ReturnofOrganization ExemptFromIncomeTax OMBNo...
Transcript of ReturnofOrganization ExemptFromIncomeTax OMBNo...
Form 990Department of the Treasury
Internal Revenue Service
Return of Organization Exempt From Income TaxOMB No 1545-0047
Under section 501 (c), 527 , or 4947(a)(1) of the Internal Revenue Code (except black lung 2®1 tlbenefit trust or private foundation) Open to Public
00, The organization may have to use a copy of this return to satisfy state reporting requirements Inspection
A For the 2011 calendar year , or tax year beginning OCT 1 , 2 011 and ending S EP 30, 2012
B Check if C Name of organization D Employer identification numberapplicable
-]Addrechangess Mission Hospital, IncNamehange Doln Business As
Initialreturn
Da1edinNumber and street ( or P.O. box if mail is not delivered to street address)
400 Ridgefield CourtAmeeFX-I returnnded
E:Iii n °a-ho
City or town , state or country , and ZIP + 4
Asheville , NC 28806pending
F Name and address of principal officer Charles F.
same as C aboveAyscue
I Tax-exem pt status L-XJ 501 ( c)(3) 501 ( c) ( A (insert no .) 4947(a)(
J Website www.mission-health.org
K Form of orcianization : Corporation Trust Association Other 00
mmarv
1:5t0
1--UCD
0LL9
56-05321 41
Room/suite E Telephone number100 (828)257 -7004
G Gross receipts $ 915,839,322.H(a) Is this a group return
for affiliates? Li Yes ©No
H(b) Are all affiliates included? El Yes E::]No
1) or 527 If "No," attach a list (see instructions)
H(c) Group exemption number 00.
L Year of formation: 19 5 51 M State of legal domicile NC
1 Briefly describe the organization's mission or most significant activities To improve the health of thepeople of Western North Carolina and the surrounding region.
2 Check this box 00- L-J if the organization discontinued its operations or disposed of more than 25% of its net assets
a 3 Number of voting members of the governing body (Part VI, line 1 a) 203
O 4 Number of independent voting members of the governing body (Part VI, line 1 b) 4 16
5 Total number of individuals employed in calendar year 2011 (Part V, line 2a) 5 7253
6 Total number of volunteers (estimate if necessary) 6 779
7 a Total unrelated business revenue from Part VIII, column (C), line 12 7a 807 , 507
b Net unrelated business taxable income from Form 990-T, line 34 7b 549, 508.
Prior Year Current Year
8 Contributions and grants (Part VIII, line 1 h) 9,443 , 904. • 8,191, 059 .
9 Program service revenue (Part VIII, line 2g) 862,508 , 231. 905,167,732.w 10 Investment Income (Part VIII, column (A), lines 3, 4, and 7d) -157, 728. 28, 946.
11 Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11 e) 777, 588. 970,824 .
12 Total revenue - add lines 8 through 11 must equ al Part VIII, column (A) , line 12 ) 872,571 , 995. 914,358,561.13 Grants and similar amounts paid (Part IX, column (A), lines 1-3) 2,338,450. 3,106,255.14 Benefits paid to or for members (Part IX, column (A), line 4) 0 . 0 .
Go 15 Salaries, other compensation, employee benefits (Part IX, column (A), lines 5-10) 369,822, 637. 393,706,467.co) 16a Professional fundraising fees (Part IX, column (A), line 11e) 0 . 0
X b Total fundraising expenses (Part IX, column (D), line 25) 00, 0
W 17 Other expenses (Part IX, column (A), lines 11 a-11 d, 11 f-24e) 430,135,568. 428,472,176.18 Total expenses Add lines 13-17 (must equal Part IX, column (A), line 25) 802,296 ,655. 825,284,898.19 Revenue less expenses Subtract line 18 from li ne 12 70,275,340. 89,073,663.
ow Beginning of Current Year End of Year
N^ 20 Total assets (Part X, line 16) 8 4 8 ,19 2, 4 8 4. 9 6 4, 2 2 0, 8 8 8.aco 21 Total liabilities (Part X , line 26) 82,524,600. 109,429,491.
22 Net assets or fund balances Subtract line 21 from line 20 765,667,884. 1 854,791,397.
Under penalties of perjury,
true, correct, and complo6
Sign
Here
Paid
Preparer
Use Only
132001 01-23-12 LHA For Paperwork Reduction Act Notice , see the
Form 990 2011 Mission Hosp ital, Inc 56-0532141 Page 2Part [[I Statement of Program Service Accomplishments
Check if Schedule 0 contains a response to any question in this Part III 0
1 Briefly describe the organization's mission:
See Schedule 0
2 Did the organization undertake any significant program services during the year which were not listed on
the prior Form 990 or 990-EZ? E]Yes 0 No
If "Yes," describe these new services on Schedule 0.
3 Did the organization cease conducting , or make significant changes in how it conducts , any program services? LlYes 0 No
If "Yes," describe these changes on Schedule 0.
4 Describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses.
Section 501 (c)(3) and 501 (c)(4) organizations and section 4947(a)(1) trusts are required to report the amount of grants and allocations to
others, the total expenses, and revenue, if any, for each program service reported.
4a (Code ) (Expenses $ 676,967,433 . including grants of $ 3,059,255 . ) (Revenue $ 900,177,190. )In 2012, Thomson Reuters released its fourth annual study identifyingthe top U.S. health systems based on balanced system-wide clinicalperformance. The Thomson Reuters 15 Top Health Systems study culleddata from more than 300 organizations and singled out 15 health systemsthat achieved superior clinical outcomes based on a composite score ofeight measures of quality, patient perception of care and efficiency.
See Schedule 0 for additional program service accomplishments.
4b (Code ) (Expenses $ including grants of $ (Revenue $
4c (Code ) (Expenses $ including grants of $ ) (Revenue $
4d Other program services (Describe in Schedule 0.)
(Expenses $ including grants of $ ) (Revenue $
4e Total program service expenses► 676,967,433.
Form 990 (2011)
08530901 351485 56-0532141 2011.05070 Mission Hospital, Inc
O2-092 See Schedule 0 for Continuation(s)2
56-05322
3Form 99O 2011 Mission Hospital, Inc 56-0532141 PagePart EV Checklist of Required Schedules
Yes No
1 Is the organization described in section 501 (c)(3) or 4947(a)(1) (other than a private foundation)?
If "Yes," complete Schedule A 1 X
2 Is the organization required to complete Schedule B, Schedule of Contributors? 2 X
3 Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for
public office? If "Yes," complete Schedule C, Part 1 3 X
4 Section 501 (c)(3) organizations . Did the organization engage in lobbying activities, or have a section 501(h) election in effect
during the tax year? If "Yes," complete Schedule C, Part Il 4 X
5 Is the organization a section 501 (c)(4), 501 (c)(5), or 501 (c)(6) organization that receives membership dues, assessments, or
similar amounts as defined in Revenue Procedure 98-19? If "Yes," complete Schedule C, Part 111 5 X
6 Did the organization maintain any donor advised funds or any similar funds or accounts for which donors have the right to
provide advice on the distribution or investment of amounts in such funds or accounts? If "Yes," complete Schedule D, Part 1 6 X
7 Did the organization receive or hold a conservation easement, including easements to preserve open space,
the environment, historic land areas, or historic structures? If "Yes," complete Schedule D, Part// 7 X
8 Did the organization maintain collections of works of art, historical treasures, or other similar assets? If "Yes," complete
Schedule D, Part 111 8 X
9 Did the organization report an amount in Part X, line 21; serve as a custodian for amounts not listed in Part X; or provide
credit counseling, debt management, credit repair, or debt negotiation services? If "Yes," complete Schedule D, Part IV 9 X
10 Did the organization, directly or through a related organization, hold assets in temporarily restricted endowments, permanent
endowments, or quasi-endowments? If "Yes," complete Schedule D, Part V 10 X
11 If the organization's answer to any of the following questions is "Yes," then complete Schedule D, Parts VI, VII, VIII, IX, or X
as applicable.
a Did the organization report an amount for land, buildings, and equipment in Part X, line 10? If "Yes," complete Schedule D,
Part Vl 11 a X
b Did the organization report an amount for investments - other securities in Part X, line 12 that is 5% or more of its total
assets reported in Part X, line 16? If "Yes," complete Schedule D, Part Vll 11b X
c Did the organization report an amount for investments - program related in Part X, line 13 that is 5% or more of its total
assets reported in Part X, line 16? If "Yes," complete Schedule D, Part Vlll 11c X
d Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in
Part X, line 16? If "Yes," complete Schedule D, Part IX 11d X
e Did the organization report an amount for other liabilities in Part X, line 25? If "Yes," complete Schedule D, Part X 11e X
f Did the organization's separate or consolidated financial statements for the tax year include a footnote that addresses
the organization's liability for uncertain tax positions under FIN 48 (ASC 740)? If "Yes," complete Schedule D, Part X 11f X
12a Did the organization obtain separate, independent audited financial statements for the tax year? If "Yes," complete
Schedule D, Parts X1, X11, and X111 12a X
b Was the organization included in consolidated, independent audited financial statements for the tax year?
If "Yes," and if the organization answered "No" to line 12a, then completing Schedule D, Parts XI, X11, and Xlll is optional 12b X
13 Is the organization a school described in section 170(b)(1)(A)(u)? If "Yes," complete Schedule E 13 X
14a Did the organization maintain an office, employees, or agents outside of the United States? 14a X
b Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business,
investment, and program service activities outside the United States, or aggregate foreign investments valued at $100,000
or more? If "Yes," complete Schedule F, Parts 1 and IV 14b X
15 Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or assistance to any organization
or entity located outside the United States? If "Yes," complete Schedule F, Parts ll and IV 15 X
16 Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or assistance to individuals
located outside the United States? If "Yes," complete Schedule F, Parts 111 and IV 16 X
17 Did the organization report a total of more than $15,000 of expenses for professional fundraising services on Part IX,
column (A), lines 6 and 11 e? If "Yes," complete Schedule G, Part 1 17 X
18 Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII, lines
1 c and 8a? If "Yes," complete Schedule G, Part ll 18 X
19 Did the organization report more than $15,000 of gross income from gaming activities on Part VIII, line 9a? If "Yes,"
complete Schedule G, Part 111 19 X
20a Did the organization operate one or more hospital facilities? If "Yes," complete Schedule H 20a X
b If "Yes" to line 20a. did the organization attach a copy of its audited financial statements to this return? 20b X
Form 990 (2011)
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4Form 990 2011 Mission Hosp ital, Inc 56-0532141 PagePart IV Checklist of Required Schedules (continued)
Yes No
21 Did the organization report more than $5,000 of grants and other assistance to any government or organization in the
United States on Part IX, column (A), line 1 ? If "Yes," complete Schedule I, Parts I and 11 21 X
22 Did the organization report more than $5,000 of grants and other assistance to individuals in the United States on Part IX,
column (A), line 2? If "Yes," complete Schedule 1, Parts 1 and 1/l 22 X
23 Did the organization answer "Yes" to Part VII, Section A, line 3, 4, or 5 about compensation of the organization's current
and former officers, directors, trustees, key employees, and highest compensated employees? If "Yes," complete
Schedule J 23 X
24a Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the
last day of the year, that was issued after December 31, 2002? If "Yes," answer lines 24b through 24d and complete
Schedule K. If "No", go to line 25 24a X
b Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception? 24b
c Did the organization maintain an escrow account other than a refunding escrow at any time during the year to defease
any tax-exempt bonds" 24c
d Did the organization act as an "on behalf of" issuer for bonds outstanding at any time during the year? 24d
25a Section 501 (c)(3) and 501 (c)(4) organizations . Did the organization engage in an excess benefit transaction with a
disqualified person during the year? If "Yes," complete Schedule L, Part I 25a X
b Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and
that the transaction has not been reported on any of the organization's prior Forms 990 or 990-EZ? If "Yes," complete
Schedule L, Part I 25b X
26 Was a loan to or by a current or former officer, director, trustee, key employee, highly compensated employee, or disqualified
person outstanding as of the end of the organization's tax year? If "Yes," complete Schedule L, Part /l 26 X
27 Did the organization provide a grant or other assistance to an officer, director, trustee, key employee, substantial
contributor or employee thereof, a grant selection committee member, or to a 35% controlled entity or family member
of any of these persons? If "Yes," complete Schedule L, Part 111 27 X
28 Was the organization a party to a business transaction with one of the following parties (see Schedule L, Part IV
instructions for applicable filing thresholds, conditions, and exceptions):
a A current or former officer, director, trustee, or key employee? If "Yes," complete Schedule L, Part IV 28a X
b A family member of a current or former officer, director, trustee, or key employee? If "Yes," complete Schedule L, Part IV 28b X
c An entity of which a current or former officer, director, trustee, or key employee (or a family member thereof) was an officer,
director, trustee, or direct or indirect owner? If "Yes," complete Schedule L, Part IV 28c X
29 Did the organization receive more than $25,000 in non-cash contributions? If "Yes," complete Schedule M 29 X
30 Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation
contributions? If "Yes," complete Schedule M 30 X
31 Did the organization liquidate, terminate, or dissolve and cease operations?
If "Yes," complete Schedule N, Part 1 31 X
32 Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? If "Yes," complete
Schedule N, Part ll 32 X
33 Did the organization own 100% of an entity disregarded as separate from the organization under Regulations
sections 301.7701-2 and 301.7701-3? If "Yes, " complete Schedule R. Part 1 33 X
34 Was the organization related to any tax-exempt or taxable entity?
If "Yes," complete Schedule R, Parts II, Ill, IV, and V, line 1 34 X
35a Did the organization have a controlled entity within the meaning of section 512(b)(13)" 35a X
b Did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of
section 512(b)(13)? If "Yes," complete Schedule R, Part V, line 2 35b X
36 Section 501 (c)(3) organizations . Did the organization make any transfers to an exempt non-charitable related organization?
If "Yes," complete Schedule R, Part V, line 2 36 X
37 Did the organization conduct more than 5% of its activities through an entity that is not a related organization
and that is treated as a partnership for federal income tax purposes) If "Yes," complete Schedule R, Part VI 37 X
38 Did the organization complete Schedule 0 and provide explanations in Schedule 0 for Part VI, lines 11 and 19?
Note. All Form 990 filers are required to complete Schedule 0 38 X
Form 990 (2011)
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Form 990 2011 Mission Hosp ital, Inc 56-0532141 Pa e5Part V Statements Regarding Other IRS Filings and Tax Compliance
Check if Schedule 0 contains a response to any question in this Part V
la Enter the number reported in Box 3 of Form 1096. Enter -0- if not applicable la 422
b Enter the number of Forms W-2G included in line 1 a Enter -0- if not applicable lb 0
c Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming
(gambling) winnings to prize winners?
2a Enter the number of employees reported on Form W-3, Transmittal of Wage and Tax Statements,
filed for the calendar year ending with or within the year covered by this return 2a 7253
b If at least one is reported on line 2a, did the organization file all required federal employment tax returns?
Note . If the sum of lines 1 a and 2a is greater than 250, you may be required to a-file (see instructions)
3a Did the organization have unrelated business gross income of $1,000 or more during the year?
b If "Yes," has it filed a Form 990-T for this year? If "No," provide an explanation in Schedule 0
4a At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a
financial account in a foreign country (such as a bank account, securities account, or other financial account)?
b If "Yes," enter the name of the foreign country: No, -
See instructions for filing requirements for Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts.
5a Was the organization a party to a prohibited tax shelter transaction at any time during the tax year?
b Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction?
c If "Yes," to line 5a or 5b, did the organization file Form 8886-T?
6a Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization solicit
any contributions that were not tax deductible?
b If "Yes," did the organization include with every solicitation an express statement that such contributions or gifts
were not tax deductible'?
7 Organizations that may receive deductible contributions under section 170(c).
a Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor'
b If "Yes," did the organization notify the donor of the value of the goods or services provided?
c Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required
to file Form 8282?
d If "Yes," indicate the number of Forms 8282 filed during the year 7d
e Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract?
f Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract?
g If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required?
h If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098-C?
8 Sponsoring organizations maintaining donor advised funds and section 509(a )( 3) supporting organizations . Did the supporting
organization, or a donor advised fund maintained by a sponsoring organization, have excess business holdings at any time during the year?
9 Sponsoring organizations maintaining donor advised funds.
a Did the organization make any taxable distributions under section 4966?
b Did the organization make a distribution to a donor, donor advisor, or related person?
10 Section 501(c)(7) organizations . Enter:
a Initiation fees and capital contributions included on Part VIII, line 12 10a
b Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities 10b
11 Section 501(c)(12) organizations . Enter:
a Gross income from members or shareholders 11a
b Gross income from other sources (Do not net amounts due or paid to other sources against
amounts due or received from them.) 11b
12a Section 4947(a)(1) non -exempt charitable trusts . Is the organization filing Form 990 in lieu of Form 1041?
b If "Yes," enter the amount of tax-exempt interest received or accrued during the year 12b
13 Section 501 (c)(29) qualified nonprofit health insurance issuers.
a Is the organization licensed to issue qualified health plans in more than one state?
Note. See the instructions for additional information the organization must report on Schedule 0.
b Enter the amount of reserves the organization is required to maintain by the states in which the
organization is licensed to issue qualified health plans 13b
c Enter the amount of reserves on hand 13c
14a Did the organization receive any payments for indoor tanning services during the tax year?
b If "Yes," has it filed a Form 720 to report these payments? If "No," provide an explanation in Schedule 0
13200501-23-12
508530901 351485 56-0532141 2011.05070 Mission Hospital, Inc
Yes No
1c X
2b X
3a X
3b X
4a X
5a X
5b X
5c
6a X
6b
7a X
7b
7c X
7e
7f X
7
7h
8
12a
14a I I X
Form 990 (2011)
56-05322
Form 990 (2011) Mission Hospital, Inc 56-0532141 Page6Tart VI Governance, Management, and Disclosure For each "Yes" response to lines 2 through 7b below, and fora "No" response
to line 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule 0. See instructions.
Check if Schedule 0 contains a response to any question in this Part VI 0
Section A. Governin g Body and ManagementYes No
la Enter the number of voting members of the governing body at the end of the tax year 1 a 20
If there are material differences in voting rights among members of the governing body, or if the governing
body delegated broad authority to an executive committee or similar committee, explain in Schedule 0
b Enter the number of voting members included in line 1 a, above, who are independent 1 b 16
2 Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other
officer, director, trustee, or key employee? 2 X
3 Did the organization delegate control over management duties customarily performed by or under the direct supervision
of officers, directors, or trustees, or key employees to a management company or other person? 3 X
4 Did the organization make any significant changes to its governing documents since the prior Form 990 was filed? 4 X
5 Did the organization become aware during the year of a significant diversion of the organization's assets? 5 X
6 Did the organization have members or stockholders? 6 X
7a Did the organization have members, stockholders, or other persons who had the power to elect or appoint one or
more members of the governing body? 7a X
b Are any governance decisions of the organization reserved to (or subject to approval by) members, stockholders, or
persons other than the governing body? 7b X
8 Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following
a The governing body? 8a X
b Each committee with authority to act on behalf of the governing body? 8b X
9 Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the
organization's mailin g address? If "Yes " provide the names and addresses in Schedule 0 9 X
Section B. Policies his Section B requests information about policies not required by the Internal Revenue Code )
Yes No
10a Did the organization have local chapters, branches, or affiliates? 10a X
b If "Yes," did the organization have written policies and procedures governing the activities of such chapters, affiliates,
and branches to ensure their operations are consistent with the organization's exempt purposes? 10b
11a Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form? 11a X
b Describe in Schedule 0 the process, if any, used by the organization to review this Form 990.
12a Did the organization have a written conflict of interest policy? If "No," go to line 13 12a X
b Were officers, directors, or trustees, and key employees required to disclose annually interests that could give rise to conflicts 12b X
c Did the organization regularly and consistently monitor and enforce compliance with the policy? If "Yes," describe
in Schedule 0 how this was done 12c X
13 Did the organization have a written whistleblower policy? 13 X
14 Did the organization have a written document retention and destruction policy? 14 X
15 Did the process for determining compensation of the following persons include a review and approval by independent
persons, comparability data, and contemporaneous substantiation of the deliberation and decision?
a The organization's CEO, Executive Director, or top management official 15a X
b Other officers or key employees of the organization 15b X
If "Yes" to line 15a or 15b, describe the process in Schedule 0 (see instructions).
16a Did the organization invest in, contribute assets to, or participate in a point venture or similar arrangement with a
taxable entity during the year? 16a X
b If "Yes," did the organization follow a written policy or procedure requiring the organization to evaluate its participation
in point venture arrangements under applicable federal tax law, and take steps to safeguard the organization's
exempt status with respect to such arrangements? 16b X
Section C . Disclosure17 List the states with which a copy of this Form 990 is required to be filed ► None
18 Section 6104 requires an organization to make its Forms 1023 (or 1024 if applicable), 990, and 990-T (Section 501(c)(3)s only) available
for public inspection Indicate how you made these available . Check all that apply.
0 Own website Another's website 0 Upon request
19 Describe in Schedule 0 whether (and if so , how), the organization made its governing documents , conflict of interest policy , and financial
statements available to the public during the tax year.
20 State the name , physical address, and telephone number of the person who possesses the books and records of the organization: ►Mission Finance Dept - 828-257-7004400 Ridgefield Court, Suite 100, Asheville, NC 28806
01-23-12 Form 990 (2011)
608530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Form 990 2011 Mission Hospital, Inc 56-0532141 Page 7
Part, VU Compensation of Officers , Directors, Trustees, Key Employees, Highest Compensated
Employees, and Independent ContractorsCheck if Schedule 0 contains a response to any question in this Part VII 1XI
Section A. Officers . Directors , Trustees . Key Employees, and Highest Compensated Employees
1a Complete this table for all persons required to be listed Report compensation for the calendar year ending with or within the organization's tax year
• List all of the organization' s current officers, directors, trustees (whether individuals or organizations), regardless of amount of compensation.Enter •0• in columns (D), (E), and (F) if no compensation was paid.
• List all of the organization' s current key employees, if any. See instructions for definition of "key employee."
• List the organization' s five current highest compensated employees (other than an officer, director, trustee, or key employee) who received reportable
compensation (Box 5 of Form W-2 and/or Box 7 of Form 1099-MISC) of more than $100,000 from the organization and any related organizations.
• List all of the organization' s former officers, key employees, and highest compensated employees who received more than $100,000 of
reportable compensation from the organization and any related organizations.
• List all of the organization' s former directors or trustees that received, in the capacity as a former director or trustee of the organization,
more than $10,000 of reportable compensation from the organization and any related organizations.
List persons in the following order: individual trustees or directors; institutional trustees; officers; key employees; highest compensated employees;and former such persons.
O Check this box if neither the organization nor any related or anizatlon compensated any current officer, director, or trustee.
(A) (B) (C) (D) (E) (F)
Name and Title Average Position Reportable Reportable Estimated
hours per(do not check more than onebox, unless person is both an compensation compensation amount of
week officer and a director/trustee ) from from related other
(describe the organizations compensation
hours for i & organization (W-2/1099•MISC) from the
related3 01 (W 2/1099 MISC) organization
organizations 9 o and related
in Schedule a organizations0) b Pn
Y x aEi
(1) Janice W. Brumit
Chairman 9.20 X X 0. 0. 0
(2) Robert C . Roberts
Vice Chairman & Treasurer 2.30 X X 0. 0. 0.
(3) Darryl J. Hart
Secretary 3.20 X X 0. 0. 0.
(4) George D . Renfro
Director 12.00 X 0 • 0 • 0
(5) R. Ray Bailey
Director 2.80 X 0. 0. 0
(6) John R. Ball
Director 2.80 X 0. 0• 0
(7) George Bilbrey , Jr., M.D.
-
Director 7.50 X 0 . 0 • 0
( B) Richard W. Bock, M.D.
Director 5.10 X 0 • 0 • 0
(9) John F.A.V. Cecil
Director 2. 70 X 0• 0• 0
(10) W. Leon Elliston, M.D.
-
Director 4 .2 0 X 0. 0. 0.
( 11) Brian R . England, M.D.
Director 2. 10 X 0• 0• 0
( 12) John W. Garrett, M.D.
Director 4.20 X 0. 0. 0.(13) William S. Hickman
Director 7.40 X 0. 0. 0.
(14) William E. Lee
Director 2.70 X 0. 0. 0
(15) Robert M. Moore, Jr.
Director 3.00 X 0. 0. 0.
(16) Charles D. Owen, III
Director 4.20 X 0. 0• 0
(17) Anna S. Shivers
Director 2.70 X 0. 0. 0 .-
132007 01 - 23-12 Form 990 (2011)7
08530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Form 990 2011 Mission Hosp ital, Inc 56-0532141 Page 8V.'lrt V111 ce..ti,rn A mm- n;-t- T.,,.f- Levu RmnI, vuec an'1 Winhact (mmnonsated Emnlnvees (cnnttnued)
(A) (B) (C) (D) (E) (F)
Name and title Average Position Reportable Reportable Estimated
hours per(do not ch eck more than onebox, unless person is both an compensation compensation amount of
week officer and a director/trustee) from from related other(describe i the organizations compensationhours for b organization (W2/1099•MISC) from therelated (W2/1099•MISC) organization
organizations g and relatedin Schedule 9 1-3 organizations
0) oC
E E
= d
`
(18) Wyatt S. Stevens
Director 5.50 X 0. 0. 0 .
(19) Pamela M. Turner
Director 3.00 X 0. 0. 0 .
( 20) Ronald Paulus, M.D.
System President & CEO 70.00 X X 1, 371, 164. 0. 232, 641.
(21) Charles F. Ayscue
Chief Financial Officer 65.00 X 577, 872. 0. 112,792.
(22) Dr. Jill Hoggard Green,
Hospital President & COO 65.00 X 146, 785. 0. 23,890.(23) Ann Y. Young
General Counsel 60.00 X 373, 306. 0. 54,191.(24) Brian Aston
Chief Operating Officer 60.00 X 390, 345. 0. 13,076.( 25) Dale Fell, M.D.
Chief Medical Officer 60.00 X 483,613. 0. 92,199.(26) Donald A. Jennings
Chief Information Officer 60.00 X 436, 081. 0 . 33,118.
1b Sub-total ► 3, 779, 946. 0 . 561,907.
c Total from continuation sheets to Part VII, Section A ► 2,486,450. 0 . 344,146.
d Total (add lines lbandlc) ► 6,266,396. 0. 906,053.
2 Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable
compensation from the organization ► 227
Yes No
3 Did the organization list any former officer, director, or trustee, key employee, or highest compensated employee on
line 1 a? If "Yes, " complete Schedule J for such individual 3 X
4 For any individual listed on line 1 a, is the sum of reportable compensation and other compensation from the organization
and related organizations greater than $150,000? If "Yes," complete Schedule J for such individual 4 X
5 Did any person listed on line 1 a receive or accrue compensation from any unrelated organization or individual for services
rendered to the organization? If "Yes " complete Schedule J for such person 5 X
Section B. Independent Contractors
1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from
thn nr, ,n-tinn Rennrt rmmnaneatinn fnr tha calonrinr va r anrlinn with or within tha nrnnnl7atinn'e tax vP.ar_
(A) (B) (C)Name and business address Description of services Compensation
MAHEC501 Biltmore Avenue, Asheville, NC 28801 Residenc y Program 8,000,987.Asheville Anesthesia, 76 Peachtree Road,Suite 300, Asheville, NC 28803 Medical Services 3,899,020.Freeman White Architectural8845 Red Oak Boulevard, Charlotte, NC 28217 Services 2,333,771.Asheville Heart, PA257 McDowell Street, Asheville, NC 28803 edical Services 2,129,013.Asheville Pulmonary & Critical Care Associa30 Choctaw Street, Asheville, NC 28801 edical Services 1,590,457.2 Total number of independent contractors (including but not limited to those listed above) who received more than
$ 100 ,000 of com pensation from the or anization ► 10 3
See Part VII, Section A Continuation sheets
132008 01-23-12
808530901 351485 56-0532141 2011.05070 Mission Hospital, Inc
Form 990 (2011)
56-05322
Form 990 2011 Mission Hosp ital, Inc 56-0532141
Part V4f Section A. Officers. Directors . Trustees . Kev Emnlovees. and Hiahest Compensated Emolovees (continued)
(A)
Name and title
(B)
Average
hours
(C)
Position
(check all that apply)
(D)
Reportable
compensation
(E)
Reportable
compensation
(F)
Estimated
amount of
per
week
v n .Y
o
_a2
o
from
theorganization
(W-2/1099-MISC)
from related
organizations(W-2/1099-MISC)
other
compensation
from the
organization
and related
organizations
(27) Kathy Guyette
Chief Nursing Officer 60.00 X 334, 767. 0 . 55,299.(28) Maria Roloff
VP Human Resources 60.00 X 255, 250. 0. 55,626.(29) Dr. William Maples
Chief Quality Officer 60.00 X 425, 535. 0. 47,489.(30) Rhonda Miller
VP Revenue Cycle 60.00 X 326, 923. 0 . 38,283.(31) James F. Reel, M.D.
Chief Medical Information Officer 60.00 X 301, 502. 0 . 23, 580 .(32) John J. Maher
VP System Integration 60.00 X 251, 302. 0 . 68,054.(33) Karen Lemieux
VP Heart Services 60.00 X 245, 895. 0 . 49,989.(34) Joseph F. Damore
Former CEO and Director 0.00 X 345, 276. 0 . 5,826.
Total to Part VII Section A , line 1 c 2 F 4861450. 344,146.
132201 05-01-11
08530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Form 990 2011 Mission Hospital , Inc 56-0532141 Page9
Part VIII Statement of Revenue
(A) (B) (C) (D)Revenue
Total revenue Related or Unrelated excluded fromexempt function business tax under
revenue revenue sections 512,513, or 514
y y>= C
1 a Federated campaigns la
o b Membership dues lb
yQ c Fundraising events 1c
6 d Related organizations 1 d 8, 191 , 0 5 9.
vi E_ e Government grants (contributions) 1eOy f All other contributions , gifts, grants, and
M.C similar amounts not included above if
C'p 9 Noncash contnbutions included in lines la-1f $
VIn h Total. Add lines 1 a-1 f ► 8 , 191,059.
Business Code
0 2a Patient Revenue 900099 885039181. 884231674. 807,507.b Affiliate Income 900099 12855163. 12855163.
Oar- c Dietary Services 722210 4,183,035. 4183035.MW d Joint Ventures 621990 3,090,353. 3,090,353.
o e
a f All other program service revenue
Total . Add lines 2a-2f ► 905167732. :3 Investment income (including dividends , interest, and
other similar amounts) ► 7,528. 7,528.
4 Income from investment of tax-exempt bond proceeds ►5 Royalties ►
( i ) Real a Personal
6 a Gross rents 489,870. 5,180..b Less- rental expenses 2 88,866 . 5,180.
c Rental income or (loss ) 2 01,004. 0. 1d Net rental income or (loss ) ► 201,004* 201,004.
7 a Gross amount from sales of ( i ) Securities a Other
assets other than inventory 102,027
b Less . cost or other basis
and sales expenses 80,609.c Gain or (loss) 21,418 .
d Net gain or (loss ) ► 21,418. 21,418.
d 8 a Gross income from fundraising events (not
including $ of
ai contributions reported on line 1c). See
Part IV, line 18 a
= b Less: direct expenses b
c Net income or (loss ) from fundraising events ►9 a Gross income from gaming activities. See
Part IV, line 19 a
b Less - direct expenses b
c Net income or (loss ) from gaming activities ►10 a Gross sales of inventory , less returns
and allowances a 1875926.
b Less : cost of goods sold b 1106106.
c Net income or loss from sales of invento ► 769 , 820. 769,820.Miscellaneous Revenue Business Code
11 a
b
c
d All other revenue
e Total . Add lines 11a-11d ►12 Total revenue See instructions ► 914358561. 1900177190. 1 807,507. 1 5182805*
13200901-23-12 Form 990 (2011)
1008530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Mission Hospital, IncStatement of Functional
56-0532141
Section 501(c)(3) and 501 (c)(4) organizations must complete all columns. All other organizations must complete column (A) but are not required to
complete columns (B), (C), and (D).
Check if Schedule 0 contains a res onse to any question in this Part IX E]
Do not include amounts reported on lines Bb,76, 86, 96, and f06 of Part V///.
(A)Total expenses
(B)Program service
expenses
(C)Management andgeneral eenses
(D)Fundraisingexpenses
1 Grants and other assistance to governments and
organizations in the United States See Part IV , line 21 3 ,059,255. 3,059,255.
2 Grants and other assistance to individuals in
the United States . See Part IV , line 22 47,000. 47,000.
3 Grants and other assistance to governments,
organizations , and individuals outside the
United States . See Part IV , lines 15 and 16
4 Benefits paid to or for members
5 Compensation of current officers, directors,
trustees , and key employees 4,678,714. 4,678,714.
6 Compensation not included above , to disqualified
persons ( as defined under section 4958(f)(1)) and
persons described in section 4958 (c)(3)(B)
7 Other salaries and wages 313,565, 391. 38, 309, 697. 75,255,694.
8 Pension plan accruals and contributions (include
section 401 ( k) and section 403(b) employer contributions ) 10 , 366, 516 7,878,552. 2 , 487 , 964
9 Other employee benefits 41, 498, 788. 31, 539, 079. 9, 959, 709.
10 Payroll taxes 23, 597, 058. 17, 933, 764. 5,663,294.
11 Fees for services (non-employees).
a Management 3, 052, 965. 2, 533, 961. 519,004.
b Legal 1 , 739, 490. 1, 739, 490.
c Accounting 221,902. 221,902.
d Lobbying 113, 500. 113,500.
e Professional fundraising services See Part IV, line 17
f Investment management fees
g Other 84,747,147. 70,340,132. 14,407,015.
12 Advertising and promotion 5,197,099. 4,313,592. 883,507.
13 Office expenses 2, 710, 639. 2, 249, 830. 460,809.
14 Information technology 13,509,981. 11,213,284. 2,296,697.
15 Royalties
16 Occupancy 36, 110, 341. 29, 971, 583. 6,138,758.
17 Travel 1, 401, 782. 1, 163, 479. 238, 303.
18 Payments of travel or entertainment expenses
for any federal , state, or local public officials
19 Conferences , conventions , and meetings
20 Interest
21 Payments to affiliates
22 Depreciation , depletion, and amortization 60,418,883. 50,147,673. 10,271,210.
23 Insurance 15, 937, 119. 13, 227, 809. 2,709,310.24 Other expenses Itemize expenses not covered
above ( List miscellaneous expenses in line 24e If line24e amount exceeds 10% of line 25, column (A)amount , list line 24e expenses on Schedule 0 )
a Medical Supplies 172,432,881. 167,259,895. 5,172,986.b Equipment Leases 11,714,565. 9,723,081. 1,991,484.c medical Equip Repairs & 9,099,407. 7,552,508. 1,546,899.d UBI Taxes 213,151. 213,151.e All other expenses 9, 851, 324. 8, 176, 608. 1, 674, 716.
25 Total functional ex p enses . Addlines1throu g h 24e 825,284,898 . 676,967,433. 148,317,465. 0.26 Joint costs . Complete this line only it the organization
reported in column ( B) joint costs from a combined
educational campaign and fundraising solicitation
Check here 0' if followin g SOP 98-2 (ASC 958-720)
132010 01-23-12 Form 990 (2011)11
08530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Form 990 2011 Mission Hosp ital, Inc 56-0532141 Pa ellPart X Balance Sheet
(A) (B)Beginning of year End of year
1 Cash - non-interest-bearing 1
2 Savings and temporary cash investments 1,162,086. 2 1,162,088.3 Pledges and grants receivable, net 3
4 Accounts receivable, net 185,557,162. 4 288,372,80 8.5 Receivables from current and former officers, directors, trustees, key
,
employees, and highest compensated employees. Complete Part II
of Schedule L 5
6 Receivables from other disqualified persons (as defined under section
4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing
employers and sponsoring organizations of section 501 (c)(9) voluntary
employees' beneficiary organizations (see instructions) 6
y 7 Notes and loans receivable, net 7
, 8 Inventories for sale or use 14,016,791. 8 14,252,680.9 Prepaid expenses and deferred charges 6,330,771. 9 7,885,787.10a Land, buildings, and equipment: cost or other
basis. Complete Part VI of Schedule D 10a 1233291726.b Less: accumulated depreciation 10b 600,436,059. 622,916,007. 1 0c 632,855,667.
11 Investments - publicly traded securities 11
12 Investments - other securities. See Part IV, line 11 12
13 Investments - program-related. See Part IV, line 11 18,209,667. 13 19,691,858.14 Intangible assets 14
15 Other assets. See Part IV, line 11 15
16 Total assets. Add lines 1 throw h 15 must equal line 34 848,192,484. 16 964,220,888.17 Accounts payable and accrued expenses 66,911,812. 17 69,745,393.18 Grants payable 18
19 Deferred revenue 15, 464, 768. 19 36, 298, 827.20 Tax-exempt bond liabilities 20
0 21 Escrow or custodial account liability. Complete Part IV of Schedule D 2122 Payables to current and former officers, directors, trustees, key employees,
,o highest compensated employees, and disqualified persons. Complete Part II
of Schedule L 22
23 Secured mortgages and notes payable to unrelated third parties 23
24 Unsecured notes and loans payable to unrelated third parties 24
25 Other liabilities (including federal income tax, payables to related third
parties, and other liabilities not included on lines 17.24). Complete Part X of
ScheduleD 148,020. 25 3,385,271.26 Total liabilities . Add lines 17 throu gh 25 82,524,600. 26 109,429,491.
Organizations that follow SFAS 117, check here L and complete
lines 27 through 29, and lines 33 and 34.
E_ 27 Unrestricted net assets 765,667,884. 27 854,791,397.m 28 Temporarily restricted net assets 28
29 Permanently restricted net assets 29
LL Organizations that do not follow SFAS 117, check here ► 0 and
o complete lines 30 through 34.
30 Capital stock or trust principal, or current funds 30
31 Paid-in or capital surplus, or land, building, or equipment fund 31
32 Retained earnings, endowment, accumulated income, or other funds 32
Z 33 Total net assets or fund balances 765,667,884. 33 854,791,397.34 Total liabilities and net assets/fund balances 848,192,484. 34 964,220,888.
Form 990 (2011)
132011 01-23-12
1208530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Form 990 2011 Mission Hospital, Inc 56-0532141 Pa e12Part Xl Reconciliation of Net Assets
Check if Schedule 0 contains a response to any question in this Part XI
1 Total revenue (must equal Part VIII, column (A), line 12) 1 914,358,561.2 Total expenses (must equal Part IX, column (A), line 25) 2 825,284,898.3 Revenue less expenses. Subtract line 2 from line 1 3 89,073,663.4 Net assets or fund balances at beginning of year (must equal Part X, line 33, column (A)) 4 765,667,884.
5 Other changes in net assets or fund balances (explain in Schedule 0) 5 49,850.6 Net assets or fund balances at end of year. Combine lines 3, 4, and 5 (must eq ual Part X, line 33, column (B)) 6 85417911397.Part X[ Financial Statements and Reporting
Check if Schedule 0 contains a response to any question in this Part XII EJYes No
1 Accounting method used to prepare the Form 990 : = Cash 0 Accrual = Other
If the organization changed its method of accounting from a prior year or checked " Other ,' explain in Schedule 0.
2a Were the organization 's financial statements compiled or reviewed by an independent accountant? 2a X
b Were the organization 's financial statements audited by an independent accountant? 2b X
c If "Yes " to line 2a or 2b , does the organization have a committee that assumes responsibility for oversight of the audit,
review , or compilation of its financial statements and selection of an independent accountant? 2c X
If the organization changed either its oversight process or selection process during the tax year , explain in Schedule 0.
d If "Yes ' to line 2a or 2b, check a box below to indicate whether the financial statements for the year were issued on a
separate basis, consolidated basis , or both:
= Separate basis 0 Consolidated basis = Both consolidated and separate basis
3a As a result of a federal award , was the organization required to undergo an audit or audits as set forth in the Single Audit
Act and OMB Circular A• 133? 3a X
b If "Yes ," did the organization undergo the required audit or audits? If the organization did not undergo the required audit
or audits . explain why in Schedule 0 and describe any steps taken to undergo such audits. 3b F
Form 990 (2011)
13201201-23-12
1308530901 351485 56 -0532141 2011.05070 Mission Hospital, Inc 56-05322
SCHEDULE A Public Charity Status and Public Support(Form 990 or 990-EZ)
Complete if the organization is a section 501 (c)(3) organization or a section
Department of the Treasury 4947(a)(1) nonexempt charitable trust.
Internal Revenue Service ► Attach to Form 990 or Form 990-EZ. ► See separate instructions.
OMB No 1545-0047
2011Open to publicInspection
Name of the organization Employer identification number
Mission Hosp ital, Inc 56-0532141
Part Reason for Public Charity Status (All organizations must complete this part.) See Instructions
The organization is not a private foundation because it is: (For lines 1 through 11, check only one box)
1 E] A church, convention of churches, or association of churches described in section 170 (b)(1)(A)(i).
2 El A school described in section 170(b)(1)(A)(ii). (Attach Schedule E.)
3 A hospital or a cooperative hospital service organization described in section 170(b)(1)(A)(iii).
4 A medical research organization operated in conjunction with a hospital described in section 170(b)(1)(A)(iii). Enter the hospital's name,
city, and state:
5 71 An organization operated for the benefit of a college or university owned or operated by a governmental unit described in
section 170 (b)(1)(A)(iv) . (Complete Part II.)
6 D A federal, state , or local government or governmental unit described in section 170 (b)(1)(A)(v).
7 EJ An organization that normally receives a substantial part of its support from a governmental unit or from the general public described in
section 170 (b)(1)(A)(vi ). (Complete Part II.)
8 E] A community trust described in section 170(b)(1)(A)(vi ). (Complete Part II.)
9 = An organization that normally receives * ( 1) more than 33 1/3% of its support from contributions , membership fees, and gross receipts from
activities related to its exempt functions • subject to certain exceptions , and (2 ) no more than 33 1/3% of its support from gross investment
income and unrelated business taxable income (less section 511 tax) from businesses acquired by the organization after June 30, 1975.
See section 509(a )(2). (Complete Part III.)
10 An organization organized and operated exclusively to test for public safety . See section 509(a)(4).
11 An organization organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or
more publicly supported organizations described in section 509 (a)(1) or section 509(a)(2). See section 509(a)(3). Check the box that
describes the type of supporting organization and complete lines 11 a through 11 h.
a = Type I b = Type II c 0 Type III • Functionally integrated d = Type Ill Other
e By checking this box , I certify that the organization is not controlled directly or indirectly by one or more disqualified persons other than
foundation managers and other than one or more publicly supported organizations described in section 509 (a)(1) or section 509(a)(2).
f If the organization received a written determination from the IRS that it is a Type I , Type II, or Type III
supporting organization, check this box
Since August 17, 2006, has the organization accepted any gift or contribution from any of the following persons?
(i) A person who directly or indirectly controls, either alone or together with persons described in (II) and (iii) below,
the governing body of the supported organization?
(ii) A family member of a person described in (I) above''
(iii) A 35% controlled entity of a person described in (I) or (II) above?
Provide the following information about the supported organization(s).
Yes No
11 i
11 ii
(i) Name of supportedorganization
(II) EIN(iii) Type oforganization
(described on lines 1-9above or IRC section
iv) Is the organization
in col (1) listed in yourgoverning document?
(v) Did you notify theorganization in col(i) of your support?
(vi) Is thecol
(I)or Inzedlln
the(I) gaU S
(vii) Amount of
support
(see instructions )) Yes No Yes No Yes No
Total
LHA For Paperwork Reduction Act Notice, see the Instructions for Schedule A (Form 990 or 990 -EZ) 2011
Form 990 or 990-EZ.
13202101-24-12
1408530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Schedule A (Form 990 or 990-E 2011 Page 2
Part It Support Schedule for Organizations Described in Sections 170(b)( 1)(A)(iv) and 170(b)(1)(A)(vi)(Complete only if you checked the box on line 5, 7, or 8 of Part I or if the organization failed to qualify under Part III. If the organization
fails to qualify under the tests listed below, please complete Part III.)
Section A. Public SupportCalendar year (or fiscal year beginning in ) ► (a) 2007 (b) 2008 (c) 2009 2010 (e) 2011 Total
1 Gifts, grants, contributions, and
membership fees received. (Do not
include any 'unusual grants.")
2 Tax revenues levied for the organ-
ization's benefit and either paid to
or expended on its behalf
3 The value of services or facilities
furnished by a governmental unit to
the organization without charge
4 Total. Add lines 1 through 3
5 The portion of total contributions
by each person (other than a
governmental unit or publicly
supported organization) included
on line 1 that exceeds 2% of the
amount shown on line 11,
column (f)
6 Public support. Subtract line 5 from line 4
Section B. Total Support
Calendar year ( or fiscal year beginning In) ►7 Amounts from line 4
8 Gross income from interest,
dividends, payments received on
securities loans, rents, royalties
and income from similar sources
9 Net income from unrelated business
activities, whether or not the
business is regularly carried on
10 Other income. Do not include gain
or loss from the sale of capital
11
12
(a) 2007 (b) 2008 (c) 2009 (d) 2010 (e) 2011 Total
assets (Explain in Part IV.)
Total support . Add lines 7 through 10
Gross receipts from related activities, etc. (see instructions) 12
13 First five years . If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a section 501 (c)(3)
Section C.14 Public support percentage for 2011 (line 6, column (f) divided by line 11, column (f)) 14 %
15 Public support percentage from 2010 Schedule A, Part II, line 14 15 %
16a 33 1 /3% support test - 2011 . If the organization did not check the box on line 13, and line 14 is 33 1/3% or more, check this box and
stop here . The organization qualifies as a publicly supported organization ►0b 331 /3% support test - 2010. If the organization did not check a box on line 13 or 16a, and line 15 is 33 1/3% or more, check this box
and stop here . The organization qualifies as a publicly supported organization ►017a 10% -facts -and-circumstances test - 2011 . If the organization did not check a box on line 13, 16a, or 16b, and line 14 is 10% or more,
and if the organization meets the "facts-and-circumstances" test, check this box and stop here . Explain in Part IV how the organization
meets the "facts-and-circumstances" test. The organization qualifies as a publicly supported organization ►0b 10% -facts -and-circumstances test - 2010 . If the organization did not check a box on line 13, 16a, 16b, or 17a, and line 15 is 10% or
more, and if the organization meets the "facts-and-circumstances" test, check this box and stop here . Explain in Part IV how the
organization meets the "facts-and-circumstances" test. The organization qualifies as a publicly supported organization ►018 Private foundation . If the oroamzation did not check a box on line 13, 16a, 16b, 17a, or 17b, check this box and see instructions ►
Schedule A (Form 990 or 990-EZ) 2011
13202201-24-12
1508530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Schedule A (Form 990 or 990-EZ) 2011 Page 3Part Il Support Schedule for Organizations Described in Section 509(a)(2)
(Complete only if you checked the box on line 9 of Part I or if the organization failed to qualify under Part II. If the organization fails to
qualify under the tests listed below, please complete Part II.)
Section A. Public SupportCalendar year ( or fiscal year beginning in ) ► (a) 2007 (b) 2008 (c) 2009 (cQ 2010 (e) 2011 Total
1 Gifts, grants, contributions, and
membership fees received. (Do not
include any "unusual grants ")
2 Gross receipts from admissions,merchandise sold or services per-formed, or facilities furnished inany activity that is related to theorganization's tax-exempt purpose
3 Gross receipts from activities thatare not an unrelated trade or bus-
iness under section 513
4 Tax revenues levied for the organ-
ization's benefit and either paid to
or expended on its behalf
5 The value of services or facilities
furnished by a governmental unit to
the organization without charge
6 Total . Add lines 1 through 5
7a Amounts included on lines 1, 2, and
3 received from disqualified persons
b Amounts included on lines 2 and 3 received
from other than disqualified persons that
exceed the greater of $5,000 or 1 % of the
amount on line 13 for the year
c Add lines 7a and 7b
8 Public support (Subuzict line 7c from line 6 )
Section B. Total SupportCalendar year (or fiscal year beginning in) ►9 Amounts from line 6
10a Gross income from interest,dividends, payments received onsecurities loans, rents, royaltiesand income from similar sources
b Unrelated business taxable income
(less section 511 taxes) from businesses
acquired after June 30, 1975
c Add lines 1 Oa and 1 Ob11 Net income from unrelated business
activities not included in line 10b,whether or not the business isregularly carried on
12 Other income. Do not include gainor loss from the sale of capitalassets (Explain in Part IV.)
13 Total support (Add lines 9, 10c, 11, and 12)
(a ) 2007 b 2008 c 2009 2010 a 2011 Total
14 First five years . If the Form 990 is for the organization ' s first , second, third, fourth, or fifth tax year as a section 501 (c)(3) organization,
check this box and stop here ► []Section C . Computation of Public SuDDOrt Percentage15 Public support percentage for 2011 (line 8, column (f) divided by line 13, column (f)) 15 %
16 Public support percentage from 2010 Schedule A, Part III, line 15 16 %
Section D. Computation of Investment Income Percentage
17 Investment income percentage for 2011 (line 10c, column (f) divided by line 13, column (f)) 17
18 Investment income percentage from 2010 Schedule A, Part III, line 17 18
19a 33 1 /3% support tests - 2011 . If the organization did not check the box on line 14, and line 15 is more than 33 1/3%, and line 17 is not
more than 33 1/3%, check this box and stop here . The organization qualifies as a publicly supported organization
b 33 1 /3% support tests - 2010 . If the organization did not check a box on line 14 or line 19a, and line 16 is more than 33 1/3%, and
line 18 is not more than 33 1/3%, check this box and stop here . The organization qualifies as a publicly supported organization ►020 Private foundation . If the organization did not check a box on line 14, 19a, or 19b, check this box and see instructions ► LI132023 01-24- 12 Schedule A (Form 990 or 990-EZ) 2011
16
%
08530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
SCHEDULE C(Form 990 or 990-EZ)
Department of the TreasuryInternal Revenue Service
Political Campaign and Lobbying ActivitiesFor Organizations Exempt From Income Tax Under section 501 (c) and section 527
01 Complete if the organization is described below. 01 Attach to Form 990 or Form 990-EZ.
101, See seDarate instructions.
OMB No 1545-0047
2011Open to Public
Inspection
If the organization answered "Yes" to Form 990, Part IV , line 3, or Form 990-EZ , Part V, line 46 (Political Campaign Activities), then
• Section 501 (c)(3) organizations: Complete Parts I•A and B. Do not complete Part I•C.
• Section 501(c) (other than section 501 (c)(3)) organizations: Complete Parts I•A and C below. Do not complete Part I•B.
• Section 527 organizations: Complete Part I•A only.
If the organization answered "Yes" to Form 990, Part IV, line 4, or Form 990-EZ , Part VI, line 47 (Lobbying Activities), then
• Section 501(c)(3) organizations that have filed Form 5768 (election under section 501(h)): Complete Part II-A Do not complete Part II-B.
• Section 501 (c)(3) organizations that have NOT filed Form 5768 (election under section 501(h)): Complete Part II-B. Do not complete Part II-A
If the organization answered "Yes" to Form 990, Part IV , line 5 (Proxy Tax), or Form 990-EZ, Part V, line 35c (Proxy Tax), then
• Section 501 (c )(4) , (5 ) , or (6 ) organizations: Complete Part Ill.
Name of organization Employer identification number
Mission Hospital, Inc 1 56-0532141
?Part [A Complete if the organization is exempt under section 501 (c) or is a section 527 organization.
1 Provide a description of the organization's direct and indirect political campaign activities in Part IV.
2 Political expenditures $
3 Volunteer hours
Part l-B Complete if the organization is exempt under section 501 (c)(3).1 Enter the amount of any excise tax incurred by the organization under section 4955 $
2 Enter the amount of any excise tax incurred by organization managers under section 4955
3 If the organization incurred a section 4955 tax, did it file Form 4720 for this year? Yes No
4a Was a correction made? Yes No
b If "Yes describe in Part IV.
Part i-G Complete if the organization is exempt under section 501 (c), except section 501 (c)(3).
1 Enter the amount directly expended by the filing organization for section 527 exempt function activities $
2 Enter the amount of the filing organization's funds contributed to other organizations for section 527
exempt function activities $
3 Total exempt function expenditures. Add lines 1 and 2. Enter here and on Form 1120•POL,
line 17b $
4 Did the filing organization file Form 1120-POL for this year? Yes No
5 Enter the names, addresses and employer identification number (EIN) of all section 527 political organizations to which the filing organization
made payments. For each organization listed, enter the amount paid from the filing organization's funds. Also enter the amount of political
contributions received that were promptly and directly delivered to a separate political organization, such as a separate segregated fund or a
political action committee (PAC). If additional space is needed, provide information in Part IV.
(a) Name (b) Address (c) EIN (d) Amount paid fromfiling organization's
funds. If none, enter -0•.
(e) Amount of politicalcontributions received and
promptly and directlydelivered to a separatepolitical organization
If none, enter -0-.
For Paperwork Reduction Act Notice , see the Instructions for Form 990 or 990 -EZ. Schedule C (Form 990 or 990- EZ) 2011
LHA
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2108530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleC (Form 990or990•E 2011 Mission Hospital, Inc 56-0532141 Pa e2Part fl-A Complete if the organization is exempt under section 501 (c)(3) and filed Form 5768
(election under section 501(h)).
A Check 00, LJ if the filing organization belongs to an affiliated group (and list in Part IV each affiliated group member's name, address, EIN,
expenses , and share of excess lobbying expenditures).
01 if the filina oraanization checked box A and " limited cor
(a) Filing I (b) Affiliated groupLimits on Lobbying Expenditures
organization's totals(The term expenditures means amounts paid or incurred .) totals
1 a Total lobbying expenditures to influence public opinion (grass roots lobbying)
b Total lobbying expenditures to influence a legislative body (direct lobbying)
c Total lobbying expenditures (add lines 1 a and 1 b)
d Other exempt purpose expenditures
g Grassroots nontaxable amount (enter 25% of line 10
h Subtract line 1g from line la. If zero or less, enter -0-
i Subtract line if from line 1c. If zero or less, enter •0•
If there is an amount other than zero on either line 1 h or line 11, did the organization file Form 4720
reporting section 4911 tax for this year? El Yes El No
4-Year Averaging Period Under Section 501(h)
(Some organizations that made a section 501(h) election do not have to complete all of the five
columns below. See the instructions for lines 2a through 2f on page 4.)
Lobbying Expenditures During 4-Year Averaging Period
Calendar year(or fiscal year beginning in)
(a) 2008 (b) 2009 (c) 2010 (d) 2011 (e) Total
2a Lobby in g nontaxable amount
b Lobbying ceiling amount
(150% of line 2a, column(e))
c Total lobbyin g expenditures
d Grassroots nontaxable amount
e Grassroots ceiling amount
(150% of line 2d, column (e))
f Grassroots lobby in g expenditures
Schedule C (Form 990 or 990-EZ) 2011
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2208530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
e Total exempt purpose expenditures (add lines 1c and 1d)
Schedule C (Form 990or990•E 2011 Mission Hospital, Inc 56-0532141 Pa e3
Part 11-8 Complete if the organization is exempt under section 501(c)(3) and has NOT filed Form 5768
(election under section 501(h)).
For each "Yes" response to lines la through 1/ below, provide in Part IV a detailed description (a) (b)
of the lobbying activity. Yes No Amount
1 During the year, did the filing organization attempt to influence foreign, national, state or
local legislation, including any attempt to influence public opinion on a legislative matter
or referendum, through the use of:
a Volunteers? X
b Paid staff or management (include compensation in expenses reported on lines 1 c through 11)? X
c Media advertisements? X
d Mailings to members, legislators, or the public? X
e Publications, or published or broadcast statements? X
f Grants to other organizations for lobbying purposes? X
g Direct contact with legislators, their staffs, government officials, or a legislative body? X 91,145.
h Rallies , demonstrations, seminars, conventions, speeches, lectures, or any similar means? X
i Other activities? X 231 , 750.
j Total. Add lines 1 c through 11 322,895.
2a Did the activities in line 1 cause the organization to be not described in section 501 (c)(3)? X
b If "Yes," enter the amount of any tax incurred under section 4912
c If "Yes," enter the amount of any tax incurred by organization managers under section 4912
d If the filing organization incurred a section 4912 tax , did it file Form 4720 for this year?
Part Ili-A Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section
501 (c)(6).Yes No
1 Were substantially all (90% or more) dues received nondeductible by members? 1
2 Did the organization make only in-house lobbying expenditures of $2,000 or less? 2
3 Did the organization agree to carry over lobby in g and political expenditures from the prior year? 3
Part III-B Complete if the organization is exempt under section 501 (c)(4), section 501(c)(5), or section
501(c)(6) and if either (a) BOTH Part III-A, lines 1 and 2, are answered " No" OR (b) Part III -A, line 3, is
answered "Yes."
1 Dues, assessments and similar amounts from members 1
2 Section 162(e) nondeductible lobbying and political expenditures (do not include amounts of political
expenses for which the section 527 (f) tax was paid).
a Current year 2a
b Carryover from last year 2b
c Total 2c
3 Aggregate amount reported in section 6033(e)(1)(A) notices of nondeductible section 162(e) dues 3
4 If notices were sent and the amount on line 2c exceeds the amount on line 3, what portion of the excess
does the organization agree to carryover to the reasonable estimate of nondeductible lobbying and political
expenditure next year? 4
5 Taxable amount of lobbying and political expenditures (see instructions) 5
Complete this part to provide the descriptions required for Part I-A, line 1; Part 1•B, line 4 ; Part I•C, line 5; Part II -A; and Part II- B, line 1 Also, complete
this part for any additional information.
Part II-B, Line 1, Lobbying Activities:
Mission Hospital employs consultants for health care issues - Other
than direct contact with legislators, staffs, government officials or a
legislative body, other activities include tracking of proposed and
filed legislation, attendance at administrative and legislative
committee meetings, advising senior leadership on strategy,Schedule C (Form 990 or 990-EZ) 2011
132043 01-27-12
2308530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleC (Form 990or990•E 2011 Mission Hospital , Inc 56-0532141 Pa e4
Part tV Supplemental Information (continued)
oraanization of briefing sessions and loqistics and scheduling of
senior leadership visits.
Breakdown of above costs:
Direct contact with legislators paid to independent contractors $
56,750
Estimate of portion of AHA dues expended for specific lobbying $
34, 395
Other activities paid to independent contractors(described above) $
56,750
Advocacy on National Issues
$175,000
Schedule C (Form 990 or 990-EZ) 2011
132044 01-27-12
2408530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
SCHEDULE D Supplemental Financial Statements V'"'°'"° "'-VV"'(Form 990) ► Complete if the organization answered "Yes," to Form 990 , 2011
Part IV , line 6, 7 , 8, 9, 10 , 11 a, l l b, 11 c, l l d , Ile, 11If , 12a, or 12b. Open to Pub.116Department the TreasuryInternal Reven ue Serv
iceice 10, Attach to Form 990. 10' See separate instructions . Instpection
Name of the organization Employer identification number
Mission Hosp ital, Inc 56-0532141Part I Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts . Complete if the
organization answered "Yes" to Form 990, Part IV, line 6.(a) Donor advised funds (b) Funds and other accounts
1 Total number at end of year
2 Aggregate contributions to (during year)
3 Aggregate grants from (during year)
4 Aggregate value at end of year
5 Did the organization inform all donors and donor advisors in writing that the assets held in donor advised funds
are the organization's property, subject to the organization's exclusive legal control? Yes No
6 Did the organization inform all grantees, donors, and donor advisors in writing that grant funds can be used only
for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring
impermissible private benefit? 0 Yes No
Part It Conservation Easements . Complete if the organization answered "Yes' to Form 990, Part IV, line 7.
1 Purpose (s) of conservation easements held by the organization (check all that apply)
Preservation of land for public use (e . g., recreation or education ) Preservation of an historically important land area
Protection of natural habitat Preservation of a certified historic structure
Preservation of open space
2 Complete lines 2a through 2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last
day of the tax year.
[ 1 Held at the End of the Tax Year
a Total number of conservation easements 2a
b Total acreage restricted by conservation easements 2b
c Number of conservation easements on a certified historic structure included in (a) 2c
d Number of conservation easements included in (c) acquired after 8/17/06, and not on a historic structure
listed in the National Register 2d
3 Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during the tax
year ►4 Number of states where property subject to conservation easement is located ►
5 Does the organization have a written policy regarding the periodic monitoring, inspection, handling of
violations, and enforcement of the conservation easements it holds? 0 Yes E] No
6 Staff and volunteer hours devoted to monitoring, inspecting, and enforcing conservation easements during the year ►
7 Amount of expenses incurred in monitoring, inspecting, and enforcing conservation easements during the year ► $
8 Does each conservation easement reported on line 2(d) above satisfy the requirements of section 170(h)(4)(B)(I)
and section 170(h)(4)(B)(II)? 0 Yes No
9 In Part XIV, describe how the organization reports conservation easements in its revenue and expense statement, and balance sheet, and
include, if applicable, the text of the footnote to the organization's financial statements that describes the organization's accounting for
conservation easements.
Pert It[ Organizations Maintaining Collections of Art, Historical Treasures , or Other Similar Assets.
Complete if the organization answered "Yes" to Form 990, Part IV, line 8
is If the organization elected, as permitted under SFAS 116 (ASC 958), not to report in its revenue statement and balance sheet works of art,
historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide, in Part XIV,
the text of the footnote to its financial statements that describes these items.
b If the organization elected, as permitted under SFAS 116 (ASC 958), to report in its revenue statement and balance sheet works of art, historical
treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide the following amounts
relating to these items.
(i) Revenues Included in Form 990, Part VIII, line 1 ► $
(ii) Assets included in Form 990, Part X ► $
2 If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide
the following amounts required to be reported under SFAS 116 (ASC 958) relating to these items:
a Revenues Included in Form 990, Part VIII, line 1 ► $
b Assets Included in Form 990, Part X ► $
LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990. Schedule D (Form 990) 201113205101-23-12
2508530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleD (Form 990 2011 Mission Hospital, Inc 56-0532141 Pa e2
part 111 Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued)
3 Using the organization's acquisition, accession, and other records, check any of the following that are a significant use of its collection items
(check all that apply):
a EDPublic exhibition d 0 Loan or exchange programs
b Scholarly research e 0 Other
c Preservation for future generations
4 Provide a description of the organization's collections and explain how they further the organization's exempt purpose in Part XIV.
5 During the year, did the organization solicit or receive donations of art, historical treasures, or other similar assets
to be sold to raise funds rather than to be maintained as part of the orci anization's collection? 0 Yes No
Part IV Escrow and Custodial Arrangements . Complete if the organization answered "Yes" to Form 990, Part IV, line 9, or
reported an amount on Form 990 , Part X, line 21.
la Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not included
on Form 990, Part X?
b If "Yes," explain the arrangement in Part XIV and complete the following table:
c Beginning balance
d Additions during the year
e Distributions during the year
f Ending balance
2a Did the organization include an amount on Form 990, Part X, line 21?
b If "Yes." explain the arrangement in Part XIV.
= Yes = No
Part V Endowment Funds . Complete if the organization answered "Yes" to Form 990, Part IV, line 10.
la Beginning of year balance
b Contributions
c Net investment earnings, gains, and losses
d Grants or scholarships
e other expenditures for facilities
and programs
f Administrative expenses
g End of year balance
(a ) Current year (b) Prior year (c) Two years back d Three ears back a Four years back
4 , 664 , 953. 4 , 711 , 681. 4 , 547 , 329. 3 1 839 , 833.
61 , 836. 103 544. 131 834. 552 663.
900 879. 65 , 168. 183 727. 307 349.
229 450. 215 440. 151 209. 152 516.
5 , 398 , 218. 4 , 664 , 953. 4 1 711 , 681. 4 , 547 , 329.
2 Provide the estimated percentage of the current year end balance (line 1 g, column (a)) held as,
a Board designated or quasi•endowment ► 15 • 4 3 %
b Permanent endowment ► 63.93 %c Temporarily restricted endowment ► 20.64 %
The percentages in lines 2a, 2b, and 2c should equal 100%.
3a Are there endowment funds not in the possession of the organization that are held and administered for the organization
by: Yes No
(i) unrelated organizations 3a i X
(ii) related organizations 3a ii X
b If "Yes" to 3a(ii), are the related organizations listed as required on Schedule R? 3b X
4 Describe in Part XIV the intended uses of the organization's endowment funds.
Part V1 Land_ Buildinas . and Eauioment . See Form 990. Part X. line 10.
Description of property (a) Cost or other
basis (investment)
(b) Cost or other
basis (other)
(c) Accumulated
depreciation
(d) Book value
la Land 31 ,336,747. : 31,336,747.
b Buildings 712, 344, 203. 40, 982, 296 .
c Leasehold improvements 8, 516 , 4 5 4.
.
2, 3 8 0, 916 .
d Equipment 324, 317, 365. 80, 723, 734 .
e other 156,776,957. 77,431,974.Total . Add lines 1 a throu g h 1 e. (Column (d) must equal Form 990, Part X column (B), line 10(c)) ► 632,855,667.
Schedule D (Form 990) 2011
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2608530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleD (Form 990 2011 Mission Hospital, Inc 56-0532141 Pa e3
Part VII Investments - Other Securities . See Form 990, Part X, line 12.
(a) Description of security or category
(including name of security)(b) Book value
(c) Method of valuation:
Cost or end-of-year market value
(1) Financial derivatives
(2) Closely- held equity interests
(3) Other
(A)
(B)
(C)
( D)
(G )
(H )
Total. ( Col ( b ) must a ual Form 990 , Part X col 8 line 12 ►
Part Vi11I Investments - Program Related . See Form 990, Part X, line 13
(a) Description of investment type (b) Book value(c) Method of valuation:
Cost or end-of-year market value
1
(2 )
(3 )
(4 )
(5 )
(6 )
(7 )
(8 )
(9)
( 10 )
Total. ( Col ( b ) must e q ual Form 990 , Part X , col ( B ) line 13 ►
2708530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Schedule D (Form 990 ) 2011 Mission Hospital, Inc 56-0532141 Page4
Part X1 I Reconciliation of Change in Net Assets from Form 990 to Audited Financial Statements
1 Total revenue (Form 990, Part VIII, column (A), line 12) 12 Total expenses (Form 990, Part IX, column (A), line 25) 2
3 Excess or (deficit) for the year. Subtract line 2 from line 1 3
4 Net unrealized gains (losses) on investments 4
5 Donated services and use of facilities 5
6 Investment expenses 6
7 Prior period adjustments 7
8 Other (Describe in Part XIV.)
9 Total adjustments (net). Add lines 4 through 8T-9n10 Excess or deficit for the year per audited financial statements. Combine lines 3 and 9
Part Al Reconciliation of Revenue per Audited Financial Statements With Revenue per Return
1 Total revenue, gains, and other support per audited financial statements 1
2 Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a Net unrealized gains on investments 2a
b Donated services and use of facilities 2b
c Recoveries of prior year grants 2c
d Other (Describe in Part XIV.) 2d
e Add lines 2a through 2d 2e
3 Subtract line 2e from line 1 3
4 Amounts included on Form 990, Part VIII, line 12, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b 4a
b Other (Describe in Part XIV.) 4b
c Add lines 4a and 4b 4c
5 Total revenue. Add lines 3 and 4c. his must equal Form 990, Part 1 line 12 ) 5
Part X1111 Reconciliation of Expenses per Audited Financial Statements With Expenses per Return
1 Total expenses and losses per audited financial statements 1
2 Amounts included on line 1 but not on Form 990, Part IX, line 25:
a Donated services and use of facilities 2a
b Prior year adjustments 2b
c Other losses 2c
d Other (Describe in Part XIV.) 2d
e Add lines 2a through 2d 2e
3 Subtract line 2e from line 1 3
4 Amounts included on Form 990, Part IX, line 25, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b 4a
b Other (Describe in Part XIV) 4b
c Add lines 4a and 4b 4c
5 Total expenses Add lines 3 and 4c. his must equal Form 990, Part 1 line 18. ) 5
Part XIV Supplemental Information
Complete this part to provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1 a and 4; Part IV, lines 1 b and 2b; Part V, line 4; Part
X, line 2; Part XI, line 8, Part XII, lines 2d and 4b; and Part XIII, lines 2d and 4b. Also complete this part to provide any additional information.
Part V, line 4: Endowment Funds are held at the Mission Healthcare
Foundation, Inc and used for various donor restrictions in accordance with
Mission Hospital's tax exempt purpose.
Part X, Line 2: Mission applies the provisions of FASB ASC Topic 740
for Income Taxes in accountinq for uncertainty in income taxes. ASC 740
provides guidance on when tax positions are recognized in an entity's
financial statements and how the values of these positions are determined.Schedule D (Form 990) 2011
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2808530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleD (Form 990 2011 Mission Hosp ital , Inc 56-0532141 Pa e5Par AR Supplemental Information (continued)
There is currently no impact on mission's combined financial statements as
a result of the aoolication of ASC 740.
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2908530901 351485 56-0532141 2011.05070 Mission Hospital, Inc
Schedule D (Form 990) 2011
56-05322
SCHEDULE H OMB No 1545-0047
(Form 990) Hospitals10, 2 1Complete if the organization answered "Yes" to Form 990, Part IV , question 20.
Department of the Treasury ► Attach to Form 990. ► See separate instructions . Open to PublicInternal Revenue Service Inspection
Name of the organization Employer identification number
Mission Hosp ital, Inc 56-0532141Part I Financial Assistance and Certain Other Community Benefits at Cost
Yes No
1 a Did the organization have a financial assistance policy during the tax year? If "No," skip to question 6a la X
b If "Yes ," was it a written policy? 1 b X2 If the organization had multiple hospital facilities , indicate which of the following best describes application of the financial assistance policy to its vanous hospital
facilities during the tax year
Applied uniformly to all hospital facilities EJ Applied uniformly to most hospital facilities
Generally tailored to individual hospital facilities
3 Answer the following based on the financial assistance eligibility criteria that applied to the largest number of the organization ' s patients during the tax year
a Did the organization use Federal Poverty Guidelines ( FPG) to determine eligibility for providing free care ? If "Yes,"
Indicate which of the following was the FPG family income limit for eligibility for free care: 3a X
0 100% 0 150% 0 200% [_1 Other %
b Did the organization use FPG to determine eligibility for providing discounted care? If "Yes," indicate which of the
following was the family income limit for eligibility for discounted care: 3b X
= 200% = 250% 300% El 350% E] 400% Other %
c If the organization did not use FPG to determine eligibility , describe in Part VI the income based criteria for determining
eligibility for free or discounted care . Include in the description whether the organization used an asset test or other
threshold , regardless of income , to determine eligibility for free or discounted care.
4 Did the organization ' s financial assistance policy that applied to the largest number of its patients during the tax year provide for free or discounted care to the
'medicall indi ent'?
4 X
y g
X5a Did the organization budget amounts for free or discounted care provided under its financial assistance policy during the tax year? 5a
b If "Yes ," did the organization ' s financial assistance expenses exceed the budgeted amount? 5b X
c If 'Yes " to line 5b , as a result of budget considerations , was the organization unable to provide free or discounted
care to a patient who was eligible for free or discounted care? 5c X
6a Did the organization prepare a community benefit report during the tax year? 6a X
b If "Yes ," did the organization make it available to the public? 6b X
Comp lete the followin g table usin g the worksheets provided in the Schedule H instructions Do not submit these worksheets with the Schedule H
7 Cinanniel Acmetanrn and (.nrtain (lthar (:nmmiinity Ranafit at rnct
Financial Assistance and
Means-Tested Government Programs
(a) Number ofactivities or
programs (optional)
(b) Personsserved
(optional )
(C) Totalcommunity
benefit expense
(d) Directoffsettingrevenue
(e) Netcommunity
benefit expense
(f) Percent oftotal expense
a Financial Assistance at cost (from
Worksheet 1) 2 0427511. 0427511. 2.48%
b Medicaid (from Worksheet 3,
column a) 113055208 120470509 - 7415301. .00%
c Costs of other means -tested
government programs (from
Worksheet 3, column b)
d Total Financial Assistance and
Means-Tested Government Programs 133482719 120470509 13012210. 2.48'o
Other Benefits
e Community health
improvement services and
community benefit operations
(from Worksheet 4) 8706474. 930,504. 7775970. .94%f Health professions education
(from Worksheet 5) 9443580. 6929301. 2514279. .30%g Subsidized health services
(from Worksheet 6) 31926040. 5995242. 25930798. 3.14%h Research (from Worksheet 7) 2223071. 570,758. 1652313. .20%i Cash and in -kind contributions
for community benefit (from
worksheet s) 3631549. 3631549. .44%j Total . Other Benefits 5 5930714. 14425805. 141504909. 5.02%k Total . Add lines 7dand7 189413433 134896314 54517119. 7.50%
132091 01-23-12 LHA For Paperwork Reduction Act Notice , see the Instructions for Form 990.
3008530901 351485 56-0532141 2011.05070 Mission Hospital, Inc
Schedule H (Form 990) 2011
56-05322
ScheduleH (Form 990 2011 Mission Hosp ital , Inc 56-0532141 Pa e2
Part I1 Community Building Activities complete this table if the organization conducted any community building activities during the
tax year. and describe in Part VI how its community budding activities promoted the health of the communities it serves.
(a) Number ofactivities or programs
(optional)
(b) Persons
served (optional)(C) Totalcommunity
building expense
(d) Directoffsetting revenue
(e) Netcommunity
building expense
(f) Percent of
total expense
1 Ph ysical im p rovements and housin g
2 Economic development
3 Community support
4 Environmental improvements
5 Leadership development and
trainin g for communit y members
6 Coalition buildin g
7 Community health improvement
advocacy
8 Workforce development 811, 611. 811, 611. .10%9 Other
10 Total 811,611. 1 1 811 611. .10%
I.Part RI I Bad Debt, Medicare, & Collection Practices
Section A. Bad Debt Expense
1 Did the organization report bad debt expense in accordance with Healthcare Financial Management Association
Statement No. 15? 1
2 Enter the amount of the organization's bad debt expense 2 6 9 , 6 4 4 , 4 5 6 .
3 Enter the estimated amount of the organization's bad debt expense attributable to
patients eligible under the organization's financial assistance policy 3
4 Provide in Part VI the text of the footnote to the organization's financial statements that describes bad debt
expense. In addition, describe the costing methodology used in determining the amounts reported on lines
2 and 3, and rationale for including a portion of bad debt amounts as community benefit.
Section B. Medicare
5 Enter total revenue received from Medicare (including DSH and IME) 5 53, 0 0 7 , 19 0 .
6 Enter Medicare allowable costs of care relating to payments on line 5 6 R 71,033 , 475.
7 Subtract line 6 from line 5. This is the surplus (or shortfall) 7 j- 1 8 , 0 2 6 , 2 85 .
8 Describe in Part VI the extent to which any shortfall reported in line 7 should be treated as community benefit.
Also describe in Part VI the costing methodology or source used to determine the amount reported on line 6.
Check the box that describes the method used:
Cost accounting system MI Cost to charge ratio El Other
Section C . Collection Practices
9a Did the organization have a written debt collection policy during the tax year? 9a
b If "Yes," did the organization's collection policy that applied to the largest number of its patients during the tax year contain provisions on the
collection practices to be followed for patients who are known to q uali fy for financial assistance' Describe in Part VI 9b
Yes I No
X
X
XPart IV I Manaaement Companies and Joint Ventures (see instructions)
(a) Name of entity (b) Description of primaryactivity of entity
(c) Organization'sprofit % or stockownership %
(d) Officers, direct-ors, trustees, orkey employees'profit % or stockownership %
(e) Physicians'profit % or
stockownership %
1 Asheville Imaging ut atient ImagingCenter, LLP Services 69.00% .84% 29.16%
a netic Resonance
2 Asheville MRI Imag ing 50.00% 2.82% 47.18%-
132092 01-23-12
3108530901 351485 56-0532141 2011.05070 Mission Hospital, Inc
Schedule H (Form 990) 2011
56-05322
ScheduleH (Form 990 2011 Mission Hospital , Inc 56-0532141 Pa e3
Part 1l Facility Information
Section A. Hospital Facilities
(list in order of size, from largest to smallest)
ow many hospital facilities did the organization operate
during the tax year? 1
Name and address
d^'
o
'a
C
U
=i
rn
f0
-5E
N
N
0
YO-
o
y
LU
0^
o
o
L
U
f-
U)
Nt
ro
ftl
Y
U
T„
ro
CoN
No^
o
N'iw
OEw
her (describe)
1 Mission Hosp ital509 and 428 Biltmore AvenueAsheville, NC 28801 X X X X
132093 01-23-12
3208530901 351485 56-0532141 2011.05070 Mission Hospital, Inc
Schedule H (Form 990) 2011
56-05322
ScheduleH (Form 990 2011 Mission Hosp ital, Inc 56-0532141 Pa e4
Part Y Facility Information (continued)Section B. Facility Policies and Practices
(Complete a separate Section B for each of the hospital facilities listed in Part V, Section A)
Name of Hospital Facility : Mission Hospital, Inc.
Line Number of Hospital Facility (from Schedule H, Part V, Section A):
Community Health Needs Assea tax year 2011
1 During the tax year or any prior tax year , did the hospital facility conduct a community health needs assessment (Needs
Assessment)? If "No," skip to line 8
If "Yes," indicate what the Needs Assessment describes (check all that apply):
a 0 A definition of the community served by the hospital facility
b Demographics of the community
c Existing health care facilities and resources within the community that are available to respond to the health needs
of the community
d How data was obtained
e The health needs of the community
f Primary and chronic disease needs and other health issues of uninsured persons , low-income persons , and minority
groups
g The process for identifying and prioritizing community health needs and services to meet the community health needs
h The process for consulting with persons representing the community's interests
i Information gaps that limit the hospital facility's ability to assess the community ' s health needs
j Other (describe in Part VI)
2 Indicate the tax year the hospital facility last conducted a Needs Assessment: 20
3 In conducting its most recent Needs Assessment , did the hospital facility take into account input from persons who represent
the community served by the hospital facility? If "Yes," describe in Part VI how the hospital facility took into account input
from persons who represent the community , and identify the persons the hospital facility consulted
4 Was the hospital facility ' s Needs Assessment conducted with one or more other hospital facilities ? If "Yes," list the other
hospital facilities in Part VI
5 Did the hospital facility make its Needs Assessment widely available to the public?
If "Yes," indicate how the Needs Assessment was made widely available (check all that apply):
a Hospital facility' s website
b Available upon request from the hospital facility
c Other (describe in Part VI)
6 If the hospital facility addressed needs identified in its most recently conducted Needs Assessment , indicate how (check all
that apply)-
a Adoption of an implementation strategy to address the health needs of the hospital facility 's community
b Execution of the implementation strategy
c Participation in the development of a community -wide community benefit plan
d Participation in the execution of a community -wide community benefit plan
e Inclusion of a community benefit section in operational plans
f Adoption of a budget for provision of services that address the needs identified in the Needs Assessment
g Prioritization of health needs in its community
h Prioritization of services that the hospital facility will undertake to meet health needs in its community
i Other (describe in Part VI)
7 Did the hospital facility address all of the needs identified in its most recently conducted Needs Assessment ? If "No," explain
in Part VI which needs it has not addressed and the reasons why it has not addressed such needs
Financial Assistance
Did the hospital facility have in place during the tax year a written financial assistance policy that.
8 Explained eligibility criteria for financial assistance, and whether such assistance includes free or discounted care?
9 Used federal poverty guidelines (FPG) to determine eligibility for providing free care?
If "Yes," indicate the FPG family income limit for eligibility for free care: 150 %
If "No," explain in Part VI the criteria the hospital facility used.
132094 01-23-12
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Schedule H (Form 990) 2011
3308530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Mission Hospital, Inc 56-0532141 Pa e5Pali Y Facilitv Information (continued) Mission Hospital, Inc.
Yes No
10 Used FPG to determine eligibility for providing discounted care? 10 X
If "Yes," indicate the FPG family income limit for eligibility for discounted care: 300 %
If "No," explain in Part VI the criteria the hospital facility used.
11 Explained the basis for calculating amounts charged to patients? 11 X
If "Yes," indicate the factors used in determining such amounts (check all that apply):
a Income level
b Asset level
c Medical indigency
d Insurance status
e Uninsured discount
f 0 Medicaid/Medicare
g State regulation
h MI Other (describe in Part VI)
12 Explained the method for applying for financial assistance? 12 X
13 Included measures to publicize the policy within the community served by the hospital facility? 13 X
If "Yes," indicate how the hospital facility publicized the policy (check all that apply):
a The policy was posted on the hospital facility ' s website
b The policy was attached to billing invoices
c The policy was posted in the hospital facility ' s emergency rooms or waiting rooms
d The policy was posted in the hospital facility ' s admissions offices
e 0 The policy was provided, in writing , to patients on admission to the hospital facility
f The policy was available on request
q Other (describe in Part VI)
Billin g and Collections
14 Did the hospital facility have in place during the tax year a separate billing and collections policy , or a written financial
assistance policy (FAP) that explained actions the hospital facility may take upon non -payment? 14 X
15 Check all of the following actions against an individual that were permitted under the hospital facility's policies during the tax
year before making reasonable efforts to determine patient's eligibility under the facility's FAP:
a Reporting to credit agency
b Lawsuits
c Liens on residences
d Body attachments
e Other similar actions (describe in Part VI)
16 Did the hospital facility or an authorized third party perform any of the following actions during the tax year before making
reasonable efforts to determine the patient's eligibility under the facility' s FAP? 16 X
If "Yes," check all actions in which the hospital facility or a third party engaged:
a Reporting to credit agency
b Lawsuits
c Liens on residences
d Body attachments
e Other similar actions (describe in Part VI)
17 Indicate which efforts the hospital facility made before initiating any of the actions checked in line 16 (check all that
apply),
a 0 Notified patients of the financial assistance policy on admission
b 0 Notified patients of the financial assistance policy prior to discharge
c Notified patients of the financial assistance policy in communications with the patients regarding the patients' bills
d Documented its determination of whether patients were eligible for financial assistance under the hospital facility's
financial assistance policy
132095 01-23-12 Schedule H (Form 990) 2011
3408530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleH (Form 990 2011 Mission Hospital, Inc 56-0532141 Pa e6
Part Facility Information (continued) Mission Hospital, Inc.
18 Did the hospital facility have in place during the tax year a written policy relating to emergency medical care that requires the
hospital facility to provide, without discrimination, care for emergency medical conditions to individuals regardless of their
eligibility under the hospital facility's financial assistance policy?
If "No," indicate why:
a The hospital facility did not provide care for any emergency medical conditions
b The hospital facility's policy was not in writing
c The hospital facility limited who was eligible to receive care for emergency medical conditions (describe in Part VI)
d Other (describe in Part VI)
Individuals El
19 Indicate how the hospital facility determined , during the tax year , the maximum amounts that can be charged to FAP•eligible
individuals for emergency or other medically necessary care
a The hospital facility used its lowest negotiated commercial insurance rate when calculating the maximum amounts
that can be charged
b The hospital facility used the average of its three lowest negotiated commercial insurance rates when calculating
the maximum amounts that can be charged
c The hospital facility used the Medicare rates when calculating the maximum amounts that can be charged
d EXI Other (describe in Part VI)
20 Did the hospital facility charge any of its patients who were eligible for assistance under the hospital facility's financial
assistance policy , and to whom the hospital facility provided emergency or other medically necessary services , more than
No
the amounts generally billed to individuals who had insurance covering such care? 20
If 'Yes," explain in Part A.
21 Did the hospital facility charge any of its FAP•eligible patients an amount equal to the gross charge for any service provided
to that patient? 21 X
If "Yes," explain in Part VI.
132096 01-23-12 Schedule H (Form 990) 2011
3508530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleH Form990 2011 Mission Hospital, Inc 56-0532141 Pa e7
Part V Facility Information (continued)Section C . Other Health Care Facilities That Are Not Licensed , Registered , or Similarly Recognized as a Hospital Facility
(list in order of size, from largest to smallest)
How many non-hospital health care facilities did the organization operate during the tax year? 32
Name and address Type of Facility (describe)
1 Outpatient Infusion21 Hosp ital DriveAsheville, NC 28801 Infusion Services
2 Asheville Surgery Center5 Medical Park DriveAsheville, NC 28803 Ambulatory Surgical Services
3 Asheville Imagin g Center, LLC
534 Biltmore AvenueAsheville, NC 28801 Outpatient Imaging Services
3 Heartpath, Sleep Lab, Cardiovascular5 Vanderbilt Park DriveAsheville, NC 28803 Pulmonary Rehab, Sleep Studies
4 Children's Services11 Vanderbilt DriveAsheville, NC 28803 Outpatient Children's Services
4 Asheville MRI, LLC222 Asheland AvenueAsheville, NC 28801 MRI Facility
5 Positronic Emissions Testing21 Hosp ital DriveAsheville, NC 28801 Imaging Radiology
5 Wound Care7 Yorkshire StreetAsheville, NC 28803 Wound Therapy
6 Mission Rehabilitation Services534 Biltmore AvenueAsheville, NC 28801 Rehabilitation Services
7 Outpatient Clinical Pharmacy Services Medication assistance;
501 Biltmore Avenue anticoagulation;Asheville, NC 28801 pharmacotherapy programs
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Schedule H (Form 990) 2011
56-05322
Schedule l- ( Form 990 2011 Mission Hospital , Inc 56-0532141 Pa e7
Part Facility Information (continued)Section C . Other Health Care Facilities That Are Not Licensed , Registered , or Similarly Recognized as a Hospital Facility
(list in order of size, from largest to smallest)
How many non-hospital health care facilities did the organization operate during the tax year?
Name and address Type of Facility (describe)
8 Sports Medicine ProgramOne University HeightsAsheville, NC 28804 Sports Medicine, PT
8 Occumed & Staff Health50 Doctors Drive Company & Staff HealthAsheville, NC 28801 Services
10 Low Vision Center, Staff Health240 Sardis RoadAsheville, NC 28806 Low Vision, Staff Health
11 Mission Fitness Center534 Biltmore AvenueAsheville, NC 28801 Physical Therapy
13 Outpatient Laboratory490 Hospital DriveClyde, NC 28721 Laboratory & Radiology
14 Breastfeeding Center2 Medical Park DriveAsheville, NC 28803 Education
15 Genetics Center11 Vanderbilt DriveAsheville, NC 28803 Genetics Testing
16 Health Education Center Diabetes; Asthma:HTN
501 Biltmore Avenue Program;Cholesterol, OPAsheville, NC 28801 Nutritional Therapy
17 MCC Procedure & Radiology Suites11 Vanderbilt DriveAsheville, NC 28803 Radiological Suites
18 High Risk OB490 Hospital DriveClyde, NC 28721 OB Consultations
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Schedule H (Form 990) 2011
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ScheduleH (Form 990 2011 Mission Hospital , Inc 56-0532141 Pa e7
Fart w Facility Information (continued)Section C . Other Health Care Facilities That Are Not Licensed, Registered , or Similarly Recognized as a Hospital Facility
(list in order of size, from largest to smallest)
How many non-hospital health care facilities did the organization operate during the tax year?
Name and address Type of Facility (describe)
23 Mission Rehabilitation Services200 Racquet Club RoadAsheville, NC 28803 Rehabilitation Services
24 Mission Rehabilitation ServicesOne University HeightsAsheville, NC 28806 Rehabilitation Services
25 Mission Rehabilitation services151 Weaverville PlazaWeaverville, NC 28787 Rehabilitation Services
26 Mission Rehabilitation services1388 Sand Hill RoadAsheville, NC 28806 Rehabilitation Services
27 Pediatric Hematology/oncology21 Hosp ital DriveAsheville, NC 28801 Pediatric Cancer Services
28 Radiation Therapy21 Hosp ital DriveAsheville, NC 28801 Radiation Therapy
29 Mission Radiology100 Victoria RoadAsheville, NC 28801 Radiological Services
30 Mission My Care Plus1388 Sand Hill RoadAsheville, NC 28806 Radiological Services
32 Mission Radiology7 Vanderbilt Park Dr.Asheville, NC 28803 Radiological Services
33 qports Medicine Program534 Biltmore AvenueAsheville, NC 28801 Sports Medicine, PT
132097 01-23-12
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Schedule H (Form 990) 2011
56-05322
ScheduleH (Form 990 2011 Mission Hospital , Inc 56-0532141 Pa e7part V 1 Facility Information (continued)Section C . Other Health Care Facilities That Are Not Licensed , Registered , or Similarly Recognized as a Hospital Facility
(list in order of size, from largest to smallest)
How many non-hospital health care facilities did the organization operate during the tax year?
Name and address Type of Facility (describe)
34 Wound Healin g & Hyperbaric Program7 Yorkshire StreetAsheville, NC 28803 Wound Therapy
35 Wound Healin g Center490 Hospital DriveClyde, NC 28721 Wound Therapy
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Schedule H (Form 990) 2011
56-05322
ScheduleH (Form 990 2011 Mission Hos pital , Inc 56-0532141 Pa e6Pan VI Supplemental InformationComplete this part to provide the following information.
1 Required descriptions . Provide the descriptions required for Part I, lines 3c, 6a, and 7; Part II; Part III, lines 4, 8, and 9b; and Part V, Section B,
lines 1j, 3, 4, 5c, 6i, 7, 9, 10, 11 h, 13g, 15e, 16e, 17e, 18d, 19d, 20, and 21.
2 Needs assessment . Describe how the organization assesses the health care needs of the communities it serves, in addition to any needs
assessments reported in Part V, Section B.
3 Patient education of eligibility for assistance . Describe how the organization informs and educates patients and persons who may be billed
for patient care about their eligibility for assistance under federal, state, or local government programs or under the organization's financial
assistance policy.
4 Community information . Describe the community the organization serves, taking into account the geographic area and demographic
constituents it serves.
5 Promotion of community health . Provide any other information important to describing how the organization's hospital facilities or other health
care facilities further its exempt purpose by promoting the health of the community (e.g., open medical staff, community board, use of surplus
funds, etc.).
6 Affiliated health care system . If the organization is part of an affiliated health care system, describe the respective roles of the organization
and its affiliates in promoting the health of the communities served.
7 State filing of community benefit report . If applicable, identify all states with which the organization, or a related organization, files a
community benefit report.
Part I, Line 7: Mission used worksheets 1 throuqh 8 provided by the
IRS, using the cost to charae ratio method. For physician clinics, as
described in subsidized health services, actual costs were used plus
indirect costs calculated using the Medicare cost report because the cost
to charge ratio did not accurately capture costs for those areas. The
financials include all patient segments, including inpatient, outpatient,
emergency room, private insurance, Medicaid, Medicare, uninsured, and
self-pay. A cost to charge ratio was generated using the IRS Worksheet 2
and used for all community benefits reported except for subsidized
services which used direct expenses plus overhead to more accurately
report the costs involved. See note on subsidized health services.
Medicaid Direct Offsettinq Revenue includes $17,603,085 in revenue from
for years. Medicaid surplus from current year programs would have been
$7,415,301 without the prior period revenue.
Part I, Line 7g: Subsidized health services include physician clinics
rimarily serving pediatric specialty patients. Other services include
trauma, psychiatric and senior services. $31,926,040 in cost, less
$5,995,242 in net patient revenue calculates to $25,930,798 in community132098 01-23-12 Schedule H (Form 990) 2011
4008530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleH (Form 990 2011 Mission Hospital , Inc 56-0532141 Pa e8
Part 'V1 Supplemental Information
benefits from subsidized health services provided.
Part II: Workplace development: Recruitment of Physicians
and other health professionals to medical shortage areas.
Part III, Line 4: Per the Footnotes to the Consolidated Financial
Statements: "Costs of services associated with uncollectible accounts are
estimated at $32,014,000 and $31,692,000 for September 30, 2012 and 2011,
respectively."
Above numbers are for entire Health system, which includes the $25,653,000
for mission Hospital.
Estimates for the estimated bad debt expense attributable to patients
eligible under the organization's financial assistance policy is based on
estimated charity care provided for the fiscal year ended September 30
2012 but for which information was not available until after the fiscal
ear end.
The above estimates were developed using the methodology adopted by the
North Carolina Hospital Association in 2006 for such costs, includin
information from Mission's cost reporting systems used to support its
related filinqs with the Medicare and Medicaid programs.
Charitable discounts and other discounts decrease net patient revenue as
reported on page 9 of the core form of the 990. Recoveries of previous
bad debt written off are netted against bad debt expense before reduci
to the cost basis.Schedule H (Form 990) 2011
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ScheduleH (Form 990 2011 Mission Hospital , Inc 56-0532141 Pa esPart V! Supplemental Information
Part III, Line 8: The shortfall reported is based on using the
Medicare allowable costs. However , if full costing were used , there would
be a shortfall of approximately $35 million dollars. Per the Form 990
instructions, the Medicare cost report is the basis for calculating the
costs using costs related to the revenue reoorted, including DSH and IME.
Part III, Line 9b: Patients who aualifv for financial assistance and
other charity care are notified using the process described in the
education of patients' eligibility in Part VI, on line 3.
Mission ' s stated policy with respect to financial assistance: "Mission
Hospital will make every effort to thoroughly screen all patients that are
uninsured or underinsured in an effort to identify a source of financial
sponsorship. Only after a final determination is made that the patient is
not eligible for any source of funding to cover the medical expenses will
the account be eligible for consideration of financial assistance."
After the notifications and processes referenced above have been
completed, standard debt collection policies are in effect for the portion
of the bill for which the patient is responsible.
Mission Hospital, Inc.:
Part V, Section B, Line llh: Mission has a catastrophic provision for
balances over $10,000. The patient will not owe more than 25% of their
annual income.
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Schedule H (Form 990) 2011
56-05322
ScheduleH ( Form990 2011 Mission Hosp ital, Inc 56-0532141 Pa e8Part Vi Supplemental Information
Mission Hospital, Inc.:
Part V, Section B, Line 13g: See Part VI, line 3: Mission provides
information to patients on the financial assistance policy by directing
patients to a patient billing representative on the Mission Hospital
website; messages on billing statements and in brochures provided in the
hospital facility's emergency rooms; waiting rooms; and admissions
offices, was well as on admission to the hospital facility. Financial
assistance application can be a complicated and confusing process to
patients and their family and the process is better understood when the
patient has an opportunity to ask questions and have the application
explained in person. As of October 2012, the policy was posted on the
Hospital website and the policy is now provided to the patient when
services are provided.
Mission Hospital, Inc.:
Part V. Section B. Line 17e: Mission performs these actions before
initiating any collection actions.
Mission Hospital, Inc.:
Part V, Section B, Line 19d: Patients with income levels of 251% to 300%
of the FPG receive a minimum of 25% discount. This compares to managed
care discounts with an averaqe of 20 to 25%.
Patients with income levels of less than or equal to 150% of the FPG
throuah 250% of the FPG receive greater discounts: 50% - 100%.
Schedule H (Form 990) 2011
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ScheduleH (Form 990 2011 Mission Hospital, Inc 56-0532141 Pa e8
Part ./l Supplemental Information
Mission Hospital, Inc.:
Part V, Section B, Line 20: Less than 5% of patients eligible under the
Hospital's FAP were charged more than the amounts generally billed to
individuals who had insurance covering such care. These patients received
a 25% discount. The rest of the patients eligible under the FAP were give
a 50% or Greater discount from the gross charges.
For the upcoming tax years, processes and policies have been put into
place to prevent FAP patients from being charged more than amounts
nerallv billed to individuals who had insurance covering such care.
Part VI, Line 2: The Buncombe County Health Department coordinates a
Community Health Assessment (CHA) every three years, with the most recent
assessment completed in December 2012. Mission Hospital has provided
funding for this process as well as in-kind staff support. Primary data in
these assessments has been obtained through individual household surveys
inion surveys conducted with leaders in education, United Way, local
government programs, mission Hospital and non-profit health agencies, and
listening sessions with specific ethnic focus groups. Secondary data is
obtained from MATCH (Mobilizing Action Toward Community Health) County
Ranking Report, Behavioral Risk Factory Surveillance Survey, and the
Census Bureau . A broad based community CHA Steering Committee then uses
this data in defining the county health needs priorities. The Buncombe
County Health Assessment and the Madison County Health Assessment
riorities are the basis for the hospital's Community Benefit Grants
awarded annually to local and regional non-profit agencies. The CHA dataSchedule H (Form 990) 2011
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ScheduleH (Form 990 2011 Mission Hospital, Inc 56-0532141 Pa e8Part VI Supplemental Information
is also used in Mission Hospital's outreach program development with
community and regional collaborators.
Part VI, Line 3: We provide information to our patients regarding how
to apply for financial assistance /charity care in the following ways:
Our internet website and our brochures contain the following information
about financial assistance:
We understand your concerns about the cost of your healthcare, and we're
here to help you find financial assistance if you need it.
If you choose to submit your own insurance claim to your insurance company
instead of assianina benefits to mission, or do not have insurance to
cover your services, you must pay "up front" for services at the time of
your visit. However, if you are unable to pay your bill due to
insufficient insurance coverage, no insurance coverage , or limited income,
we have staff available to assist you in applying for financial assistance
through the following sources:
State Agency Programs: We'll help you determine if you qualify for a
variety of state agency programs.
Medicaid: We can help you determine whether you qualify for Medicaid
benefits, and help you apply for Medicaid if you are unable to go to your
local DSS (Department of Social Services) office.
Hospital Discounts: You may qualify for discounts on your balance owed.Schedule H (Form 990) 2011
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ScheduleH (Form 990 2011 Mission Hos pital , Inc 56-0532141 Pa e8
Part 1/1 Supplemental Information
Hospital discounts are determined usinq criteria such as household income
asset and other fund sources available, considered in relation to total
amount owed.
Based upon these criteria, you may be eligible to receive a 25%, 50%, 75%
or a 100% discount. Mission Hospital's financial assistance policy
utilizes household income quidelines published by the Health and Human
Services department to determine discount eligibility. Our staff can
assist you in making application for a discount.
There are also a variety of state agency assistance programs available to
North Carolina residents. Our staff can help you determine if you qualify
for help from these programs. For further information contact us at (828)
213-1590 or (800) 848-8732, extension 31590.
To make a payment or apply for financial assistance, visit our Business
Office or call our Customer Service Center:
(828) 213-1500 or (800) 848-8732
M - F, 8:00 a.m. - 4:30 p.m.
There are also messages on patient bills giving additional information
regarding amounts due such as how to contact the hospital if they have
questions.
Part VI, Line 4: For Buncombe County and the surroundinq counties
representing the primary and secondary service areas, the percentage of
uninsured adults ranqes from 19-24%, children living in poverty from
20-25%, and unemployment ranges from 7.3-12.2%. The persons living inSchedule H (Form 990) 2011
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ScheduleH (Form 990 2011 Mission Hospital, Inc 56-0532141 Pages
Part VI Supplemental Information
these counties with only a hiqh school education or less ranges from
42-68 %. (NC County Health Rankinqs 2011
The 2009 populations for these counties are as follows:
(Southern Rural Development Data Center 2010)
0-24 years 27.1-30.4 %
25-64 years 50.1-52.5 %
65+vear 15.9-22.4 %
Part VI, Line 5: See Program Service Accomplishments listed in
Schedule 0 for Form 990, Part II, line 4.
Part VI, Line 6: Mission Health System, Inc. is the parent
organization for the charitable organizations of Mission Hospital, Inc.;
Mission Healthcare Foundation, Inc.; Mission Medical Associates, Inc; Blue
Ridge Regional Hospital, Inc.; and The McDowell Hospital, Inc.
The System's mission is to support the activities of mission Hospital Inc
and Mission Healthcare Foundation, Inc.
Mission Hospital, Inc. is a regional integrated health system providin
superior care and service to patients and their families through a full
continuum of integrated services, education, and research. It serves as a
trauma center to people of Western North Carolina and the surrounding
counties.
Mission Medical Associates mission is to provide physician services in
predominantly rural areas that are insufficiently served, therebySchedule H (Form 990) 2011
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ScheduleH (Form 990 2011 Mission Hospital , Inc 56-0532141 Pa e8Part '111 Supplemental Information
improving the health care of the general public. In many cases this
involves recruiting and placing primary care physicians, as well as
pediatric and adult specialty services close to where people live and
work.
Blue Ridge Regional Hospital serves as a community hospital in Mitchell,
Yancev and surrounding counties.
The McDowell Hospital serves as a community hospital in McDowell and the
surrounding counties.
Mission Healthcare Foundation, Inc. supports the mission and programs of
Mission Hospital, Inc. and Mission Health System, Inc. and of other
organizations that are tax exempt under the provisions of Section
501(c)(3) of the Internal Revenue Code and works to benefit the community
and region served by the entities listed above.
Part VI. Line 7, List of States Receiving Community Benefit
NC
t:
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Schedule H (Form 990) 2011
56-05322
SCHEDULEI(Form 990) Grants and Other Assistance to Organizations,
Governments, and Individuals in the United States
Department of the Treasury I Complete if the organization answered "Yes" to Form 990, Part IV, line 21 or 22.Internal Revenue Service ► Attach to Form 990.
OMB No 1545-0047
2011Open to Public
Inspection
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
Part; General Information on Grants and Assistance
Does the organization maintain records to substantiate the amount of the grants or assistance, the grantees ' eligibility for the grants or assistance, and the selection
criteria used to award the grants or assistance? Yes No
2 Describe in Part IV the organization's procedures for monitorin g the use of g rant funds in the United States.
f( Grants and Other Assistance to Governments and Organizations in the United States . Complete if the organization answered 'Yes' to Form 990, Part IV, line 21, for any
recipient that received more than $5,000 Check this box if no one recipient received more than $5,000. Part II can be duplicated if additional space is needed ► 01 (a) Name and address of organization (b) EIN (c) IRC section (d) Amount of (e) Amount of (f) Method of (g) Description of (h) Purpose of grant
or government if applicable cash grant non cashvaluation (book,FMV, appraisal,
non-cash assistance or assistanceassistance other)
Asheville Buncombe Community Assistance to local
Christian Ministry - 155 nonprofit
Livingston St - Asheville, NC Assistance for local
28801 56-1987021 5 01(c)(3) 370 000. 0. nonprofit
Asheville Chamber of Commerce
151 Haywood Road Assistance to local
Asheville , NC 28801 56-0125440 01(c)(6) 75 , 000. 0. nonprofit
All Souls Counseling Ctr
9 Swan Street Mental Health & Substance
Asheville , NC 28803 56-2200862 01(c)(3) 95 , 000. 0. Counseling
Council on Aging
1617 Hendersonville Road ealth Care Support for
Asheville , NC 28803 23-7410586 01(c)(3) 32 , 500. 0. Aging
Community Care of WNC
53 S French Broad Suite 300 Access to Health Care -
Asheville , NC 28801 56-2097503 01(c)(3) 109 218. 0. edicaid
ssistance to local
Literacy Council of Buncombe onprofit
County - 31 College St Suite B-221 ssistance to local
- Asheville , NC 28801 58-1696409 O1(c)(3) 5 , 800. 1 0. 1 1 onprofit
2 Enter total number of section 501 (c)(3) and government organizations listed in the line 1 table _ ► 27.
3 Enter total number of other organizations listed in the line 1 table ► 4
LHA For Paperwork Reduction Act Notice , see the Instructions for Form 990. Schedule I (Form 990) (2011)
132101 01-27-12 49
Schedule) (Form 990 Mission Hospital, Inc 56-0532141 Pane lPart 11 Continuation of Grants and Other Assistance to Governments and Organizations in the United States (Schedule I (Form 990), Part II.)
(a) Name and address of (b) EIN (c) IRC section (d) Amount of (e) Amount of (f) Method of (g) Description of (h) Purpose of grantorganization or government if applicable cash grant non-cash valuation non-cash assistance or assistance
assistance (book, FMV,appraisal, other)
MAHEC
121 Hendersonville Road
Asheville , NC 28803 56-1071426 5 01(c)(3) 13 , 500. 0. Access to Health Care
Memory Care
100 Far Horizons Lane Support for Healthcare
Asheville , NC 28803 56-2178294 01(c)(3) 110 000. 0, or Aging
Buncombe County Health Department
35 Woodfin St
Asheville , NC 28801 56-6000279 Buncombe County 200 000. 0. Access to Health Care
Pisgah Legal Services
89 Montford Avenue Legal Services for Low
Asheville , NC 28802 56-1191115 01(c)(3) 100 000. 0. I ncome Families
United Way
50 South French Broad Avenue Assistance to Local
Asheville , NC 28801 56-0576157 01(c)(3) 105 000. 0. nonprofits
YWCA
185 South French Broad Avenue Assistance to Local
Asheville , NC 28801 56-0547476 01(c)(3) 37 , 500. 0. nonprofits
The Lewis Rathbun Center emporary lodging for
121 Sherwood Road families of out of town
Asheville , NC 28803 56-1706625 01(c)(3) 220 000. 0, patients.
Manna Food Bank
627 Swannanoa River Road Assistance to local
Asheville , NC 28805 58-1514800 01(c)(3) 25 , 000. 0. nonprofits
American Red Cross
100 Edgewood Road Assistance to local
Asheville , NC 28801 53-0196605 0l(c)(3) 9 , 000. 0. onprofits
Schedule I (Form 990)
132241 05-01-11 50
Schedulel (Form 990 Mission Hospital, Inc 56-0532141 Page 1
I Part # I Continuation of Grants and Other Assistance to Governments and Organizations in the United States (Schedule I (Form 990), Part II.)
(a) Name and address of (b) EIN (c) IRC section (d) Amount of (e) Amount of (f) Method of (g) Description of (h) Purpose of grantorganization or government if applicable cash grant non-cash valuation non-cash assistance or assistance
assistance (book, FMV,appraisal, other)
Buncombe County Medical Society
PO Box 15126
Asheville , NC 28813 58-1480867 01(c)(3) 150 000. 0. ccess to Health Care
YMCA
53 Ashland Avenue, Suite 105 Assistance to Local
Asheville , NC 28801 56-0530013 01(c)(3) 50 , 000. 0. nonprofit
Western Carolina University
230 HFR Admin Building ssistance to Local
Cullowhee , NC 28723 24-5150850 overnmental 50 , 000. 0, governmental agency
Three Streams Family Health Center
1710 Old Haywood Road
Asheville , NC 28806 56-2252990 01(c)(3) 100 000. 0, cce.ss to Health Care
Cancer Care of WNC
PO BOx 695
Asheville , NC 28802 56-1693667 14 , 600. 0, ccess to Health Care
Homeward Bound of Asheville
35 Grove St ssistance to Local
Asheville , NC 28801 56-1560917 01(c)(3) 22 , 500. 0. nonprofit
The McDowell Hospital
430 Rankin Drive
Marion , NC 28752 56-0623938 01(c)(3) 0. 447 , 430. ost Equipment Access to Health Care
Mission Healthcare Foundation, Inc
980 Hendersonville Road Assistance to Local
Asheville , NC 28803 56-1881331 5 01(c)(3) 0. 421 , 582. ost Equipment nonprofit
Mountain Area Child & Family
2586 Riceville Road utrition Support for
Asheville , NC 28805 56-2040462 01(c)(3) 22 , 000. 0, hildren
Schedule I (Form 990)
132241 05-01-11 51
Schedule) (Form 990 Mission Hospital , Inc 56-0532141 Pa e1Part f1 Continuation of Grants and Other Assistance to Governments and Organizations in the United States (Schedule I (Form 990), Part II.)
(a) Name and address of (b) EIN (c) IRC section (d) Amount of (e) Amount of (f) Method of (g) Description of (h) Purpose of grantorganization or government if applicable cash grant non-cash valuation non-cash assistance or assistance
assistance (book, FMV,appraisal, other)
Child Abuse Prevention Services
Inc. - 50 S FrenchBroadAve Ste 152 Assistance to Local
- Asheville , NC 28801 58-1828408 01(c)(3) 37 , 000. 0. nonprofit
Girls on the Run of WNC, Inc.
50 S FrenchBroadAve Ste 249
Asheville , NC 28801 35-2177794 01(c)(3) 6 , 000. 0. Prevent Childhood Obesity
Western Carolinians For Criminal
Justice - PO Box 7472 - Asheville, Assistance to Local
NC 28802 58-1491257 01(c)(3) 45 , 000. 0. nonprofit
WNC Community Health Services
PO Box 338
Asheville , NC 28802 56-1852922 5 01(c)(3) 37 , 500. 0, ccess to Health Care
WNC Aids Project
PO Box 2411 Assistance to Local
Asheville , NC 28802 58-1772685 01(c)(3) 16 , 000. 0. nonprofit
Schedule I (Form 990)
132241 05-01-ti 52
Schedule) (Form 990 2011 Mission Hospital , Inc 56-0532141 Page 2
Pa t#I# Grants and Other Assistance to Individuals in the United States . Complete if the organization answered "Yes" to Form 990, Part IV, line 22.Part III can be duplicated if additional space is needed.
(a) Type of grant or assistance (b) Number ofrecipients
(c) Amount ofcash grant
(d) Amount of non-cash assistance
(e) Method of valuation(book, FMV, appraisal, other)
(f) Description of non-cash assistance
Scholarship program for health careers for members
of minority groups - $2 , 400 scholarships 19 45 , 600. 0.
Part IV I Supplemental Information . Complete this part to provide the information required in Part I, line 2, and any other additional information.
Schedule I, Part I, Line 2: The Hospital donates funds to various local and
national non-profits in furtherance of its charitable mission.
For grants to organizations, mission makes grants to governmental and
501(c)(3) entities. These entities have demonstrated their mission through
their qualification as exempt organizations. A special committee reviews
grant requests received through the application process and allocates
donations each near.
132102 01-27-12 53 Schedule I (Form 990) (2011)
Schedule) (Form990 2011 Mission Hospital , Inc 56-0532141 Pa e2Part 1V Supplemental Information
To qualify for a Kesha Young Health Careers Scholarship, the following
requirements must be met and provided along with an application for the
scholarship.
Be a member of a minority group. Minority is defined according to the
guidelines of the federal and state governments as African-American,
Hispanic, Asian/Pacific Islander, and Native American.
Be a resident of Western North Carolina.
Maintain a minimum cumulative Grade Point Averaqe of 2.75 on a 4.0 scale.
Pursue a field of study for which Mission Hospital has an employment need.
Students must be interested in pursuina a career in the followinq areas:
Occupational Therapist, Pharmacist, Paramedic, Reqistered Nurse ( ADN or
AND-BSN programs),Physical Therapist, Physical Therapist Assistant,
SpeechThera ist,Surgical Tech.
Schedule I (Form 990) 2011
132291 05-01-11
5408530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
SCHEDULE J Compensation Information OMB No 1545-0047
(Form 990) For certain Officers, Directors, Trustees, Key Employees, and Highest2011Compensated Employees
► Complete if the organization answered "Yes" to Form 990,
Department of the Treasury Part IV, line 23. Open to Public
Internal Revenue Service ► Attach to Form 990. ► See separate instructions. Inspection
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
Part i Questions Regarding CompensationYes No
la Check the appropriate box(es) if the organization provided any of the following to or for a person listed in Form 990,
Part VII , Section A , line 1a . Complete Part III to provide any relevant information regarding these items.
0 First-class or charter travel Housing allowance or residence for personal use
Travel for companions Payments for business use of personal residence
Tax indemnification and gross-up payments Health or social club dues or initiation fees
Discretionary spending account Personal services (e.g., maid , chauffeur, chef)
b If any of the boxes on line 1 a are checked, did the organization follow a written policy regarding payment or
reimbursement or provision of all of the expenses described above? If "No,' complete Part I I I to explain lb X
2 Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all officers, directors,
trustees, and the CEO/Executive Director, regarding the items checked in line 1 a? 2 X
3 Indicate which , if any, of the following the filing organization used to establish the compensation of the organization's
CEO/Executive Director . Check all that apply . Do not check any boxes for methods used by a related organization to
establish compensation of the CEO/Executive Director . Explain in Part III.
Compensation committee Written employment contract
Independent compensation consultant Compensation survey or study
Form 990 of other organizations Approval by the board or compensation committee
4 During the year, did any person listed in Form 990, Part VII, Section A, line 1 a, with respect to the filing
organization or a related organization:
a Receive a severance payment or change-of-control payment? 4a X
b Participate in, or receive payment from, a supplemental nonqualified retirement plan? 4b X
c Participate in, or receive payment from, an equity-based compensation arrangement? 4c X
If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III.
Only section 501(c)(3) and 501(c)(4) organizations must complete lines 5-9.
5 For persons listed in Form 990, Part VII, Section A, line 1 a, did the organization pay or accrue any compensation
contingent on the revenues of-
a The organization? 5a X
b Any related organization? 5b X
If 'Yes' to line 5a or 5b, describe in Part Ill.
6 For persons listed in Form 990, Part VII, Section A, line 1 a, did the organization pay or accrue any compensation
contingent on the net earnings of:
a The organization? 6a X
b Any related organization? 6b X
If "Yes" to line 6a or 6b, describe in Part III.
7 For persons listed in Form 990, Part VII, Section A, line 1 a, did the organization provide any non-fixed payments
not described in lines 5 and 6? If "Yes," describe in Part III 7 X
8 Were any amounts reported in Form 990, Part VII, paid or accrued pursuant to a contract that was subject to the
initial contract exception described in Regulations section 53.4958-4(a)(3)? If "Yes," describe in Part III 8 X
9 If "Yes" to line 8, did the organization also follow the rebuttable presumption procedure described in
Reg ulations section 53 4958-6 (c) ? 9
LHA For Paperwork Reduction Act Notice, see the Instructions for Form 990 . Schedule J (Form 990) 2011
13211101-23-12
5508530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
2011 Mission Hospital, Inc 56-0532141I Part H 1 Officers , Directors , Trustees, Key Employees, and Highest Compensated Employees . Use duplicate copies if additional space is needed.For each individual whose compensation must be reported in Schedule J, report compensation from the organization on row (I) and from related organizations, described in the instructions, on row ().Do not list any individuals that are not listed on Form 990, Part VII.
Note . The sum of columns (B)(i)-(iii) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1 a, applicable column (D) and (E) amounts for that individual.
(B) Breakdown of W-2 and/or 1099-MISC compensation (C) (D) (E) (F)
(A) Name(i) Base
compensation(ii) Bonus &incentive
compensation
(iii) Otherreportable
compensation
Retirement andother deferredcompensation
Nontaxablebenefits
Total of columns(B)()•(D)
Compensationreported as deferred
in prior Form 990
(i) 749,748. 290,000. 331,416. 208,197. 24,444. 1,603,805. 0.1Ronald Paulus, M.D. 0. 0. 0. 0. 0. 0. 0.
(i) 396,351. 138,400. 43,121. 107,570. 5,222. 690,664. 0.2Charles F. Ayscue 0. 0. 0. 0. 0. 0. 0.Dr. Jill Hoggard (;) 106,511. 39,898. 376. 21,256. 2,634. 170,675. 0.
3Green, 0. 0. 0. 0. 0. 0. 0.(i) 268,502. 65,489. 39,315. 45,955. 8,236. 427,497. 8,900.
4Ann Y. Young 0. 0. 0. 0. 0. 0. 0.0) 100,704. 0. 289,641. 10,809. 2,267. 403,421. 0.
5 Brian Aston 0. 0. 0. 0. 0. 0. 0.(;) 341,851. 92,794. 48,968. 76,628. 15,571. 575,812. 33,716.
6Dale Fell, M.D. 0. 0. 0. 0. 0. 0. 0.(i) 255,531. 58,180. 122,370. 16,500. 16,618. 469,199. 91,223.
Donald A. Jenning s 0. 0. 0. 0. 0. 0. 0.(;) 260,634. 69,327. 4,806. 44,225. 11,074. 390,066. 0.
8 KathGuyette ;, 0. 0. 0. 0. 0. 0. 0.(i) 230,816. 0. 24,434. 38,360. 17,266. 310,876. 13,959.
9Maria Roloff 0. 0. 0. 0. 0. 0. 0.0) 337,916. 85,493. 2,126. 44,399. 3,090. 473,024. 0.
1oDr. William maples 0. 0. 0. 0. 0. 0. 0.(;) 221,685. 84,925. 20,313. 29,904. 8,379. 365,206. 0.
11Rhonda Miller 0. 0. 0. 0. 0. 0. 0.(;) 253,044. 46,260. 2,198. 9,800. 13,780. 325,082. 0.
12James F. Keel, M.D. 0. 0. 0. 0. 0. 0. 0.(i) 248,692. 0. 2,610. 48,111. 19,943. 319,356. 0.
13 John J. Maher 0. 0. 0. 0. 0 . 0. 0.V) 207,308. 33,977. 4,610. 33,987. 16,002. 295,884. 0.-
14Karen LeMieux 0. 0. 0. 0. 0. 0. 0.0) 0. 0. 345,276. 2,538. 3,288. 351,102. 83,267.
15Jose h F. Damore 0. 0. 0. 0. 0. 0. 0.M
16 i;
Schedule J (Form 990) 2011132112 01-23-12 56
Schedule) (Form 990 2011 Mission Hospital , Inc 56-0532141 Pa e3dart fit Supplemental Information
Complete this part to provide the information, explanation, or descriptions required for Part I, lines 1 a, 1 b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for anyadditional information.
Part I, Line la: First class travel and charter travel are approved for
unusual circumstances. First class travel can be approved if coach class
is unavailable and travel is necessary for an urgent business purpose.
Charter travel can be approved if it is a less expensive alternative to
booking multiple individual seats on commercial aircraft.
Board member travelled first class for a required business meeting when
economy class was unavailable. Management and board members used chartered
air travel for required hospital business travel because it was a less
expensive travel option on occasion.
Part I, Lines 4a-b: Joseph Damore, Former CEO received Severance Pay of
252.135 in calendar year 2011.
Brian Aston, Former COO received Severance Pav of $289,516 in calendar year
2011.
Key Employees and Highest Compensated Employees who participated in a
Supplemental Non-Qualified retirement plan with contribution amounts.Schedule J (Form 990) 2011
132113 01-23-12 57
Schedule ) (Form 990 2011 Mission Hospital , Inc 56-0532141 Page 3Part IIE Supplemental Information
Complete this part to provide the information , explanation , or descriptions required for Part I, lines 1 a , 1 b, 3, 4a , 4b, 4c, 5a, 5b , 6a, 6b, 7, and 8, and for Part II. Also complete this part for any
additional information.
These amounts are included in Retirement and other Deferred Compensation on
page 2 of Schedule J:
Ronald Paulus $203,755
Charles Ayscue $ 85,570
Jill Hoggard Green $ 21,256
Brian Aston $ 9,074
Dale Fell $ 60,128
Ann Young $ 29,455
Maria Roloff $ 24,200
Kathy Guyette $ 34,425
Rhonda Miller $ 5,265
John Maher $ 48,111
Karen LeMieux $ 25,187
William Maples $ 44,399
Key Employees and Highest Compensated who received payments from a
supplemental non-qualified retirement plan. These payments are included in
Other Reportable Compensation on Schedule J, page 2.
Maria Roloff $ 19,662Schedule J (Form 990) 2011
132113 01-23-12 58
Schedule) (Form 990 2011 Mission Hos ital , Inc 56-0532141 Page 3Pail Eft Supplemental Information
Complete this part to provide the information, explanation, or descriptions required for Part I, lines 1 a, 1 b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for anyadditional information
Ann Young $ 10,798
Joseph Damore $ 90,148
Donald Jennings $105,433
Dale Fell $ 44,321
Schedule J (Form 990) 2011
132113 01 -23-12 59
SCHEDULE L Transactions With Interested Persons OMB No 1545-0047
(Form 990 or 990-EZ) ► Complete if the organization answered2011"Yes" on Form 990, Part IV , line 25a , 25b, 26 , 27, 28a , 28b, or 28c,
Department of the Treasuryor Form 990- EZ, Part V, line 38a or 40b. 4pep To public
Internal Revenue Service ► Attach to Form 990 or Form 990-EZ. ► See separate instructions . Inspection
Name of the organization Employer identification number
Mission Hospital , Inc 56-0532141
Part I Excess Benefit Transactions (section 501 (c)(3) and section 501(c)(4) organizations only).
Complete if the organization answered "Yes" on Form 990, Part IV, line 25a or 25b, or Form 990•EZ, Part V, line 40b .
1 c Corrected?(a) Name of disqualified person (b) Description of transaction
Yes No
2 Enter the amount of tax imposed on the organization managers or disqualified persons during the year under
section 4958 ► $
3 Enter the amount of tax, if any, on line 2, above, reimbursed by the organization ► $
Part fl Loans to and/or From Interested Persons.(:mmnleta if fha nrnnnnatinn ancwarpri "Voc" on Form 99f1 Part IV_ line 2R _ or Fnrm 990•F7. Part V. line 38a.
(a) Name of interestedperson and purpose
(b) Loan to or fromthe organization?
(c) Original principalamount
(d) Balance due (e) Indefault?
(f) Approvedby board ornornmittPP
(g) Writtenagreement?
To From Yes No Yes No Yes No
Total ►Part II[ Grants or Assistance Benefiting Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 27.
(a) Name of interested person (b) Relationship between interested person and (c) Amount and type ofthe organization assistance
LHA For Paperwork Reduction Act Notice , see the Instructions for Form 990 or 990 - EZ. Schedule L (Form 990 or 990 - EZ) 2011
132131 01-19-12
6008530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleL (Form 990or990-E 2011 Mission Hos p ital, Inc 56-0532141 Pa e2
Part IV, Business Transactions Involving Interested Persons.
(.mmnlete if thu nrnnnr afinn nnewurcrl "Vac" nn Fnrm QQn Par} IV fin,- 9Ra 9Rh nr 9RC
(a) Name of interested person (b) Relationship between interestedperson and the organization
(c) Amount oftransaction
(d) Description oftransaction
(e) Sharing oorganization'srevenues?
Yes No
Janet Garrett Wife of Board Membe 15,925. om ensatio xWilliam Lee Board Member 597,284. William Lee XWyatt Stevens Board Member 363,444. Wyatt Steve X
Part V Supplemental InformationComplete this part to provide additional information for responses to questions on Schedule L (see Instructions).
Sch L, Part IV, Business Transactions Involvina Interested Persons:
a) Name of Person: Janet Garrett
b) Relationship Between Interested Person and Organization:
Wife of Board Member
c) Amount of Transaction $ 15,925.
(d) Description of Transaction: Compensation for participation on board
committee
(e) Sharing of Organization Revenues? = No
a) Name of Person: William Lee
b) Relationship Between Interested Person and Orqanization:
Board Member
c) Amount of Transaction $ 597,284.
(d) Description of Transaction: William Lee is a greater than 5%
shareholder of Blue Ridae X-Rav which does business with the hospital.
The hospital purchases pharmaceutical supplies in arms-length
transactions at fair market value. The price for the supplies is
negotiated through a group purchasing arrangement and not directly
negotiated with the vendor. Mr. Lee is not involved in negotiating the
ricina for these aoods.Schedule L (Form 990 or 990-EZ) 2011
13213201-19-12
6108530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
ScheduleL Form990or990 •E 2011 Mission Hospital, Inc 56-0532141 Pa e2
RArt 1l Supplemental Information
Complete this part to provide additional information for responses to questions on Schedule L (see instructions).
(e) Sharing of Oraanization Revenues? = No
(a) Name of Person: Wyatt Stevens
(b) Relationship Between Interested Person and Organization:
Board Member
(c) Amount of Transaction $ 363,444.
(d) Description of Transaction: Wyatt Stevens together with another
family member owns a greater than 5% share of Roberts & Stevens which
performs legal services for the hospital. The hospital engages Roberts &
Stevens for legal services in arms-length transactons at fair market
value. Mr. Stevens is not involved in negotiating the pricing for the
services rendered, nor does he perform any of the services engaged by the
hospital.
(e) Sharinq of Organization Revenues? = No
13246105-01-11 Schedule L (Form 990 or 990-EZ) 2011
6208530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
SCHEDULE 0 Supplemental Information to Form 990 or 990-EZ UM N 1040-UU4/(Form 990 or 990-EZ) Complete to provide information for responses to specific questions on 2011
Form 990 or 990-EZ or to provide any additional information. Open to PublicDepartmen t the Treasury )kts5#^ectioltInternalrnal Reven ue Service 101, Attach to Form 990 or 990 -EZ.
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
Form 990, Part III, Line 1, Description of organization mission:
and Part I, line 1, most significant activities
Mission Statement
To improve the health of the people of Western North Carolina and the
surrounding region.
Guiding Principles
Serve people as a not-for-profit health system governed by a voluntary
community board
Ensure sustainability through stewardship of the region's assets
Significantly enhance the quality of services we provide to patients
in a compassionate and cost-effective manner
Collaborate in order to improve access across the entire continuum of
care
Promote wellness and health to benefit the reqion
Eliminate preventable incidents of patient harm
2020 Vision
A reaional integrated health system providinq superior care and service
to patients and their families throuqh a full continuum of integrated
services, education, and research.
Form 990, Part III, Line 4a, Program Service Accomplishments:
As a result, Mission Health was ranked as one of the Top 15 Health
Systems in the nation, and one of only five such health systems in itsLHA For Paperwork Reduction Act Notice , see the Instructions for Form 990 or 990 -EZ. Schedule 0 (Form 990 or 990-EZ) (2011)13221101-23-12
6308530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
size category ($750 million to $1.5 billion in revenue ). Among the key
findinas were : Lower 30-Day Mortality Rates; Better Survival Rates;
Fewer Complications;Shorter Hospital Stays;Better Patient Safety and
Core Measure Adherence
For the fourth-straight year, Thomson Reuters named mission Hospital
one of the nation's Top 100 Hospitals. The annual study evaluates
hospitals across the nation on measures of Overall Organization
Performance;Patient Care;Operational Efficiency;Financial Stability
Mission Hospital was named one of the Top 100 out of nearly 3,000 U.S.
hospitals. The award is a testament to mission Hospital's ability to
achieve high-quality patient outcomes while improving efficiency.
According to the study, annual metrics for Medicare inpatients would be
significantly improved if every hospital in the nation performed at the
level of Mission Hospital and the other Top 100 Hospitals.
Mission Children's Hospital is the only Children's Hospital in western
North Carolina.
Mission Children's Hospital has over 60 Board-certified pediatric
subspecialists in 23 different specialties and dedicated facilities and
staff for children.
Mission Children's Hospital has 129 beds with 2,700 children cared for
on the pediatric inpatient unit each year, 4,000 outpatient pediatric
surgeries and nearly 14,000 pediatric visits to the Emergency
Department.Each year approximately 700 ill and premature newborns
receive lifesaving care in the Neonatal Intensive Care Unit.Mission
Children's Hospital babies go home from our NICU 13 days earlier than
the national average.012312 Schedule 0 (Form 990 or 990-EZ) (2011)
6408530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Mission Hospital is licensed for 735 beds and bassinets.
The medical staff has more than 750 physicians representing nearly all
specialties and subspecialties. Mission Hospital is the busiest
surgical hospital in the state, with more than 40,000 surgical cases
per year. Mission Hospital is the largest hospital west of Charlotte
and houses the region's only dedicated Level II Trauma Center.Mission
Hospital is the 91st largest hospital out of more than 6,000 hospitals
in the United States. Patients are 50 percent local and 50 percent
reqional.
Mission Health ' s performance on publicly reported quality measures has
reached the top 10 percent in the nation across multiple metrics
resulting in mission Health earninq a performance-based incentive bonus
from CMS.Over the past 10 years, Mission Health has implemented changes
which have resulted in steady improvement in eliminating all
bloodstream infections. The rate for mission Health as a whole is
approaching zero. Mission Hospital is in the top third nationally and a
top performer in the state of North Carolina for readmission rates
(preventing people from having to come back to the hospital
unnecessarilv).Patients are extremely satisfied with the care at
Mission Hospital. Patient satisfaction scores have reached the top 10
percent nationally due to Mission Hospital providing compassionate care
and enhancina communication. In addition, nine departments received the
elite five-star award from Professional Research Consultants, rankin
them in the top 10 percent nationally.
Mission Hospital's innovative initiatives and implementation of best
ractices helped sianificantlv decrease the number of days patients
13223- 2 Schedule 0 (Form 990 or 990-EZ) (2011)
6508530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Schedule 0 (Form 990 or 990-EZ) (2011 ) Page 2
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
Paae 2
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
require ventilator support in the Intensive Care Unit, as well as the
total number of days they require ICU care.
Throuah implementation of evidence-based best practices, mission
Hospital has had a significant decrease in Urinary Tract Infections and
Respiratory Infections and is reaching top performance levels
nationallv.Throuah a relentless focus on quality and safety, Mission
Hospital has attained one of the highest risk-adjusted survival rates
in the nation.
Mission Hospital's Stroke Program received the Gold Plus Award from the
American Heart Association/American Stroke Association. Mission
Hospital was recognized for at least 24 months of 85 percent or higher
adherence on all applicable achievement measures and at least 75
percent or higher adherence on select stroke quality measures .Mission
Hospital's Cardiovascular Critical Care and Recovery Units received the
prestigious Beacon Award for Critical Care Excellence given
semiannually by the American Association of Critical Care Nurses. This
award recognizes units that exhibit the highest quality standards in
nurse recruitment and retention, patient outcomes, staff training,
healthy work environments, leadership and evidence-based practice and
research.Mission Hospital's Weight Management Center was named a Blue
Distinction Center for Specialty Care for Bariatric Surgery by the
BlueCross BlueShield Association.Mission Hospital's Heart Services
received the Gold Performance Achievement Award from the American
Colleae of Cardioloav Foundation for heart attack treatment. The award
is based on a hospitals consistent use of treatment guidelines that
were created using criteria from two rigorous programs: ACTION
Registry, developed by the National Cardiovascular Data Registry, and13221201-23-12 Schedule 0 (Form 990 or 990-EZ) (2011)
6608530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Name of the organization Employer identification number
Mission Hospital, Inc 56-0 532141
the "Get With the Guidelines" program for heart attack, developed by
the American Heart Association.
Mission Hospital earned full accreditation from the Society of Chest
Pain Centers, making it the only accredited center in western North
Carolina and one of only 24 in the state.
Three Mission Hospital nurses were named among "North Carolina's Great
100 Nurses" in 2012 for exemplary patient care by the Great 100, a
grassroots peer recognition organization honoring the nursing
ession in North Carolina.
Mission Health created the Office of Patient Experience to ensure an
optimal environment at mission Health by assisting our patients with
needs, resolving problems and bridging language barriers.Mission Health
established a new protocol initiative, a short checklist reviewed by
healthcare professionals before every procedure.A new mission Hospital
Physician Executive Council was created to provide a vehicle for
increased physician input and to more fully integrate their wisdom into
the administration of the hospital.Mission Health collaborated with the
Mountain Area Health Education Center (MAHEC) to bring a Hospice and
Palliative Medicine Fellowship program to Mission Health.
The Mission Health Cancer Center's qoal is to provide state-of-the-art
care for patients with cancer and ensure an exceptional experience
durinq a very difficult time. The Center is structured in a partnership
model, that allows the patient to have the best possible outcome,
without harm or waste. The Center is accredited through the American
College of Surgeons as a Comprehensive Community Cancer Program with01-23-12 Schedule 0 (Form 990 or 990 -EZ) (2011)
6708530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
commendation.
In 2012, Mission Health established a Center for Innovation which
exists to encourage, support and develop ideas for innovative
ovements in healthcare. Innovation is the introduction of new
ideas, services, processes and products aimed at dramatically improving
treatment, diagnosis, education, outreach, prevention or research, with
the long-term goal of improving quality, safety, outcomes and
efficiencies.
In September 2012, Mission Health opened a comprehensive care clinic,
Mission My Care Plus, in Candler, North Carolina. The practice is part
of Mission Health's vision for the future of healthcare and represents
an innovative approach to caring for individuals and families in a
patient-centered, comprehensive manner. Mission My Care Plus provides
family care, pediatrics, prenatal care, physical therapy, minor
procedures and a complete on-site pharmacy.
In 2012, Mission Health continued its legacy of providing leading-edge
heart care by performing the first transcatheter aortic valve
replacement surgery (TAVR) in western North Carolina. The life-changing
procedure is a treatment for patients with severe aortic stenosis who
were previously considered inoperable. Surgeons at Mission Hospital
perform more than 400 valve procedures annually, ranking mission
Hospital in the top five percent nationally according to the Society of
Thoracic Surgeons.
Form 990, Part VI, Section A, line 2: Mr. Charles Owen, board member and
01-2312 Schedule 0 (Form 990 or 990-E2) (2011)
6808530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Page 2
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
Ms. Janice Brumit, board member have a business relationship, as Mr. Owen &
Ms. Brumit's spouse have a business relationship.
Form 990, Part VI, Section A, line 6: Mission Health System, Inc, a
501(c)(3) is the parent company of Mission Hospital, Inc. It is the sole
member of Mission Hospital, Inc.
Form 990, Part VI, Section A, line 7a: Mission Health System, the sole
member of mission Hospital, Inc has reserved powers relatinq to the
governing body of Mission Hospital as follows:
Appointment of members of the Board of Directors of the Hospital, including
the power to fill any vacancies on the Hospital Board of Directors.
Removal, with or without cause, and at any time, of members of the Board of
Directors of the Hospital.
intment and/or removal of the President of the Hospital.
Form 990, Part VI, Section A, line 7b : Mission Health System as sole
member of Mission Hospital has reserve powers as follows:
Approval of any plan of dissolution, consolidation or merger of the
Hospital.
Approval of the acquisition, purchase, sale or disposition of assets of the
Hospital with a value in excess of $5,000,000.
Approval of the incurrence of long-term debt.
Development and implementation of strategies for contracting with managed
care providers and other payors, including the development of a
nhvsician-hospital oraanization.
royal of strategic and financial plans of the Hospital.
Approval of capital and operating budgets of the Hospital.fo3- 2 Schedule 0 (Form 990 or 990 - EZ) (2011)
6908530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
Approval of any material expansion or elimination of any clinical service
or non-clinical service at the Hospital.
Form 990, Part VI, Section B, line 11: A draft of the Form 990 is prepared
by the Manager of Tax Services at Mission Hospital. The Form 990 is
reviewed by the organization's CEO, CFO, General Counsel and Compliance
Officer. In addition, an outside accounting firm is engaged to review and
sign the 990 and prepare the return for final filing with the IRS. Before
filing, highlights of Form 990 are reviewed by Board Committees which may
include the Audit and Compliance Committee; Finance and Property Committee
and HR and Compensation Committee. After committee review, a draft of the
990 is provided to the Mission Hospital Board of Directors for review.
Highlights of the governance, compensation, and financial statements are
reviewed with the board and they have the opportunity to ask questions and
suggest improvements or provide corrections. If there are changes as a
result of board review, a corrected Form 990 will be provided for final
approval before filing. After final approval, the Form 990 will be filed
with the IRS.
Form 990, Part VI, Section B, Line 12c: Audit and Compliance Committee
Reviews:
The Independent Directors on the Audit and Compliance Committee review
Conflicts of Interest and Disabling Situations, consider any issues
involving conflicts and make determinations as to whether a particular
relationship or arrangement would disable an individual from serving as a
fiduciary for the Board or would reasonably be expected to exert an
influence on the individual's ludament and preclude the individual from
being an Independent Director. The Audit and Compliance Committee may13221201-23-iz Schedule 0 (Form 990 or 990-EZ) (2011 ))
7008530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Name of the organization Employer identification number
Mission Hospital, Inc 5 6-0532141
retain counsel from outside audit, legal, governance or other experts. Any
determination of percent of revenue or income received by an individual or
entity may be based on certifications from outside auditors of disclosures
made directly by the individual to the audit firm. The determinations of
the Audit and Compliance Committee may be reviewed by the board.
The organization's conflict of interest policy applies to members of senior
leadership, medical staff, clinical service line leaders, elected medical
staff leaders, departmental directors, staff members working in the
purchasing department, and all other staff members with purchasing
authority, as well as immediate family members of such interested persons
and entities in which interested persons have a material financial
interest.
The organization's policy is for all interested persons to disclose any and
all conflicts of interest in accordance with the IRS guidelines for
tax-exempt entities as well as any other applicable state or federal law.
Upon initial assumption of duties, interested persons are provided with a
copy of the conflict of interest policy and sign a conflict of interest
disclosure statement. Thereafter, the statements will be completed
annually. Periodically all staff members are asked to complete a conflict
of interest disclosure statement. Internal and external auditors, General
Counsel or outside counsel will periodically conduct a review of the
disclosure process to determine whether the organization is in compliance
with the policy.
Procedures used if a conflict of interest is identified:
The Interested Persons shall not participate in any discussion or vote
regarding the transaction and shall not be present in the meeting room for
any part of the discussion or vote relating to the transaction issue.
The Board of Directors will discuss the transaction but will not formallyf2-1o32 Schedule 0 (Form 990 or 990-EZ) (2011)
7108530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
rove such transaction unless the disinterested members of the Board have
decided by majority vote that the transaction is in the best interests of
and for the benefit of the organization, and is fair and reasonable thereto
in all respects.
If a violation of the policy is identified, the interested persons are
subject to appropriate sanctions, including removal from their positions.
All situations such as this will be brought to the integrity steering
committee for final resolution.
Form 990, Part VI, Section B, Line 15: The Human Resources and
Compensation Committee
* Recommends to the Board any revisions to the overall philosophy and
policy to guide the determination of compensation and benefit packages for
executives which includes the CEO, the CFO, and President as well as all
other executives, which would include all key employees; and
* Makes executive compensation decisions on behalf of the Board, within the
parameters of the overall philosophy and policy approved by the Board, with
support from outside executive compensation consultants to ensure
compensation levels are at fair market value; and
* Reports to the Board on its actions.
The Committee also:
* Conduct a periodic review of Mission Health System and Hospital executive
compensation philosophy and policies and practices and recommends any
revisions to the Board.
* Determines which positions are eligible for the executive compensation
lan.
* Establishes and approves the salary parameters for the CEO, others
eligible under the executive compensation plan, and employees who aref-1o232 Schedule 0 (Form 990 or 990-EZ) (2011)
7208530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Page 2
Name of the organization Employer identification numberMission Hospital, Inc 56-0 532141
Disqualified Persons.
* Establishes and approves the terms of all incentives, benefits or
programs included in the executive compensation plan.
* Reviews and approves all employment contracts for the CEO and all others
eligible under the executive compensation plan, uses discretion in
recommending amendments or termination of these arrangements to the Board.
* Reviews the performance and determines the compensation of the CEO and
others defined as eligible under the executive compensation plan based on
the achievement of shared and personal goals.
* Reviews any special situations where, at the discretion of the full
Board, the CEO, or independent consultants, the advice or approval of the
Committee is requested.
* Has sole responsibility in retaining qualified compensation and benefits
consultants and other professional advisors as the need may arise, and to
terminate their contracts.
* Confers with members of management , such as the General Counsel and the
Vice President of Human Resources, assists the Committee in performing its
duties, so long as their role remains technical in nature.
* Meets at least bi-monthly and conducts discussions in executive sessions
as needed.
* Keeps and distributes minutes of all its meetings to its members. Items
of a sensitive nature are referenced in the minutes with detailed
supporting documentation retained on file.
* Reports to the full Board at the next Board meeting following the
Committee meeting, or as requested.
* Discloses any potential conflicts of interest situations to the Committee
Chairman that may affect their independent directors' status as soon as
they arise.13221201-23-12 Schedule 0 (Form 990 or 990-EZ) (2011 )
7308530901 351485 56 -0532141 2011.05070 Mission Hospital, Inc 56-05322
1 Page 2
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
* Maintains complete documentation of all matters discussed by the
Committee.
* Maintains complete confidentiality on all matters reviewed and discussed.
* Exercises any fiduciary, administrative, or other functions assigned to
the Committee which are related to executive compensation or benefits
plans.
* Obtains education and traininq to exercise all responsibilities
effectively and keeps abreast of significant developments in executive
compensation practices and regulations.
* Ensures that all aspects of Mission Health System and Hospital executive
compensation adhere to all relevant regulatory requirements.
* Reviews the Committee charter annually and revises it as appropriate and
conduct an annual evaluation of the Committee's performance.
Form 990, Part VI, Section C, Line 19: Mission Hospital prepares an annual
report to the community and makes its significant accomplishments available
through this report on the Mission Hospital website. Audited Financials
are attached to the 990. The articles of incorporation are available to the
ublic through the North Carolina Secretary of State website. Conflict of
interest policy and by-laws are available upon request.
Form 990, Paqe 7 , Part VII A
Board Member Hours
Mission Health System, Inc. and Mission Hospital, Inc. share a common
board and key employees. The hours spent on the two entities cannot be
separated with accuracy as the activities are interrelated to a ve
high degree as Mission Health System provides administrative and other
support to Mission Hospital, Inc.
012312 Schedule O (Form 990 or 990 -EZ) (2011)
7408530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
Form 990, Part XI, line 5, Changes in Net Assets:
Net unrealized gains on investments: 49,850.
of22-12 Schedule 0 (Form 990 or 990-EZ) (2011)75
08530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
SCHEDULER Related Organizations and Unrelated PartnershipsOMB No 1545-0047
990 2011(Form ) ► Complete if the organization answered " Yes" to Form 990, Part IV, line 33, 34, 35, 36, or 37. Open to PublicDepartment of the Treasury ► Attach to Form 990. ► See separate instructions. InInternal Revenue Service '&pecWn
Name of the organization Employer identification number
Mission Hospital, Inc 56-0532141
Part t Identification of Disregarded Entities (Complete if the organization answered 'Yes' to Form 990, Part IV, line 33.)
(a)
Name, address, and EINof disregarded entity
(b)
Primary activity
(c)
Legal domicile (state or
foreign country)
(d)
Total Income
(e)
End-of-year assets
(f)
Direct controllingentity
Part II Identification of Related Tax-Exempt Organizations (Complete if the organization answered 'Yes' to Form 990, Part IV, line 34 because it had one or more related tax-exemptorganizations during the tax year.)
(a)Name, address, and EINof related organization
(b)
Prima activitrY Y
(c)
Leal domicile or9 (state
foreign country)
(d)
Exempt CodePsection
(e)
Public chantYstatus (if section
(f)
Direct controllin 9entity
(9)Section 512(b)(13)
controlledentity?
501 (c)(3)) Yes No
Mission Health System , Inc - 58-1450888
400 Ridgefield Court , Suite 100 Parent Company Support
Asheville , NC 28806 ervicesMissionHospital Mi North Carolina 5 01(c)(3) L ine 11a I X
Mission Medical Associates , Inc - 26-3627231
866 Hendersonville Road ission Health
Asheville , NC 28803 Employed Physician Group North Carolina 01(c)(3) L ine 9 - System , Inc X
The McDowell Hospital , Inc - 56-0623938
430 Rankin Avenue ission Health
Marion , NC 28742 C ommunity Hospital orth Carolina 5 01(c)(3) ine 3 System , Inc X
Mission Healthcare Foundation , Inc -
56-1881331 , 980 Hendersonville Road , ission Health
Asheville , NC 28803 oundatioa orth Carolina 01(c)(3) L ine 7 System , Inc X
For Paperwork Reduction Act Notice, see the Instructions for Form 990. Schedule R (Form 990) 2011
13216101-23-12 LHA 76
Schedule R (Form 990) Mission Hospital, Inc 56-0532141
#Par! 11 Continuation of Identification of Related Tax-Exempt Organizations
(a)
Name, address, and EINof related organization
(b)
Primary activity
(c)
Legal domicile (state or
foreign country)
(d)
Exempt Codesection
(e)
Public chantystatus (if section
(f)
Direct controllin 9entity
(g)Section 512(b)(13)
controlledorganization?
501(c)(3)) Yes NoBlue Ridge Regional Hospital , Inc -
56-1025032 , P 0 Box 9 , Spruce Pine , NC ission Health
28777 C ommunity Hospital North Carolina 01(c)(3 ) L ine 3 ystem Inc X
Blue Ridge Regional Hospital Foundation - lue Ridge
58-2172660 , PO Box 247 , Spruce Pine , NC egional
28777 Hospital Foundation North Carolina 01(c)(3) Line ila I ospital Inc. X-
132222 05-01-11 77
Schedule R (Form 990) 2011 Mission Hospital, Inc 56-0532141 Page 2
Part fit Identification of Related Organizations Taxable as a Partnership (Complete if the organization answered "Yes" to Form 990, Part IV, line 34 because it had one or more relatedorganizations treated as a partnership during the tax year.)
(a)
Name, address , and EINof related organization
(b)
Primary activity
(c)Legal
domicile(state or
(d)
Direct controllingentity
y
(e)
Predominant income(related unrelated,
excluded from tax under
(f)
Share of totalincome
(9)
Share ofend of ear
t
(h)
D isproport i on -ate allocat ons^
(i)
Code V-UBIamount in box20 of Schedule
U)
General omanaging
artne/1
(k)
Percentageownership
foreigncountry ) sections 512-514)
asse sYes No K-1 (Form 1065) Ye No
Asheville Imaging , LLP Outpatient
56-1907201 , 534 Biltmore Imaging
Avenue , Asheville , NC 28801 S ervices NC elated 1 , 638 , 693. 635 452. N/A X 69.00%
Imaging Realty , LLP -
56-1907203 , 534 Biltmore edical Office
Avenue , Asheville , NC 28801 Building NC N/A N/A N/A N/A / N/A / N/AMSJHS and CCP Joint
Development Company , LLC -
56-2250464 , 428 Biltmore Yong Term Acute
Avenue , Asheville , NC 28801 are Hospital NC N/A N/A N/A N/A N/A N/A / N/A
Blue Ridge DME LLC - R ome Medical-
26-3570174 , 125 Hospital quipment and
Drive , Spruce Pine , NC 28777 upplies Sales NC N/A N/A N/A N/A / N/A / N/APar f Identification of Related Organizations Taxable as a Corporation or Trust (Complete if the organization answered 'Yes' to Form 990, Part IV, line 34 because it had one or more related
organizations treated as a corporation or trust during the tax year.)
(a)
Name, address, and EINof related organization
(b)
Primary activity
(c)
Legal domicile(state orforeigncountry)
(d)
Direct controllingentity
(e)
Type of entity(C corp, S corp,
or trust)
(f)
Share of totalincome
(g)
Share ofend-of-year
assets
(h)
Percentageownership
Horizon Health Corp - 56-1341621
213 Ridgefield Court
Asheville , NC 28806 Holding Company NC N/A CORP N/A N/A N/AHorizon Management Services Inc - 56 -1341624 Patient Billing and
213 Ridgefield Court Collection Services,
Asheville , NC 28806 edical Property NC N/A CORP N/A N/A N/ADogwood Insurance Company , Ltd
The Grand Pavilion Commercial Centre , PO Box 30600 Captive Insurance ayman-
Cayman Islands , CAYMAN ISLANDS Entity Islands N/A CORP N/A N/A N/A
132162 01 -23-12 78
See Part VII for ContinuationsSchedule R (Form 990) 2011
Schedule R (Form 990) Mission Hospital, Inc 56-0532141
Part tit Continuation of Identification of Related Organizations Taxable as a Partnership
(a)
Name, address , and EINof related organization
(b)
Primary activity
(c)Legal
domicile(state or
(d)
Direct controllingentity
(e)
Predominant income( related, unrelated ,
excluded from tax under
(1)
Share of totalincome
(g)
Share ofend-of-year
t
(h )
D isproport i on-ate allocations?
(1)
Code V-UBIamount in box20 of Schedule
Gj)General omanaging
artnefT
(k)
Percentageownership
foreigncountry) sections 512-514)
asse sYes No K-1 (Form 1065) a No
McDowell MRI LLC - 75-3046378
414 Rankin Avenue
Marion , NC 28752 edical Imaging NC N/A N/A N/A N/A / N/A / N/A
132223 05-01-11 79
Schedule R(Form 990)2011 Mission Hospital, Inc 56-0532141 Paoe3
Part V Transactions With Related Organizations (Complete if the organization answered 'Yes' to Form 990, Part IV, line 34, 35, 35a, or 36.)
Note. Complete line 1 if any entity is listed in Parts II, III, or IV of this schedule. Yes No
1 During the tax year, did the organization engage in any of the following transactions with one or more related organizations listed in Parts II-IV'?
a Receipt of (i) interest (ii) annuities (iii) royalties or (iv) rent from a controlled entity _ 1a X
b Gift, grant, or capital contribution to related organization(s) 1 b X
c Gift, grant, or capital contribution from related organization(s) 1c X
d Loans or loan guarantees to or for related organization(s) 1 d X
e Loans or loan guarantees by related organization(s) le X
If Sale of assets to related organization(s) if X
g Purchase of assets from related organization(s) _ 1 X
h Exchange of assets with related organization(s) 1 h X
i Lease of facilities, equipment, or other assets to related organization(s) 1 i X
j Lease of facilities, equipment, or other assets from related organization(s)
k Performance of services or membership or fundraising solicitations for related organization(s)
I Performance of services or membership or fundraising solicitations by related organization(s)
m Sharing of facilities, equipment, mailing lists, or other assets with related organization(s)
n Sharing of paid employees with related organization(s)
o Reimbursement paid to related organization(s) for expenses 10 X
p Reimbursement paid by related organization(s) for expenses _ 1 X
q Other transfer of cash or property to related organization(s) 1 X
r Other transfer of cash or property related organization s l r X
2 If the answer to any of the above is "Yes.' see the instructions for information on who must complete this line- including covered relatinnshins and transaction thresholrts
(a)Name of other organization
(b)Transactiontype (a•r)
(c)Amount involved
(d)Method of determining
amount involved
(i)Asheville Imaging , LLP R 1,456,304. ash
(2) Asheville Imaging , LLP I 43,076. MV
(3) Asheville Imaging , LLP K 112,530. MV
(4)
(5)
(6)
132163 01-23-12 8 0 Schedule R (Form 990) 2011
Schedule R (Form 990) 2011 Mission Hospital, Inc 56-0532141 Page4
Part 1lf Unrelated Organizations Taxable as a Partnership (Complete if the organization answered 'Yes' to Form 990, Part IV, line 37.)
Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue)that was not a related organization. See instructions regarding exclusion for certain investment partnerships.
(a)
Name, address, and EINof entity
(b)
Primary activity
(c)
Legal domicile(state or foreign
(d)Predominant income(related, unrelated,
from tax
(e)armersl^So1(s^^
(f)
Share oftotal
(g)
Share ofend of year
(h)oispropor-
anotoanos^
(i)
Code V-UBIamount in box 20of Schedule K-1
01General omani^
(k)
Percentageownership
country) under section 512-514 ) Yes N. income assets Yes No (Form 1065) Yes No
Schedule R (Form 990) 2011
13216401-23-12 81
ScheduleR (Form 990 2011 Mission Hospital, Inc 56-0532141 Pa e5
Pad V.. Supplemental InformationComplete this part to provide additional information for responses to questions on Schedule R (see instructions).
Part IV, Identification of Related Organizations Taxable as Corp or Trust:
Name of Related Organization:
Horizon Management Services Inc
Primary Activity: Patient Billinq and Collection Services, Medical
Pronerty Rental
01-23-12 Schedule R (Form 990) 2011
8208530901 351485 56-0532141 2011.05070 Mission Hospital, Inc 56-05322
KP G
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Combined Financial Statements
September 30, 2012 and 2011
(With Independent Auditors' Report Thereon)
KPMG LLPSuite 1000401 Commerce StreetNashville , TN 37219-2422
Independent Auditors' Report
The Board of DirectorsMission Health System, Inc.:
We have audited the accompanying combined balance sheets of Mission Health System, Inc. and Affiliates(Mission) as of September 30, 2012 and 2011, and the related combined statements of operations, changesin net assets, and cash flows for the years then ended. These combined financial statements are theresponsibility of Mission's management. Our responsibility is to express an opinion on these combinedfinancial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An audit includes consideration ofinternal control over financial reporting as a basis for designing audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of Mission's internalcontrol over financial reporting. Accordingly, we express no such opinion. An audit also includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.
In our opinion, the combined financial statements referred to above present fairly, in all material respects,the financial position of Mission Health System, Inc. and Affiliates as of September 30, 2012 and 2011,and the results of their operations, their changes in net assets, and their cash flows for the years then ended,in conformity with U.S. generally accepted accounting principles.
As discussed in note 1(w) to the combined financial statements, Mission changed its presentation of theprovision for bad debts as a result of the adoption of Accounting Standards Update 2011-07: Health CareEntities: Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and theAllowancefor Doubtful Accounts for Certain Health Care Entities.
K'PMG LcPJanuary 11, 2013
KPMG LLP is a Delaware limited liability partnership,the U S member firm of KPMG International Cooperative('KPMG Intemational '), a Swiss entity
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Combined Balance Sheets
September 30, 2012 and 2011
(In thousands)
Assets
Current assets:Cash and cash equivalentsInvestmentsCurrent portion of assets limited as to useAccounts receivable, less allowance for uncollectible
accounts of $50,037 in 2012 and $60,264 in 2011Other receivablesInventoriesPrepaid expenses and other
Total current assets
Assets limited as to useProperty and equipment, netOther assets
2012 2011
$ 119,81278,43215,560
118,518
16,895
147,86951,59316,0689,690
439,024
580,186690,48928,869
$ 1,738,568
124,40344,98915,7137,838
328,356
504,673679,29827,474
1,539,801
Liabilities and Net Assets
Current liabilities:Current portion of long-term debtLine of creditAccounts payableAccrued payroll and other expensesDue to third-party payors
Total current liabilities
Long-term debtOther long-term liabilities
Total liabilities
$ 9,16430,80035,75077,56939,801
193,084
363,84537,673
594,602
10,506850
25,58072,04017,546
126,522
375,17227,943
529,637
Net assets:UnrestrictedTemporarily restrictedPermanently restricted
Total net assets attributable to Mission Health System, Inc.
Noncontrolling interests
Total net assets
See accompanying notes to combined financial statements.
1,122,79516,1633,561
1,142,519
1,447
1,143,966
$ 1,738,568
989,60315,6173,585
1,008,805
1,359
1,010,164
1,539,801
2
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Combined Statements of Operations
Years ended September 30, 2012 and 2011
(In thousands)
Unrestricted revenue, gains, and other support:Net patient service revenueProvision for bad debts
Net patient service revenue less provision for bad debts
2012
$ 1,091,512(93,974)
997,538
2011
985,787(93,826)
891,961
Other revenue
Total unrestricted revenue, gains, and other support
Expenses:Salaries and wagesEmployee benefitsSupplies and other expensesDepreciation and amortizationInterest
Total expenses
Operating income
Nonoperating gains:Investment income, netOther nonoperating gains, net
Nonoperating gains, net
Revenue, gains, and other support in excess of expenses
and losses before noncontrolling interests
Noncontrolling interests
Revenue, gains, and other support in excess of expensesand losses attributable to Mission Health System, Inc
Net unrealized gains (losses) on investmentsOtherNet assets released from restriction for capital expenditures and
contributed capital equipment
Change in unrestricted net assets
See accompanying notes to combined financial statements.
56,863
1,054,401
435,91697,258
384,27865,68215,761
998,895
55,506
18,7226,703
25,425
80,931
43,757
935,718
408,11691,552
328,42060,55114,922
903,561
32,157
17,5043,740
21,244
53,401
(932) (699)
79,999
49,624(422)
52,702
(23,729)(133)
3,991
$ 133,192
4,685
33,525
3
Balance at September 30, 2010
Revenue, gains, and other support inexcess of expenses and losses
Net unrealized losses on investmentsInvestment income, netDonor-restricted gifts, grants, and bequestsOtherDistributions to noncontrolling interestsNet assets released from restriction
for operationsNet assets released from restriction
for capital expenditures and contributedcapital equipment
Change in net assets
Balance at September 30, 2011
Revenue, gains, and other support inexcess of expenses and losses
Net unrealized gains on investmentsInvestment income, netDonor-restricted gifts, grants, and bequestsOtherDistributions to noncontrolling interestsNet assets released from restriction
for operationsNet assets released from restriction
for capital expenditures and contributedcapital equipment
Change in net assets
Balance at September 30, 2012
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Combined Statements of Changes in Net Assets
Years ended September 30, 2012 and 2011
(In thousands)
Temporarily PermanentlyUnrestricted restricted restricted
$ 956,078 14,857 3,481
Noncontrollinginterest Total
1,707 976,123
52,702 - - 699 53,401(23,729) - - - (23,729)- 186 - - 186- 7,523 104 - 7,627
(133) - - - (133)- - - (1,047) (1,047)
(2,264) - - (2,264)
4,685 (4,685) - - -
33,525 760 104 (348) 34,041
989,603 15,617 3,585 1,359 1,010,164
79,999 - - 932 80,93149,624 533 - - 50,157- 789 - - 789- 5,457 61 - 5,518
(422) 85 (85) - (422)- - - (844) (844)
(2,327) - - (2,327)
3,991 (3,991) - - -
133,192 546 (24) 88 133,802
$ 1,122,795 16,163 3,561 1,447 1,143,966
See accompanying notes to combined financial statements
4
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Combined Statements of Cash Flows
Years ended September 30, 2012 and 2011
(In thousands)
Cash flows from operating activities:Change in net assetsAdjustments to reconcile change in net assets to net cash
provided by operating activities:Net realized and unrealized (gains) losses on investmentsDepreciation and amortizationProvision for uncollectible accountsDistributions to noncontrolling interests(Gain) loss on sale of property and equipmentPermanently restricted and capital contributionsChanges in operating assets and liabilities:
Patient and other receivablesAccounts payable and accrued payroll and other expensesOther operating assets and liabilities, net
Net cash provided by operating activities
Cash flows from investing activities:Capital expendituresPurchases of investmentsPurchases of assets limited as to useSales of assets limited as to useProceeds from sale of property and equipment
Net cash used in investing activities
Cash flows from financing activities:Line of credit proceeds, netRepayment of debtDistributions to noncontrolling interestsPermanently restricted and capital contributions
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental information:Cash paid for interest , net of amount capitalized
2012
133,802
(65,312)65,68293,974
844(1,246)(3,967)
(125,468)15,69929,600
2011
34,041
10,18860,55193,8261,047134
(4,789)
(114,233)6,2023,133
143,608 90,100
(77,839) (147,829)(78,432) -
(101,583) ( 148,661)92,717 175,3272,419 34
(162,718) (121,129)
30,338 32,620(13,057) (39,276)
(844) (1,047)3,967 4,789
20,404 (2,914)
1,294 (33,943)
118,518 152,461
$ 119,812 118,518
15,563 16,027
See accompanying notes to combined financial statements.
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
(1) Organization and Summary of Significant Accounting Policies
Mission Health System, Inc. (Mission) is a multidimensional healthcare organization, principally located inAsheville, North Carolina, providing inpatient, outpatient, and emergency services largely for residents ofwestern North Carolina. The significant accounting policies used by Mission in preparing and presentingits combined financial statements follow:
(a) Principles of Combination
The combined financial statements include the accounts of Mission and its controlled affiliates. Suchaffiliates of Mission include Mission Hospital, Inc. (the Hospital ), Mission Medical Associates, Inc.(MMA), Horizon Health Corporation, Imaging Realty , LLC, Asheville Specialty Hospital, BlueRidge Regional Hospital , Inc., The McDowell Hospital , Inc. (McDowell ), and Mission HealthcareFoundation, Inc.
Dogwood Insurance Company (SPC), Ltd. (Dogwood) is incorporated as an exempted SegregatedPortfolio Company with Limited Liability under the Companies Law of the Cayman Islands, andholds an Unrestricted Class `B' Insurer's license under Section 4 of Cayman Islands Insurance Law.The license enables Dogwood to transact insurance business, other than domestic business, fromwithin the Cayman Islands. Dogwood is equally owned by Mission and WakeMed, was originallyincorporated under the name Dogwood Insurance Company, Ltd. on April 9, 2010, and onNovember 18, 2010 changed its name to Dogwood Insurance Company (SPC), Ltd. Dogwood
currently consists of the "General Company" (which comprises only nominal financial amounts) andtwo segregated portfolios. The segregated portfolios are Mission Segregated Portfolio (Mission SP)and WakeMed Segregated Portfolio. The accompanying combined financial statements include thefinancial position and results of operations of Mission SP only.
Noncontrolling interests have been recorded to recognize the portion of the net assets and operatingresults of affiliates not wholly owned by Mission.
All significant intercompany accounts and transactions have been eliminated in combination.
(b) Use ofEstimates
The preparation of combined financial statements in conformity with U.S. generally acceptedaccounting principles requires management to make estimates and assumptions that affect thereported amounts of assets, liabilities, revenue, and expenses, as well as disclosure of contingentassets and liabilities. Actual results could differ from those estimates.
Significant items subject to such estimates and assumptions include the determination of theallowances for uncollectible accounts and contractual adjustments, accrued general and professionalliability costs, reserves for employee healthcare and workers' compensation claims, estimatedthird-party payor settlements, and the valuation of certain alternative investments as furtherdescribed in note 1(d).
In particular, laws and regulations governing the Medicare and Medicaid programs are extremelycomplex and subject to interpretation. As a result, there is at least a reasonable possibility that
6 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
recorded estimates associated with these programs will change by a material amount in the near
term.
(c) Cash Equivalents
Cash equivalents include certain investments in highly liquid debt instruments with original
maturities of three months or less.
(d) Investments and Investment Income
Investments in equity securities with readily determinable fair values and all investments in debt
securities are measured at fair value in the combined balance sheets. Investment income items
(including realized gains and losses on investments, earnings and losses on equity method alternative
investments, impairment losses, interest, and dividends) are included in revenue, gains, and other
support in excess of expenses and losses unless the income or loss is restricted by donor or law.
Mission reports the net change in unrealized gains and losses on investments in portfolios where
Mission retains sole investment management control as a change in unrestricted net assets unless
their use is restricted by explicit donor stipulations or law and, in accordance with relevant
accounting literature, generally excludes such net unrealized amounts from revenue, gains, and other
support in excess of expenses and losses.
Mission also has investments in certain marketable and nonmarketable alternatives (most often
referred to as hedge funds or private equity funds and generally organized as limited partnerships,
limited liability companies or corporations) and commingled funds (generally organized as collective
trust funds). Mission accounts for marketable and nonmarketable alternatives organized as limited
partnerships or limited liability companies with specific ownership accounts using the equity
method, which generally approximates net asset value. Mission accounts for commingled funds
using the fair value method or the equity method, dependent on its percentage ownership in a
specific fund. Mission accounts for marketable and nonmarketable alternatives organized as
corporations at net asset value as a practical expedient to fair value, when the investment has a
readily determinable value and transacts frequently (at least quarterly).
Mission routinely evaluates and measures its individual investments for unrealized losses that are
deemed to be "other-than-temporary," using the relevant guidance in Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) 320, Investments-Debt and
Equity Securities, for subsequent measurement of investments in debt and equity securities. Any
such losses are characterized in the period of determination as nonoperating losses and included in
the period's revenue, gains, and other support in excess of expenses and losses. The underlying
holdings of marketable alternatives and commingled funds are typically valued by the general
partner and trustee, respectively, using quoted market prices for publicly traded securities and
valuation estimates for derivative instruments. The underlying holdings of nonmarketable
alternatives are typically valued by general partners at cost or adjusted value based on recent
arms-length transactions, appraisals by third parties of properties held, or other methodologies. The
valuations provided by the general partners and trustees are routinely evaluated by management, and
management believes such values are reasonable.
(Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
Management is required to make certain estimates in the preparation of the combined financial
statements. Among those potentially significant estimates are the valuation of certain marketable and
nonmarketable alternatives. These estimates may be subjective and can require judgment regarding
significant matters such as the amount and timing of future cash flows and the selection of discount
rates that appropriately reflect market and credit risks. Mission believes that the carrying amounts of
these investments are reasonable estimates of fair value. Changes in assumptions or actual results
that differ from such estimates could have a material impact on the combined financial statements.
(e) Fair Value Accounting Standard
Mission follows the following financial accounting and reporting literature regarding fair valuemeasurements:
FASB ASC 820, Fair Value Measurements and Disclosures, which defines fair value,
establishes an enhanced framework for measuring fair value, and expands disclosures about fair
value measurements;
FASB Accounting Standards Update (ASU) 2010-06, Improving Disclosures about Fair Value
Measurements, which amended Topic 820 and also requires that Mission provide additional
enhanced disclosures related to its fair value measurements; and
the measurement provisions of FASB ASU 2009-12, Investments in Certain Entities That
Calculate Net Asset Value per Share (or Its Equivalent), as it applies to certain investments in
funds that do not have readily determinable fair values - including private equity investments,
hedge funds, real estate, and other funds. This guidance amends ASC 820 and permits, as a
practical expedient, the use of net asset value or its equivalent for the estimation of the fair value
of investments in investment companies for which the investment does not have a readily
determinable fair value. Net asset value, in many instances, may not equal fair value that would
be calculated pursuant to ASC 820.
(j9 Assets Limited as to Use
Assets limited as to use primarily include assets held by trustees under indenture agreements, funds
subject to donor restriction, and assets set aside by the Board of Directors for future operational andcapital needs. Amounts required to meet related current liabilities of Mission are classified as current
assets in the accompanying combined balance sheets.
(g) Property and Equipment
Property and equipment are stated at cost. Provisions for depreciation are computed using thestraight-line method over the estimated useful lives of the assets, which range from 3 to 40 years.Equipment under capital lease obligations is amortized using the straight-line method over theshorter of the lease term or the estimated useful life of the equipment. Leasehold improvements areamortized over the shorter of the lease term or estimated useful life. Such amortization is included indepreciation and amortization in the combined financial statements.
Gifts of long- lived assets such as land, buildings , or equipment are reported as unrestricted support,and are excluded from revenue, gains, and other support in excess of expenses and losses unless
8 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assetswith explicit restrictions that specify how the assets are to be used, and gifts of cash or other assetsthat must be used to acquire long-lived assets, are reported as restricted support. Absent explicit
donor stipulations about how long those long-lived assets must be maintained, expirations of donor
restrictions are reported when the donated or acquired long-lived assets are placed into service.
Contributions restricted to the purchase of property and equipment, which restrictions are met within
the same year as received, are reported as increases in unrestricted net assets in the combined
financial statements.
(h) Costs ofBorrowing
Bond issuance costs and bond discounts are amortized over the term of the related bond issue using amethod that approximates the interest method.
Interest cost incurred on borrowed funds during the period of construction of capital assets is
capitalized, net of income earned on related trusteed assets, as a component of the cost of acquiring
those assets.
(i) Temporarily and Permanently Restricted Net Assets
Temporarily restricted net assets are assets which use by Mission is restricted by donors for a
specific time period or purpose. Permanently restricted net assets have been restricted by donors to
be maintained in perpetuity.
(f) Revenue, Gains, and Other Support in Excess ofExpenses and Losses
The combined statements of operations include revenue, gains, and other support in excess ofexpenses and losses. Changes in unrestricted net assets, which are excluded from revenue, gains, and
other support in excess of expenses and losses, include contributions of long-lived assets, specifically
defined impacts from adoption of required accounting standards, and certain investment incomeitems as previously described.
(k) Net Patient Service Revenue
Net patient service revenue is reported at the estimated net realizable amounts due from patients,
third-party payors, and others for services rendered, including estimated retroactive adjustments
arising from future audits, reviews, and investigations. Retroactive adjustments are considered in the
recognition of revenue on an estimated basis in the period the related services are rendered, and such
amounts are adjusted in future periods as adjustments become known or as years are no longer
subject to such audits, reviews, and investigations.
(l) Charity Care
Mission provides care to patients who meet certain criteria under its charity care policy without
charge or at amounts less than its established rates. Because Mission does not pursue collection of
amounts determined to qualify as charity care, they are not reported as revenue.
9 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
(m) Contributions
Unconditional promises to give cash and other assets are reported at estimated fair value at the date
the promise is received. Conditional promises to give are recognized when the conditions are
substantially met, and indications of intentions to give are reported at fair value at the date the gift is
received. The gifts are reported as either temporarily or permanently restricted support if they are
received with donor stipulations that limit the use of the donated assets. When a donor restriction
expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished),
temporarily restricted net assets are reclassified as unrestricted net assets and reported in the
combined statements of operations as net assets released from restriction.
(n) Income Taxes
Mission and its affiliates, except for Horizon Health Corporation, Imaging Realty , LLC, and
Asheville Specialty Hospital , have been recognized as exempt from federal income tax under
Internal Revenue Code Section 501(a) as organizations described in Section 501 (c)(3), and therefore,
related income is generally not subject to federal or state income taxes. Horizon Health Corporation
is a for-profit corporation and subject to federal and state income taxes. Imaging Realty , LLC and
Asheville Specialty Hospital are taxable pass -through entities . Taxes on unrelated business income
and taxable income from Horizon Health Corporation are recognized as necessary in the
accompanying combined financial statements; regardless , associated tax accounting impacts are not
material.
Mission applies the provisions of FASB ASC 740, Income Taxes, in accounting for uncertainty in
income taxes. ASC 740 provides guidance on when tax positions are recognized in an entity's
financial statements and how the values of these positions are determined. There is currently no
impact on Mission's combined financial statements as a result of the application of ASC 740.
(o) Derivative Financial Instruments
Mission includes the accrued differential payable or receivable on its derivative financial instruments
in operating income. Estimated gains or losses arising from fair value changes in derivatives are
included as nonoperating items in the determination of revenue, gains, and other support in excess of
expenses and losses. Mission has not elected hedge accounting with respect to any of its derivatives.
(p) Estimated Professional and General Liability Costs
The provision for estimated professional and general liability costs includes estimates of the ultimate
costs for both reported claims and claims incurred but not reported.
(q) Functional Expense Classification
All expenses in the accompanying combined statements of operations were incurred for or related tothe provision of healthcare services by Mission.
10 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
(r) Impairment ofLong-Lived Assets
Long-lived assets, such as property and equipment and purchased intangibles subject to amortization,
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows
expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future
cash flows, an impairment charge is recognized to the extent the carrying amount of the asset
exceeds its fair value. If applicable, assets to be disposed of are separately presented in the combined
balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are
no longer depreciated. If applicable, the assets and liabilities of a disposal group classified as held for
sale are presented separately in the appropriate asset and liability sections of the combined balance
sheets.
(s) Inventories
Inventories , consisting principally of medical supplies and pharmaceuticals , are stated at the lower of
cost (first-in , first-out method) or replacement market.
(t) Guarantees
Mission follows the provisions of FASB ASC 460, Guarantees . ASC 460 requires entities to
disclose additional information about certain guarantees , or groups of similar guarantees , even if the
likelihood of the guarantor having to make any payments under the guarantee is remote . For certain
guarantees , ASC 460 also requires that a guarantor recognize a liability equal to the fair value of the
guarantee upon its issuance . ASC 460 recognition accounting has had no impact on the
accompanying combined financial statements , and Mission otherwise complies with the additional
disclosure requirements of ASC 460 when applicable.
(u) Subsequent Events
Mission has evaluated subsequent events for recognition and disclosure through January 11, 2013,
the date the combined financial statements were issued.
In October 2012, Mission became the sole member of Transylvania Health System, (Transylvania).
Transylvania is the sole member of Transylvania Community Hospital, Inc., d/b/a Transylvania
Regional Hospital, Transylvania Regional Hospital Foundation, Inc. and Transylvania Physician
Services, Inc., not-for-profit corporations, and the sole stockholder of Transylvania Services, Inc., a
for-profit corporation. Transylvania operates a critical access community hospital in Brevard, North
Carolina with 25 acute care beds and 10 sub-acute care beds.
Mission continues to evaluate opportunities to enter into affiliation agreements with community
hospitals resident within Mission's general service area. In addition to the affiliation agreement with
Transylvania finalized and described above, Mission has three separate affiliation agreements under
discussion, one facility of which, Mission currently provides management services. In general,
Mission would expect the consummation of affiliation transactions to result in the facilities
becoming a part of the Mission combined group for financial reporting purposes. While there can be
11 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
no assurance that final agreements will in fact be consummated, Mission currently expects that any
final agreements would be fiscal year 2013 transactions.
In November 2012, Mission issued taxable revenue bonds, Series 2012. Mission will use theproceeds of the Series 2012 bonds to finance the costs of various capital improvements, equipmentand other strategic initiatives for the benefit of Mission. The proceeds will also be used to pay certain
expenses incurred in connection with the authorization, issuance and sale of the Series 2012 bonds.
In December 2012, as part of its financing plans, Mission received a commitment from a local
commercial bank for a taxable loan totaling $70,150 (the "Bank Loan"). The Bank Loan has a fixed
rate and will be amortized over a 15 year period. The proceeds from the Bank Loan will be used to
supplement the Series 2012 Bonds for the purposes of various capital improvements, equipment and
other strategic initiatives for the benefit of Mission.
(v) Endowment Accounting
Mission follows FASB ASC 958 , Not-for-Profit Entities . Among its financial reporting guidance for
such entities , ASC 958 provides guidance on (a) the net asset classification of donor-restrictedendowment funds for a not-for-profit organization that is subject to an enacted version of the
Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA ), and (b) related
enhanced disclosures about an organization ' s endowment funds (both donor-restricted and
board-designated).
Mission does not maintain any board-designated endowment funds and its endowment assets (and
related activities) are otherwise immaterial for purposes of the detail disclosures mentioned above.
(w) Accounting Standards
Recently Adopted
The FASB issued ASU 2010-23, Health Care Entities: Measuring Charity Care for Disclosure, in
August 2010. ASU 2010-23 amends ASC Subtopic 954-605, Health Care Entities: RevenueRecognition, to require that cost be used as the measurement basis for charity care disclosurepurposes. The method used to estimate such costs as well as any funds received to offset or subsidizecharity services provided should also be disclosed. Mission adopted the provisions of this standardon October 1, 2011 and retrospectively applied the provisions to all periods presented. The adoptionhad no impact on the combined financial statements.
The FASB issued ASU 2010-24, Health Care Entities: Presentation of Insurance Claims and
Related Insurance Recoveries, in August 2010. ASU 2010-24 amends ASC Subtopic 954-450,
Health Care Entities: Contingencies, to clarify that a health care entity should not net insurance
recoveries against a related liability and the claim liability should be determined without
consideration of insurance recoveries. Mission adopted the provisions of this standard prospectively
on October 1, 2011.
In July 2011, the FASB issued ASU 2011-07, Health Care Entities, Presentation and Disclosure of
Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for
12 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
Certain Health Care Entities. This ASU changed Mission's presentation of the provision for bad
debts in the combined statements of operations from an operating expense to a deduction from net
patient service revenue. It also expands disclosures regarding policies for recognizing revenue,
assessing contra revenue line items, and activity in the allowance for bad debts. Mission adopted the
provisions of this standard on October 1, 2011 and retrospectively applied the provisions to all
periods presented.
The FASB issued ASU 2011-08, Testing Goodwill for Impairment, in September 2011.ASU 2011-08 permits an entity to make a qualitative assessment of whether it is more likely than not
that a reporting unit's fair value is less than its carrying amount before applying the two-step test for
impairment of goodwill. If an entity concludes that it is more likely than not that the fair value of a
reporting unit is less than its carrying amount, it would not be required to perform the two-step
impairment test for that reporting unit. Mission adopted the provisions of this standard on October 1,
2011. The adoption had no impact on the combined financial statements.
(x) Healthcare Industry Environment
In the light of the current sluggish pace of recovery of the U.S. economy from the downturn
experienced in 2008 - 2009 , Mission management continues to monitor economic conditionsclosely , both with respect to potential impacts on the healthcare provider industry and from a more
general business perspective. Management recognizes that economic conditions may continue to
impact the System in a number of ways, including (but not limited to) uncertainties associated with
U.S. financial system reform and rising self-pay patient volumes and corresponding increases in
uncompensated care.
Additionally , the general healthcare industry environment is increasingly uncertain, especially with
respect to the impacts of federal healthcare reform legislation , which was passed in the spring of
2010 and largely upheld by the U. S. Supreme Court in June 2012. Potential impacts of ongoing
healthcare industry transformation include, but are not limited to:
• Significant (and potentially unprecedented) capital investment in healthcare information
technology (HCIT);
• Continuing volatility in the state and federal government reimbursement programs;
• Lack of clarity related to the health benefit exchange framework mandated by reform legislation,
including important open questions regarding exchange reimbursement levels, changes in
combined state/federal disproportionate share payments, and impact on the healthcare "demand
curve" as the previously uninsured enter the insurance system;
• Effective management of multiple major regulatory mandates, including achievement of
meaningful use of HCIT and the transition to ICD-l0; and
• Significant potential business model changes throughout the healthcare ecosystem, including
within the healthcare commercial payor industry.
13 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
The business of healthcare in the current economic, legislative, and regulatory environment is volatile. Any
of the above factors, along with others both currently in existence and which may arise in the future, could
have a material adverse impact on the System's financial position and operating results.
(2) Certificate of Public Advantage
A Certificate of Public Advantage (COPA) was issued by the state of North Carolina in December 1995 topermit a collaborative relationship between the then-separate Memorial Mission Hospital and St. Joseph's
Hospital to achieve economies of scale through cost reduction initiatives. As part of the acquisition of St.Joseph's Hospital in October 1998, the COPA was amended. Among other provisions, the COPA requires
that Mission maintain certain operating margin and cost targets (as amended in 2005). Compliance with
COPA restrictions is the responsibility of Mission's management and is subject to monitoring by state
regulatory agencies.
In the fall of 2011, a Select Committee on Certificate of Need and Related Hospital Issues (the
"Committee") was established and held public hearings across the State regarding, among other matters,
the State's certificate of public advantage laws. Although the Committee issued no actions orrecommendations regarding the COPA, several questions were raised regarding assurance of compliance
with its non-financial provisions. Therefore, Mission volunteered to undergo a five year review of such
compliance. This assessment, which was completed and made public on September 13, 2012, found
Mission to be in full compliance in all major areas. Furthermore, as of the date of this issuance, Mission
has filed all periodic and interim reports required under the Certificate of Public Advantage, and neither
DHHS nor the Attorney General has proposed to revoke or modify the Certificate of Public Advantage
after reviewing these periodic and interim reports.
14 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
(3) Investments and Assets Limited as to Use
The composition of investments and assets limited as to use follows:
2012
Investments:Fixed income securities $ 78,432
Assets limited as to use:By indenture agreements - held by trustee:
Cash and cash equivalents 15,560Fixed income securities -
15,560
By donor restriction:Cash and cash equivalentsFixed income securitiesCommon stocksAlternative investment vehiclesCollective trust funds
By board for future needs:Cash and cash equivalentsFixed income securitiesCommon stocksAlternative investment vehiclesCollective trust funds
Under terms of deferred compensation planagreements - common stocks
Amounts classified as current assets
3502,0925,7721,0561,148
10,418
20,85163,503121,077170,508185,316
561,255
8,513
674,178
(93,992)
$ 580,186
2011
16,507388
16,895
8932,2143,7481,7721,894
10,521
16,67359,05786,698157,784168,506
488,718
5,434
521,568
(16,895)
504,673
15 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
Alternative investment vehicles include limited partnerships and offshore investment funds. These fundsmay invest in certain types of financial instruments intended to hedge against market risk, including,among others, futures and forward contracts, options, and securities sold not yet purchased. These financialinstruments, which involve varying degrees of off-balance sheet risk, may result in loss due to market riskand other factors. Alternative investment vehicles by strategy type follow:
Hedge fundsPrivate equityReal estateNatural resources
2012 2011
$ 122,18837,9026,8564,618
$ 171,564
124,24828,0545,5181,736
159,556
Mission has outstanding commitments to private equity interests to provide capital infusions upon request.The projected capital call amounts for the next five fiscal years are summarized in the table below (thereare currently no such commitments after fiscal year 2018):
Projectedcapital calls
Fiscal year:2013 $ 14,9002014 11,3002015 7,0002016 4,3002017 2,4002018 1,000
$ 40,900
Private equity interests have initial 10 to 12 year terms, with potential extensions of I to 6 years. As ofSeptember 30, 2012, the average remaining contractual life of the private equity interests is approximatelynine years.
Mission's current hedge fund investments are generally restricted from redemption for defined lock-upperiods. Some of the hedge fund investments with redemption restrictions allow early redemption forspecified fees. The terms and conditions under which Mission may redeem these investments vary, usuallyrequiring 30 to 180 days notice after the initial lock-up period.
16 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
Based upon the terms and conditions in effect at September 30, 2012, Mission's hedge fund investmentscan be redeemed or sold as follows:
Fiscal year:2013 $ 101,4012014 16,004
Total $ 117,405
The following tables reflect investments with unrealized losses at September 30, 2012 and 2011. The tablessegregate investments that have been in a sustained unrealized loss position for less than 12 months fromthose that have been in a sustained unrealized loss position for 12 or more months.
2012Sustained loss of less than Sustained loss of
12 months 12 months or longer Total unrealized losses
Unrealized Unrealized Unrealized
Description of securities Fair value losses Fair value losses Fair value losses
Equity securities $ 9,210 790 9,210 790Collective trust funds - - 32,506 2,255 32,506 2,255
Total $ - - 41,716 3,045 41,716 3,045
2011Sustained loss of less than Sustained loss of
12 months 12 months or longer Total unrealized lossesUnrealized Unrealized Unrealized
Description of securities Fair value losses Fair value losses Fair value losses
Equity securities $ 8,109 1,891 - - 8,109 1,891Collective trust funds 29,580 5,994 - - 29,580 5,994
Total $ 37,689 7,885 - - 37,689 7,885
For financial reporting purposes, the collective trust funds, in all material respects, "private mutual funds"comprise fully marketable debt and equity securities, which are carried in the accompanying combinedbalance sheets at Mission's proportionate interest in the underlying fair value of the related fundinvestments. The terms and conditions associated with Mission's participation in the noted collective trustfunds do not require that Mission make additional investments in the funds nor is Mission restricted in itsability to make withdrawals from the funds. Therefore, Mission appropriately measures its ability andintent at the fund level and, therefore, currently considers the unrealized losses noted in the tables above as"temporary" in assessing the required financial accounting under Mission's policy as described in note 1.
Unrealized losses on investments are generally due to fluctuations in market price caused by factors suchas credit quality of issuers, interest rates, demand, and market expectations. As a result of evaluation ofthese factors, Mission currently considers the unrealized losses noted in the tables above as "temporary" inassessing the required financial accounting under Mission's policy as described in note 1.
17 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
Mission recognized $601 and $8,679 in other-than-temporary losses (consistent with its policy described in
note 1) in 2012 and 2011, respectively.
Net investment income (loss) reported in unrestricted net assets comprises of the following:
2012 2011
Net investment income included in nonoperating gains:Interest and dividend income $ 3,034 3,963Realized gains on sales of investments , net 6,616 11,145Alternative investment program gains, net 9,072 2,396
18,722 17,504
Other changes in unrestricted net assets:Net unrealized gains (losses ) on investments 49,624 (23,729)
Total $ 68,346 (6,225)
(4) Property and Equipment
Property and equipment consist of the following:
2012
Land and land improvementsBuildingsEquipment and capitalized software costsInformation technology licensing contract (note 17)
$ 70,382785,092447,34811,933
1,314,755
2011
53,971707,507412,39511,933
1,185,806
Accumulated depreciation and amortization (660,575) (606,943)
654,180 578,863
Construction in progress 36,309 100,435
$ 690,489 679,298
Construction in progress at September 30, 2012 is principally related to projects for facility enhancements,
clinical equipment, and information system upgrades. These projects are expected to be completed duringfiscal year 2012 at an estimated total remaining cost to complete of approximately $41,853 to be funded
from operations. Mission capitalized interest of $1,152 and $2,911 in 2012 and 2011, respectively.
(5) Employee Benefit Plans
Mission has a defined contribution savings plan available to all employees who have met certain length ofservice requirements. Under this plan, Mission matches employee contributions up to 8% of compensation
18 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
depending on years of service and hire date. Expense associated with the plan was approximately $10,441and $9,933 in 2012 and 2011, respectively.
Mission sponsored a nonqualified deferred income plan for certain members of senior management, fundedentirely by elective contributions of the participants. Funding of this plan was discontinued in May 2002.
Participants are fully vested in the associated prior funding and, therefore, a liability equal to the
corresponding funding is recognized by Mission. Plan funding and the related liability, each totaling
$1,078 and $1,006, respectively, at September 30, 2012 and 2011, are included in assets limited as to use
and other long-term liabilities, respectively, in the accompanying combined balance sheets.
Mission sponsors and funds a nonqualified deferred income plan for certain members of senior
management. Plan participants are entitled to the benefits once they comply with established substantial
risk of forfeiture rules. Plan funding, including accrued earnings, and the related liability of $3,516 and
$2,692, respectively, at September 30, 2012 and 2011, are included in assets limited as to use and other
long-term liabilities, respectively, in the accompanying combined balance sheets. The plan also includes a
split dollar insurance agreement funded by Mission. The cash surrender value of $123 and $72 is included
in assets limited as to use at September 30, 2012 and 2011, respectively, in the accompanying combinedbalance sheets.
(6) Accrued Payroll and Other Expenses
Accrued payroll and other expenses consist of the following:
2012 2011
Accrued salaries, wages, and benefits $ 39,346 36,231Other accrued expenses 12,335 8,346Interest payable 7,683 7,485Employee health reserves 7,232 6,606Patient credit balances 6,041 5,658Workers' compensation liability reserves 4,289 4,378Current portion of capitalized software obligation - 1,438Retainage payable - 1,080Due to affiliates 643 818
$ 77,569 72,040
(7) Line of Credit
Mission maintains a $30,000 unsecured line of credit with a bank at LIBOR plus 0.50%. This line of credit
had an outstanding balance of $30,000 at September 30, 2012 and no amounts were outstanding at
September 30, 2011. The line of credit expires on December 6, 2014 and Mission retains the right to renew
at this date.
One of Mission's affiliates maintains a $3,000 unsecured line of credit with a bank at LIBOR plus 1.75%.
This line of credit had an outstanding balance of $800 and $850 at September 30, 2012 and 2011,
19 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
respectively. The line of credit expires in March 2013 and management anticipates routine renewal of the
expiring facility under substantially the same terms and conditions as noted.
(8) Long-term Debt
A summary of long-term debt follows:
2012 2011
Revenue bonds, issued in January 2007 through theCommission. Interest rates range from 4.00% to 5.00%;interest payments due semiannually on April 1 andOctober 1; principal payments due annually onOctober 1 through 2032. $ 251,805 253,775
Revenue bonds, issued in February 2010 through theCommission. Interest rates range from 3.00% to 5.00%;interest payments due semiannually on April 1 andOctober 1; principal payments due annually onOctober I through 2035. 63,405 65,000
Revenue bonds, issued in August 2011 through theCommission. Interest rates is 2.50% for the first five years;interest payments due semiannually on April 1 andOctober 1; principal payments due annually onOctober 1 through 2028. 31,405 32,270
Revenue bonds, issued in October 2003 through theCommission. Interest at variable rates (0.16% atSeptember 30, 2012); interest payments due monthly;principal payments due annually on October 1 through 2018. 10,030 11,260
Revenue bonds, issued in July 1997 through the NorthCarolina Medical Care Commission (the Commission).Interest at variable rates (0.34% at September 30, 2012);interest payments due quarterly on January 1, April 1,July 1, and October 1; principal payments due annually(beginning in July 2006) on July 1 through 2017. 935 1,135
Revenue bonds issued in December 1999 through theCommission. Interest at a variable rate convertible to afixed rate through May 2016 (0.25% at September 30,2011). Interest payments due monthly; principalpayments due annually on May 1 through 2016. - 2,740
Revenue bonds, issued in October 2001 through theCommission. Interest rates range from 4.00% to 4.13%;interest payments due semiannually on April 1 andOctober 1; principal payments due annually onOctober I through 2011. - 1,920
20 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
Net unamortized premium
2012 2011
Total revenue bonds
Various notes payable and capital lease obligations, interestranging from 2.38% to 10.79%, maturing through June2025, generally secured by property and equipment
Total long-term debt
Current portion
Long-term debt, excluding current portion
Future maturities of long-term debt follow:
$ 5,923 6,171
363,503 374,271
9,506 11,407
373,009 385,678
(9,164) (10,506)
$ 363,845 375,172
Amount
20132014201520162017Thereafter
9,1649,0679,3389,5319,538
320,448
367,086
Plus net unamortized premium 5,923
$ 373,009
All revenue bonds are generally secured by Mission net revenue (as defined) and certain trusteed fundsdescribed in note 3. Additionally, there are a number of customary restrictive covenants contained in theagreements related to Mission's revenue bond issues, including maintenance of certain debt servicecoverage and other financial ratios.
The 1997, 1999, and 2003 revenue bonds bear interest at variable rates and are supported by remarketingand standby bond purchase agreements. Interest rates are periodically adjusted based upon prevailing ratesfor the contract period related to the remarketed tranche. In the event a market for variable rate instrumentsis not sustained, the standby agreements provide for refinancing the bonds. The average annual interest rateon the 1997, 1999, and 2003 revenue bonds approximated 3.67% and 3.90% for the years endedSeptember 30, 2012 and 2011, respectively.
In August 2011, Mission issued $32,270 in Series 2011 revenue bonds through the Commission. Theproceeds of this issue were used to refund the Series 1998 revenue bonds.
21 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
On August 17, 2011, Mission entered into agreements to guarantee portions of borrowings totaling $14,485
and $14,655 obtained, respectively, by the community hospitals which Mission is in affiliation discussions
with as described in note 1(v) community hospitals. These guarantees are secured by certain property of
the hospitals. The loan balances of $13,355 and $14,422 at September 30, 2012 are equal to the guarantees.
If either of the entities default, Mission would be required to perform under the guarantee in an amount
equal to the then-outstanding amounts. Mission monitors the financial performance of the entities on amonthly basis. No accrual for Mission's obligation under this guarantee is currently required.
(9) Derivative Financial Instruments
Mission does not use derivative financial instruments for trading purposes. In each instance, the fair value
of the relevant instrument is generally estimated as the amount Mission would receive or pay for the
termination right at the reporting date, taking into account current interest rates and other factors, including
credit default risk.
In 2000, McDowell entered into a swap agreement, which is in effect until May 2016. The swap agreement
exchanges a variable rate for a fixed rate of 4.92%. The fair value of the swap as of September 30, 2012
and 2011 was a liability of $236 and $331, respectively, which is included in other long-term liabilities in
the combined balance sheets.
In September 2002, Mission entered into a forward-starting swap agreement that was executed in
conjunction with the refunding of the balance of the Series 1993 revenue bonds, which were refunded with
proceeds from the Series 2003 bonds. The swap agreement exchanged a variable rate for a fixed rate of
3.59%. The effective date of this transaction was October 2003, which mirrored the call date of the Series
1993 bonds. The fair value of the swap was a net liability of $1,022 and $1,166 at September 30, 2012 and
2011, respectively, which is included in other long-term liabilities.
(10) Other Long-Term Liabilities
A summary of other long-term liabilities follows:
Accrued general and professional liability costsFair value of derivative financial instrumentsDeferred compensation payableOther
2012 2011
$ 27,461 20,8891,258 1,4978,391 5,213563 344
$ 37,673 27,943
(11) Leases
Rental expense, including short-term cancelable rentals, was $18,989 and $17,525 during 2012 and 2011,respectively.
Mission has master agreements with financing companies (the Lessors) and the Commission for certainequipment financing. Financing under the agreements is provided concurrent with Mission's assignment of
22 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
security interest and title in eligible assets to the Lessors and the Commission. The Lessors obtain
financing from the Commission, reimburse Mission for its purchase cost of eligible assets, and then lease
the related assets back to Mission. Individual lease arrangements under the agreements are generally
structured as operating leases, and related payments are included in the future minimum lease payments
outlined below. Mission has the option to purchase the equipment from the Lessors at the end of the
respective lease terms, generally at fair value (as defined).
The following is a schedule by year of future minimum lease payments due under noncancelable operating
leases that have initial or remaining lease terms in excess of one year:
Amount
2013 $ 11,4322014 9,6362015 6,5732016 2,2002017 1,435
Thereafter 7,950
$ 39,226
In late 2010, the FASB issued for comment Proposed Accounting Standards Update - Leases (Topic 840).
After receiving and considering significant feedback, the FASB has indicated its intention to issue a related
final ASU in calendar year 2014. This new guidance is expected to require Mission to recognize virtually
all of its leases on the combined balance sheet. Assuming the ASU is in fact issued, adoption could cause
considerable changes in the presentation of Mission's debt and interest expense in its combined financial
statements (among other things). Management is reviewing the implications of the proposed ASU for
Mission, including potential implications for many complex agreements and arrangements, which might be
impacted by this major accounting change. While that work is ongoing, management is optimistic that
there will not be material issues associated with important related matters, such as overall Mission credit
ratings or future debt covenant compliance.
(12) Net Patient Service Revenue
Certain affiliates of Mission have agreements with governmental and other third-party payors that provide
for reimbursement to such affiliates at amounts different from established rates. Contractual adjustments
under third-party reimbursement programs represent the difference between billings at established rates for
services and amounts reimbursed by third-party payors. A summary of the basis of reimbursement with
major third-party payors follows:
Medicare - Inpatient and outpatient services rendered to Medicare program beneficiaries are
generally paid at prospectively determined rates. These rates vary according to patient classification
systems based on clinical, diagnostic, and other factors. Additionally, payments for certain other
reimbursable items are made at tentative rates, with final settlements determined after submission of
annual cost reports by Mission and audits by the Medicare fiscal intermediary. Mission's Medicare
cost reports have been audited by the Medicare fiscal intermediary through September 30, 2006.
23 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
Revenue from the Medicare program totaled approximately 36% and 38% of Mission's net patientservice revenue for the years ended September 30, 2012 and 2011, respectively.
Medicaid - Inpatient services rendered to Medicaid program beneficiaries are paid at prospectivelydetermined rates per discharge. Outpatient services are generally paid based upon costreimbursement methodologies . Mission is reimbursed at a tentative rate with final settlementdetermined after it submits its annual Medicaid cost reports. Mission ' s Medicaid cost reports havebeen audited by the Medicaid program through September 30, 2006 , and with periods September 30,2009 and 2010 currently settled without audit. Revenue from the Medicaid program totaledapproximately 16% and 13% of Mission's net patient service revenue for the years endedSeptember 30, 2012 and 2011, respectively.
In March 2012, the federal government approved an amendment to the North Carolina MedicaidDisproportionate Share (DSH) Program that provides a new funding model, which employsassessments of all hospitals as a percentage of their costs. Assessment payments, as well as existingstate funds, are matched by federal funds and redistributed so that declines in private hospitalpayments are mitigated. During 2012, Mission's gross Medicaid receipts from the DSH Programwere $110,750. Total assessments paid by Mission during the year were $32,388. The net of thegross receipts less the assessment is included as a reduction in net patient revenues.
Regulators continue to review North Carolina's Medicaid disproportionate share program, which hasdelayed the settlement of associated program funds relative to amounts received by Mission in fiscalyears 2008 through 2012. Conclusions from the ongoing regulatory review of the state's programhave not been finalized and the impact on the program from the finalization of the review (eitherpositive or negative) has yet to be determined. There can be no assurance that Mission will continueto qualify for future participation in this program or that the program will not be discontinued ormaterially modified.
Other - Mission has also entered into payment agreements with certain commercial insurancecarriers, health maintenance organizations , preferred provider organizations, and directly with localemployers . The basis for payment to Mission under these agreements includes prospectivelydetermined rates per discharge, discounts from established charges, and prospectively determineddaily rates.
In the spring of 2010, the Patient Protection and Affordable Care Act and the Health Care and EducationReconciliation Act (collectively, the Health Care Acts) were signed into law by President Obama. Theimpact of the Health Care Acts is complicated and difficult to predict, but Mission anticipates itsreimbursement in the future will be affected by major elements of the Health Care Acts designed to (1)increase insurance coverage, (2) change provider and payor behavior, and (3) encourage alternativepayment and delivery models. Many healthcare reform variables remain unknown and are, among otherthings, dependent on implementation by federal and state governments and reactions by providers, payors,employers, and individuals. Mission continues to monitor developments in healthcare reform andparticipates actively in contemplating and designing new programs that are encouraged and/or required bythe Health Care Acts.
24 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
The Health Information Technology for Economic and Clinical Health (HITECH) Act was enacted as partof the American Recovery and Reinvestment Act of 2009 and signed into law in February 2009. In the
context of the HITECH Act, Mission must implement a certified Electronic Health Record (EHR) in an
effort to promote the adoption and "meaningful use" of health information technology. The HITECH Act
includes significant monetary incentives and payment penalties meant to encourage the adaption of EHR
technology. Mission anticipates system-wide compliance with the Meaningful Use objectives mandated in
the HITECH legislation. Certain Mission entities have met and attested to various stages of meaningful use
in 2012 and 2011, with $8,010 and $5,203 of incentives recognized and either received or pending final
third party settlement in 2012 and 2011, respectively.
With respect to reserves for third-party payor cost report audits and anticipated settlements , Mission
routinely provides such reserves through the periods of initial audit and final settlement of the cost reports.
Mission has historically provided such reserves in recognition of the complexity of relevant reimbursement
regulations and the volatility of related settlement processes . In any event , Mission ' s estimates in this area
will differ from actual experience , and those differences may be material . During 2012 and 2011, net
patient service revenue increased approximately $25,960 and $3,744 , respectively , due to settlements
related to prior periods , changes in estimates related to prior cost reporting periods, and removal of
allowances previously estimated that are no longer necessary as a result of final settlements and years that
are no longer subject to audits, reviews, and investigations . The 2012 increase primarily represents
settlements related to a Medicare rural floor appeal of $7,419, and recognition of Medicaid DSH revenue
related to prior periods of $18,541.
The composition of net patient service revenue follows:
2012
Gross patient service revenue $ 2,305,997Less provision for contractual and other adjustments (1,214,485)Less provision for bad debts (93,974)
Net patient service revenue $ 997,538
2011
2,090,748(1,104,961)
(93,826)
891,961
Patient accounts receivable are reduced by an allowance for bad debts. In evaluating the collectibility of
accounts receivable, Mission analyzes historical collections and write-offs and identifies trends for each of
its major payor sources of revenue to estimate the appropriate allowance for bad debts and provision for
bad debts. Management regularly reviews data about these major payor sources of revenue in evaluation of
the sufficiency of the allowance for bad debts. For receivables associated with services provided to patients
who have third-party coverage, Mission analyzes contractually due amounts and provides an allowance for
uncollectible accounts, allowance for contractual adjustments, provision for bad debts, and contractual
adjustments 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 or with balances remaining after the third-party coverage has already paid, Mission
records a significant provision for bad debts in the period of service on the basis of its historical
collections, which indicates that many patients decline to pay the portion of their bill for which they are
financially responsible. The difference between the discounted rate and the amounts collected after all
25 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
reasonable collection efforts have been exhausted is written off against the allowance for bad debts.Mission has not changed it charity core or uninsured discount policies during fiscal year 2012 or 2011.Mission's self-pay write-offs increased approximately $3,242 from $65,989 for fiscal year 2011 toapproximately $69,231 for fiscal year 2012. Increased write-offs were the result of higher utilization and
other contributing factors leading to increased gross charges. Mission maintains an allowance for
uncollectible accounts from other third-party payors which is not material.
(13) Service to the Community
Mission accepts all patients regardless of their ability to pay. Mission has established a formal policy
whereby a patient may qualify for charity care if certain criteria are met. These policies define charityservices as those services for which no or only partial payment is anticipated because of a patient's ability
to pay. In assessing a patient's ability to pay, Mission utilizes the generally recognized poverty income
levels, but also includes certain cases where incurred charges are significant when compared to thepatient's available resources. In addition to providing services to the financially disadvantaged, Missionparticipates in state and federal programs designed for the indigent and elderly whereby healthcare servicesare often times reimbursed at or below Mission's full cost of providing such services. Additionally,Mission subsidizes graduate medical education in the community. Estimated total community benefit costs
and unreimbursed costs of government healthcare programs for Mission are $112,901 and $85,804 for
September 30, 2012 and 2011, respectively (as detailed below). Additionally, costs of services associated
with uncollectible accounts are estimated at $32,014 and $31,692 for September 30, 2012 and 2011,
respectively.
Estimated costs of treating charity care patientsUnreimbursed medical education and research costsOther direct community benefit costs
Total community benefit costs
Estimated unreimbursed costs of treating Medicare patientsEstimated unreimbursed costs of treating Medicaid patients
Total community benefit costs and unreimbursedcosts of government healthcare programs
2012 2011
$ 21,6256,521
47,385
75,531
16,7876,741
44,230
67,758
35,444 14,4301,926 3,616
$ 112,901 85,804
The above estimates were developed using the methodology adopted by the North Carolina HospitalAssociation in 2006 for such costs, including information from Mission's cost reporting systems used tosupport its related filings with the Medicare and Medicaid programs.
Mission presents the above information as only one series of quantifiable measures associated with itscommunity commitment . Importantly, management believes this information presents only one facet of themultiple ways in which Mission fulfills its obligation to serve the communities within its service area.
26 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
(14) Temporarily and Permanently Restricted Net Assets
Temporarily restricted net assets are available for the following purposes:
Capital expendituresHospital programs
2012 2011
$ 7,287 6,9228,876 8,695
$ 16,163 15,617
Permanently restricted net assets consist of endowment contributions to be maintained in perpetuity, the
income from which is expendable to support healthcare services.
(15) Insurance Programs
The accompanying combined financial statements include Mission SP, which as described in note I is asegregated portfolio of Dogwood, a captive insurance affiliate of Mission that issues professional andgeneral liability insurance to Mission. Effective September 30, 2010, Mission transferred the liability forboth known and incurred but not reported claims for all policy periods prior to June I, 2010 to Dogwood.Mission is self-insured with respect to general and professional liability risks in an underlying layer of$4,000 per occurrence, with an additional $2,000 per occurrence, $4,000 aggregate buffer layer, and$16,000 aggregate retention. Incurred losses under Mission's incident reporting system and incurred butnot reported losses are accrued based on estimates that incorporate Mission's past experience, as well asother considerations such as the nature of each claim or incident, relevant trend factors, and advice fromconsulting actuaries. As of September 30, 2012 and 2011, Mission has recorded an accrual for estimatedlosses, discounted at 2%, of $27,461 and $20,889, respectively, which is included in other long-termliabilities in the accompanying combined balance sheets.
Mission has substantial excess professional liability coverage available under the provisions of excessclaims-made policies, which expire June 1, 2012. To the extent that any claims-made coverage is notrenewed or replaced with equivalent insurance, claims based on occurrences during the term of suchcoverage, but reported subsequently, would be uninsured. Management believes, based on incidentsidentified through Mission's incident reporting system, that any such claims would not have a materialeffect on Mission's operations or financial position. In any event, management anticipates that theclaims-made coverage currently in place will be renewed or replaced with equivalent insurance as the termof such coverage expires. Mission also has substantial excess general liability coverage under theprovisions of occurrence-based excess policies.
Mission is self-insured with respect to employee health coverage, up to a lifetime limit of $2,000 peremployee. In addition, Mission is self-insured with respect to workers' compensation coverage, up to alimit of $400 per individual claim. Substantial coverage with a third-party carrier is maintained for excesslosses with respect to both employee health and workers' compensation exposures.
As of September 30, 2012 and 2011, Mission has recorded accruals for employee health and workers'compensation exposures, including the cost of both reported and unreported claims, totaling $11,521 and
27 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
$10,984, respectively, which are included in accrued payroll and other expenses in the accompanying
combined balance sheets.
Mission's self-insured employee health plan allows employees to elect a consumer-driven option, whereby
Mission funds first-dollar coverage of qualifying medical expenses up to certain limits. Unused amountscredited under the first-dollar coverage may be rolled into future plan years, subject to a ceiling.
Beginning in fiscal year 2009, amounts in excess of the carry-over ceiling are credited to a health
reimbursement account and a post-retirement benefit component was added to the health plan. Excludingan employee's interest in their qualifying balance, all other unused balances are forfeited upon termination
of employment. As of September 30, 2012 and 2011, Mission has recognized a liability of $2,845 and
$2,364, respectively, which is included in accrued payroll and other expenses, for the post-retirement
obligation component (as defined) of the plan.
Mission's commitment to fund first-dollar health expenses as described above is recognized in employee
health plan expense as employees incur medical costs and file for reimbursement with the health plan.
Future commitments, based on active employees, under the first-dollar healthcare reimbursement plan atSeptember 30, 2012 are $4,400. Actual future utilization under the plan is not reasonably estimable.
(16) Concentrations of Credit Risk
Mission grants credit to patients, substantially all of whom reside in the service areas of Mission. Missiongenerally does not require collateral or other security in extending credit to patients; however, it routinely
obtains assignment of (or is otherwise entitled to receive) patients' benefits payable under their healthinsurance programs, plans, or policies (e.g., Medicare, Medicaid, and other preferred providerarrangements and commercial insurance policies). The mix of gross receivables from patients and
third-party payors follows:
2012 2011
Medicare 26% 23%Medicaid 19 19Other third-party payors 28 27Commercial 11 11Patients 16 20
100% 100%
(17) Information Technology Contract
Effective October 1, 2005, Mission entered into a contract with a major information technology vendor.The agreement, which itself incorporates and substantially modified the terms of a prior existing agreementwith the vendor, is for a term of seven years. The contract generally commits Mission to the purchase of avariety of information technology products and services from this vendor for a defined payment streamover the term of the contract. Certain software license and related implicit maintenance costs (totalingapproximately $3,892 and $2,231, respectively) were capitalized at the inception of the agreement, withrecognition of an associated liability related to Mission's acquisition of these intangible assets. During
28 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
2007, the contract was amended such that certain information technology products included in the contractwere recharacterized as software licenses. As a result, Mission capitalized additional software license and
related implicit maintenance costs of $2,557 and $1,466, respectively, at the time the contract was
amended. Capitalized software and implied maintenance costs are being amortized over the estimateduseful life of the software licenses (generally seven years) and the implicit maintenance period (whichvaries depending on first date of productive use), respectively. Other contract costs are evaluated forcapitalization or expense recognition under relevant accounting literature as associated products and/orservices are provided. Mission's payment commitments under the contract concluded in fiscal year 2012
and consisted of $1,438 for capitalized software obligation and $4,319 for other contract costs.
(18) Fair Value of Financial Instruments
(a) Fair Value ofFinancial Instruments
The carrying amounts of all applicable asset and liability financial instruments reported in the
combined balance sheets (except for certain fixed rate debt instruments) approximate their fair values
at September 30, 2012 and 2011. Fair value of a financial instrument is defined as the amount atwhich the instrument could be exchanged in a current transaction between willing parties.
The fair value of Mission's debt portfolio has been estimated using interest rates currently availableto Mission for borrowings of similar character, collateral, and duration. The aggregate fair value ofthe portfolio approximates $393,483 and $389,853 at September 30, 2012 and 2011, respectively.
(b) Fair Value Hierarchy
In accordance with ASC 820, Mission has categorized its financial instruments, based on the priority
of inputs used in related valuation techniques, into a three-level fair value hierarchy. The fair value
hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1)and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial
instruments fall within different levels of the hierarchy, the categorization is based on the lowest
level input that is significant to the fair value measurement of the instrument. The three levels of the
fair value hierarchy are as follows:
Level I inputs are quoted prices (unadjusted) in active markets for identical assets or liabilitiesthat Mission has the ability to access at the measurement date;
• Level 2 inputs are inputs other than quoted prices included within Level I (including net assetvalue) that are observable for the asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
29 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
The fair value hierarchy of investments and assets limited as to use at September 30, 2012 and 2011
follows:
2012
Cash and cash equivalents
Fixed income securities:DomesticInternational
Common stocks:DomesticInternational
Alternative investment vehicles:
Hedge funds
Private equity
Real estate
Natural resources
Commodities
Collective trust funds:
Domestic
International
Level I Level 2 Level 3 Total
$ 41,228 - - 41,228
129,161 17,074 - 146,235
482 - - 482
115,601 - - 115,601
12,436 - - 12,436
- 103,559 18,567 122,126
- - 37,964 37,96481 - 6,856 6,937- - 4,618 4,61887 - - 87
- 92,984 - 92,984
- 93,480 - 93,480
$ 299,076 307,097 68,005 674,178
2011
Cash and cash equivalents
Fixed income securities:
DomesticCommon stocks:
Domestic
Alternative investment vehicles:
Hedge funds
Private equityReal estateNatural resources
Collective trust funds:
DomesticInternational
Total
Level1 Level 2 Level 3 Total
$ 36,894 - - 36,894
61,659 - - 61,659
93,059 - - 93,059
- 97,841 26,407 124,248
- - 28,054 28,054- - 5,518 5,518
- - 1,736 1,736
- 76,064 - 76,064
- 94,336 - 94,336
$ 191,612 268,241 61,715 521,568
30 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
The roll-forward of Level 3 assets limited as to use for the years ended September 30, 2012 and 2011follows:
Fair value at September 30, 2010 $ 45,527Unrealized and realized gains, net 4,164Sales, net (2,821)Purchases 14,845
Fair value at September 30, 2011 61,715
Unrealized and realized gains, net 2,537Sales, net (12,884)Purchases 16,637
Fair value at September 30, 2012 $ 68,005
Assets limited as to use classified as Level 2 are generally categorized based on the following
principles:
Shares or units in collective trust funds (as opposed to direct interests in the funds' underlying
holdings) and hedge funds, which may be marketable. Because the net asset value reported by
each fund is used as a practical expedient to estimate the fair value of Mission's interest therein,classification as Level 2 is based on Mission's ability to redeem its interest at or near the date of
the combined balance sheet. If the interest can be redeemed in the near term, the investment isclassified in Level 2. The classification of investments in the fair value hierarchy is not
necessarily an indication of the risks, liquidity, or degree of difficulty in estimating the fair value
of each investment's underlying assets and liabilities.
• Bonds whose fair values are determined by independent vendors. The vendors compile prices
from various sources and may apply matrix pricing for similar bonds or loans where no price is
observable in an actively traded market. If available, the vendor may also use quoted prices for
recent trading activity of assets with similar characteristics to the bond being valued.
Assets limited as to use classified as Level 3 are generally categorized based on the following
principles:
Ownership interests in hedge funds and private equity are valued by and obtained from the fund
manager. Account statements are received directly from independent administrators or the
underlying hedge funds managers, who are responsible for the pricing of these funds. Before
reliance on these valuations, Mission evaluates the fair value estimation processes and control
environment, the investee fund's policies and procedures for estimating fair value of underlying
investments, the investee fund's use of independent third party valuation experts, and the
professional reputation and standing of the investee fund's auditor.
• The System had no significant transfers of assets and liabilities into or out of Level 1, Level 2 or
Level 3 during either fiscal year 2012 or 2011.
31 (Continued)
MISSION HEALTH SYSTEM, INC.AND AFFILIATES
Notes to Combined Financial Statements
September 30, 2012 and 2011
Mission's interest rate swaps are executed over the counter and are valued using the net present
value of the cash flow streams and current market rates, as no quoted market prices exist for such
instruments. Mission categorizes its interest rate swaps as Level 2 within the fair value hierarchy.
(c) Limitations
Fair value estimates are made at a specific point in time, based on relevant market information and
information about the financial instruments. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment and, therefore, cannot be determined with
precision. Changes in assumptions could significantly affect the estimates.
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