Smyth County Community Hospital

“Mountain states health alliance is the 80% member of smyth county community hospital. Smyth county community hospital foundation is the 20% member of smyth county community hospital.”

“There are two classes of members, and each class is entitled to elect a specified number of directors to the board. The mountain states health alliance (msha) class is elected by the msha board of directors and the smyth county community hospital class is elected by the smyth county community hospital foundation board of directors. Neither side can veto an appointment.”

“Certain decisions of the board are, pursuant to charter and virginia statute, subject to approval of the members. These decisions include: dissolution of the corporation; merger of the corporation; non-ordinary course of business sale of assets; etc. No ordinary, day-to-day decisions are subject to member approval.”

“The cfo reviewed the form 990 with the board of directors prior to filing with the irs and the return was made available to each board member in an electronic format prior to the review.”

“Annually, the corporate audit and compliance department of msha forwards the conflict of interest policy and disclosure form to all msha management team members and board members including those at scch. Employees and board members must note any conflicts or attest they have "none", and return the form to the audit and compliance department. Any noted disclosures are forwarded to the appropriate management or board personnel to evaluate and utilize when a transaction involving a conflicted person arises. Additionally, personnel who have a conflict arise between the annual distribution of the policy and forms are required to disclose the conflict and would be disciplined in any instance where they have not disclosed and engaged in a conflicted transaction.”

“Msha's human resource (h/r) department evaluates salary and benefits for scch's ceo on an annual or near-annual basis. H/r's evaluation is based on market data obtained from independent third-party consultants for positions with similar responsibilities at similarly situated organizations. Based on that review, h/r makes a recommendation to msha's president & ceo, who has final approval for the compensation of scch's ceo. In addition, msha offers an incentive plan to executives based on targeted achievement metrics set in advance of the pay year. Established metrics include: communication with patients, patient evidence-based care scores and patient safety, value- based purchasing, etc. These same metrics are used for all employees within msha, with a small number of exceptions for our companies that do not provide direct patient care.”

“Similar to the ceo's compensation, the cfo receives compensation and benefits that comply with msha's salary policy. His pay is set at a market percentile specific to his position.”

“Governing documents and our conflict of interest policy are made available upon request to appropriate parties requesting them. Financial statements are made available to those parties who own indebtedness of the company on a quarterly basis. Form 990, part vii - related organizations director compensation: hospital board of directors members john jeter, sean mcmurray, and anthony clary, m.d. Have form 990 reportable compensation derived from services they provide to related organizations and to scch. Tony keck has form 990 reportable compensation for services provided to msha, a related organization. Eric sacknoff, m.d., has form 990 reportable compensation for services provided to msmg, a related organization. None of their compensation is related to their board service.”

“Part i, line i - organization's mission: smyth county community hospital (scch) is committed to bringing loving care to health care. We exist to identify and respond to the health care needs of individuals and communities in our region and to assist them in attaining their highest possible level of health.”

“(continued)for the year ending june 30, 2016, scch recorded 1,560 inpatient hospital admissions and 287 nursing home admissions. There were 81,023 outpatient visits, 17,545 emergency visits and 13,625 home health visits. Scch is on the front lines in the battle against prescription drug abuse. The hospital has partnered with east tennessee state university's bill gatton college of pharmacy to create a pharmacy task force. The group includes scch medical staff, msha pharmacists, and pharmacists from the community. Drug abuse in smyth county is a significant problem so getting together the physicians who write prescriptions with the pharmacists who fill the prescriptions, the problem can be addressed with mutual dialogue. The pharmacy tax force is focused on prescription drug abuse in the hospital's primary service area. The hospital subsidizes two physician practices located in rural, medically underserved areas. These clinics allow residents to receive quality care without having to travel outside of their home area. This is especially important for elderly residents and others that require family or friends to provide transportation to physician appointments. Our cost during the year to subsidize the two clinics was just under 247,000. The hospital continues the value optimization system (vos), a practice that uses the "lean" philosophy that looks at workday processes and locates wasteful activity. After identifying waste, ways are identified to eliminate the waste. The end result for a hospital is to free up more time to spend with patients rather than doing unnecessary things. During the year, scch conducted nine vos events. Several of the projects resulted in better patient care and improved patient satisfaction, as measured by patient surveys conducted by an outside, independent firm. Some of the measureable improvements included: nurse-patient communication, physician- patient communication, and information provided to patients at discharge. At francis marion manor (fmm), our nursing home, vos teams were able to achieve a number of successes, such as: reducing the number of patient falls, urinary tract infections, the use of hypnotic medications, and excessive weight loss. Another fmm improvement during the year was a sharp decline (70%) in the number of team member call-ins (absenteeism or late for work). Scch serves as a clinical training facility for health professional education students. We have dedicated staff to work with regional colleges and universities to coordinate the placement of healthcare professional students as part of their educational curriculum. In addition to clinical training, the health care students entering our system are required to have orientation and computer training. Included in the number of participants receiving clinical experience at scch were 74 nursing students from various colleges, universities and programs, a 23% increase over prior year. In addition to the increased number of students receiving training in our hospitals, the hours devoted to each student also increased. This nursing clinical experience required extensive scch nursing staff involvement. The clinical setting and hands-on instruction cost scch 196,538. Scch provided a clinical setting for another 72 students training in health-related programs such as pharmacy, social work, ot/pt, emt/paramedic and other allied-health disciplines, a more than fourfold increase over prior year. Not only did the number of students increase, but the number of hours devoted to each student increased. The increased hours per student was predominantly related to more students in programs that require much longer hospital experience/training. These additional clinical students cost scch 315,009. Scch's nursing care facility, francis marion manor, continues to offer a successful program to train certified nurse assistants. This year, our certified nurse assistant (cna) program was approved by medicare as an allied health education program.”

“Part v, line 2a msha, scch's majority owner, processes payroll for scch. Scch reimburses msha for all salary and benefits related to our team members and the expense is recorded on scch's books. Scch operates a rural health clinic. Under current centers for medicare and medicaid services (cms) regulations governing staffing at a rural health clinic, at least one midlevel provider (nurse practitioner, physician assistant, etc.) must be a w-2 employee of the clinic. Therefore, scch pays one midlevel provider directly (rather than msha paying this team member's salary with scch reimbursing msha).”

“Hospital supported clinics 4,169,277 0 0 physician fees 1,799,065 0 0 dietary fees 1,497,399 0 0 laundry services 210,783 0 0 environmental services 0 134,277 0 laboratory services 68,421 0 0 other 953,885 13,807 0 lithotripsy services 142,871 0 0 transcription services 63,344 0 0 collection services 0 314,459 0 consulting fees 0 169,214 0”

“Part iv, line 24a and part x, line 20 - tax exempt bond liability the tax exempt bond liability reflects the portion of bonds issued by mountain states health alliance, scch's majority owner, on behalf of scch for capital needs. Scch pays all costs related to this portion of the bond issue.”

“Capital contribution to related organization -110,118 temporarily restricted grants -149 total -110,267”