2013-11-13T08:34:25-06:00 2012-12-31 160765486 LUMSDEN & MCCORMICK LLP 369 FRANKLIN STREET BUFFALO NY 14202 990 2012-01-01 160755799 ORLEANS COMMUNITY HEALTH ORLE 5857988102 200 OHIO STREET MEDINA NY 14103 DEBRA MICHALEK 5857988102 2013-11-11 1 MICHAEL J GRIMALDI P01295846 7168563300 2012 2016-02-24 21:20:13Z DEBRA MICHALEK 200 OHIO STREET MEDINA NY 14103 32507266 0 X WWW.MEDINAMEMORIAL.ORG X 1908 NY ORLEANS COMMUNITY HEALTH EXISTS TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE BY PROVIDING EQUAL ACCESS TO QUALITY HEALTH CARE SERVICES PROVIDED AT THE RIGHT TIME, IN THE RIGHT PLACE, WITH THE MOST EFFICIENT USE OF RESOURCES. THIS WILL BE ACCOMPLISHED THROUGH A COLLABORATIVE EFFORT WITH PHYSICIAN PARTNERS, HOSPITAL ASSOCIATES, VOLUNTEERS AND THE TWIG ASSOCIATION, USING A PHILOSOPHY OF CONTINUOUS QUALITY IMPROVEMENT. 16 12 565 21 1794 794 1101203 1588830 33163411 29634156 46745 45659 447125 1238621 34758484 32507266 4638 0 0 0 20740644 20124642 0 0 30646 12581289 12106726 33326571 32231368 1431913 275898 14714461 18922372 7539930 8371419 7174531 10550953 X ORLEANS COMMUNITY HEALTH EXISTS TO IMPROVE THE HEALTH OF THE COMMUNITIES WE SERVE BY PROVIDING EQUAL ACCESS TO QUALITY HEALTH CARE SERVICES PROVIDED AT THE RIGHT TIME, IN THE RIGHT PLACE, WITH THE MOST EFFICIENT USE OF RESOURCES. THIS WILL BE ACCOMPLISHED THROUGH A COLLABORATIVE EFFORT WITH PHYSICIAN PARTNERS, HOSPITAL ASSOCIATES, VOLUNTEERS AND THE TWIG ASSOCIATION, USING A PHILOSOPHY OF CONTINUOUS QUALITY IMPROVEMENT. 0 0 23926480 30646352 PATIENT SERVICES - THE HOSPITAL PROVIDES ACUTE INPATIENT, LONG-TERM SKILLED NURSING FACILITY AND OUTPATIENT CARE TO PATIENTS WHO RESIDE PRIMARILY IN THE LOCAL GEOGRAPHIC REGION. THE HOSPITAL ACCEPTS ALL PATIENTS, REGARDLESS OF ABILITY TO PAY. THE POLICY ESTABLISHED BY THE HOSPITAL DEFINES CHARITY SERVICES AS THOSE SERVICES FOR WHICH NO PAYMENT IS ANTICIPATED. 23926480 1 1 0 0 0 0 0 0 0 0 1 0 0 1 1 1 1 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0 1 1 0 0 0 0 0 0 1 0 0 0 1 80 0 1 565 1 1 1 0 0 0 0 0 0 0 0 0 X 16 12 0 0 0 1 0 0 0 1 1 0 0 0 1 1 1 1 1 1 1 0 NY X X DEBRA MICHALEK 5857982000 200 OHIO STREET MEDINA NY 14103 W BRUCE KRENNING 2.00 X X 0 0 0 DAWN MELAND 2.00 X X 0 0 0 PATRICIA FOX 2.00 X X 0 0 0 DAVID G MONTI DVM 2.00 X X 0 0 0 C JAY ELLIE MD 2.00 X 0 0 0 RON FELSTEAD 2.00 X 0 0 0 PATRICIA HERMANN 2.00 X 0 0 0 CINDY HEWITT 2.00 X 0 0 0 WILLIAM HUNGERFORD 2.00 X 0 0 0 LANCE MARK 2.00 X 0 0 0 APRIL MCGAFFICK 2.00 X 0 0 0 GLORIA MORGAN 2.00 X 0 0 0 KELLIE SPYCHALSKI 2.00 X 0 0 0 MALCOLM THOMAS 2.00 X 0 0 0 MARK VARALLO MD 2.00 X 168000 0 0 SHARON ZACHER 2.00 X 0 0 0 JAMES SINNER 37.50 1.00 X 244808 0 8347 DEBRA MICHALEK 37.50 X 166970 0 3886 BRIAN BANAS 37.50 X 174533 0 5405 RAYMOND NIEWSWONGER 37.50 X 140285 0 14136 KENNETH BIXEL 37.50 X 145515 0 1898 DAVID PLAVIAK 37.50 X 112281 0 105 NAGUI ADEEB 37.50 X 205028 0 14327 KATHLEEN BRAUEN 37.50 X 106307 0 11299 ERIC MUSIAL 37.50 X 114801 0 13515 1578528 0 72918 10 0 1 0 MARK VARALLO MD PO BOX 1207 WILSON NY 14172 PHYSICIAN SERVICES 168000 AMRIT SINGH MD 9245 HUNT CLUB LANE CLARENCE NY 14031 PHYSICIAN SERVICES 115200 2 318628 1202121 68081 1588830 NET PATIENT SERVICES 621990 29634156 29634156 29634156 45659 45659 MEANINGFUL USE INCENTIVE PAYMENTS 900099 925405 925405 MISCELLANEOUS 900099 133782 133782 CAFETERIA SALES 900099 90849 90849 88585 86791 1794 1238621 32507266 30646352 1794 270290 X 1186169 168000 1018169 15887301 12268885 3618416 277175 226388 50787 1568640 1221128 347512 1205357 928125 277232 264217 264217 4016174 2108304 1907870 59898 11355 21231 27312 1096139 696737 396349 3053 501122 355797 145325 261422 136945 124196 281 112820 88929 23891 985221 985221 208983 142217 66766 MEDICAL SUPPLIES 1680745 1678032 2713 PHARMACEUTICALS 1346111 1344648 1463 PROVISION FOR BAD DEBTS 1003075 1003075 FOOD 299716 292620 7096 271083 270074 1009 32231368 23926480 8274242 30646 352282 3183868 4628470 4253744 553701 588885 111810 123509 33166869 26048894 5364329 7117975 1515446 1489208 74625 74625 2113798 2090558 14714461 18922372 4476067 4041172 2197538 1729975 866325 2600272 7539930 8371419 X 5248520 8657561 1926011 1893392 7174531 10550953 14714461 18922372 X 275898 -26237 3126761 X X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 13000 13000 14279223 8202792 6076431 47208 47208 0 18494816 17798894 695922 332622 332622 7117975 NET ASSETS OF THE FOUNDATION 1893392 OTHER ASSETS 197166 2090558 SHORT-TERM BORROWINGS 1807523 ESTIMATED THIRD-PARTY PAYOR SETTLEMENTS 792749 2600272 34317697 -26237 2247823 2221586 32096111 411155 411155 32507266 31227284 0 31227284 1004084 1004084 32231368 PART XI, LINE 2D - OTHER ADJUSTMENTS: DISTRIBUTIONS FROM K-1S RECORDED AS INCOME 101,852. CONTRIBUTION FROM ORCHARD MANOR, INC. - LOAN FORGIVENESS 573,760. CONTRIBUTION FROM ORCHARD MANOR, INC. - CASH 2,575,286. PROVISION FOR BAD DEBTS -1,003,075. PART XI, LINE 4B - OTHER ADJUSTMENTS: INTER-ORGANIZATION CONTRIBUTIONS FROM ORLEANS COMMUNITY HEALTH FOUNDATION 318,628. REVENUES FROM PASSTHROUGH INVESTMENT ACTIVITIES 92,527. PART XII, LINE 4B - OTHER ADJUSTMENTS: OTHER EXPENSES FROM PASSTHROUGH INVESTMENT ACTIVITIES 1,009. PROVISION FOR BAD DEBTS 1,003,075. 1 1 X 1 X 1 X 1 0 0 307856 268390 39466 0.00120 2361859 3335388 -973529 0.00000 2669715 3603778 -934063 0.00120 2669715 3603778 -934063 0.00120 0 995523 9063605 9741204 -677599 X 1 0 1 1 ORLEANS COMMUNITY HEALTH

200 OHIO STREET MEDINA NY 14103

X X X ORLEANS COMMUNITY HEALTH 1 1 1 100.000000000000 1 300.000000000000 1 X 1 1 X X X X 1 X X X X 1 X X X X X X 0 X 0 0 PART I, L7 COL(F): BAD DEBT EXPENSE IS AN ACCUMULATION OF 3% OF GROSS CHARGES ESTIMATED AS BAD DEBT, ACTUAL AMOUNTS WRITTEN OFF AS BAD DEBT, BAD DEBT RECOVERY AND AN ADJUSTMENT TO THE BAD DEBT RESERVES ACCOUNT. PART II: N/A PART III, LINE 4: PATIENT ACCOUNTS RECEIVABLE ARE REDUCED BY AN ALLOWANCE FOR DOUBTFUL ACCOUNTS. IN EVALUATING THE COLLECTIBILITY OF PATIENT ACCOUNTS RECEIVABLE, THE SYSTEM ANALYZES ITS PAST HISTORY AND IDENTIFIES TRENDS FOR EACH OF ITS MAJOR PAYOR SOURCES OF REVENUE TO ESTIMATE THE APPROPRIATE ALLOWANCE FOR DOUBTFUL ACCOUNTS AND PROVISION FOR BAD DEBTS. MANAGEMENT REGULARLY REVIEWS DATA ABOUT THESE MAJOR PAYOR SOURCES OF REVENUE IN EVALUATING THE SUFFICIENCY OF THE ALLOWANCE FOR DOUBTFUL ACCOUNTS. FOR RECEIVABLES ASSOCIATED WITH SERVICES PROVIDED TO PATIENTS WHO HAVE THIRD-PARTY COVERAGE, THE SYSTEM ANALYZES CONTRACTUALLY DUE AMOUNTS AND PROVIDES AN ALLOWANCE FOR DOUBTFUL ACCOUNTS AND A PROVISION FOR BAD DEBTS, IF NECESSARY (FOR EXAMPLE, FOR EXPECTED UNCOLLECTIBLE DEDUCTIBLES AND COPAYMENTS ON ACCOUNTS FOR WHICH THE THIRD-PARTY PAYOR HAS NOT YET PAID, OR FOR PAYORS WHO ARE KNOWN TO BE HAVING FINANCIAL DIFFICULTIES THAT MAKE THE REALIZATION OF AMOUNTS DUE UNLIKELY). FOR RECEIVABLES ASSOCIATED WITH SELF-PAY PATIENTS (WHICH INCLUDES BOTH PATIENTS WITHOUT INSURANCE AND PATIENTS WITH DEDUCTIBLE AND COPAYMENT BALANCES DUE FOR WHICH THIRD-PARTY COVERAGE EXISTS FOR PART OF THE BILL), THE SYSTEM RECORDS A SIGNIFICANT PROVISION FOR BAD DEBTS IN THE PERIOD OF SERVICE ON THE BASIS OF ITS PAST EXPERIENCE, WHICH INDICATES THAT MANY PATIENTS ARE UNABLE OR UNWILLING TO PAY THE PORTION OF THEIR BILL FOR WHICH THEY ARE FINANCIALLY RESPONSIBLE. THE DIFFERENCE BETWEEN THE STANDARD RATES (OR THE DISCOUNTED RATES IF NEGOTIATED) AND THE AMOUNTS ACTUALLY COLLECTED AFTER ALL REASONABLE COLLECTION EFFORTS HAVE BEEN EXHAUSTED IS CHARGED OFF AGAINST THE ALLOWANCE FOR DOUBTFUL ACCOUNTS. PART III, LINE 8: PART III, LINE 8: THE COSTING METHODOLOGY USED TO DETERMINE THE MEDICARE ALLOWABLE COSTS REPORTED IN THE HOSPITAL'S MEDICARE COST REPORT IS THE COST TO CHARGE RATIO. PART III, LINE 2: BAD DEBT EXPENSE IS AN ACCUMULATION OF 3% OF GROSS CHARGES ESTIMATED AS BAD DEBT, ACTUAL AMOUNTS WRITTEN OFF AS BAD DEBT, BAD DEBT RECOVERY AND AN ADJUSTMENT TO THE BAD DEBT RESERVES ACCOUNT. PART VI, LINE 2: THE HOSPITAL ASSESSES THE HEALTH CARE NEEDS OF THE COMMUNITY THROUGH PATIENT SATISFACTION SURVEYS; FOCUS GROUPS OF COMMUNITY MEMBERS, BOARD OF DIRECTORS, AND EMPLOYEES; AND SPECIFIC HEALTH-RELATED PRIORITIES AS THEY ARISE. PART VI, LINE 3: PATIENTS ARE INFORMED OF THE HOSPITAL'S CHARITY CARE POLICY AND GIVEN THE OPPORTUNITY TO APPLY. ELIGIBILITY REQUIREMENTS FOR MEDICAID AND RELATED GOVERNMENT ASSISTANCE PROGRAMS ARE ALSO SHARED WITH PATIENTS. PART VI, LINE 4: THE HOSPITAL IS THE ONLY HOSPITAL IN ORLEANS COUNTY AND PROVIDES SERVICES TO THE RURAL COMMUNITIES OF BOTH ORLEANS AND NIAGARA COUNTIES. PART VI, LINE 5: N/A PART VI, LINE 6: N/A REPORTS FILED WITH STATES PART VI, LINE 7 NY X X X 0 0 0 0 0 0 0 0 0 MARK VARALLO MD 168000 0 0 0 0 0 0 0 0 0 168000 0 0 0 JAMES SINNER 244808 0 0 0 0 0 7305 0 1042 0 253155 0 0 0 DEBRA MICHALEK 166970 0 0 0 0 0 0 0 3886 0 170856 0 0 0 BRIAN BANAS 174533 0 0 0 0 0 5195 0 210 0 179938 0 0 0 RAYMOND NIEWSWONGER 140285 0 0 0 0 0 4335 0 9801 0 154421 0 0 0 NAGUI ADEEB 205028 0 0 0 0 0 6300 0 8027 0 219355 0 0 0 LANCE MARK HOSPITAL BOARD MEMBER 10020 LANCE MARK, HOSPITAL BOARD MEMBER, PROVIDES LEGAL SERVICES TO THE HOSPITAL. 0 PATRICIA FOX HOSPITAL BOARD MEMBER 12250 PATRICIA FOX, HOSPITAL BOARD MEMBER, IS THE OWNER OF GARDEN VIEW BED & BREAKFAST WHICH PROVIDES LODGING SERVICES FOR HOSPITAL TRAVELERS. 0 CINDY HEWITT HOSPITAL BOARD MEMBER 8400 CINDY HEWITT, HOSPITAL BOARD MEMBER, IS A KEY EMPLOYEE AT MEDINA SAVINGS & LOAN WHICH PROVIDES BANKING SERVICES TO THE HOSPITAL. SHE IS ALSO THE SPOUSE OF TOM HEWITT, WHO OWNS AN OFFICE BUILDING AND RENTS OFFICE SPACE TO THE HOSPITAL. 0 C JAY ELLIE MD HOSPITAL BOARD MEMBER 714171 C. JAY ELLIE, MD, HOSPITAL BOARD MEMBER, IS THE CEO OF FINGER LAKES EMERGENCY PHYSICIAN SERVICES, PLLC, THE FOUNDER AND OWNER OF WORKFIT MEDICAL, LLC, AND OWNER OF DELPHI HOSPITALIST SERVICES. THE BUSINESSES PROVIDE PHYSICIAN, STAFFING, AND MEDICAL SERVICES TO THE HOSPITAL. 0 MARK VARALLO MD HOSPITAL BOARD MEMBER 168000 CONTRACTED PHYSICIAN 0 FORM 990, PART VI, SECTION A, LINE 5 THE PAYROLL COORDINATOR (THE ACCUSED) OF ORLEANS COMMUNITY HEALTH, MEDINA MEMORIAL HOSPITAL ("THE HOSPITAL") WAS AN EMPLOYEE FOR APPROXIMATELY 20 YEARS. DURING THIS TIME THE ACCUSED MISAPPROPRIATED FUNDS BEHONGING TO THE HOSPITAL. THE HOSPITAL HAS COMMENCED A CIVIL ACTION AGAINST THE ACCUSED. THE HOSPITAL BELIEVE THE ACCUSED HAD MISAPPROPRIATED APPROXIMATELY $720,000 OF ITS FUNDS SINCE 1998. THE HOSPITAL TERMINATED THE ACCUSED ON JANUARY 28, 2013. THE SAME DAY, THE FEDERAL BUREAU OF INVESTIGATION (FBI) BEGAN ITS INVESTIGATION OF THE ACCUSED. THIS INVESTIGATION IS ON GOING. WE UNDERSTAND THAT THE INVESTIGATION IS COMING TO ITS CONCLUSION AND THE ACCUSED WILL BE CRIMINALLY CHARGED IN THIS MATTER. THE MISAPPROPRIATION WAS UNCOVERED THE WEEK OF JANUARY 14, 2013 BY THE CONTROLLER. IT WAS INITIALLY DISCOVERED BY EXAMINING THE PAYMENTS OF DEDUCTIONS FOR THE PAYROLL DATED NOVEMBER 15, 2012. A DISCREPANCY BETWEEN PAYROLL RECORDS AND ACTUAL ELECTRONIC BANK TRANSACTIONS WERE FOUND. THE ENTIRE LOSS WAS CALCULATED BY EXAMINING BANK STATEMENTS AND BANK BATCHES; PAYROLL JOURNALS AND REPORTS; AND THE GENERAL LEDGER OF THE HOSPITAL FOR THE PERIOD JANUARY 1, 1998 THROUGH DECEMBER 31, 2012. THE AMOUNT EMBEZZLED IN 2012 TOTALED $64,500. FORM 990, PART VI, SECTION B, LINE 11 THE 990 IS PREPARED AND REVIEWED BY VARIOUS INDIVIDUALS WITHIN MANAGEMENT AND PROVIDED TO THE GOVERNING BODY PRIOR TO ITS FILING AS TIME ALLOWS OR AT ITS NEXT MEETING WHEN TIME DOES NOT PERMIT REVIEW PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C ON AN ANNUAL BASIS, DIRECTORS ARE REQUIRED TO COMPLETE AND SIGN A CONFLICT OF INTEREST POLICY STATEMENT WHICH IS MAINTAINED IN HOSPITAL ADMINISTRATION RECORDS. FORM 990, PART VI, SECTION B, LINE 15 THE HUMAN RESOURCES DEPARTMENT PROVIDES DATA FOR OFFICERS AND KEY EMPLOYEES FROM THE WESTERN NEW YORK WAGE SURVEY TO DETERMINE COMPENSATION LEVELS WHICH ARE REVIEWED AND DETERMINED AT THE BOARD LEVEL. MINUTES ARE TAKEN FOR THESE MEETINGS. FORM 990, PART VI, SECTION C, LINE 19 THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM THE CHIEF FINANCIAL OFFICER. IN ADDITION, AN ANNUAL MEETING IS HELD, WHICH IS OPEN TO THE PUBLIC, SUMMARIZING MOST RECENT ANNUAL FINANCIAL RESULTS. OTHER FEES FORM 990, PART IX, LINE 11G PROFESSIONAL FEES: PROGRAM SERVICE EXPENSES 2,108,304. MANAGEMENT AND GENERAL EXPENSES 1,907,870. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 4,016,174. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: CHANGES IN ASSETS OF ORLEANS COMMUNITY HEALTH FOUNDATION 286,009. INTER-ORGANIZATION CONTRIBUTIONS FROM ORLEANS COMMUNITY HEALTH FOUNDATION -318,628. CONTRIBUTION FROM ORCHARD MANOR, INC. - LOAN FORGIVENESS 573,760. CONTRIBUTION FROM ORCHARD MANOR, INC. - CASH 2,575,286. NET PASSTHROUGHS FROM K-1S -91,518. DISTRIBUTIONS FROM K-1S RECORDED AS INCOME 101,852. FORM 990, PART XII, LINE 2C THE PROCESS HAS NOT CHANGED FROM THE PRIOR YEAR. ORLEANS COMMUNITY HEALTH FOUNDATION INC 200 OHIO STREET MEDINA NY 14103 161155081 COLLECTION AND INVESTMENT OF HOSPITAL CONTRIBUTIONS NY 501(C)(3) 11B N/A 0 ORCHARD MANOR INC 200 OHIO STREET MEDINA NY 14103 161329745 RESIDENTIAL HEALTH CARE NY 501(C)(3) 9 N/A 0 0 0 1 0 1 0 0 0 0 0 0 1 0 0 0 0 0 0 0