2013-11-01T12:02:20-05:00 2012-12-31 450250958 EIDE BAILLY LLP 800 NICOLLET MALL STE 1300 MINNEAPOLIS MN 554027033 990 2012-01-01 810232121 BOZEMAN DEACONESS HEALTH SERVICES BOZE 4065855000 915 HIGHLAND BOULEVARD BOZEMAN MT 59715 GORDON DAVIDSON 4065855000 2013-10-24 1 KIM C HUNWARDSEN P00484560 6122536500 2013-10-24 2012 2016-03-07 17:11:31Z GORDON DAVIDSON 915 HIGHLAND BOULEVARD BOZEMAN MT 59715 199837289 0 X WWW.BOZEMANDEACONESS.ORG X 1911 MT TO IMPROVE COMMUNITY HEALTH AND QUALITY OF LIFE FOR RESIDENTS AND VISITORS OF THE BOZEMAN, MT AREA. 11 10 1702 258 3440956 -417788 1506716 5147781 184227479 189866074 3706737 3596072 -887204 384534 188553728 198994461 916074 723800 0 0 80728682 85703925 0 0 0 89819043 94685237 171463799 181112962 17089929 17881499 309285614 325034056 88857449 88587723 220428165 236446333 X TO IMPROVE COMMUNITY HEALTH AND QUALITY OF LIFE. 0 0 43600028 0 39692297 BOZEMAN DEACONESS HEALTH GROUP CONSISTS OF OUR DEPARTMENTS THAT PROVIDE PHYSICIAN SERVICES TO OUTPATIENTS. THE NUMBER OF MEDICARE AND MEDICAID PATIENTS SEEN IN 2012 REMAINED FAIRLY CONSISTENT AT ABOUT 44% OF TOTAL VISITS. REVENUE FOR THESE PATIENTS AND UNINSURED PATIENTS TOTALED 54% OF ALL CLINIC REVENUE. TOTAL OPERATING REVENUES WERE $39,692,297 WITH ASSOCIATED OPERATING EXPENSES OF $43,600,028. THE LOSS OF $3,907,731 IS REFLECTIVE OF OUR COMMITMENT TO PROVIDE ACCESS TO ALL PATIENTS REGARDLESS OF THEIR ABILITY TO PAY. 20002597 0 47325549 BOZEMAN DEACONESS SURGICAL SERVICES STRIVES TO OFFER A WIDE ARRAY OF SURGICAL OPTIONS USING STATE OF THE ART TECHNOLOGY. OF THE 5,472 INPATIENT AND OUTPATIENT SURGERIES, ABOUT ONE THIRD WERE MEDICARE AND MEDICAID PATIENTS, WHICH COMPRISED 40% ($18,974,409) OF TOTAL REVENUE FROM THESE SERVICES ($47,325,549). OVER HALF OF THE MEDICARE/MEDICAID REVENUES ($10,884,104) WERE UNREIMBURSED AND WRITTEN OFF, ALONG WITH ANOTHER $5,480,928 FROM OTHER PAYORS. OUR OPERATING ROOM ALSO RECORDED $14,649,845 IN OPERATING EXPENSES PLUS ANOTHER $5,352,752 OF INDIRECT OVERHEAD. 8394683 0 8511043 THE EMERGENCY ROOM AT BOZEMAN DEACONESS HOSPITAL IS ONE OF THE BUSIEST DEPARTMENTS IN OUR ORGANIZATION, WITH JUST UNDER 24,000 VISITS IN 2012. APPROXIMATELY 32% OF THESE VISITS WERE FROM MEDICARE AND MEDICAID PATIENTS, COMPRISING $5,320,911 OF THE $15,504,868 OF THE GROSS REVENUE. OVER HALF OF THE MEDICARE/MEDICAID REVENUE IS UNREIMBURSED (57%) AND WRITTEN OFF, ALONG WITH ALMOST 40% OF THE REMAINING REVENUE (TOTAL WRITE-OFFS OF $6,993,825). DIRECT AND INDIRECT EXPENSES INCURRED IN SUPPORTING THE OPERATION OF THIS EMERGENCY ROOM ACCUMULATED TO $8,394,683. 72094468 723800 94337185 BOZEMAN DEACONESS HEALTH SERVICES OPERATES AN 86 BED HOSPITAL FACILITY (HOSPITAL), ALONG WITH A 43 UNIT ASSISTED LIVING HOME AND A 115 UNIT INDEPENDENT LIVING HOME (HILLCREST SENIOR LIVING OR HSL). ALL PATIENT AND RESIDENT SERVICE REVENUE IS USED TO PROVIDE HEALTH CARE SERVICES, HEALTH CARE PROMOTION, AND HEALTH CARE EDUCATION TO BOZEMAN AND THE SURROUNDING COMMUNITIES. 72094468 723800 94337185 144091776 1 1 0 1 0 0 0 0 0 1 1 0 1 0 1 1 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 0 1 174 0 1 1702 1 1 1 0 0 0 0 0 0 0 0 0 X 11 10 0 0 0 0 0 1 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 X GORDON DAVIDSON 4065851036 915 HIGHLAND BLVD BOZEMAN MT 59715 TERRY CUNNINGHAM 1.00 X X 0 0 0 JULIE JACKSON 1.00 X X 0 0 0 KIRK MILLER 1.00 X X 0 0 0 JOHN MURDOCH 1.00 X X 0 0 0 JOHN ROBBINS MD 50.00 X X 141823 0 41895 BRIAN BROWN 1.00 X 0 0 0 KATIE DAUGHENBAUGH 1.00 X 0 0 0 JAYNEE GROSETH 1.00 X 0 0 0 LEN LUTZ 1.00 X 0 0 0 REV DAVE MCCONNELL 1.00 X 0 0 0 TOM MILLESON 1.00 X 0 0 0 KERRY PETITT 1.00 X 0 0 0 STAN MOSER 50.00 X 829983 0 15353 GORDON DAVIDSON 50.00 X 385965 0 51486 ELIZABETH LEWIS 50.00 X 383048 0 51181 HUGH HETHERINGTON MD 50.00 X 616001 0 53314 ANNE CASTILLO MD 50.00 X 658881 0 15000 JACK HENSOLD MD 50.00 X 557749 0 50827 DANE SOBEK MD 50.00 X 651212 0 50006 BLAIR ERB MD 50.00 X 673260 0 35080 JOHN NORDWICK 0.00 X 485452 0 11458 5383374 0 375600 88 1 1 0 MC BUILDERS JV 1203 S CHURCH BOZEMAN MT 59715 CONSTRUCTION 7280065 ABSAROKA EMERGENCY PHYSICIANS 1184 N 15TH STREET SUITE 1 BOZEMAN MT 59715 ER PHYSICIANS FEE 3475898 GALLATIN VALLEY ANESTHESIA 10150 S CENTENNIAL PKWY SUITE 230 SANDY UT 84070 ANESTHESIOLOGY 789528 ARBOR MEDIC PO BOX 10305 BOZEMAN MT 59715 LANDSCAPING/LAWN/SNOW REMOVAL 783328 PERSNICKETY DRY CLEANERS 2020 W BABCOCK BOZEMAN MT 59715 LAUNDRY SERVICE 680263 27 3871567 1276214 5147781 PATIENT SERVICE REVENU 622110 170468207 170072070 396137 RESIDENT SERVICE REVEN 623000 5626913 5626913 PHARMACY REVENUE 446110 3172185 1631124 1541061 CAFETERIA REVENUE 722210 1314146 1314146 9284623 8165399 1119224 189866074 2545400 2545400 1227362 842828 384534 384534 384534 399162 651510 0 0 399162 651510 1050672 1050672 198994461 186809652 3440956 3596072 723800 723800 1881233 178688 1702545 496983 496983 68265567 55767496 12498071 2838873 2292793 546080 7224386 5718380 1506006 4996883 3936790 1060093 228924 228924 79292 79292 46850 46850 437369 437369 15288277 8196533 7091744 969066 118492 850574 3518236 1072583 2445653 2365547 371878 1993669 443582 304148 139434 295722 202766 92956 2272769 2272769 13323005 13323005 1965951 618119 1347832 MEDICAL SUPPLIES 33828034 33764907 63127 PROVISION FOR BAD DEBTS 10465697 10465697 TAXES & LICENSES 5658967 4456871 1202096 EQUIPMENT RENT & MAINTE 2850842 2850842 647107 306061 341046 181112962 144091776 37021186 0 25543416 28992288 20584585 24171929 406123 374082 5227112 5505814 2064705 1733947 237294610 114896440 117922661 122398170 48051003 96277961 44678793 3089376 17671871 17009133 9678992 9718401 17456353 15762955 309285614 325034056 19066668 22728234 628404 51463674 54896740 7044537 866191 10654166 10096558 88857449 88587723 X 210501099 228739587 8334508 6102205 1592558 1604541 220428165 236446333 309285614 325034056 X 17881499 2533240 -4396571 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 1 0 0 0 0 1 0 1 46850 46850 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: HIRED CONSULTANT TO PROVIDE LOBBYING SERVICES IN CONNECTION WITH GOVERNMENTAL AFFAIRS REPRESENTATION TO ENSURE HOSPITAL, COMMUNITY, AND EMPLOYEE INTERESTS AND NEEDS ARE REPRESENTED. BOZEMAN DEACONESS HEALTH SERVICES REIMBURSES CERTAIN PROFESSIONAL MEMBERSHIP DUES OF EMPLOYEES. A PORTION OF SUCH MEMBERSHIP DUES ARE USED BY THE PROFESSIONAL ASSOCIATIONS FOR LOBBYING ACTIVITIES. 9765686 385183 873051 110901 10913019 9735942 398579 -284159 84676 9765686 8337197 383010 1071551 55816 9735942 7225497 36288 1087324 11912 8337197 9844389 75363 -1797068 897187 7225497 0.75220 0.18660 0.06120 0 1 1 7715596 7715596 143561562 66548784 77012778 79376185 48347656 31028529 6641267 6641267 122398170 INVESTMENT IN JOINT VENTURES 17009133 F 17009133 ESTIMATED THIRD-PARTY PAYOR SETTLEMENTS 250000 DEPOSITS 9846558 10096558 X DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS: PART V, LINE 4: EACH ENDOWMENT FUND IS PRIVY TO A SEPARATE AGREEMENT. DONATIONS MADE FOR EACH PURPOSE SHALL BE RECEIVED, HELD, AND INVESTED BY THE BOZEMAN DEACONESS FOUNDATION ACCORDING TO ESTABLISHED POLICIES GOVERNING GIFT ACCEPTANCE, INVESTMENT, AND DISTRIBUTION. THE PRINCIPAL OF THE FUND SHALL BE RETAINED IN PERPETUITY. THE INTEREST INCOME IS UTILIZED FOR THE GREATEST NEEDS OF THE DESIGNATED DEPARTMENT. POLICY SAYS THE ORGANIZATION CAN USE A PORTION OF INTEREST FOR OPERATIONS. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: THE ORGANIZATION, WHICH INCLUDES THE HOSPITAL, CONSISTS OF MONTANA NONPROFIT CORPORATIONS 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 ORGANIZATION IS ANNUALLY REQUIRED TO FILE A RETURN OF ORGANIZATION EXEMPT FROM INCOME TAX (FORM 990) WITH THE IRS. IN ADDITION, THE ORGANIZATION IS SUBJECT TO INCOME TAX ON NET INCOME THAT IS DERIVED FROM BUSINESS ACTIVITIES THAT ARE UNRELATED TO ITS EXEMPT PURPOSE. THE ORGANIZATION FILES AN EXEMPT ORGANIZATION BUSINESS INCOME TAX RETURN (FORM 990T) WITH THE IRS TO REPORT ITS UNRELATED BUSINESS TAXABLE INCOME. BOZEMAN DEACONESS REAL ESTATE DEVELOPMENT CORP. IS A FOR PROFIT ENTITY FOR WHICH INCOME TAXES ARE PROVIDED FOR THE TAX EFFECTS OF TRANSACTIONS REPORTED IN THE FINANCIAL STATEMENTS AND CONSIST OF TAXES CURRENTLY DUE PLUS DEFERRED TAXES. THERE WAS NO TAXABLE INCOME IN 2012 AND 2011. THE ORGANIZATION BELIEVES THAT IT HAS 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 ORGANIZATION'S FEDERAL FORM 990T AND BOZEMAN DEACONESS REAL ESTATE DEVELOPMENT CORP.'S TAX FILINGS ARE NO LONGER SUBJECT TO FEDERAL AND STATE TAX EXAMINATIONS BY TAX AUTHORITIES FOR YEARS BEFORE 2009. 1 1 X 1 X 1 X 1 1 1 0 1 1 7144156 373916 6770240 0.03970 9238433 6032851 3205582 0.01880 593058 858823 -265765 0.00000 16975647 7265590 9710057 0.05850 677273 188859 488414 0.00290 186524 186524 0.00110 35212289 27935002 7277287 0.04260 321947 321947 0.00190 36398033 28123861 8274172 0.04850 53373680 35389451 17984229 0.10700 2832 2832 0.00000 7788 7788 0.00000 472 472 0.00000 4808 4808 0.00000 2957 2957 0.00000 708 708 0.00000 19565 19565 1 10954255 0 30856438 34594141 -3737703 X 1 0 1 1 BOZEMAN DEACONESS HOSPITAL

915 HIGHLAND BLVD BOZEMAN MT 59107

X X X BOZEMAN DEACONESS HOSPITAL 1 1 1 150.000000000000 1 250.000000000000 1 X X X X 1 1 X 1 0 X X X X 1 X 0 1 6 DEACONESS INTERCITY IMAGING LLC

915 HIGHLAND BLVD BOZEMAN MT 59715

OUTPATIENT IMAGING CENTER ROCKY MOUNTAIN SURGERY CENTER LLC

1450 ELLIS ST SUITE 101 BOZEMAN MT 59715

OUTPATIENT SURGICAL CENTER BOZEMAN DIALYSIS CENTER

931 HIGHLAND BLVD SUITE 3105 BOZEMAN MT 59715

OUTPATIENT DIALYSIS CENTER HILLCREST SENIOR LIVING

1201 HIGHLAND BLVD BOZEMAN MT 59715

INDEPENDENT AND ASSISTED LIVING FACILITY HOSPICE OF SOUTHWEST MONTANA LLC

1600 ELLIS STREET SUITE 3A BOZEMAN MT 59715

HOSPICE SERVICES FAMILY DOCTORS URGENT CARE LLC

120 N 18TH AVENUE BOZEMAN MT 59715

OUTPATIENT HEALTH CARE PART I, LINE 3C: ANY INDIVIDUAL AND THEIR DEPENDENTS WHO ARE AT 150% OF THE FEDERAL POVERTY INCOME LEVEL OR BELOW WILL BE ELIGIBLE TO RECEIVE A 100% WRITE-OFF OF THE SELF-PAY PORTION OF INCURRED CHARGES, UPON COMPLETION OF AN APPLICATION. ANY UNINSURED INDIVIDUAL WITH INCOME UNDER 250% OF THE FEDERAL POVERTY GUIDELINES (FPG) WILL BE ELIGIBLE TO RECEIVE A DISCOUNT FROM CHARGES BASED ON CERTAIN GUIDELINES. COMPLETION OF THE FINANCIAL ASSISTANCE APPLICATION WILL BE REQUIRED. IN SOME CASES, FULL OR PARTIAL ASSISTANCE MAY BE PROVIDED TO INSURED INDIVIDUALS WITH GROSS FAMILY INCOMES ABOVE 250% OF THE FPG ADJUSTED FOR FAMILY SIZE. CATASTROPHIC FINANCIAL ASSISTANCE IS AVAILABLE TO INDIVIDUALS WHO HAVE A LARGE BALANCE REMAINING AFTER ALL THIRD PARTY PAYMENTS HAVE BEEN TAKEN INTO ACCOUNT. THE BALANCE UNDER CONSIDERATION IS THAT AMOUNT WHICH IS DEEMED TO BE THE PATIENT'S FINANCIAL RESPONSIBILITY. IF SUCH RESPONSIBILITY IS GREATER THAN 50% OF THE FAMILY'S ANNUAL HOUSEHOLD INCOME, THE EXCESS AMOUNT WILL BE TREATED AS CATASTROPHIC FINANCIAL ASSISTANCE AND WRITTEN OFF OF THE PATIENT'S ACCOUNT. THIS ASSISTANCE IS AVAILABLE WITHOUT RESPECT TO THE FPG, BUT THEY MUST FOLLOW THE SAME PROCESS AS ALL OTHER PATIENTS SEEKING FINANCIAL ASSISTANCE BASED UPON FPG. ASSET TESTS ARE NOT USED FOR DETERMINING ANY LEVEL OF FINANCIAL ASSISTANCE. ALL DECISIONS REGARDING FINANCIAL ASSISTANCE ARE IN THE SOLE DISCRETION OF BDH. PRIOR TO PROVIDING SERVICES, BDH WILL MAKE AN EFFORT TO NOTIFY THE PATIENT REGARDING THEIR ELIGIBILITY FOR FINANCIAL ASSISTANCE. PART I, LINE 6A: THE ORGANIZATION'S COMMUNITY BENEFIT REPORT CAN BE FOUND ON ITS WEBSITE AT WWW.BOZEMANDEACONESS.ORG/REPORTS. PART I, LINE 7: THE COST TO CHARGE RATIO FROM WORKSHEET 2 WAS USED TO OBTAIN THE COSTS RELATED TO CHARITY CARE, MEDICAID, AND OTHER MEANS-TESTED PROGRAMS. ALL OTHER BENEFITS WERE CALCULATED USING OUR INTERNAL COSTING SYSTEM. THIS SYSTEM ASSIGNS ALL DIRECT EXPENSES TO SEPARATE COST CENTERS (DEPARTMENTS) AND ACCOUNTS. INDIRECT COSTS ARE THEN ALLOCATED TO APPLICABLE DEPARTMENTS BASED ON APPROPRIATE STATISTICS. FOR EXAMPLE, ENGINEERING AND ENVIRONMENTAL SERVICES WOULD BE ALLOCATED BASED ON SQUARE FOOTAGE WHEREAS INFORMATION SYSTEMS AND BENEFITS ARE ALLOCATED BASED ON AN ACCUMULATED COST PERCENTAGE AS DETERMINED BY THE MEDICARE COST REPORT. OUR INTERNAL SYSTEM DOES RECORD PATIENT REVENUES BASED ON TYPE (INPATIENT VS. OUTPATIENT VS. EMERGENCY) AND PAYOR (MEDICAID, MEDICARE, COMMERCIAL, SELF-PAY, ETC.). RELATED COSTS ARE THEN DETERMINED BASED ON THE PRO-RATED SHARE AS A PERCENTAGE OF THE TOTAL. FOR EXAMPLE, IF MEDICAID COMPRISES 7% OF A DEPARTMENT'S REVENUE, MEDICAID EXPENSES ARE CALCULATED AT 7% OF THE TOTAL AS WELL. PART I, LINE 7G: AMOUNT OF COST ATTRIBUTABLE TO A PHYSICIAN CLINIC IS $28,543,556. ALL COSTS ASSOCIATED WITH A PROVIDER-BASED CLINIC OPERATIONAL DEPARTMENT WERE CONSIDERED PART OF THIS TOTAL. PART I, L7 COL(F): THE AMOUNT OF BAD DEBT EXPENSE REMOVED FROM THE DENOMINATOR IS $10,465,697. PART II: BOZEMAN DEACONESS HEALTH SERVICES PROVIDED LEADERSHIP DEVELOPMENT TO ASPIRING HEALTHCARE PROFESSIONALS THROUGH THE JUNIOR ACHIEVEMENT PROGRAM. BDHS EMPLOYEES SPOKE WITH HIGH SCHOOL STUDENTS ABOUT A CAREER AS A NURSE AND PROVIDED THEM WITH REAL LIFE EXAMPLES OF WHAT THE PROFESSION ENTAILS. THESE ACTIVITIES PROMOTE HEALTHCARE BECAUSE THE INDIVIDUALS ARE DIRECTED TOWARD LEARNING ABOUT HEALTH CARE PROFESSIONS AND WILL HOPEFULLY ENCOURAGE FUTURE INTEREST IN THESE TYPES OF POSITIONS THAT PROMOTE HEALTHCARE.ONE OF OUR ADMINISTRATORS PARTICIPATED IN ECONOMIC AND BUSINESS DEVELOPMENT THROUGH INVOLVEMENT IN SEVERAL ADVISORY BOARDS AND TASK FORCE PROJECTS AND INITIATIVES. THE INVOLVEMENT IN THESE COMMUNITY INITIATIVES PROVIDES AWARENESS OF HEALTH ISSUES AND EDUCATION ON HOW TO ACCESS HEALTH SERVICES. PART III, LINE 4: BAD DEBT IS REPORTED AT CHARGES AS RECORDED BY THE ORGANIZATION AND INCLUDED JOINT VENTURES. BAD DEBT IS REPORTED BASED UPON ACTUAL BAD DEBT EXPENSE NET OF DISCOUNTS AND CONTRACTUAL ADJUSTMENTS, LESS RECOVERIES.IN DETERMINING THE AMOUNT OF BAD DEBT ATTRIBUTABLE TO PATIENTS ELIGIBLE UNDER OUR CHARITY CARE POLICY, WE OBTAINED STATISTICAL INFORMATION DIRECTLY FROM OUR CREDIT AGENCIES. FROM THIS INFORMATION WE WERE ABLE TO CALCULATE AN AVERAGE PERCENTAGE (15%) OF ACCOUNTS TURNED OVER FOR COLLECTIONS THAT WOULD HAVE BEEN SUBSEQUENTLY DEEMED UNCOLLECTIBLE OR RETURNED FOR CHARITY. THIS PERCENTAGE WAS APPLIED TO BAD DEBT EXPENSE AT CHARGES TO DETERMINE THE ESTIMATE. NONE OF THE BAD DEBT IS INCLUDED AS COMMUNITY BENEFIT.NOTE IN AUDITED FINANCIAL STATEMENTS:THE CARRYING AMOUNT OF PATIENT AND RESIDENT RECEIVABLES IS REDUCED BY A VALUATION ALLOWANCE THAT REFLECTS MANAGEMENT'S BEST ESTIMATE OF AMOUNTS THAT WILL NOT BE COLLECTED FROM PATIENTS, RESIDENTS AND THIRD-PARTY PAYORS. MANAGEMENT REVIEWS PATIENT AND RESIDENT RECEIVABLES BY PAYOR CLASS AND APPLIES PERCENTAGES TO DETERMINE ESTIMATED AMOUNTS THAT WILL NOT BE COLLECTED FROM THIRD PARTIES UNDER CONTRACTUAL AGREEMENTS AND AMOUNTS THAT WILL NOT BE COLLECTED FROM PATIENTS AND RESIDENTS DUE TO BAD DEBTS. MANAGEMENT CONSIDERS HISTORICAL WRITE OFF AND RECOVERY INFORMATION IN DETERMINING THE ESTIMATED BAD DEBT PROVISION. PART III, LINE 8: THE ENTIRE AMOUNT OF SHORTFALL SHOULD BE CONSIDERED A COMMUNITY BENEFIT.THE MEDICARE SHORTFALL REPRESENTS A COST ABSORBED BY THE HOSPITAL AS A RESULT OF PROVIDING CARE TO MEDICARE PATIENTS. THE CONTRACT DRIVING THIS LOSS IS A NONDISCRETIONARY CONTRACT, AS IS PROVIDING THE SERVICES TO THIS POPULATION OF INDIVIDUALS. THE COST OF PROVIDING THIS BENEFIT TO THE COMMUNITY SHOULD BE REPORTABLE AS SUCH. 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 CMS.FOR THE JOINT VENTURES, NET MEDICARE REVENUE WAS USED AS THE REVENUE RECEIVED, AND THAT PERCENTAGE OF TOTAL REVENUES WAS APPLIED AGAINST OPERATING EXPENSES TO DETERMINE RELATED COSTS. THE JOINT VENTURE PORTION OF THE SHORTFALL IS $793,338. PART III, LINE 9B: THE COLLECTION POLICY DOES NOT SPECIFICALLY ADDRESS THE COLLECTION PRACTICES TO BE FOLLOWED FOR PATIENTS WHO ARE KNOWN TO QUALIFY FOR CHARITY CARE OR FINANCIAL ASSISTANCE. BOZEMAN DEACONESS HOSPITAL PART V, SECTION B, LINE 14G: A SUMMARY OF THE FINANCIAL ASSISTANCE POLICY IS POSTED ON THE HOSPITAL FACILITY WEBSITE, ATTACHED TO BILLING INVOICES, PROVIDED TO PATIENTS ON ADMISSION TO THE HOSPITAL FACILITY AND IS AVAILABLE UPON REQUEST. INFORMATION ABOUT FINANCIAL ASSISTANCE IS ALSO INCLUDED IN OUR PATIENT FINANCIAL SERVICES BROCHURE. BOZEMAN DEACONESS HOSPITAL PART V, SECTION B, LINE 20D: FOR ALL SELF-PAY PATIENTS, AN AUTOMATIC 5% DISCOUNT IS APPLIED TO CHARGES UPON BILLING. THIS IS COMPARABLE TO WHAT OUR MOST FAVORABLE INSURANCE CONTRACT RATE WOULD BE. BOZEMAN DEACONESS HOSPITAL PART V, SECTION B, LINE 22: ALL INDIVIDUALS ELIGIBLE UNDER THE HOSPITAL FINANCIAL ASSISTANCE POLICY ARE PROVIDED A DISCOUNT FOR EMERGENCY AND OTHER MEDICALLY NECESSARY CARE. THE FINANCIAL ASSISTANCE POLICY DOES NOT APPLY TO ELECTIVE PROCEDURES. THEREFORE, FAP-ELIGIBLE PATIENTS WITHOUT INSURANCE MAY BE CHARGED GROSS CHARGES ON ELECTIVE PROCEDURES. PART V, SECTION B, LINE 1: THE REPORT WAS COMPLETED IN 2012; HOWEVER DUE TO SECTION B, LINES 1 - 8C BEING OPTIONAL FOR 2012, THESE QUESTIONS HAVE NOT BEEN COMPLETED AND WILL BE ANSWERED IN 2013. PART VI, LINE 2: IN 2011, BDHS PARTNERED WITH GCCHD TO CONDUCT A LARGER AND COMPREHENSIVE GRANT-FUNDED COMMUNITY HEALTH ASSESSMENT AND HEALTH IMPROVEMENT PLANNING FOCUSING ON GALLATIN COUNTY CALLED THE "HEALTHY GALLATIN" INITIATIVE. THE HEALTHY GALLATIN INITIATIVE IS A RESULT OF COLLABORATION BETWEEN GCCHD, CHP, MONTANA STATE UNIVERSITY'S LOCAL GOVERNMENT CENTER AND MANY OTHER ORGANIZATIONS, ALL OF WHOM SHARE THE COMMITMENT TO AND HAVE A ROLE IN THE COMMUNITY'S HEALTH AND OVERALL WELL-BEING. THIS INITIATIVE CALLS FOR CONDUCTING 4 ASSESSMENTS AND IS INTENDED TO RESULT IN THE DEVELOPMENT OF A COMMUNITY-WIDE STRATEGIC PLAN FOR COMMUNITY HEALTH IMPROVEMENT. TOGETHER, THESE 4 ASSESSMENTS CALL FOR COMMUNITY INVOLVEMENT WHICH HELPS ENSURE APPROPRIATE COMMUNITY OWNERSHIP OF THE HEALTHY GALLATIN INITIATIVE. RESULTS OF THESE ASSESSMENTS WERE MADE PUBLIC IN JANUARY 2012 AND AN IMPLEMENTATION STRATEGY WAS APPROVED BY THE BOARD LATER IN FALL OF 2012.1. COMMUNITY HEALTH STATUS ASSESSMENT (CHSA) IDENTIFIED PRIORITY COMMUNITY HEALTH AND QUALITY OF LIFE ISSUES THROUGH THE 3-COUNTY JOINT HEALTHY GALLATIN CHNA CONDUCTED VIA TELEPHONE SURVEY IN THE SUMMER OF 2011.2. COMMUNITY THEMES AND STRENGTHS ASSESSMENT (CTSA) PROVIDED A DEEP UNDERSTANDING OF THE ISSUES RESIDENTS FEEL ARE IMPORTANT. THIS WAS CONDUCTED THROUGH A SERIES OF IN-DEPTH COMMUNITY CONVERSATIONS CALLED "STUDY CIRCLES" IN SEVEN DIFFERENT COMMUNITIES THROUGHOUT GALLATIN COUNTY. THESE FACILITATED SMALL GROUP, DEMOCRATIC, HIGHLY PARTICIPATORY CONVERSATIONS/DISCUSSIONS OCCUR ONCE A WEEK OVER A PERIOD OF THREE WEEKS. THESE CONVERSATIONS WERE MEANT TO EMPOWER PEOPLE NOT ONLY TO FIGURE OUT THE MOST IMPORTANT HEALTH ISSUES, BUT TO ALSO PRODUCE IDEAS AND IDENTIFY SOLUTIONS THAT WILL WORK BEST FOR THEIR INDIVIDUAL COMMUNITY, AND GALLATIN COUNTY AS A WHOLE. STUDY CIRCLES, CONDUCTED FROM MARCH THROUGH JULY 2011, WERE COMPLETED IN 7 COMMUNITIES: BOZEMAN, BELGRADE, THREE FORKS, WEST YELLOWSTONE, MANHATTAN/AMSTERDAM/CHURCHILL, GALLATIN GATEWAY AND BIG SKY. THE FACILITATION GUIDE USED CALLED "BUILDING A HEALTHIER COMMUNITY: WHAT CAN WE DO TO MAKE AND KEEP OUR COMMUNITY HEALTHY, STRONG, AND VIBRANT" WAS DEVELOPED BY THE STUDY CIRCLES RESOURCE CENTER, A PROJECT OF THE TOPSFIELD FOUNDATION, INC, A NONPROFIT, NONPARTISAN FOUNDATION DEDICATED TO ADVANCING DELIBERATIVE DEMOCRACY AND IMPROVING THE QUALITY OF PUBLIC LIFE IN THE UNITED STATES. 3. LOCAL PUBLIC HEALTH SYSTEM ASSESSMENT (LPHSA) FOCUSED ON THE LOCAL PUBLIC HEALTH SYSTEM---ALL OF THE ORGANIZATIONS AND ENTITIES, WHETHER PUBLIC, PRIVATE, OR VOLUNTARY, THAT CONTRIBUTES TO THE DELIVERY OF PUBLIC HEALTH SERVICES WITHIN A COMMUNITY. THE PURPOSE OF THE ASSESSMENT WAS TO EVALUATE THE ACTIVITIES, COMPONENTS AND CAPACITIES OF OUR LOCAL PUBLIC HEALTH SYSTEM IN PROVIDING THE ESSENTIAL PUBLIC HEALTH SERVICES IN GALLATIN COUNTY. THE DIALOGUE THAT OCCURRED IN ANSWERING THESE QUESTIONS HELPED IDENTIFY AREAS OF STRENGTH AND WEAKNESS AND DETERMINE OPPORTUNITIES FOR IMPROVEMENT. THE ASSESSMENT INSTRUMENT USED WAS DEVELOPED BY THE NATIONAL PUBLIC HEALTH PERFORMANCE STANDARDS PROGRAM WHICH IS A COLLABORATIVE EFFORT OF SEVEN NATIONAL PARTNERS, WHICH INCLUDES CDC AND THE AMERICAN PUBLIC HEALTH ASSOCIATION. THE GALLATIN COUNTY LPHSA WAS CONDUCTED OVER 2 DAYS IN APRIL 2011. THIRTY-EIGHT ORGANIZATIONS AND SIXTY-FIVE INDIVIDUALS PARTICIPATED, INCLUDING REPRESENTATION FROM THE LOCAL HEALTH DEPARTMENT, HEALTHCARE PROVIDERS, HUMAN SERVICE ORGANIZATIONS, SCHOOLS AND UNIVERSITIES, ELECTED OFFICIALS AND GOVERNMENTAL ORGANIZATIONS, FAITH INSTITUTIONS, YOUTH DEVELOPMENT ORGANIZATIONS, ECONOMIC AND PHILANTHROPIC ORGANIZATIONS, AND ENVIRONMENTAL AGENCIES 4. FORCES OF CHANGE ASSESSMENT (FCA) WAS AIMED AT IDENTIFYING FORCES---SUCH AS TRENDS, FACTORS, OR EVENTS----THAT ARE OR WILL BE INFLUENCING THE HEALTH AND QUALITY OF LIFE OF THE COMMUNITY AND THE WORK OF THE LOCAL PUBLIC HEALTH SYSTEM. THE ASSESSMENT WAS CONDUCTED DURING ONE, THREE-HOUR BRAINSTORMING SESSION WITH REPRESENTATION FROM DIFFERENT ORGANIZATIONS FROM ACROSS THE COUNTY INCLUDING ACADEMIA, COMMUNITY HEALTH, RURAL HEALTH, AND ENVIRONMENTAL HEALTH ORGANIZATIONS. PARTICIPANTS IDENTIFIED FACTORS, TRENDS AND EVENTS AFFECTING THE HEALTH OF GALLATIN COUNTY, RANGING FROM ECONOMIC FORCES TO SOCIAL, POLITICAL, AND ENVIRONMENTAL FORCES. PARTICIPANTS ALSO IDENTIFIED BOTH THREATS AND OPPORTUNITIES FOR MANY OF THE FORCES IDENTIFIED. PART VI, LINE 3: BOZEMAN DEACONESS HOSPITAL IS DEEPLY COMMITTED TO PROVIDING FINANCIAL ASSISTANCE TO PATIENTS NEEDING, BUT UNABLE TO AFFORD, MEDICALLY NECESSARY HEALTH CARE SERVICES. BDH POSTS NOTICE OF ITS FINANCIAL ASSISTANCE POLICY IN ALL ADMITTING AREAS, AS WELL AS ON THE WEBSITE. AT THE EARLIEST FEASIBLE TIME, BDH WILL ATTEMPT TO DETERMINE WHETHER A PATIENT HAS THIRD PARTY COVERAGE FOR ANY PART OF THE HOSPITAL SERVICES PROVIDED. IF A PATIENT DOES NOT HAVE THIRD PARTY COVERAGE, A PATIENT ADVOCATE FROM THE MASH PROGRAM WILL SCREEN ALL INPATIENT CASES AND ANY OUTPATIENT CASES EXCEEDING $1,000 IN TOTAL CHARGES TO DETERMINE IF THE PATIENT QUALIFIES FOR THIRD PARTY FUNDING. IF NOT, THE PATIENT ADVOCATE WILL EXPLAIN THE FINANCIAL ASSISTANCE POLICY AND GIVE THE PATIENT AN APPLICATION IF DESIRED. IN CIRCUMSTANCES WHERE PAYMENT IN FULL WILL CAUSE FINANCIAL HARDSHIP THAT WILL SIGNIFICANTLY HARM THE PATIENT OR PATIENT'S FAMILY, THE APPLICANT MAY BE ASKED TO VISIT WITH CONSUMER CREDIT COUNSELING SERVICES TO FURTHER REVIEW THEIR FINANCIAL SITUATIONS. UPON REQUEST, PATIENTS MAY BE ASKED TO COMPLETE AN APPLICATION FOR MEDICAID PARTICIPATION OR FOR COVERAGE BY OTHER GOVERNMENTAL PAYMENT PROGRAMS. PATIENT BILLS ALSO CONTAIN BILLING INFORMATION EXPLAINING FINANCIAL OPTIONS AND PROVIDE CONTACT INFORMATION TO THE APPROPRIATE RESOURCES. PART VI, LINE 4: BOZEMAN DEACONESS HEALTH SERVICES MAINTAINS A 3 COUNTY SERVICE AREA OF GALLATIN, PARK, AND MADISON COUNTIES. AS OF JULY 1, 2012, THE CENSUS BUREAU ESTIMATES THAT THE 3-COUNTY AREA NOW REPRESENTS A POPULATION OF APPROXIMATELY 116,000, A 2.7% (3,074) INCREASE FROM CENSUS 2010, WITH MUCH OF THE GROWTH CONCENTRATED IN GALLATIN. BDHS IS STILL THE ONLY HOSPITAL FACILITY IN GALLATIN COUNTY, ITS PRIMARY SERVICE AREA, REPRESENTING ABOUT 87% OF INPATIENT ADMISSIONS. BDHS CONSIDERS BOTH PARK AND MADISON COUNTIES, EACH HAVING A CRITICAL ACCESS HOSPITAL, AS SECONDARY SERVICE AREAS, REPRESENTING ABOUT 8% OF BDHS' INPATIENT POPULATION.GALLATIN'S MEDIAN HOUSEHOLD INCOME (HHI) HAS CHANGED DRAMATICALLY OVER THE PAST DECADE FROM $38,000 IN 2000 TO $50,000 IN 2010. HOWEVER, THE PROPORTION OF PERSONS LIVING BELOW THE FEDERAL POVERTY LEVEL (FPL) HASN'T CHANGED AND REMAINED AROUND 13%. IF PERSONS LIVING BETWEEN 100% TO 199% OF FPL ARE INCLUDED, THIS RATE JUMPS TO 30%. TOGETHER, THESE RESIDENTS (I.E. LIVING BELOW 200% OF FPL) COMPRISE THE LOW-INCOME SEGMENT OF THE POPULATION. PART VI, LINE 5: AS A SOLE COMMUNITY HOSPITAL, BOZEMAN DEACONESS HEALTH SERVICES IS COMMITTED TO PROVIDING QUALITY CARE AND PROMOTING HEALTH TO THE VERY COMMUNITY THAT SUPPORTS US. OUR GOVERNING BODY IS REPRESENTED BY INDIVIDUALS OF OUR COMMUNITY, WITH ALL BUT ONE BEING INDEPENDENT TO OUR ORGANIZATION. TO ENSURE IMMEDIATE ACCESS TO CARE, BDHS HAS AN OPEN MEDICAL STAFF AND REQUIRES EACH MEDICAL STAFF MEMBER TO CARE FOR ANYONE PRESENTING A NEED FOR CARE IN THE EMERGENCY DEPARTMENT. WE ALSO DEVOTE A SIGNIFICANT AMOUNT OF SURPLUS FUNDS TO MAINTAINING A HIGH LEVEL OF PATIENT CARE THROUGH QUALITY INITIATIVES AND TECHNOLOGY INVESTMENTS.BDHS GIVES BACK TO ITS COMMUNITY THROUGH COMMUNITY BENEFIT OPPORTUNITIES, WHICH AT JUST UNDER $18 MILLION COMPRISED 10.5% OF OUR TOTAL OPERATING EXPENSES (EXCLUDING BAD DEBT) IN 2012.VARIOUS EMPLOYEES, PHYSICIANS, ADMINISTRATORS, AND BOARD MEMBERS OF THE HOSPITAL ARE ACTIVELY INVOLVED IN VOLUNTEER ROLES INCLUDING COMMUNITY BOARD POSITIONS IN NUMEROUS OTHER ACTIVITIES, GROUPS, AND ORGANIZATIONS THAT ACTIVELY PROMOTE THE HEALTH OF THE COMMUNITY. PART VI, LINE 6: BOZEMAN DEACONESS HEALTH SERVICES OWNS A MAJORITY INTEREST IN ADVANCED MEDICAL IMAGING AND ROCKY MOUNTAIN SURGERY CENTER. THESE ORGANIZATIONS HOLD SIMILAR POLICIES REGARDING PROVIDING CARE TO ALL MEMBERS OF THE COMMUNITY AND OFFERING FINANCIAL ASSISTANCE AS DETERMINED BY ABILITY TO PAY. PART VI, LINE 6B: THE ORGANIZATION'S COMMUNITY BENEFIT REPORT CAN BE FOUND ON ITS WEBSITE AT WWW.BOZEMANDEACONESS.ORG. 1 WESTERN MONTANA MENTAL HEALTH CENTER BLDG T-9 FORT MISSOULA RD MISSOULA MT 59804 810307814 501(C)(3) 169500 SUPPORT COMMUNITY HEALTH CRISIS PROGRAMS WITHIN OUR SERVICE AREA BOZEMAN DEACONESS FOUNDATION 931 HIGHLAND BLVD SUITE 3200 BOZEMAN MT 59715 811407943 501(C)(3) 500000 FUND ENDOWMENTS COMMUNITY HEALTH PARTNERS 126 S MAIN STREET LIVINGSTON MT 59047 841420492 501(C)(3) 45000 SUPPORT COMMUNITY HEALTH PROGRAMS WITHIN OUR SERVICE AREA 3 0 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: RECIPIENTS OF GRANTS AND ASSISTANCE PREPARE INFORMATIONAL REPORTS SUBSTANTIATING THE USE OF THE FUNDS THAT WERE EARMARKED TO SUPPORT COMMUNITY HEALTH PROGRAMS. INVOLVEMENT OF BOZEMAN DEACONESS HEALTH SERVICES STAFF AND/OR ADMINISTRATION AS VOLUNTEERS IN THE ACTIVITIES BEING SUPPORTED ALSO ENSURES PROPER USAGE OF FUNDS. X 1 1 X X X X 1 0 0 0 0 1 0 1 0 JOHN ROBBINS MD 136261 0 5000 0 562 0 28671 0 13819 0 184313 0 0 0 STAN MOSER 167614 0 70525 0 591844 0 8640 0 7512 0 846135 0 0 0 GORDON DAVIDSON 271238 0 103437 0 11290 0 36661 0 16437 0 439063 0 0 0 ELIZABETH LEWIS 209893 0 166132 0 7023 0 33663 0 19130 0 435841 0 0 0 HUGH HETHERINGTON MD 488084 0 127089 0 828 0 32000 0 22262 0 670263 0 0 0 ANNE CASTILLO MD 653053 0 5000 0 828 0 15000 0 948 0 674829 0 0 0 JACK HENSOLD MD 550373 0 5000 0 2376 0 33165 0 18610 0 609524 0 0 0 DANE SOBEK MD 563352 0 87500 0 360 0 32566 0 18389 0 702167 0 0 0 BLAIR ERB MD 571712 0 100000 0 1548 0 15000 0 21029 0 709289 0 0 0 JOHN NORDWICK 13277 0 414068 0 58107 0 77 0 11454 0 496983 0 0 0 PART I, LINE 1A PER CONTRACT, THE CEO IS REIMBURSED FOR TWO BUSINESS TRIPS PER YEAR WHERE THEIR SPOUSE ACCOMPANIES THEM. THESE ARE REPORTED AS TAXABLE COMPENSATION. PART I, LINE 4A STAN MOSER RECEIVED A SEVERANCE PAYMENT IN THE AMOUNT OF $581,700.83. PART I, LINE 6 A PHYSICIAN LISTED IN PART VII, SECTION A, RECEIVES INCENTIVE COMPENSATION BASED ON ACTUAL RELATIVE VALUE UNIT'S (RVU'S) PRODUCED IN EXCESS OF TARGETS. THE TOTAL OF THE INCENTIVE IS CALCULATED BY TAKING THE EXCESS RVU'S TIMES A RVU CONVERTER. THE RVU CONVERTER IS BASED UPON NET EARNINGS FROM SERVICES PROVIDED BY THE PHYSICIAN. PART I, LINE 7 THE BOARD ESTABLISHES GOALS EACH YEAR AND IF MET, THERE IS COMPENSATION TIED TO THEM. ALL SUCH COMPENSATION IS REVIEWED BY THE INDEPENDENT COMPENSATION SPECIALISTS. INCENTIVE COMPENSATION IS DETERMINED BY ACHIEVING FINANCIAL PERFORMANCE IN EXCESS OF BUDGETED PERFORMANCE, AND ACHIEVING PRE-DETERMINDED GOALS DEALING WITH PATIENT QUALITY, PATIENT SATISFACTION AND EMPLOYEE SATISFACTION. THIS APPLIES TO ALL SENIOR ADMINISTRATION AND ALL PHYSICIANS (WITH ONE EXCEPTION DESCRIBED IN SCHEDULE J, PART I LINE 6A) THAT RECEIVES COMPENSATION AND INCLUDES INCENTIVE COMPENSATION REFLECTED IN PART II, COLUMN B(II). SUPPLEMENTAL INFORMATION PART III PART II: THE AMOUNT PAID TO THE FORMER CEO WAS FOR COMPENSATION EARNED FROM AN INCENTIVE PLAN THAT WAS IN PLACE DURING HIS TENURE AT BOZEMAN DECONESS HEALTH SERVICES, BUT NOT PAYABLE UNTIL AFTER THE ENDING OF THE FISCAL YEAR. A MONTANA FACILITY FINANCE AUTHORITY 810302402 61204JAW4 2004-03-01 12591558 FUND NEW BUILDING IV ADDTN BOZEMAN DEACONESS CAMPUS & REFUND 6/10/93 BONDS 0 0 0 B MONTANA FACILITY FINANCE AUTHORITY 810302402 621043CZ0 2005-09-21 28001371 FUND ADDTN TO HILLCREST & DEFEASE 3/28/00 HILLCREST CONSTRUCTION BONDS 0 0 0 C MONTANA FACILITY FINANCE AUTHORITY 364615155 61204EAH8 2010-04-22 6645000 REFINANCING OF 1998 BOND DEBT ISSUED 9/2/1998 0 0 0 D MONTANA FACILITY FINANCE AUTHORITY 810302402 61204MAS6 2011-09-28 20680164 TO FUND STRUCTURE AND EQUIPMENT OF NEW ER, ACQUISITION OF LEGACY CONDOS 0 0 0 A 6165000 12616746 741885 25188 297573 7033560 4518540 2005 1 0 1 1 B 4755000 28220708 1896340 213865 345919 7152476 18612108 2006 0 1 1 1 C 1560000 6645000 137988 6507012 2010 1 0 1 1 D 635000 20689941 9777 421184 20258980 2013 0 0 0 1 A 0 0 0 0 0.00000 0.00000 0.00000 0 0 1 B 0 0 0 0 0.00000 0.00000 0.00000 0 0 1 D 0 0 0 0 0.00000 0.00000 0.00000 0 0 1 A 0 0 0 1 0 0 0 0 0 B 0 0 0 1 0 0 0 0 0 C 0 0 0 0 0 0 0 0 0 D 0 0 0 0 0 0 0 0 0 A 1 B 1 C 1 D 1 SCHEDULE K PART IV, ARBITRAGE, LINE 2C DATE REBATE COMPUTATION PERFORMED ISSUER NAME: MONTANA FACILITY FINANCE AUTHORITY DATE THE REBATE COMPUTATION WAS PERFORMED: 06/28/2013 ISSUER NAME: MONTANA FACILITY FINANCE AUTHORITY DATE THE REBATE COMPUTATION WAS PERFORMED: 06/24/2010 SCHEDULE K, PART II, LINE 3, COLUMN (A): THE AMOUNT ON LINE 3 INCLUDES $12,591,558 OF PROCEEDS AND $25,188 OF INTEREST. SCHEDULE K, PART II, LINE 3, COLUMN (B): THE AMOUNT ON LINE 3 INCLUDES $28,001,371 OF PROCEEDS AND $219,337 OF INTEREST. SCHEDULE K, PART II, LINE 3, COLUMN (D): THE AMOUNT ON LINE 3 INCLUDES $20,680,164 OF PROCEEDS AND $9,777 OF INTEREST. FORM 990, PART VI, SECTION A, LINE 7A THE YELLOWSTONE CONFERENCE OF THE METHODIST CHURCH CONFIRMS THE BOARD MEMBERS AND HAS AUTHORITY TO APPOINT THE CLERGY MEMBER OF THE BOARD. FORM 990, PART VI, SECTION A, LINE 7B CHANGING THE ARTICLES OF INCORPORATION IN RELATIONSHIP TO THE PROCESS OF SELECTING BOARD MEMBERSHIP MUST BE APPROVED BY THE YELLOWSTONE CONFERENCE OF THE UNITED METHODIST CHURCH. FORM 990, PART VI, SECTION B, LINE 11 THE FINANCE COMMITTEE WILL REVIEW FORM 990 IN DETAIL AND WILL MAKE A RECOMMENDATION TO THE FULL BOARD FOR APPROVAL BEFORE FILING OF THE FORM 990. THE CFO REVIEWS THE FORM 990 AT A HIGHER LEVEL WITH THE BOARD BEFORE APPROVAL IS GRANTED. FORM 990, PART VI, SECTION B, LINE 12C IN-HOUSE COUNSEL IDENTIFIES POTENTIAL CONFLICTS FROM ANNUAL DISCLOSURES AND INFORMS THE BOARD CHAIR. THE BOARD CHAIR DISCUSSES THE CONFLICT AND DECIDES WHETHER THE CONFLICT IS OF SUCH A NATURE TO EXCLUDE THE CONFLICTED PARTY FROM DISCUSSION AND/OR VOTE. THIS POLICY COVERS ALL BOARD MEMBERS, OFFICERS, SENIOR ADMINISTRATION, AND KEY EMPLOYEES. FORM 990, PART VI, SECTION B, LINE 15 THE EXECUTIVE COMMITTEE RECEIVES A FORMAL PRESENTATION BY AN INDEPENDENT COMPENSATION CONSULTANT (AS SELECTED BY THE BOARD) QUALIFIED TO PERFORM COMPENSATION REVIEWS INCLUDING USAGE OF COMPARABILITY DATA. THIS PERSON PRESENTS RECOMMENDATIONS TO THE COMPENSATION COMMITTEE OF THE BOARD. THE COMPENSATION COMMITTEE MAKES RECOMMENDATIONS TO THE FULL BOARD ON AN ANNUAL BASIS FOR OFFICERS AND SENIOR ADMINISTRATION. THIS ANNUAL PROCESS WAS PERFORMED IN FALL 2011 TO DETERMINE 2012 COMPENSATION. FORM 990, PART VI, SECTION C, LINE 19 GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND ALL TAX RELATED INFORMATION REQUIRED TO BE AVAILABLE FOR PUBLIC INSPECTION ARE AVAILABLE VIA WALK-IN, TELEPHONE CALL, E-MAIL, AND/OR MAIL-IN REQUEST. THE AUDITED FINANCIAL STATEMENTS ARE REQUIRED TO BE ATTACHED TO THE FORM 990 AND PROVIDED TO THE MUNICIPAL SECURITIES RULEMAKING BOARD, WHICH IS OUR TAX-EXEMPT BONDS TRUSTEE, VIA AN ON-LINE, CENTRAL FILING LOCATION CALLED ELECTRONIC MUNICIPAL MARKET ACCESS (EMMA). THE FINANCIAL STATEMENTS CAN BE OBTAINED BY THE GENERAL PUBLIC AT THE EMMA WEBSITE. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: TRANSFERS TO RELATED PARTIES -4,396,571. HILLCREST SENIOR LIVING LIMITED LIABILITY COMPANY 1201 HIGHLAND BLVD BOZEMAN MT 59715 810232121 INDEPENDENT AND ASSISTED LIVING HOME MT 6234007 33821615 BOZEMAN DEACONESS HEALTH SERVICES BOZEMAN DEACONESS FOUNDATION 931 HIGHLAND BLVD SUITE 3200 BOZEMAN MT 59715 841407943 RAISE FUNDS TO SUPPORT BOZEMAN DEACONESS HEALTH SERVICES MT 501(C)(3) LINE 7 N/A 1 DEACONESS INTERCITY IMAGING LLC 915 HIGHLAND BLVD BOZEMAN MT 59715 810666871 HEALTHCARE - IMAGING SERVICES MT N/A RELATED 1607640 2645059 0 1 0.77500 ROCKY MOUNTAIN SURGICAL CENTER LLC 1450 ELLIS ST SUITE 101 BOZEMAN MT 59715 364462300 HEALTHCARE - SURGICAL SERVICES MT N/A RELATED 2715127 2788777 0 0 0.51010 BOZEMAN DIALYSIS CENTER PO BOX 37000 BILLINGS MT 59107 810519879 HEALTHCARE - DIALYSIS SERVICES MT N/A RELATED -163645 0 1 0.60000 BOZEMAN DEACONESS REAL ESTATE DEVELOPMENT CORP PO BOX 10490 BOZEMAN MT 59719 205496567 SALE OF REAL ESTATE PROPERTY AND RESIDENCES TO SENIORS MT N/A C 2013946 9065461 1.00000 1 0 1 1 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 DEACONESS INTERCITY IMAGING LLC I 302448 GENERAL LEDGER AND CORP. 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