4A (Expenses $ 16728797 including grants of $ 6570) (Revenue $ 19799861)
FRIO HOSPITAL ASSOCIATION (THE ASSOCIATION) OPERATES A NOT-FOR-PROFIT ACUTE CARE HOSPITAL, FRIO REGIONAL HOSPITAL (THE HOSPITAL). THE HOSPITAL PROVIDES INPATIENT AND OUTPATIENT SERVICES AS WELL AS OTHER AFFILIATED SERVICES TO FRIO COUNTY, TEXAS. INPATIENT ADMISSIONS OF 360 (1,247 PATIENT DAYS); 8,053 EMERGENCY ROOM VISITS; 119 DELIVERIES; 120 SURGERIES; AND 9,329 OUTPATIENT VISITS (INCLUDING RADIOLOGY).

SCHEDULE H, PART V, SECTION B
COMPLIANCE WITH 501R: Frio Regional Hospital identified a couple of areas where it was not yet fully compliant with the Final 501r regulations. The Hospital realized the most recent CHNA and Implementation Strategy were not on the hospitals website. Once this was identified, the hospital uploaded the documents on November 1, 2016. During this time, the Hospital also identified that the Financial Assistance Policy, Application and Plain Language Summary were not compliant with the final 501r regulations and the current documents were not on the website. The website had been redesigned, and the documents were not included on the new site. The hospital updated its policy, application and plain language summary to address the requirements under 501r and uploaded them to the new website on December 21, 2016. This was also the day the board approved the documents. Finally, at the time the 990 tax return was being prepared, an Amounts Generally Billed (AGB) calculation had not been completed. The hospital has engaged an outside accounting firm to complete the calculation, and the hospital will use these calculations to make any corrections to patient accounts as needed. Frio Personnel are working diligently toward compliance and will correct any additional failures to comply as they are identified. Top management will monitor the website quarterly to confirm the hospital continues to stay compliant with the widely publicized requirements under 501r.

SCHEDULE H, PART V, SECTION B, LINE 5
Persons who represent the community: The hospital determined the needs of the community through an extensive phone survey campaign that included over 600 residential phone numbers in Pearsall, TX, as well as surveys in both Spanish and English distributed in-person around the community. Some of the surveys respondents volunteered and were selected to participate in focus groups to help analyze and prioritize the needs identified. The community members questioned in the interviews, surveys and focus groups consisted of individuals within the hospital (physician and non-physician), Camino Real MHMR, Family Medical Clinic, Frio County WIC, Frio Health Department, Hood Medical Clinic, Nix Rural Healthcare Clinic, Pearsall School District, South Texas Rural Health, and the local YMCA.

Schedule H, Part V, Section B, Lines 7 & 10
CHNA & IMPLEMENTATION STRATEGY: THE HOSPITALS COMMUNITY HEALTH NEEDS ASSESSMENT AND IMPLEMENTATION STRATEGY ARE AVAILABLE UPON REQUEST AND AT THE FOLLOWING WEB ADDRESS: www.frioregionalhospital.com/about-us/community-health-needs-assessment/

Schedule H, Part V, Section B, Line 11
"Needs addressed and not addressed: The Hospitals Board of directors were able to use the information compiled by the focus groups during the survey campaign to develop and adopt the implementation strategy. All of the needs identified within the community health needs assessment were addressed in the strategy. The campaign produced three main areas of needs to address. These areas are: 1. The need to establish an on-going community outreach and public relations program whose purpose is to inform the public on hospital services, health education and health resources. This will be accomplished by providing information and educating the public through health literature, public forums, health fairs, and collaboration with other health resources, civic, political, nonprofit, and religious and business organizations. The strategy is to distribute hospital/health related material, educational information and free screenings at various local events and locations. The hospital will assist and collaborate with community organizations with health fairs, community events, partnerships and provide booth sponsorships to raise health awareness. During 2016 members of the hospital participated in the following: -Partnered with Methodist Healthcare Ministries of South Texas, Inc. Through this partnership they will serve the community of Pearsall on various health education topics such as breastfeeding education. -Participated with Frio County Translational Advisory Board (TAB) in distributing literature on the hospital and its services at the Frio County Health Fair -HR/Marketing Director represented the hospital at Hunters Extravaganza in Cotulla -Participated in the Eagle Ford Safety & Equipment Rodeo The Hospital also plans to utilize local and other media to help advertise services to the community. During 2016 hospital members: -Had quarterly articles published on hospital-provided services in the Inspire Health Magazine -Continued publicizing health and hospital events through the local media and website to increase wellness and important health and community information. The hospital will also create and implement in-house events and activities to enhance community involvement and as a means to increase awareness of hospital leadership and services. During 2016 the hospital held an Easter Egg Hunt for the community on campus, a monthly community blood drive, an open house during National Hospital Week for all departments, and hosted the third annual visit with Santa and CASA Toy Drive for children of the community. 2. As an employment leader and the largest health provider in the area, the hospital needs to improve outreach and participation in collaborative efforts toward improving the publics sense of well-being, pride and confidence as members of our rural community. The implementation strategy is to provide community organizations and groups with in-kind, informational and financial assistance with the intent to help them meet their community goals and objectives. The hospital plans to Be more involved with community organizations to provide assistance and support. During 2016 the hospital: -Donated money for scholarship youth participants in Pearsall for the Jr. Rodeo Livestock Show -Had personnel participate with food distributions at the food bank and Fireman's Park -Had personnel run a booth at Pearsall Career Day, TAB Health Fair and Pioneer Days -Participated in Relay for Life, raising several hundred dollars for cancer awareness -Participated in various events connected to the schools in the area -Physicians collaborated with the REACH program of the University of Texas School of Public Health Regional Campus in San Antonio to announce its report: ""Chronic Pain: The hidden Epidemic in Frio County"" 3. Improve physician and medical staff involvement in community education by increasing the number and frequency of physician and medical-staff attended events where they can educate youth and adults alike in various health topics important to this rural community. During 2016 the strategy is to promote educational, wellness and career discussions with community-at-large by: -Holding an Open House at its Rehab Facility to introduce new therapy equipment -Hold town hall meetings where physicians and medical staff can answer questions of the community attendees -having physicians attend Career Day at Pearsall High School to discuss careers in the medical field"

SCHEDULE H, PART V, SECTION B, LINES 16A, 16B & 16C
FINANCIAL ASSISTANCE DOCUMENTS: THE HOSPITALS FINANCIAL ASSISTANCE POLICY, APPLICATION AND PLAIN LANGUAGE SUMMARY ARE AVAILABLE UPON REQUEST AND AT THE FOLLOWING WEB ADDRESS: www.frioregionalhospital.com/patients-and-visitors/financial-assistance/

SCHEDULE H, PART III, SECTION A, LINE 2
Bad debt expense: The organization's bad debt expense was calculated using the expense reported on the financial statements. Schedule H, Part III, Section A, Line 3 Bad Debt Expense attributable to patients eligible under financial assistance policy: THE ORGANIZATION IS UNABLE TO ESTIMATE THE AMOUNT FOR LINE 3 AND HAS ELECTED TO LEAVE IT BLANK. BAD DEBT EXPENSE SHOULD BE CONSIDERED COMMUNITY BENEFIT BECAUSE THIS IS UNCOMPENSATED HEALTHCARE PROVIDED TO RESIDENTS OF THE COMMUNITY. Schedule H, Part III, Section A, Line 4 Bad debt footnote: Accounts receivable are reduced by an allowance for doubtful accounts. In evaluating the collectability of accounts receivable, the Hospital analyzes its past history and identifies trends for each of its major payer sources of revenue to estimate the appropriate allowance for doubtful accounts and provision for uncollectible accounts. Management regularly reviews data about these major payer sources of revenue in evaluating the sufficiency of the allowance for doubtful accounts. For receivables associated with services provided to patients who have third-party coverage, the Hospital analyzes contractually due amounts and provides an allowance for doubtful accounts and a provision for uncollectible accounts, if necessary (for example, for expected uncollectible deductibles and copayments on accounts for which the third-party payer has not yet paid, or for payers who are known to be having financial difficulties that make the realization of amounts due unlikely). For receivables associated with self-pay patients (which includes both patients without insurance and patients with deductible and copayment balances due for which third-party coverage exists for part of the bill), the Hospital records a significant provision for uncollectible accounts in the period of service on the basis of its past experience, which indicates that many patients are unable or unwilling to pay the portion of their bill for which they are financially responsible. The difference between the standard rates (or the discounted rates if negotiated or provided by policy) and the amounts actually collected after all reasonable collection efforts have been exhausted is charged off against the allowance for doubtful accounts. The Hospitals allowance for doubtful accounts for self-pay patients was 95% of self-pay accounts receivable at December 31, 2016 and 2015. In addition, the Hospitals write-offs were approximately $4,680,000 and $3,360,000 for the years ended December 31, 2016 and 2015, respectively. The increase in write-offs from 2015 to 2016 is attributable to an increase in patient volumes at the Hospital.

SCHEDULE H, PART III, SECTION B, LINE 8
Costing Methodology: THE HOSPITAL USES MEDICARE COST REPORT METHODOLOGY, WHICH APPORTIONS ROUTINE COSTS (ROOM AND BOARD) BASED ON MEDICARE OR MEDICAID DAYS TO TOTAL DAYS AND APPORTIONS ANCILLARY COSTS BASED ON PROGRAM CHARGES TO TOTAL CHARGES. THE HOSPITAL HAS A MEDICARE SHORT FALL OF $1,350,602, AND IT SHOULD BE TREATED AS A COMMUNITY BENEFIT IN THAT THE HOSPITAL TREATS PATIENTS REGARDLESS OF THE REIMBURSEMENT BY MEDICARE.

SCHEDULE H, PART III, SECTION C, LINE 9B
Collection Practices: THE HOSPITAL PAYS FOR OUTSOURCED EARLY OUT COLLECTIONS UP TO 120 DAYS WHERE THE PATIENT PORTION OF THE CHARGES ARE HANDLED BY A THIRD PARTY VENDOR. THOSE WHO QUALIFY FOR CHARITY OR INDIGENT PROGRAMS APPLY FOR THOSE SERVICES WITH HELP OF TWO DEDICATED STAFF MEMBERS. ONCE A PATIENT HAS QUALIFIED FOR THE CHARITY OR INDIGENT PROGRAMS, ALL COLLECTIONS PROCESSES CEASE.

SCHEDULE H, PART VI, LINE 2
Needs Assessment: NEEDS OF THE COMMUNITY ARE ASSESSED BY GEOGRAPHIC INFORMATION AVAILABLE TO THE HOSPITAL, as well as STATISTICAL INFORMATION THAT THE HOSPITAL CAN USE TO FURTHER ITS BENEFIT TO THE COMMUNITY.

SCHEDULE H, PART VI, LINE 3
Patient education of eligibility for assistance: THERE ARE SEVERAL WAYS THAT THE HOSPITAL EDUCATES THE PUBLIC ABOUT ITS CHARITY CARE PROGRAMS. THE WEBSITE GIVES THE INFORMATION WHERE THE HOSPITAL'S CASEWORKER CAN BE FOUND IN ADDITION TO A STATE EMPLOYEE OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES ON CAMPUS. THERE ARE ALSO SIGNS IN BOTH ENGLISH AND SPANISH THAT DIRECT PATIENTS TO THE ASSISTANCE THEY COULD QUALIFY FOR.

SCHEDULE H, PART VI, LINE 4
Community Information: FRIO HOSPITAL SERVES THE FRIO COUNTY AND SURROUNDING COMMUNITIES. THESE CONSIST OF PRIMARILY 70% OF THE WORKFORCE WITH A VOCATIONAL OR TRADE BACKGROUND. PRIMARILY A HISPANIC POPULATION, 11,987 OR 74% OF THE 16,252 PEOPLE LIVING IN FRIO COUNTY ARE HISPANIC ACCORDING TO THE LATEST CENSUS. FRIO HOSPITAL IS LOCATED IN PEARSALL WHICH IS APPROXIMATELY 55 MILES FROM SAN ANTONIO AND APPROXIMATELY 97 MILES FROM THE MEXICAN BORDER. MEDIAN INCOME FOR FAMILIES WAS $23,470. HOWEVER, 30.4% OF THE POPULATION OF FAMILIES WERE BELOW THE POVERTY LINE. OF THOSE, 43.2% WERE UNDER THE AGE OF 18 AND 40.0% OF THOSE WERE 65 AND OLDER.

SCHEDULE H, PART VI, LINE 5
PROMOTION OF COMMUNITY HEALTH: Frio Regional Hospital provides information and educates the public through health literature, public forums, and collaboration with other health resources. The hospital reaches out to civic, political, nonprofit, religious and business organizations by distributing hospital/health related material, educational information and free screenings at various local events and locations. The hospital also Assists and collaborates with community organizations with health fairs, community events, partnerships and providing booth sponsorships to raise health awareness. See the Schedule H, Part V, Section B, Line 11 disclosure for additional information to the Hospitals promotion of community health during 2016.

SCHEDULE H, PART VI, LINE 6
AFFILIATED HEALTH CARE SYSTEM: N/A Schedule H, Part VI, Line 7 STATE FILING OF COMMUNITY BENEFIT REPORT: The Hospital has not filed a community benefit report for the 2016 tax year.

SCHEDULE H, PART I, LINE 3C
FACTORS OTHER THAN FPG DETERMINING FREE OR DISCOUNTED CARE: THE HOSPITAL USES THE FOLLOWING OTHER CRITERIA TO DETERMINE ELIGIBILITY FOR FREE OR DISCOUNTED CARE: - GROSS FAMILY INCOME - FAMILY SIZE - EMPLOYMENT STATUS AND FUTURE EARNING CAPACITY - OTHER FINANCIAL RESOURCES - OTHER FINANCIAL OBLIGATIONS - THE AMOUNT AND FREQUENCY OF HOSPITAL AND OTHER MEDICAL BILLS

SCHEDULE H, PART I, LINE 7, column f
Percent of total expenses: BAD DEBT EXPENSE OF $6,003,193 WAS INCLUDED IN TOTAL EXPENSE ON FORM 990, PART IX, LINE 25, COLUMN (A), BUT WAS SUBTRACTED FROM TOTAL EXPENSE FOR PURPOSES OF CALCULATING THE PERCENTAGE OF TOTAL EXPENSE IN COLUMN (F).