2011-06-22T14:21:05-05:00 2010-09-30 Arnett & Foster PLLC P O Box 2629 Charleston WV 25329 990 2009-10-01 550484469 Hospital Development Co HOSP 3049274444 200 Hospital Drive Spencer WV 25276 Douglas Bentz 3049274444 2011-06-21 1 Harry C Harless 3043460441 2009 2016-02-24 21:20:13Z Roane General Hospital Douglas Bentz 200 Hospital Drive Spencer WV 25276 23724515 0 X www.roanegeneralhospital.com X 1966 WV To promote the general health and welfare of Roane County and surrounding areas and all of the citizens thereof by furthering all legitimate methods for the prevention and treatment of disease and the positive promotion of health, both personal and public, including but not limited to the operation of hospitals, nursing schools, nursing homes and medical research facilities; to foster and conduct education in medicine in all its branches and in those adjacent and kindred arts and sciences such as nursing and technical training which contribute to the diagnosis, treatment, care and prevention of disease. 16 14 310 40 0 0 74322 123479 23223661 23215836 29108 78528 218376 217396 23545467 23635239 0 0 13000955 13001932 0 0 10164330 11216317 23165285 24218249 380182 -583010 14280598 13765809 7748571 7669370 6532027 6096439 Roane General Hospital is dedicated to the delivery of high-quality, cost effective health care to all members of our community. The work we do makes a difference in people's lives. 1 0 2515058 16043112 Roane General Hospital generated gross revenue of $39,058,434 of which 39% or $15,108,282 was uncollectible due to contractual agreements with Medicare, Medicaid and other third-party payors. Bad debts due to inability or unwillingness of patients to pay amounted to $2,515,058. Additionally, charges for patients meeting 200% of the poverty level and who qualified for charity care were written off totaling $934,830 or 2% of gross revenues. 17475131 7023867 As a Critical Access hospital we provided health care services to our community which included the following days of care: Skilled/ICF 11,762;Swing 1,269; and Acute Care 1,512. Additionally, we provided 25,415 outpatient diagnostic visits; 9,451 emergency room visits; 22,049 rural health clinic provider visits; and 2,005 school based clinic provider visits. Additional revenue and expenses related to these services are included above. 110958 148857 The hospital also provided community health education and health screening services at reduced fees during the year in the form of a community health fair with 217 screenings; a Board of Education health fair with 98 screeenings;237 sports physicals, and 172 flu shots Additionally, 223 employees were given annual free health screening as an incentive to improve their quality of life. Other activities and participants include 38 Heart Walk, 103 Nut Run/Walk, 24 Kids Bike Race, Fitness Complex Memberships provided for 819 community members and 456 employees. Other programs provided include Cardiac Rehab, Laboratory Services, Emergency Room, Pharmacy, Radiology, CT Scan, Ultrasound, MRI, Nuclear Medicine, Physical Therapy, Operating Room and RHC's. Revenues and expenses for these programs are included above. 20101147 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 39 0 1 310 1 0 0 0 0 0 0 0 0 0 16 14 0 0 0 0 1 1 0 1 1 0 0 0 1 1 1 1 1 1 1 0 X Louise Ward 3049276201 200 Hospital Drive Spencer WV 25276 Douglas E Bentz 40.00 X X 179651 0 15892 Kenneth J Seen 40.00 X 174643 0 19152 Richard E Bowlby 0.50 X 0 0 0 William G Downey Jr 0.50 X 0 0 0 Greg Boggs 0.50 X 0 0 0 Jennifer McCulty 0.50 X 0 0 0 John Varda 0.50 X 0 0 0 Bob Ashley 0.50 X 0 0 0 Jeanette Atkinson 0.50 X 0 0 0 Martha Cooper 0.50 X 0 0 0 Jack D Garrett II 0.50 X 0 0 0 Tom Whittier 0.50 X 0 0 0 Paul Hughes 0.50 X 0 0 0 John H Taylor 0.50 X 0 0 0 Gerald M Titus Jr 0.50 X 0 0 0 Bob Zdanek 0.50 X 0 0 0 Brent Watson 40.00 X 266942 0 22857 Hong Kin Ng 40.00 X 262812 0 21996 Daniel B Prudich 40.00 X 248998 0 22540 Christopher N Lambert 40.00 X 218769 0 20696 Brian K Richardson 40.00 X 236329 0 18201 Marie L Kessell 40.00 X 160713 0 14986 1748857 0 156320 18 0 1 0 J&J Health Care Systems Inc 5972 Collections Cntr Dr Chicago IL 60693 Collection Agency 273293 Insight Health Corp PO Box 847689 Dallas TX 75284 Mobile MRI 259182 Advanced Technical Solutions LLC PO Box 149 Scott Depot WV 25560 IT Support 144412 Stroudwater Associates 50 Sewall St Suite 102 Portland ME 04102 Consulting 140658 Charleston Area Medical Center 501 Morris Street Charleston WV 25301 Pathology 115418 8 74050 49429 123479 Patient services 900099 23066979 23066979 Wellness center 900099 148857 148857 23215836 120001 120001 1410 1410 1410 1410 47803 89276 -41473 -41473 -41473 Cafeteria 722210 159876 159876 Medical records 518210 12500 12500 Vending 454210 5405 5405 38205 38205 215986 23635239 23215836 0 295924 787638 648305 139333 9724430 8004178 1720252 155906 128326 27580 1567461 1290177 277284 766497 630904 135593 25817 25817 86875 86875 1401083 1153231 247852 84315 69400 14915 2993528 2463973 529555 304294 250464 53830 300139 247044 53095 73593 60574 13019 177551 177551 1064963 876571 188392 745743 613821 131922 Bad debts 2515058 2515058 Health care provider ta 562344 562344 Maintenance & repairs 302763 249204 53559 Collections 167050 167050 Dues and subscriptions 135002 111120 23882 276199 226453 49746 24218249 20101147 4117102 0 198060 11758 1005483 387668 3077206 2625272 1259 213109 225002 72703 114185 16529538 9612486 7345701 6917052 1947592 2309407 109606 154182 311138 1020024 14280598 13765809 3396961 3697546 2663996 2908720 1687614 1063104 7748571 7669370 X 6293722 5856881 238305 239558 6532027 6096439 14280598 13765809 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 238305 1253 239558 236964 1341 238305 1.00000 0 0 125809 125809 4841889 2324139 2517750 11517600 7266715 4250885 44240 21632 22608 6917052 Interest in net assets of Roane General Foundation 332292 Third party payor settlements 687732 1020024 Capital leases 1055547 Patient funds 7557 1063104 23635239 24218249 -583010 126268 21154 147422 -435588 23633986 0 23633986 1253 1253 23635239 24218249 0 24218249 0 24218249 Part V, Line 4: Description of Intended Use of Endowment Funds: The income is restricted for the purchase of hospital equipment and for hospital operations. Part X: Description of Uncertain Tax Positions Under FIN 48: The audited financial statements did not contain a footnote concerning uncertain tax positions under FIN 48. Part XI, Line 8 - Other Adjustments: Change in interest in net assets of Foundation: 21154. Part XII, Line 4b - Other Adjustments: Interest income on endowment assets: 1253. 1 1 X 1 X 0 0 1 1 0 0 652546 65128 587418 0.02710 1802437 1507165 295272 0.01360 2454983 1572293 882690 0.04070 1 2386 190227 30427 159800 0.00740 1 2386 190227 30427 159800 0.00740 1 2386 2645210 1602720 1042490 0.04810 0 1692131 4701363 4964397 -263034 X 1 1 Roane General Hospital

200 Hospital Drive Spencer WV 25276

X X X Skilled & intermediate care Part I, Line 7: The cost of charity care was estimated using a cost to charge ratio derived from Worksheet 2 of the Schedule H instructions.The cost of community health improvement services and community benefit operations was derived from the organization's Medicare cost report for the tax year. Part I, Line 7f: Bad debt expense amounting to $2,515,058 is included in Part IX, Line 25. Part III, Line 4: Management uses collection percentages based upon historical collection experience to determine collectibility. Management also reviews troubled, aged accounts to determine collection potential. Patient accounts receivable are written off when deemed uncollectible. Recoveries of accounts previously written off are recorded as a reduction to bad debt expense when received.Bad debt expense (at cost) was determined using a cost to charge ratio derived from Worksheet 2 of the Schedule H instructions. Part III, Line 8: Medicare allowable costs were estimated using Worksheet B of the Schedule H instructions. Part III, Line 9b: SCREENING: All patients identified as self pay will be screened for Medicaid eligibility referral, provided financial counseling and processed for appropriate financial assistance. FINANCIAL ASSISTANCE: Roane General Hospital encourages patients to apply for financial assistance; patients will be screened according to eligibility rules as defined in governmental assistance program guidelines and/or Roane General Hospital's Financial Assistance Policy and Procedure. CHARITY CARE: Patients with income at or below 200% of Federal Poverty Guidelines are eligible to apply for Roane General Hospital's Charity Care program. Remaining self pay accounts will be flagged and followed up for financial education regarding their obligation to finalize a mutually acceptable financial agreement to resolve their bill. Part VI, Line 2: Currently we conduct a strategic planning retreat with top management, department managers, and Chief of the Medical Staff. This SWAT analysis and discussion is used to identify services that may be added, refined or deleted needed to meet the needs of our patients and community. This strategic plan is then submitted for review and approval by the Board of Directors, which is made of community leaders. Part VI, Line 3: During the intake process or upon request, a financial counselor informs and educates patients and persons who are billed for patient care about their eligibility for assistance under federal or state programs or under the organization's charity care policy. Part VI, Line 4: Roane General Hospital is located in Roane County, West Virginia. The service area includes all of Roane and also draws from parts of Jackson, Calhoun, Clay and Wirt Counties. Roane County is a rural county covering an average area of 484 sq. miles, with 6,161 households and 4,479 families. The per capita Income is approx $21,163.00. As a Critical Access Hospital with 25 Acute Care/Swing beds and 35 Skilled/Intermediate Care beds, we also operate three Rural Health clinics and three School Based Clinics. Our revenue is generated from the following sources: Medicare 33%, WV Medicaid 20% Self Pay 11% Managed Care 17% and 19% Other Government and Private Insurance. Roane General Hospital is also one of the largest employers in our community with 275 employees and an annual payroll with benefits of $13,249,823. We are located approx. 27 miles from both I-77 and I-79 and approximately 50 miles from the larger tertiary hospitals in Charleston and Parkersburg, WV. The nearest hospital is a small rural hospital approximately 30 miles away. Part VI, Line 6: The members of the Board of Directors of Roane General Hospital are all local business leaders and other community representatives. Medical Staff privileges are extended to all qualified employed physicians, consulting physicians and medical staff of the local Federally Qualified Health Center. All surplus funds are reinvested in the purchase of new medical equipment, technology or upgrades and renovation of facilities built in 1970. Our Emergency Room is open 24 hours and is staffed by Board Certified Emergency Medicine physicians. The hospital also operates three Rural Health Clinics and three School Based Clinics staffed by physicians employed by Roane General Hospital. Physicians including an orthopedist, urologist, podiatrist, and general practice/wound skin care specialist use our clinics on various days to screen patients and provide care not available in our community on a full-time basis. Roane General Hospital's Auxiliary, operated independently from the hospital, has approx. 40 members who provide information and customer support services. They also conduct several fund raising events during the year and proceeds from their sales are donated the hospital to offset the expense of new equipment or renovations. Roane General Hospital Foundation, Inc. was formed to allow charitable contributions to support the hospital and also as a vehicle for formal fundraising activities as requested by the hospital. This Foundation has a separate Board of Directors who oversee the operation and approve any donations to the hospital. X X X X 0 0 0 0 0 0 0 0 0 Douglas E Bentz 179651 0 0 0 0 0 7725 0 8778 0 196154 0 0 0 Kenneth J Seen 174643 0 0 0 0 0 7136 0 12588 0 194367 0 0 0 Brent Watson 266942 0 0 0 0 0 10862 0 12555 0 290359 0 0 0 Hong Kin Ng 262812 0 0 0 0 0 10000 0 12748 0 285560 0 0 0 Daniel B Prudich 248998 0 0 0 0 0 10089 0 12955 0 272042 0 0 0 Christopher N Lambert 218769 0 0 0 0 0 8681 0 12737 0 240187 0 0 0 Brian K Richardson 236329 0 0 0 0 0 6186 0 12732 0 255247 0 0 0 Marie L Kessell 160713 0 0 0 0 0 6515 0 9043 0 176271 0 0 0 Form 990, Part III, line 2 New Program Services Outpatient Infusion Therapy service to provide care to patients requiring intravenous infusions, treatments and education. Outpatient Diabetes Education in partnership with University of Charleston School of Pharmacy to train, counsel, track and monitor patients progression in the program and improve their quality of life. Enhanced Swing Bed program of care to bridge the gap in continuum of care for patients not ready or able to return home. Form 990, Part VI, Section A, line 6 The corporation has one class of members which consist of (a) the original incorporators of the corporation; (b) each of the corporation's directors; (c) those individual residents of Roane County who are at least 25 years of age and have (i) contributed their time, talent or money to effectuate the purposes of the corporation, (ii) been invited by the Board of Directors of corporation of membership, (iii) received a notice of membership, and (iv)have been appointed as members by the Board of Directorsin accordance with the bylaws of the corporation; and (d) who is at least 25 years of age of those companies (including sole proprietorships, partnerships, limited liability companies, and corporations) with their place of business located in Roane County that have (i) contributed their time, talent or money to effectuate the purposes of the corporation, (ii) been invited by the Board of Directors of corporationfor a respresentative of the company identified by the Board of Directors to be a member, (iii) received a notice of membership, and (iv)had such representative approved as a member by the Board of Directors of the corporation in accordance with the bylaws of the corporation. However if such designated member ceases to be affiliated with such company, his membership in the corporation will be automatically revoked. Members of the corporation shall not be entitled to vote on any matter other than (a) election of directors at the annual meeting of the members of the corporation, (b) the removal of directors for cause, (c) the approval of any amendment to the articles of incorporation approved and recommended by the Board of Directors, (d) the amendment or repeal of the corporation's bylaws, and (e)the dissolution and liquidation of the corporation. There are 16 Board of Directors and 36 members that make up the class of members. Form 990, Part VI, Section A, line 7a See line 6 explanation above. Form 990, Part VI, Section B, line 11 The 990 is prepared by our accounting firm who work with the CEO and the VP of Finance to obtain data. Once complete, the 990 is submitted to the CEO for review and approval prior to filing. Form 990, Part VI, Section B, line 12c Board members are required to complete and sign a conflict of interest statement each year sent from either the hospital auditors or from the hospital compliance officer. We monitor compliance by making this part of the annual review of our compliance program. Form 990, Part VI, Section B, line 15 The CEO's salary/benefits are identified in his employment contract and an annual increase recommended based on comparison data from public records showing other CEO salaries of similar sized hospitals in West Virginia and approved by the Exectutive Committee of the Board. The key employees, physician salaries are contract driven and negotiated by the CEO based on market data. All other employees salaries are based on an annual review ranging from 2-4% (avg. 3%) and reviewed annually against the WVHA salary survey with pay scale market upgrades as appropriate. Form 990, Part VI, Section C, line 19 An annual audited financial statement is published in the local newspaper as required by the Health Care Authority under Public Disclosure requirements. Audited financial statements are also submitted to any financing entities as required. Form 990, Part XII, line 3c Oversight of audit There was no change from the prior year in the oversight or selection process related to the independent accountant auditing the financial statements. Roane General Hospital Foundation 200 Hospital Drive Spencer WV 25276 550745015 To support in furthering development of high quality health care. WV 501(c)(3) 11 N/A 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 In a letter from the Internal Revenue Service dated June 13, 2010, the Service denied a second extension to file the Form 990 for the tax period ending September 30, 2010 because the second extension did not provide a statement explaining why additional time is needed to file the return. We understand that since our gross receipts are in excess of $1,000,000 your office will assess a penalty of $100 per day. We concede that second extension for the Form 990 was filed in error and that a penalty for late filing will be assessed but respectfully request full abatement of such penalty as we have reasonable cause for the error in filing the second extension Form 990. Reasonable cause exists as circumstances beyond our control were responsible as described below. Reasonable cause exists due to a clerical error on the part of our Accounting firm in which the explanation for a second extension was inadvertently omitted. The second extension was needed in order to gather the appropriate information necessary to file a complete and accurate return. The additional requirements of Schedule H include information gathered to file other reports, e.g. cost reports, we file annually. Once this information is gathered and verified, our Accounting firm prepares the appropriate reports. These reports were not completed until after the first extension was due (May 15th). Therefore, additional time was needed to file the Form 990.Reasonable cause also exists because we have a proven track record of filing our reports in a timely matter. Our prior Forms 990, payroll reports and other reports filed with the IRS have always been filed on time. Additionally, a penalty assessment would be an undue burden on our operations since we are a critical access Hospital which operates in an economically depressed area. Any of these reasons standing alone may not constitute reasonable cause, however, all of them together, would in anyones mind constitute reasonable cause especially since the return is being filed by the due date of a properly filed second extension. We understand your office may subject us to a penalty under Section 6652 (c) which imposes a penalty on an organization for failing to file a return required under Section 6033 (a)(1) of the Internal Revenue Code. Section 6652(c)(4) of the Internal Revenue Code provides that no penalty shall be imposed under this subsection with respect to any failure if it is shown that such failure is due to reasonable cause. Reasonable cause is not clearly defined in the Internal Revenue Code or the relevant Treasury Regulations. The Internal Revenue Code provides no guidance at all, and certain regulations applicable to other Sections of the Internal Revenue Code provide only minimal help. One regulation applicable to the failure to properly file certain information returns states that reasonable cause exists if there were significant mitigating factors or the failure arose from events beyond the taxpayers control. The Internal Revenue Service has issued limited guidance on what qualifies as reasonable cause. Various court decisions have also addressed the definition of reasonable cause. Many of the cases involved the taxpayers reliance on a tax expert or third party. In United States vs. Boyle, 55 AFTR 2d 85-1535 (105 S.Ct. 687), the United States Supreme Court established a bright line rule for when reliance on a tax advisor does not constitute reasonable cause. In this estate tax case in which the taxpayer owed significant taxes, the Supreme Court held that a taxpayer cannot avoid the penalties under Section 6651(a)(1) of the Internal Revenue Code by relying on an agent to file the return. Nonetheless, we do not believe this case is applicable to the case at hand. First, and foremost, potential penalties may be imposed under Section 6652(c) of the Internal Revenue Code whereas the Supreme Court case involved Section 6651(a)(1). Secondly, in our case, no taxes are due or will be paid late. In the Supreme Court case, the taxpayer owed and paid late several hundred thousand dollars in taxes. Third, the standard for escaping the tax under Section 6651(a)(1) is a higher standard than that under Section 6652(c). Under Section 6651(a)(1) the taxpayer must prove both that the failure did not result from willful neglect, and (emphasis added) that the failure was due to reasonable cause. Last but not least, we were not relying on the tax expert to file the return but to file an extension. Accordingly, we believe that United States vs. Boyle AFTR 2d 85-1535 (105 S.Ct. 687), is not applicable to the case at hand and that reasonable cause also exists as we relied upon a tax expert to file the extension. In summary, we respectfully request abatement of any potential late filing penalty as we have reasonable cause. Reasonable cause exists as circumstances beyond our control directly contributed to the late filing of the Form 990. It was our intention to file for an extension and hired a third-party tax expert to prepare and file such extension. Reliance on a third-party tax expert, our record of timely filing, and our unique position in providing Critical Care Access in an underserved area combine to provide reasonable cause to abate any potential penalty. We also believe that our fact pattern can be differentiated from the Supreme Court decision in United States vs. Boyle AFTR 2d 85-1535 (105 S.Ct. 687), and that our reliance on a third party is also reasonable cause. The events described above in addition to the following provide additional support that reasonable cause existed and that the penalty should not be imposed:1. If timely extensions had been filed, the tax return would have been timely filed;2. A lay person does not normally know the due date of a Form 990 especially when the accounting period is not a calendar year end;3. No harm was done as no taxes were due or payable;4. We acted in good faith;5. Late filing was not a conscious, intentional failure or reckless indifference, i.e. it was not due to willful neglect;6. We filed the tax return without being requested to by the Internal Revenue Service other than the request with the denial of the extension; and7. Based on our knowledge, we have never paid a penalty in a prior period for filing the Form 990 late.