2012-05-15T08:38:00-05:00 2011-06-30 Deloitte Tax LLP 50 South Sixth Street Suite 2800 Minneapolis MN 55402 990 2010-07-01 450359785 MeritCare Health Enterprises Inc MERI 7012342000 PO Box 2010 Fargo ND 58122 Lisa M Carlson 7012344811 2012-05-14 1 Kristina Rasmussen 6123974000 2012-05-11 2010 2016-02-24 21:20:13Z Kelby K Krabbenhoft 1305 W 18th Street Sioux Falls SD 57117 14838757 0 X www.sanfordhealth.org X 1980 ND Dedicated to the work of Health and Healing. 20 7 54 0 551818 53532 0 0 12783103 14838757 0 0 0 0 12783103 14838757 0 0 0 0 1599652 1733365 0 0 0 9876049 11455771 11475701 13189136 1307402 1649621 2668430 4343788 400871 528092 2267559 3815696 The mission of Sanford "Dedicated to the Work of Health and Healing" and the vision "Improving the Human Condition Through Exceptional Care, Innovation and Discovery", is the constant force that drives the organization's plans, decisions and actions. 0 0 13189136 14838757 As part of the Sanford delivery system, MeritCare Health Enterprises supports the other affiliates through the operation of pharmacies for the benefit of patients and employees of Sanford Medical Center Fargo and Sanford Clinic North. The provision of these items to patients aids in the overall promotion of health in the community. 13189136 0 0 0 0 0 0 0 0 0 1 0 1 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 1 54 1 1 1 0 0 0 0 0 X 20 7 1 0 0 0 1 1 1 1 1 0 0 0 1 1 1 1 1 1 1 0 X Doug Okland 7012342000 PO Box 2010 Fargo ND 58122 X Ann Christenson 0.50 X 0 0 0 Barb Everist 0.50 X 0 0 0 Barbara Stork 0.50 X 0 0 0 Barry Martin 0.50 X 0 0 0 Brent Teiken 0.50 X 0 0 0 David Beito 0.50 X 0 0 0 Don Morton 0.50 X 0 0 0 Jerome Feder 0.50 X 0 0 0 Jim Entenman 0.50 X 0 0 0 John C Vanderwoude 60.00 X 0 1184560 30701 John Jambois 0.50 X 0 0 0 Lauris Molbert 0.50 X 0 0 0 Mark Paulson MD 60.00 X 0 220036 46521 Michael L Olson 60.00 X 0 518455 6998 Michael L Olson Deferred Comp 60.00 X 0 0 46935 Mikal Claar 0.50 X 0 0 0 Pamela Anderson 0.50 X 0 0 0 Richard D Hardie 60.00 X 0 444434 18343 Ronald Moquist 0.50 X 0 0 0 Terrence Grimm MD 60.00 X 0 585887 42328 Terry Baloun 0.50 X 0 0 0 Kelby K Krabbenhoft 60.00 X X 0 1274514 19513 Kelby K Krabbenhoft Deferred Comp 60.00 X X 0 0 565838 Lisa Carlson 60.00 X 0 418112 51907 Douglas Okland 60.00 X 0 177590 32160 Ellen Cooke 60.00 X 0 231565 34031 Linda O'Halloran 60.00 X 0 341521 38178 Michael Gibbs 60.00 X 0 308310 38810 Robert Biberdorf 60.00 X 0 172563 23488 Tammie Dohman 60.00 X 127026 0 9701 Mark Plencner 60.00 X 115783 0 10165 Harrison Storandt 60.00 X 109657 0 12676 LeAnn Ness 60.00 X 103471 0 8134 Roger Gilbertson MD 60.00 X 0 549117 0 Roger Lee 60.00 X 0 155194 21659 Paul Richard 60.00 X 0 395926 41452 Bruce Pitts MD 60.00 X 0 557647 40890 Gregory Post MD 60.00 X 0 431368 41890 Rhonda Ketterling MD 60.00 X 0 357957 37740 Jeffrey Hoss 60.00 X 0 281751 41878 Evelyn Quigley 60.00 X 0 207342 35995 Douglas Vang 60.00 X 0 760803 4058 455937 9574652 1301989 4 1 1 0 0 Pharmacy Sales 446110 14730404 14178586 551818 East Ottertail Pharmac 446110 108353 108353 14838757 14838757 14286939 551818 0 1198725 1198725 127452 127452 295757 295757 111431 111431 41824 41824 637 637 239068 239068 85329 85329 5103 5103 11239 11239 Medical Supplies 11045153 11045153 Miscellaneous Expenses 16346 16346 Bad Debt 11072 11072 13189136 13189136 0 0 17279 6883 968565 2371670 1232031 1449705 391 0 281926 230623 56790 51303 393374 464227 2668430 4343788 400871 528092 400871 528092 X 2267559 3815696 2267559 3815696 2668430 4343788 X 1649621 -101484 X 0 1 1 X 0 281926 230623 51303 51303 Investment in East Ottertail Pharmacy 464227 F 464227 Description of Uncertain Tax Positions Under FIN 48: Part X: Certain controlled organizations are subject to income taxes. Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting basis of assets and liabilities based on enacted tax rates and laws. A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year. The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported. MeritCare Health Enterprises, Inc did not have a material income tax liability at June 30, 2011; some related organizations have established reserves. 1 1 1 0 0 0 1 0 0 John C Vanderwoude 0 1000000 0 0 0 184560 0 7350 0 23351 0 1215261 0 0 Mark Paulson MD 0 196432 0 0 0 23604 0 31527 0 14994 0 266557 0 0 Michael L Olson 0 504486 0 0 0 13969 0 0 0 6998 0 525453 0 0 Michael L Olson Deferred Comp 0 0 0 0 0 0 0 46935 0 0 0 46935 0 0 Richard D Hardie 0 414473 0 0 0 29961 0 7350 0 10993 0 462777 0 0 Terrence Grimm MD 0 500004 0 0 0 85883 0 34928 0 7400 0 628215 0 0 Kelby K Krabbenhoft 0 789232 0 0 0 485282 0 0 0 19513 0 1294027 0 0 Kelby K Krabbenhoft Deferred Comp 0 0 0 0 0 0 0 565838 0 0 0 565838 0 0 Lisa Carlson 0 335811 0 0 0 82301 0 34928 0 16979 0 470019 0 0 Douglas Okland 0 167951 0 0 0 9639 0 25199 0 6962 0 209751 0 0 Ellen Cooke 0 203485 0 0 0 28080 0 32951 0 1080 0 265596 0 0 Linda O'Halloran 0 299379 0 0 0 42142 0 34928 0 3250 0 379699 0 0 Michael Gibbs 0 273000 0 0 0 35310 0 34928 0 3882 0 347120 0 0 Robert Biberdorf 0 154817 0 0 0 17746 0 22808 0 680 0 196051 0 0 Roger Gilbertson MD 0 0 0 0 0 549117 0 0 0 0 0 549117 0 0 Roger Lee 0 141070 0 0 0 14124 0 20253 0 1406 0 176853 0 0 Paul Richard 0 314418 0 0 0 81508 0 34928 0 6524 0 437378 0 0 Bruce Pitts MD 0 457914 0 0 0 99733 0 34928 0 5962 0 598537 0 0 Gregory Post MD 0 431368 0 0 0 0 0 34928 0 6962 0 473258 0 0 Rhonda Ketterling MD 0 314702 0 0 0 43255 0 34928 0 2812 0 395697 0 0 Jeffrey Hoss 0 260000 0 0 0 21751 0 34928 0 6950 0 323629 0 0 Evelyn Quigley 0 181819 0 0 0 25523 0 29033 0 6962 0 243337 0 0 Douglas Vang 0 719167 0 0 0 41636 0 552 0 3506 0 764861 0 0 Part I, Line 1a On Part I, Questions Regarding Compensation, Sanford checked several of the items as provided to listed persons: First Class or Charter Travel - Charter travel for business purposes is provided for individuals as needed and as cost appropriate. These costs are not included in the W-2's of the individuals as they meet the business purpose of Sanford. Travel for Companions - Limited travel for companions is required for certain annual meetings. These costs are not included in the W-2's of the individuals as they are incurred for business purposes of Sanford. Tax Indemnification and gross-up payments - Certain compensation may be grossed up to include appropriate tax amounts. Health or social club dues or initiation fees - All Sanford employees are eligible for discounted wellness memberships, a portion of these discounts and other club dues are included as fringe benefits, and taxed as such. Personal services - Individuals may have benefits which include tax preparation or planning, this benefit is included in income and taxed. Part I, Line 3: The Sanford Board of Trustees directly engages a nationally recognized independent compensation consulting firm to annually review the total compensation of arrangements of the officers of the organization, and to report findings and recommendations to the Sanford Board of Trustees for deliberation and action. The most recent study was completed in 2011. Part I, Lines 4a-c Part I, Lines 4a-c: Roger Gilbertson, former MeritCare President and CEO, received a payment of $549,117 upon his retirement, per employment contract. Douglas Vang received a severance payment of $478,906. Part I, Line 4b/Schedule J, Part II, Column C: In addition to employer contributions to pension plans, amounts representing increases and decreases in actuarial value (actuarial value factors include age, tenure and salary) of defined contribution and defined benefit SERP Plans are included in Column C. Participants and changes in values include: Kelby Krabbenhoft $420,519 Part I, Line 6b: Sanford physicians are compensated based on the professional services they perform within the clinic in which they provide care. Generally, the model is revenue less expenses. Physicians listed that were paid on this model include: Michael L Olson Richard Hardie Part I, Line 7: Certain Executives are eligible for a discretionary incentive bonus, based on financial targets and other goals. Supplemental Information Part III Compensation reported on Schedule J includes: (B)(i) Base compensation - salaries are based on the experience and performance of each executive and bench-marked using independent compensation survey information. (B)(ii) - Bonus & incentive compensation - as part of executive compensation, individuals may be eligible for incentive performance compensation, however if the organization does not make its financial targets, incentive payments are not paid regardless of performance. (B)(iii) Other Reportable Compensation - generally includes taxable executive benefits. It also includes the one-time payout of previously deferred compensation (which was also reported as compensation in the earned period). To be in compliance with the IRS regulatory environment, listed individuals compensation includes a one-time payment of deferred compensation; this compensation was earned over multiple periods, and should be treated as earned over that length of time in exchange for services provided. (C) Deferred Compensation includes employer contributions to pension plans and the increase (or decrease) in the actuarial value (actuarial value factors include age, tenure and salary) of the benefit plans. (D) Nontaxable Benefits generally includes health insurance premiums. Supplemental Information Part III A memo regarding executive compensation, written by the Chairman of the Sanford Board of Trustees, is on file and available upon request. Supplemental Information Part III Compensation paid to trustees is for full-time professional responsibilities as physicians, administrators or employees of the organization. The total compensation paid to Kelby Krabbenhoft of $1,274,514 is comprised of Base salary of $789,232, and Other Taxable Earnings of $485,282. In addition, an amount of $565,838 has been reported for the estimated amount of ratable increase in value of the defined benefit pension plan, defined benefit SERP and a Gift Agreement Management Continuity Retention. Form 990, Part VI, Section A, line 2 Pamela Anderson, Trustee, and Lisa Carlson, CFO, have a business relationship. The following officers, board members, and key employees are employees of Sanford or its related organizations. Many of these employees also serve on other related Sanford boards, or have business relationships with each other that span the organization as a whole: John Vanderwoude Mark Paulson Michael Olson Richard Hardie Terrence Grimm Kelby Krabbenhoft Lisa Carlson Douglas Okland Ellen Cooke Linda O'Halloran Michael Gibbs Form 990, Part VI, Section A, line 6 Sanford North is the sole shareholder of the organization. Form 990, Part VI, Section A, line 7a Board members are members of the Board of Governors of Sanford North. Form 990, Part VI, Section A, line 7b Sanford North, as sole shareholder, reviews the actions of MeritCare Health Enterprises, Inc. Form 990, Part VI, Section B, line 11 The Form 990 is prepared internally by the finance department and reviewed by executive management. An external accounting firm reviews the return prior to filing and prepares return highlights and key disclosures for the Board of Trustees meeting immediately following the return filing date. After the return is filed, a complete copy is made available to the current trustees. Form 990, Part VI, Section B, line 12c The annual Conflict of Interest disclosure process is managed by the Chief Compliance Officer (CCO). The CCO is responsible for assuring that all completed forms are returned in a timely and complete manner. Conflict of Interest questionnaires are sent to System Trustees, members of the governing boards of subsidiary entities, officers, and key employees for all the entities subject to the IRS Form 990 filings. The disclosures are summarized for review by the executive committee of the Board of Trustees, pursuant to policy. This review allows: 1) The Board to acquire an awareness of financial relationships of board members and key management employees and can invoke the recusal process on a case-by-case basis when potential conflicts are implicated in Board decisions and deliberations, and, 2) Gives the Board the opportunity to seek additional information and clarification about disclosures to determine potential conflicts of interest and how to manage such. Form 990, Part VI, Section B, line 15 The Sanford Board of Trustees directly engages a nationally recognized independent compensation consulting firm to annually review the total compensation arrangements of the officers and operating unit executives of the organization, including the CEO, and to report the findings and recommendations to them for deliberation and action. The deliberations and actions are recorded in the minutes of the Sanford Board of Trustees. The most recent study was completed in 2011. Additionally, Sanford periodically engages an independent compensation consultant to review and issue a report regarding the reasonableness of the total compensation arrangements of all physicians employed by the organization. The most recent study of physician total compensation arrangements was completed in 2009. Form 990, Part VI, Section C, line 19 Although the organization does not maintain a website where the public can access these documents, it would respond individually to any requests or inquiries from the public for these documents. Form 990, Part VII Board members of Sanford provide services to Sanford subsidiaries. Hours reported for each individual reflect the time spent on work related to either the filing organization or related organization. Sanford Board of Trustees has ultimate governance responsibilities for each entity within the Sanford system. In addition, a Board of Directors is established for each entity, which has specific delegated responsibilities from the Board of Trustees related to the oversight of day to day operations of that entity. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net Asset Transfers (AP Intercompany) -101,484. Total to Form 990, Part XI, Line 5: -101,484. Sanford Health 1305 West 18th Street Sioux Falls SD 57117 311527032 Supporting Organization SD 501(c)(3) 11-III Sanford 0 Sanford Health Foundation 1305 West 18th Street Sioux Falls SD 57117 363297853 Supporting Organization SD 501(c)(3) 11-I Sanford Health 1 Sanford 801 Broadway Drive Fargo ND 58122 271218956 Supporting Organization ND 501(c)(3) 11-II 0 SHM-Sanford 1305 West 18th Street Sioux Falls SD 57105 271213769 Supporting Organization SD 501(c)(3) 11-II 0 SHM-MeritCare 801 Broadway Drive Fargo ND 58122 271213717 Supporting Organization ND 501(c)(3) 11-II 0 Sanford North PO Box 2010 Fargo ND 58122 450385890 Supporting Organization ND 501(c)(3) 11-II Sanford 0 Sanford Medical Center Fargo PO Box 2010 Fargo ND 58122 450226909 Hospital ND 501(c)(3) 3 Sanford North 1 Sanford Clinic North PO Box 2010 Fargo ND 58122 911770748 Clinics ND 501(c)(3) 9 Sanford North 1 Sanford Health Network North PO Box 2010 Fargo ND 58122 450409348 Hospitals/Clinics ND 501(c)(3) 11-II Sanford North 1 Sanford Medical Center Wheaton 401 12th Street North Wheaton MN 56296 272042143 Hospital/Clinic MN 501(c)(3) 3 Sanford North 1 Sanford Health Foundation North PO Box 2010 Fargo ND 58122 450398104 Supporting Organization ND 501(c)(3) 7 Sanford North 1 Sanford Medical Center Thief River Falls 120 Labree Ave S Thief River Falls MN 56701 410709579 Hospital MN 501(c)(3) 3 Sanford North 1 Sanford Medical Center Mayville 42 6th Ave SE Mayville ND 58257 450228899 Hospital ND 501(c)(3) 3 Sanford North 1 MeritCare Minnesota 1720 South Highway 59 Thief River Falls MN 56701 261530302 Promotion of health MN 501(c)(3) 3 Sanford North 1 Agassiz Assurance Company 100 Bankd Street Suite 610 Burlington VT 05401 743121855 Insurance VT 501(c)(3) 11-II Sanford North 1 FM Ambulance Service 2215 18th St South Fargo ND 58103 450344371 EMT ND 501(c)(4) Sanford North 1 Sanford Health of Northern Minnesota 1300 Anne St NW Bemidji MN 56601 411266009 Hospital MN 501(c)(3) 3 Sanford North 1 Baker Park Inc 803 Dewey Ave NW Bemidji MN 56601 411372480 Low Income Senior Housing MN 501(c)(3) 9 Sanford Health of Northern Minnesota 1 Sanford Health Foundation of Northern Minnesota 1300 Anne St NW Bemidji MN 56601 411389317 Fundraising - Support MN 501(c)(3) 11-I Sanford Health of Northern Minnesota 1 North Country Medical Clinic 1300 Anne St NW Bemidji MN 56601 411753855 Family Practice Medical Clinic MN 501(c)(3) 3 Sanford Health of Northern Minnesota 1 Sanford ResearchUSD 1305 West 18th St PO Box 5039 Sioux Falls SD 571175039 460450378 Research SD 501(c)(3) 3 Sanford Health 1 Sanford USD Medical Center 1305 West 18th St PO Box 5039 Sioux Falls SD 571175039 460227855 Hospital SD 501(c)(3) 3 Sanford Health 1 Sanford Clinic 1305 West 18th St PO Box 5039 Sioux Falls SD 571175039 460447693 Clinical Services SD 501(c)(3) 3 Sanford Health 1 Sanford Health Network 1305 West 18th St PO Box 5039 Sioux Falls SD 571175039 460388596 Hospitals/Clinics SD 501(c)(3) 11-I Sanford Health 1 Sanford Home Health 1305 West 18th St PO Box 5039 Sioux Falls SD 571175039 460282134 Home Health Services SD 501(c)(3) 9 Sanford Health 1 National Student Housing - South Dakota LLC 100 S Phillips Ave Sioux Falls SD 57104 202129839 Investment SD Sandford Health Related 0 0 0.00000 RAC Rentals LLC 100 S Phillips Ave Sioux Falls SD 57104 261961077 Investment SD Sandford Health Related 0 0 0.00000 Heart Partners at Sanford 1305 W 18th Street Sioux Falls SD 57117 460449572 Healthcare SD Sanford Health C Sanford Home Medical Equipment Inc 2710 W 12th Street Sioux Falls SD 57105 460388597 Healthcare Equipment SD Sanford Health C Sanford Health Plan 300 Cherapa Place Sioux Falls SD 57103 911842494 Insurance SD Sanford Health C Sanford Health Plan of MN 300 Cherapa Place Sioux Falls SD 57103 460445852 Insurance MN Sanford Health C Healthcare Environmental Services Inc 1420 40th St NW Fargo ND 58102 450336598 Laundry and Incineration Services ND Sanford North C Bemidji Medical Equipment Inc 1300 Anne St NW Bemidji MN 56601 411551725 Retail Sales of DME MN Sanford Health of Northern Minnesota C North Country Management Inc 1300 Anne St NW Bemidji MN 56601 411820025 Management Services MN Sanford Health of Northern Minnesota C Sanford World Clinics 1305 West 18th Street Sioux Falls SD 57117 262707628 Healthcare SD Sanford Health C 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 Sanford Medical Center Fargo M 85000 Cost