| Form 990, Part III, Line 4a, Description of Program Service: |
Since its inception in 1924, Baptist Healthcare System, Inc. ("Baptist") has been dedicated to providing accessible, quality healthcare to all patients regardless of their ability to pay. The hospitals owned and operated by Baptist Healthcare System, Inc. under tax identification number 61-0444707 include: Baptist Health Louisville, located in Louisville, Kentucky; Baptist Health Corbin, located in Corbin, Kentucky; Baptist Health Lexington, located in Lexington, Kentucky; Baptist Health Paducah, located in Paducah, Kentucky; Baptist Health La Grange, located in La Grange, Kentucky, Baptist Health Richmond, located in Richmond, Kentucky, Baptist Health Hardin, located in Elizabethtown, Kentucky and Baptist Health Floyd, located in New Albany, Indiana. VISION: The vision of Baptist Health is to lead in clinical excellence, compassionate care and growth to meet the needs of our patients and to be the healthcare leader in Kentucky and Indiana. Both the mission and vision are engrained into the culture of the organization. Our goal is to deliver efficient, effective and affordable high-value services through outstanding and dedicated teams focused on clinical excellence and more importantly, the people in the communities we serve. With over 400 community access points of care, and having earned a reputation for providing high quality patient care utilizing the latest in medical technology, patients seek out Baptist facilities for their care. According to state statistics for the period ended 9/30/2021, Baptist Health is one of the largest healthcare providers in the Commonwealth of Kentucky, providing more services than any other health system. KENTUCKY FY 2021 HOSPITAL STATISTICS: LICENSED BEDS: 2,770 beds - the second largest number of beds of any health system in Kentucky. EMPLOYEES: 17,461 employees at end of the fiscal year - one of the top employers in Kentucky. INPATIENT CARE: 94,638 admissions/472,853 days - the largest number of admissions in Kentucky at a system-owned or managed hospital. One out of every five inpatients receiving care in Kentucky received care at a system-owned or managed hospital. OBSTETRIC (DELIVERIES): 12,906 babies - the largest number of babies delivered in Kentucky at a system-owned or managed hospital. Almost one in four babies in Kentucky was delivered at a Baptist owned or managed hospital. EMERGENCY VISITS: 343,538 registrations - the largest number of emergency visits in Kentucky at a system-owned or managed hospital. One in seven Emergency Department patients was treated at a system-owned or managed hospital. OUTPATIENT VISITS: 2,514,967 hospital visits - one in six outpatients in Kentucky receiving care in an acute-care setting was seen at a system-owned or managed hospital. MISSION: As indicated by its mission statement, "Baptist Health demonstrates the love of Christ by providing and coordinating care and improving health in our communities", BHS strives to continue its Christian heritage of service. Baptist Health is organized and operated exclusively for the benefit of each community that we serve, and each hospital is considered a respected and valuable community asset. The Baptist Boards of Directors are comprised of local representatives who, along with the hospitals' management and employees, understand that they are responsible to the communities for providing high quality health care services. Over the years, Baptist has gained a reputation for providing compassionate, safe, high quality, cost efficient, patient friendly care. RESPONSIVE TO COMMUNITY NEEDS: Operating healthcare facilities in today's environment requires a delicate balance between producing a sufficient margin to allow for adequate staffing and investment in new technologies, while also providing enough resources to absorb the cost of care for those patients who do not have the ability to pay for the services. During the 2021 fiscal year, Baptist was able to re-invest over $184 million into the communities in new technology, construction, renovation and systems improvement. Because of the need to generate a modest margin while caring for all patients, Baptist strives to fulfill its community responsibility of collecting appropriate reimbursement from all patients who have the necessary resources while providing a generous, yet accountable charity care policy to assist those patients who do not have the means to pay for the services rendered. (See "Charity Care Policy" later in this section for further discussion). From a broad perspective, Baptist hospitals consistently provide a high level of quality care to every patient and enhance the health of the people it serves through health and educational promotions, health screenings, medical research, community engagement and the training of health professionals. OTHER COMMUNITY BENEFITS INCLUDE: - Maintaining necessary, but unprofitable services that meet community needs - Helping to recruit physicians to underserved areas - Helping patients coordinate services with other healthcare providers - Providing resources for support groups - Promoting and providing preventive care services - Monitoring clinical outcomes in order to ensure quality care - Committing resources to improving safety and processes of care - Providing services conveniently accessible by patients - Working with state and local agencies and governments to safely and effectively respond to public health emergencies. In addition, Baptist employees volunteer thousands of hours in community services and leadership. Baptist's support for community activities underscores its commitment to improving the lives of those served. Because Baptist and its employees contribute so much of their time, talent and resources to serve others, communities served by Baptist are better places to live and work. Quantification of many of the community benefits is detailed later in this section. However, what the Statement of Program Service Accomplishments doesn't measure is the economic benefit derived by each community from Baptist being one of the largest employers in the state. The economic impact of the wages paid to Baptist employees is significant considering the dollars they spend on food, housing, services and other products. |
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CHARITY CARE POLICY: To further the mission of enhancing the health of the people and communities it serves, Baptist provides medically necessary inpatient and outpatient care to patients regardless of race, religion, sex, national origin, disability, age or their ability to pay. Recognizing that not all patients have the ability to pay, Baptist has a charity care policy to accurately evaluate a patient's ability to pay for services received. Baptist relies solely on the physician order to determine whether treatment is medically necessary and whether the patient is treated on an inpatient or outpatient basis. Neither the patient's financial condition nor their ability to pay for services has any bearing upon whether, or how, the patient is treated in a Baptist facility. Patients are transferred only when Baptist does not provide the specialized service that is medically required, or by specific request of the patient. Baptist has notices posted throughout the hospital that clearly communicate Baptist's charity care policy. Baptist employees are instructed in the application of the charity care policy and are trained to recognize situations that indicate the financial resources of a patient may be inadequate. These employees freely and willingly volunteer information regarding the charity care policy to any patient who may express a concern regarding the ability to pay for services. The policy provides that: --- A patient or guarantor whose income plus liquid assets are less than 300% of the current federal poverty level for his or her family size may be eligible for a full discount under the FAP after all other healthcare payment resources have been utilized and exhausted. --- A patient or guarantor whose family income plus liquid assets is between 300% and 1200% of the current federal poverty level for his or her family size may be eligible for partial assistance. Patients have a total yearly obligation of 10% of their annual income plus liquid assets. --- A patient or guarantor whose family income plus liquid assets is above 1200% have a total yearly obligation of 20% of their annual income plus liquid assets. --- A patient that is uninsured or their health insurance does not cover emergency or medically necessary care provided by a Baptist Health hospital will be allowed a discount that limits payment responsibility to the amounts generally billed to individuals who have insurance covering such care. If eligible for a discount under the FAP, a patient or guarantor will receive the discount regardless of whether he or she pays or has paid the balance on the billing statement, provided all other healthcare resources are first exhausted. In accordance with the provisions of Section 501(r), if charity care eligibility cannot be determined, good stewardship requires that the hospital initially begin the collection process. However, immediately upon determining that the guarantor is eligible for charity care, collection efforts on the balance eligible for charity will cease and the appropriate balance will be designated as charity. TAX-EXEMPT STATUS REQUIREMENTS: The Internal Revenue Service Revenue Ruling 69-545 provides that a hospital can demonstrate it has met the community benefit standard by having a full-time emergency room open to the public regardless of ability to pay for services received. Baptist operates Emergency Departments that are open 24 hours a day, 365 days a year and treated over 343,000 emergency patients during fiscal year 2021. Baptist facilities and emergency departments post policies stating that patients will be treated regardless of their ability to pay. Depending on the severity of a patient's condition, as a service to the patient, Baptist may verify insurance prior to rendering services in the emergency department. Under no circumstances is emergency care delayed by discussions regarding insurance coverage or ability to pay for services. In addition, Baptist does not convey or intimate in any way to any emergency medical transportation service an unwillingness to treat any particular patient in need of medical attention. ACCOUNTABILITY TO THE BROADER COMMUNITY: As previously noted, the Baptist Health Board of Directors embraces its responsibility to represent the broader community in guiding Baptist in its provision of healthcare services. The Board meets periodically to provide oversight as to how best to continue to serve each community. Regularly scheduled meetings of the full Board and its Committees are described below: Board of Directors Quarterly Audit & Enterprise Risk Committee Quarterly Executive Committee As needed Compensation Committee As needed Finance Committee Monthly Governance Effectiveness Committee Quarterly Quality and Mission Effectiveness Committee Quarterly |
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One of the key functions of the Board is to ensure Baptist not only utilizes sound financial management, but also embraces a culture of compliance that permeates throughout the healthcare system. This is best demonstrated by Baptist's commitment of resources for compliance activities including the designation of a Compliance Officer. The compliance function reports to the Audit & Enterprise Risk Committee (established in 1994) which is comprised of three independent members of the Board who are not members of the Finance Committee. Additionally, at least one member has the expertise to be considered a financial expert in the public sector. Another key function of the Board is to ensure that compensation paid to executives is reasonable and meets the guidelines set forth by the Internal Revenue Service. Through the Compensation Committee, (CC), the Board ensures that: 1) members of the CC do not have any conflicts of interest, i.e., they are not employed or receive compensation subject to approval by the executives, 2) the compensation is approved in advance by the CC, 3) the CC obtains and relies upon appropriate comparability data in making decisions, 4) every form of compensation and benefit is included in the comparisons, 5) the CC documents the basis for its decision concurrently with making the decision, and 6) based upon the data, the compensation is reasonable. The following is a summary of Baptist's community service for the year ended August 31, 2021, in terms of services to the poor and indigent and the benefits provided to the communities it serves. QUANTIFIABLE COMMUNITY BENEFIT: Baptist is fully committed to its responsibility as a charitable organization and commits extensive resources to fulfill that obligation to the community. To the extent possible, Baptist has quantified the benefits provided to the communities it serves: Description Amount Benefits for the Poor and Indigent: Unreimbursed Cost of Charity Care $ 38,476,000 Unreimbursed Cost of Medicaid 10,433,000 -------------- Total Benefits for the Poor and Indigent $ 48,909,000 Benefits for the Broader Community: Net Loss on Subsidized Health Services $ 138,590,000 Community Health Improvement Services 1,546,000 Health Professions Education 978,000 Research 148,000 Financial & In-Kind Contributions 2,734,000 --------------- Total Benefits for the Community $ 143,996,000 ---------------- Total Quantifiable Community Benefit $ 192,905,000 GLOSSARY OF COMMUNITY BENEFIT TERMS: BENEFITS FOR THE POOR AND INDIGENT: Describes services provided to persons who cannot afford healthcare because of inadequate resources and/or who are uninsured or underinsured. This includes those patients that qualify for Charity, Medicaid, Kentucky's Children Health Insurance Program (KCHIP), Kentucky Hospital Care Program (KHCP) and other persons whose income is inadequate (based on each patient's individual circumstances). 1. Unreimbursed cost of charity care describes the services provided to persons who cannot afford to pay. It also includes the Health Care Provider Tax (Kentucky Revised Statutes 142.303) that is assessed on all hospital patient revenues received for the purpose of funding state Medicaid, KHCP and KCHIP programs. The amounts reflect the net cost of these services after reducing the costs for contributions and other revenues received by Baptist as direct assistance for the provision of care. 2. Unreimbursed cost of Medicaid reflects costs of treating Medicaid beneficiaries not reimbursed by government programs. BENEFITS FOR THE BROADER COMMUNITY: Describes services provided to other needy populations that may not qualify as indigent but that need special services and support. The benefits include the cost of health promotion and education, health clinics and screenings, and medical research that benefits the community. 1. Net loss on subsidized health services reflects the loss from services that would be discontinued if the decision were based on profit motives only. 2. Other community benefit includes costs incurred by Baptist in providing support and coordination of health education and awareness events as well as the cost of employees paid time to attend, staff, and coordinate these activities. 3. Baptist makes cash and in-kind donations on behalf of the poor and needy to community agencies and to special funds used for charitable purposes. |
| Form 990, Part VI, Section A, line 2 |
The Board of Directors is made up of executives from related organizations. The following individual has a business relationship in that he serves on the Board of Directors of the organization and is an officer and/or director of a related organization: Gerard Colman. |
| Form 990, Part VI, Section B, line 11b |
The internally prepared Form 990 is reviewed by an outside accounting firm. A copy of the IRS Form 990 is provided to the Board of Directors prior to the filing of the return. Any questions or comments are addressed by explanation or a change to the form. |
| Form 990, Part VI, Section B, line 12c |
DESCRIPTION OF PROCESS TO MONITOR TRANSACTIONS FOR CONFLICTS OF INTEREST: Annually the Secretary of BHS sends out a Conflict of Interest questionnaire to each of the directors and officers serving on the Board of BHS. After completion, they are returned to the Secretary and reviewed by the Board or the Governance Effectiveness Committee for any potential conflicts. A conflict of interest is any circumstance, relationship (financial or otherwise), activity or decision (made in the course of governance, management or professional responsibilities or otherwise) that adversely influences or appears to adversely influence the ability of a covered person to: 1) make objective decisions on behalf of BHS and/or 2) act in the best interests of BHS in a manner consistent with the tax-exempt purposes of BHS. The Board or Committee will determine by a majority vote of disinterested directors whether the disclosed financial or special interest may result in a conflict of interest. |
| Form 990, Part VI, Section B, line 15 |
COMPENSATION DETERMINATION PROCESS: Annually in December, the BHS Compensation Committee reviews the compensation, including base compensation and incentive compensation, for the CEO and all officers and key employees of BHS. The BHS Compensation Committee is comprised of independent Board Members. The Committee retains a Compensation Consultant to advise the Committee and who provides data as to comparable compensation for similarly qualified persons in functionally comparable positions at similarly situated healthcare organizations. The Committee reviews this information in approving annual base and incentive compensation and other items of reportable compensation described on Schedule J of the IRS Form 990. The decisions of the Committee regarding compensation are contemporaneously documented in the minutes of the Committee. Annually, the Committee Chairperson and the Compensation Consultant provide a report on executive compensation to the full Board of Directors of BHS. |
| Form 990, Part VI, Section C, line 19 |
AVAILABILITY OF GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, & FINANCIAL STATEMENTS TO GENERAL PUBLIC: In adherence to the Master Trust Indenture among BHS and U.S. Bank National Association, as Master Trustee, dated as of February 1, 2009, BHS reports its financial results on a quarterly basis to the Master Trustee who in turn makes them available through Electronic Municipal Market Access. Additionally, the organization will provide any documents open to public inspection upon request. |
| Form 990, Part VII |
HOURS WORKED FOR RELATED ORGANIZATION: Officers for BHS provide services to BHS and its subsidiaries. Hours worked are not tracked on an entity by entity basis. Therefore, all officers' hours reported on Form 990, Part VII, Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors represent aggregate hours worked per week for all entities. |
| Form 990, Part XI, line 9: |
MIS Funding 6,723,276. Transfer JV Fund 1,619,467. Physician Entity Funding -242,551,990. Other Changes 39,145. IS Depreciation -5,551,501. Post Retirement Change -653,819. Balance Sheet Transfer -2,808,768. Capital Released 6,284,862. Unrestricted Capital 176,301. |
Attach to Form 990 or 990-EZ.