2012-03-15T10:17:12-05:00 2011-04-30 MCGLADREY & PULLEN LLP 1 S WACKER DRIVE STE 800 CHICAGO IL 60606 990 2010-05-01 362167920 Sherman Hospital SHER 8477429800 1425 N Randall Road Elgin IL 60123 Eric Krueger 8477429800 2012-03-13 1 Zack Fortsch 3126343400 2010 2016-02-24 21:20:13Z Richard B Floyd 1425 N Randall Road Elgin IL 60123 279831696 0 X HTTP://WWW.SHERMANHEALTH.ORG X 1887 IL To serve the community by consistently providing quality healthcare with compassion. 21 17 2356 417 344032 -149085 1384962 890153 222632053 267101674 856240 6653889 3661064 4539613 228534319 279185329 5000 5000 0 0 99700526 110921740 0 0 0 141810424 168621047 241515950 279547787 -12981631 -362458 499595524 488691902 327935351 335511238 171660173 153180664 X To make a positive difference through outstanding healthcare and service--every life, every moment, every day. 0 1 245437054 5000 267747206 While the Sherman Hospital ("Sherman") facility is a community hospital, it is also a regional heart center. In 1972, when the first open-heart surgery was performed at its facilities, the hospital facility became one of the first community hospitals in the nation performing open heart surgery. Today, the hospital facility is a recognized regional heart center for the far northwest suburbs of Chicago. According to the Illinois Hospital Association/Compdata statistics, the hospital consistently sees some of the most complex open heart cases in the state of Illinois (the "state"), and the hospital's mortality rate in cardiac surgery is consistently one of the lowest in the state. Sherman has received numerous national awards and recognition for excellence in quality. 245437054 1 1 0 1 0 0 0 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 1 0 1 1 0 0 1 1 1 1 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 1 0 0 1 223 0 1 2356 1 1 1 0 0 0 0 1 1 0 0 0 0 X 21 17 1 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 IL X Eric Krueger 2247838718 1425 N Randall Road Elgin IL 60123 X Richard Floyd 34.00 X X 563213 0 126112 Terry Dunning 4.00 X X 6000 0 0 Charles Burnidge 4.00 X X 6000 0 0 Audrey Reed 4.00 X X 6000 0 0 Robert Cormier 4.00 X X 6000 0 0 David Bear 4.00 X 2000 0 0 Roger Bielinski MD 4.00 X 6000 0 0 Nathaniel Edmond 4.00 X 3000 0 0 William Hoffer 4.00 X 6000 0 0 Lane B Hoffman 4.00 X 5500 0 0 Sharon Jakle 4.00 X 3000 0 0 Richard Jakle 4.00 X 2000 0 0 Joy Jensen 4.00 X 24829 0 14393 Pamela Jensen 4.00 X 5500 0 0 Kenneth Koehler 4.00 X 8080 0 0 Lawrence Kosinski MD 4.00 X 2750 0 0 Dorothea Poulos MD 4.00 X 17350 0 0 Solomon Secemsky MD 4.00 X 6000 0 0 Shujauddin Valika MD 4.00 X 5000 0 0 Linda Wallace 4.00 X 2750 0 0 Brian Ziegler 4.00 X 2250 0 0 Eric Krueger 34.00 X 305241 0 56470 Linda Deering 34.00 X 345158 0 60209 Ian Jones 34.00 X 387180 0 61160 Katie Bata 34.00 X 214402 0 38571 Jane Bradford 20.00 X 160891 0 12455 Mary Martini 34.00 X 188600 0 33863 Judith Balcitis 34.00 X 176343 0 19677 Thomas Nitz 34.00 X 175536 0 33834 Sharon McGregor 41.00 X 146165 0 27393 Michael Mulay 30.00 X 139327 0 22600 Patrick Uplegger 40.00 X 139536 0 13264 Donnis Boggs 42.00 X 138842 0 5142 Barbara Scott 50.00 X 137391 0 10945 3343834 0 536088 89 0 1 0 GE Medical Systems PO Box 96483 Chicago IL 60693 Medical Equipment Repairs 1779108 Alliance Rehab 1520 Kensington Road Ste 105 Oak Brook IL 60523 Occupational, Physical & Speech Therapy 1176953 Cerner Corporation 2800 Rockcreek Parkway Kansas City MO 64117 Information Technology 980565 Demi & Cooper 18 Villa Court Elgin IL 60120 Advertising 902757 Transolutions Inc 1541 S Waukegan Rd Waukegan IL 60085 Medical Transcription 899087 82 139190 353915 397048 890153 Net Patient Services 621110 160116008 160116008 Medicare/Medicaid Paym 621110 94036385 94036385 Medicaid Assessment 621110 12700662 12700662 Paramedic Training 621110 109142 109142 Medical Records 621110 102105 102105 37372 37372 267101674 838135 838135 6389984 574230 5815754 5815754 5815754 48300 139190 72137 -23837 -23837 Cafeteria Revenue 721000 2028746 2028746 Algonquin Road Surgery 900099 573112 573112 Laboratory Revenue 621500 465974 465974 1495618 72420 344032 1079166 4563450 279185329 267747206 344032 10203938 5000 5000 2651315 2651315 89652390 80568627 9083763 3059062 3059062 9606697 9606697 5952276 5952276 747650 747650 172945 172945 18210955 11127452 7083503 1250180 53835 1196345 1330909 521123 809786 3516293 3389317 126976 14035192 5718147 8317045 254925 187182 67743 14868248 14868248 25923144 24182097 1741047 6813898 5947289 866609 Supplies 47176976 45987921 1189055 Bad Debt Expense 22803867 22803867 IL Medicaid Tax 7681947 7681947 Equipment Rental 1997991 1882240 115751 Gift Shop/Coffee Shop 318839 318839 1517088 655293 861795 279547787 245437054 34110733 0 24999917 31353392 39967383 47699724 3843785 4595034 3426889 3416146 625461001 239711184 405227927 385749817 7912288 4003262 14217335 11874527 499595524 488691902 28549431 35897453 2116777 267555803 264180693 31830117 33316315 327935351 335511238 X 170971782 152167405 688391 1013259 171660173 153180664 499595524 488691902 X -362458 -18117051 X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 32141 32141 0 Explanation of Other Lobbying Activities: Part II-B, Line 1i: Percentage of annual IHA and MCHC dues allocable to lobbying activities. 15177056 15177056 410238240 103191387 307046853 2780933 885987 1894946 185569975 132145697 53424278 11694797 3488113 8206684 385749817 Estimated Third-Party Payor Settlements 23776280 Accrued Medical Malpractice and Other 8886582 Construction Payable 653453 33316315 Description of Uncertain Tax Positions Under FIN 48: Part X: Sherman is primarily comprised of not-for-profit corporations as described in Section 501 (c)(3) of the Internal Revenue Code (Code). Section 501 (c)(3) organizations are exempt from federal income taxes on related income on those entities pursuant to Section 501(a) of the Code. None of Sherman's not-for-profit organizations have significant unrelated business activities. Sherman uses an asset and liability approach for financial accounting and reporting purposes as it relates to income taxes. Deferred tax liabilities and assets are determined based upon the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Sherman Health Systems and its not-for-profit affiliates file the applicable Form 990s (Return of Organization Exempt from Income Tax) annually. When these returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would ultimately be sustained. Examples of tax positions common to health systems include such matters as the following: the tax-exempt status of each entity, the continued tax-exempt status of bonds issued by the obligated group, the nature, characterization and taxability of joint venture income and various positions relative to potential sources of unrelated business taxable income (UBIT). UBIT is reported on Form 990T, as appropriate. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes that it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Benefit Ball 187490 139190 48300 1587 1130 46433 7800 15187 187490 139190 48300 1587 1130 46433 7800 15187 72137 -23837 1 1 1 X 1 X 600.000000000000 1 1 0 1 1 2808795 0 2808795 0.01090 42550373 33496247 9054126 0.03530 45359168 33496247 11862921 0.04620 374575 56443 318132 0.00120 475468 109142 366326 0.00140 314313 121966 192347 0.00070 322904 92285 230619 0.00090 1487260 379836 1107424 0.00420 46846428 33876083 12970345 0.05040 498380 498380 0.00190 498380 498380 0.00190 6177568 514250 72931238 96154631 -23223393 X 1 1 1 Algonquin Road Surgery Center LLC Free-standing ancillary surgery center 0.25500 0.00000 0.49000 1 1 Sherman Hospital

1425 N Randall Road Elgin IL 601232300

X X X General healthcare NA 1 6 Sherman Health Imaging & Rehabilitation

745 Fletcher Drive Suite 103 Elgin IL 60123

Imaging & PT Services Sherman Health Resource Center

1019 E Chicago Street Elgin IL 60123

Cardiac Rehab & PT Sherman Immediate Care

600 S Randall Road Algonquin IL 60102

Immediate Care Sherman Immediate Care

934 Center Street Elgin IL 60103

Immediate Care Sherman Immediate Care

2320 Royal Blvd Elgin IL 60123

Immediate Care Sherman Immediate Care

2000 McDonald Road South Elgin IL 60177

Immediate Care Part I, Line 6a: Part I, Line 6a. Sherman Hospital prepares and files the Annual Non-Profit Hospital Community Benefit Plan Report with the Attorney General's Office of the State of Illinois. Part I, L7 Col(f): The following is from the text of the footnote to the audited financial statements describing patient receivables, provision for doubtful accounts and bad debt expense. "Patient receivables due directly from the patients are carried at their original charge for the service provided less amounts covered by third-party payors and less an estimated allowance for doubtful receivables. Management estimates this allowance based on the aging of its accounts receivable and its historical collection experience for each payor type. Recoveries of receivables previously written off are recorded as a reduction of bad debt expense when received. The past due status of receivables is determined on a case-by-case basis depending on the payor responsible. Interest is not charged on past due accounts." Self pay discounts are not included in bad debt expense in the financial statements. The organization's bad debt expense (at cost) as reported on lines 2 and 3 above were determined using a cost to charge ratio. Part II: Sherman Hospital serves as the Regional Hospital Coordinating Center (RHCC) for Emergency Medical Services Regional Planning Area IX, which is the Illinois Department of Public Health (IDPH) designation for the lead disaster planning hospital. The Region includes 12 full service hospitals and serves a population of approximately 1.4 million people. As the RHCC, Sherman Hospital is a recipient of the ASPR Hospital Preparedness Program grants through IDPH. We are responsible for meeting federally identified capabilities to prepare for all hazardous community health emergencies. One of our primary tasks is to build relationships and resources with municipal, county and state agencies to plan for multidisciplinary response to a community disaster or other healthcare emergency. Our activities seek to improve the resiliency of the population we serve. Part III, Line 8: The costing methodology used to determine the amount reported on line 6 above was determined using a cost to charge ratio calculated using the IRS worksheets. Part III, Line 9b: Part III, Line 9b. It is the policy of Sherman to offer patients a payment plan and/or charity assistance when it becomes known or even suspected that a patient needs financial assistance. Financial counselors are notified and every attempt is made to work with the patient or their family to help them complete an application. Financial counselors work with the patient to help determine if they are eligible for any federal programs, including Medicaid, or other third party payors. In the event no third party programs are identified, we then work with the patient to help them apply for charity discounts and payment plans. If a patient is known to qualify for charity care, it is our policy not to pursue collections against them. Part I, line 3a. Sherman provides emergent and medically necessary services to all patients without regard to the patient's ability to pay. Sherman's financial assistance policy applies to all Sherman facilities, and the amount of free care provided under the policy is determined by need and is not limited or rationed by budgeted amounts. Under the policy, Sherman will provide free care to individuals without insurance with incomes up to 200% of the Federal Poverty Level. Part I, Line 3b. For uninsured patients who do not qualify for charity care, Sherman provides a discount regardless of their ability to pay or income level. Under this program, Sherman provides a 30% discount off charges at the time of service. Consistent with the Hospital Uninsured Patient Discount Act (Illinois), uninsured patients may also be entitled to a 60% discount off charges based on their income level. Under this policy, Sherman provides a discount (up to 60%) on a sliding scale up to 600% of the Federal Poverty Level. Of the remaining balance, the patient's liability is capped at 25% of the family annual income. Part VI, Line 2: The Community Health Needs Assessment for 2011 will be conducted in collaboration with area hospitals and the Kane County Health Department. Hospitals participating include Delnor Community Hospital in Geneva, Provena St. Joseph's Hospital in Elgin, Rush Copley in Aurora and Provena Mercy Medical Center in Aurora in addition to Sherman Hospital.Northern Illinois University Public Opinion Lab will be responsible for the survey using telephone and focus group methodology. The 2011 Illinois Behavioral Risk Factor Surveillance Systems (BRFSS) questionnaire will be administered so that it will be possible to compare Kane County results with Illinois and national estimates for adults aged 18 and older, as well as children. Results will include a comprehensive assessment that identifies local public health strengths, weaknesses and unmet health-related needs. Results will be utilized to mobilize the Community Wellness Department at Sherman Health to identify and act on strategic health issues in collaboration with other health agencies in our surrounding service areas. Part VI, Line 3: Informing the public that charity care is available is an important element of Sherman's charity care program. Information about the policy is posted on the Sherman Health website. Patient bills include detailed information regarding the charity care policy is also provided to patients. A summary description of the financial assistance policy is available in patient registration areas and from financial counselors who are present on-site at the Hospital to assist patients in qualifying for governmental assistance programs and charity care. Part VI, Line 4: Sherman Hospital is located in Elgin, Illinois which is approximately 40 miles northwest of Chicago. The Hospital's primary and secondary service areas, defined as those zip codes contributing approximately 60% of Hospital's total inpatients, cover portions of Kane, McHenry, DuPage, Lake and Cook counties and are comprised of the following communities:60014 Crystal Lake, IL60102 Algonquin, IL60103 Bartlett, IL60107 Streamwood, IL60110 Carpentersville, IL60118 Dundee, IL60120 Elgin, IL60123 Elgin, IL60124 Elgin, IL60136 Gilberts, IL60142 Huntley, IL60156 Lake in the Hills, IL60177 South Elgin, IL60010 Barrington, IL60012 Crystal Lake, IL60013 Cary, IL60021 Fox River Grove, IL60047 Lake Zurich, IL60050 McHenry, IL60084 Wauconda, IL60098 Woodstock, IL60133 Hanover Park, IL60134 Geneva, IL60140 Hampshire, IL60152 Marengo, IL60174 Saint Charles, IL60175 Saint Charles, IL60180 Union, IL60192 Schaumburg, IL60194 Schaumburg, IL60510 Batavia, ILFor FY11, the adult Hospital admissions were from the following age groups: pediatrics 4%15-44 35%45-64 23%65-74 15%>75 23%The gender of these admissions was 64% female and 36% male. Reports Filed With States Part VI, Line 7 IL X 1 1 X X X X 0 1 0 0 0 0 0 1 0 Richard Floyd 481507 0 75622 0 6084 0 105613 0 21180 0 690006 0 0 0 Eric Krueger 271069 0 33497 0 675 0 36252 0 20774 0 362267 0 0 0 Linda Deering 294348 0 39945 0 10865 0 53027 0 7864 0 406049 0 0 0 Ian Jones 334710 0 48069 0 4401 0 43908 0 18542 0 449630 0 0 0 Katie Bata 183771 0 30189 0 442 0 25933 0 13078 0 253413 0 0 0 Jane Bradford 160030 0 0 0 861 0 6344 0 6868 0 174103 0 0 0 Mary Martini 165935 0 22397 0 268 0 22688 0 16632 0 227920 0 0 0 Judith Balcitis 160233 0 15510 0 600 0 19677 0 612 0 196632 0 0 0 Thomas Nitz 155895 0 19026 0 615 0 17708 0 16738 0 209982 0 0 0 Sharon McGregor 139545 0 0 0 6620 0 5494 0 22236 0 173895 0 0 0 Michael Mulay 133433 0 0 0 5894 0 5536 0 17405 0 162268 0 0 0 Patrick Uplegger 136187 0 0 0 3349 0 5606 0 8041 0 153183 0 0 0 Part I, Line 1a Sherman Hospital pays for dues and other expenses incurred at Elgin Country Club, which is used to entertain physician and board groups. Because Rick Floyd uses the club periodically, he reimburses Sherman for any time or expense deemed personal. None of the expenses are included in his taxable compensation. Part I, Line 4b Supplemental Executive Retirement Plan Participants: Richard Floyd - $93,363 Linda Deering - $42,491 Ian Jones - $32,696 Eric Krueger - $26,033 Katie Bata - $17,692 Mary Martini - $15,610 Thomas Nitz - $14,664 Judith Balcitis - $13,998 Part I, Line 7 Payment of other incentive compensation was based on meeting or exceeding various corporate goals. Illinois Finance Authority 861091967 45200FBB4 2007-10-31 168752200 Construct and equip facility 0 0 0 174623008 16875220 2395571 7755962 147596255 2009 0 0 0 1 0 0 0 0 0 0.00000 0.00590 0.00590 1 0 0 0 1 Royal Bank of Canada 30.000000000000 1 1 0 Juliet Dunning Daughter of Terry Dunning, Chairman 36558 Gross wages 0 Changes in Program Services Form 990, Part III, line 3 The Hospital sold its hemodialysis operations and related assets and therefore have ceased providing such services. Form 990, Part VI, Section A, line 2 Sharon Jakle and Richard Jakle have a family relationship. Form 990, Part VI, Section A, line 6 The sole member of Hospital is Sherman Health Systems (SHS). Form 990, Part VI, Section A, line 7a See Part VI, Section A, Line 7b explanation. Form 990, Part VI, Section A, line 7b The following decisions of Hospital's board of directors requires approval from SHS, as its sole member: -To appoint the directors of the Corporation; -To remove a director of the Corporation at any time, with or without cause; -To appoint the Chairman and Vice Chairman of the Corporation, and all officers of the Corporation who are not also employees of the Corporation; -To unilaterally approve and amend the articles of incorporation and bylaws of the Corporation before the same become effective; -To approve, interpret or change the statement of the Corporation's purpose before the same becomes effective; -To approve each annual operating and capital budget and long-range plan of the Corporation before expenditures may be made therefrom; -To approve the appointment of independent auditors, all accounting policies, internal auditors (if any) and all investment guidelines; -To approve all contracts obligating the Corporation to expend or repay an amount in excess of $100,000, and which was not included in a previously approved annual budget; -To approve all plans of merger, consolidation or voluntary dissolution of the Corporation; -To approve the sale, lease, exchange, mortgage, pledge or other diposition of more than $100,000 in value of property and assets of the Corporation in any one year which is not within an approved budget; -To approve the creation of majority controlled or owned subsidiaries or affiliates by the Corporation; -To approve the Corporation's incurring debt, including intra-system debt, or obligating its assets in excess of an amount designated by the Member, unless such debt or obligation was included in a budget previously approved by the Member; -To approve corporate acquisitions by the Corporation of any joint venture; -To approve investments by the Corporation in excess of an amount designated by the Member, unless such investment was included in a budget previously approved by the Member Form 990, Part VI, Section B, line 11 The organization's tax advisor prepares Form 990. Management reviews Form 990 with the tax advisor and submits the completed form to the Audit Committee for review and approval. The Audit Committee meets with the tax advisor to discuss and approve Form 990 for filing. A copy of Form 990 is distributed to the organization's governing body prior to filing. Form 990, Part VI, Section B, line 12c Each director, principal officer and member of a committee with board-delegated powers shall annually sign a statement, which affirms that such person: a) has received a copy of the conflict of interest policy, b) has read and understands the policy, c) has agreed to comply with the policy, and d) understands that sherman is a charitable organization and that in order to maintain federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes. To ensure that Sherman operates in a manner consistent with its charitable purposes and that it does not engage in activities that could jeopardize its status as an organization exempt from federal income tax, periodic reviews shall be conducted. Form 990, Part VI, Section B, line 15 Market evaluations will be conducted on a periodic basis for all positions within Sherman. The evaluation process consists of review of established salary benchmarks for market competitiveness, and evaluation of turnover and retention. The salary and executive compensation committee is responsible for evaluating the performance of and establishing the compensation and benefits for the senior management of the parent corporation and its affiliates. Form 990, Part VI, Section C, line 19 All organization governing documents, the conflict of interest policy, and financial statements are made available to the public upon request. Form 990, Part VII, Hours Per Week Worked at Related Organizations: Richard Floyd: Sherman Health Systems - 6 hrs; Sherman West Court - 1 hr; Sherman Home Health Corporation - 1 hr; Sherman Health Foundation - 0.5 hrs Eric Krueger: Sherman Health Systems - 6 hrs; Sherman Home Health Care Corporation - 1 hr; Sherman Health Foundation - 0.5 hrs Linda Deering: Sherman Health Systems - 6 hrs Ian Jones: Sherman Health Systems - 6 hrs Katie Bata: Sherman Health Systems - 6 hrs; Sherman Home Health Care Corporation - 0.5 hrs Judith L. Balcitis: Sherman Health Systems - 6 hrs; Sherman Home Health Care Corporation - 0.5 hrs Thomas Nitz: Sherman Health Systems - 6 hrs; Sherman West Court - 1 hr Joy Jensen: Sherman Health Foundation - 20 hrs Jane Bradford: Health Visions, Inc. - 20 hrs Mary Martini: Sherman Health Systems - 6 hrs Michael Mulay: Sherman Health Systems - 10 hrs Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Book/Tax Difference Relating to Partnership Investments 7,949. Net Transfers to Affiliates -18,125,000. Total to Form 990, Part XI, Line 5: -18,117,051. Sherman Health Foundation 1425 N Randall Road Elgin IL 60123 320106211 Provide Charitable Support to Healthcare Organization IL 501(c)(3) Line 11a, I Sherman Health Systems 1 Sherman Health Systems 1425 N Randall Road Elgin IL 60123 363673380 Maintain Health Service Institutions serving the Surrounding Community IL 501(c)(3) Line 11a, I N/A 0 Sherman Home Health Care Corporation 901 Center Street Suite 2001A Elgin IL 60120 363330085 Services Include Skilled and Unskilled General Nursing IL 501(c)(3) Line 9 Sherman Health Systems 1 Sherman West Court 1950 Larkin Avenue Elgin IL 60123 363725580 Provide Long-Term Nursing Care IL 501(c)(3) Line 9 Sherman Health Systems 1 Health Visions Inc 1425 N Randall Road Elgin IL 60123 363780082 Physician Practice Management IL N/A C Sherman Group Practice Inc 1435 N Randall Road Elgin IL 60123 262891035 Physician Group IL N/A C Sherman Physicians Group Inc 1435 N Randall Road Elgin IL 60123 264800497 Physician Group IL N/A C Sherman Health Insurance Company Ltd PO Box 1159 Grand Cayman CJ KY1-1102 980703036 Insurance Provider CJ N/A C 1 0 1 0 0 0 0 1 0 1 0 0 1 1 0 1 1 1 Sherman Health Systems A 2000 Interest on indemnity agreement Health Visions Inc N 3367747 Salaries & Benefit Allocations Sherman Health Foundation N 315493 Salaries & Benefit Allocations Sherman Home Health Care Corporation N 2234037 Salaries & Benefit Allocations Sherman West Court N 4574162 Salaries & Benefit Allocations Health Visions Inc P 1097461 Vendor Payments Sherman Health Foundation P 225411 Vendor Payments Sherman Home Health Care Corporation P 1351180 Vendor Payments Sherman West Court P 4845192 Vendor Payments Health Visions Inc R 3180000 Cash Transfers Sherman Health Foundation R 469094 Cash & Net Asset Transfers Sherman West Court R 11045000 Cash Transfers Sherman Home Health Care Corporation R 4415000 Cash Transfers