2011-05-13T09:43:06-05:00 2010-06-30 KPMG LLP TWO CENTRAL PARK PLAZA SUITE 1501 OMAHA NE 68102 990 2009-07-01 420782518 ALEGENT HEALTH-MERCY HOSPITAL CORNING IA ALEG 4023434323 PO BOX 368 CORNING IA 50841 SCOTT M WOOTEN 4023434323 2011-05-13 1 4023481450 2009 2016-02-24 21:20:13Z SCOTT M WOOTEN 12809 WEST DODGE ROAD OMAHA NE 68154 18988445 0 X WWW.ALEGENT.COM X 1953 IA TO PROVIDE HIGH QUALITY CARE FOR THE BODY, MIND AND SPIRIT OF EVERY PERSON. 11 6 173 65 0 0 282947 658918 16812227 18140286 4178 1398 135615 178999 17234967 18979601 323472 472122 0 7802047 7661222 0 0 7588083 8763285 15713602 16896629 1521365 2082972 12046324 14162658 926242 959603 11120082 13203055 Faithful to the healing ministry of Jesus Christ, our Mission is to provide high quality care for the body, mind and spirit of every person. Our commitment to healing calls us to:Create caring and compassionate environments Respect the dignity of every person Care for the resources entrusted to us as responsible stewards Collaborate with others to improve the health of our communities Attend especially to the needs of those who are poor and disadvantaged Act with integrity in all endeavors To achieve this Mission, we pledge to be creative, visionary leaders committed to holistic healthcare in the region. 0 0 11981625 472122 12695476 Alegent Health Mercy Hospital, Corning supports the mission by continually making services more convenient and accessible while maintaining a level of efficiency. The hospital offers the following services to our patients: 24-hour emergency care with heliport accommodations, Diagnostic imaging services, Cardiovascular services, Chemotherapy and Electroencephalograms (EEGs) Physical therapy. 2793423 1822624 Alegent Health Mercy Hospital, Corning provides several specialty clinics each week through visiting specialists in the following areas: Audiology, Ear, Nose and Throat, Cardiovascular Services, Dermatology, Gastroenterology, General surgery/Wound Care, Gynecology/Obstetrics, Oncology, Opthalmology, Orthopedic Surgery, Podiatry, Urology, Speech and Occupational Therapy and Psychiatry. 860860 3717680 Corning has strived to improve the health status of children, teens, adults, senior citizens, friends and neighbors in this rural community. Mercy Hospital-Corning is proud to offer healthcare services close to home within the community. The diagnostic imaging services provided include the following: CT scans, MRI and nuclear medicine in addition to general radiology, mammography, surgical radiography and ultrasound. 15635908 1 1 0 1 0 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 61 0 1 173 1 0 0 0 0 0 0 0 0 0 11 6 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 IA X SCOTT M WOOTEN SENIOR VPCFO 4023434323 12809 WEST DODGE ROAD OMAHA NE 68154 RICHARD HOGAN 2.00 X X 0 0 0 DOUG LEONARD 2.00 X X 0 0 0 KARL MCCARTY 2.00 X 0 0 0 jane rychnovsky 2.00 X X 0 0 0 LINDA SHEARER 2.00 X 0 0 0 RODNEY TRIPLETT 60.00 X X 0 132932 40326 MIKE GRUNDMAN 2.00 X 0 0 0 DENISE MCNITT 60.00 X 0 130201 30345 DEBRA GOLDSMITH 60.00 X X 94807 0 27867 RANDY ALLMAN 2.00 X 0 0 0 D RANDALL PRITZA MD 2.00 X 0 486517 32310 PHYLLIS MULLEN 2.00 X X 0 0 0 SCOTT WOOTEN 60.00 X 0 761827 20275 RICHARD HACHTEN II 60.00 X 0 1636890 734490 MAEN HADDADIN MD 60.00 X 523935 0 37982 STEPHEN GRUBA MD 60.00 X 241660 0 33882 BETHEL KOPP MD 60.00 X 345831 0 37085 Amy Wetzel 60.00 X 100616 0 21583 Caroline Amao MD 60.00 X 174371 0 32955 1481220 3148367 1049100 6 0 1 0 REHABVISIONS 11623 ARBOR ST OMAHA NE 68144 REHAB SERVICES 208870 Cassling 13808 F Street omaha NE 68137 DIAGNOSTIC IMAGING 103746 COMPREHENSIVE MRI IMAGING SERVICES LLC PO BOX 330 COTTAGE GROVE WI 53527 DIAGNOSTIC IMAGING 100300 3 506859 112230 39829 658918 NET PATIENT SVC REVENU 621500 17974173 17974173 AFFILIATE REVENUE 900099 144054 144054 HEALTH PROMOTIONS 611710 22059 22059 18140286 1398 1398 1200 1200 1200 1200 1225 550 675 675 11945 8294 3651 3651 OTHER OPERATING REVENU 900099 91681 91681 CAFETERIA 722320 77979 77979 REIMBURSED SERVICES 900099 3813 3813 173473 18979601 18235780 0 84903 10550 10550 461572 461572 243825 243825 6115918 5626645 489273 160307 147482 12825 753111 692862 60249 388061 357016 31045 2229 2229 1077869 1077869 75103 69095 6008 2693280 2477818 215462 334558 334558 42890 39459 3431 11441 10526 915 10258 10258 842741 842741 35038 32235 2803 PURCHASED SERVICES 2368553 2179069 189484 BAD DEBTS 1201807 1201807 MEMBERSHIP & DUES 25679 23625 2054 MISCELLANEOUS 20320 18694 1626 TAXES & LICENSES 11004 10124 880 10515 9674 841 16896629 15635908 1260721 0 930898 811559 1868 1872 2087364 1951070 417591 443843 17758606 9891182 8104290 7867424 504313 3086890 12046324 14162658 248257 252003 355556 677985 352044 926242 959603 X 11120082 13203055 11120082 13203055 12046324 14162658 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 0 1 2229 0 0 0 2229 0 982 19356 20338 3471 2489 982 1.00000 0 1 1 7500 7500 6342693 2524091 3818602 305337 185251 120086 10807630 7181840 3625790 295446 295446 7867424 INTERCOMPANY RECEIVABLE 3086890 3086890 AMOUNTS DUE TO 3RD PARTY PAYORS 352044 352044 Part V, Line 4: Description of Intended Use of Endowment Funds: ENDOWMENT FUNDS ARE INTENDED TO HELP WITH THE ORGANIZATIONAL OPERATIONS OF MERCY HEALTH CARE FOUNDATION and ALEGENT HEALTH MERCY HOSPITAL, CORNING, IA. PART X - THE ENTITIES REPORTED IN THE CONSOLIDATED AUDIT HAVE ADOPTED FASB INTERPRETATION NO. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, INCLUDED IN FASB ASC SUBTOPIC 740-10, INCOME TAXES - OVERALL, ENTITIES OF ALEGENT HEALTH RECOGNIZES THE EFFECT OF INCOME TAX POSITIONS ONLY IF THOSE POSITIONS ARE MORE LIKELY THAN NOT OF BEING SUSTAINED. RECOGNIZED INCOME TAX POSITIONS ARE MEASURED AT THE LARGEST AMOUNT THAT IS GREATER THAN 50% LIKELY OF BEING REALIZED. CHANGES IN RECOGNITION OR MEASUREMENT ARE REFLECTED IN THE PERIOD IN WHICH THE CHANGE IN JUDGEMENT OCCURS. DURING 2010 AND 2009, MANAGEMENT DETERMINED THAT THERE ARE NO INCOME TAX POSITIONS REQUIRING RECOGNITION IN THE CONSOLIDATED FINANCIAL STATEMENTS. 1 1 X 0 0 1 1 1 0 1 1 769 269988 269988 0.01720 769 269988 269988 0.01720 255 43008 2463 40545 0.00260 10 103 0 103 0.00000 159013 90681 68332 0.00440 51123 10847 40276 0.00260 30 40770 40770 0.00260 295 294017 103991 190026 0.01220 1064 564005 103991 460014 0.02940 9000 9000 0.00060 2375 2375 0.00020 1 8391 799 7592 0.00050 1 49813 168 49645 0.00320 1 33 33 0.00000 3 69612 967 68645 0.00450 1 401853 0 6903477 8985751 -2082274 X 1 1 ALEGENT HEALTH MERCY HOSPITAL

603 ROSARY DRIVE CORNING IA 50841

X X X AH CORNING RURAL HEALTH CLINIC

601 ROSARY DRIVE CORNING IA 50841

RURAL HEALTH CLINIC AH BEDFORD RURAL HEALTH CLINIC

618 COURT AVE BEDFORD IA 50833

RURAL HEALTH CLINIC AH LENOX RURAL HEALTH CLINIC

810 1/2 E VAN BUREN ST LENOX IA 50851

RURAL HEALTH CLINIC AH MERCY HOSP SKILLED NURSING FACILITY

603 ROSARY DRIVE CORNING IA 50841

SKILLED NURSING FACILITY Part I, Line 3c: Alegent Health Mercy Hospital, Corning, IA is part of the Alegent Health System. The amount of financial assistance write-off for entities of the Alegent Health System will be based on a financial assistance sliding fee schedule utilizing a derivative of the current US Dept of Housing and Urban Development (HUD) very low income guidelines, which are updated yearly.All efforts are made to establish whether patients are eligible for financial assistance prior to service if possible, otherwise as soon as possible following service. Representatives of the Alegent Health System help patients seek reimbursement from local, state and federal programs at no charge to the patient. After these efforts and resources have been exhausted, patients are assisted in the application process for financial assistance consistent with the Alegent Health SYSTEM'S Financial Assistance Policy. The application process requires that the patient complete a personal financial application and provide verification documents. Verification includes employment verification and obtaining documentation of the APPLICANT'S financial condition such as federal tax return, pay stub, net worth and/or liquid assets and reasonable household or business expenses. Financial assistance may still be granted in certain circumstances involving a catastrophic occurrence resulting in medical bills grossly exceeding the PATIENT'S ability to pay, and in these situations, the PATIENT'S responsibility will be limited to 20% of the FAMILY'S gross annual income.Part I, line 6a: The Alegent Health System produces a public community benefit report that is mailed to a core constituency and placed in key places throughout the organization. It is also available on the COMPANY'S intranet site, and on its public website at www.alegent.com. Part I, Line 7: THE COSTING METHODOLOGY USED TO CALCULATE THE AMOUNTS REPORTED IN THE TABLE WERE WORKSHEETS 1 - 8 PROVIDED WITH THE SCHEDULE H INSTRUCTIONS. THE COST TO CHARGE RATIO DERIVED FROM WORKSHEET 2 WERE USED TO CALCULATE TOTAL COMMUNITY BENEFIT EXPENSE FOR CHARITY CARE, MEDICAID AND OTHER MEANS TESTED. Part I, Line 7g: ALEGENT HEALTH-MERCY HOSPITAL PROVIDES SUBSIDIZED HEALTH TO THE BROADER COMMUNITY THROUGH RURAL COMMUNITY SUPPORT CLINICS, RURAL HEALTH CLINICS, EMERGENCY AND TRAUMA CARE. Part I, Line 7f: Bad debt of $1,201,807 included in THE functional expense total part IX, line 25 is not included in the total operating expense used to calculate the table 7 percentages. Part III, Line 4: THE AUDITED FOOTNOTES FOR ENTITIES OF THE ALEGENT HEALTH SYSTEM DO NOT CONTAIN FOOTNOTES RELATED TO BAD DEBT EXPENSE. BAD DEBT EXPENSE IS IDENTIFIED ON THE CONSOLIDATED STATEMENT OF OPERATIONS WHICH IS CONSISTENT WITH THE REPORTING PRACTICE OF OTHER HEALTH CARE ORGANIZATIONS.Bad debt expense (at cost) FOR ENTITIES OF ALEGENT HEALTH are determined by using the cost to charge ratio from Medicare Cost reports per entity and multiplying the ratio by the actual bad debt charges per entity.To determine the amount of the organization's bad debt expense (at cost) attributable to patients eligible under the organization's charity care policy, Representatives of the Alegent Health System determine if an account needs to be moved from bad debt to charity when a patient either comes forward and completes a charity application, which is approved or if it is determined that the patient has no other resources to pay the account balance. Part III, Line 8: The Alegent Health System does not consider Medicare shortfalls to be community benefit, per the recommendation of the Catholic Health Association. The Medicare charges reported on line 5 and 6 are from Medicare cost reports which used a cost to charge ratio. Part III, Line 9b: The Alegent Health SYSTEM'S Self Pay Billing and Bad Debt Policy has a clearly delineated process for collection agencies to follow, including explicit instructions to adhere to the same financial assistance guidelines as Alegent Health, WHICH ENSURE THAT NO CHARITY CARE PATIENTS GO INTO COLLECTIONS. PART V: 3 RURAL HEALTH CLINIC AND 1 SKILLED NURSING FACILITY. Part VI, Line 2: Entities of the Alegent Health System approach community needs assessment as a corporate activity that develops and integrates county based health profiles for each of the counties where one of our licensed hospitals are located. The process to develop the assessment is collaborative in nature and involves health departments, existing health coalitions, community members and hospital leadership, as is supported by the Alegent Health Planning and Community Benefit Department staff. The Alegent Health Planning department conducts market assessments that identify the Omaha METROPOLITAN STATISTICAL AREA'S (MSA) population and demographic characteristics. Additionally, in cooperation with local health departments and coalitions, the Alegent Health Community Benefit/Healthier Community department conducts an annual review of the documented community health needs and plans of each of the communities it serves. This assessment process involves summarizing existing data and research from local health department reports and local coalition reports into a comprehensive summary grid incorporating a multitude of factors including- demographics, health status metrics, Behavioral Risk Factor Surveillance Survey (BRFSS) data, documented health issues, qualitative information from qualitative and community based processes and identification of Alegent HEALTH'S participation and specific strategic action plans. The profiles are integrated into the governance and planning for Alegent Health on two levels: I. Reporting to the committee of the Board of Directors charged With health planning oversight and;II. Into the annual strategic planning processes of Alegent Health. Part VI, Line 3: There are several financial assistance access points throughout a PATIENT'S care cycle. Bills contain financial assistance verbiage; signs are posted in clinics and hospitals, and there is information on financial assistance posted at registration points throughout clinics and hospitals. Information on The Alegent Health SYSTEM'S financial assistance policies are located several places on www.alegent.com. Part VI, Line 4: Alegent Health Mercy Hospital, Corning, IA serves Adams and Taylor Counties in Iowa, with an estimated population of 10,289. Census estimates show that Adams and Taylor Counties racial and ethnic makeup is 97.6 white, 1.7% some other race alone, and 0.7% two or more races; with 3.5% being Hispanic or latino. The median household income for Adams is $36,439, and for Taylor it is $39,530 compared to $48,098 for the state of Iowa. The amount of students receiving free or reduced lunch ranges from 42.5% in the Bedford School District, to 85.7% in the Clearfield School District. Part VI, Line 5: Alegent Health Mercy Hospital, Corning, IA provides staff leadership, administrative support and financial support to a number of community health and economic development coalitions including-Alegent Health Home Care and Hospice which operates as the local public health department, Adams County Tobacco Free coalition, Corning Economic Development Board and the Adams County Economic Development Corporation. The hospital funds the renovation of the community swimming pool and the Alegent Health Wellness Center and manages the Adams County Rescue Squad. The hospital supported a pilot project at the elementary school to increases STUDENT'S level and intensity of physical activity through structured recess activity and staff training. Part VI, Line 6: Alegent Health Mercy Hospital, Corning, IA further promotes the health of its community through financial and in-kind donations.BOARD OF DIRECTORS - The Board of Directors manages the affairs of ALEGENT HEALTH-MERCY HOSPITAL, CORNING. The number of Directors is not less than five and no more than fifteen. ALEGENT HEALTH-MERCY HOSPITAL, CORNING'S Board of Directors is primarily comprised of volunteer members of the local community who are leaders in the fields of business, healthcare, accounting and medicine and understand their role in providing strong corporate governance.EMERGENCY DEPARTMENT - ALEGENT HEALTH-MERCY HOSPITAL, CORNING has a full-time emergency department that is open to the public and provides medical screening examinations and stabilizing treatment within the capabilities and capacity of the hospital regardless of but not limited to the PATIENT'S race, color, sex, age, and/or ability to pay. The hospital is in compliance with the federal EMTALA regulations.MEDICAL STAFF - The hospital maintains an open medical staff. All qualified MDs, DOs, other healthcare practitioners, and mid-level practitioners are eligible to apply for privileges at the hospital. ALEGENT HEALTH-MERCY HOSPITAL, CORNING'S policy on physician credentialing is that no individual is to be denied medical staff appointment based on sex, race, creed, color or national origin. The standards a physician must meet for appointment relate to (1) educational qualifications and licensing; (2) professional competence, (3) character, (4) ethical standing, and (5) ability to relate to and work with others. Applications are reviewed at several levels within the organization. Physicians who have been granted staff privileges automatically become members of the medical staff at the hospital. Part VI, Line 7: The senior leadership of the individual hospitals are engaged in the community needs assessment process that is conducted from the corporate offices of the Alegent Health system (See Part VI-2/Community Needs Assessment). The hospital is involved in shared budget decision making to meet the prioritized community health needs in collaboration with community partners. The corporate function is funded from the operations of the individual hospitals to leverage expertise and time that is focused on promoting health versus addressing acute care needs. The individual hospitals become more involved in specific strategic responses through the services they provide and their participation in the coalitions across the Alegent Health service area. 1 ADAMS COMMUNITY ECONOMIC DEVELOPMENT 710 DAVIS AVENUE CORNING IA 50841 421013266 501(c)(3) 9000 GENERAL SUPPORT 1 CHARITY CARE 769 461372 BOOK REDUCE OR WRITE OFF OF PATIENT SERVICES. ROSE ANN AUXILIARY SCHOLARSHIPS 1 200 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: Alegent Health-Mercy Hospital, Corning, IOWA recognizes the right to quality healthcare regardless of age, sex, race, religion, national origin, or ability to pay. Business office staff helps patients seek local, state, and federal reimbursement at no charge when no other source of payment is available. Financial assistance is provided to patients with demonstrated inability to pay for medically necessary services. THESE FUNDS ARE DIRECTLY USED TO OFFSET THE PATIENTS ACCOUNTS RECEIVABLE. SCHEDULE I, PART I, LINE 2: The organization makes grants to other 501(C)(3) organizations and the funds are only provided for charitable purposes. Other Information: Part IV: THE ROSE ANN AUXILIARY SCHOLARSHIP IS PROVIDED TO FUND THE SECOND SEMESTER OF STUDY TO ELIGIBLE HIGH SCHOOL SENIORS ENTERING THE HEALTH CARE FIELD. APPLYING STUDENTS MUST INDICATE A HEALTH CARE MAJOR AND COLLEGE OR INSTITUTION THEY PLAN TO ATTEND ACCOMPANIED BY A LETTER STATING REASONS WHY THEY SHOULD RECEIVE THE SCHOLARSHIP AND PERSONAL INFORMATION TO HELP THE SELECTION COMMITTE IN MAKING THEIR DECISION. AFTER the SCHOLARSHIP IS GRANTED, STUDENTS MUST PROVIDE GRADES FOR THEIR FIRST SEMESTER AND PROOF OF ENROLLMENT FOR A SECOND SEMESTER. X X X X X 1 1 0 1 0 1 1 0 0 RODNEY TRIPLETT 0 108019 0 16753 0 8160 0 19080 0 21246 0 173258 0 0 DENISE MCNITT 0 88913 0 16321 0 24967 0 11297 0 19048 0 160546 0 0 D RANDALL PRITZA MD 0 370774 0 0 0 115743 0 19380 0 12930 0 518827 0 0 SCOTT WOOTEN 0 375635 0 170377 0 215815 0 13255 0 7020 0 782102 0 192696 RICHARD HACHTEN II 0 288224 0 16160 0 1332506 0 732179 0 2311 0 2371380 0 1293967 MAEN HADDADIN MD 481691 0 27344 0 14900 0 19380 0 18602 0 561917 0 0 0 STEPHEN GRUBA MD 212996 0 14653 0 14011 0 25894 0 7988 0 275542 0 0 0 BETHEL KOPP MD 299740 0 30814 0 15277 0 26454 0 10631 0 382916 0 0 0 Caroline Amao MD 169653 0 0 0 4718 0 13336 0 19619 0 207326 0 0 0 Part I, Line 4a THE FOLLOWING REPORTABLE INDIVIDUALS RECEIVED SEVERANCE PAYMENTS FROM ALEGENT HEALTH (A RELATED ORGANIZATION) DURING THE 2009 CALENDAR YEAR AND THESE SEVERANCE PAYMENTS WERE INCLUDED IN THE INDIVIDUAL'S W-2 INCOME AND REPORTABLE AS COMPENSATION ON SCHEDULE J: RICHARD HACHTEN II - $363,816. PART I, LINE 4B: ALEGENT HEALTH HAS A MARKET BASED NONQUALIFIED RETIREMENT PLAN APPROVED BY THE BOARD OF DIRECTORS THAT EXECUTIVES PARTICIPATE IN OF WHICH ANNUAL CONTRIBUTIONS ARE MADE. DURING 2009, THE SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN TERMINATED AND PARTICIPANTS RECEIVED A TOTAL PAYOUT OF THEIR BALANCE. THE FOLLOWING REPORTABLE INDIVIDUALS RECEIVED SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN PAYMENTS FROM ALEGENT HEALTH DURING THE 2009 CALENDAR YEAR AND THE PAYMENTS WERE INCLUDED IN THE INDIVIDUAL'S W-2 INCOME AND REPORTABLE AS COMPENSATION ON SCHEDULE J: Scott Wooten - $192,696 Richard HachTen II - $930,151. Part I, Line 5 Physicians employed by ALEGENT HEALTH MERCY HOSPITAL, CORNING, IA are compensated based on their individual practice revenues less practice expenses. Absent extenuating circumstances, there is no guaranteed based salary or minimum salary past their initial practice start-up period. Some physicians are compensated based on their work RVU production which is a nationally accepted measure of physician productivity. Part I, Line 6 Compensation for members of management of Alegent Health and related entities is determined at a system level. MEMBERS OF MANAGEMENT INCLUDE RICHARD HACHTEN II, SCOTT WOOTEN, DEBRA GOLDSMITH, DENISE MCNITT AND RODNEY TRIPLETT. MEMBERS OF ALEGENT HEALTH MANAGEMENT ARE ELIGIBLE FOR AN ANNUAL INCENTIVE BONUS. INCENTIVE AWARDS ARE BASED ON FOUR INDIVIDUAL PERFORMANCE MEASURES WHICH ARE LINKED TO FOUR SYSTEM PERFORMANCE GOALS. FOR EACH MANAGER, 75% OF THE INCENTIVE AWARD WILL BE DETERMINED BY SYSTEM PERFORMANCE GOALS AND 25% DETERMINED BY INDIVIDUAL PERFORMANCE. ONE OF THE FOUR SYSTEM PERFORMANCE GOALS IS DEPENDENT ON THE FINANCIAL RESULTS OF THE ENTIRE ALEGENT HEALTH SYSTEM FOR THE FISCAL YEAR. Supplemental Information Part III Part I, Line 3 - ALEGENT HEALTH GOVERNANCE OF EXECUTIVE COMPENSATION: ACTING AS PRUDENT STEWARDS OF ITS FINANCIAL RESOURCES, THE ALEGENT HEALTH BOARD COMPENSATION COMMITTEE RECOMMENDS AND THE BOARD EXECUTIVE COMMITTEE APPROVES EXECUTIVE COMPENSATION PHILOSOPHY, POLICY AND GUIDELINES. IT DOES SO WITH THE OBJECTIVE OF ATTRACTING AND RETAINING TOP EXECUTIVE TALENT TO ENSURE ALEGENT HEALTH IS ABLE TO FULFILL ITS FAITH-BASED MISSION AND ACHIEVE ITS VISION OF BECOMING WORLD-CLASS. THE ALEGENT HEALTH COMPENSATION COMMITTEE FOLLOWS A THOROUGH AND INTENTIONAL PROCESS THAT INCLUDES CONSULTATION WITH INDEPENDENT, EXPERT COUNSEL AND CAREFULLY COMPARES COMPENSATION LEVELS TO MARKET-BASED COMPENSATION OF SIMILAR SIZED, NON-PROFIT AND FOR-PROFIT HEALTH SYSTEMS AND ALSO UTILIZES A BLEND OF NOT-FOR PROFIT AND GENERAL INDUSTRY DATA FOR EXECUTIVE ROLES WHERE THE RECRUITING MARKET IS ARGUABLY BROADER THAN THE NOT-FOR-PROFIT SECTOR. TOTAL COMPENSATION INCLUDES BASE COMPENSATION, AND ALSO INCLUDES PERFORMANCE-BASED INCENTIVE COMPENSATION FOR ACHIEVING BOARD-SET GOALS FOR CLINICAL QUALITY, PATIENT SAFETY AND SATISFACTION, PHYSICIAN PERCEPTION, STRATEGIC AND FACILITY PLANNING AND FINANCIAL PERFORMANCE. IT MAY ALSO INCLUDE OTHER CASH PAYMENTS SUCH AS ONE-TIME RELOCATION COSTS, AND/OR CASH PAYMENTS FOR DEFERRED COMPENSATION. ADDITIONALLY, COMPENSATION FOR NON EXECUTIVE LEVEL MANAGEMENT POSITIONS WITHIN THE ALEGENT HEALTH SYSTEM ARE DETERMINED BY THE ALEGENT HEALTH HUMAN RESOURCE DEPARTMENT. THE HUMAN RESOURCE DEPARTMENT COMPARES MANAGEMENT COMPENSATION LEVELS TO SIMILAR POSITIONS WITHIN THE GEOGRAPHICAL AREA IN ORDER TO DETERMINE REASONABLE COMPENSATION. SCHEDULE J, PART II: THE ALEGENT HEALTH EXECUTIVES HAVE A PROVISION IN THEIR COMPENSATION AGREEMENT THAT PROVIDES FOR POTENTIAL SEVERANCE PAYMENTS IN THE EVENT OF TERMINATION WITHOUT CAUSE OR CHANGE OF CONTROL. THE AMOUNT OF SEVERANCE AN EXECUTIVE MAY OR MAY NOT RECEIVE IF TERMINATED ACCORDING TO THE COMPENSATION AGREEMENT IS INCLUDED AS DEFERRED COMPENSATION IN COLUMN C. Form 990, Part VI, Section A, line 6 ALEGENT HEALTH-BERGAN MERCY HEALTH SYSTEM IS THE SOLE MEMBER OF ALEGENT HEALTH-MERCY HOSPITAL, CORNING, IOWA. Form 990, Part VI, Section A, line 7a ALEGENT HEALTH-BERGAN MERCY HEALTH SYSTEM APPOINTS INDIVIDUALS TO SERVE ON THE BOARD OF DIRECTORS. THE BOARD, OR A NOMINATING COMMITTEE OF THE BOARD, PRESENT A SLATE OF NOMINEES AND THEIR CREDENTIALS TO THE MEMBER FOR APPROVAL. ALEGENT HEALTH-BERGAN MERCY HEALTH SYSTEM MAY REJECT ANY NOMINEE OR APPOINT INDIVIDUALS DIRECTLY TO THE BOARD OF DIRECTORS, OR REQUEST ADDITIONAL NOMINEES BY GIVING WRITTEN NOTICE OF SUCH ACTIONS TO THE CHAIRMAN OF THE BOARD. Form 990, Part VI, Section A, line 7b THE POWERS, DUTIES AND RIGHTS RESERVED TO ALEGENT HEALTH-BERGAN MERCY HEALTH SYSTEM WILL BE, BUT ARE NOT LIMITED TO, THE FOLLOWING: A. TO AMEND, REVISE OR ALTER THE ARTICLES OF INCORPORATION OR THE BYLAWS; B. TO APPOINT AND REMOVE, WITH OR WITHOUT CAUSE, MEMBERS OF THE BOARD OF DIRECTORS; C. TO APPROVE ANY MERGER OR CONSOLIDATION INTO OR WITH ANY OTHER CORPORATION, ORGANIZATION OR ASSOCIATION, AND TO APPROVE THE DISSOLUTION OR OTHERWISE WRAPPING UP OF THE AFFAIRS; D. TO APPROVE THE SALE, LEASE, EXCHANGE, MORTGAGE, PLEDGE OR OTHER DISPOSITION OF ALL, OR SUBSTANTIALLY ALL, OF THE ASSETS; E. TO APPROVE THE INCORPORATION OR DISSOLUTION OF AFFILIATED ENTITIES ORGANIZATIONS OR ASSOCIATIONS; AND F. TO RECEIVE THE ANNUAL REPORT OF THE BOARD OF DIRECTORS. Form 990, Part VI, Section B, line 11 ALEGENT HEALTH-MERCY HOSPITAL, CORNING, IA IS PART OF THE ALEGENT HEALTH SYSTEM. TAX RETURNS FOR ENTITIES OF THE ALEGENT HEALTH SYSTEM ARE PREPARED BY THE SYSTEM TAX DEPARTMENT. FOLLOWING THE PREPARATION OF ALEGENT HEALTH-MERCY HOSPITAL, CORNING, IA FORM 990 BY ALEGENT HEALTH INTERNAL TAX STAFF, THE RETURN IS REVIEWED BY THE ALEGENT HEALTH TAX DIRECTOR, EXTERNAL TAX ADVISOR AND THE CHIEF FINANCIAL OFFICER. ADDITIONALLY, THE BOARD OF DIRECTORS ARE PROVIDED A WEB LINK THAT DIRECTS THEM TO THE FINAL TAX RETURN AND ALL REQUIRED SCHEDULES. QUESTIONS ARE REFERRED TO THE ALEGENT HEALTH TAX DIRECTOR AND THE BOARD IS NOTIFIED OF THE DATE THE TAX RETURN WILL BE FILED. Form 990, Part VI, Section B, line 12c Written Conflict of Interest Policy - ALEGENT HEALTH MERCY HOSPITAL, CORNING, IOWA has adopted the conflict of interest policy and conflict of investigation process of Alegent Health. Annual completion of the disclosure statement is required by the Board of Directors. Stated disclosures are investigated by the Alegent Health Compliance Officer and reported to the Conflicts of Interest Committee. The Conflicts of Interest Committee reviews the investigation and makes recommendations to the Governance Committee. The Governance Committee makes the final determination of whether or not there is a disqualifying event and communicates it to the ALEGENT HEALTH MERCY HOSPITAL, CORNING, IOWA Board OF DIRECTORS. At any time a Board Member or Key Employee may declare a conflict of interest and recuse his/herself from the discussion. The individual is also required to disclose any known or possible conflicts of interest that arise during the calendar year. Form 990, Part VI, Section B, line 15 THE GOVERNING BOARD OF ALEGENT HEALTH ENGAGED THE SERVICES OF AN INDEPENDENT CONSULTING FIRM THAT HOLDS ITSELF OUT TO THE PUBLIC AS A COMPENSATION CONSULTANT THAT IS QUALIFIED TO AND REGULARLY PERFORMS EXECUTIVE AND OFFICER COMPENSATION STUDIES. THE CONSULTING FIRM CONDUCTED A REVIEW AND ANALYSIS OF THE TOTAL COMPENSATION PAID TO THE CEO AND OTHER OFFICERS AND KEY EMPLOYEES OF THE ORGANIZATION, BASED ON COMPARABLE COMPENSATION FOR SIMILARLY QUALIFIED PERSONS IN FUNCTIONALLY COMPARABLE POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS AND DETERMINED THAT THE COMPENSATION WAS REASONABLE. THE CONSULTING FIRM ISSUED AN OPINION LETTER AS TO THE REASONABLENESS OF THE TOTAL COMPENSATION PAID TO EMPLOYEES IDENTIFIED AS DISQUALIFIED PERSONS. THE OPINION LETTER SETTING FORTH THE FINDINGS WAS REVIEWED AND APPROVED BY THE COMPENSATION COMMITTEE OF THE GOVERNING BOARD. CONTEMPORANEOUS DOCUMENTATION AND RECORDKEEPING WITH RESPECT TO DELIBERATIONS AND DECISIONS REGARDING THE COMPENSATION ARRANGEMENTS WERE MAINTAINED. THIS PROCESS WAS USED FOR THE SENIOR VICE PRESIDENT, CHEIF FINANCIAL OFFICER, PRESIDENT & CHEIF EXECUTIVE OFFICER. Form 990, Part VI, Section C, line 19 The conflict of interest policy is made available to the public on the website at www.alegent.com. ALEGENT HEALTH MEMORIAL HOSPITAL, CORNING, IOWA does not make the financial statements or governing documents available to the public. However, ARTICLES OF INCORPORATION are available at www.sos.state.ia.us. FORM 990, PART I, LINE 5 AND PART V, LINE 2A THE EMPLOYEES LISTED IN PART I, LINE 5 AND PART V, LINE 2A ARE EMPLOYED BY ALEGENT HEALTH-MERCY HOSPITAL, CORNING, IA. HOWEVER, THROUGH A COMMON PAY AGENT AGREEMENT, THE EMPLOYEES ARE PAID BY ALEGENT HEALTH AND PAYROLL EXPENSES ARE ALLOCATED TO ALEGENT HEALTH-MERCY HOSPITAL, CORNING, IA. FORM 990, PART V, LINE 1C PAYMENTS TO VENDORS FOR ENTITIES THAT ARE PART OF THE ALEGENT HEALTH SYSTEM ARE MADE BY ALEGENT HEALTH, THEREFORE NO FORM 1099S ARE ISSUED BY ALEGENT HEATLH-MERCY HOSPITAL, CORNING, IOWA. ALEGENT HEALTH FILES THE FORM 1099S AND COMPILES WITH THE BACKUP WITHHOLDING RULES FOR REPORTABLE PAYMENTS TO VENDORS AND GAMING WINNINGS. 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