue SW Winnebago MN 56098 Children's residential, Supervised living, Chemical dependency treatment Part I, Line 7: Charity care expense was converted to cost on line 7a based on an overall cost-to-charge ratio addressing all patient segments. Unreimbursed Medicaid on line 7b and subsidized health services on line 7g were determined using the costing methods to prepare the cost reports. Part I, Ln 7 Col(f): The amount of bad debt expense removed from the denominator is $1,279,101. Part III, Line 2: Bad debt expense is reported at charges as recorded by the organization. All discounts and payments on a patient's account are accounted for prior to determining bad debt expense. Part III, Line 3: The Organization estimates that 25% of bad debt expense is attributable to patients eligible for financial assistance under the financial assistance policy. We estimate that 25% of those who should have completed financial assistance forms and applications could have qualified for financial assistance had they applied. Part III, Line 4: The footnote to the Organization's financial statements can be found on page 9 of the attached audited financial statements. Part III, Line 8: United Hospital District is a critical access hospital. There was a shortfall for 2016 due to sequestration. Even though Medicare was at a loss, the Hospital provides services to these patients because access to healthcare and individual's health is important to the Hospital. Therefore, the Medicare shortfall is considered a community benefit.Medicare allowable costs were obtained from the 2016 Medicare cost report.The Medicare Cost Report is completed based on the rules and regulationsset forth by the Centers for Medicare and Medicaid Services. Part III, Line 9b: Within 7 days after an insurance payment, the patient will start receiving monthly billings. Statements are sent on a monthly cycle basis. If no payment is received 30 days after the statement went out, the patient is contacted by phone. If no payment is received for 90 days, the patient is contacted by letter to advise him or her of further collection actions to be taken. When agreed upon amounts are not paid off, arrangements can be made for a series of payments to fulfill a patients obligation. Each account is reviewed by a business office staff member before placing with a collection agency. If an individual is determined to be eligible for financial assistance, no collection actions will be taken. If an individual is determined to be eligible for financial assistance after collection actions have started, the collection actions will be reversed. Part VI, Line 2: UHD has standing advisory committees with representation from our communities for Home Health/Hospice, ATCW and the clinic Medical Home. Input from the members helps set the strategies and initiatives for improvement. We've also had Focus Groups to address Obstetrical services and another for Orthopedic services. Our patient satisfaction survey incorporates a comments section which gives our patients a voice to make suggestions. Part VI, Line 3: Whether in person or on our web-site, UHD provides the following information for financial assistance: (1) posts its charity care policy, or a summary thereof, and financial assistance contact information in admissions areas, emergency rooms, and other areas of the organization's facilities in which eligible patients are likely to be present; (2) provides a copy of the policy, or a summary thereof, and financial assistance contact information to patients as part of the intake process; (3) provides a copy of the policy, or a summary thereof, and financial assistance contact information to patients with discharge materials; (4) includes the policy, or a summary thereof, along with financial assistance contact information, in patient bills; and/or (5) discusses with the patient the availability of various government benefits, such as Medicaid or state programs, and assists the patient with qualification for such programs, where applicable. In addition, the Business Office has several certified individuals to assist with applications for both State and Federal insurance plans. Part VI, Line 4: UHD is located in Blue Earth, Minnesota, a community of approximately 3,400 situated in the west central end of Faribault County. The county borders Martin County to the west, Freeborn County to the east, and two Iowa counties, Kossuth and Winnebago, to the south.UHD is the only hospital serving Faribault County and the northern Iowa adjacent counties. Faribault County comprises 82% of UHD outpatient admissions while the remaining adjacent counties comprises 95% of all outpatient encounters. The population within a 10-mile radius of Blue Earth is about 9,000 and within a 20-mile radius is about 30,000.The closet full-service hospitals are in:Fairmont, MN - Mayo Clinic Health Systems - 22 miles westAlbert Lea, MN - Mayo Clinic Health Systems - 52 miles east (This hospital is shutting down in-patient services over the next 2 years.)Mankato, MN - Mayo Clinic Health Systems - 45 miles northEmmetsburg, IA - Palo Alto County Hospital - 66 miles southwest Part VI, Line 5: United Hospital District's current board members reside in the service area. Medical staff privileges for physicians are provided to all qualified care providers who also primarily reside in the service area. The Hospital also has relationships for certain specialists who provide their medical care in our clinics and hospital. All surplus funds are reinvested in the program areas for the hospital and clinics. X X X 0 0 0 0 0 0 0 1 0 Aaron Johnson MD Board Member/Physician 240515 0 78504 0 0 0 0 0 19771 0 338790 0 0 0 Bobby Karp MD Board Member/Physician 311242 0 65446 0 28188 0 12861 0 22594 0 440331 0 0 0 Richard Ash CEO 204990 0 101 0 0 0 10644 0 22325 0 238060 0 0 0 Candance Arends CNO 131080 0 101 0 0 0 6845 0 20565 0 158591 0 0 0 Alex Wong Surgeon 426848 0 25102 0 8357 0 13250 0 22800 0 496357 0 0 0 Joanne Roehr Physician (Jan-June) 145537 0 25000 0 14094 0 1826 0 5221 0 191678 0 0 0 Mary Trites Physician 200918 0 102 0 7674 0 0 0 8095 0 216789 0 0 0 Shawna Barnett CRNA 204869 0 101 0 0 0 10645 0 23536 0 239151 0 0 0 Carmelle McHarge CRNA 216079 0 101 0 0 0 10071 0 9035 0 235286 0 0 0 Part I, Line 7 Bonus and incentive compensation reported in schedule J, Part II, column (ii) for Aaron Johnson, Bobby Karp, and Alex Wong is incentive compensation paid based on RVU's. Bobby Karp Medical Provider Signing Incentive X 125000 50000 0 1 1 Alex Wong Medical Provider Signing Incentive X 50000 21429 0 1 1 71429 Form 990, Part III, line 2 United Hospital District opened a new clinic April 1, 2016 in Fairmont, Minnesota which is 18 miles away. Laboratory, x-ray and physical therapy services are available on-site. Form 990, Part VI, Section A, line 1 The Organization has an Executive Committee consisting of the Chair, Vice Chair, Secretary and Treasurer. In addition, the CEO is an ex-officio, non-voting member of the Executive Committee. The Chair of the Board of Directors is the Chair of the Executive Committee. The Executive Committee has the authority of the Board of Directors in the management of the business of the Organization in intervals between meetings of the Board of Directors. Form 990, Part VI, Section A, line 7a The Board of Directors consists of no fewer than seven and no more than fifteen members. Three "District Directors" are appointed by the United Hospital District Board of Directors. There can be up to two "At-Large Directors" who are elected by the Board of Directors but need not be residents of the Geographic Service Area. There is one Ex Officio director, who is the physician serving as the Chief of Medical Staff of the hospital. The remaining members of the Board of Directors are "Area Directors" who are elected by the Board of Directors of this corporation and must be residents of the Geographic Service Area. The Geographic Service Area means all of the cities and townships comprising the District, plus any additional area contained within the lowest number of contiguous zip codes from which the hospital drew at least 75 percent of its inpatients during the previous fiscal year. Form 990, Part VI, Section B, line 11b The CFO reviews the Form 990 and a copy is provided to the board members prior to filing with the IRS. Form 990, Part VI, Section B, line 12c The organization has a conflict of interest policy in place which covers the officers and board members of the organization. Potential conflicts are reviewed and determined by the CEO and board chair. If an individual has a conflict of interest, they are asked to abstain from voting on the conflicting issue. Form 990, Part VI, Section B, line 15a CEO: The Executive Committee of the Board reviews salary surveys from the Minnesota Hospital Association in determining the salary for the CEO. Other officers: Similarly to the CEO, the results of the salary survey from the Minnesota Hospital Association is used in determining the salary for the remaining officers. The CEO approves these increases in compensation. The Senior Executive Suite, including the CEO, CFO, CNO and CMO approve the salaries for all other key employees and managers on a yearly basis. Form 990, Part VI, Section C, line 19 The governing documents, conflict of interest policy and financial statements are not made available to the public Form 990, Part IX, line 11g Outside Consultants/Purchased Services: Program service expenses 3,606,568. Management and general expenses 443,863. Fundraising expenses 0. Total expenses 4,050,431. Licenses/Dues: Program service expenses 48,619. Management and general expenses 69,626. Fundraising expenses 0. Total expenses 118,245. Other Fees: Program service expenses 313,471. Management and general expenses 245,100. Fundraising expenses 0. Total expenses 558,571.