SCHEDULE H
(Form 990)
Department of the Treasury
Internal Revenue Service
Hospitals
MediumBullet Complete if the organization answered "Yes" on Form 990, Part IV, question 20.
MediumBullet Attach to Form 990.
MediumBullet Information about Schedule H (Form 990) and its instructions is at www.irs.gov/form990.
OMB No. 1545-0047
2015
Open to Public Inspection
Name of the organization
Mercy Medical Center Inc
 
Employer identification number

93-0386868
Part I
Financial Assistance and Certain Other Community Benefits at Cost
Yes
No
1a
Did the organization have a financial assistance policy during the tax year? If "No," skip to question 6a . . . .
1a
Yes
 
b
If "Yes," was it a written policy? ......................
1b
Yes
 
2
If the organization had multiple hospital facilities, indicate which of the following best describes application of the financial assistance policy to its various hospital facilities during the tax year.
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) as a factor in determining eligibility for providing free care?
If "Yes," indicate which of the following was the FPG family income limit for eligibility for free care:
3a
 
No
%
b
Did the organization use FPG as a factor in determining eligibility for providing discounted care? If "Yes," indicate
which of the following was the family income limit for eligibility for discounted care: . . . . . . . .
3b
 
No
%
c
If the organization used factors other than FPG in determining eligibility, describe in Part VI the criteria used 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, as a factor in determining 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 "medically indigent"? . . . . . . . . . . . . .

4

Yes

 
5a
Did the organization budget amounts for free or discounted care provided under its financial assistance policy during
the tax year? . . . . . . . . . . . . . . . . . . . . . . .

5a

Yes

 
b
If "Yes," did the organization's financial assistance expenses exceed the budgeted amount? . . . . . .
5b
 
No
c
If "Yes" to line 5b, as a result of budget considerations, was the organization unable to provide free or discountedcare to a patient who was eligibile for free or discounted care? . . . . . . . . . . . . .
5c
 
 
6a
Did the organization prepare a community benefit report during the tax year? . . . . . . . . .
6a
Yes
 
b
If "Yes," did the organization make it available to the public? . . . . . . . . . . . . .
6b
Yes
 
Complete the following table using the worksheets provided in the Schedule H instructions. Do not submit these worksheets with the Schedule H.
7
Financial Assistance and Certain Other Community Benefits at Cost
Financial Assistance and
Means-Tested
Government Programs
 (a) Number of activities or programs (optional) (b) Persons served (optional) (c) Total community benefit expense (d) Direct offsetting revenue (e) Net community benefit expense (f) Percent of total expense
a Financial Assistance at cost
(from Worksheet 1) . . . 		  4,431 521,410   521,410 0.30 %
b Medicaid (from Worksheet 3, column a) . . . . .   69,653 38,303,853 32,849,127 5,454,726 3.11 %
c Costs of other means-tested government programs (from Worksheet 3, column b) . .         0 0 %
d Total Financial Assistance and Means-Tested Government Programs . . . . . 0 74,084 38,825,263 32,849,127 5,976,136 3.41 %
Other Benefits
e Community health improvement services and community benefit operations (from Worksheet 4). 22 66,859 469,564   469,564 0.27 %
f Health professions education (from Worksheet 5) . . .         0 0 %
g Subsidized health services (from Worksheet 6) . . . . 1   2,340   2,340 0 %
h Research (from Worksheet 7) .         0 0 %
i Cash and in-kind contributions for community benefit (from Worksheet 8) . . . . 11 200 214,929 100 214,829 0.12 %
j Total. Other Benefits . . 34 67,059 686,833 100 686,733 0.39 %
k Total. Add lines 7d and 7j . 34 141,143 39,512,096 32,849,227 6,662,869 3.80 %
For Paperwork Reduction Act Notice, see the Instructions for Form 990. Cat. No. 50192T Schedule H (Form 990) 2015
Schedule H (Form 990) 2015
Page
Part II
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 building activities promoted the health of the communities it serves.
(a) Number of activities or programs (optional) (b) Persons served (optional) (c) Total community building expense (d) Direct offsetting
revenue 		(e) Net community building expense (f) Percent of total expense
1 Physical improvements and housing         0 0 %
2 Economic development 2   5,445   5,445 0 %
3 Community support         0 0 %
4 Environmental improvements         0 0 %
5 Leadership development and
training for community members		 1   130   130 0 %
6 Coalition building 3   2,296   2,296 0 %
7 Community health improvement advocacy 2   174,909   174,909 0.10 %
8 Workforce development         0 0 %
9 Other         0 0 %
10 Total 8 0 182,780 0 182,780 0.10 %
Part III
Bad Debt, Medicare, & Collection Practices
Section A. Bad Debt Expense
Yes
No
1
Did the organization report bad debt expense in accordance with Heathcare Financial Management Association Statement No. 15? ..........................
1
Yes
 
2
Enter the amount of the organization's bad debt expense. Explain in Part VI the methodology used by the organization to estimate this amount. ......
2
678,731
3
Enter the estimated amount of the organization's bad debt expense attributable to patients eligible under the organization's financial assistance policy. Explain in Part VI the methodology used by the organization to estimate this amount and the rationale, if any, for including this portion of bad debt as community benefit. ......
3
0
4
Provide in Part VI the text of the footnote to the organization’s financial statements that describes bad debt expense or the page number on which this footnote is contained in the attached financial statements.
Section B. Medicare
5
Enter total revenue received from Medicare (including DSH and IME).....
5
50,645,419
6
Enter Medicare allowable costs of care relating to payments on line 5.....
6
57,203,537
7
Subtract line 6 from line 5. This is the surplus (or shortfall)........
7
-6,558,118
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:
Section C. Collection Practices
9a
Did the organization have a written debt collection policy during the tax year? ..........
9a
Yes
 
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 qualify for financial assistance? Describe in Part VI .........................

9b

Yes

 
Part IV
Management Companies and Joint Ventures(owned 10% or more by officers, directors, trustees, key employees, and physicians—see instructions)
(a) Name of entity (b) Description of primary
activity of entity 		(c) Organization's
profit % or stock
ownership % 		(d) Officers, directors,
trustees, or key
employees' profit %
or stock ownership % 		(e) Physicians'
profit % or stock
ownership %
1
2
3
4
5
6
7
8
9
10
11
12
13
Schedule H (Form 990) 2015
Schedule H (Form 990) 2015
Page
Part VFacility Information
Section A. Hospital Facilities
(list in order of size from largest to smallest—see instructions)
How many hospital facilities did the organization operate during the tax year?1
Name, address, primary website address, and state license number (and if a group return, the name and EIN of the subordinate hospital organization that operates the hospital facility) 		Licensed Hospital General-Medical-Surgical Children's Hospital Teaching Hospital Critical Hospital ResearchGrp Facility ER-24Hours ER-Other Other (Describe) Facility reporting group
1 Mercy Medical Center Inc
2700 Stewart Parkway
Roseburg,OR97471
http://mercyrose.org/
14-1133 		X X         X      
Schedule H (Form 990) 2015
Page 4
Schedule H (Form 990) 2015
Page 4
Part VFacility Information (continued)

Section B. Facility Policies and Practices

(Complete a separate Section B for each of the hospital facilities or facility reporting groups listed in Part V, Section A)
Mercy Medical Center Inc
Name of hospital facility or letter of facility reporting group  
Line number of hospital facility, or line numbers of hospital facilities in a facility
reporting group (from Part V, Section A): 		1
Yes No
Community Health Needs Assessment
1 Was the hospital facility first licensed, registered, or similarly recognized by a state as a hospital facility in the current tax year or the immediately preceding tax year?........................ 1   No
2 Was the hospital facility acquired or placed into service as a tax-exempt hospital in the current tax year or the immediately preceding tax year? If “Yes,” provide details of the acquisition in Section C............... 2   No
3 During the tax year or either of the two immediately preceding tax years, did the hospital facility conduct a community health needs assessment (CHNA)? If "No," skip to line 12...................... 3 Yes  
If "Yes," indicate what the CHNA report describes (check all that apply):
a
b
c
d
e
f
g
h
i
j
4 Indicate the tax year the hospital facility last conducted a CHNA: 20 15
5 In conducting its most recent CHNA, did the hospital facility take into account input from persons who represent the broad interests of the community served by the hospital facility, including those with special knowledge of or expertise in public health? If "Yes," describe in Section C how the hospital facility took into account input from persons who represent the community, and identify the persons the hospital facility consulted ................. 5 Yes  
6 a Was the hospital facility’s CHNA conducted with one or more other hospital facilities? If "Yes," list the other hospital facilities in Section C.................................. 6a   No
b Was the hospital facility’s CHNA conducted with one or more organizations other than hospital facilities?” If “Yes,” list the other organizations in Section C. ............................ 6b   No
7 Did the hospital facility make its CHNA report widely available to the public?.............. 7 Yes  
If "Yes," indicate how the CHNA report was made widely available (check all that apply):
a
b
c
d
8 Did the hospital facility adopt an implementation strategy to meet the significant community health needs
identified through its most recently conducted CHNA? If "No," skip to line 11. .............. 		8 Yes  
9 Indicate the tax year the hospital facility last adopted an implementation strategy: 20 15
10 Is the hospital facility's most recently adopted implementation strategy posted on a website?......... 10 Yes  
a If "Yes" (list url): http://www.mercyrose.org/assets/community-benefit-report-2016_finalrev.pdf
b If "No," is the hospital facility’s most recently adopted implementation strategy attached to this return? ...... 10b   No
11 Describe in Section C how the hospital facility is addressing the significant needs identified in its most recently conducted CHNA and any such needs that are not being addressed together with the reasons why such needs are not being addressed.
12a Did the organization incur an excise tax under section 4959 for the hospital facility's failure to conduct a CHNA as required by section 501(r)(3)?............................... 12a   No
b If "Yes" on line 12a, did the organization file Form 4720 to report the section 4959 excise tax?........ 12b    
c If "Yes" on line 12b, what is the total amount of section 4959 excise tax the organization reported on Form 4720 for all of its hospital facilities? $  

Schedule H (Form 990) 2015
Page 5
Schedule H (Form 990) 2015
Page 5
Part VFacility Information (continued)

Financial Assistance Policy (FAP)
Mercy Medical Center Inc
Name of hospital facility or letter of facility reporting group  
Yes No
Did the hospital facility have in place during the tax year a written financial assistance policy that:
13 Explained eligibility criteria for financial assistance, and whether such assistance included free or discounted care? 13 Yes  
If “Yes,” indicate the eligibility criteria explained in the FAP:
a
b
c
d
e
f
g
h
14 Explained the basis for calculating amounts charged to patients?................. 14 Yes  
15 Explained the method for applying for financial assistance?................... 15 Yes  
If “Yes,” indicate how the hospital facility’s FAP or FAP application form (including accompanying instructions) explained the method for applying for financial assistance (check all that apply):
a
b
c
d
e
16 Included measures to publicize the policy within the community served by the hospital facility?........ 16 Yes  
If "Yes," indicate how the hospital facility publicized the policy (check all that apply):
a
http://www.mercyrose.org/financial-20170309.html
b
http://www.mercyrose.org/financial-20170309.html
c
d
e
f
g
h
i
Billing and Collections
17 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 all of the actions the hospital facility or other authorized party may take upon non-payment?.................................. 17 Yes  
18 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 the individual’s eligibility under the facility’s FAP:
a
b
c
d
e
Schedule H (Form 990) 2015
Page 6
Schedule H (Form 990) 2015
Page 6
Part VFacility Information (continued)

Mercy Medical Center Inc
Name of hospital facility or letter of facility reporting group  
Yes No
19 Did the hospital facility or other authorized party perform any of the following actions during the tax year before making reasonable efforts to determine the individual’s eligibility under the facility’s FAP?............ 19   No
If "Yes," check all actions in which the hospital facility or a third party engaged:
a
b
c
d
20 Indicate which efforts the hospital facility or other authorized party made before initiating any of the actions listed (whether or not checked) in line 19. (check all that apply):
a
b
c
d
e
f
Policy Relating to Emergency Medical Care
21 Did the hospital facility have in place during the tax year a written policy relating to emergency medical care that required 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?.................. 21 Yes  
If "No," indicate why:
a
b
c
d
Charges to Individuals Eligible for Assistance Under the FAP (FAP-Eligible Individuals)
22 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
b
c
d
23 During the tax year, did the hospital facility charge any FAP-eligible individual to whom the hospital facility provided emergency or other medically necessary services more than the amounts generally billed to individuals who had insurance covering such care? ............................... 23   No
If "Yes," explain in Section C.
24 During the tax year, did the hospital facility charge any FAP-eligible individual an amount equal to the gross charge for any service provided to that individual? ........................... 24   No
If "Yes," explain in Section C.
Schedule H (Form 990) 2015
Page 7
Schedule H (Form 990) 2015
Page 7
Part V
Facility Information (continued)
Section C. Supplemental Information for Part V, Section B. Provide descriptions required for Part V, Section B, lines 2, 3j, 5, 6a, 6b, 7d, 11, 13b, 13h, 15e, 16i, 18d, 19d, 20e, 21c, 21d, 22d, 23, and 24. If applicable, provide separate descriptions for each hospital facility in a facility reporting group, designated by facility reporting group letter and hospital facility line number from Part V, Section A (“A, 1,” “A, 4,” “B, 2,” “B, 3,” etc.) and name of hospital facility.
Form and Line Reference Explanation
Schedule H, Part V, Section B, Line 5 Facility , 1 Facility , 1 - Mercy Medical Center, Inc.. Since the implementation of CHI Mercy Health's 2013-2016 Community Health Improvement Plans, assessment of community needs and portunities has been ongoing with Mercy leadership in partnership with community stakeholders. Over the last year, to ensure broad input from community residents and partners for our new Health Improvement Plan, outreach was conducted via a Community Perception phone survey, Community Perception on-line survey, a Community Engagement Forum; and one-on-one interviews with key community leaders.
Schedule H, Part V, Section B, Line 11 Facility , 1 Facility , 1 - Mercy Medical Center, Inc.. The Community Health Needs Assessment and the Implementation Plan to address the needs identified are included in the Community Benefit Report posted to Mercy Medical Center's website at the link above. As a result of the Needs Assessment, Mercy Medical Center is taking action to reduce incidences of domestic violence, reduce the proportion of child and adult obesity, reduce the proportion of residents using tobacco, and support parent education. Even with great challenges, Douglas County residents have a strong history of collaboration on initiatives to improve the health of our community members. Stakeholder work effort over the last three years has created new opportunities to form partnerships to increase community engagement. Stakeholders know that a healthier Douglas County is not the responsibility of a single entity, nor a single sector of the community; rather, achieving measureable health improvements requires broad community involvement and collective action across all sectors of our community. Partnerships and collaborations are the key to the success of any initiative undertaken by Mercy. Mercy will continue to support existing programs, and leverage community resources and expertise to build a more accessible and sustainable network of programs and services for the prevention, early detection and management of chronic disease. In our efforts to improve the health of the community Mercy will continue to use the model of The Spectrum of Prevention, "a fundamental model in public health, acknowledges that a broad range of factors play a role in health," as we develop health improvement implementation plans for 2016-2019. CHI Mercy Health will work with community partners to develop our 2016-2019 Community Health Improvement Plans by November 2016. Based on current work and ongoing dialogue with stakeholders regarding collaboration opportunities some of the potential strategies include: Violence Prevention - Goal to Reduce Incidences of Domestic Violence As domestic violence is the leading indicator of child abuse, Mercy and Mercy Foundation will continue the ongoing work oftheUP2USNowViolence Child Abuse Prevention Initiative, and partner with stakeholders to develop programs to reduce incidences of domestic violence. Work of the Coalition includes: * Conducting child abuse and domestic violence screening trainings to identified local medical and social service providers of high-risk families. * Expanding use of Interagency Referral System to identify high-risk families and provide intervention services. * Implementing Community Awareness campaigns. * Developing Legislation proposals regarding Oregon State Domestic Violence laws. Obesity - Goal to Reduce Proportion of Child and Adult Obesity Youth - Mercy currently has successfully partnership with local Douglas County Schools and the OSU Extension, SNAP ED programs to deliver the Healthy Kids Outreach Program. The Healthy Kids Outreach Program is the only program providing school based basic health education and healthcare to underserved, rural school age children in Douglas County. Our program provides health education, nutrition education with the Supplemental Nutritional Assistance Program (SNAP), Kids in the Kitchen (a middle school cooking and nutrition classroom series), on-site dental clinics, on-site wellness nurses, health resource referrals and direct medical care to children through our area schools. Adult - * Mercy's dietary staff will work with hospital cafeteria staff to expand healthy food choices for employees and staff. * Mercy will support policy change efforts to increase access to healthy food. * Mercy will support policy change efforts to increase access to physical activity opportunities. Tobacco Usage - Goal to Reduce Proportion of Residents Using Tobacco * Mercy will continue asking about tobacco use during intake history and will provide materials and resources to patients as requested. * Mercy will work with our Education and Support Groups department to expand smoking cession support group opportunities. * Mercy will work with Douglas County Independent Physician Association and the Umpqua Health Alliance to promote ongoing staff education on clinical best practices for tobacco use screenings, referral and treatment options. * Mercy will partner with ADAPT to promote the Oregon Tobacco Quit Line. * Mercy will support community-wide efforts to improve policies to reduce tobacco usage. Parenting Education Efforts * Mercy will function as a pilot site for parenting workshops to broaden the overall reach of the existing program offered and facilitated by the Douglas County Education Service District SD, and to better extend it to underserved or under-supported parent groups. * Mercy will provide strategic marketing and communication service to help improve the visibility of critical parenting education opportunities in our community. Market saturation points will be carefully selected to best target the groups that are underserved, and most frequently overlooked. * Mercy will work to establish or identify an evidence supported digital delivery option for parent education as an adjunct to existing market efforts. Priority Community Health Needs Not Being Addressed with Health Improvement Plans by the Hospital and Reasons Why Two of the needs identified in the 2016 Public Perception Survey that are not being isolated as key priorities are substance abuse and teen issues. Through Mercy Foundation's UP2US Now Violence Prevention Initiative, well established partnerships have functioning strategies in place to address teen and pre-teen concerns, and our county already has a strong community task force actively addressing the substance abuse problem. We do not have the expertise or human capital to lead the charge on the substance abuse work in our community, however, we will continue to look for strategic opportunities to collaborate with the existing abuse prevention and recovery network, as well as Law Enforcement to support the programs they offer, and continue to strongly promote the work they do. While Mercy recognizes the seriousness of issues like bike safety, motor vehicle safety, including speeding, DUI occurrences and motor vehicle crash mortality, we have chosen to more effectively use our resources to impact higher priority community needs. We are committed to supporting local government efforts to improve motor vehicle safety, and will partner in initiatives as needed, Mercy is not in the position to lead this effort at this time.
Schedule H, Part V, Section B, Line 13 Facility , 1 Facility , 1 - Mercy Medical Center, Inc. HUD LOW INCOME GUIDELINES USED.
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
Schedule H (Form 990) 2015
Page 8
Schedule H (Form 990) 2015
Page 8
Part VFacility Information (continued)

Section D. 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?9
Name and address Type of Facility (describe)
1 Mercy Institute of Rehabilitation
2400 NW Stewart Parkway 200
Roseburg,OR97471 		Outpatient Therapy Services
2 Mercy Medical Center - CCC Lab Draw Site
2880 NW Stewart Parkway
Roseburg,OR97471 		Outpatient Laboratory Drawing Center
3 Mercy Medical Center - Myrtle Creek Draw Site
861 Old Hwy 99 South
Myrtle Creek,OR97457 		Outpatient Laboratory Drawing Center
4 Mercy Outpatient Laboratory
2480 Stewart Parkway
Roseburg,OR97471 		Outpatient Laboratory Drawing Center
5 Home Health & Hospice
2400 NW Stewart Parkway 200
Roseburg,OR97471 		Home Care
6 Mercy Outpatient Imaging
1813 W Harvard Ave Suite 411
Roseburg,OR97471 		Outpatient Imaging Services
7 Mercy Umpqua Orthopedic Radiology
277 Medical Loop
Roseburg,OR97471 		Outpatient Imaging Services
8 Mercy Sleep Lab
2400 Stewart Parkway Suite 300
Roseburg,OR97471 		Sleep Testing Services
9 Mercy Medical Center Outpatient Imaging & Lab at Evergreen Family Medicine
2570 NW Edenbower
Roseburg,OR97471 		Outpatient Imaging Services and Outpatient Laboratory Drawing Site
10
Schedule H (Form 990) 2015
Page 9
Schedule H (Form 990) 2015
Page 9
Part VI
Supplemental Information
Provide the following information.
1 Required descriptions. Provide the descriptions required for Part I, lines 3c, 6a, and 7; Part II and Part III, lines 2, 3, 4, 8 and 9b.
2 Needs assessment. Describe how the organization assesses the health care needs of the communities it serves, in addition to any CHNAs 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.
Form and Line Reference Explanation
Schedule H, Part VI Lines 2, 4 & 5: Community Benefit Narrative and Needs Assessment Mercy Medical Center, Inc. led a community wide needs assessment, gathering input on healthcare needs and priorities from community residents and partners. Outreach was conducted via a Community Perception phone survey, a Community Engagement Forum and one-on-one interviews with key community leaders and residents, as well as a survey monkey was provided electronically to approximately 200 not-for-profit and human services organizations. In addition, Mercy Medical Center, Inc. conducted a patient survey regarding access and usage of healthcare services. The community engagement forum was facilitated to review the results of the surveys above, and prioritize the needs. A report from the process was available in June, 2016. Mercy Medical Center, Inc. is a Sole Community Provider in Douglas County, Oregon. Douglas County covers an expansive 5,071 square miles from the Pacific Ocean to well into the Cascade Mountains and includes 12 incorporated cities. Douglas County includes the entire Umpqua River watershed and a large portion of the Umpqua National Forest. It is primarily rural and forested area, and the Federal Government owns approximately half of the land in the county. The latest census places the population of Douglas County at 107,490, with nearly 70% of the residents live near the I-5 corridor that runs through the county. The largest city is the county seat of Roseburg where most of the health services are provided. Douglas County faces challenges from an aging population and high rates of unemployment and poverty. Few educational opportunities, high rates of tobacco and other drug use, and few local resources to address these issues add to the challenges. As a large county with many rural communities, the socio-economic profile is like that of Appalachian America. Per the 2014 American Community Survey, 15.5% of county residents have a bachelor's degree or higher compared to the Oregon State average of 30.8%. The median household income is $42,000 compared with the Oregon State average of $51,075. 20.1% of all residents and 29.4% of children under 18 live in poverty. 68% of children in schools located outside of Roseburg are on the free and reduced lunch program. Douglas County has been designated as a federally designated medically underserved area. ORGANIZATION'S MISSION, VISION, AND TAX-EXEMPT PURPOSE: Since it was founded more than 100 years ago, Mercy Medical Center has always been committed to providing the highest quality health and wellness to our community. Our commitment urges us towards compassionate support, greatly enhancing the health care experience of our patients and their families. From community health and health care education to providing essential health services, giving back to our community is an essential part of what we do. Mercy Medical Center, founded in 1909, is a not-for-profit hospital located in Roseburg, OR. Mercy Medical Center ("MMC") is a 174-bed facility with a level III Trauma designation, including two specialty units and an Adult and Adolescent Intensive Care. As a Not-For-Profit organization, MMC serves all persons in the community on a nondiscriminatory basis regardless of ability to pay serving all of Douglas County. From inception, Mercy Medical Center embraced the mission of the founding Catholic congregation, and has joined with other congregations to form Catholic Health Initiatives. The mission of Mercy Medical Center is to provide excellent, compassionate care for the people of our community. It also has a board of directors that is comprised of independent community representatives. In addition to providing medical services, Mercy Medical Center provides many community-based services, designed to promote healthier communities. To enhance the health status of the population, we focus on holistic care including spiritual, emotional and physical well-being. Mercy Medical Center operates a 24-hour emergency room 365 days per year. That emergency room is open to all individuals regardless of ability to pay. Mercy Medical Center participates in Medicare and Medicaid, and has an active charity care program. Mercy Medical Center has an open medical staff with privileges available to all qualified physicians in the area. It also engages in training and education of health care professionals. Mercy Medical Center is included in the Official Catholic Directory as a tax-exempt hospital. II. Community Benefit Approach: Since 1909, Mercy Medical Center has been serving the medical needs of Douglas County. In fact, 2015 marks 107 years of service to our community. Over the years, our focus has remained on meeting the diverse health care needs of our county's residents. With a population of greater than 100,000; Douglas County has higher than average unemployment and poverty. Through collaboration with community agencies, Mercy and Mercy Foundation have been instrumental in increasing healthcare services for families with ill children. In 2007, the foundation launched the Healthy Kids Outreach Program, which brings wellness nurses and resources to the most underserved schools in the community. In an effort to bring new and needed services to town, Mercy added a coronary intervention program in 2007 to our Shaw Heart and Vascular Center. By having this service locally for the first time, patients had access to state-of-the-art angioplasty services without having to travel. Realizing the strong connection that physician access has to building overall community health, Mercy has been active in helping to recruit an impressive number of new physicians. These new physicians include internists and specialists, who continue to enhance Douglas County residents' access to care. II. Uncompensated Care: Mercy Medical Center provides a significant level of free care each year. In FY 2016, the cost of charity care provided by the organization was $521,410. Mercy Medical Center also incurred $17,285,322 in un-reimbursed costs for services provided to Medicare and Medicaid patients, which represent over 71% of the patients served by Mercy Medical Center. Frequently, the cost of providing services to Medicare and Medicaid patients is greater than the payments Mercy Medical Center receives from the government/state. QUALITATIVE DESCRIPTION OF COMMUNITY BENEFIT: I. Community Outreach for the Poor: Food Donations to Mission: Mercy Medical Center helps to alleviate hunger in the community by donating excess food prepared by the hospital kitchen to the Roseburg Rescue Mission and Umpqua Community Action Network (UCAN) (Foodbank). Additionally Mercy Medical Center, Inc. participates in UCAN's "March Against Hunger" annual event, encouraging staff to assist in the planning and implementation. Community Education: Mercy's Community Education Program is designed specifically to provide the community with preventive and health education services. Mercy's Community Education Programs are free to the public and designed to provide instruction to help achieve the healthiest possible lifestyles. During fiscal year 2016 Mercy Medical Center, Inc. contributed $469,734 to Community Health Improvement and Education programs. Diabetes Education: The American Diabetes Association certifies Mercy's Diabetes Education. Mercy's outpatient Diabetes Learning Center provide information, resources and confidence to help people with diabetes control their condition and enjoy a full, healthy life. One-on-one education is provided by diabetes certified registered nurse and dietitian. In addition, we offer individual and group classes for diabetes education. Childbirth Education: Mercy Medical Center's Family Birthplace provides classes that meet every week throughout the year, and include prenatal education, breastfeeding, Gift of Motherhood and Childbirth classes. These classes cover all kinds of issues surrounding childbirth and parenting. United Way Day of Caring: Each year, the United Way hosts a "Day of Caring" event. United Way agencies submit requests for volunteers to paint, plant, or clean at their facility. Each agency is assigned volunteers who help meet the needs of the different agencies. Examples of past Day of Caring projects include sprucing up a United Way funded day care center, helping with the Kids on the Block festival, painting interior and exterior facilities, cleaning, and gardening. Mercy Medical Center's employees have participated in several Day of Caring projects. Disease Prevention and Awareness: Mercy Medical Center collaborates with local partners to raise awareness and help fund prevention of diseases such as cancer, diabetes, cystic fibrosis, muscular dystrophy and AIDS. Mercy Medical Center donated to local organizations sponsoring promotions in presentation formats, covering topics such as heart disease, diabetes, stroke, and breast cancer awareness.
Schedule H, Part I, Line 6a Prepares Its Own Annual Written Community Benefit Report Mercy Medical Center, Inc prepares its own annual written community benefit report. Its community benefit report is not contained in that of a related organization.
Schedule H, Part VI Lines 2, 4 & 5: Community Benefit Narrative and Needs Assessment Strategic Planning and Recruiting Costs: Douglas County has been designated as a Physician underserved area. There is a need for significant physician recruitment to the area, to meet the current needs for care for the county residents as well as an increased need for future demand for patient medical care. Mercy has supported research into county needs by type of physician, and also has supported recruitment of new physicians in the area in conjunction with other community medical providers. Health Fairs and Screenings: Mercy Medical Center provides cholesterol screenings, glucose screening, blood pressure checks, and flu shots to the community. These free screenings reached a large portion of the county. Support Groups: Mercy Medical Center provides a location for over 15 support groups to meet, and advertises meeting locations and times in several different publications: Board Activities: Mercy Medical Center employees are encouraged to be involved in community leadership. Employees serve in a variety of leadership capacities in the community including serving on boards such as Battered Persons Advocacy, Chamber of Commerce, COBB Street Board, Council on Aging, Economic Development Committee, Future 1st Citizen, Project Leadership and the United Way. Agencies Supported: Mercy Medical Center provided cash donations to numerous agencies such as the Boys and Girls Club, Camp Millennium, Roseburg Chamber of Commerce, Rotary Foundation, United Way, Wish, COBB St, DCCAPS, Umpqua Community Health Clinic and various High Schools in Douglas County. In all, Mercy Medical Center had expenses that exceeded $185,000 in Community Building activities. Contributions: Mercy Medical Center receives some community support from donations that helps fund research and education, capital expansion and renovation, indigent care, new equipment and operating costs. The value of this community support is returned to the community through lower costs in patient programs and community services described throughout this document.
Schedule H, Part I, Line 3c Eligibility criteria for free or discounted care When Catholic Health Initiatives (the ultimate parent organization to Mercy Medical Center, Inc) established its financial assistance policy it was determined that establishing a household income scale based on the HUD very low income guidelines more accurately reflects the socioeconomic dispersions among urban and rural communities in 18 states served by CHI hospitals and health care facilities. In comparing HUD guidelines to the Federal Poverty Guidelines (FPG), we find that on average HUD guidelines compute to approximately 200% to 250% (and sometimes 300%) of FPG. Mercy Medical Center, Inc bases its financial assistance eligibility on HUD's 130% of Very Low Income Guidelines based on geography, and affords the uninsured and underinsured the ability to obtain financial assistance write-offs, based on a sliding scale, ranging from 25%-100% of charges.
Schedule H, Part I, Line 7 Bad Debt Expense excluded from financial assistance calculation 678731
Schedule H, Part I, Line 7 Costing Methodology used to calculate financial assistance A cost accounting system was not used to compute amounts in the table; rather costs in the table were computed using the organization's cost-to-charge ratio. The cost-to-charge ratio covers all patient segments. The cost-to-charge ratio for the year ended 6/30/16 was computed using the following formula: Operating expense (before restructuring, impairment and other losses) divided by gross patient revenue. Based on that formula, $174,198,401 /$559,632,854 results in a 31.13% cost-to-charge ratio. Worksheet 2 was not used to derive the cost-to-charge ratio.
Schedule H, Part II Community Building Activities Physician recruitment made up the majority of Mercy Medical Center's community building activities for the year. Mercy Medical Center is located in Douglas County, which is a federally designated medically underserved area, as well as a primary care shortage area. By recruiting physicians to Douglas County, Mercy Medical Center is expanding access for the community, which can improve community health.
Schedule H, Part III, Line 2 Bad debt expense - methodology used to estimate amount Costing methodology for amounts reported on line 2 is determined using the organization's cost/charge ratio of 31.13%. When discounts are extended to self-pay patients, these patient account discounts are recorded as a reduction in revenue, not as bad debt expense.
Schedule H, Part III, Line 3 Bad Debt Expense Methodology Mercy Medical Center, Inc does not believe that any portion of bad debt expense could reasonably be attributed to patients who qualify for financial assistance since amounts due from those individuals' accounts will be reclassified from bad debt expense to charity care within 30 days following the date that the patient is determined to qualify for charity care.
Schedule H, Part III, Line 4 Bad debt expense - financial statement footnote Mercy Medical Center, Inc does not issue separate company audited financial statements. However, the organization is included in the consolidated financial statements of Catholic Health Initiatives. The consolidated footnote reads as follows: "The provision for bad debts is based upon management's assessment of historical and expected net collections, taking into consideration historical business and economic conditions, trends in health care coverage, and other collection indicators. Management routinely assesses the adequacy of the allowances for uncollectible accounts based upon historical write-off experience by payor category. The results of these reviews are used to modify, as necessary, the provision for bad debts and to establish appropriate allowances for uncollectible net patient accounts receivable. After satisfaction of amounts due from insurance, CHI follows established guidelines for placing certain patient balances with collection agencies, subject to the terms of certain restrictions on collection efforts as determined by each facility. The provision for bad debts is presented on the consolidated statement of operations as a deduction from patient services revenues (net of contractual allowances and discounts) since CHI accepts and treats all patients without regard to the ability to pay.
Schedule H, Part III, Line 8 Community benefit & methodology for determining medicare costs Using essentially the same Medicare cost report principles as to the allocation of general services costs and "apportionment" methods, the "CHI Workbook" calculates a payers' gross allowable costs by service (so as to facilitate a corresponding comparison between gross allowable costs and ultimate payments received). The term "gross allowable costs" means costs before any deductibles or co-insurance are subtracted. Mercy Medical Center, Inc's ultimate reimbursement will be reduced by any applicable copayment/ deductible. Where Medicare is the secondary insurer, amounts due from the insured's primary payer were not subtracted from Medicare allowable costs because the amounts are typically immaterial. Although not presented on the Medicare cost report, in order to facilitate a more accurate understanding of the "true" cost of services (for "shortfall" purposes) the CHI Workbook allows a health care facility not to offset costs that Medicare considers to be non-allowable, but for which the facility can legitimately argue are related to the care of the facility's patients. In addition, although not reportable on the Medicare cost report, the CHI workbook includes the cost of services that are paid via a set fee-schedule rather than being reimbursed based on costs (e.g. outpatient clinical laboratory). Finally, the CHI Workbook allows a facility to include other health care services performed by a separate facility (such as a physician practice) that are maintained on separate books and records (as opposed to the main facility's books and records which has its costs of service included within a cost report). True costs of Medicare computed using this methodology: Total Medicare Revenue: $50,645,419 Total Medicare costs: $57,203,537 Surplus or Shortfall ($6,558,118) Mercy Medical Center, Inc believes that excluding Medicare losses from community benefit makes the overall community benefit report more credible for these reasons: Unlike subsidized areas such as burn units or behavioral-health services, Medicare is not a differentiating feature of tax-exempt health care organizations. In fact, for-profit hospitals focus on attracting patients with Medicare coverage, especially in the case of well-paid services that include cardiac and orthopedics. Significant effort and resources are devoted to ensuring that hospitals are reimbursed appropriately by the Medicare program. The Medicare Payment Advisory Commission (MedPAC), an independent Congressional agency, carefully studies Medicare payment and the access to care that Medicare beneficiaries receive. The commission recommends payment adjustments to Congress accordingly. Though Medicare losses are not included by Catholic hospitals as community benefit, the Catholic Health Association guidelines allow hospitals to count as community benefit some programs that specifically serve the Medicare population. For instance, if hospitals operate programs for patients with Medicare benefits that respond to identified community needs, generate losses for the hospital, and meet other criteria, these programs can be included in the CHA framework in Category C as "subsidized health services." Medicare losses are different from Medicaid losses, which are counted in the CHA community benefit framework, because Medicaid reimbursements generally do not receive the level of attention paid to Medicare reimbursement. Medicaid payment is largely driven by what states can afford to pay, and is typically substantially less than what Medicare pays.
Schedule H, Part III, Line 9b Collection practices for patients eligible for financial assistance Mercy Medical Center, Inc's debt collection policy provides that Mercy Medical Center, Inc will perform a reasonable review of each inpatient account prior to turning an account over to a third-party collection agent and prior to instituting any legal action for non-payment, to ensure that the patient and patient guarantor are not eligible for any assistance program (e.g. Medicaid) and do not qualify for coverage through Mercy Medical Center, Inc's community assistance policy. After having been turned over to a third-party collection agent, any patient account that is subsequently determined to meet the Mercy Medical Center, Inc community assistance policy is required to be returned immediately by the third-party collection agent to Mercy Medical Center, Inc for appropriate follow-up. Mercy Medical Center, Inc requires its third-party collection agents to include a message on all statements indicating that if a patient or patient guarantor meets certain stipulated income requirements, the patient or patient guarantor may be eligible for financial assistance. All of Catholic Health Initiatives' hospitals' contracts with third party collection agencies include the following standards: * Neither CHI hospitals nor their collection agencies will request bench or arrest warrants as a result of non-payment; * Neither CHI hospitals nor their collection agencies will seek liens that would require the sale or foreclosure of a primary residence; and * No Catholic Health Initiatives' collection agency may seek court action without hospital approval. Finally, collection agencies are trained on the Catholic Health Initiatives Mission, Core Values and Standard of Conduct to make sure all patients are treated with dignity and respect.
Schedule H, Part V, Section B, Line 16a FAP website - Mercy Medical Center, Inc.: Line 16a URL: http://www.mercyrose.org/financial-20170309.html;
Schedule H, Part V, Section B, Line 16b FAP Application website - Mercy Medical Center, Inc.: Line 16b URL: http://www.mercyrose.org/financial-20170309.html;
Schedule H, Part V, Section B, Line 16c FAP plain language summary website - Mercy Medical Center, Inc.: Line 16c URL: http://www.mercyrose.org/financial-20170309.html;
Schedule H, Part VI, Line 3 Patient education of eligibility for assistance Mercy Medical Center, Inc includes information concerning its financial assistance policy on its website. In addition, Mercy Medical Center, Inc prominently displays its financial assistance policy in both English and Spanish in obvious locations throughout the hospitals, including the emergency rooms and other patient intake areas, as well as in Mercy Medical Center, Inc outpatient facilities. In addition, Mercy Medical Center, Inc registration clerks are trained to provide consultation to those who have no insurance or potentially inadequate insurance concerning their financial options including application for Medicaid and for financial assistance under Mercy Medical Center, Inc's financial assistance policy. Upon registration (and once all EMTALA requirements are met), patients who are identified as uninsured (and not covered by Medicare or Medicaid) are provided with a packet of information that addresses the financial assistance policy and procedures including an application for assistance. Mercy Medical Center, Inc registration clerks read the organization's medical assistance policy to those who appear to be incapable of reading, and provide translators for non-English-speaking individuals. Mercy Medical Center, Inc's staff will also assist the patient/guarantor with applying for other available coverage (such as Medicaid), if necessary. Counselors assist Medicare eligible patients in enrollment by providing referrals to the appropriate government agencies.
Schedule H, Part VI, Line 6 Affiliated health care system Mercy Medical Center, Inc, along with its affiliated outpatient facilities, are part of Catholic Health Initiatives. Catholic Health Initiatives (CHI) is a national faith-based nonprofit health care organization with headquarters in Englewood, Colorado. CHI's exempt purpose is to serve as an integral part of its national system of hospitals and other charitable entities, which are described as market-based organizations, or MBOs. An MBO is a direct provider of care or services within a defined market area that may be an integrated health system and/or a stand-alone hospital or other facility or service provider. CHI serves as the parent corporation of its MBOs which are comprised of 104 hospitals, including four academic medical centers, and 30 critical access facilities; community health service organizations; accredited nursing colleges; home health agencies; and other facilities that span the inpatient and outpatient continuum of care. Together, these facilities provided $1.1 billion in financial assistance and community benefit in the 2016 fiscal year, including services for the poor, free clinics, education and research. CHI provides strategic planning and management services as well as centralized "shared services" for the MBOs. The provision of centralized management and shared services - including areas such as accounting, human resources, payroll and supply chain -- provides economies of scale and purchasing power to the MBOs. The cost savings achieved through CHI's centralization enable MBOs to dedicate additional resources to high-quality health care and community outreach services to the most vulnerable members of our society. Mercy Medical Center, Inc operates with its wholly owned affiliates and community partners, along with its fundraising arm, the Mercy Foundation, Inc, to serve the health care needs of the Douglas County, Oregon communities.
Schedule H, Part VI, Line 7 State filing of community benefit report OR
Schedule H (Form 990) 2015
Additional Data


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