2011-08-15T08:14:06-05:00 2010-09-30 DIXON HUGHES GOODMAN LLP 500 Ridgefield Court Asheville NC 28806 990 2009-10-01 560583151 SCOTLAND MEMORIAL HOSPITAL INC SCOT 9102917920 500 LAUCHWOOD DRIVE LAURINBURG NC 28352 MATT PRACHT 9102917920 2011-08-15 1 Michael Rauchwarg 8282542254 2009 2016-02-24 21:20:13Z MATT PRACHT 500 LAUCHWOOD DRIVE LAURINBURG NC 28352 121251293 0 X WWW.SCOTLANDHEALTH.ORG X 1945 NC TO OFFER A FULL RANGE OF ACUTE CARE AND INPATIENT SERVICES TO THE RESIDENTS SCOTLAND COUNTY, NORTH CAROLINA AND THE SURROUNDING AREA. 23 21 1165 191 205193 34376 1309394 297069 114105934 118148322 -2905082 1868339 940673 937563 113450919 121251293 69364 123031 0 49043348 48569839 0 0 62109064 64760395 111221776 113453265 2229143 7798028 114127375 118226948 50531109 47931214 63596266 70295734 TO PROVIDE HIGH QUALITY, COMPASSIONATE HEALTH CARE. 0 0 87194836 123031 118090769 SEE SCHEDULE O 87194836 1 1 0 1 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 1 80 0 1 1165 1 1 1 0 0 0 0 0 0 0 0 23 21 0 1 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 NC X X MATTHEW D PRACHT VP FINANCE 9102917920 500 LAUCHWOOD DR LAURINBURG NC 28352 JIM MASON 1.00 X X 0 0 0 TERRY GARNER 1.00 X X 0 0 0 CRAIG ELLIS 1.00 X 0 0 0 PAUL RUSH MD 1.00 X X 43562 0 0 MICHAEL O'DONNELL MD 1.00 X 1700 0 0 MIKE VINSON 1.00 X 0 0 0 BRADFORD FAULKENBERRY MD 1.00 X 0 0 0 MILTON FARMER 1.00 X 0 0 0 CHARLES JENKINS 1.00 X 0 0 0 WAYNE HOBBS 1.00 X 0 0 0 KATHY MANIS 1.00 X 0 0 0 KEN NICHOLS 1.00 X 0 0 0 RAY CHAVIS DDS 1.00 X 0 0 0 DONNIE MCDONALD 1.00 X 0 0 0 JAMES MCDOUGALD 1.00 X 0 0 0 KURT JUTE DO 1.00 X 0 0 0 JANE ROGERS 1.00 X 0 0 0 JONATHAN ROWSON MD 2.00 X 232176 0 26478 NANCY WALKER 1.00 X 0 0 0 DAVID HARLING 1.00 X 0 0 0 KYLE CHAVIS 1.00 X 0 0 0 JOSHUA MALCOLM 1.00 X 0 0 0 JEFF MERCER 1.00 X 0 0 0 GREGORY C WOOD 40.00 X 283411 0 43557 MATTHEW D PRACHT 40.00 X 162437 0 37535 FRANK YANG MD 40.00 X 371145 0 38965 JOHN NOBLES MD 40.00 X 197406 0 18493 JAMES STATEN MD 40.00 X 197406 0 33423 DENIS RICARD 40.00 X 167841 0 31238 RUTH GLASER 40.00 X 171709 0 24340 1828793 0 254029 33 0 1 0 MCKESSON DRUG PO BOX 409021 ATLANTA GA 30384 PHARMACUETICALS 1912017 LIBERTY ANESTHESIA PLLC 16101 CADDIE COURT WAGRAM NC 28396 ANESTHESIA SERVICES 1853083 STRYKER ORTHOPEDICS PO BOX 92213 CHICAGO IL 60673 ORTHOPEDIC EQUIPMENT & SUPPLIES 1478411 FIRST HEALTH OF THE CAROLINAS PO BOX 8500 PINEHURST NC 28374 PROFESSIONAL FEES - HOSPITALISTS 1339011 MEDLINE INDUSTRIES PO BOX 38208 PITTSBURG PA 15251 MEDICAL SUPPLIES 1312512 90 78542 218527 297069 PATIENT SERVICES 621500 118123127 117989241 133886 HOSPICE IT CONTRACT 624100 13000 13000 CANCER TREATMENT 624100 12195 12195 118148322 778391 778391 147746 147746 147746 147746 1089948 1089948 1089948 1089948 CAFETERIA REVENUE 722210 469124 71307 397817 INVESTMENT IN MOB 900099 68403 68403 PURCHASE DISCOUNTS 900099 31367 31367 220923 76333 144590 789817 121251293 118090769 205193 2658262 123031 123031 723286 723286 37011002 28716817 8294185 2667893 1947562 720331 5379064 3926717 1452347 2788594 2035674 752920 1041 1041 294196 294196 321891 321891 237192 237192 17929281 10993298 6935983 385080 36661 348419 16378951 13717929 2661022 2316092 321863 1994229 295025 196193 98832 598248 598248 8676985 8676985 1395515 71230 1324285 BAD DEBT 15638506 15638506 MISCELLANEOUS 227693 193592 34101 PUBLIC RELATIONS & COMM 64699 530 64169 GIFT SHOP EXPENSES 0 113453265 87194836 26258429 0 490615 31676 17379882 12667029 13825191 13390722 1795250 1832434 1007651 643400 122726720 75544602 47581480 47182118 27027396 39289923 631948 625351 4387962 2564295 114127375 118226948 10062892 10997391 12863763 10852944 4087940 2598416 23516514 23482463 50531109 47931214 X 63147282 69941365 448984 354369 63596266 70295734 114127375 118226948 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 7676 7676 0 Part II-B, Line 1i: Explanation of Other Lobbying Activities: PORTION OF MEMBERSHIP DUES PAID TO NCHA ALLOCATED TO LOBBYING EXPENSES 60507236 37702891 22804345 5486904 3418965 2067939 55243116 34422746 20820370 1489464 1489464 47182118 CAPITAL LEASE OBLIGATIONS 2180249 ACCRUED INTEREST PAYABLE 302453 ESTIMATED 3RD PARTY SETTLEMENTS 6995297 PENSION PLAN LIABILITY 14004464 23482463 121251293 113453265 7798028 1160025 -743535 -1515050 -1098560 6699468 120356476 1160025 23026 1183051 119173425 2077868 2077868 121251293 112913473 0 112913473 539792 539792 113453265 Part X: Description of Uncertain Tax Positions Under FIN 48: THE CORPORATION AND ITS NONPROFIT AFFILIATES ARE EXEMPT FROM FEDERAL INCOME TAXES UNDER SECTION 501(A) AS ORGANIZATIONS DESCRIBED IN SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE. THE LLC IS TREATED AS A PARTNERSHIP AND AS SUCH, THE INCOME FLOWS THROUGH TO THE OWNERS OF THE LLC. THE CORPORATION HAS DETERMINED THAT IT DOES NOT HAVE ANY MATERIAL UNRECOGNIZED TAX BENEFITS OR OBLIGATIONS AS OF SEPTEMBER 30, 2010. Part XI, Line 8 - Other Adjustments: PENSION PLAN ADJUSTMENT: 23026. OTHER THAN TEMPORARILY IMPAIRMENT OF INVESTMENTS: -224932. TRANSFER FROM AFFILIATES: -1313144. Part XII, Line 2d - Other Adjustments: PENSION PLAN ADJUSTMENT: 23026. Part XII, Line 4b - Other Adjustments: TRANSFER FROM AFFILIATES: 1313144. MANAGEMENT FEES NETTED AGAINST EXPENSES ON FINANCIALS: 539792. IMPAIRMENT OF ASSETS: 224932. Part XIII, Line 4b - Other Adjustments: MANAGEMENT FEES NETTED AGAINST INCOME ON FS: 539792. 1 1 1 X 1 X 1 1 1 0 1 0 3097692 3097692 0.03170 16085327 13658368 2426959 0.02480 19183019 13658368 5524651 0.05650 439130 134137 304993 0.00310 45500 45500 0.00050 484630 134137 350493 0.00360 19667649 13792505 5875144 0.06010 377751 377751 0.00390 377751 377751 0.00390 6957978 1182856 28635522 29819687 -1184165 X 1 0 SCOTLAND MEMORIAL HOSPITAL INC

500 LAUCHWOOD DRIVE LAURINBURG NC 28352

X X X DISPROPORTIONATE SHARE HOSPITAL Part III, Line 4: A RATIO OF COST TO CHARGE METHODOLOGY IS UTILIZED. HOSPITAL COSTS ARE DIVIDED BY TOTAL CHARGES TO DETERMINE A COST TO CHARGE RATIO, WHICH IS THEN MULTIPLIED BY BAD DEBT CHARGES TO CALCULATE THE BAD DEBT COSTS. BAD DEBT CHARGES INCLUDES CHARGES THAT WERE WRITTEN OFF TO BAD DEBT AND CHARGES THAT WERE WRITTEN OFF ACCORDING TO SCOTLAND MEMORIAL HOSPITAL'SUNINSURED DISCOUNT POLICY. UNINSURED DISCOUNTS AND BAD DEBTS INCLUDES THE COST OF SERVICES PROVIDED TO UNINSURED OR UNDERINSURED PATIENTS AND TO PATIENTS WHO OTHERWISE DO NOT PAY FOR THEIR HEALTHCARE SERVICES.STUDIES OF SCOTLAND COUNTY SHOW THAT 17% OF HOUSEHOLDS ARE BELOW THE FEDERAL POVERTY LIMIT, THEREFOR, IT IS ESTIMATED THAT 17% OF BAD DEBT IS ATTRIBUTABLE TO CHARITY CARE. Part III, Line 8: THE ENTIRE AMOUNT OF THIS LOSS IS A COMMUNITY BENEFIT. MEDICARE IS THE LARGEST PAYOR CLASS AT SCOTLAND MEMORIAL HOSPITAL, COMPRISING 49% OF THE SERVICES PROVIDED.A COST TO CHARGE RATIO USING ALLOWABLE MEDICARE INPATIENT COSTS WAS USED TO CALCULATE THE INFORMATION PROVIDED. Part VI, Line 2: SCOTLAND MEMORIAL IS A MEMBER OF CAROLINAS COASTAL HEALTH ALLIANCE, WHICH HAS PREPARED COMMUNITY HEALTH ASSESSMENTS FOR ITS MEMBER HOSPITALS AND THE COMMUNITIES SERVED. Part VI, Line 4: SCOTLAND MEMORIAL HOSPITAL'S PRIMARY SERVICE AREA INCLUDES SCOTLAND COUNTY AND WESTERN ROBESON COUNTY, NC, AND MARLBORO COUNTY, SC. BOTH SCOTLAND AND ROBESON COUNTIES ARE LISTED AS HEALTH CARE SHORTAGE AREASIN THE HPSA DIRECTORY. ALL THREE COUNTIES HAVE A LARGE INDIGENT POPULATION AND FOR THE MAJORITY OF 2010, SCOTLAND COUNTY HAD THE HIGHEST UNEMPLOYMENT LEVEL OF NC COUNTIES. Part VI, Line 5: SCOTLAND MEMORIAL HOSPITAL PLAYS A VERY ACTIVE ROLE IN RECRUITING PHYSICIANS AND MID-LEVEL PROVIDERS TO SERVE THE PATIENTS IN OUR SERVICEAREA. SCOTLAND AND ROBESON COUNTY, NC AND MARLBORO COUNTY, SC ROUTINELY HAVE SHORTAGES IN HEALTHCARE PROVIDERS. BY ITS EFFORTS, THE HOSPITAL ENSURES A NETWORK OF PROVIDERS IS AVAILABLE FOR THE CARE OF THOSE IN NEED OUR RURAL SETTING. Part VI, Line 6: SCOTLAND MEMORIAL HOSPITAL FULFILLS ITS TAX EXEMPT PURPOSE BY THE PROVISION OF HEALTH CARE SERVICES WITHIN ITS SERVICE AREA TO PATIENTS WITH LITTLE OR NO RESOURCES TO PAY FOR CARE, AND BY THE ACCEPTANCE OF PAYMENTS FROM MEDICARE AND MEDICAID AT SUBSTANTIALLY REDUCED RATES.ALL EXCESS FUNDS ARE APPLIED TO PATIENT CARE THROUGH THE ANNUAL BUDGET PROCESS, WHEREBY ALL AVAILABLE FUNDS ARE ALLOCATED BASED ON NEEDS HIERARCHY. Part VI, Line 7: SCOTLAND MEMORIAL HOSPITAL SERVES AS THE PRIMARY HEALTHCARE PROVIDER IN THE SYSTEM, SERVING TO ASSESS COMMUNITY NEEDS AND COORDINATE MUCH OF THE HEALTH CARE RENDERED WITHIN SCOTLAND COUNTY. NC 1 NURSING SCHOLARSHIPS 8 12072 HUMAN RESOURCE SCHOLARSHIPS 29 39869 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: THE ORGANIZATION SETS CLEAR CRITERIA FOR THE AWARDING OF VARIOUS SCHOLARSHIP PROGRAMS. RECIPIENTS MUST PROVE DURING THE APPLICATION PROCESS THAT THEY MEET THE CRITERIA FOR SUCH AWARDS. X 0 0 0 0 0 1 0 0 0 JONATHAN ROWSON MD 187843 0 26196 0 18137 0 13193 0 13285 0 258654 0 0 0 GREGORY C WOOD 281234 0 0 0 2177 0 28583 0 14974 0 326968 0 0 0 MATTHEW D PRACHT 162237 0 0 0 200 0 20916 0 16619 0 199972 0 0 0 FRANK YANG MD 294871 0 55090 0 21184 0 25158 0 13807 0 410110 0 0 0 JOHN NOBLES MD 142316 0 55090 0 0 0 16937 0 1556 0 215899 0 0 0 JAMES STATEN MD 170206 0 27200 0 0 0 13402 0 20021 0 230829 0 0 0 DENIS RICARD 159593 0 8248 0 0 0 11299 0 19939 0 199079 0 0 0 RUTH GLASER 136507 0 35077 0 125 0 11450 0 12890 0 196049 0 0 0 Part I, Line 6 GREGORY WOOD (CEO) AND MATTHEW PRACHT (CFO) WERE ON A MANAGEMENT INCENTIVE PROGRAM THAT REQUIRED THE COMPLETION OF SPECIFIC ORGANIZATION PERFORMANCE MEASURES, WHICH INCLUDED FINANCIAL PERFORMANCE, QUALITY OUTCOMES, CUSTOMER SATISFACTION, AND EMPLOYEE RETENTION. Form 990, Part VI, Section A, line 3 EFFECTIVE APRIL 1, 2009, SCOTLAND HEALTH CARE SYSTEM IS ENGAGED IN A TEN-YEAR MANAGEMENT AGREEMENT WITH THE CHARLOTTE-MECKLENBURG HOSPITAL AUTHORITY D/B/A CAROLINAS HEALTHCARE SYSTEM TO MANAGE THE SYSTEM ON A DAY-TO-DAY BASIS. Form 990, Part VI, Section B, line 11 PRIOR TO THE FILING DATE, THE FORM 990 WAS PRESENTED TO THE BOARD OF TRUSTEES FOR REVIEW. AFTER A DISCUSSION PERIOD AND QUESTION & ANSWER PERIOD, THE BOARD OF TRUSTEES VOTED TO APPROVE THE FORM 990 AS PRESENTED. Form 990, Part VI, Section B, line 12c THE HOSPITAL REQUIRES ALL OFFICERS, DIRECTORS, TRUSTEES TO REVIEW AND SIGN THE CONFLICT OF INTEREST DISCLOSURE STATEMENT ANNUALLY. Form 990, Part VI, Section B, line 15 THE BOARD OF TRUSTEES REVIEWS AND APPROVES THE COMPENSATION OF THE CEO BY THE FOLLOWING PROCEDURE: THE OPERATING COMMITTEE, WHICH IS THE EXECUTIVE COMMITTEE OF THE BOARD OF TRUSTEES, ESTABLISHED A FORMAL COMPENSATION PHILOSOPHY WITH RESPONSIBILITIES IN 1996 USING AN OUTSIDE FIRM SPECIALIZING IN EXECUTIVE COMPENSATION. THIS PHILOSOPHY INCLUDES AN ANNUAL PROCESS WHICH BENCHMARKS INCUMBENT CEO AND CFO COMPENSATION AGAINST COMPARATIVE PEERS, OBTAINED FROM EXTERNAL INFORMATION. ANNUAL INCENTIVE PLANS ARE ESTABLISHED USING OBJECTIVE CRITERIA FOR BOTH THESE INDIVIDUALS AND OTHER MEMBERS OF THE EXECUTIVE TEAM. THE ENTIRE BOARD ALSO COMPLETES AN EVALUATION OF THE CEO WHICH IS ADDED TO THE ANNUAL INCENTIVE PLAN OBJECTIVES ESTABLISHED TO DETERMINE THE CEO'S ANNUAL COMPENSATION AND INCENTIVE PLAN PERFORMANCE. THE OPERATING COMMITTEE ALSO APPROVES THE CFO'S ANNUAL COMPENSATION INCLUDING HIS/HER INCENTIVE PLAN. THE OPERATING COMMITTEE CONTRACTS WITH THE CAROLINAS HEALTHCARE SYSTEM FOR THE CEO. THE OPERATING COMMITTEE ALSO REVIEWS AND APPROVES COMPENSATION FOR OTHER MEMBERS OF SHCS EXECUTIVE STAFF ON AN ANNUAL BASIS. FOR THE OTHER THREE VICE PRESIDENT'S, THEIR COMPENSATION IS APPROVED BY THE OPERATING COMMITTEE. Form 990, Part VI, Section C, line 18 PHOTOCOPIES OF THE FORM 990 ARE AVAILABLE UPON REQUEST AT THE ORGANIZATION'S ADMINISTRATIVE OFFICE. IN ADDITION, RECENT FILINGS OF THE FORM 990 ARE AVAILABLE ONLINE AT WWW.GUIDESTAR.ORG. Form 990, Part VI, Section C, line 19 THE HOSPITAL MAKES IT GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY AVAILABLE TO THE PUBLIC UPON REQUEST AT THE SCOTLAND MEMORIAL HOSPITAL EXECUTIVE ASSISTANT TO THE PRESIDENT'S OFFICE. THE HOSPITAL MAKES ITS FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC UPON REQUEST AT THE VP, FINANCE OFFICE OR GENERAL ACCOUNTING DEPARTMENT. FORM 990, PART III STATEMENT OF PROGRAM SERVICE ACCOMPLISHMENTS: SCOTLAND MEMORIAL HOSPITAL, INC., LOCATED IN THE CITY OF LAURINBURG, SCOTLAND COUNTY, NORTH CAROLINA, IS A NOT-FOR-PROFIT, 501(C)(3), COMMUNITY OWNED HOSPITAL GOVERNED BY A LOCAL BOARD OF TRUSTEES. IT IS A SUBSIDIARY OF SCOTLAND HEALTH CARE SYSTEM, A NOT-FOR-PROFIT, 501(C)(3) CORPORATION, WHICH ALSO INCLUDES THE EDWIN MORGAN CENTER (A 50 BED SKILLED NURSING FACILITY), HOSPICE OF SCOTLAND COUNTY, AND THE SCOTLAND MEMORIAL FOUNDATION. THE MISSION OF SCOTLAND HEALTH CARE SYSTEM IS TO PROVIDE QUALITY, COMPASSIONATE HEALTH CARE. THE VISION OF SCOTLAND HEALTH CARE SYSTEM IS TO BE THE COMMUNITY'S HEALTHCARE PROVIDER OF CHOICE. THE VALUES STATEMENT PROCLAIMS, "WE STAND FOR EXCELLENCE, INTERGRITY, AND COMMUNITY ACCOUNTABILITY". THE HOSPITAL OFFERS A FULL RANGE OF ACUTE CARE AND INPATIENT SERVICES, INCLUDING INPATIENT REHABILITATION AND INTENSIVE CARE. FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2010, THE HOSPITAL HAD AN INPATIENT VOLUME OF 20,944 ADULT AND PEDIATRIC PATIENT DAYS. THE AVERAGE DAILY CENSUS, INCLUDING INPATIENT REHABILITATION AND NURSERY INTENSIVE CARE UNITS, WAS 61 PATIENTS. THE HOSPITAL PERFORMED OVER 4,400 INPATIENT AND OUTPATIENT SURGERIES AND OVER 1,900 ENDOSCOPE CASES DURING THE YEAR. APPROXIMATELY 35,800 PATIENTS WERE TREATED IN THE EMERGENCY ROOM AND OVER 740 BABIES WERE DELIVERED. WITH A STAFF OF OVER 900 EMPLOYEES, THE HOSPITAL IS THE AREA'S SECOND LARGEST EMPLOYER. SIXTY-FOUR PHYSICIANS OFFER A COMPREHENSIVE RANGE OF SPECIALTIES INCLUDING: ANESTHESIOLOGY, CARDIOLOGY, DERMATOLOGY, EMERGENCY MEDICINE, FAMILY MEDICINE, GASTROENTEROLOGY, GENERAL SURGERY, GYNECOLOGY AND OBSTETRICS, HOSPITALIST SERVICES, INTERNAL MEDICINE, MEDICAL AND RADIATION ONCOLOGY, NEPHROLOGY, NEUROLOGY, OCCUPATIONAL MEDICINE, OPHTHALMOLOGY, ORTHOPEDICS, OTOLARYNGOLOGY, PAIN MANAGEMENT, PATHOLOGY, PEDIATRICS, PULMONARY MEDICINE, RADIOLOGY AND UROLOGY. SOPHISTICATED TECHNOLOGIES INCLUDE: NUCLEAR MEDICINE, 64-SLICE CT SCANNING, LASER SURGERY, MAGNETIC RESONANCE IMAGING (MRI), LAPAROSCOPIC CHOLYSTYSTECTOMY, POSITRON EMISSION TOMOGRAPHY/CT AND INTENSITY- MODULATED RADIATION THERAPY. IN ADDITION, MOBILE UNITS ALLOW PHYSICIANS TO PERFORM LITHOTRIPSY AND CARDIAC CATHETERIZATION PROCEDURES LOCALLY. THE HOSPITAL HAS TWO RURAL HEALTH CLINICS, FOUR FREE-STANDING PHYSICIAN PRACTICES AND AN URGENT CARE CENTER/ OCCUPATIONAL HEALTH CLINIC, ALL LOCATED WITHIN A 30-MILE RADIUS. TOTAL VISITS AT THESE SEVEN OUTLYING CLINICS WERE 49,941 IN FISCAL YEAR 2010. OUTPATIENT SPECIALTY CLINICS INCLUDE THE FOLLOWING SERVICES: ALLERGY, ASTHMA, IMMUNOLOGY, PEDIATRIC CARDIOLOGY, PAIN MANAGEMENT, VASCULAR SURGERY AND WOUND HEALING. MOSBY NURSING SKILLS AND MOSBY NURSING CONSULT ARE AVAILABLE ON THE HOSPITAL'S INTRANET TO THE STAFF FOR CLINICAL REFERENCE MATERIALS AND PATIENT EDUCATION SERVICES. PATIENTS CAN RECEIVE THE MOSBY MATERIAL IN ENGLISH AND SPANISH. GE TIP TV IS AVAILABLE 24 HOURS A DAY IN ALL INPATIENT ROOMS FOR PATIENT EDUCATION. THE HOSPITAL'S PRIMARY SERVICE AREA IS SCOTLAND COUNTY AND THE WESTERN PART OF ROBESON COUNTY. THE SECONDARY SERVICE AREA INCLUDES ROBESON COUNTY AND RICHMOND COUNTY, NORTH CAROLINA, AND MARLBORO COUNTY, SOUTH CAROLINA. FISCAL YEAR 2010 COMMUNITY BENEFIT THE HOSPITAL PROVIDES SERVICES THAT BENEFIT THE COMMUNITY, MUCH OF WHICH IS BELOW THE COST OF PROVIDING THESE SERVICES. THE FOLLOWING IS A SUMMARY OF COMMUNITY BENEFIT PROVIDED BY SCOTLAND MEMORIAL HOSPITAL, INC.: COSTS OF TREATING CHARITY CARE PATIENTS - $3,243,965 PATIENTS WITH INCOMES BELOW 150% OF THE FEDERAL POVERTY GUIDELINES QUALIFY FOR CHARITY CARE AND ADJUSTMENTS ARE MADE TO THEIR ACCOUNTS ACCORDING TO THE HOSPITAL'S POLICY. THE CHARITY CARE POLICY HAS A SLIDING SCALE FOR INCOME LEVELS BETWEEN 150% AND 200% OF THE FEDERAL POVERTY GUIDELINES. THERE IS ALSO A CHARITY PROVISION FOR CASES THAT ARE DETERMINED TO BE MEDICALLY INDIGENT ACCORDING TO THE HOSPITAL'S CHARITY POLICY. IN FISCAL YEAR 2010, THERE WERE OVER 4,000 ACCOUNTS WHO RECEIVED BENEFIT FROM THE HOSPITAL'S CHARITY PROGRAM. UNREIMBURSED COSTS OF TREATING MEDICARE PATIENTS - $5,087,978 THE HOSPITAL PARTICIPATES IN THE MEDICARE PROGRAM AT PREDETERMINED RATES FOR INPATIENT AND OUTPATIENT SERVICES. THE HOSPITAL MUST ACCEPT PAYMENT FROM CMS FOR MEDICARE SERVICES AND WRITE-OFF THE DIFFERENCE BETWEEN THE PAYMENT AMOUNT AND PATIENT BILLED CHARGES. IN ADDITION TO THE PREDETERMINED RATES, MEDICARE PAYS THE HOSPITAL FOR CERTAIN PASS-THROUGH ITEMS, BUT COLLECTIVELY ALL THE PAYMENTS FROM MEDICARE DO NOT FULLY COMPENSATE THE HOSPITAL FOR THE COST OF SERVICES PROVIDED. IN FISCAL YEAR 2010, THE HOSPITAL TREATED 3,100 INPATIENTS AND OVER 42,000 OUTPATIENTS WITH MEDICARE AS THEIR PRIMARY INSURANCE COVERAGE. UNREIMBURSED COSTS OF TREATING MEDICAID PATIENTS - $4,963,270 DUE TO ITS PROXIMITY TO THE BORDER BETWEEN NORTH AND SOUTH CAROLINA, SCOTLAND MEMORIAL HOSPITAL TREATS PATIENTS WHO HAVE MEDICAID COVERAGE FROM EITHER STATE. FOR THE NORTH CAROLINA MEDICAID PROGRAM, THE HOSPITAL IS REIMBURSED PREDETERMINED RATES FOR INPATIENT SERVICES AND A PERCENTAGE OF COST FOR OUTPATIENTS. SOUTH CAROLINA MEDICAID CONTRACTS TO PAY A SET AMOUNT FOR BOTH INPATIENT AND OUTPATIENT SERVICES. FOR BOTH NORTH AND SOUTH CAROLINA MEDICAID PROGRAMS, THE REIMBURSEMENT DOES NOT FULLY COVER THE COST OF PROVIDING SERVICES TO THE PATIENTS WHO PARTICIPATE IN THE PROGRAM. SCOTLAND MEMORIAL HOSPITAL IS A DISPROPORTIONATE SHARE HOSPITAL AND RECEIVES SOME OF THE MEDCAID COST SHORTFALL FROM FEDERAL MATCHING FUNDS. IN ORDER TO PARTICIPATE IN MEDICAID PROGRAMS, THE HOSPITAL MUST ACCEPT PAYMENT FROM BOTH NORTH AND SOUTH CAROLINA AND WRITE-OFF THE DIFFERENCE BETWEEN CHARGES AND THE PAYMENT AMOUNT. IN THE FISCAL YEAR 2010, THE HOSPITAL TREATED 2,300 INPATIENTS AND OVER 29,000 OUTPATIENTS WITH MEDICAID AS THEIR PRIMARY INSURANCE. CASH DONATIONS AND IN-KIND DONATIONS - $43,500 BEING AN INTEGRAL PART OF THE COMMUNITY IT SERVICES AND ONE OF THE LARGEST EMPLOYERS, THE HOSPITAL PROVIDED DONATIONS TO VARIOUS CHARITABLE ORGANIZATIONS. THE HOSPITAL DONATES STAFF TIME, SUPPLIES, AND FACILITY SPACE TO COMMUNITY GROUPS. PLEASE REFER TO THE COMMENT REGARDING COMMUNITY SPONSORED EVENTS AND ACTIVITIES IN THE FOLLOWING SUMMARY. TOTAL OF DIRECT COMMUNITY BENEFITS - $13,338,713 COMMUNITY SPONSORED EVENTS AND ACTIVITIES THE HOSPITAL IS HEAVILY INVOLVED IN COMMUNITY EVENTS AND SPONSORS MANY CHARITABLE ACTIVITIES, INCLUDING UNITED WAY, AMERICAN CANCER SOCIETY RELAY FOR LIFE, WALK AMERICA (MARCH OF DIMES FOR HEALTHIER BABIES), SMART START AND OTHER LOCAL FUNDRAISING EVENTS. MANY EMPLOYEES PARTICIPATE IN SOME OR ALL OF THESE EVENTS. THE HOSPITAL SUPPORTS THE LOCAL HIGH SCHOOL (SCOTLAND COUNTY HIGH SCHOOL) AND ENCOURAGES LOCAL HIGH SCHOOL TEENS INTERESTED IN THE MEDICAL FIELD TO JOB SHADOW WITH HOSPITAL EMPLOYEES. FREE ANNUAL PHYSICALS ARE PROVIDED TO LOCAL HIGH SCHOOL AND MIDDLE SCHOOL STUDENTS. HOSPITAL EMPLOYEES ARE ENCOURAGED TO SPEAK AT LOCAL JOB FAIRS AND AT THE HIGH SCHOOL CAREER DAY FESTIVITIES. HOSPITAL TOURS ARE OFFERED TO LOCAL SCHOOLS. MANY SUPPORT GROUPS ARE OFFERED TO THE COMMUNITY INCLUDING GROUPS FOR: ALZHEIMER'S, AMPUTEES, BETTER BREATHERS, CANCER, DIABETES, MULTIPLE SCLEROSIS, NARCOTICS ANONYMOUS, PARKINSON'S AND MANY OTHERS. COMMUNITY AND INDUSTRIAL HEALTH PREVENTION AND EDUCATION PROGRAMS SUCH AS CHOLESTEROL AND PROSTRATE SCREENINGS ARE OFFERED. ANNUAL HEALTH FAIRS ARE HELD FOR WOMEN AND MEN'S HEALTH RELATED TOPICS, OFTEN WITH LOCAL PHYSICIANS AS KEYNOTE SPEAKERS. MANY OF THESE MEETINGS ARE FREE TO THE PUBLIC. "SCOTTY", A MOBILE HEALTHCARE UNIT, AND "MISSY', A NEW SMALLER SIZED MOBILE UNIT, ARE CONTINUALLY ON THE MOVE VISITING LOCAL SCHOOLS, BUSINESSES AND INDUSTRY OFFERING FREE BLOOD SCREENS, CHOLESTEROL CHECKUPS, AND PHYSICALS. THE FOLLOWING PROGRAMS REPRESENT THOSE OFFERED BY THE HOSPITAL TO THE COMMUNITY IN THE PAST YEAR PURSUANT TO THE MISSION STATEMENT: "TO PROVIDE QUALITY, COMPASSIONATE HEALTH CARE": * COMMUNITY PROGRAMS - WOMEN'S HEALTH EVENT, SPEAKERS AND EDUCATION SESSIONS, 112 ATTENDEES * AMERICAN CANCER SOCIETY RELAY FOR LIFE * GOT PAIN? - COMMUNITY DINNER FEATURING DR. RAYBON, DR. WASHINGTON, AND SANDY WILLIAMS, RN-BC, OCN CPE AS GUEST SPEAKERS, APPROXIMATELY 100 ATTENDEES. * LOOK GOOD FEEL BETTER PROGRAM FOR WOMEN UNDERGOING TREATMENT FOR CANCER: THIS PROGRAM TEACHES FEMALE CANCER PATIENTS BEAUTY TECHNIQUES TO HELP RESTORE THEIR APPEARANCE AND SELF-IMAGE DURING CHEMOTHERAPY AND RADIATION TREATMENTS. VOLUNTEER BEAUTY PROFESSIONALS LEAD SMALL GROUPS, USUALLY CONSISTING OF 3 TO 5 WOMEN, THROUGH PRACTICAL, HANDS-ON EXPERIENCE. WOMEN LEARN ABOUT MAKEUP TECHNIQUES, SKINCARE, NAIL CARE, AND OPTIONS RELATED TO HAIR LOSS SUCH AS WIGS, TURBANS, AND SCARVES. EACH GROUP PROGRAM PARTICIPANT RECEIVES A FREE KIT OF COSMETICS FOR USE DURING AND AFTER THE WORKSHOP, AS WELL AS A VARIETY OF WIGS AND HATS FROM WHICH TO CHOOSE. THERE WERE 4 SESSIONS HELD, WITH A TOTAL OF 4 PARTICIPANTS. * FREE CHOLESTEROL AND PROSTATE CANCER BLOOD DRAWS SPONSORED BY SCOTLAND MEMORIAL FOUNDATION: - 02/04/10 : 10 ATTENDEES, JERUSALEM UNITED METHODIST CHURCH - 02/11/10 : 40 ATTENDEES, SCOTLAND PLACE - 02/16/10 : 14 ATTENDEES, MAXTON, NC - 02/27/10 : 50 ATTENDEES, SCOTLAND MEMORIAL HOSPITAL - 06/04/10 : 104 ATTENDEES, FREE PROSTATE CANCER BLOOD SCREENINGS AND A UROLOGIST PERFORMED 99 PHYSICAL EXAMS, WITH SCREENINGS PROVIDED IN THE OCCUPATIONAL HEALTH CLINIC. * SOUTH SCOTLAND SCHOOL HEALTH FAIR - MARCH 11, 2010, INCLUDED FREE SCREENINGS FOR CHOLESTEROL, PROSTATE CANCER, BLOOD PRESSURE, AND BODY COMPOSITION SCREENINGS FOR TEACHERS. - CHOLESTEROL AND GLUCOSE : 27 PARTICIPANTS (10 ABNORMAL CHOLESTEROL, 1 ABNORMAL GLUCOSE) - BLOOD PRESSURE : 27 PARTICIPANTS (9 ABNORMAL) - BODY FAT : 27 PARTICIPANTS (4 ABNORMAL) - BONE DENSITY SCREENING : 3 PARTICIPANTS (1 ABNORMAL) * SPORTS PHYSICALS FOR MIDDLE SCHOOLS & HIGH SCHOOL - MAY 15, 2010, 345 STUDENTS RECEIVED A FREE PHYSICAL TO PARTICIPATE IN SPORTS AT SCOTLAND HIGH SCHOOL. THE MAJORITY OF MIDDLE SCHOOL STUDENTS WERE DONE PRIOR TO THIS DATE AT INDIVIDUAL SCHOOLS. LOCAL MEDICAL PROVIDERS VOLUNTEERED THEIR TIME AT THE DIFFERENT SCHOOLS. * NATIONAL EMPLOYEE HEALTH & FITNESS DAY - MAY 11, 2010, FREE ANNUAL EVENT IN WHICH THE COMMUNITY IS INVITED TO JOIN HOSPITAL ASSOCIATES GET FIT BY WALKING THE ONE-MILE COURSE AROUND THE HOSPITAL. * SCOTLAND PLACE - MAY 14, 2010 - BONE DENSITY : 18 PARTICIPANTS - BLOOD PRESSURE SCREENINGS : 18 PARTICIPANTS * MAXTON FAMILY PRACTICE PARKING LOT - MAY 18, 2010 - 14 PARTICIPANTS * GREEN PINE CHURCH - MAY 22, 2010 - BONE DENSITY : 30 PARTICIPANTS - BLOOD PRESSURE SCREENINGS : 30 PARTICIPANTS * WALMART LAURINBURG - MAY 6, 2010 - BONEDENSITY : 20 PARTICIPANTS - BLOOD PRESSURE SCREENING : 20 PARTICIPANTS * FUNDRUN SCREENINGS - COMMUNITY MEMBERS RAN TO RAISE MONEY FOR THE SCOTLAND MEMORIAL HOSPITAL FOUNDATION. THIS MONEY WAS USED TO ASSIST WITH PATIENT SERVICES AT SCOTLAND CANCER TREATMENT CENTER. A PRE AND POST ASSESSMENT OF PARTICIPANTS WAS DONE. ASSESSMENT INCLUDED CHOLESTEROL SCREENING, BLOOD PRESSURE, BODY FAT ANALYSIS AND HEIGHT AND WEIGHT. * CANCER SURVIVORS DAY - MAY 14, 2010. A NATIONWIDE, FREE ANNUAL PROGRAM FOR CANCER SURVIVORS AND FAMILY MEMBERS TO CELEBRATE LIFE. ON THIS DATE, THERE WERE 125 CANCER SURVIVORS AND GUESTS PARTICIPATING, A TOTAL OF 250 IN ATTENDANCE. * SUPPORT GROUPS - NO CHARGE FOR ANY OF THESE SUPPORT GROUPS TO USE THE HOSPITAL FACILITIES FOR THEIR MONTHLY MEETINGS: - ALCOHOLICS ANONYMOUS - ALZHEIMER'S SUPPORT GROUP - AMPUTEE SUPPORT GROUP - BETTER BREATHERS - WOMENS CANCER SUPPORT GROUP - DIABETES SUPPORT GROUP - MULTIPLE SCLEROSIS SUPPORT GROUP - NARCOTICS ANONYMOUS - PARKINSON'S SUPPORT GROUP * CPR AND ACLS TRAINING - PROGRAMS ARE AVAILABLE TO LOCAL COMMUNITY MEMBERS AND PRIVATE PHYSICIAN OFFICES AND THEIR STAFF. * NON-PROFIT USE OF HOSPITAL FACILITIES - ACCOMODATION WAS MADE FOR SOME NON-PROFIT ENTITIES TO UTILIZE THE HOSPITAL MEETING ROOMS TO PROVIDE EDUCATION OR TO HOLD MEETINGS, INCLUDING SCOTLAND COUNTY HUMANE SOCIETY (BOARD MEETINGS), LAURINBURG/SCOTLAND CHAMBER OF COMMERCE (STRATEGIC PLANNING), SOUTHERN REGIONAL AHEC (STAFF EDUCATION AND TRAINING), PEE DEE AHEC (PANDEMIC TRAINING), DUKE REGIONAL ADVISORY COUNCIL COMMITTEE (DISASTER TRAINING), AND SOCIETY OF OCCUPATIONAL HEALTH NURSES (REGIONAL MEETINGS). THE FOLLOWING IS THE COMMUNITY BENEFITS REPORT FINANCIAL REPORT FOR SCOTLAND MEMORIAL HOSPITAL, INC. FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2010: DIRECT COMMUNITY BENEFITS * ESTIMATED COSTS OF TREATING CHARITY CARE PATIENTS - $3,243,965 * ESTIMATED UNREIMBURSED COSTS OF TREATING MEDICARE PATIENTS - $5,087,978 * ESTIMATED UNREIMBURSED COSTS OF TREATING MEDICAID PATIENTS - $4,963,270 * COMMUNITY BUILDING ACTIVITIES - 10 * UNREIMBURSED MEDICAL EDUCATION AND RESEARCH COSTS - $0 * CASH AND IN-KIND DONATIONS AND NON-BILLED SERVICES - $43,500 * PAYMENTS MADE IN LIEU OF TAXES - $0 * TOTAL DIRECT COMMUNITY BENEFITS - $13,338,713 * OTHER TAX SUPPORT OR OTHER SUBSIDIES RECEIVED FOR PROVISION OF COMMUNITY BENEFITS - $0 TOTAL DIRECT COMMUNITY BENEFITS - $13,338,713 BAD DEBT COSTS * ESTIMATED COSTS OF TREATING BAD DEBT PATIENTS - $6,957,978 SCOTLAND HEALTHCARE SYSTEMS INC 500 LAUCHWOOD DRIVE LAURINBURG NC 28352 581847657 OPERATE FOR THE BENEFIT OF, PERFORM FUNCTIONS, AND CARRY OUT PURPOSES OF SMH NC 501(c)(3) Line 11a, I N/A SCOTLAND MEMORIAL FOUNDATION INC 500 LAUCHWOOD DRIVE LAURINBURG NC 28352 581828201 CONDUCT FUNDRAISING ACTIVITIES FOR SCOTLAND HEALTH CARE SYSTEM NC 501(c)(3) Line 7 SCOTLAND HEALTH GROUP INC EDWIN MORGAN CENTER INC 500 LAUCHWOOD DRIVE LAURINBURG NC 28352 589178020 SKILLED NURSING FACILITY NC 501(c)(3) Line 9 SCOTLAND HEALTH GROUP INC HOSPICE OF SCOTLAND COUNTY INC 610 E LAUCHWOOD DRIVE LAURINBURG NC 28352 561468269 HEALTHCARE FOR TERMINALLY ILL PATIENTS NC 501(c)(3) Line 7 SCOTLAND HEALTH GROUP INC SMH TITLE HOLDING COMPANY 500 LAUCHWOOD DRIVE LAURINBURG NC 28352 581849143 TITLE HOLDING COMPANY NC 501(c)(2) SCOTLAND HEALTH GROUP INC SCOTLAND REGIONAL HEALTH NETWORK 500 LAUCHWOOD DRIVE lAURINBURG NC 28352 272187756 OPERATES HOSPITALIST PROGRAM NC 501(c)(3) Line 7 SCOTLAND HEALTH GROUP INC SCOTLAND MOB LLC 500 LAUCHWOOD DRIVE LAURINBURG NC 28352 205900149 RENTAL ESTATE NC SCOTLAND HEALTH GROUP INC INVESTMENT 63670 939188 0 1 SCOTLAND ENTERPRISES INC 500 LAUCHWOOD DRIVE LAURINBURG NC 28352 561651832 HEALTH CARE NC SCOTLAND HEALTH GROUP INC C 1 0 1 0 0 0 0 0 1 1 1 1 1 1 0 0 1 1 SCOTLAND MEMORIAL FOUNDATION INC C 78542 EDWIN MORGAN CENTER INC Q 139098 SCOTLAND MOB LLC I 36148 SCOTLAND MEMORIAL FOUNDATION INC Q 186238 SCOTLAND REGIONAL HEALTH NETWORK INC Q 1313144