2013-05-07T09:58:03-05:00 2012-09-30 450250958 Eide Bailly LLP 800 Nicollet Mall Ste 1300 Minneapolis MN 554027033 990 2011-10-01 411804205 LifeCare Medical Center LIFE 2184632500 715 Delmore Drive Roseau MN 56751 Keith Okeson 2184632500 2013-05-06 1 Kim Hunwardsen CPA P00484560 6122536500 2013-05-06 2011 2016-02-25 16:41:14Z Keith Okeson 715 Delmore Drive Roseau MN 56751 38908002 0 X www.lifecaremedicalcenter.org X 1995 MN Promotion of Health 13 13 519 356 460 0 508109 288699 36634554 38055024 255137 236682 31388 22399 37429188 38602804 3500 1500 0 0 19718328 20253706 0 0 0 14487064 14128804 34208892 34384010 3220296 4218794 51926048 57235217 9914251 10999573 42011797 46235644 X To provide care for a healthy life. 0 0 29567363 1500 38055024 LifeCare Medical Center operates a 25-bed acute care hospital, including a 60-bed nursing facility, home health, hospice, and public health in Roseau, Minnesota. The organization also operates a 40-bed nursing home and 12 apartments of assisted living in Greenbush, Minnesota. The purpose of the organization is to own, maintain, and operate a hospital, nursing homes, furnish medical and surgical care to the sick, infirmed, or injured.Acute Care Hospital (Inpatient and Outpatient)Inpatient days: 2,101Outpatient visits: 35,878Long Term CareLifeCare Roseau Manor Resident Days: 20,700LifeCare Greenbush Manor Resident Days: 14,041Home Health/Public Health Visits: 13,374Hospice Clients Served: 24To fulfill its mission of community service, LifeCare Medical Center provides care to patients who meet certain criteria under its charity care policy without charge or at amounts less than its established rates. The amount of charges foregone, based on established rates, was $276,097 for the year ended September 30, 2012. 29567363 1 1 0 0 0 0 0 0 1 0 1 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 79 0 1 519 1 1 1 0 0 0 0 0 0 0 0 0 X 13 13 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 MN X Cathy Huss 2184634763 715 Delmore Drive Roseau MN 56751 Corwin Vatnsdal 1.00 X X 1875 0 0 Carolyn Eeg 1.00 X X 525 0 0 Carmen Przekwas 1.00 X X 1800 0 0 Therese McBride 1.00 X X 1275 0 0 Brenda Sather 1.00 X 1275 0 0 Ralph Herseth MD 1.00 X 975 0 0 Paul Everson 1.00 X 825 0 0 Jon Johnson Oct-Nov 1.00 X 825 0 0 Mark Wilson 1.00 X 1200 0 0 Pete Granger 1.00 X 750 0 0 Steve Haugen 1.00 X 750 0 0 Pete Helgeson 1.00 X 825 0 0 Chuck Lindner 1.00 X 1275 0 0 Shane Isane Mar-Sep 1.00 X 0 0 0 Cathy Huss 40.00 X 156208 0 45853 Keith Okeson 40.00 X 194591 0 51211 Gordon Streiff 40.00 X 127439 0 42512 Sue Lisell 40.00 X 148868 0 41031 Shannon D Carlson 40.00 X 109932 0 32199 Judy K Mattson 40.00 X 118096 0 42547 869309 0 255353 6 0 1 0 Wapiti Medical Group PO Box 92 Newell SD 57760 Locum Physicians 1197087 Altru Health 1200 S Columbia Rd Grand Forks ND 582083780 EHR 782989 CMDI 150 10th St NW Milaca MN 56353 Radiology Services 574500 RC Shefland Anesthesia Ltd 27040 County 9 Bemidji MN 56601 Anesthesia Services 475494 Dakota Software 2303 S Washington Street Grand Forks ND 58201 EHR 334153 18 120301 168398 288699 Net Patient Service re 622110 36744697 36744697 Other Revenue 621500 1310327 1309867 460 38055024 247769 247769 316510 294111 22399 22399 22399 11087 -11087 -11087 -11087 38602804 38054564 460 259081 1500 1500 390607 390607 15355381 13268930 2086451 532375 478552 53823 2858426 2416773 441653 1116917 943425 173492 1727 1727 58562 58562 3555309 3386283 169026 171438 171438 2089891 1129884 960007 1 1 764967 755119 9848 387030 353458 33572 36493 11705 24788 233618 233618 2134872 2134872 144786 144786 Medical Supplies 2885845 2885845 Bad Debt Expense 565705 565705 Surcharge Fees 544088 544088 MN Care Tax 273029 273029 281443 39791 241652 34384010 29567363 4816647 0 5953008 7046473 4588209 5804454 425657 627781 141412 135072 42475221 20826024 22117221 21649197 17080733 19495457 776491 851536 843317 1625247 51926048 57235217 3515361 4181237 725000 6195000 5870000 203890 223336 9914251 10999573 X 42011797 46235644 42011797 46235644 51926048 57235217 X 4218794 5053 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 1 15740 15740 29133579 12285723 16847856 11894574 8072859 3821715 1431328 467442 963886 21649197 38602804 34384010 4218794 5053 5053 4223847 38901968 5053 5053 38896915 -294111 -294111 38602804 34678121 294111 294111 34384010 0 34384010 Part IV, Line 2b: The Medical Center acts as custodian for the funds of the residents, holds resident security deposits, and holds employee voluntary withholdings. Funds for residents and others totaled $223,336 and $203,890 at September 30, 2012 and 2011. Description of Uncertain Tax Positions Under FIN 48: Part X: The Medical Center 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 Medical Center is annually required to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. In addition, the Medical Center is subject to income tax on net income that is derived from business activities that are unrelated to their exempt purpose. The Medical Center has determined it is not subject to unrelated business income tax and has not filed an Exempt Organization Business Income Tax Return (Form 990T) with the IRS. The Medical Center believes that is 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 Medical Center 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 XII, Line 4b - Other Adjustments: Rental Expense Recorded in Expense for Financial Statements -294,111. Part XIII, Line 2d - Other Adjustments: Rental Expense Recorded in Expense for Financial Statements 294,111. 1 1 X 1 X 1 X 1 1 0 1 1 207000 207000 0.00610 7319823 5498915 1820908 0.05380 7526823 5498915 2027908 0.05990 152220 11900 140320 0.00410 64123 64123 0.00190 3279707 2380271 899436 0.02660 457 457 0.00000 34856 34856 0.00100 3531363 2392171 1139192 0.03360 11058186 7891086 3167100 0.09350 8173 8173 0.00020 17663 17663 0.00050 2772 2772 0.00010 19245 19245 0.00060 23969 23969 0.00070 79728 79728 0.00240 151550 151550 0.00450 0 565705 5475 5465258 5430778 34480 X 1 1 1 1 LifeCare Medical Center

715 Delmore Drive Roseau MN 56751

X X X X X Urgent Care LifeCare Medical Center 1 0 1 1 200.000000000000 1 300.000000000000 1 X X X 1 1 X X 1 0 1 X 0 0 3 LifeCare Roseau Manor

715 Delmore Drive Roseau MN 56751

Skilled Nursing Facility LifeCare Greenbush Manor

19120 290th Street Greenbush MN 56726

Skilled Nursing Facility and Assisted Living Facility LifeCare Home Care and Hospice

715 Delmore Drive Roseau MN 56751

Home Health and Hospice Part I, Line 3c: Part I, Line 6b: The organization's community benefit report can be found on its website at lifecaremedicalcenter.org and is shared with service area residents in an annual newsletter that focuses on community benefit. Part I, Line 7: Charity care was converted to cost by multiplying the ratio of cost to gross charges by the gross uncompensated charges associated with providing charity care to its patients. Community health improvements and cash and in-kind contributions are calculated at actual costs recorded in the general ledger. Education costs are based on estimated time and wages to manage students and interns at the facilities. Medicaid is calculated based on gross charges and estimated payments from the internal revenue system. Subsidized health services is converted to cost according to costs allocated to the relevant cost centers on the Medicare Cost Report. Part I, L7 Col(f): The amount of bad debt expense removed from total expenses to determine the percentage was $565,705. Part II: Community support includes donations to local community organizations and employee staff time donated to local community committees. Environmental improvements include the time employees spend in their involvement in the Green Team. Employees of the Green Team managed the process for creating other recycling opportunities for its employees that would not otherwise be available to the them. By being involved in the community through the above activities, we are able to increase health awareness.Roseau County is considered a Health Professional Shortage Area and therefore is including the costs of recruitment in workforce development. This promotes better care for our patients. Part III, Line 4: The estimated amount of bad debt expense attributable to patients eligible under the organization's charity care policy is calculated by using gross charity care at charge as a percentage of total gross hospital revenue. It is reasonable to assume that charity care as a percentage of gross revenue can also be applied to bad debt.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. Financial Statement Note:The carrying amount of patient and resident receivables is reduced by a valuation allowance that reflects management's 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: 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. Part III, Line 9b: If a patient is known to qualify for financial assistance, or if the patient begins the financial assistance process, all collection actions cease until the application is compelte. LifeCare Medical Center Part V, Section B, Line 13g: In addition to providing the full policy upon request, the Hospital also references the policy on its website, billing invoices, as well as brochures summarizing the policy in the emergency rooms and admissions office. Part VI, Line 2: LifeCare provides the Public Health functions for the Roseau County. Through this role, we participate in a community needs assessment through Quinn County to assess the needs of our service area. Part VI, Line 3: We have financial counselors who have phone conversations with patients during our collections process. We guide patients to other financial programs as well as our own charity care program. Brochures are available in the admitting area which is in the same location as the Emergency Room. Information is also sent to our patients via patient bills. Our website has the charity care application and brochure, as well as the contact information for our financial counselors, available to patients. Part VI, Line 4: Roseau County is a rural area with a population of approximately 17,000 people. We are the sole hospital located in Roseau County and the nearest tertiary hospital is two hours away. We are a federally-designated medically underserved area. In 2009, approximately 12.7% of the population was age 65 or older. The average per capita income is 23,061 and approximately 9.7% of the population is below the federal poverty level. Part VI, Line 5: The organization's governing body is comprised of volunteer members who reside in the community. Medical staff privileges are extended to all qualified physicians in the community. Surplus funds are reinvested in facilities to improve patient care. The hospital operates an emergency room that is available to all, regardless of ability to pay.As a not-for-profit organization, LifeCare Medical Center has made a promise to give back to its community. As a regional healthcare leader, LifeCare strives to respond to healthcare needs by partnering with local leaders, educators, government officials and others.The community benefit report summarizes how this leadership role has made a difference to the people of the area. Included are highlights describing how LifeCare has played an integral role in enhancing the health and overall well being of the community.Trusted PartnershipsLifeCare's commitment to quality care extends beyond its walls and into the community where strong partnerships have been built to maintain and improve the health and overall well-being of its neighbors. LifeCare EMS personnel are proud of their trusted relationships with regional emergency response groups. Area fire fighters, police, and others participate in disaster training sessions where a disaster is staged and responded to as if it were a real life situation. This type of training helps prepare all groups involved.Education for a Healthy FuturePart of LifeCare's mission is to help educate the next generation of health care professionals. LifeCare Directors work closely with many regional high school and post-secondary educational facilities to bring students into our organization through job shadowing, internships, rural scholar and other programs. Through these programs, students get a firsthand look at specific health care careers as they learn from our staff for a day, week, month or several months based on their program. Students often times focus on rural healthcare employment opportunities that may be available to them once they have completed their education.Community CareLifeCare recognizes that circumstances arise where a patient is simply unable to pay a hospital bill. In these situations, LifeCare offers a program called Community Care, in which LifeCare forgives the bills of deserving families and individuals who meet set income guidelines. Great appreciation has been voiced by many who received a helping hand from this program. In fiscal year 2012, LifeCare granted nearly $300,000 in Community Care.A Healthy Awareness and Community OutreachLifeCare employees know the importance of educating the public about a healthy lifestyle. And sometimes the best way to provide awareness is to venture outside the facility. That's why LifeCare is involved with many initiatives throughout our communities. By reaching out to the public through parish nursing, nutrition and exercise programs, civic projects, health and safety awareness, health fairs, and other methods, they are able to educate and strengthen the community.Fifth grade tours have become a favorite for students throughout Roseau County. A hospital tour is coupled with a mini health fair where students learn their blood type. The goal of this program is to influence young students into making healthy lifestyle decisions, in addition to introducing them to careers in healthcare.A partnership with area law enforcement has allowed LifeCare to initiate the POLST program, which assists local and county law enforcement officers and other first responders in helping patients in a medical emergency.Funding Essential ServicesLifeCare's commitment to community needs is exemplified by its contribution to subsidized services. In fiscal year 2012, LifeCare absorbed approximately $900,000 in costs in order to sustain services that rely on funding from other sources, in particular the Medicaid program. These departments include Home Health Care, Hospice, Public Health, and LifeCare's two nursing homes (Roseau Manor and Greenbush Manor).LifeCare Medical Center distributed almost $3 million in Community Benefits in fiscal year 2012. Reports Filed With States Part VI, Line 7 MN X X X 0 0 0 0 0 0 0 0 0 Cathy Huss 142562 0 3400 0 10246 0 27085 0 20164 0 203457 0 0 0 Keith Okeson 184590 0 600 0 9401 0 30476 0 22386 0 247453 0 0 0 Gordon Streiff 126167 0 250 0 1022 0 24399 0 19421 0 171259 0 0 0 Sue Lisell 138121 0 3200 0 7547 0 31456 0 10910 0 191234 0 0 0 Judy K Mattson 116928 0 100 0 1068 0 20713 0 22839 0 161648 0 0 0 Form 990, Part VI, Section A, line 1 The Executive Committee consists of the Chair, Vice-Chair, Treasurer, Secretary, and at least one other director (who shall be selected annually). The President/CEO will be a non-voting member of the committee. The President/CEO will be excused for matters relating to compensation and evaluation. The Executive Committee shall meet as often as necessary at the call of the Chair, Vice-Chair, or at the request of any two of its members. A majority of the Executive Committee shall constitute a quorum. The Executive Committee's specific responsibilities are to: * Exercise the authority of the board in the management of the business of the corporation between regularly scheduled meetings. * Report to the board any official actions it has taken at the next board meeting. * Review and approve the compensation program for the senior leaders of the organization that is designed to allow the organization to recruit and retain superior talent. * Responsible for conducting on an annual basis the process of establishing goals, evaluating the performance and establishing the compensation of the President/CEO. Form 990, Part VI, Section B, line 11 The return is reviewed initially by the CFO. The return is made available to the Board of Trustees before it is filed. Form 990, Part VI, Section B, line 12c All officers, trustees, and key employees are required to complete a conflict of interest form annually. The form is reviewed by the Board of Trustees to determine if any conflicts exist. If there are any conflicts, the Board of Trustees will discuss the restrictions that should be placed on the person with the conflict. Restrictions are typically related to voting and discussion of matters related to the conflict. Form 990, Part VI, Section B, line 15 The compensation for the CEO and CFO is approved by the Executive Committee based on comparability data. The CEO and CFO both have employment contracts. The deliberation and discussion of compensation is documented in the board meeting minutes. This process takes place on an annual basis. Form 990, Part VI, Section C, line 19 The organization's governing documents, conflict of interest policy, and financial statements are available upon request. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net unrealized gains on investments: 5,053.