4A (Expenses $ 5135669726 including grants of $ 68440909) (Revenue $ 5706801819)
SEE PROGRAM SERVICE STATEMENT IN SCHEDULE O.

PART I, LINE 3C: CCHS PROVIDES MEDICALLY NECESSARY SERVICES TO ALL PATIENTS, REGARDLESS OF RACE, COLOR, CREED, GENDER OR COUNTRY OF NATIONAL ORIGIN AND WITHOUT REGARD TO THE PATIENT'S ABILITY TO PAY. CCHS HAS A CHARITY CARE POLICY THAT IS AMONG THE MOST GENEROUS IN THE REGION. THIS POLICY APPLIES TO ALL CCHS FACILITIES, AND THE AMOUNT OF CARE PROVIDED UNDER THE POLICY IS DETERMINED BY NEED AND IS NOT LIMITED OR RATIONED BY BUDGETED AMOUNTS. UNDER THE POLICY, CCHS WILL PROVIDE FREE CARE TO INDIVIDUALS WITHOUT INSURANCE WITH INCOMES UP TO 250% OF THE FEDERAL POVERTY LEVEL AND DISCOUNTED CARE ON A SLIDING SCALE UP TO 400% OF THE FEDERAL POVERTY LEVEL. IN ADDITION, THE POLICY CONTAINS A MEDICAL INDIGENCE PROVISION, WHICH PROVIDES ASSISTANCE REGARDLESS OF INCOME LEVEL WHERE MEDICAL COSTS WILL EXCEED 25% OF ANNUAL FAMILY INCOME. UNLIKE THE CHARITY CARE POLICIES OF MOST HOSPITALS, THE CCHS POLICY APPLIES TO HOSPITAL CHARGES AND PROFESSIONAL FEES FOR SERVICES PROVIDED BY CCHS EMPLOYED PHYSICIANS.

PART I, LINE 7: THE BEST AVAILABLE DATA WAS USED TO CALCULATE THE COST AMOUNTS REPORTED IN ITEM 7. FOR CERTAIN CATEGORIES, THE BEST AVAILABLE DATA WAS DERIVED FROM A COST ACCOUNTING SYSTEM. IN OTHER CATEGORIES, SPECIFIC COST-TO-CHARGE RATIOS WERE CALCULATED AND APPLIED TO THAT CATEGORY.

PART I, LINE 7G: CCF EMPLOYS ITS PHYSICIANS, THEREFORE THE ASSOCIATED COSTS AND CHARGES RELATING TO THESE PHYSICIAN SERVICES ARE INCLUDED IN ALL RELEVANT CATEGORIES OF PART I.

PART I, L7 COL(F): BAD DEBT EXPENSE REPORTED ON FORM 990, BUT SUBTRACTED FOR PURPOSES OF CALCULATING THE PERCENTAGES IS $285,005,092.

PART II: CLEVELAND CLINIC ADDRESSES VARIOUS COMMUNITY CONCERNS, INCLUDING HEALTH IMPROVEMENT, POVERTY, WORKFORCE DEVELOPMENT, AND ACCESS TO HEALTH CARE. CLEVELAND CLINIC DIRECTS EMPLOYEE TIME AND TALENT TO SERVE ON COMMUNITY COLLABORATION BOARDS, HEALTH ADVOCACY PROGRAMS, AND PHYSICAL IMPROVEMENT PROJECTS TO PROMOTE THE HEALTH OF THE COMMUNITIES THE ORGANIZATION SERVES.

PART III, LINE 4: THE COST OF BAD DEBT AS REFLECTED IN PART III, LINE 2 WAS CALCULATED USING A COST TO CHARGE RATIO. ANY DISCOUNTS PROVIDED OR PAYMENTS MADE TO A PARTICULAR PATIENT ACCOUNT ARE APPLIED TO THAT PATIENT ACCOUNT PRIOR TO ANY BAD DEBT WRITE-OFF AND ARE THUS, NOT INCLUDED IN BAD DEBT EXPENSE.TEXT OF FOOTNOTE FROM AUDITED FINANCIAL STATEMENTS:THE PROVISION FOR UNCOLLECTIBLE ACCOUNTS IS BASED UPON MANAGEMENT'S ASSESSMENT OF HISTORICAL AND EXPECTED NET COLLECTIONS CONSIDERING HISTORICAL BUSINESS AND ECONOMIC CONDITIONS, TRENDS IN HEALTH CARE COVERAGES AND OTHER COLLECTION INDICATORS. PERIODICALLY THROUGHOUT THE YEAR, MANAGEMENT ASSESSES THE ADEQUACY OF THE ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS BASED UPON HISTORICAL WRITE-OFF EXPERIENCE BY PAYOR CATEGORY. THE RESULTS OF THIS REVIEW ARE THEN USED TO MAKE MODIFICATIONS TO THE PROVISION FOR UNCOLLECTIBLE ACCOUNTS TO ESTABLISH AN APPROPRIATE ALLOWANCE FOR UNCOLLECTIBLE RECEIVABLES. AFTER SATISFACTION OF AMOUNTS DUE FROM INSURANCE, THE SYSTEM FOLLOWS ESTABLISHED GUIDELINES FOR PLACING CERTAIN PAST DUE PATIENT BALANCES WITH COLLECTION AGENCIES, SUBJECT TO THE TERMS OF CERTAIN RESTRICTIONS ON COLLECTION EFFORTS AS DETERMINED BY THE SYSTEM.

PART III, LINE 8: MEDICARE ALLOWABLE COSTS ARE CALCULATED USING A COST-TO-CHARGE RATIO.CCHS HAS USED THE CHA METHODOLOGY FOR REPORTING COMMUNITY BENEFIT SINCE 2004 AS IT WAS THE EMERGING COMMUNITY BENEFIT REPORTING STANDARD AND NOW HAS BEEN ADOPTED IN LARGE PART BY THE IRS FOR 990 REPORTING PURPOSES. THE CHA MODEL DOES NOT INCLUDE MEDICARE SHORTFALL AS COMMUNITY BENEFIT.

PART III, LINE 9B: IT IS OUR POLICY NOT TO PURSUE COLLECTION PRACTICES AGAINST PATIENTS KNOWN TO QUALIFY FOR CHARITY CARE OR OTHER FINANCIAL ASSISTANCE. IN CERTAIN CASES IT MAY NOT BE EASILY DETERMINED WHETHER OR NOT A PATIENT QUALIFIES FOR CHARITY CARE OR FINANCIAL ASSISTANCE; HOWEVER, IF AFTER COLLECTION PRACTICES HAVE BEGUN IT LATER BECOMES KNOWN THAT A PATIENT QUALIFIES, THE COLLECTION EFFORTS CEASE.

SCH H PART I, LINE 6A - AN ANNUAL COMMUNITY BENEFIT REPORT IS PREPARED FOR THE HEALTH SYSTEM AS A WHOLE WHICH INCLUDES THE PARENT ORGANIZATION AND RELATED AFFILIATES.SCH H PART III, LINES 5, 6, & 7 - MEDICARE SHORTFALL - IN ADDITION TO THE MEDICARE PROGRAMS REFLECTED IN THE COST REPORTS, CCHS INCURS COSTS AND RECEIVES REIMBURSEMENT FOR OTHER MEDICARE ELIGIBLE SERVICES. THE TOTAL REVENUE RECEIVED AND COSTS ASSOCIATED WITH THE ADDITIONAL MEDICARE SERVICES ARE $551,838,741 AND $766,267,752 RESPECTIVELY. THIS RESULTS IN ADDITIONAL MEDICARE SHORTFALL OF $214,429,011 WHICH, ADDED TO THE SHORTFALL OF $46,369,963 AS REPORTED ON THE COSTS REPORTS, BRINGS THE TOTAL MEDICARE SHORTFALL TO $260,798,974.SCH H PART V - FACILITIES - IN ADDITION TO THE LICENSED AND/OR REGISTERED FACILITIES LISTED IN PART V, CLEVELAND CLINIC HAS SEVEN ADMINISTRATIVE LOCATIONS.SCH H PART I, LINE 7B - UNREIMBURSED MEDICAID - THE NET COMMUNITY BENEFIT EXPENSE FIGURE REPORTED FOR UNREIMBURSED MEDICAID IS NET OF CCHS' HCAP BENEFIT OF $13,993,049.SCH H PART I, LINE 7 - NOTE THAT THE TOTAL AMOUNT OF CHARITY CARE AND OTHER COMMUNITY BENEFITS OF $665,288,021 AS REPORTED ON PART I, LINE 7 DIFFERS FROM THE TOTAL COMMUNITY BENEFIT FOR CLEVELAND CLINIC HEALTH SYSTEM AS REPORTED IN THE SYSTEM'S COMMUNITY BENEFIT REPORT. THE AMOUNT DIFFERS IN THREE RESPECTS: 1) RESEARCH DIRECT OFFSETTING REVENUE OF $133,474,511 IS NOT REPORTED AS A COMPONENT OF COMMUNITY BENEFIT PER IRS INSTRUCTION BUT IS INCLUDED AS AN OFFSET TO COMMUNITY BENEFIT PER CHA GUIDELINES 2) IRS DOES NOT CONSIDER COMMUNITY BUILDING ACTIVITIES AS REPORTED IN PART II TO BE COMMUNITY BENEFIT WHERE THESE ACTIVITIES ARE INCLUDED IN COMMUNITY BENEFIT PER CHA GUIDELINES AND 3) THE PROPORTIONATE SHARE OF JOINT VENTURE COMMUNITY BENEFIT IS INCLUDED IN LINE 7.

PART VI, LINE 2: CCHS MEETS THE NEEDS OF THE COMMUNITY THROUGH ITS EDUCATION, RESEARCH, AND PATIENT CARE PROGRAMS. CCHS ALSO CONDUCTS A BROAD SPECTRUM OF OUTREACH PROGRAMS AND SERVICES IN THE COMMUNITIES IT SERVES. CCHS SPONSORS A VARIETY OF PROGRAMS FOR AT-RISK POPULATIONS AND SPECIAL NEEDS GROUPS, AS WELL AS FOR THE BROADER COMMUNITY. THE SPECIFIC NEEDS TARGETED BY THESE PROGRAMS HAVE BEEN IDENTIFIED BY THE EXPERIENCE OF COMMUNITY HOSPITAL AND FAMILY HEALTH CENTER ADVISORY COUNCILS, NEIGHBORHOOD FOCUS GROUPS, AND THROUGH COMMUNITY NEEDS ASSESSMENTS THAT IDENTIFIED HEALTH PROBLEMS IN THE COMMUNITIES SERVED BY THE HOSPITALS.

PART VI, LINE 3: INFORMING THE PUBLIC THAT CHARITY CARE IS AVAILABLE IS AN IMPORTANT ELEMENT OF OUR CHARITY CARE PROGRAM AND THE CLEVELAND CLINIC CONTINUOUSLY STRIVES TO IMPROVE ITS COMMUNICATIONS WITH PATIENTS ON THE AVAILABILITY OF CHARITY CARE. INFORMATION ABOUT THE CHARITY CARE POLICY IS POSTED ON THE CLEVELAND CLINIC WEBSITE. PATIENT BILLS INCLUDE DETAILED INFORMATION REGARDING THE CHARITY CARE POLICY AND AN INSERT DESCRIBING THE CHARITY CARE PROGRAM IS INCLUDED WITH BILLING STATEMENTS. A SUMMARY DESCRIPTION OF THE CHARITY CARE POLICY IS AVAILABLE IN PATIENT REGISTRATION AREAS AND FROM FINANCIAL COUNSELORS WHO ARE PRESENT ON-SITE AT EACH CLEVELAND CLINIC HOSPITAL AND AT ALL FAMILY HEALTH CENTERS TO ASSIST PATIENTS IN QUALIFYING FOR GOVERNMENTAL ASSISTANCE PROGRAMS AND CHARITY CARE.

PART VI, LINE 4: CCHS DEFINES THE COMMUNITY IT SERVES BROADLY TO INCLUDE THE LOCAL CLEVELAND METROPOLITAN AREA, THE NORTHEAST OHIO SEVEN COUNTY AREA, THE STATE OF OHIO AND THE ENTIRE MIDWEST REGION, THE COUNTRY, AND THE INTERNATIONAL COMMUNITY. IN ADDITION, IN FLORIDA, CCHS SERVES WESTON AND BROWARD COUNTY RESIDENTS, AND OTHER CITIZENS OF THE STATE OF FLORIDA. CCHS RESEARCH ACTIVITIES HAVE RESULTED IN NUMEROUS ADVANCES IN MEDICAL CARE THAT BENEFIT THE PUBLIC AT LARGE. CCHS MEDICAL EDUCATION ACTIVITIES ATTRACT MEDICAL STUDENTS AND FELLOWS FROM ACROSS THE U.S. AND AROUND THE WORLD.

PART VI, LINE 6: ONE OF THE HALLMARKS OF A CHARITABLE ORGANIZATION IS THAT THE ORGANIZATION SERVES A BROAD, INDEFINITE CHARITABLE CLASS. ONE OF THE KEY INDICATORS THAT AN ORGANIZATION SERVES THE BROADER COMMUNITY IS CONTROL OF THE ORGANIZATION BY INDEPENDENT COMMUNITY LEADERS. CCF AND ITS REGIONAL HOSPITAL GOVERNING BOARDS ARE MADE UP OF MEMBERS OF THE COMMUNITY WHO DIRECT AND GUIDE MANAGEMENT IN CARRYING OUT THE MISSION OF CCF AND ITS SUBORDINATES. TRUSTEES/DIRECTORS ARE SELECTED ON THE BASIS OF THEIR EXPERTISE AND EXPERIENCE IN A VARIETY OF AREAS BENEFICIAL TO THE CLEVELAND CLINIC AND THE HEALTH SYSTEM AND ARE NOT COMPENSATED FOR THEIR SERVICES.ANOTHER HALLMARK OF A CHARITABLE ORGANIZATION IS THAT SURPLUS FUNDS ARE USED TO FURTHER CHARITABLE PURPOSES AND ACTIVITIES. SURPLUS FUNDS FOR CCF AND ITS SUBORDINATES ARE REINVESTED AND USED IN CARRYING OUT THE EXEMPT MISSION -- PATIENT CARE, RESEARCH, AND EDUCATION

PART VI, LINE 7: CLEVELAND CLINIC IS THE PARENT ORGANIZATION OF THE HEALTH SYSTEM, AN INTEGRATED HEALTH SYSTEM CONSISTING OF AN ACADEMIC MEDICAL CENTER, MEDICAL SCHOOL, COMMUNITY HOSPITALS, FAMILY HEALTH CENTERS, VARIOUS ANCILLARY SERVICES, AND A LARGE GROUP OF EMPLOYED PHYSICIANS AND PHYSICIAN RESEARCHERS.