2014-05-15T12:19:48-05:00 2013-06-30 340641962 BRUNER-COX LLP 388 S MAIN STREET SUITE 403 AKRON OH 44311 990 2012-07-01 340714479 GRACE HOSPITAL GRAC 4402043500 17730 LORAIN AVE CLEVELAND OH 44111 RAJIVE KHANNA 2164563880 2014-05-15 1 LISA M HILLING P01624111 3303760100 2012 2015-11-30 17:44:51Z RAJIVE KHANNA 17730 LORAIN AVE CLEVELAND OH 44111 28613715 0 X WWW.GRACEHOSPITAL.ORG X 1910 OH TO SERVE AS A CENTER FOR EXCELLENCE IN THE PROVISION OF SPECIALIZED HEALTH CARE SERVICES AND COMFORT FOR PATIENTS AND FAMILIES COPING WITH CATASTROPHIC ILLNESS AND INJURY. 11 9 290 9 0 0 378474 408352 26500361 27909698 118105 251200 25966 44465 27022906 28613715 109301 94969 0 0 10218393 11832769 0 0 0 13744727 14016040 24072421 25943778 2950485 2669937 14796962 16489806 7095063 5549154 7701899 10940652 X TO SERVE AS A CENTER FOR EXCELLENCE IN THE PROVISION OF SPECIALIZED HEALTH CARE SERVICES AND COMFORT FOR PATIENTS AND FAMILIES COPING WITH CATASTROPHIC ILLNESS AND INJURY. 0 0 22261025 94969 28157898 GRACE HOSPITAL IS A NON-FOR-PROFIT, LONG-TERM ACUTE CARE HOSPITAL LOCATED IN CLEVELAND, OHIO DEDICATED TO PROVIDING PERSONALIZED CARE TO MEET THE NEEDS OF PATIENTS COPING WITH CATASTROPHIC OR CHRONIC INJURY OR ILLNESS REQUIRING EXTENDED HOSPITALIZATION. THE HOSPITAL WAS FOUNDED IN 1910 BY A GROUP OF PHYSICIANS WHO WERE COMMITTED TO MEETING THE HEALTHCARE NEEDS OF THE COMMUNITY. GRACE HOSPITAL HAS CONTINUOUSLY PROVIDED SERVICES FOR ITS PATIENTS. IN 1995, GRACE HOSPITAL EARNED APPROVAL TO BECOME THE FIRST CERTIFIED LONG-TERM ACUTE CARE HOSPITAL IN BOTH THE CITY OF CLEVELAND AND CUYAHOGA COUNTY. THE HOSPITAL PRESENTLY SPONSORS SEVERAL INPATIENT SERVICES INCLUDING COMPLEX MEDICAL, PULMONARY, REHABILITATION, VENTILATOR WEANING, LEFT VENTRICAL ASSIST DEVICE, TRANSPLANT SUPPORT, WOUND CARE, AND NEUROLOGICAL REHABILITATION PROGRAMS. THESE SERVICES ARE PROVIDED AT INPATIENT SATELLITES LOCATED WITHIN FAIRVIEW, LAKEWOOD, SOUTH POINTE AND BEDFORD HOSPITALS. GRACE HOSPITAL IS COMMITTED TO PROVIDING PERSONALIZED HEALTHCARE CHARACTERIZED BY QUALITY, ACCESSIBILITY, EFFICIENCY, AND COST EFFECTIVENESS. THE HOSPITAL IS SENSITIVE TO AGE, CULTURAL, AND ECONOMIC VARIATIONS, AND IS CONTINUOUSLY ASSESSED AND IMPROVED THROUGH A QUALITY MANAGEMENT PROGRAM. GRACE VOLUNTARILY MAINTAINS A CHARITY CARE POLICY THAT PROVIDES CARE TO INDIVIDUALS REGARDLESS OF ABILITY TO PAY. THE HOSPITAL IS ALSO COMMITTED TO EMPLOYING INDIVIDUALS TO MATCH CULTURAL DIVERSITY OF ITS PATIENT POPULATION. SEVERAL JOB POSTINGS IN THE HOSPITAL REQUIRE EMPLOYEES TO BE BILINGUAL IN EITHER SPANISH OR VIETNAMESE. GRACE HOSPITAL IS INVOLVED IN MANY COMMUNITY ACTIVITIES, INCLUDING HEALTH FAIRS, SPECIAL HEALTH-RELATED PRESENTATIONS, AND SPONSORSHIPS IN HEALTHCARE EDUCATION. IN ADDITION, THE HOSPITAL SPONSORS MEETINGS FOR MANY NON-PROFIT COMMUNITY ORGANIZATIONS. THE BOARD OF DIRECTORS, MEDICAL STAFF, AND MANAGEMENT OF GRACE HOSPITAL ARE COMMITTED TO THE PROVISION OF QUALITY SPECIALTY HEALTHCARE SERVICES, AS A LONG-TERM HOSPITAL, AND FULFILLING A LEADERSHIP ROLE IN THE COMMUNITY. DESPITE CHALLENGING ECONOMIC TIMES, GRACE HOSPITAL HAS SUCCESSFULLY CONTINUED ITS ROLE OF COMMUNITY SERVICE AS ORIGINALLY ENVISIONED BY ITS FOUNDERS. 22261025 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 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 1 42 0 290 1 0 0 0 0 0 0 0 0 0 0 X 11 9 0 0 0 0 0 0 0 1 1 0 0 1 1 1 0 1 1 1 1 0 OH X X MICHELLE HENNIS 2164563880 17730 LORAIN AVENUE CLEVELAND OH 44111 WILLARD E BARTEL 1.00 0.00 X X 0 0 0 MP PATEL MD 1.00 0.00 X 0 0 0 ROBERT A GREVEY 1.00 0.00 X X 0 0 0 GERALD L JEPPE 1.00 0.00 X 0 0 0 REV JOSEPH D MCNULTY 1.00 0.00 X X 0 0 0 JOHN H NICKELS 10.00 0.00 X 91486 0 0 JUDITH Z PETERS 1.00 0.00 X 0 0 0 DEEPAK RAHEJA 5.00 0.00 X 0 0 0 RICHARD J RYMOND 1.00 0.00 X 0 0 0 PAUL C VENIZELOS 1.00 0.00 X 0 0 0 DONALD L LONG CPA 1.00 0.00 X X 0 0 0 RAJIVE KHANNA 40.00 0.00 X 214480 0 2431 ROBERT P RANGE 20.00 20.00 X 288269 0 0 MICHELLE HENNIS 40.00 0.00 X 104938 0 0 BARBARA J MORAN 40.00 0.00 X 127429 0 0 826602 0 2431 4 0 1 0 CORNERSTONE HEALTHCARE GROUP HOLDING IN 13455 NOEL ROAD SUITE 1320 DALLAS TX 75240 CONSULTING 1420000 MAXIM HEALTHCARE SERVICES INC 13841 COLLECTIONS DR CHICAGO IL 60693 EMPLOYMENT AGENCY 544490 SS&G HEALTHCARE SERVICES LLC 275 SPRINGSIDE DR SUITE 100 AKRON OH 44333 BILLING SERVICE 274258 THE CAREER PLAZA INC 7326 INDUSTRIAL PARK BLVD MENTOR OH 44060 EMPLOYMENT AGENCY 129181 4 408352 408352 PATIENT SERVICE REVENU 624100 27094305 27094305 SPECIALTY HOSPITAL OF 624100 662669 662669 OTHER PROGRAM SERVICE 624100 152724 152724 27909698 248200 248200 44465 0 44465 44465 44465 3000 0 3000 3000 3000 28613715 28157898 0 47465 94969 94969 699173 91486 607687 9282168 8656112 626056 1021397 895147 126250 830031 727435 102596 79848 79848 24331 24331 1231636 1231636 5400 5400 1831648 1473355 358293 74485 53731 20754 56116 53742 2374 194621 189613 5008 369387 194245 175142 PURCHASED SERVICES-PROF 5906954 5906954 SUPPLIES - MEDICAL 3169435 3169435 EQUIPMENT RENTAL AND MA 738988 645097 93891 SUPPLIES - GENERAL 145917 89410 56507 187274 20294 166980 25943778 22261025 3682753 0 210663 338752 78643 1500135 5525158 4725820 251504 264571 84616 207392 10268520 9575827 702951 692693 326585 574785 7616842 8185658 14796962 16489806 4461626 3545018 1317415 488070 1316022 1516066 7095063 5549154 X 85057 2754994 7616842 8185658 7701899 10940652 14796962 16489806 2669937 568816 0 X X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 32151 32151 4345664 4198369 147295 145197 130786 14411 5704233 5246672 457561 41275 41275 692693 ASSETS HELD IN PERPETUAL TRUST 8185658 8185658 CAPITAL LEASE OBLIGATIONS 2784 EST SETTLEMENTS TO THIRD-PARTIES 1513282 1516066 X 29182531 568816 568816 28613715 0 28613715 25943778 0 25943778 0 25943778 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: THE HOSPITAL FOLLOWS ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES TOPIC OF THE FASB ACCOUNTING STANDARDS CODIFICATION, WHICH ADDRESSES THE INFORMATION OF WHETHER TAX BENEFITS CLAIMED OR EXPECTED TO BE CLAIMED ON A TAX RETURN SHOULD BE RECORDED IN THE FINANCIAL STATEMENTS. UNDER THIS GUIDANCE, THE HOSPITAL MAY RECOGNIZE THE TAX BENEFIT FROM AN UNCERTAIN TAX POSITION ONLY IF IT IS MORE-LIKELY-THAN-NOT THAT THE TAX POSITION WILL BE SUSTAINED ON EXAMINATION BY TAXING AUTHORITIES, BASED ON THE TECHNICAL MERITS OF THE POSITION. THE TAX BENEFITS RECOGNIZED IN THE FINANCIAL STATEMENTS FROM SUCH A POSITION ARE MEASURED BASED ON THE LARGEST BENEFIT THAT HAS A GREATER THAN 50% LIKELIHOOD OF BEING REALIZED UPON ULTIMATE SETTLEMENT. IN ADDITION, THE GUIDANCE ON ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES ADDRESSES DE-RECOGNITION, CLASSIFICATION, INTEREST AND PENALTIES ON INCOME TAXES, AND ACCOUNTING IN INTERIM PERIODS. MANAGEMENT HAS DETERMINED THAT THE EFFECTS OF THIS PRONOUNCEMENT TO BE INSIGNIFICANT, THEREFORE NO ADJUSTMENTS HAVE BEEN RECORDED AND NO FURTHER DISCLOSURES REQUIRED. 1 1 X 1 X 1 X 1 0 0 349 0 349 0.00000 4154469 5161539 -1007070 0.00000 4154818 5161539 -1006721 4154818 5161539 -1006721 1 611540 0 12508999 12620416 -111417 X 1 1 1 SPECIALTY HOSPITAL OF LORAIN NOT-FOR-PROFIT LONG-TERM ACUTE CARE HOSPITAL IN LORAIN, OHIO 0.33330 0.00000 0.00000 5 1 GRACE FAIRVIEW

18101 LORAIN AVE CLEVELAND OH 44111

X LONG TERM ACUTE CARE A 2 GRACE SOUTH POINTE

20000 HARVARD AVE CLEVELAND OH 44122

X LONG TERM ACUTE CARE A 3 GRACE LAKEWOOD

14519 DETROIT AVE LAKEWOOD OH 44107

X LONG TERM ACUTE CARE A 4 GRACE BEDFORD

44 BLAINE AVENUE BEDFORD OH 44146

X LONG TERM ACUTE CARE A 5 SPECIALTY HOSPITAL OF LORAIN

254 CLEVELAND AVE AMHERST OH 44001

X LONG TERM ACUTE CARE SPECIALTY HOSPITAL OF LORAIN 5 0 1 1 100.000000000000 1 200.000000000000 1 X X X X X X X 1 1 X 1 0 0 X X X 0 0 FACILITY REPORTING GROUP - A 0 1 1 100.000000000000 1 200.000000000000 1 X X X X X X X 1 1 X 1 0 0 X X X 0 0 PART I, LINE 3C: N/A PART I, LINE 6A: N/A PART I, LINE 7: THE AMOUNTS REPORTED ON LINE B WERE GENERATED FROM THE MEDICAID COST REPORT FILED FOR FY2013 AND INCLUDE GRACE HOSPITAL'S PROPORTIONATE SHARE FROM SPECIALTY HOSPITAL OF LORAIN. NEGATIVE COMMUNITY BENEFIT REPRESENTS MEDICAID SURPLUS TO BE REPAID TO MEDICAID PROGRAM.ACUTE CARE HOSPITAL SERVICES RENDERED TO MEDICAID PROGRAM BENEFICIARIES ARE PAID AT PROSPECTIVELY DETERMINED RATES. THESE RATES VARY ACCORDING TO A PATIENT CLASSIFICATION SYSTEM THAT IS BASED ON CLINICAL, DIAGNOSTIC AND OTHER FACTORS. CAPITAL COSTS FOR MEDICAID INPATIENT SERVICES ARE REIMBURSED BASED ON A COST REIMBURSEMENT METHODOLOGY. THE HOSPITAL IS REIMBURSED FOR COST REIMBURSABLE ITEMS AT A TENTATIVE RATE WITH FINAL SETTLEMENT DETERMINED AFTER SUBMISSION OF ANNUAL COST REPORTS AND AUDITS THEREOF BY THE FISCAL INTERMEDIARY. PART I, LINE 7G: N/A PART II: N/A PART III, LINE 4: IN EVALUATING THE COLLECTABILITY OF ACCOUNTS RECEIVABLE, THE HOSPITAL 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 DOUBTFUL ACCOUNTS. IN ADDITION, MANAGEMENT REGULARLY REVIEWS DATA ABOUT THESE MAJOR PAYOR SOURCES OF REVENUE IN EVALUATING THE SUFFICIENCY OF THE CONTRACTUAL ALLOWANCE. FOR RECEIVABLES ASSOCIATED WITH SERVICES PROVIDED TO PATIENTS WHO HAVE THIRD-PARTY COVERAGE, THE HOSPITAL ANALYZES CONTRACTUALLY DUE AMOUNTS AND PROVIDES AN ALLOWANCE, IF NECESSARY (FOR EXAMPLE, FOR EXPECTED UNCOLLECTIBLE DEDUCTIBLES AND CO-PAYMENTS 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 CO-PAYMENT BALANCES DUE FOR WHICH THIRD-PARTY COVERAGE EXISTS FOR PART OF THE BILL), THE HOSPITAL IMMEDIATELY RESERVES THEIR BALANCES IN THE ALLOWANCE DOUBTFUL ACCOUNTS AND WRITES-OFF TO COLLECTION AFTER THE PATIENT IS BILLED FOUR TIMES, 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 AMOUNT REPORTED ON LINE 2 REPRESENTS GROSS CHARGES WRITTEN OFF DURING 2013. NO PORTION OF BAD DEBTS IS INCLUDED AS COMMUNITY BENEFIT. THE HOSPITAL PROVIDES CARE TO PATIENTS WHO MEET CERTAIN CRITERIA UNDER ITS CHARITY CARE POLICY WITHOUT CHARGE OR AT AMOUNTS LESS THAN ITS ESTABLISHED RATES. BECAUSE THE HOSPITAL DOES NOT PURSUE COLLECTION OF AMOUNTS DETERMINED TO QUALIFY AS CHARITY CARE, THEY ARE NOT REPORTED AS REVENUE AND NOT INCLUDED IN BAD DEBT EXPENSE. PART III, LINE 8: MEDICARE SHORTHALL IS NOT TREATED AS COMMUNITY BENEFIT. THE AMOUNTS REPORTED WERE GENERATED FROM THE MEDICARE COST REPORT FILED FOR FY2013. INPATIENT ACUTE CARE SERVICES AND OUTPATIENT SERVICES RENDERED TO MEDICARE PROGRAM BENEFICIARIES ARE PAID AT PROSPECTIVELY DETERMINED RATES PER DISCHARGE. THESE RATES VARY ACCORDING TO A PATIENT CLASSIFICATION SYSTEM THAT IS BASED ON CLINICAL, DIAGNOSTIC, AND OTHER FACTORS. INPATIENT NONACUTE CARE SERVICES RELATED TO MEDICARE BENEFICIARIES ARE PAID BASED ON A COST REIMBURSEMENT METHODOLOGY. THE HOSPITAL IS REIMBURSED FOR COST REIMBURSABLE ITEMS AT TENTATIVE RATES WITH FINAL SETTLEMENT AFTER SUBMISSION OF ANNUAL COST REPORTS AND AUDITS THEREOF BY THE MEDICARE FISCAL INTERMEDIARY. PART III, LINE 9B: FREE CARE WILL BE EXTENDED TO THOSE WHO QUALIFY FOR THESE REASONS: THE PATIENT IS UNINSURED, THE PATIENT IS NOT ELIGIBLE FOR MEDICAID OR PENDING MEDICAID APPROVAL,THE PATIENT IS DETERMINED TO BE UNABLE TO PAY FOR SERVICES PROVIDED, THE PATIENT IS UNABLE TO ACCEPT AN INSTALLMENT PAYMENT ARRANGEMENT, THE PATIENT IS BELOW 200% OF THE FEDERAL POVERTY GUIDELINES, AND THE PATIENT IS A HARDSHIP CASE AS DESIGNATED BY THE PHYSICIAN AND GRACE HOSPITAL. THE PATIENT WILL NEED TO COMPLETE A CHARITY CARE FORM AND RETURN TO GRACE HOSPITAL FOR DETERMINATION OF FREE CARE. GRACE HOSPITAL STAFF OR ITS BILLING REPRESENTATIVES WILL HELP THE PATIENT COMPLETE THE FORM ON REQUEST. ULTIMATELY, IT IS THE PATIENT'S RESPONSIBILITY TO COMPLETE THE FORM. HE/SHE WILL CONTINUE TO BE FULLY RESPONSIBLE FOR THE BILL UNTIL A DETERMINATION IS MADE. DOCUMENTED PROOF OF INCOME IS REQUIRED. PART IV, JOINT VENTURES IN FISCAL YEAR 2008, GRACE HOSPITAL (HOSPITAL) ENTERED INTO A JOINT VENTURE WITH TWO OTHER HEALTHCARE PROVIDERS TO OPERATE SPECIALTY HOSPITAL OF LORAIN (SPECIALTY), A NOT-FOR-PROFIT LONG-TERM ACUTE CARE HOSPITAL IN LORAIN, OHIO. THE PARTIES TO THE JOINT VENTURE OPERATE AS MEMBER ORGANIZATIONS OF SPECIALTY, EACH WITH A 33-1/3% INTEREST. EACH MEMBER ORGANIZATION HAS ALSO AGREED TO SERVE AS CO-GUARANTORS WITH SEVERAL LIABILITIES ON A LINE OF CREDIT NOT TO EXCEED $1,000,000, WHICH IS SECURED BY SPECIALTY'S ASSETS. AS OF JUNE 30, 2013, THE OUTSTANDING BALANCE ON THIS LINE OF CREDIT IS $150,603.IN FISCAL YEAR 2008, THE HOSPITAL ENTERED INTO A MANAGERIAL, AS WELL AS, VARIOUS CLINICAL SERVICE AGREEMENTS WITH SPECIALTY. THE AGREEMENTS SPECIFY THE HOSPITAL IS TO PROVIDE MANAGERIAL AND CLINICAL SERVICES AT COST AND COST PLUS 3%, RESPECTIVELY. FOR THE YEARS ENDED JUNE 30, 2013 AND 2012, REVENUE RECOGNIZED AS A RESULT OF THESE AGREEMENTS IS REPORTED ON THE HOSPITAL'S STATEMENTS OF OPERATIONS TOTALING $662,669 AND $643,387, RESPECTIVELY. RECEIVABLES FOR THESE SERVICES, IN ADDITION TO OTHER REIMBURSEMENTS, ARE REPORTED ON THE HOSPITAL'S STATEMENTS OF FINANCIAL POSITION TOTALING $214,519 AND $121,245 AT JUNE 30, 2013 AND 2012, RESPECTIVELY.THE HOSPITAL'S INVESTMENT IN SPECIALTY IS CARRIED ON THE HOSPITAL'S STATEMENT OF FINANCIAL POSITION AT JUNE 30, 2013 AND 2012. THESE ASSETS REPRESENT THE HOSPITAL'S PROPORTIONATE SHARE OF SPECIALTY'S NET ASSET BALANCES, WHICH ARE RECORDED ON THE EQUITY METHOD.GRACE HOSPITAL'S PROPORTIONATE SHARE OF SPECIALTY'S FINANCIAL ASSISTANCE AND CERTAIN OTHER COMMUNITY BENEFITS AT COST AND BAD DEBTS HAVE BEEN INCLUDED IN SCHEDULE H. SPECIALTY HOSPITAL OF LORAIN PART V, SECTION B, LINE 12H: THE FOLLOWING STRUCTURE WILL BE UTILIZED TO DETERMINE THE AMOUNT OF FREE CARE TO BE PROVIDED. HOUSEHOLD INCOME AND THE NUMBER OF PEOPLE LIVING IN HOUSEHOLD WILL BE THE TWO MAJOR CRITERIA USED TO DETERMINE IF A PATIENT IS ELIGIBLE FOR FREE CARE. EXTENUATING CIRCUMSTANCES SHOULD BE NOTED AND MAY INCLUDE INFORMATION SUPPLIED TO SUPPORT EXCEPTIONAL SCENARIOS INCLUDING A TERMINAL ILLNESS, DEATH OF A SPOUSE, OR CATASTROPHIC PROBLEMS. SPECIALTY HOSPITAL OF LORAIN PART V, SECTION B, LINE 19D: SPECIALTY HOSPITAL OF LORAIN IS A LONG TERM ACUTE CARE (LTAC) FACILITY LOCATED ON A FLOOR OF AMHERST HOSPITAL. DUE TO THE TYPE OF SERVICES PROVIDED, SHL DOES NOT PROVIDE CARE FOR EMERGENCY MEDICAL CONDITIONS. IF FULL-SERVICE EMERGENCY ROOM CARE IS NEEDED, THE FACILITIES OF AMHERST HOSPITAL ARE AVAILABLE. SPECIALTY HOSPITAL OF LORAIN PART V, SECTION B, LINE 20D: A SLIDING SCALE FEE SCHEDULE IS USED TO DETERMINE THE MAXIMUM AMOUNTS THAT CAN BE CHARGED TO FAP-ELIGIBLE INDIVIDUALS. FAILURE TO CONDUCT CHNA PART V, SECTION B, QUESTION #1 PURSUANT TO INTERNAL REVENUE BULLETIN 2014-3 AND IRS NOTICE 2014-3, GRACE HOSPITAL (GRACE) IS DISCLOSING FAILURE TO COMPLY WITH IRC SECTION 501(R)(3) WHICH REQUIRES A HOSPITAL ORGANIZATION TO CONDUCT A COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA). UNDER PROP. REG. 1.501(R)-2(C), "A HOSPITAL FACILITY'S FAILURE TO MEET ONE OR MORE OF THE REQUIREMENTS DESCRIBED IN PROP. REG. 1.501(R)-3 THROUGH 1.501(R)-6 THAT IS NEITHER WILLFUL NOR EGREGIOUS SHALL BE EXCUSED FOR PURPOSES OF THIS SECTION IF THE HOSPITAL FACILITY CORRECTS AND MAKES DISCLOSURE IN ACCORDANCE WITH THE RULES SET FORTH IN THE GUIDANCE." GRACE'S FAILURE TO COMPLY WITH THE REQUIREMENT TO CONDUCT A CHNA WAS NEITHER WILLFUL NOR EGREGIOUS. GRACE IS A LONG-TERM ACUTE CARE HOSPITAL (LTAC) THAT OPERATES ON FLOORS WITHIN THREE CLEVELAND CLINIC HOSPITALS AND ONE UNIVERSITY HOSPITAL FACILITY. FOR EACH HOSPITAL FACILITY THAT GRACE OPERATES WITHIN, A CHNA WAS CONDUCTED BY THAT HOSPITAL SYSTEM. DUE TO LIMITED RESOURCES, STAFF LIMITATIONS AND BASED ON THE SERVICES THAT GRACE PROVIDES, GRACE WAS NOT AWARE OF THE REQUIREMENT TO CONDUCT A CHNA AND DID NOT CONDUCT A CHNA FOR FISCAL YEAR 2013 (7/1/2012 - 6/30/2013). UPON CONSULTATION FROM OUTSIDE CONSULTANTS, GRACE WAS MADE AWARE OF THE REQUIREMENT. ONCE ADVISED ON REQUIREMENT TO CONDUCT A CHNA, GRACE BEGAN PROCESS OF IMPLEMENTING A PLAN TO CONDUCT A CHNA AND WILL PREPARE AND ADOPT A CHNA REPORT CONTAINING ALL OF THE REQUIRED ELEMENTS AND WILL MAKE THE CHNA REPORT WIDELY AVAILABLE ON A WEB SITE WITHIN THE MEANING OF PROP. REG. 1.501(R)-1(C)(4) OF THE 2013 PROPOSED REGULATIONS. PART VI, LINE 2: THE HOSPITAL PRESENTLY SPONSORS SEVERAL INPATIENT SERVICES INCLUDING COMPLEX MEDICAL, PULMONARY, REHABILITATION, VENTILATOR WEANING, LEFT VENTRICAL ASSIST DEVICE, TRANSPLANT SUPPORT, WOUND CARE, AND NEUROLOGICAL REHABILITATION PROGRAMS. THESE SERVICES ARE PROVIDED AT INPATIENT SATELLITES LOCATED WITHIN AMHERST, FAIRVIEW, HURON, LAKEWOOD, AND SOUTH POINTE HOSPITALS. GRACE HOSPITAL IS COMMITTED TO PROVIDING PERSONALIZED HEALTHCARE CHARACTERIZED BY QUALITY, ACCESSIBILITY, EFFICIENCY, AND COST EFFECTIVENESS. THE HOSPITAL IS SENSITIVE TO AGE, CULTURAL, AND ECONOMIC VARIATIONS, AND IS CONTINUOUSLY ASSESSED AND IMPROVED THROUGH A QUALITY MANAGEMENT PROGRAM. GRACE VOLUNTARILY MAINTAINS A CHARITY CARE POLICY THAT PROVIDES CARE TO INDIVIDUALS REGARDLESS OF ABILITY TO PAY. THE HOSPITAL IS ALSO COMMITTED TO EMPLOYING INDIVIDUALS TO MATCH CULTURAL DIVERSITY OF ITS PATIENT POPULATION. SEVERAL JOB POSTINGS IN THE HOSPITAL REQUIRE EMPLOYEES TO BE BILINGUAL IN EITHER SPANISH OR VIETNAMESE. GRACE HOSPITAL IS INVOLVED IN MANY COMMUNITY ACTIVITIES, INCLUDING HEALTH FAIRS, SPECIAL HEALTH-RELATED PRESENTATIONS, AND SPONSORSHIPS IN HEALTHCARE EDUCATION. IN ADDITION, THE HOSPITAL SPONSORS MEETINGS FOR MANY NON-PROFIT COMMUNITY ORGANIZATIONS. THE BOARD OF DIRECTORS, MEDICAL STAFF, AND MANAGEMENT OF GRACE HOSPITAL ARE COMMITTED TO THE PROVISION OF QUALITY SPECIALTY HEALTHCARE SERVICES, AS A LONG-TERM HOSPITAL, AND FULFILLING A LEADERSHIP ROLE IN THE COMMUNITY. DESPITE CHALLENGING ECONOMIC TIMES, GRACE HOSPITAL HAS SUCCESSFULLY CONTINUED ITS ROLE OF COMMUNITY SERVICE AS ORIGINALLY ENVISIONED BY ITS FOUNDERS. PART VI, LINE 3: INFORMATION ABOUT ELIGIBILITY FOR ASSISTANCE UNDER FEDERAL, STATE OR LOCAL GOVERNMENT PROGRAMS IS DESCRIBED ON THE PATIENT'S BILL. THE PATIENT WILL NEED TO COMPLETE A CHARITY CARE FORM AND RETURN TO GRACE FOR DETERMINATION OF FREE CARE. GRACE STAFF OR ITS BILLING REPRESENTATIVES WILL HELP THE PATIENT COMPLETE THE FORM ON REQUEST. PART VI, LINE 4: GRACE HOSPITAL IS A LONG-TERM ACUTE CARE HOSPITAL (LTACH) DEDICATED TO PROVIDING HIGH QUALITY PRIMARY AND SECONDARY HEALTH CARE SERVICES TO MEET THE NEEDS OF LOCAL COMMUNITIES IN NORTHEAST OHIO. PART VI, LINE 5: PART VI, LINE 5: ON APRIL 19, 2005, THE GRACE CENTER (CENTER) WAS INCORPORATED TO PROMOTE HEALTH AND WELLNESS IN THE GEOGRAPHIC AREA HISTORICALLY SERVED BY GRACE HOSPITAL (HOSPITAL). THE CENTER IS PLANNED AS A SPECIALTY HEALTHCARE ORGANIZATION TO PROVIDE CONSULTATIVE, DIAGNOSTIC, REHABILITATIVE, EDUCATION, FITNESS, THERAPEUTIC, AND PHARAMCY PROGRAMS ON AN OUTPATIENT AND INPATIENT BASIS TO MEET THE NEEDS OF THE ADULT POPULATION. TO ASSIST WITH THE ESTABLISHMENT OF THE CENTER, IN DECEMBER 2006, THE HOSPITAL ENTERED INTO AN AGREEMENT WITH THE CENTER FOR LEASING THE WEST 14TH FACILITIES (FACILITIES) AT A RENTAL AMOUNT OF $1 PER YEAR FOR FIVE YEARS, WITH AN AUTOMATIC FIVE-YEAR RENEWAL TERM. IN RETURN, THE CENTER WAS TO PROVIDE CHARITABLE SERVICES FOCUSED ON THE TREMONT AREA, IMPROVE THE FACILITIES AND ASSUME OPERATIONAL EXPENSES. THE LEASE ALSO PROVIDES THE CENTER AN OPTION TO PURCHASE THE FACILITIES FOR $1 AT ANY TIME DURING THE TERM OF THE LEASE PROVIDED VARIOUS OPERATING COVENANTS ARE MET. THE HOSPITAL'S BOARD HAD ALSO APPROVED A RESOLUTION TO PROVIDE THE CENTER WITH A $750,000 OPERATING TERM LOAN AND TO GUARANTEE A $3,500,000 LOAN TO RENOVATE THE FACILITIES. THE LEASE, THE GUARANTEE OF A LOAN, AND THE OPERATING LOAN ARE ALL CROSS-DEFAULTED AND SECURED BY THE FACILITIES. IF A MATERIAL DEFAULT OCCURS UNDER THE LEASE, THE OPERATING TERM LOAN OR THE GUARANTEE IS DRAWN ON, THE HOSPITAL WILL HAVE THE RIGHT TO TERMINATE THE LEASE OR TAKE BACK THE FACILITIES. FINALLY, IF THE CENTER EXERCISES ITS PURCHASE OPTION, THE HOSPITAL WILL FORGIVE ALL AMOUNTS UNDER THE OPERATING TERM LOAN DUE TO THE HOSPITAL. APPROXIMATELY $976,000 AND $881,000 AS OF JUNE 30, 2013 AND 2012, RESPECTIVELY, HAD BEEN EXPENSED BY THE HOSPITAL TO THE CENTER UNDER THE OPERATING TERM LOAN. THE HOSPITAL CONTRIBUTED FUNDS TO THE CENTER TOTALING $94,969 AND $109,301 DURING 2013 AND 2012, RESPECTIVELY, WHICH HAS BEEN TREATED AS CONTRIBUTIONS TO THE CENTER ON THE STATEMENTS OF OPERATIONS. IN ADDITION, AS OF JUNE 30, 2013 AND 2012, GRACE CENTER HAS DRAWN $276,223 ON A LOAN THAT THE HOSPITAL SERVES AS THE GUARANTOR.DUE TO OPERATIONAL AND FINANCIAL CONSIDERATIONS, THE HOSPITAL AND CENTER ELECTED TO NOT MOVE FORWARD WITH IMPLEMENTING THE LEASE AGREEMENT. INSTEAD, THE HOSPITAL PLANS TO ESTABLISH A NOT-FOR-PROFIT FOUNDATION WHICH WOULD WHOLLY OWN BOTH THE HOSPITAL AND CENTER. THE FOUNDATION WOULD THEN PROVIDE THE REMAINING SUPPORT REQUIRED TO START-UP THE CENTER. PART VI, LINE 6: N/A PART VI, LINE 7 N/A PART V, LINE 8 FACILITY REPORTING GROUP A SEE BELOW FACILITY 1 -- GRACE FAIRVIEW PART V, SECTION B, LINE 12H: THE FOLLOWING STRUCTURE WILL BE UTILIZED TO DETERMINE THE AMOUNT OF FREE CARE TO BE PROVIDED. HOUSEHOLD INCOME AND THE NUMBER OF PEOPLE LIVING IN HOUSEHOLD WILL BE THE TWO MAJOR CRITERIA USED TO DETERMINE IF A PATIENT IS ELIGIBLE FOR FREE CARE. EXTENUATING CIRCUMSTANCES SHOULD BE NOTED AND MAY INCLUDE INFORMATION SUPPLIED TO SUPPORT EXCEPTIONAL SCENARIOS INCLUDING A TERMINAL ILLNESS, DEATH OF A SPOUSE, OR CATASTROPHIC PROBLEMS. FACILITY 1 -- GRACE FAIRVIEW PART V, SECTION B, LINE 19D: GRACE HOSPITAL IS A LONG TERM ACUTE CARE (LTAC) FACILITY LOCATED ON A FLOOR OF FAIRVIEW HOSPITAL, A CLEVELAND CLINIC HOSPITAL. DUE TO THE TYPE OF SERVICES PROVIDED, GRACE DOES NOT PROVIDE CARE FOR EMERGENCY MEDICAL CONDITIONS. IF FULL-SERVICE EMERGENCY ROOM CARE IS NEEDED, THE FACILITIES OF FAIRVIEW HOSPITAL ARE AVAILABLE. FACILITY 1 -- GRACE FAIRVIEW PART V, SECTION B, LINE 20D: A SLIDING SCALE FEE SCHEDULE IS USED TO DETERMINE THE MAXIMUM AMOUNTS THAT CAN BE CHARGED TO FAP-ELIGIBLE INDIVIDUALS. FACILITY 3 -- GRACE LAKEWOOD PART V, SECTION B, LINE 12H: FACILITY 3 -- GRACE LAKEWOOD PART V, SECTION B, LINE 12H: THE FOLLOWING STRUCTURE WILL BE UTILIZED TO DETERMINE THE AMOUNT OF FREE CARE TO BE PROVIDED. HOUSEHOLD INCOME AND THE NUMBER OF PEOPLE LIVING IN HOUSEHOLD WILL BE THE TWO MAJOR CRITERIA USED TO DETERMINE IF A PATIENT IS ELIGIBLE FOR FREE CARE. EXTENUATING CIRCUMSTANCES SHOULD BE NOTED AND MAY INCLUDE INFORMATION SUPPLIED TO SUPPORT EXCEPTIONAL SCENARIOS INCLUDING A TERMINAL ILLNESS, DEATH OF A SPOUSE, OR CATASTROPHIC PROBLEMS. FACILITY 3 -- GRACE LAKEWOOD PART V, SECTION B, LINE 19D: GRACE HOSPITAL IS A LONG TERM ACUTE CARE (LTAC) FACILITY LOCATED ON A FLOOR OF LAKEWOOD HOSPITAL, A CLEVELAND CLINIC HOSPITAL. DUE TO THE TYPE OF SERVICES PROVIDED, GRACE DOES NOT PROVIDE CARE FOR EMERGENCY MEDICAL CONDITIONS. IF FULL-SERVICE EMERGENCY ROOM CARE IS NEEDED, THE FACILITIES OF LAKEWOOD HOSPITAL ARE AVAILABLE. FACILITY 3 -- GRACE LAKEWOOD PART V, SECTION B, LINE 20D: A SLIDING SCALE FEE SCHEDULE IS USED TO DETERMINE THE MAXIMUM AMOUNTS THAT CAN BE CHARGED TO FAP-ELIGIBLE INDIVIDUALS. FACILITY 2 -- GRACE SOUTH POINTE PART V, SECTION B, LINE 12H: FACILITY 2 -- GRACE SOUTH POINTE PART V, SECTION B, LINE 12H: THE FOLLOWING STRUCTURE WILL BE UTILIZED TO DETERMINE THE AMOUNT OF FREE CARE TO BE PROVIDED. HOUSEHOLD INCOME AND THE NUMBER OF PEOPLE LIVING IN HOUSEHOLD WILL BE THE TWO MAJOR CRITERIA USED TO DETERMINE IF A PATIENT IS ELIGIBLE FOR FREE CARE. EXTENUATING CIRCUMSTANCES SHOULD BE NOTED AND MAY INCLUDE INFORMATION SUPPLIED TO SUPPORT EXCEPTIONAL SCENARIOS INCLUDING A TERMINAL ILLNESS, DEATH OF A SPOUSE, OR CATASTROPHIC PROBLEMS. FACILITY 2 -- GRACE SOUTH POINTE PART V, SECTION B, LINE 19D: GRACE HOSPITAL IS A LONG TERM ACUTE CARE (LTAC) FACILITY LOCATED ON A FLOOR OF SOUTH POINTE HOSPITAL, A CLEVELAND CLINIC HOSPITAL. DUE TO THE TYPE OF SERVICES PROVIDED, GRACE DOES NOT PROVIDE CARE FOR EMERGENCY MEDICAL CONDITIONS. IF FULL-SERVICE EMERGENCY ROOM CARE IS NEEDED, THE FACILITIES OF SOUTH POINTE HOSPITAL ARE AVAILABLE. FACILITY 2 -- GRACE SOUTH POINTE PART V, SECTION B, LINE 20D: A SLIDING SCALE FEE SCHEDULE IS USED TO DETERMINE THE MAXIMUM AMOUNTS THAT CAN BE CHARGED TO FAP-ELIGIBLE INDIVIDUALS. FACILITY 4 -- GRACE BEDFORD PART V, SECTION B, LINE 12H: FACILITY 4 -- GRACE BEDFORD PART V, SECTION B, LINE 12H: THE FOLLOWING STRUCTURE WILL BE UTILIZED TO DETERMINE THE AMOUNT OF FREE CARE TO BE PROVIDED. HOUSEHOLD INCOME AND THE NUMBER OF PEOPLE LIVING IN HOUSEHOLD WILL BE THE TWO MAJOR CRITERIA USED TO DETERMINE IF A PATIENT IS ELIGIBLE FOR FREE CARE. EXTENUATING CIRCUMSTANCES SHOULD BE NOTED AND MAY INCLUDE INFORMATION SUPPLIED TO SUPPORT EXCEPTIONAL SCENARIOS INCLUDING A TERMINAL ILLNESS, DEATH OF A SPOUSE, OR CATASTROPHIC PROBLEMS. FACILITY 4 -- GRACE BEDFORD PART V, SECTION B, LINE 19D: GRACE HOSPITAL IS A LONG TERM ACUTE CARE (LTAC) FACILITY LOCATED ON A FLOOR OF BEDFORD MEDICAL CENTER, A CAMPUS OF UNIVERSITY HOSPITALS REGIONAL HOSPITALS. DUE TO THE TYPE OF SERVICES PROVIDED, GRACE DOES NOT PROVIDE CARE FOR EMERGENCY MEDICAL CONDITIONS. IF FULL-SERVICE EMERGENCY ROOM CARE IS NEEDED, THE FACILITIES OF BEDFORD HOSPITAL ARE AVAILABLE. FACILITY 4 -- GRACE BEDFORD PART V, SECTION B, LINE 20D: A SLIDING SCALE FEE SCHEDULE IS USED TO DETERMINE THE MAXIMUM AMOUNTS THAT CAN BE CHARGED TO FAP-ELIGIBLE INDIVIDUALS. 1 THE GRACE CENTER 2307 WEST 14TH STREET CLEVELAND OH 44113 204577277 94969 GENERAL PURPOSE PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: THE GRANT WAS ISSUED TO A RELATED PARTY. THE FUNDS ARE MONITORED BY THOSE BOARD MEMBERS WHO OVERLAP WITHIN THE ENTITIES. X 0 0 0 0 0 0 0 0 0 RAJIVE KHANNA 214480 0 0 0 0 0 2145 0 286 0 216911 0 0 0 ROBERT P RANGE 288269 0 0 0 0 0 0 0 0 0 288269 0 0 0 FORM 990, PART VI, SECTION B, LINE 11 THE HOSPITAL CONTRACTS WITH AN OUTSIDE ACCOUNTING FIRM FOR THE PREPARATION OF THE FORM 990. THE HOSPITAL PROVIDES MATERIAL BASED ON REQUESTS FROM THE ACCOUNTING FIRM. MOST OF THE INFORMATION IS PROVIDED BY THE DIRECTOR OF FINANCE. THE FINAL FORM IS REVIEWED BY THE DIRECTOR OF FINANCE AND THE CEO. A COPY OF THE FORM 990 IS PROVIDED TO THE BOARD OF TRUSTEES. FORM 990, PART VI, SECTION B, LINE 15 THE COMPENSATION OF THE ORGANIZATION'S CEO IS DETERMINED BY THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC UPON REQUEST. FORM 990, PART XII, LINE 2C THE ORGANIZATION HAS NOT CHANGED ITS OVERSIGHT OR THE SELECTION PROCESS DURING THE TAX YEAR. THE GRACE CENTER 2307 WEST 14TH STREET CLEVELAND OH 44113 204577277 HEALTHCARE OH GRACE FOUNDATION C 1 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 THE GRACE CENTER B 94969 CASH THE GRACE CENTER D 276223 OUTSTANDING LOAN GUARANTEE