2017-05-12T12:17:24-05:00 2016-06-30 450250958 Eide Bailly LLP 800 Nicollet Mall Ste 1300 Minneapolis MN 554027033 990 2015-07-01 460224598 Avera St Luke's AVER 6056225272 305 South State Street Aberdeen SD 57401 Geoff Durst Sec/Treas & VP of Finance 6056225127 2017-05-12 1 Kim Hunwardsen CPA P00484560 6122536500 2017-05-10 2015 2021-01-29 14:40:06Z Todd Forkel 305 South State Street Aberdeen SD 57401 195394499 0 0928 X www.averastlukes.org X 1901 SD Promotion of Health 17 12 1645 125 481655 -110491 2620304 1318990 173912031 193101274 1080669 586061 -569733 -412640 177043271 194593685 472158 168835 0 0 107375006 115591794 0 0 104505 73471173 81682599 181318337 197443228 -4275066 -2849543 202990393 189823411 94997573 92215286 107992820 97608125 X Avera is a health ministry rooted in the Gospel. Our mission is to make a positive impact in the lives and health of persons and communities by providing quality services guided by Christian values. 0 0 170857548 168835 192665269 Avera St. Luke's mission is to provide acute care and long-term healthcare services including skilled nursing, congregate living and assisted living (Medicaid certified), of which there were 15,849 acute patient days, 941 nursery patient days, 47,748 nursing home resident days, 182,281 clinic visits and 134,771 outpatient visits. Avera St. Luke's provides health care services to patients who meet certain criteria under its Charity Care Policy without charge or at amounts less than established rates. Since the Organization does not pursue collection of these amounts, they are not reported as patient service revenue. The amount of charges foregone for services provided under the Organization's charity care policy was approximately $6,730,644 for the year ended June 30, 2016. The estimated cost of providing these services was $2,492,802 for the year ended June 30, 2016, calculated by multiplying the ratio of cost to gross charges for the Organization by the gross uncompensated charges associated with providing charity care to its patients.Avera St. Luke's also provides community benefit health activities at less than or at no cost to support those in the area served. These activities include: donations/grants/educational scholarships, community education programs; special programs for the elderly, handicapped, and medically underserved; support for rural clinics; nursing staff for health centers serving minority populations; and a variety of broad community support activities. During the year ended June 30, 2016, specific activities included meals delivered to residential homes; senior resource programs for billing assistance; meeting facilities and programs for patients and families; assistance to health educators; emergency healthcare providers; wellness programs; and housing families of hospitalized patients.As a member of the Avera Health System, Avera St. Luke's upholds the vision of the Presentation and Benedictine Sisters to work through collaboration to provide a quality, effective health ministry and to improve the health care of individuals and our communities through a regionally integrated network of persons and institutions. Avera St. Luke's engages in activities (including a Community Health Needs Assessment) designed to improve the health of individuals and communities in response to a calling to heal the sick, the elderly, and the oppressed. 170857548 1 1 0 1 0 0 0 0 1 1 1 1 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 0 1 0 0 1 0 0 0 0 0 0 1 1 1 0 0 1 171 0 1 1645 1 1 1 0 0 0 0 0 0 0 0 0 X 17 12 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 0 1 1 0 X Geoff Durst 6056225272 305 South State Street Aberdeen SD 57401 Bob Olson Chair 1.00 0.00 X X 0 0 0 Josh Kraft Vice Chair 1.00 0.00 X X 0 0 0 Sr Mary Kay Panowicz Director 1.00 7.00 X 0 0 0 Jean Gerber MD Director 1.00 0.00 X 0 0 0 Lyle Biegler MD Director 1.00 0.00 X 397283 0 31957 Thomas Luzier MD Director 1.00 0.00 X 0 0 0 Michael Evans Director 1.00 0.00 X 0 0 0 Tage Born MD Director 1.00 0.00 X 774433 0 27957 Carmen Meyer Director 1.00 0.00 X 0 0 0 Robert Fouberg Director 1.00 0.00 X 0 0 0 Judith Bledsoe Director 1.00 0.00 X 0 0 0 Sr Denette Leifeld OSB Director 1.00 0.00 X 0 0 0 Stephen Peters MD Director 1.00 0.00 X 492303 0 30733 Sr Mary Thomas Director 1.00 0.00 X 0 0 0 Sr Pam Donelan Director 1.00 0.00 X 0 0 0 Larry Sidaway Physician/Medical Staff President 1.00 0.00 X 482531 0 24613 Todd Forkel President & CEO 40.00 0.00 X X 0 518707 40404 Geoffrey Durst Sec/Treas & SrVP Finance 36.00 6.00 X 218970 0 22005 Shahid Chaudhary CMO 40.00 0.00 X 1148491 0 31457 Christopher Larson General Surgeon 40.00 0.00 X 1359091 0 20657 James Macdougall Orthopedic Surgeon 40.00 0.00 X 853717 0 15692 Brandon Fites Orthopedic Surgeon 40.00 0.00 X 1039916 0 28457 Roger Werth General Surgeon 40.00 0.00 X 1209603 0 26179 Richard Conklin Oncologist 40.00 0.00 X 1349099 0 31451 9325437 518707 331562 133 0 1 0 Avera Health 3900 W Avera Dr Ste 301 Sioux Falls SD 571085721 Shared services 15896242 JDH Construction Inc 507 N Hyman Dr Aberdeen SD 57401 Construction 6498625 Med-Trans Corporation 209 State Hwy 121 Bypass Lewisville TX 75067 Helicopter Transportation Services 1313776 Cardiosolution LLC 4270 Glendale Milford Rd Cincinnati OH 45242 Physician Services 825481 Aegis Therapies Inc 1000 Fianna Way Fort Smith AR 72919 Physical therapy 341613 22 55223 112057 1151710 1318990 Net patient services 621110 188887549 188887549 Supporting revenue 624100 3072690 2591035 481655 Invest in partnership 900099 828929 828929 EHR revenue 900099 512225 512225 Invest AH Foundation 900099 -200119 -200119 193101274 154101 154101 271603 753359 -481756 -481756 -481756 366017 65943 0 0 366017 65943 431960 431960 70921 47455 23466 23466 Interest Income 900099 45650 45650 45650 194593685 192665269 481655 127771 X 166335 166335 2500 2500 3627796 3377301 250495 26884 26884 89927016 82514826 7372926 39264 5205357 4776436 426649 2272 11789773 10837520 947107 5146 5014968 4601735 411044 2189 2000 2000 62238 62238 9088 9088 20697871 7236115 13460929 827 61495 22905 38590 12464543 10540067 1908146 16330 111944 111546 398 2127580 2082848 40192 4540 329122 218704 110014 404 216098 211870 4228 2369001 2369001 7685538 6974136 711402 1887506 1873442 14064 Medical supplies 22486183 22483244 2939 Bad debt 5400378 5400378 Licenses and permits 3308470 2987153 321317 Equipment lease/rental 1794960 1749653 45307 668584 292949 342102 33533 197443228 170857548 26481175 104505 10864818 6168843 20713988 23073419 190231 671899 1559124 1024173 3545632 3340394 1473897 1437934 188609201 101853405 84385897 86755796 35008289 27130037 1298097 652550 39928130 39568366 4022290 0 202990393 189823411 14862082 15130573 76504467 74282422 70118 68423 3560906 2733868 94997573 92215286 X 102181918 94692660 5282837 2424784 528065 490681 107992820 97608125 202990393 189823411 X -2849543 -1092010 -6443142 X X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 11976 11976 0 Part II-B, Line 1: Avera St. Luke's paid dues to organizations which have a portion of the dues attributed to lobbying activities. 0 1 X 4364943 462040 65820 1837645 18188 3036970 3963040 676958 153521 414764 13812 4364943 756018 3133989 168152 73620 21499 3963040 1159121 4051 407154 756018 526177 641131 -8187 1159121 0.19220 0.18290 0.62490 0 1 1 1623353 4338192 5961545 129205825 62873421 66332404 50956831 37348810 13608021 2485000 1631174 853826 86755796 Investment in Surgical Associates Endoscopy Center LLC 421639 F Assets limited to use - Avera pooled investments 23402520 F Investment in Avera Health Foundation 3305878 F 27130037 Estimated third-party payor settlements 730177 Interest rate swap agreement 2003691 2733868 X Part IV, Line 2b: The organization holds funds in trust on behalf of its residents. Part V, Line 4: The Organization's endowments consist of a portion of their interest in the net assets of the Avera Health Foundation. The Avera Health Foundation includes endowment funds which have been established for a variety of purposes. As required by generally accepted accounting principles, net assets associated with endowment funds, including funds designated by the Board of Directors to function as endowments (if any), are classified and reported based on the existence or absence of donor-imposed restrictions. The Organization's permanently restricted endowment funds are donor restricted. Part X, Line 2: Avera Health and most of its sponsored organizations are considered nonprofit corporations as described in Section 501(c)(3) of the Internal Revenue Code and are exempt from federal income taxes on related income pursuant to Section 501(a) of the Code. These organizations are required to file a Return of Organization Exempt from Income Tax (Form 990) with the Internal Revenue Service (IRS). Avera Health and certain sponsored organizations also file an Exempt Organization Business Income Tax Return (Form 990T) with the IRS to report their unrelated business taxable income. Avera Health and its sponsored organizations believe 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 Organization 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. The federal Form 990T filings and taxable subsidiary returns for consolidated subsidiaries are no longer subject to federal tax examinations by tax authorities for years before 2013. Certain consolidated entities are subject to federal income taxes. Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting basis of assets and liabilities based on enacted tax rates and laws. Deferred tax assets and liabilities are not material as of June 30, 2016 and 2015. The Organization paid an immaterial amount of federal and state income taxes for the years ended June 30, 2016 and 2015. 1 1 X 1 X 1 X 1 1 1 0 1 1 4447 2492802 2492802 0.01300 48166 8012943 3684191 4328752 0.02250 529894 529894 0.00280 52613 11035639 3684191 7351448 0.03830 8 930 274406 63001 211405 0.00110 4 48 18404 1700 16704 0.00010 10 1738 8838378 5928428 2909950 0.01520 5 23920 799791 1560 798231 0.00420 27 26636 9930979 5994689 3936290 0.02060 27 79249 20966618 9678880 11287738 0.05890 1 756 756 0.00000 1 5 680 680 0.00000 2 5 1436 1436 1 5400378 0 49474507 62414269 -12939762 X 1 1 1 Surgical Associates Endoscopy Clinic LLC Endoscopy Procedures 0.51000 0.49000 1 1 Avera St Luke's 305 South State Street Aberdeen SD 57401 www.averastlukes.org 10525 X X X 18 provider based clinics Avera St Luke's 1 0 0 1 X X X X X X X X X 15 1 0 0 1 X www.avera.org/st-lukes/ X www.avera.org/about/community-health-needs-assessments/ X 1 15 1 www.avera.org/locations/st-lukes/ 0 0 1 X 150.000000000000 400.000000000000 X X X X 1 1 X X X 1 X http://www.avera.org/experience/ah/financial-assistance-charity-care/ X http://www.avera.org/experience/ah/financial-assistance-charity-care/ X http://www.avera.org/experience/ah/financial-assistance-charity-care/ X X X X X X 1 X 0 X X X X X 1 X 0 1 Avera St. Luke's Part V, Section B, Line 5: In late December 2015, Avera St. Luke's conducted three focus groups representing community leaders and members, health care providers, uninsured/underinsured persons and policy makers in order to discuss health care needs and concerns in Brown County. The hospital invited a vast array of individuals from all facets of the community to participate in an on-line survey and also held focus groups.Additionally, Avera St. Luke's held a focus group for approximately 20 individuals representing the uninsured and underinsured of our community. Those individuals came to us through invitations from various community programs. The hospital also held one of the focus group at the Salvation Army following their noon meal. Avera St. Luke's Part V, Section B, Line 11: The three major areas to focus on from the completed 2015 CHNA were dental care, health care affordability and travel and accessibility to health care. This decision was based on the severity of the issue, our current involvement in these areas and our professional outlook. Three priorities have been identified through both primary and secondary sources. Our first implementation strategy will focus on primarily on education, good dental health, accessibility (transportation), and affordability. After numerous meetings and research, we have come up with a number of steps to begin moving forward on our plan to improve education of and access to adult dental health. The subsequent points are details of Avera St. Luke's plan:1. Investigate a partnership with dentists in Brown County to determine how we can work together to improve dental care.2. Explore whether other local service and educational organizations have interest in partnering to improve dental care. 3. Develop an educational program to present at health fairs, local service clubs, etc.4. Investigate initiating a dental health campaign for the area through:5. Dedicated Resource InvestmentAccessibility to CareOur second implementation strategy, specifically as it relates to transportation is noted and will address this need in collaboration with Brown County and the City of Aberdeen in development of educational materials on what is currently available for transportation and how to access at minimal cost. Avera has formalized a Community Health Needs committee to shepherd and facilitate community collaborations with city and county officials. Avera St. Luke's commits on a yearly average $3,500 in assistance to those in need, through the provision of gas cards, tokens for community buses, taxies and in some cases bus fare to return them to their home of origin. Our long term care facility provides a shuttle to all residents for appointments and day programs, and commits $50,000 annually to this service. The Avera Foundation has granted $12,960 annually toward transportation as well.Affordable CareAnd our third implementation strategy concerning affordable care, programs are in place and will be addressed through the programs listed. With the implementation of the Affordable Health Care Act and the opening of the health insurance exchanges, along with bundled payment programs and rural Accountable Care Organization designation and through Avera MAAP (Medical Application Assistance program) a full time social worker assists patients on navigation through Medicare, Medicaid, Disability and insurance exchange programs. Access and navigation assistance to medication programs, medical equipment needs are also available. Avera St. Luke's Part V, Section B, Line 13h: Presumptive charity care may be applied in situations where all other avenues of financial assistance have been exhausted. The facility has the discretion to weigh extenuating circumstances when determining eligibility for and the amount of charity care to provide. Avera St. Luke's Part V, Section B, Line 16i: A summary of the financial assistance policy is posted in the Hospital facility's emergency rooms, waiting rooms, and admissions office and is included in the billing statement. In addition, the financial assistance policy is discussed with the patient upon admission to the facility. Avera St. Luke's Part V, Section B, Line 20e: If a patient is self-pay and has a large balance, an Avera patient advocate will help them apply for other forms of assistance. If they are not eligible for any other coverage, the patient is given a financial assistance application to complete and return to the facility. Avera St. Luke's Part V, Section B, Line 22d: The hospital facility calculated the amount generally billed under the look-back method using the lowest inpatient and outpatient combined Medicare and commercial payment rate. This rate will be reviewed and updated on an annual basis each October. Avera St. Luke's Part V, Section B, Line 24: Individuals eligible for financial assistance are not charged gross charges for emergency or other medically necessary care; however may be charged gross charges for elective care. 6 1 - Avera Mother Joseph Manor 1002 N Jay Street Aberdeen SD 57401 Nursing Home, Assisted and Congregate Living 2 - Avera Eureka Health Care Center E Hwy 10 Eureka SD 57437 Skilled Nursing Facility 4 - Marshall County Medical ClinicAvera 413 9th St Britton SD 574302274 Clinic 6 - Avera Clinic of Ellendale 240 Main St Ellendale ND 58436 Clinic 8 - Avera Medical Group Fastcare Kesslers 615 6th Ave SE Aberdeen SD 57401 Clinic 9 - Avera Medical Group Selby 4401 Main St Selby SD 57472 Clinic Part I, Line 3c: The methodology used to determine eligibility for financial assistance takes into consideration income, net assets, family size and resources available to pay for care. In addition, presumptive charity care may be applied in situations where all other avenues have been exhausted. Part I, Line 6a: Our community benefit report is contained in a report prepared by Avera Health, a related organization. It is available through the website and requested mailing, and is filed with the Catholic Health Association. Part I, Line 7: A combination of costing methodologies were used to calculate the amounts reported in the table. A cost-to-charge ratio derived from Worksheet 2, ratio of patient care cost-to-charges was used to calculate charity care at cost, unreimbursed Medicaid and Means-Tested Government Program expenses. Subsidized health was calculated based on actual cost/loss. For all other amounts, costs and revenues as reflected by the general ledger system were used. Part I, Ln 7 Col(f): Bad debt expense of $5,400,378 is included on Form 990, Part IX, line 25, column (A) but excluded for purposes of calculating this percentage. Part II, Community Building Activities: NATIONAL NIGHT OUT - National Night Out is an annual community-building campaign that promotes police-community partnerships and neighborhood camaraderie to make our neighborhoods safer, more caring places to live. National Night Out enhances the relationship between neighbors and law enforcement. Our local sponsors, the Aberdeen Police Department, invite local organizations to participate each year in this event held on the first Tuesday of August at Melgaard Park. A free meal is served by volunteers from many organizations and entertainment is offered all free of charge. Avera St. Luke's has participated by offering a booth with games and prizes with our focus on child safety - recent focuses have been on back to school safety with walking, bike riding and outdoor play. The event brings out around 1,500 to 2,000 children and families for a fun evening. ASPIRE/SD DEPT OF VOC REHAB - Project SEARCH providers internships for high school students in their last year of eligibility and assists in helping students attain work skills and prepare them for a job. Students are chosen for the program who are ready to join the workforce and do not have plans to go to college but have skills that would enable them to be gainfully employed. We want to assist in meeting the community workforce needs as well as help these students obtain employment vs. being our federal assistance. Part III, Line 2: Bad debt expense is reported net of discounts and contractual allowances. A payment on an account previously written off reduces bad debt expense in the current year.Bad debt is reported at charges as recorded by the organization. Part III, Line 3: Avera St. Luke's does not believe that any portion of bad debt expense could reasonably be attributed to patients who may qualify for financial assistance since evaluations are completed to determine those amounts due and will be reclassified from bad debt expense to charity care within 30 days following the evaluation of the amount. Part III, Line 4: The footnote to the Organization's financial statements that describes bad debt expenses can be found on page 10 of the attached audited financial statements. Part III, Line 8: Medicare allowable costs of care are based on the Medicare cost report. The Medicare Cost Report is completed based on the rules and regulations set forth by Centers for Medicare and Medicaid Services. Avera St. Luke's follows the CHA guidelines in reporting community benefits and therefore any Medicare shortfall (as calculated including our non-cost report entities) is excluded from our community benefit report. However, Medicare is the organization's largest payer and patients with Medicare coverage are accepted regardless of whether or not a surplus or deficit is realized from providing the services. This basis therefore means providing Medicare services promotes access to healthcare services which is a key advantage for our community. Part III, Line 9b: If the patient qualifies for the organization's financial assistance policy for low-income, uninsured patients and is cooperating with the organization with regard to efforts to settle an outstanding bill within current self-pay collection policy guidelines and timeframes, the organization or its agent shall not send, nor intimate that it will send, the unpaid bill to any outside collection agency. Avera organizations will allow all individuals 120 days from the first post discharge statement to apply for financial assistance before sending the uncollected account to an outside collection agency. Avera will provide the patient with a statement or final notice that contains a listing of the specific collection action(s) it intends to initiate, and a deadline after which they may be initiated no earlier than 30 days before action is initiated. If the patient qualifies for 100% charity care, no further bills will be sent. A letter will be sent instead indicating that the patient's bill has been completely forgiven. Part VI, Line 2: Health care needs are assessed through various methods. Given Aberdeen is a regional center/hub and the third largest city in South Dakota, Avera St. Luke's is integrally involved with community organizations, universities/colleges, schools, state programs and local governments. Although another smaller hospital opened in Aberdeen during FY 2013, the next largest hospital is 100 miles from Aberdeen and most of the towns within our region have a population of less than 2,000. By working with all in our region, we are able to determine health needs and provide programs and solutions where possible. Our second community health needs assessment (CHNA) was completed and posted to our website by June 30, 2016. The three major areas initially highlighted for further research and comparison were dental care, health care affordability and travel and accessibility to health care. Part VI, Line 3: The Organization utilizes various methods to inform patients about our financial assistance policy. Admitting areas have signs/posters noting charity care and financial assistance. Avera St. Luke's and Avera Health utilize the internet to address financial assistance. Social workers are in direct contact with patients and make referrals to the Business Office for financial assistance and in many cases, work directly with the patient on various government programs which may be available and help with applications. For those who receive bills for services and have concerns about their ability to pay, financial counselors work directly with them on financial assistance. We have brochures available to all and treat all without regard to their ability to pay. Part VI, Line 4: Aberdeen is the third largest city in South Dakota. Using South Dakota estimated data for July 2015, census reflected a population of approximately 28,102. Our primary service area consists of the following counties: Brown, Marshall, Day, Faulk, Edmunds, McPherson, and Spink in South Dakota and Dickey County in North Dakota. The population of this area is approximately 64,000. Our secondary service area includes other close by counties. This large service area is due to outreach and the scope of specialty services offered by Avera St. Luke's for which if not offered, a patient would travel up to 200 miles for the same service. Given we are a rural community in the truest sense; we have a very aged population. Many of the patients within this region are Medicare age. Other than the hospital that opened in Aberdeen during FY 2013, the next closest hospitals are 40 to 100 miles away and have limited services and are Critical Access Hospitals served by limited physicians. Patient demographics within the region would indicate that after you consider those patients admitted to the smaller hospitals, the majority of the rest seek services at Avera St. Luke's and the other hospital in Aberdeen. The population in the primary service counties range from 2,337 to 38,785. South Dakota Census data estimates for 2015-2016 contains many data elements, therefore, will comment on Brown County (location of Avera St. Luke's), Spink County (second largest in primary service area with growth) and McPherson County (due to aged population). % change in Pop. % over 65 Non-White Pop. % State of SD 5.4% 15.7% 14.50%Brown County 6.2% 16.1% 9.20% Spink County 1.7% 20.1% 4.10%McPherson County -1.8% 27.7% 1.7%Median Household IncomeState of SD 50,338Brown County 52,469Spink County 49,627McPherson County 37,602As the above indicate, our region has experienced essentially little growth with the exception of Brown County and the percent over 65 years old is high compared to the State average. The high average age correlates with Medicare admissions being 45.08% of total admissions. Medicaid admissions totaled 8.23%, and newborn admissions totaled 9.22% of all admissions. In addition to Medicare and Medicaid, there is a County Indigent Program which resulted in approximately $6,225,062 of assistance at charge and was for 360 Inpatient patients and 605 Out patients.From an unemployment standpoint, South Dakota (2.4%) and our region has faired much better than the US. Within the primary service area, current unemployment rates range from a low of 2.4% in Brown County to a high of 3.5% in Day County. Part VI, Line 5: Avera St. Luke's is a regional facility within Avera Health System. We are a health ministry cosponsored by the Benedictine Sisters of Yankton, South Dakota and the Presentation Sisters of Aberdeen, South Dakota. Our health ministry is rooted in the Gospel and requires us to make a positive impact in the lives and health of persons and communities by providing quality services guided by Christian values. Avera St. Luke's vision is to be an exceptional health care organization for patients to receive care, physicians to practice and employees to work. The Organization's values are Compassion, Hospitality and Stewardship.Our governing body consists of 17 members who are physicians, community and regional residents and Sister representatives from the Presentation and Benedictine Orders. In addition, four employees (three physicians and the CEO) serve on the board. The governing body included one Sister who represents both orders and is a System Representative. In addition to the governing body, we have two advisory boards. These include: Northern State University Business School and Salvation Army Advisory Board. Medical Staff privileges can be extended to qualified physicians based on receiving approval of their application and credentials by the Medical Dental Staff and then the Hospital governing body. The Hospital's governing body then takes into account other factors related to overall community need and how a physician would impact the Hospital's overall ability to fulfill the mission.Avera St. Luke's mission and values ensure our focus is on the patient, family, employees, physician, those in need, visitors and our region as a whole. The value of Stewardship requires the organization to use all resources in a way that fulfills the mission and values. Each year, our operating and capital budgets are based on various assumptions that in the end provide the needed resources and take into account Charity Care, patient care, technology, education, community services, employee benefit and compensation plans and programs for meeting the region's needs. All surplus funds are used and maintained to provide for both current and future needs.Specific examples of how we further our exempt purpose include but are not limited to the following:a. The only inpatient psychiatric unit within 200 milesb. Interventional Cardiology and Radiology services. These services allow us to meet patient needs when care is critical to their survival and must be delivered on a very timely basis.c. Air Ambulance to transport patients to our facility or 200 miles to tertiary facilities.d. End Stage Renal Disease program which serves our broad region with the next closest facility being 100 miles away. Additionally, we employ a full-time Nephrologist to care for the patients along with others who require intensive physician care.e. A 24 hour Emergency Room which treats all patients without regard to the ability to pay. The ER is staffed by physicians 24 hours per day.f. Provision of a multitude of educational and training programs for healthcare professionals and regional residents. The region was awarded an Area Health Education Center by the South Dakota School of Medicine and will be located in Aberdeen. The award was based on applications and interviews within the State and was a collaborative effort of many healthcare and non-healthcare organizations within the region with two being 100 miles from Aberdeen.g. Avera St. Luke's is currently a Rural Referral Center. The nearest hospitals are tertiary facilities 200 miles away by ground and approximately 140 miles by air.h. Avera St. Luke's participates in many community organizations and efforts to better the region. Leadership of the organization is on boards of many exempt organizations (Salvation Army, Foundations, College/University Advisory Boards, Youth Adult Partnership of Aberdeen).i. Our Auxiliary and Volunteers provide opportunities for over 400 individuals. The Auxiliary provides annual scholarships of $500 for students entering higher education in health related fields. In fiscal year 2016, 16,624 hours of service were provided to Avera St. Luke's by volunteers which reduces costs.j. Provide assistance to small rural hospitals (Critical Access Hospitals) within the region through various programs, management agreements, computer systems, educations and other services to assist in keeping their area's patients in the local community when possible.k. Recruitment of specialists in nephrology, neurosurgery, neurology, cardiology and psychiatry to meet the region's need in order to eliminate travel of 200 miles to obtain these services.l. Development and subsidy of various rural clinics to meet needs in those communities.m. Development of a local clinic to provide primary health care (not urgent or emergency care) to individuals regardless of their ability to pay in a setting that is conducive to walk-in for a very minimal cost (about $64 - $108). This clinic is staffed by mid-level providers (PA/Nurse Practioners) and is open on weekends and certain holidays to all and insurance billing is provided.n. Chemical Addiction services on an outpatient basis are provided to the region and State. Our Worthmore program is well known and respected within the region and state and is the closest program within 150-200 miles. We contract with the State for patients who meet their qualification guidelines and work with governmental agencies within the region and State. o. Provide drug and alcohol prevention programs to the local schools through various contracts. Our involvement started when the previous provider discontinued their contract. Part VI, Line 6: The communities in which Avera operates all have unique health and community benefit needs and in keeping with the Catholic Healthcare Association guidelines each Hospital strives to meet its community's identified needs. The Avera Central Office advocates for all on community benefit related matters of state, regional, and national importance. 1 Presentation College 1500 N Main Aberdeen SD 57401 522424588 501(c)(3) 164800 General support 1 0 Part I, Line 2: Avera St. Luke's policy is to provide grants/contributions to not-for-profit entities and governmental divisions that benefit the community and region through programs and activities. The organization also provides scholarships to medical students and other students in the community. Scholarships are given to schools to help monitor the use of the funds. In some years total scholarships are under the reporting threshold for Schedule I. 0 0 0 0 0 0 0 0 0 Lyle Biegler MD Director 396882 0 0 0 401 0 5300 0 27432 0 430015 0 0 0 Tage Born MD Director 770707 0 0 0 3726 0 5300 0 23432 0 803165 0 0 0 Stephen Peters MD Director 487678 0 0 0 4625 0 5300 0 26208 0 523811 0 0 0 Larry Sidaway Physician/Medical Staff President 468800 0 0 0 13731 0 5300 0 20088 0 507919 0 0 0 Todd Forkel President & CEO 0 412140 0 0 0 106567 0 18750 0 22586 0 560043 0 0 Geoffrey Durst Sec/Treas & SrVP Finance 215821 0 0 0 3149 0 0 0 22780 0 241750 0 0 0 Shahid Chaudhary CMO 1146871 0 0 0 1620 0 5300 0 26932 0 1180723 0 0 0 Christopher Larson General Surgeon 1357633 0 0 0 1458 0 0 0 21432 0 1380523 0 0 0 James Macdougall Orthopedic Surgeon 846751 0 0 0 6966 0 5300 0 10705 0 869722 0 0 0 Brandon Fites Orthopedic Surgeon 1038296 0 0 0 1620 0 5300 0 23932 0 1069148 0 0 0 Roger Werth General Surgeon 1198911 0 0 0 10692 0 5300 0 21654 0 1236557 0 0 0 Richard Conklin Oncologist 1342133 0 0 0 6966 0 5300 0 26926 0 1381325 0 0 0 Schedule J, Part I Line 3: The President/CEO's compensation is paid by a related organization, Avera Health. Avera St. Luke's relied on the related organization for determining the compensation for the President/CEO using the methods described in Part I, Line 3. Richard Conklin Employee Client Billing X 140231 121021 0 1 1 Richard Conklin Employee Community Needs Loan X 100000 30270 0 1 1 Christopher Larson Employee Community Needs Loan X 250000 155769 0 1 1 Roger Werth Employee Community Needs Loan X 250000 155769 0 1 1 James MacDougall Employee Community Needs Loan X 200000 104535 0 1 1 Brandon Fites Employee Community Needs Loan X 200000 104535 0 1 1 671899 Megan Biegler Wife of board member Lyle Biegler 26884 Compensation and benefits as an employee 0 Form 990, Part VI, Section A, line 6 The sole member of the organization is Avera Health, a nonprofit corporation organized and existing under the laws of the state of South Dakota and exempt under 501(c)(3) of the Internal Revenue Code of 1986, as amended. Form 990, Part VI, Section A, line 7a Avera Health, as the sole member, has the power to appoint and remove, with or without cause, members of the board of directors. Form 990, Part VI, Section A, line 7b Avera Health, as the sole member, has the following rights as the Member. 1) To approve the adoption, amendment or repeal of the statements of philosophy, mission and values of Corporation; 2) To initiate the adoption, amendment or repeal of any provision of the Articles of Incorporation or Bylaws of Corporation, and to give final approval of any such action with respect thereto; 3) To approve and act upon the alienation of real property and precious artifacts under the canonical stewardship of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, South Dakota ("Presentation Sisters") or the Benedictine Sisters of Sacred Heart Monastery ("Benedictine Sisters"), pursuant to the policies established by the Member; 4) To approve any plan of merger, consolidation or dissolution of the Corporation, or the divestiture of a sponsored work or ministry associated with the Corporation; 5) To approve the creation of new sponsored works or ministries to be conducted by or under the authority of the Corporation; 6) To appoint and remove, with or without cause, the Board of Directors of the Corporation. 7) To appoint and/or remove, with or without cause, the President and Chief Executive Officer of the Corporation. 8) To approve operating/capital budgets and strategic plans of the Corporation. 9) To approve expenditures outside of operating and capital budgets exceeding defined thresholds according to policy which may be adopted from time to time by the Member. 10) To approve acquisitions, sales and leases, according to policy which may be adopted from time to time by the Member. 11) To establish and maintain employee benefit programs. 12) To establish and maintain insurance programs. 13) To approve major community fund drives. 14) To approve the appointment of auditors. 15) To adopt policies designed to effectuate the reserved powers of the Member. Form 990, Part VI, Section A, line 8b There are no committees with the authority to act on behalf of the governing body. Form 990, Part VI, Section B, line 11 The Form 990 is reviewed by the CEO and CFO. After initial reviews, a draft is provided to the finance committee for final review. The return is provided to the board prior to filing. Form 990, Part VI, Section B, line 12c The conflict of interest policy covers board members, officers and key employees. At each board meeting, a request is made for all board members to disclose any potential conflict of interest pertaining to any item listed on the agenda or pertaining to any potential item that could be discussed during the course of the meeting. The declaration of conflict of interest is recorded in the meeting minutes. The board makes a determination of whether there is a conflict of interest and if so, implements the procedure for evaluating the issue or transaction involved. The board member or officer with the conflict must refrain from voting. A statement of conflict of interest disclosure is made on an annual basis by officers and directors. The information is maintained in a database and a report is provided to the board. Form 990, Part VI, Section B, line 15b The CEO is compensated by Avera Health. Annually the Compensation Committee of Avera Health, which is comprised of six (6) system members appointed by the religious orders, meets with an independent consultant regarding fair market value of officers and key employees. The Compensation Committee approves all salaries based on comparable data and documents the basis for their decision in meeting minutes. The organization has a Physician Relations/Executive Compensation Committee to review physician related transactions and compensation related to physicians, other officers and key employees of the Organization. The Committee meets as needed with respect to physician compensation. With respect to leadership positions we contract with an outside consultant to gather wage and market data. Information is provided to the consultant for leadership positions that reflects the leader's area of responsibilities including the position title and education requirements, reporting structure, number of FTE's, total revenue and expenses and years of experience. Form 990, Part VI, Section C, line 19 The organization's governing documents and conflict of interest policy are not available to the general public. The organization's financial statements are attached to the Form 990 per IRS instructions and therefore are available to the general public. Form 990, Part IX, line 11g Repairs and maintenance: Program service expenses 2,896,648. Management and general expenses 73,001. Fundraising expenses 0. Total expenses 2,969,649. Other fees: Program service expenses 4,194,421. Management and general expenses 1,271,026. Fundraising expenses 827. Total expenses 5,466,274. ACS fees: Program service expenses 145,046. Management and general expenses 12,116,902. Fundraising expenses 0. Total expenses 12,261,948. Form 990, Part XI, line 9: Capital Transfer -5,857,952. Change in fair value of interest rate swap -442,529. Book/Tax adjustment on investment in Endoscopy LLC -142,661. Form 990, Part XII, Line 2c: The Audit Committee of Avera Health, parent organization, selects the auditor and reviews the consolidated audited financial statements for Avera Health, which includes Avera St. Luke's. Form 990, Part VI, Line 16b: There is no written policy or procedure since in the event of any such proposed transaction the board or a committee with delegated authority reviews all materials, valuations and operational aspects for any proposed transaction. Such transaction would be evaluated in accordance with the exempt status of the organization and its applicable purposes. Any transaction also would be approved by the board and the member. Form 990, Part X, Line 20: The issue price includes the filing organization's share of the entire bond issue, which was issued to Avera Health on behalf of the Avera Obligated Group. The Avera Obligated Group consists of Avera Health, Avera McKennan, Avera St. Luke's, Avera Queen of Peace, Avera St. Mary's, Avera Sacred Heart, and Avera Marshall. In accordance with IRS instructions, information related to the tax exempt bond reporting is being reported on Avera Health's tax return. Avera Health 3900 West Avera Drive Suite 300 Sioux Falls SD 57108 460422673 Promotion of health SD 501(c)(3) Line 9 N/A 0 Avera Gettysburg 606 East Garfield Gettysburg SD 57442 460234354 Healthcare services SD 501(c)(3) Line 3 Avera St Mary's 0 Avera St Anthony's Hospital 300 N 2nd Street ONeill NE 68763 470463911 Healthcare services NE 501(c)(3) Line 3 Avera Health 0 Avera Holy Family 826 North 8th Street Estherville IA 51334 420680370 Healthcare services IA 501(c)(3) Line 3 Avera Health 0 Avera Holy Family Foundation 826 North 8th Street Estherville IA 51334 421317452 Fundraising IA 501(c)(3) Line 9 Avera Holy Family 0 Avera Marshall 300 S Bruce Street Marshall MN 56258 410919153 Healthcare services MN 501(c)(3) Line 3 Avera Health 0 Avera Marshall Foundation 300 S Bruce Street Marshall MN 56258 411784801 Fundraising MN 501(c)(3) Line 7 Avera Marshall 0 St Benedict Health Center 401 West Glynn Drive Parkston SD 57366 460226738 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 St Benedict Health Center Foundation West Glynn Drive PO Box B Parkston SD 57366 460458725 Support health related services SD 501(c)(3) Line 11a, I St Benedict Health Center 0 Avera McKennan 1325 S Cliff Ave PO Box 5045 Sioux Falls SD 57117 460224743 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 Avera Queen of Peace Hospital 525 North Foster Mitchell SD 57301 460224604 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 Sacred Heart Health Services 501 Summit Street Yankton SD 57078 460225483 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 Avera St Mary's 801 East Sioux Avenue Pierre SD 57501 460230199 Healthcare services SD 501(c)(3) Line 3 Avera Health 0 Avera at Home 5116 S Solberg Ave Sioux Falls SD 57108 460399291 Home services SD 501(c)(3) Line 9 Avera Health 0 Lewis and Clark Health Education and Service Agency 1000 W 4th Street Suite 9 Yankton SD 57078 460337013 Healthcare education SD 501(c)(3) Line 9 Sacred Heart Health Services 0 Avera Tyler 240 Willow Street Tyler MN 56178 410853163 Healthcare services MN 501(c)(3) Line 3 Avera Marshall 0 Avera Health Plans Inc 3900 West Avera Drive Suite 101 Sioux Falls SD 57108 460451539 Health financing and health plan admin SD 501(c)(4) Avera Health 0 Surgical Associates Endoscopy Center LLC 310 S Penn Aberdeen SD 57401 460461429 Surgical associates/Endoscopy services SD Avera St Luke's Related 828929 69599 0 0 0.51000 Avera Home Medical Equipment of Floyd Valley Hospital LLC 714 Lincoln St NE Lemars IA 51031 820582350 Medical services - home medical equipment SD N/A Avera Home Medical Equipment of Estherville LLC 602 Central Ave Estherville IA 51334 201686097 Medical services - home medical equipment SD N/A Avera Home Medical Equipment of Sioux Center LLC 38 19th St Sw Sioux Center IA 51250 753203100 Medical services - home medical equipment SD N/A Avera Home Medical Equipment of Marshall LLC 1104 East College Drive Marshall MN 56258 205271924 Medical services - home medical equipment SD N/A Avera Home Medical Equipment of Spencer Hospital LLC 2400 S Minnesota Ave Sioux Falls SD 57117 800619999 Medical services - home medical equipment SD N/A Q&M Properties LLC 525 North Foster Mitchell SD 57301 731652049 Medical clinic building SD N/A Heart Hospital of South Dakota LLC 4500 W 69th Street Sioux Falls SD 57108 562143771 Healthcare services SD N/A Brookings Health System - Avera Home Medical Equipment LLC 101 22nd Ave Suite 101 Brookings SD 57006 453204123 Medical services - home medical equipment SD N/A Accounts Management Inc 5132 S Cliff Ave Suite 101 Sioux Falls SD 57108 460373021 Collection agency SD N/A C 0 Avera Property Insurance Inc 610 W 23rd St Ste 1 PO Box 38 Yankton SD 57078 460463155 Insurance SD N/A C 0 Valley Health Services 501 Summit Street Yankton SD 57078 460357149 Rental Real Estate SD N/A C 0 Alucent Medical Inc 1325 S Cliff Avenue PO Box 5045 Sioux Falls SD 571175045 471818349 Biotech Research SD N/A C 0 South Dakota State Medical Holding Company Inc 2600 W 49th Street Sioux Falls SD 57105 460401087 Insurance SD N/A C 0 DakotaCare Administrative Services Inc 2600 W 49th Street Sioux Falls SD 57105 460424322 Insurance SD N/A C 0 1 0 1 0 0 0 0 1 0 0 0 1 0 0 0 1 0 0 1 Surgical Associates Endoscopy Clinic LLC L 507742 General Ledger Surgical Associates Endoscopy Clinic LLC S 900000 K-1 distribution Surgical Associates Endoscopy Clinic LLC A 86563 General Ledger Schedule R, Part II: Effective October 1, 2015, Avera Health Plans Inc. obtained tax exempt status under IRC 501(c)(4). Avera Health Plans Inc. was previously taxed as a C-corporation. Effective March 1, 2016, Avera Tyler was acquired by Avera Health. Schedule R, Part III: Avera Home Medical Equipment of Estherville, LLC dissolved effective October 1, 2015. Avera Home Medical Equipment of Marshall, LLC dissolved effective January 1, 2016. Operations of both entities were transferred to Avera @ Home.