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      <Name>walter winkler</Name>
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      <Description>Keokuk Area Hospital is a private 501 c 3 tax exempt charitable community primary care acute hospital with a mission of ensuring quality healthcare services are available to all residents of our community regardless of their ability to pay. The hospital provides emergency care, outpatient, and inpatient services to about 45,000 patients each year. 75% of these patients are either medicare, medicaid, or indigent and result in more than $5,000,000 of uncompensated care each year. Keokuk Area Hospital struggles to continue providing this uncompensated care due to growing medicare and medicaid cost shortfalls as the hospital receives only 78% of cost from medicare and 72% of cost from medicaid, and almost nothing from indigent patients. 990 - PART III a. 2010 10/1/2010 - 09/30/2011 PART III a. Keokuk Area Hospital is a community facility with a mission of providing quality health care services to residents of our community, at a reasonable cost, regardless of their ability to pay. To date, efforts by KAH have been highly successful as demonstrated by the wide scope of services available for a community hospital of 49 beds, and the relatively low cost when compared to other facilities of KAH's size locally, regionally or nationally. (as evidenced by the Iowa Hospital's Databank Benchmarking program and other benchmarking services such as Data Advantage) The Governing Board is made up of local concerned residents from various business and professional backgrounds who serve without compensation. Keokuk Area Hospital's services and community benefit include: A. In 2011, KAH cared for almost 46,000 patients. 75% of these patients were either Medicare, Medicaid, or indigent leaving only 25% commercial insurance base. Medicare paid $3,015,572 less than the COST of caring for eligible Medicare patients Medicaid paid $1,445,833 less than the COST of caring for eligible Medicaid patients Uninsured patients COST Keokuk Area Hospital $1,769,716 which was not reimbursed The total of this Community Benefit in actual costs was $6,231,121 B. Included in the cost shortfalls above are subsidies for inpatient mental health services, obstetrics, swing bed services, emergency room services, and many other hospital services. C. Keokuk Area Hospital also expends a significant amount of funds to recruit and retain physicians, nurse practitioners, and physician assistants to the Keokuk Area. During 2011 Keokuk Area Hospital spent more than $821,000 to support the local Community Health Center and physician clinics in order to ensure all local residents had access to medical care. D. Keokuk Area Hospital also provides the following services to the community. 1. Stop smoking clinics, radon clinics, advanced directive clinics and I Can Cope programs. 2. Community Health Education of many types 3. Support groups for many chronic and acute illnesses 4. Self Help programs 5. Health Screening services 6. Immunizations 7. Counseling for a variety of topics 8. In Home Services 9. Transportation services 10. Physician Referral Service - The hospital aids any patients presenting themselves for medical treatment in finding a physician if they do not have one. 11. Baby Hot Line - A 24-hour hotline is available to the hospital OB department for expectant mothers to call with concerns or questions about their pregnancies or care of infants. 12. The hospital provides appropriate telecommunication devices for the hearing impaired, as well as policies that ensure that persons handicapped in any manner can be cared for. 13. Hospital Social Services assist patients in applying for Medicare and Medicaid benefits, finding long term care services for those who need them, and supporting both the patient and families during their hospital stay and any time after. 14. The hospital's business office provides hundreds of hours of insurance counseling and assistance to patients in getting properly reimbursed through their insuring agent. 15. The hospital provides various other telephone information programs through the hospital Psychiatric Department, as well as the Emergency Department. 16. The hospital also provides a variety of assistance to local organizations and people seeking health care services and/or information, and participates with all local health care related organizations in coordinating services and referrals. 17. The hospital has a formal improvement program with participation by all levels of employees. The PI efforts are aimed at continually improving care and increasing productivity and cost effectiveness. 18. As a demonstration of the ongoing support of the community, more than 200 volunteers continue to provide thousands of hours of time and service to patients and visitors at the hospital, and also raise significant funds towards the purchase of needed hospital equipment. The Board is committed to providing services in our community only if they can be provided in a quality manner and at a cost that is no greater than can be provided elsewhere. The hospital has also been operated without any tax support from the community and the hospital board is committed to operating the facility in such a manner that it does not become a burden to the community. The Board is also committed to charging for services in an equitable manner, and distributing costs of providing services across the broadest segment of payors possible. The greater Keokuk area includes Lee County Iowa, Hancock County Illinois, and Clark County Missouri. Each of these areas are rural and this entire market area continues to experience some of the highest unemployment rates in their respective states, caused by plant closings and cutbacks. As a result of the demographics of our area and reimbursement characteristics of Medicare and Medicaid programs (which do not pay the cost of care in rural Iowa) less than 25% of patients' third party payors must bear the burden of government shortfalls and indigent care. These third party payors do not always make up the deficit created by government and indigent patients which has resulted in losses for Keokuk Area Hospital in five of the past nine years despite KAH being a low cost hospital by any benchmarking information available. 2011 resulted in a large loss of more than $1.6 Million. Keokuk Area hospital cost shortfalls from Medicare alone have exceeded $25,000,000 over the past 13 years, making it difficult to purchase needed technology, new facilities, and equipment as well as impacting Keokuk Area Hospital's ability to provide competitive wages and benefits in our labor market. Keokuk Area Hospital employees have not had a wage increase for 3 years and contributions to the employee's 401k pension plan have been suspended to help over come government reimbursement shortfalls. Many rural Iowa hospitals have the same issues, however, most have been able to take advantage of the federal government's Critical Access Hospital program which increases Medicare payment to 101% of costs, and which once achieved brings higher payment from both Medicaid and some commercial payors such as Wellmark. Keokuk Area Hospital's census has diminished to the point where it is now operating as a Critical Access Hospital and meets all of the requirements of being a Critical Access Hospital, however, it cannot be designated as such because it is less than 35 miles from the nearest hospital, despite the fact that there is a critical access hospital within 17 miles of Keokuk, and despite the fact that Keokuk Area Hospital has been designated as a "necessary hospital" by the State of Iowa. As was the case with other hospitals prior to the Critical Access Hospital legislation being enacted, Keokuk Area Hospital is struggling to survive financially due to the failure of Medicare and Medicaid to pay the cost of caring for their enrollees. The Keokuk Community is being discriminated against simply because our Hospital was not smaller at an earlier date. The mission of caring for all Keokuk Area Residents regardless of their ability to pay creates a huge Community Benefit, however, this benefit is in jeopardy due to CMS policy of paying other hospitals in similar Communities higher rates while denying the Keokuk Community the same reimbursement.</Description>
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        <TotalCommunityBuildingExpense>3840</TotalCommunityBuildingExpense>
        <DirectOffsettingRevenue>0</DirectOffsettingRevenue>
        <NetCommunityBuildingExpense>3840</NetCommunityBuildingExpense>
        <PercentOfTotalExpense>0.00013</PercentOfTotalExpense>
      </EconomicDevelopment>
      <CommunitySupport>
        <TotalCommunityBuildingExpense>2560</TotalCommunityBuildingExpense>
        <DirectOffsettingRevenue>0</DirectOffsettingRevenue>
        <NetCommunityBuildingExpense>2560</NetCommunityBuildingExpense>
        <PercentOfTotalExpense>0.00009</PercentOfTotalExpense>
      </CommunitySupport>
      <CoalitionBuilding>
        <PersonsServed>35447</PersonsServed>
        <TotalCommunityBuildingExpense>5910</TotalCommunityBuildingExpense>
        <DirectOffsettingRevenue>0</DirectOffsettingRevenue>
        <NetCommunityBuildingExpense>5910</NetCommunityBuildingExpense>
        <PercentOfTotalExpense>0.00021</PercentOfTotalExpense>
      </CoalitionBuilding>
      <HealthImprovementAdvocacy>
        <TotalCommunityBuildingExpense>6150</TotalCommunityBuildingExpense>
        <DirectOffsettingRevenue>0</DirectOffsettingRevenue>
        <NetCommunityBuildingExpense>6150</NetCommunityBuildingExpense>
        <PercentOfTotalExpense>0.00021</PercentOfTotalExpense>
      </HealthImprovementAdvocacy>
      <WorkforceDevelopment>
        <PersonsServed>104</PersonsServed>
        <TotalCommunityBuildingExpense>51556</TotalCommunityBuildingExpense>
        <DirectOffsettingRevenue>0</DirectOffsettingRevenue>
        <NetCommunityBuildingExpense>51556</NetCommunityBuildingExpense>
        <PercentOfTotalExpense>0.00179</PercentOfTotalExpense>
      </WorkforceDevelopment>
      <Total>
        <NumberOfActivitiesOrPrograms>0</NumberOfActivitiesOrPrograms>
        <PersonsServed>70998</PersonsServed>
        <TotalCommunityBuildingExpense>70016</TotalCommunityBuildingExpense>
        <DirectOffsettingRevenue>0</DirectOffsettingRevenue>
        <NetCommunityBuildingExpense>70016</NetCommunityBuildingExpense>
        <PercentOfTotalExpense>0.00243</PercentOfTotalExpense>
      </Total>
      <BadDebtExpenseReported>1</BadDebtExpenseReported>
      <BadDebtExpenseAmount>1056599</BadDebtExpenseAmount>
      <AmountAttributableTo>718487</AmountAttributableTo>
      <AmountReimbursedByMedicare>10851701</AmountReimbursedByMedicare>
      <CostOfCareReimbursedByMedicare>13867273</CostOfCareReimbursedByMedicare>
      <MedicareSurplusOrShortfall>-3015572</MedicareSurplusOrShortfall>
      <CostingMethodologyUsed>
        <Other>X</Other>
      </CostingMethodologyUsed>
      <WrittenDebtCollectionPolicy>1</WrittenDebtCollectionPolicy>
      <ProvisionForCharityCare>1</ProvisionForCharityCare>
      <NumberOfHospitalFacilities>1</NumberOfHospitalFacilities>
      <Form990ScheduleHPartVSectionA>
        <FacilityNumber>1</FacilityNumber>
        <Name>
          <BusinessNameLine1>Keokuk Area Hospital</BusinessNameLine1>
        </Name>
        <Address>
          <AddressLine1>1600 Morgan Street</AddressLine1>
          <City>Keokuk</City>
          <State>IA</State>
          <ZIPCode>52632</ZIPCode>
        </Address>
        <LicensedHospital>X</LicensedHospital>
        <GeneralMedicalAndSurgical>X</GeneralMedicalAndSurgical>
        <Er24Hours>X</Er24Hours>
      </Form990ScheduleHPartVSectionA>
      <Form990ScheduleHPartVSectionB>
        <HospitalFacilityName>
          <BusinessNameLine1>Keokuk Area Hospital</BusinessNameLine1>
        </HospitalFacilityName>
        <HospitalFacilityNumber>1</HospitalFacilityNumber>
        <CHNAConducted>0</CHNAConducted>
        <EligibilityCriteriaExplained>1</EligibilityCriteriaExplained>
        <UsesFPGFree>1</UsesFPGFree>
        <FPGFreePercent>25000</FPGFreePercent>
        <UsesFPGDiscounted>1</UsesFPGDiscounted>
        <FPGDiscountPercent>400000</FPGDiscountPercent>
        <ExplainsBasis>1</ExplainsBasis>
        <IncomeLevel>X</IncomeLevel>
        <AssetLevel>X</AssetLevel>
        <InsuranceStatus>X</InsuranceStatus>
        <UninsuredDiscount>X</UninsuredDiscount>
        <ExplainsApplicationMethod>1</ExplainsApplicationMethod>
        <IncludesPublicityMeasures>1</IncludesPublicityMeasures>
        <PostedInAdmissionOffice>X</PostedInAdmissionOffice>
        <AvailableOnRequest>X</AvailableOnRequest>
        <OtherPublicity>X</OtherPublicity>
        <ActionsOnNonpayment>1</ActionsOnNonpayment>
        <PermitReportToCreditAgency>X</PermitReportToCreditAgency>
        <PermitLawsuit>X</PermitLawsuit>
        <CollectionActivities>1</CollectionActivities>
        <ReportToCreditAgency>X</ReportToCreditAgency>
        <Lawsuit>X</Lawsuit>
        <NotifyUponAdmission>X</NotifyUponAdmission>
        <NotifiedAllPatients>X</NotifiedAllPatients>
        <DocumentedDetermination>X</DocumentedDetermination>
        <NondiscrimEmergencyCarePolicy>1</NondiscrimEmergencyCarePolicy>
        <UsedOtherMethod>X</UsedOtherMethod>
        <AmountsGenerallyBilled>0</AmountsGenerallyBilled>
        <GrossCharges>0</GrossCharges>
      </Form990ScheduleHPartVSectionB>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P01_S00_L07</Identifier>
        <ReturnReference>Schedule H, Part I, Line 7</ReturnReference>
        <Explanation>Applied overall ratio of cost to charges to gross revenues and subtracted reimbursements received for services</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P01_S00_L07g</Identifier>
        <ReturnReference>Schedule H, Part I, Line 7g</ReturnReference>
        <Explanation>Keokuk Area Hospital provided direct monetary support to assist Tri State Medical Group in caring for indigent and sliding fee patients. Tri State is affiliated with the Community Health Centers of Southeast Iowa.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P02_S00_L00</Identifier>
        <ReturnReference>Schedule H, Part II</ReturnReference>
        <Explanation>Hospital managers and employees participate in many community activities not only providing their individual expertise and time, but also educating the public regarding healthcare services available locally, healthcare trends, and gaining valuable feedback relating to the healthcare needs of the community.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P03_S0A_L04</Identifier>
        <ReturnReference>Schedule H, Part III, Section A, Line 4</ReturnReference>
        <Explanation>This year's audit discussed bad debt in Note 1 of the attached audited financials indicating thatFASB ASU 2011-07 requires health care entities that recognize significant amounts of patient service revenue at the time the services are redndered even though they do not assess the patients't ability to pay, to change the presentation of their statement of operations by reclassifying the providion for bad debts associated with patient service revenue from an operatin expense to a deduction from patient service revenue (net of contractual allowances and discounts). Additionally, ASU 2011-07 requires those health care entities to provide enhanced disclosure about their policies for recognizing revenue and assessing bad debts, disclosures of patient service revenue (net of contractual allowances and discounts) as well as qualitative and quantitative information about changes in the allowance for doubtful accounts. The provision are effective for the first annual reporting period ending after December 15, 2012, and interim and annual periods thereafter, with early adiption is permitted. The changes to the presentatin of the provision for bad debts related to patient service revenue in the statement of operations should be applied retrospectively to all prior periode presented. thes disclosures required by ASU 2011-076 should be provided for the period of adiption and subsequent reporting periods. The Hospital is assessing the impact of the implementation of ASU 2011-07 on its financial statements. Note 1 also discussed Charity care indicating that the Hospital provides care to patients who meet certain criteria under its charity care policy without charge or at amounts less than its established rates. Because the Hospital does not pursue collections of amounts determined to qualify as charity care, they are not reported as revenue. Previous audits noted that patient receivables due directly from the patients are carried at the original charge for the service provided less amounts covered by third party payors and less an estimated allowance for doubtful redeivables based on a review of all outstanding amounts on a monthly bssis. Management determines the allowance for doubtful accounts by identifying troubled accounts, by historical experience applied to an aging of accounts and by considering the patient's financial history, credit history, and current economic conditions. The hospital does not charge interest on patient receivables. Patient receivables are written off as bad debt when deemed uncollectible, and if the patient will not fill out the necessary paperwork to qualify for charity care under the hospital's financial assistance policy. Recoveries of receivables previously written off are recorded as a areduction of bad debt expense when received. To estimate the cost of accounts written off to bad debt, the overall ratio of cost to charges was applied to gross revenues written off to bad debt. From experience uninsured patients and those which qualify for the state of Iowa ICARE program and County Assistance would meet Keokuk Area Hospital's financial assistance criteria for charity care if the patients can be located and would fill out the necessary forms to apply for assistance. 68% of patients fall in this category and this percentage is applied to the total bad debt cost to arrive at the cost of bad debt that would actually qualify as charity care. This number is more than likely understated as many patients covered by commercial insurance would also qualify and medicare no longer pays for all medicare bad debt and many medicare patients on fixed social security incomes would also qualify for charity care but are not recognized in the 68%.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P03_S0B_L08</Identifier>
        <ReturnReference>Schedule H, Part III, Section B, Line 8</ReturnReference>
        <Explanation>Costs for medicare services were derived directly from the medicare cost report. The entire $3,015,572 cost shortfall represents unrecovered cost to Keokuk Area Hospital and is in essence charity care for the elderly, and should be regarded as community benefit.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P03_S0C_L09b</Identifier>
        <ReturnReference>Schedule H, Part III, Section C, Line 9b</ReturnReference>
        <Explanation>Collection procedures indicate that once a patient provides the necessary information for the Business Office to determine they are eligible for charity care, collection procedures are not implemented, and the account is written off as charity.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P05_S0B_L13</Identifier>
        <ReturnReference>Schedule H, Part V, Section B, Line 13</ReturnReference>
        <Explanation>All patient statements and billings encourage patients to call the business office regarding the hospital's financial assistance policy.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P05_S0B_L19</Identifier>
        <ReturnReference>Schedule H, Part V, Section B, Line 19</ReturnReference>
        <Explanation>All uninsured patients are eligible for the hospital's financial assistance policy which is done on sliding scale from 100% discount to lessor discounts at varying levels.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P06_S00_L02</Identifier>
        <ReturnReference>Schedule H, Part VI, Line 2</ReturnReference>
        <Explanation>Healthcare needs assessment is a continual and ongoing process for Keokuk Area Hospital. The Board of Directors is made up of local volunteers from a variety of occupations and community organizations who serve with no compensation and representa a broad spectrum of local area residents and community interests. As such, the board itself provides extensive input as to the needs of the Community they represent. In addition, focus groups with local residents are conducted to gain input regarding healthcare needs. Input is also provided via patient satirfaction surveys. In 2010 Keokuk Area Hospita also participated in a county wide needs assessment conducted by the Lee County Health Department, and will continue to participate in those types of opportunities as they arise. Keokuk Health System Assessment of Community Needs _____________________________________________________________ Keokuk Health Systems. Inc., is the not-for-profit parent company of a variety of wholly owned and operated corporate entities involved in the planning, development, and delivery of healthcare services and products to residents and businesses within a 25 mile radius of Keokuk, Iowa. One of the purposes of this Health System is to assess and evaluate the needs of the area and include such assessments in the strategic plans and initiatives of the System's entities. These comprehensive and ongoing assessments include many and various methods and venues to gather and analyze this important data such as; &gt; VISION KEOKUK; KHS was and is an active participant in the development of a comprehensive regional plan to improve the economy and quality of life for this region. This multi-year ongoing process has involved the assessment and coordination of community and regional priorities which includes a major healthcare subsection entitled; "Enhancing the availability of quality healthcare services to attract and retain patients from this service area". This strategic priority collects and utilizes many sources of data and assessments from all of the regions healthcare providers and organizations. Keokuk Health Systems is the assigned entity to coordinate and report on progress and initiatives related to this strategic directive. &gt; KEOKUK AREA HEALTHCARE PARTNERSHIP : This community initiative is a spin-off from the VISION KEOKUK priority and was put in place to bring the healthcare providers together to evaluate needs and find ways to coordinate scarce resources. One of their initial projects was a survey of area providers to determine their priorities and needs. KHS is an active participant and leader in this community initiative. &gt; LEE COUNTY HEALTHCARE COLLABORATIVE; KHS along with a neighbor hospital (FMCH) has formed an informal collaborative to address the priorities for healthcare in Lee County. Initial efforts have included soliciting input from the regional business and industry community and the identification of needs for this important segment of the market region. &gt; REGIONAL ECONOMIC DEVELOPMENT INITIATIVES: KHS has active involvement and leadership positions with the Lee County Economic Development Group, Southeast Iowa Regional Port Authority and other economic development organizations that analyze and evaluate important demographic trends and data used in the design of services including healthcare. &gt; PATIENT SATISFACTION &amp; PERFOREMANCE IMPROVEMENT; The entities of Keokuk Health Systems all regularly solicit input from the patients and constituents they serve and use such information within their respective and collective Performance Improvement and Strategic Planning processes to design and implement care systems that better meet the needs of those we serve. Such input is solicited through the use of patient satisfaction surveys in all areas of service, personal interactions and follow-ups with entity staff members (i.e. follow-up phone calls, Patient Representative visits, Focus Groups, community mailings and presentations, media reports and interviews, Foundation events and communications, etc.) &gt; STRATEGIC PLANNING: The KHS Board conducts annual Strategic Planning sessions that include environmental assessments, trend analysis, and projections of future directions based on best knowledge available and internal evaluations of Strategic Pillar progress. &gt; PUBLICALLY REPORTED DATA: KHS is an active voluntary participant in all national and state publicly reported data bases (CMS, JCAHO, IHA, Iowa Dept. of Public Health, Iowa Division of Insurance, CHC, etc.) which identify comparative performance in key clinical and consumer benchmarks used to evaluate internal assessments of needs. &gt; JOINT VENTURES AND AFFILIATIONS: KHS is a regional partner in the provision of specialty services with other systems and providers that include renal dialysis, Neurology, Cardiology, ENT, Oncology, and others which provide assessments and evaluations of needs in these and other potential areas. &gt; TOTAL SAFETY CULTURE: The entities of KHS are active in promoting a total safety culture in all of care and service that includes all staff and resources being alert to and anticipating the needs of patients and constituents every day, every shift, and to have the freedom and confidence to report and share daily input that contribute to this transparency of information and input for planning purposes In short the entities of Keokuk Health Systems are committed to the constant need to assess, prioritize, and deliver services and care that can be provided within the limitations and abilities of our various organizations and coordinate and maximize the community benefit provided to those we serve.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P06_S00_L03</Identifier>
        <ReturnReference>Schedule H, Part VI, Line 3</ReturnReference>
        <Explanation>Hospital billing statements all contain information encouraging patient to contact the Business Office for financial assistance or help with billing third parties including government programs, and this information is also posted in registration areas as well as the Business Office itself. Business office personnel also visit with patients in the hospital who are uninsured to make them aware of the policy. The Business Office also provides space and coordination with a SHIP program which provides volunteers to help patients with billing issues.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P06_S00_L04</Identifier>
        <ReturnReference>Schedule H, Part VI, Line 4</ReturnReference>
        <Explanation>Keokuk Area Hospital serves the Southern portion of Lee County Iowa, the Western portion of Hancock County Illinois, and the Northern portion of Clark County Missouri. This entire market area is relatively economically depressed with some of the highest unemployment and poverty levels nationally. The city of Keokuk has about 15% unemployment and 23.2% of families are below the poverty level, while the surrounding county has about 8.2% unemployment and 11% of families living under poverty. These market demographics combine to result in 75% of Keokuk Area Hospital patients being Medicare, Medicaid, or Indigent with payment of only 76% of the cost of caring for these patients. This leaves only a 25% commercial insurance base from which these cost shortfalls cannot be made up.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P06_S00_L05</Identifier>
        <ReturnReference>Schedule H, Part VI, Line 5</ReturnReference>
        <Explanation>Keokuk Area Hospital is operated by an all voluntary Community Board of Directors who serve with no compensation, and maintains a totally open medical staff. All funds obtained by Keokuk Area Hospital from any source are utilized to operate the Hospital and /or providing facilities/equipment for the Hospital.</Explanation>
      </Form990ScheduleHPartVI>
      <Form990ScheduleHPartVI>
        <Identifier>SchH_P06_S00_L06</Identifier>
        <ReturnReference>Schedule H, Part VI, Line 6</ReturnReference>
        <Explanation>Keokuk Area Hospital is a subsidiary of Keokuk Health Systems and has three sister corporations which play various roles in promoting the health of our Community. Tri State Medical Group recruits and retains physicians to the Community and oeperates medical offies to snsure that area residents have access to quality medical care regardless of their ability to pay. Tri State is affiliated with the Community Health Centers of Southeastern Iowa and Keokuk Area supports Tri State and the CHC by subsidizing sliding fee patients. Keokuk Area Medical Equipment provides durable medical equiment and pharmacy services and assists the Hospital by providing services duch as oxygen and IV therapies which allows patients to be discharged from the hospital earlier resulting in lower lengths of stay and cost savings as well as providing a continuum of care. KAME also provided cost effective pharmacy and oxygen services to local nursing homes. Keokuk Area Hospital Foundation is the fund raising arm of Keokuk Health Systems and accepts donations to support healthcare in our area.</Explanation>
      </Form990ScheduleHPartVI>
    </IRS990ScheduleH>
    <IRS990ScheduleJ documentId="R000005" softwareId="10000077" softwareVersion="v1.00">
      <CompensationCommittee>X</CompensationCommittee>
      <WrittenEmploymentContract>X</WrittenEmploymentContract>
      <CompensationSurvey>X</CompensationSurvey>
      <BoardOrCommitteeApproval>X</BoardOrCommitteeApproval>
      <SeverancePayment>0</SeverancePayment>
      <SupplementalNonqualRetirePlan>0</SupplementalNonqualRetirePlan>
      <EquityBasedCompArrangement>0</EquityBasedCompArrangement>
      <CompBasedOnRevenueOfFilingOrg>0</CompBasedOnRevenueOfFilingOrg>
      <CompBasedOnRevenueRelatedOrgs>0</CompBasedOnRevenueRelatedOrgs>
      <CompBasedNetEarningsFilingOrg>0</CompBasedNetEarningsFilingOrg>
      <CompBasedNetEarningsRelateOrgs>0</CompBasedNetEarningsRelateOrgs>
      <AnyNonFixedPayments>0</AnyNonFixedPayments>
      <InitialContractException>0</InitialContractException>
      <Form990ScheduleJPartII>
        <NamePerson>Kiran Khanolkar MD</NamePerson>
        <BaseCompensationFilingOrg>0</BaseCompensationFilingOrg>
        <CompBasedOnRelatedOrgs>140339</CompBasedOnRelatedOrgs>
        <BonusFilingOrg>0</BonusFilingOrg>
        <BonusRelatedOrgs>145870</BonusRelatedOrgs>
        <OtherCompensationFilingOrg>0</OtherCompensationFilingOrg>
        <OtherCompensationRelatedOrgs>0</OtherCompensationRelatedOrgs>
        <DeferredCompFilingOrg>0</DeferredCompFilingOrg>
        <DeferredCompRelatedOrgs>9800</DeferredCompRelatedOrgs>
        <NontaxableBenefitsFilingOrg>0</NontaxableBenefitsFilingOrg>
        <NontaxableBenefitsRelatedOrgs>20951</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationFilingOrg>0</TotalCompensationFilingOrg>
        <TotalCompensationRelatedOrgs>316960</TotalCompensationRelatedOrgs>
        <CompReportPrior990FilingOrg>0</CompReportPrior990FilingOrg>
        <CompReportPrior990RelatedOrgs>33308</CompReportPrior990RelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>Jagadamba Kantanmeni</NamePerson>
        <BaseCompensationFilingOrg>286019</BaseCompensationFilingOrg>
        <CompBasedOnRelatedOrgs>0</CompBasedOnRelatedOrgs>
        <BonusFilingOrg>0</BonusFilingOrg>
        <BonusRelatedOrgs>0</BonusRelatedOrgs>
        <OtherCompensationFilingOrg>0</OtherCompensationFilingOrg>
        <OtherCompensationRelatedOrgs>0</OtherCompensationRelatedOrgs>
        <DeferredCompFilingOrg>9800</DeferredCompFilingOrg>
        <DeferredCompRelatedOrgs>0</DeferredCompRelatedOrgs>
        <NontaxableBenefitsFilingOrg>15618</NontaxableBenefitsFilingOrg>
        <NontaxableBenefitsRelatedOrgs>0</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationFilingOrg>311437</TotalCompensationFilingOrg>
        <TotalCompensationRelatedOrgs>0</TotalCompensationRelatedOrgs>
        <CompReportPrior990FilingOrg>25418</CompReportPrior990FilingOrg>
        <CompReportPrior990RelatedOrgs>0</CompReportPrior990RelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>John J Miller</NamePerson>
        <BaseCompensationFilingOrg>215366</BaseCompensationFilingOrg>
        <CompBasedOnRelatedOrgs>0</CompBasedOnRelatedOrgs>
        <BonusFilingOrg>0</BonusFilingOrg>
        <BonusRelatedOrgs>0</BonusRelatedOrgs>
        <OtherCompensationFilingOrg>0</OtherCompensationFilingOrg>
        <OtherCompensationRelatedOrgs>0</OtherCompensationRelatedOrgs>
        <DeferredCompFilingOrg>9003</DeferredCompFilingOrg>
        <DeferredCompRelatedOrgs>0</DeferredCompRelatedOrgs>
        <NontaxableBenefitsFilingOrg>21346</NontaxableBenefitsFilingOrg>
        <NontaxableBenefitsRelatedOrgs>0</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationFilingOrg>245715</TotalCompensationFilingOrg>
        <TotalCompensationRelatedOrgs>0</TotalCompensationRelatedOrgs>
        <CompReportPrior990FilingOrg>30350</CompReportPrior990FilingOrg>
        <CompReportPrior990RelatedOrgs>0</CompReportPrior990RelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>Allan Zastrow</NamePerson>
        <BaseCompensationFilingOrg>150908</BaseCompensationFilingOrg>
        <CompBasedOnRelatedOrgs>0</CompBasedOnRelatedOrgs>
        <BonusFilingOrg>0</BonusFilingOrg>
        <BonusRelatedOrgs>0</BonusRelatedOrgs>
        <OtherCompensationFilingOrg>5200</OtherCompensationFilingOrg>
        <OtherCompensationRelatedOrgs>0</OtherCompensationRelatedOrgs>
        <DeferredCompFilingOrg>6568</DeferredCompFilingOrg>
        <DeferredCompRelatedOrgs>0</DeferredCompRelatedOrgs>
        <NontaxableBenefitsFilingOrg>22884</NontaxableBenefitsFilingOrg>
        <NontaxableBenefitsRelatedOrgs>0</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationFilingOrg>185560</TotalCompensationFilingOrg>
        <TotalCompensationRelatedOrgs>0</TotalCompensationRelatedOrgs>
        <CompReportPrior990FilingOrg>29453</CompReportPrior990FilingOrg>
        <CompReportPrior990RelatedOrgs>0</CompReportPrior990RelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartIII>
        <Identifier>SchJ_P01_S00_L03</Identifier>
        <ReturnReference>Schedule J, Part I, Line 3</ReturnReference>
        <Explanation>The Executive Committee of the Board also acts as the compensation committee and reviews benchmark data from many sources including an annual Iowa Hospital Association Executive Compensation report and approves the contract and compensation amount.</Explanation>
      </Form990ScheduleJPartIII>
    </IRS990ScheduleJ>
    <IRS990ScheduleO documentId="R000006" softwareId="10000077" softwareVersion="v1.00">
      <GeneralExplanation>
        <Identifier>F990_P06_S0B_L11a</Identifier>
        <ReturnReference>Form 990, Part VI, Section B, Line 11a</ReturnReference>
        <Explanation>Draft 990 is distributed to executive committee of board prior to finalization and submission to the IRS</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>F990_P06_S0B_L12c</Identifier>
        <ReturnReference>Form 990, Part VI, Section B, Line 12c</ReturnReference>
        <Explanation>Board Members are provided a copy of the policies and sign an annual compliance statement including disclosure of any conflict of interest.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>F990_P06_S0B_L15</Identifier>
        <ReturnReference>Form 990, Part VI, Section B, Line 15</ReturnReference>
        <Explanation>Compensation for all employees is determined after review of appropriate benchmarking data including the Iowa Hospital Association annual wage and compensation survey. Compensation for highly paid employees is further reviewed by the Board Executive Committee utilizing available bencmarking data.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>F990_P06_S0C_L19</Identifier>
        <ReturnReference>Form 990, Part VI, Section C, Line 19</ReturnReference>
        <Explanation>These documents are available to anyone who requests them</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>F990_P11_S00_L05</Identifier>
        <ReturnReference>Form 990, Part XI, Line 5</ReturnReference>
        <Explanation>$825,000 of equity was transferred to Tri State Medical Group a related non profit entity to cover expenses of the medical clinic and uncompensated care, $400,000 of equity was recouped from the Keokuk ARea Hospital Organized Delivery System another related entity which terminated operations, $50,525 of assets released from restrictions used for purchase of plant and equipment, and $28.978 unrealized losses on investment from prior periods</Explanation>
      </GeneralExplanation>
    </IRS990ScheduleO>
    <IRS990ScheduleR documentId="R000007" softwareId="10000077" softwareVersion="v1.00">
      <Form990ScheduleRPartII>
        <NameOfDisregardedEntity>
          <BusinessNameLine1>Keokuk Health Systems Inc</BusinessNameLine1>
        </NameOfDisregardedEntity>
        <AddressUS>
          <AddressLine1>1600 Morgan Street</AddressLine1>
          <City>Keokuk</City>
          <State>IA</State>
          <ZIPCode>52632</ZIPCode>
        </AddressUS>
        <EIN>421237361</EIN>
        <PrimaryActivities>Parent Company of Keokuk Area Hospital</PrimaryActivities>
        <LegalDomicileState>IA</LegalDomicileState>
        <ExemptCodeSection>501 c 3</ExemptCodeSection>
        <PublicCharityStatus>exempt non profit</PublicCharityStatus>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartII>
      <Form990ScheduleRPartII>
        <NameOfDisregardedEntity>
          <BusinessNameLine1>Tri State Medical Group</BusinessNameLine1>
        </NameOfDisregardedEntity>
        <AddressUS>
          <AddressLine1>1600 Morgan Street</AddressLine1>
          <City>Keokuk</City>
          <State>IA</State>
          <ZIPCode>52632</ZIPCode>
        </AddressUS>
        <EIN>421435525</EIN>
        <PrimaryActivities>Medical Offices</PrimaryActivities>
        <LegalDomicileState>IA</LegalDomicileState>
        <ExemptCodeSection>501 c 3</ExemptCodeSection>
        <PublicCharityStatus>exempt non profit</PublicCharityStatus>
        <DirectControllingEntityName>
          <BusinessNameLine1>Keokuk Health Systems Inc</BusinessNameLine1>
        </DirectControllingEntityName>
      </Form990ScheduleRPartII>
      <Form990ScheduleRPartII>
        <NameOfDisregardedEntity>
          <BusinessNameLine1>Keokuk Area Hospital Foundation</BusinessNameLine1>
        </NameOfDisregardedEntity>
        <AddressUS>
          <AddressLine1>1600 Morgan Street</AddressLine1>
          <City>Keokuk</City>
          <State>IA</State>
          <ZIPCode>52632</ZIPCode>
        </AddressUS>
        <EIN>411202608</EIN>
        <PrimaryActivities>Fundraising</PrimaryActivities>
        <LegalDomicileState>IA</LegalDomicileState>
        <ExemptCodeSection>501 c 3</ExemptCodeSection>
        <PublicCharityStatus>exempt non profit</PublicCharityStatus>
        <DirectControllingEntityName>
          <BusinessNameLine1>Keokuk Health Systems Inc</BusinessNameLine1>
        </DirectControllingEntityName>
      </Form990ScheduleRPartII>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>Keokuk Area Hospital Organized Delivery System</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>1600 Morgan Street</AddressLine1>
          <City>Keokuk</City>
          <State>IA</State>
          <ZIPCode>52632</ZIPCode>
        </AddressUS>
        <EIN>421474799</EIN>
        <PrimaryActivity>Non Profit Indemnity Health Insurance</PrimaryActivity>
        <LegalDomicileState>IA</LegalDomicileState>
        <DirectControllingEntityName>
          <BusinessNameLine1>Keokuk Health Systems Inc</BusinessNameLine1>
        </DirectControllingEntityName>
        <TypeOfEntity>C</TypeOfEntity>
        <PercentageOwnership>1</PercentageOwnership>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>Keokuk Area Medical Equipment Inc</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>1600 Morgan Street</AddressLine1>
          <City>Keokuk</City>
          <State>IA</State>
          <ZIPCode>52632</ZIPCode>
        </AddressUS>
        <EIN>421237312</EIN>
        <PrimaryActivity>Durable Medical Equipment and Pharmacy Sales</PrimaryActivity>
        <LegalDomicileState>IA</LegalDomicileState>
        <DirectControllingEntityName>
          <BusinessNameLine1>Keokuk Health Systems Inc</BusinessNameLine1>
        </DirectControllingEntityName>
        <TypeOfEntity>C</TypeOfEntity>
        <PercentageOwnership>1</PercentageOwnership>
      </Form990ScheduleRPartIV>
      <ReceiptOfIntAnnRentsRoyalties>0</ReceiptOfIntAnnRentsRoyalties>
      <GiftGrantOrCapContrToOtherOrg>1</GiftGrantOrCapContrToOtherOrg>
      <GiftGrantOrCapContrFrOtherOrg>1</GiftGrantOrCapContrFrOtherOrg>
      <LoansOrGuaranteesToOtherOrg>0</LoansOrGuaranteesToOtherOrg>
      <LoansOrGuaranteesFromOtherOrg>0</LoansOrGuaranteesFromOtherOrg>
      <SaleOfAssetsToOtherOrg>0</SaleOfAssetsToOtherOrg>
      <PurchaseOfAssetsFromOtherOrg>0</PurchaseOfAssetsFromOtherOrg>
      <ExchangeOfAssets>0</ExchangeOfAssets>
      <RentalOfFacilitiesToOtherOrgs>0</RentalOfFacilitiesToOtherOrgs>
      <RentalOfFacilitiesFrOtherOrgs>0</RentalOfFacilitiesFrOtherOrgs>
      <PerformOfServicesForOtherOrgs>0</PerformOfServicesForOtherOrgs>
      <PerformOfServicesByOtherOrgs>0</PerformOfServicesByOtherOrgs>
      <SharingOfFacilities>0</SharingOfFacilities>
      <SharingOfPaidEmployees>0</SharingOfPaidEmployees>
      <ReimbursementPaidToOtherOrg>0</ReimbursementPaidToOtherOrg>
      <ReimbursementPaidByOtherOrg>0</ReimbursementPaidByOtherOrg>
      <OtherTransferToOtherOrg>0</OtherTransferToOtherOrg>
      <OtherTransferFromOtherOrg>0</OtherTransferFromOtherOrg>
      <TransactionsRelatedOrgsTable>
        <NameOfOtherOrganization>
          <BusinessNameLine1>Tri State Medical Group</BusinessNameLine1>
        </NameOfOtherOrganization>
        <TransactionType>b</TransactionType>
        <AmountInvolved>825000</AmountInvolved>
        <MethodOfAmtDetermination>Transfer of equity to support physician recruitment and retention and cost shortfall of community health center and clinic activities.</MethodOfAmtDetermination>
      </TransactionsRelatedOrgsTable>
      <TransactionsRelatedOrgsTable>
        <NameOfOtherOrganization>
          <BusinessNameLine1>Keokuk Area Hospital Organized Delivery System</BusinessNameLine1>
        </NameOfOtherOrganization>
        <TransactionType>c</TransactionType>
        <AmountInvolved>400000</AmountInvolved>
        <MethodOfAmtDetermination>Return of eqity from the Keokuk Area Hospital Organized Delivery System. Original equity was provided to the KAH ODS by Keokuk Area Hospital to develop a community health plan. All health plan activities were terminated in 2011 and $400,000 of equity was returned to Keokuk Area Hospital</MethodOfAmtDetermination>
      </TransactionsRelatedOrgsTable>
    </IRS990ScheduleR>
    <ReasonableCauseExplanation documentId="R000008" softwareId="10000077" softwareVersion="v1.00">
      <Explanation>Electronic filing was halted by the IRS with automatic extensions until March 30th.</Explanation>
    </ReasonableCauseExplanation>
  </ReturnData>
</Return>