2026-05-11T09:42:43-05:00 2025-06-30 990 2024-07-01 881577422 ESSENTIA HEALTH SURGERY CENTERS ESSE 2187868376 502 E 2ND STREET DULUTH MN 55805 KEVIN BOREN VICE PRESIDENT, FINANCE 2187868376 2026-05-11 0 2024 2025-03-06 01:10:19Z AL HURLEY 502 E 2ND STREET DULUTH MN 55805 13054733 0 X WWW.ESSENTIAHEALTH.ORG X 2022 MN WE ARE CALLED TO MAKE A HEALTHY DIFFERENCE IN PEOPLE'S LIVES. 5 0 50 0 0 0 0 0 10353207 13052583 -555 2150 0 0 10352652 13054733 0 0 0 0 3126199 4155149 0 0 0 11594214 13942802 14720413 18097951 -4367761 -5043218 33440167 40191610 43581651 56147627 -10141484 -15956017 X WE ARE CALLED TO MAKE A HEALTHY DIFFERENCE IN PEOPLE'S LIVES. 0 0 16455557 13052583 ESSENTIA HEALTH SURGERY CENTERS IS ORGANIZED AND SHALL BE OPERATED EXCLUSIVELY FOR CHARITABLE, EDUCATIONAL, AND SCIENTIFIC PURPOSES, SERVING AS THE OPERATIONAL PARENT OF THE ESSENTIA HEALTH ENTITIES OWNING AND/OR OPERATING AMBULATORY SURGERY CENTERS, INCLUDING CHARITABLE CARE TO PERSONS UNABLE TO PAY.ESSENTIA HEALTH SURGERY CENTERS IS THE SOLE MEMBER OF ESSENTIA HEALTH SURGERY CENTERS-DULUTH, LLC DBA ESSENTIA HEALTH SURGERY CENTER-MILLER HILL, ESSENTIA HEALTH SURGERY CENTERS-MINNESOTA, LLC DBA ESSENTIA HEALTH SURGERY CENTER-GRAND RAPIDS, AND ESSENTIA HEALTH SURGERY CENTERS-NORTH DAKOTA, LLC. ESSENTIA HEALTH SURGERY CENTER-MILLER HILL HAS FOUR OPERATING ROOMS AND OFFERS A VARIETY OF OUTPATIENT SURGERIES AND SERVICES INCLUDING EAR, NOSE & THROAT, EYE, GENERAL, GYNECOLOGIC, ORTHOPEDIC, AND UROLOGIC. ESSENTIA HEALTH SURGERY CENTER-GRAND RAPIDS OFFERS OUTPATIENT SURGERIES AND SERVICES INCLUDING COLORECTAL, GENERAL AND ORTHOPEDIC.ESSENTIA HEALTH SURGERY CENTERS EMPLOYS APPROXIMATELY 35 FULL TIME EQUIVALENTS. THE SURGERY CENTER PROVIDED MORE THAN 5,000 OUTPATIENT SURGERIES DURING FISCAL YEAR ENDED JUNE 30, 2025.DURING THE FISCAL YEAR ENDED JUNE 30, 2025, ESSENTIA HEALTH SURGERY CENTERS PROVIDED THE FOLLOWING COMMUNITY BENEFITS: $58,000 IN CHARITY CARE AND $1.5 MILLION COSTS IN EXCESS OF MEDICAID PAYMENTS.ESSENTIA HEALTH IS THE PARENT ORGANIZATION OF AN INTEGRATED HEALTH SYSTEM THAT INCLUDES THIS ORGANIZATION AND ALL ENTITIES THAT ARE OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY ESSENTIA HEALTH (COLLECTIVELY, THE "SYSTEM OR "ESSENTIA HEALTH"). 16455557 1 0 0 0 0 0 0 0 0 0 1 0 0 1 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 0 1 0 0 0 0 0 0 0 0 1 1 1 1 0 0 1 X 0 0 50 1 0 0 0 0 0 0 0 0 0 0 0 0 X 5 0 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 1 1 MN X KEVIN BOREN 2187868376 502 E 2ND STREET DULUTH MN 55805 TRACI MORRIS TREASURER/REL ORG CHIEF FINCL OFF 1.00 59.00 X 0 1054730 144686 BRADLEY BEARD BOARD VICE CHAIR/REL ORG COO 1.00 59.00 X X 0 1000148 179046 MICHAEL WATTERS SECRETARY/REL ORG CHIEF LEGAL OFF 1.00 59.00 X 0 773128 151399 AL HURLEY PRESIDENT & BOARD CHAIR 1.00 59.00 X X 0 706163 129814 KENNETH FARRELL MD BD DIRECTOR/REL ORG PHYS & DIV CHAIR 1.00 59.00 X 0 676587 72276 KEVIN BOREN VICE PRESIDENT, FINANCE/BRD TREAS 1.00 59.00 X X 0 554813 123808 ROBERT WROBLEWSKI MD BOARD DIRECTOR/RELATED ORG PHYSICIAN 1.00 59.00 X 0 579533 31930 KEVIN KARLS MD BOARD DIRECTOR/RELATED ORG PHYSICIAN 1.00 59.00 X 0 314970 21413 DEBRA WILLIAMS AMBULATORY SURGERY CENTER DIRECTOR 60.00 0.00 X 175655 0 23372 BAMBI DECHANTAL REGISTERED NURSE 60.00 0.00 X 123913 0 32209 DANIEL MAGANA REGISTERED NURSE - SUPERVISOR 60.00 0.00 X 100779 0 17391 400347 5660072 927344 3 0 1 0 0 OUTPATIENT REVENUES 621110 13052583 13052583 13052583 2150 0 2150 2150 2150 13054733 13052583 0 2150 X 3258659 3231876 26783 135776 135293 483 519340 461431 57909 241374 235438 5936 120 120 215231 152632 62599 99 99 413967 430437 -16470 2127 2110 17 965740 957803 7937 3875 3875 11426 11426 1229652 1229652 3255248 3228493 26755 77196 76781 415 MEDICAL SUPPLIES 4439757 4439757 AFFILIATE SUPPORT FEE 1787424 870654 916770 BAD DEBT 701056 701056 AFFILIATE EXPENSE AND R 533912 53391 480521 305972 233353 72619 18097951 16455557 1642394 0 236306 348145 1744727 1616760 1784202 1925005 34970517 7622408 29654777 27348109 6729885 20155 2223706 33440167 40191610 901187 1479256 28660309 26248503 1073478 4640761 14020155 22705629 43581651 56147627 X 0 0 0 0 -10141484 -15956017 -10141484 -15956017 33440167 40191610 X -5043218 -771315 X 0 1 X 1 0 X 2060601 2060601 22273490 4182877 18090613 217603 16874 200729 7540241 2889373 4650868 2878582 533284 2345298 27348109 OPERATING LEASES 2223706 2223706 PAYABLES TO RELATED TAX-EXEMPT ORGANIZATIONS 20437697 LEASE LIABILITY 2267932 22705629 X X X X 0 1 0 0 0 0 0 0 0 TRACI MORRIS TREASURER/REL ORG CHIEF FINCL OFF 0 702675 0 269075 0 82980 0 142406 0 2280 0 1199416 0 71480 BRADLEY BEARD BOARD VICE CHAIR/REL ORG COO 0 644035 0 243376 0 112737 0 134559 0 44487 0 1179194 0 90640 MICHAEL WATTERS SECRETARY/REL ORG CHIEF LEGAL OFF 0 506819 0 192028 0 74281 0 109834 0 41565 0 924527 0 62797 AL HURLEY PRESIDENT & BOARD CHAIR 0 453221 0 183113 0 69829 0 102252 0 27562 0 835977 0 59141 KENNETH FARRELL MD BD DIRECTOR/REL ORG PHYS & DIV CHAIR 0 672225 0 0 0 4362 0 27600 0 44676 0 748863 0 0 KEVIN BOREN VICE PRESIDENT, FINANCE/BRD TREAS 0 422051 0 86826 0 45936 0 80855 0 42953 0 678621 0 23244 ROBERT WROBLEWSKI MD BOARD DIRECTOR/RELATED ORG PHYSICIAN 0 578491 0 0 0 1042 0 27600 0 4330 0 611463 0 0 KEVIN KARLS MD BOARD DIRECTOR/RELATED ORG PHYSICIAN 0 303202 0 0 0 11768 0 0 0 21413 0 336383 0 0 DEBRA WILLIAMS AMBULATORY SURGERY CENTER DIRECTOR 154072 0 11605 0 9978 0 8881 0 14491 0 199027 0 0 0 BAMBI DECHANTAL REGISTERED NURSE 123850 0 0 0 63 0 4723 0 27486 0 156122 0 0 0 PART I, LINE 3 ESTABLISHING CEO'S COMPENSATION: ESSENTIA HEALTH, AS A RELATED ORGANIZATION, USED THE FOLLOWING METHODS TO ESTABLISH ESSENTIA HEALTH SURGERY CENTERS' PRESIDENT'S COMPENSATION: A COMPENSATION COMMITTEE, INDEPENDENT COMPENSATION CONSULTANT, COMPENSATION SURVEY OR STUDY, AND APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE. PART I, LINE 4B SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN: ESSENTIA HEALTH'S NONQUALIFIED RETIREMENT PLAN IS OFFERED TO DESIGNATED ESSENTIA HEALTH EXECUTIVES. THERE IS A MINIMUM FOUR YEAR VESTING DATE, OR VESTING IS AUTOMATIC UPON REACHING RETIREMENT AGE, DEATH, DISABILITY OR INVOLUNTARY TERMINATION WITHOUT CAUSE. BENEFITS ARE SUBJECT TO INCOME TAXES UPON VESTING AND PAYABLE FROM ESSENTIA HEALTH'S GENERAL ASSETS. REPORTED AS OTHER REPORTABLE COMPENSATION IN SCHEDULE J, PART II, COLUMN B (III), THE FOLLOWING INDIVIDUALS LISTED IN FORM 990, PART VII, SECTION A, LINE 1A RECEIVED PAYMENT OF THE VESTED BENEFIT FROM THE SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN DURING THE YEAR: TRACI MORRIS $78,928 BRADLEY BEARD $90,640 MICHAEL WATTERS $62,797 AL HURLEY $59,235 KEVIN BOREN $27,172 REPORTED AS RETIREMENT AND OTHER DEFERRED COMPENSATION IN SCHEDULE J, PART II, COLUMN C, ESSENTIA HEALTH MADE CONTRIBUTIONS, SUBJECT TO THE VESTING TERMS, DURING THE YEAR INTO THE SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN ON BEHALF OF THE FOLLOWING INDIVIDUALS LISTED IN FORM 990, PART VII, SECTION A, LINE 1A: TRACI MORRIS $114,806 BRADLEY BEARD $106,959 MICHAEL WATTERS $84,801 AL HURLEY $75,236 KEVIN BOREN $53,255 A DULUTH ECONOMIC DEVELOPMENT AUTHORITY 900848286 000000000 2020-05-15 65000000 SRS 2020D (SEE PART VI) 0 0 0 A 3316702 29715451 167015 29548436 2023 0 0 1 1 A 0 0 0 0 0 0 1 A 1 1 0 0 1 1 A 1 SCHEDULE K: ADDITIONAL INFORMATION/COMMENTS RELATING TO THE REPORTING OF LIABILITIES BY RELATED ORGANIZATIONS: ESSENTIA HEALTH HAS AN OBLIGATED GROUP CREATED UNDER THE MASTER TRUST INDENTURE WHICH IS COMPOSED OF THE FOLLOWING MEMBERS: ESSENTIA HEALTH, ESSENTIA HEALTH EAST, ESSENTIA HEALTH ST. JOSEPH'S MEDICAL CENTER, ESSENTIA HEALTH ST. MARY'S-DETROIT LAKES, ESSENTIA HEALTH ST. MARY'S MEDICAL CENTER, ESSENTIA HEALTH DULUTH, ESSENTIA HEALTH POLINSKY MEDICAL REHABILITATION CENTER, ESSENTIA HEALTH ST. MARY'S HOSPITAL-SUPERIOR, ESSENTIA HEALTH BRAINERD SPECIALTY CLINIC, ST. MARY'S INNOVIS HEALTH, THE DULUTH CLINIC, LTD. AND ESSENTIA HEALTH WEST (THE "OBLIGATED GROUP MEMBERS"). THE OBLIGATED GROUP MEMBERS ARE JOINTLY AND SEVERALLY OBLIGATED ON ALL INDEBTEDNESS EVIDENCED OR SECURED BY NOTES ISSUED UNDER THE MASTER TRUST INDENTURE. SERIES 2020D: THE SERIES 2020D BONDS ARE SECURED BY NOTES ISSUED UNDER THE MASTER TRUST INDENTURE. THE OBLIGATED GROUP MEMBERS: ESSENTIA HEALTH, ESSENTIA HEALTH WEST, AND ESSENTIA HEALTH EAST ARE THE CONDUIT BORROWERS OF THE SERIES 2020D BONDS. THE OBLIGATED GROUP MEMBERS ESSENTIA HEALTH DULUTH, ESSENTIA HEALTH ST. MARY'S-DETROIT LAKES, AND ESSENTIA HEALTH ST. JOSEPH'S MEDICAL CENTER AND NON-OBLIGATED GROUP MEMBER ESSENTIA HEALTH SURGERY CENTERS ARE INDIRECT BENEFICIARIES OF THE SERIES 2020D BORROWING AND HAVE RECORDED A PORTION OF THE BOND LIABILITY ON THEIR BALANCE SHEETS WHICH ARE CONSOLIDATED WITH ESSENTIA HEALTH. SCHEDULE K, PART 1, COLUMN (F): DESCRIPTION OF PURPOSE: SERIES 2020D: ACQUIRE, CONSTRUCT, RENOVATE, AND EQUIP CERTAIN HEALTH FACILITIES IN DULUTH, CLOQUET, PARK RAPIDS, AND PINE RIVER, MN. SCHEDULE K, PART II, LINE 3: ISSUE PRICE: THE SERIES 2020D BONDS WERE ISSUED BY THE ESSENTIA HEALTH OBLIGATED GROUP. THE ISSUE PRICE LISTED IN ESSENTIA HEALTH SURGERY CENTERS' SCHEDULE K, PART I, COLUMN (E) REPRESENTS THE ESSENTIA HEALTH OBLIGATED GROUP'S TOTAL BORROWING. SCHEDULE K, PART II, LINES 3 THROUGH 12: PROCEEDS: THE SERIES 2020D BONDS WERE ISSUED BY THE ESSENTIA HEALTH OBLIGATED GROUP. A PORTION OF THE SERIES 2020D BORROWINGS WERE ALLOCATED TO ESSENTIA HEALTH SURGERY CENTERS. THE PROCEEDS LISTED IN ESSENTIA HEALTH SURGERY CENTERS' SCHEDULE K, PART II, LINES 3 THROUGH 12 REPRESENT ESSENTIA HEALTH SURGERY CENTERS' ALLOCATED PORTION OF THE PROCEEDS. KEVIN KARLS MD BOARD DIRECTOR MEMBERSHIP INTEREST PURCHASE OF JOINT VENTURE X 1030944 1073478 0 1 1 1073478 PART V SUPPLEMENTAL INFORMATION: PART II, COLUMN (H):AS THE SOLE MEMBER OF ESSENTIA HEALTH SURGERY CENTERS, ESSENTIA HEALTH'S GOVERNING BODY FORMALLY APPROVED THE MEMBERSHIP INTEREST PURCHASE UPON APPROVAL AND RECOMMENDATION FROM ESSENTIA HEALTH SURGERY CENTERS' GOVERNING BODY. FORM 990, PART V, LINE 1A: 1099 REPORTING: VENDOR PAYMENTS AND FORM 1099S WERE PROCESSED THROUGH ESSENTIA HEALTH ON BEHALF OF THE LEGAL ENTITIES COMPRISING ESSENTIA HEALTH. FORM 990, PART VI, SECTION A, LINE 6 MEMBER OF ORGANIZATION: ESSENTIA HEALTH IS THE SOLE MEMBER OF ESSENTIA HEALTH SURGERY CENTERS. ESSENTIA HEALTH MAY ELECT ONE OR MORE MEMBERS OF THE GOVERNING BODY AS DESCRIBED IN SCHEDULE O, PART VI, LINE 7A. ESSENTIA HEALTH ALSO HAS RESERVED POWERS WITH RESPECT TO ESSENTIA HEALTH SURGERY CENTERS AS DESCRIBED IN SCHEDULE O, PART VI, LINE 7B. FORM 990, PART VI, SECTION A, LINE 7A MEMBER WITH RIGHT TO ELECT GOVERNING BODY: ESSENTIA HEALTH HAS THE POWER TO APPOINT AND REMOVE ESSENTIA HEALTH SURGERY CENTERS' GOVERNING BODY. FORM 990, PART VI, SECTION A, LINE 7B MEMBER WITH RIGHT TO APPROVE GOVERNING BODY DECISION: ESSENTIA HEALTH SHALL HAVE THE FOLLOWING RESERVED POWERS, FOR THE PURPOSES OF SERVING AS THE PARENT ORGANIZATION OF AN INTEGRATED HEALTH CARE NETWORK THAT INCLUDES ALL ENTITIES THAT ARE OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY ESSENTIA HEALTH (COLLECTIVELY, THE "SYSTEM"): (A) STRATEGIC AND BUSINESS PLANS. AUTHORITY TO CREATE, APPROVE AND AMEND THE CORPORATION'S STRATEGIC AND BUSINESS PLANS. (B) MISSION. AUTHORITY TO CREATE, APPROVE AND AMEND THE CORPORATION'S MISSION, PURPOSE, AND VISION STATEMENTS. (C) DEBT. APPROVAL OF THE INCURRENCE OF DEBT AND THE CREATION OF ALL MORTGAGES, LIENS, SECURITY INTERESTS, OR OTHER ENCUMBRANCES ON THE CORPORATION'S ASSETS IN EXCESS OF THE SINGLE OR ANNUAL AGGREGATE DOLLAR LIMITS PRESCRIBED IN WRITING BY THE MEMBER'S BOARD OF DIRECTORS, AND THE AUTHORITY TO CAUSE THE CORPORATION TO PARTICIPATE IN SYSTEM BORROWING. (D) GOVERNING INSTRUMENTS. AUTHORITY TO CAUSE, AND TO APPROVE, ALL AMENDMENTS TO THE CORPORATION'S ARTICLES OF INCORPORATION AND BYLAWS. (E) APPOINTMENT AND REMOVAL OF DIRECTORS. AUTHORITY TO APPOINT AND REMOVE ALL DIRECTORS ON THE CORPORATION'S BOARD OF DIRECTORS, WITH OR WITHOUT CAUSE. (F) MERGERS AND ACQUISITIONS. AUTHORITY TO CAUSE, AND TO APPROVE, ALL MERGERS, CONSOLIDATIONS, AND DISSOLUTIONS OF THE CORPORATION. (G) AFFILIATIONS AND JOINT VENTURES. AUTHORITY TO CAUSE, AND TO APPROVE, ALL AFFILIATIONS, JOINT VENTURES, AND OTHER ALLIANCES WITH THIRD PARTIES BY THE CORPORATION. (H) TRANSFER OF ASSETS WITHIN THE SYSTEM. AUTHORITY TO TRANSFER THE CORPORATION'S ASSETS, INCLUDING CASH, BETWEEN AND AMONG ENTITIES WITHIN THE SYSTEM; PROVIDED, HOWEVER, THAT THE MEMBER SHALL NOT HAVE AUTHORITY TO REQUIRE THE CORPORATION TO TRANSFER ASSETS (I) THAT WOULD CAUSE IT TO BE IN DEFAULT OF ITS COVENANTS OR OBLIGATIONS UNDER ANY BOND OR OTHER FINANCING DOCUMENTS, (II) FROM THE CATHOLIC ENTITIES TO THE SECULAR ENTITIES OR FROM THE SECULAR ENTITIES TO THE CATHOLIC ENTITIES IN A MANNER OR TO AN EXTENT THAT WOULD CAUSE THE CATHOLIC ENTITIES TO BE IN VIOLATION OF THE ETHICAL AND RELIGIOUS DIRECTIVES FOR CATHOLIC HEALTH CARE SERVICES ("ERDS"), IN THE JUDGMENT OF THE LOCAL ORDINARY, OR (III) SUCH THAT MONEY GENERATED BY SERVICES AT SECULAR FACILITIES WITHIN THE SYSTEM BY PROCEDURES THAT ARE CONTRARY TO THE ERDS WOULD BE USED AT THE CATHOLIC ENTITIES OR MONEY GENERATED BY THE CATHOLIC ENTITIES WOULD BE USED IN THE PROVIDING OF SERVICES CONTRARY TO THE ERDS AT SECULAR FACILITIES WITHIN THE SYSTEM. (I) TRANSFER OF ASSETS OUTSIDE THE SYSTEM. AUTHORITY TO CAUSE, AND TO APPROVE, THE SALE, LEASE OR OTHER TRANSFER OF THE CORPORATION'S ASSETS TO PARTIES OUTSIDE OF THE SYSTEM WHEN THE ASSET'S VALUE EXCEEDS THE SINGLE OR AGGREGATE LIMITS PRESCRIBED IN WRITING BY THE MEMBER'S BOARD OF DIRECTORS. (J) SERVICES. AUTHORITY TO CAUSE, AND TO APPROVE, THE OFFERING OR DISCONTINUANCE OF SERVICES AND SERVICE LOCATIONS BY THE CORPORATION. (K) BUDGETS. APPROVAL OF THE CORPORATION'S CAPITAL AND OPERATING BUDGETS. (L) PROFESSIONAL SERVICES. SELECTION OF THE CORPORATION'S GENERAL LEGAL COUNSEL AND EXTERNAL AUDITORS. (M) CORPORATE ACQUISITIONS. AUTHORITY TO CAUSE, AND TO APPROVE, ALL CORPORATE ACQUISITIONS BY THE CORPORATION. (N) MARKETING. THE CORPORATION'S PARTICIPATION IN SYSTEM-WIDE MARKETING AND PROMOTIONAL ACTIVITIES. (O) COMPLIANCE PLANS. AUTHORITY TO CREATE, APPROVE AND AMEND THE CORPORATION'S COMPLIANCE, SAFETY AND RISK MANAGEMENT PLANS. (P) QUALITY PLAN. AUTHORITY TO CREATE, APPROVE AND AMEND THE CORPORATION'S QUALITY PLAN. (Q) NON-BUDGETED PURCHASES. APPROVAL OF NON-BUDGETED CAPITAL PURCHASES AND LEASES IN EXCESS OF THE SINGLE OR ANNUAL AGGREGATE DOLLAR LIMITS PRESCRIBED IN WRITING BY THE MEMBER'S BOARD OF DIRECTORS. (R) HUMAN RESOURCES. AUTHORITY TO CREATE, APPROVE AND AMEND THE CORPORATION'S HUMAN RESOURCE POLICIES AND PROCEDURES. (S) SYSTEM COMPENSATION. AUTHORITY, ON BEHALF OF THE CORPORATION, TO DEVELOP AND IMPLEMENT COMPENSATION STRATEGIES, POLICIES, AND PROCEDURES ON A SYSTEM-WIDE BASIS. FORM 990, PART VI, SECTION A, LINE 8B COMMITTEES: THERE ARE NO COMMITTEES WITH AUTHORITY TO ACT ON BEHALF OF THE GOVERNING BODY. FORM 990, PART VI, SECTION B, LINE 11B FORM 990 REVIEW PROCESS: THE CURRENT FORM 990, INCLUDING ALL SCHEDULES, WAS REVIEWED BY MANAGEMENT AND THE GOVERNING BODY PRIOR TO FILING WITH THE INTERNAL REVENUE SERVICE. THE FINANCE LEADER REVIEWED THE FORM AND SCHEDULES AND ANY QUESTIONS WERE DISCUSSED. EACH CURRENT DIRECTOR OF THE GOVERNING BODY RECEIVED A FINAL COPY OF FORM 990. FORM 990, PART VI, SECTION B, LINE 12C MONITORING AND ENFORCING CONFLICT OF INTEREST POLICY: ESSENTIA HEALTH'S COMPREHENSIVE CONFLICT OF INTEREST PROGRAM PREVENTS, DETECTS, AND RESOLVES ACTUAL CONFLICTS OF INTERESTS OR THE ACTUAL OR POTENTIAL APPEARANCE OF SUCH. FIDUCIARIES, DEFINED AS AN ESSENTIA HEALTH BOARD MEMBER/TRUSTEE, OFFICER, BOARD COMMITTEE MEMBER, SENIOR MANAGEMENT EMPLOYEE, OR ANY OTHERS CONSIDERED TO BE IN A POSITION OF INFLUENCE, ARE COVERED UNDER ESSENTIA HEALTH'S CONFLICT OF INTEREST PROGRAM. UPON INITIAL APPOINTMENT, EACH FIDUCIARY MUST COMPLETE AN INITIAL CONFLICT OF INTEREST STATEMENT AND DISCLOSURE QUESTIONNAIRE. AT THE CONCLUSION OF EACH CALENDAR YEAR, EACH FIDUCIARY MUST COMPLETE AN ANNUAL CONFLICT OF INTEREST STATEMENT AND DISCLOSURE QUESTIONNAIRE. AS NEEDED, A FIDUCIARY WILL UPDATE THEIR MOST RECENTLY COMPLETED QUESTIONNAIRE EACH TIME THE FIDUCIARY BECOMES AWARE OF A FINANCIAL INTEREST, A POTENTIAL CONFLICT, OR CHANGE TO ANY INFORMATION THAT THE FIDUCIARY PREVIOUSLY REPORTED. ESSENTIA HEALTH'S CHIEF COMPLIANCE OFFICER WILL COLLECT THE QUESTIONNAIRES AND EVALUATE THE DISCLOSURES. IF A FIDUCIARY HAS A POTENTIAL CONFLICT OF INTEREST, THE CHIEF COMPLIANCE OFFICER OR DESIGNEE MAY REQUEST ADDITIONAL INFORMATION FROM THE FIDUCIARY, THE MANAGEMENT TEAM, AND OTHERS. DURING THE EVALUATION PROCESS, THE CHIEF COMPLIANCE OFFICER MAY ALSO CONSULT WITH ESSENTIA HEALTH'S BOARD AND AUDIT COMMITTEE CHAIRS, SENIOR MANAGEMENT, LEGAL DEPARTMENT, OR APPROPRIATE REPRESENTATIVES FROM ESSENTIA HEALTH. THE CHIEF COMPLIANCE OFFICER REPORTS TO THE ESSENTIA HEALTH AUDIT COMMITTEE AND THE ESSENTIA HEALTH BOARD OF DIRECTORS ANY ACTUAL OR POTENTIAL CONFLICTS OF INTEREST DISCLOSED BY THE FIDUCIARY, ALONG WITH RECOMMENDED ACTIONS. THE ESSENTIA HEALTH BOARD OF DIRECTORS (OR DESIGNEE) WILL THEN DETERMINE WHETHER TO APPROVE THE SITUATION OR TO IMPLEMENT SPECIAL CONTROLS TO MANAGE THE POTENTIAL CONFLICT OF INTEREST. THE CHIEF COMPLIANCE OFFICER WILL THEN OFFICIALLY NOTIFY THE FIDUCIARY IN WRITING OF THE BOARD'S DECISION. THE DECISION OF WHETHER OR NOT THE DISCLOSURE CONSTITUTES A CONFLICT WILL BE AT THE ESSENTIA HEALTH BOARD OF DIRECTOR'S (OR DESIGNEE) SOLE DISCRETION, AND ITS CONCERN MUST BE THE WELFARE OF ESSENTIA HEALTH AND ITS AFFILIATE(S) AND THE ADVANCEMENT OF ITS PURPOSES. WHEN THE ESSENTIA HEALTH BOARD OF DIRECTORS (OR DESIGNEE) CONSIDERS A FIDUCIARY'S DISCLOSURE AS A CONFLICT OF INTEREST, SPECIAL CONTROLS WILL BE IDENTIFIED TO MANAGE, ELIMINATE OR REDUCE THE LIKELIHOOD AND/OR APPEARANCE OF A CONFLICT ARISING. CONTROLS MAY INCLUDE, BUT ARE NOT LIMITED TO: A. IF THE CONFLICT INVOLVES AN ON-GOING MATTER OR RELATIONSHIP, THE FIDUCIARY MUST NOT PARTICIPATE IN BOARD, BOARD COMMITTEE, OR MANAGEMENT DISCUSSIONS RELATED TO THE CONFLICT AND MUST RECUSE THEMSELVES AND IF APPROPRIATE, WITHDRAW, FROM ANY BOARD MEETING OR PORTION THEREOF WHERE THE MATTER IS BEING DISCUSSED AND DURING THE VOTE ON THE POTENTIAL CONFLICT OF INTEREST. THE FIDUCIARY MAY ANSWER QUESTIONS AT THE BOARD'S OR THE BOARD COMMITTEE'S REQUEST. B. IF THE CONFLICT INVOLVES A SPECIFIC TRANSACTION OR DECISION, THE FIDUCIARY WILL FULLY DISCLOSE THEIR INTEREST AND ALL RELATED MATERIAL FACTS. THE BOARD OR COMMITTEE OF THE BOARD WILL DETERMINE WHETHER THE CONTEMPLATED TRANSACTION MAY BE AUTHORIZED AS JUST, FAIR, AND REASONABLE TO ESSENTIA HEALTH OR ITS AFFILIATE(S). IF THE BOARD DETERMINES A CONFLICT DOES NOT EXIST, THE FIDUCIARY MAY PROCEED WITH THE TRANSACTION; HOWEVER, THEY WILL NOT BE ELIGIBLE TO VOTE ON RELATED ISSUES SHOULD THEY ARISE. IF THE BOARD DETERMINES A CONFLICT DOES EXIST, THE FIDUCIARY WILL BE NOTIFIED OF THE DECISION REGARDING WHETHER THE CONTEMPLATED TRANSACTION WILL BE AUTHORIZED AS JUST, FAIR, AND REASONABLE. FORM 990, PART VI, LINE 12 POLICY APPLIES TO DISREGARDED ENTITIES: ESSENTIA HEALTH SURGERY CENTERS-DULUTH, LLC, ESSENTIA HEALTH SURGERY CENTERS-MINNESOTA, LLC AND ESSENTIA HEALTH SURGERY CENTERS-NORTH DAKOTA, LLC. FORM 990, PART VI, LINE 13 POLICY APPLIES TO DISREGARDED ENTITIES: ESSENTIA HEALTH SURGERY CENTERS-DULUTH, LLC, ESSENTIA HEALTH SURGERY CENTERS-MINNESOTA, LLC AND ESSENTIA HEALTH SURGERY CENTERS-NORTH DAKOTA, LLC. FORM 990, PART VI, LINE 14 POLICY APPLIES TO DISREGARDED ENTITIES: ESSENTIA HEALTH SURGERY CENTERS-DULUTH, LLC, ESSENTIA HEALTH SURGERY CENTERS-MINNESOTA, LLC AND ESSENTIA HEALTH SURGERY CENTERS-NORTH DAKOTA, LLC. FORM 990, PART VI, LINE 15 PROCESS APPLIES TO DISREGARDED ENTITIES: ESSENTIA HEALTH SURGERY CENTERS-DULUTH, LLC, ESSENTIA HEALTH SURGERY CENTERS-MINNESOTA, LLC AND ESSENTIA HEALTH SURGERY CENTERS-NORTH DAKOTA, LLC. FORM 990, PART VI, LINE 16: POLICY APPLIES TO DISREGARDED ENTITIES: ESSENTIA HEALTH SURGERY CENTERS-DULUTH, LLC, ESSENTIA HEALTH SURGERY CENTERS-MINNESOTA, LLC AND ESSENTIA HEALTH SURGERY CENTERS-NORTH DAKOTA, LLC. FORM 990, PART VI, SECTION B, LINE 15 PROCESS FOR DETERMINING COMPENSATION: THE INDEPENDENT EXECUTIVE COMPENSATION COMMITTEE OF ESSENTIA HEALTH'S BOARD OF DIRECTORS IS AUTHORIZED TO FULFILL THE BOARD'S RESPONSIBILITIES REGARDING EXECUTIVE COMPENSATION CONSISTENT WITH ESSENTIA'S MISSION, VALUES AND TAX-EXEMPT STATUS, AND THE EXECUTIVE COMPENSATION COMMITTEE'S CHARTER. THE EXECUTIVE COMPENSATION COMMITTEE MEETS AT LEAST TWICE ANNUALLY TO CARRY OUT ITS RESPONSIBILITIES, WHICH INCLUDE, BUT ARE NOT LIMITED TO, ESTABLISHING, REVIEWING AND MODIFYING, AS APPROPRIATE, REASONABLE COMPENSATION AND BENEFITS FOR DESIGNATED ESSENTIA EXECUTIVES WHO ARE OFFICERS OR KEY EMPLOYEES OF ESSENTIA OR ANY OF ITS AFFILIATES WHICH MAY BE PAID BY RELATED ORGANIZATIONS. THE EXECUTIVE COMPENSATION COMMITTEE ENGAGES QUALIFIED INDEPENDENT COMPENSATION ADVISORS TO PROVIDE OBJECTIVE AND IMPARTIAL COMPARATIVE DATA AND TO EXPRESS OPINIONS ON TOTAL COMPENSATION REASONABLENESS. THE EXECUTIVE COMPENSATION COMMITTEE MAY REQUEST ITS INDEPENDENT ADVISORS TO: MONITOR COMPARABILITY DATA AND MARKETPLACE TRENDS; MAKE APPROPRIATE RECOMMENDATIONS REGARDING SALARY RANGES; AND PERIODICALLY REVIEW THE MARKET COMPETITIVENESS OF ESSENTIA EXECUTIVE COMPENSATION PACKAGES. PRIOR TO ESTABLISHING OR ADJUSTING EXECUTIVE COMPENSATION, THE EXECUTIVE COMPENSATION COMMITTEE WILL OBTAIN AND RELY UPON APPROPRIATE DATA AS TO COMPARABILITY OF THE PROPOSED COMPENSATION OR ADJUSTMENTS. THE EXECUTIVE COMPENSATION COMMITTEE WILL ADEQUATELY DOCUMENT THE BASIS FOR ITS DETERMINATION CONCURRENTLY WITH MAKING THOSE DETERMINATIONS. THE EXECUTIVE COMPENSATION COMMITTEE MINUTES WILL INCLUDE: THE TERMS OF THE APPROVED COMPENSATION AND THE DATE APPROVED; THE EXECUTIVE COMPENSATION COMMITTEE MEMBERS PRESENT DURING THE REVIEW, DISCUSSION AND APPROVAL OF THE PROPOSED COMPENSATION AND THOSE WHO VOTED ON THE PROPOSED COMPENSATION; IDENTIFICATION OF THE COMPARABILITY DATA OBTAINED AND RELIED UPON BY THE EXECUTIVE COMPENSATION COMMITTEE AND HOW THE DATA WAS OBTAINED; ANY ACTIONS BY A MEMBER OF THE EXECUTIVE COMPENSATION COMMITTEE HAVING A CONFLICT OF INTEREST; AND DOCUMENTATION OF THE BASIS FOR THE DETERMINATION. THIS PROCESS WAS LAST UNDERTAKEN IN 2025 FOR ESSENTIA HEALTH SURGERY CENTERS' PRESIDENT AND IN 2024 FOR ITS VICE PRESIDENT OF FINANCE. FORM 990, PART VI, SECTION C, LINE 19 AVAILABILITY OF GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, & FINANCIAL STATEMENTS TO THE PUBLIC: GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS ARE MADE AVAILABLE TO THE PUBLIC UPON REQUEST FOR THE SAME PERIOD OF DISCLOSURE AS SET FORTH IN SECTION 6104(D). FORM 990, PART IX, LINE 24D: AFFILIATE REVENUE AND EXPENSE ALLOCATION: ESSENTIA HEALTH DULUTH, ESSENTIA HEALTH ST. MARY'S MEDICAL CENTER, THE DULUTH CLINIC, LTD., AND ESSENTIA HEALTH ST. JOSEPH'S MEDICAL CENTER ALLOCATE CERTAIN REVENUES AND EXPENSES DIRECTLY TO ESSENTIA HEALTH DULUTH, ESSENTIA HEALTH ST. MARY'S MEDICAL CENTER, THE DULUTH CLINIC, LTD., ESSENTIA HEALTH SANDSTONE, ESSENTIA HEALTH ST. MARY'S HOSPITAL-SUPERIOR, ESSENTIA HEALTH NORTHERN PINES, ESSENTIA HEALTH POLINSKY MEDICAL REHABILITATION CENTER, ESSENTIA HEALTH DEER RIVER, ESSENTIA HEALTH VIRGINIA, ESSENTIA HEALTH SURGERY CENTERS, ESSENTIA HEALTH MOOSE LAKE, ESSENTIA HEALTH ST. JOSEPH'S MEDICAL CENTER, AND ESSENTIA HEALTH BRAINERD SPECIALTY CLINIC, ALL RELATED ORGANIZATIONS. NET AFFILIATE REVENUE AND EXPENSE ALLOCATIONS OF $533,912 INCLUDE THE FOLLOWING TYPES OF REVENUE AND EXPENSES: PATIENT REVENUE; NONPATIENT REVENUE; AMORTIZATION AND DEPRECIATION; PROFESSIONAL FEES; PURCHASED SERVICES; REPAIRS AND MAINTENANCE; SALARIES, WAGES, AND RELATED BENEFITS; SUPPLIES; UTILITIES; INSURANCE; AGENCY FEES; PROVIDER AND OTHER TAXES; AND OTHER EXPENSES. FORM 990, PART XI, LINE 9: NET ASSET TRANSFER WITH RELATED ORGANIZATION -999,771. BRIGHTSIDE SURGICAL LLC DISTRIBUTION 228,456. ESSENTIA HEALTH SURGERY CENTERS-DULUTH LLC 502 E 2ND STREET DULUTH MN 55805 874339770 SURGERY CENTER MN 12422455 29672796 ESSENTIA HEALTH SURGERY CENTERS ESSENTIA HEALTH SURGERY CENTERS-MINNESOTA LLC 502 E 2ND STREET DULUTH MN 55805 874299891 SURGERY CENTER MN 632278 3788929 ESSENTIA HEALTH SURGERY CENTERS ESSENTIA HEALTH SURGERY CENTERS-NORTH DAKOTA LLC 502 E 2ND STREET DULUTH MN 55805 874474986 SURGERY CENTER ND 0 6729885 ESSENTIA HEALTH SURGERY CENTERS BRAINERD MEDICAL CENTER INC 2024 S 6TH ST BRAINERD MN 56401 371532148 CLINIC MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 BRIDGES MEDICAL CENTER 201 9TH ST W ADA MN 56510 200479568 HOSPITAL/CLINIC MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 DEER RIVER HEALTHCARE CENTER INC 115 10TH AVE NE DEER RIVER MN 56636 410844574 HOSPITAL/CLINIC/SKILLED NURSING FACILITY MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 ESSENTIA HEALTH 502 E 2ND ST DULUTH MN 55805 200360007 SUPPORTING ORG MN 501(C)(3) LINE 12C, III-FI N/A 0 ESSENTIA HEALTH ACO INC 502 E 2ND ST DULUTH MN 55805 993256474 SUPPORTING ORG DE 501(C)(3) LINE 12A, I ESSENTIA HEALTH 1 ESSENTIA HEALTH FOUNDATION 502 E 2ND ST DULUTH MN 55805 271984704 FOUNDATION MN 501(C)(3) LINE 7 ESSENTIA HEALTH 1 ESSENTIA HEALTH MOOSE LAKE 4572 COUNTY RD 61 MOOSE LAKE MN 55767 845099016 HOSPITAL/CLINIC MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 ESSENTIA INSTITUTE OF RURAL HEALTH 502 E 2ND ST DULUTH MN 55805 271291124 RESEARCH MN 501(C)(3) LINE 4 THE DULUTH CLINIC LTD 1 FIRST CARE MEDICAL SERVICES 900 HILLIGOSS BLVD SE FOSSTON MN 56542 410706143 HOSPITAL/CLINIC/SKILLED NURSING FACILITY MN 501(C)(3) LINE 3 INNOVIS HEALTH LLC 1 GRACEVILLE HEALTH CENTER 115 W 2ND ST GRACEVILLE MN 56240 410726173 HOSPITAL/CLINIC/SKILLED NURSING FACILITY MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 INNOVIS HEALTH LLC 3000 32ND AVE S FARGO ND 58103 261175213 HOSPITAL/CLINIC DE 501(C)(3) LINE 3 ESSENTIA HEALTH 1 MIDWEST MEDICAL EQUIPMENT AND SUPPLIES INC 502 E 2ND ST DULUTH MN 55805 411674021 MEDICAL EQUIPMENT MN 501(C)(3) LINE 10 ST MARY'S MEDICAL CENTER 1 NORTHERN PINES MEDICAL CENTER 5211 HWY 110 AURORA MN 55705 410841441 HOSPITAL/CLINIC/SKILLED NURSING FACILITY MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 PINE MEDICAL CENTER 705 LUNDORFF DR S SANDSTONE MN 55072 411884597 HOSPITAL MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 POLINSKY MEDICAL REHABILITATION CENTER 1600 MILLER TRUNK HWY BLDG C DULUTH MN 55811 410691275 REHABILITATION SERVICES MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 SMDC MEDICAL CENTER 502 E 2ND ST DULUTH MN 55805 411878730 HOSPITAL/CLINIC MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 ST JOSEPH'S MEDICAL CENTER 523 N 3RD ST BRAINERD MN 56401 410695602 HOSPITAL/CLINIC MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 ST MARY'S DULUTH CLINIC HEALTH SYSTEM 502 E 2ND ST DULUTH MN 55805 411836633 SUPPORTING ORG MN 501(C)(3) LINE 12B, II ESSENTIA HEALTH 1 ST MARY'S EMS 1027 WASHINGTON AVE DETROIT LAKES MN 56501 411805811 EMERGENCY SERVICES MN 501(C)(3) LINE 10 ESSENTIA HEALTH 1 ST MARY'S HOSPITAL OF SUPERIOR 3500 TOWER AVE SUPERIOR WI 54880 411811073 HOSPITAL/CLINIC MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 ST MARY'S INNOVIS HEALTH 1027 WASHINGTON AVE DETROIT LAKES MN 56501 262861321 PHARMACY MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 ST MARY'S MEDICAL CENTER 402 E 2ND ST DULUTH MN 55805 410695604 HOSPITAL MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 ST MARY'S REGIONAL HEALTH CENTER 1027 WASHINGTON AVE DETROIT LAKES MN 56501 411620386 HOSPITAL/CLINIC/SKILLED NURSING FACILITY MN 501(C)(3) LINE 3 ESSENTIA HEALTH 1 THE DULUTH CLINIC LTD 400 E 3RD ST DULUTH MN 55805 410883623 CLINIC DE 501(C)(3) LINE 3 ESSENTIA HEALTH 1 BRIGHTSIDE SURGICAL LLC 401 N 9TH ST BISMARCK ND 58501 831888619 AMBULATORY SURGERY CENTER ND ESSENTIA HEALTH SURGERY CENTERS RELATED 577855 1332068 0 1 0.72780 ESSENTIA HEALTH INSURANCE SERVICES SPC LTD PO BOX 1159 GRAND CAYMAN CJ K7-1102 981829514 SELF INSURANCE CJ N/A C 1 MID DAKOTA CLINIC INC 502 E 2ND ST DULUTH MN 55805 450311334 CLINIC OPERATIONS CEASED 9/30/22 ND N/A C 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 ESSENTIA HEALTH M 1787424 ACTUAL COSTS ESSENTIA HEALTH P 518136 ACTUAL COSTS ST MARY'S MEDICAL CENTER S 18000000 ACTUAL COSTS ST MARY'S REGIONAL HEALTH CENTER S 1600000 ACTUAL COSTS SCHEDULE R, PART II, COLUMN (A): THE FOLLOWING ESSENTIA HEALTH ENTITIES HAVE A DOING BUSINESS AS NAME: LEGAL NAME; DOING BUSINESS AS NAME BRAINERD MEDICAL CENTER, INC.; ESSENTIA HEALTH BRAINERD SPECIALTY CLINIC BRIDGES MEDICAL CENTER; ESSENTIA HEALTH ADA DEER RIVER HEALTHCARE CENTER, INC.; ESSENTIA HEALTH DEER RIVER FIRST CARE MEDICAL SERVICES; ESSENTIA HEALTH FOSSTON GRACEVILLE HEALTH CENTER; ESSENTIA HEALTH HOLY TRINITY HOSPITAL INNOVIS HEALTH, LLC; ESSENTIA HEALTH WEST MIDWEST MEDICAL EQUIPMENT AND SUPPLIES, INC.; ESSENTIA HEALTH MEDICAL EQUIPMENT & SUPPLIES NORTHERN PINES MEDICAL CENTER; ESSENTIA HEALTH NORTHERN PINES PINE MEDICAL CENTER; ESSENTIA HEALTH SANDSTONE POLINSKY MEDICAL REHABILITATION CENTER; ESSENTIA HEALTH POLINSKY MEDICAL REHABILITATION CENTER SMDC MEDICAL CENTER; ESSENTIA HEALTH DULUTH ST. JOSEPH'S MEDICAL CENTER; ESSENTIA HEALTH ST. JOSEPH'S MEDICAL CENTER ST. MARY'S DULUTH CLINIC HEALTH SYSTEM; ESSENTIA HEALTH EAST ST. MARY'S EMS; ESSENTIA HEALTH EMS ST. MARY'S HOSPITAL OF SUPERIOR; ESSENTIA HEALTH ST. MARY'S HOSPITAL-SUPERIOR ST. MARY'S MEDICAL CENTER; ESSENTIA HEALTH ST. MARY'S MEDICAL CENTER ST. MARY'S REGIONAL HEALTH CENTER; ESSENTIA HEALTH ST. MARY'S-DETROIT LAKES