Board of Trustees members present: Todd Jourgensen, Chair; Don Myers; Forrest Luke; Terry Carwile; Alman Nicodemus and Kelly Hepworth.

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1 750 Hospital Loop Craig, Colorado BOARD OF TRUSTEES MEETING AGENDA March 22, 2018, Board Room, 6:00 p.m. Board of Trustees members present: Todd Jourgensen, Chair; Don Myers; Forrest Luke; Terry Carwile; Alman Nicodemus and Kelly Hepworth. Board of Trustees members absent: Cathrine Blevins. Hospital staff present: Andy Daniels, CEO; Denise Arola, CFO; Jennifer Riley, VP of Hospital Operations; Sam Serniak, Physician Recruiter; Paula Davison, Population Health Director; and Megan Richardson, Recorder. Call to Order. The meeting was called to order by Todd Jourgensen, Chair, at 6:00 p.m. Opportunity for Public to Address the Board. There were no requests. Agenda Review. There were no changes to the agenda. April Calendar. The calendar was reviewed and accepted by the board. Consent Agenda Meeting Minutes. MOTION 2018:19 Moved by Alman Nicodemus, seconded by Terry Carwile, That the Board of Trustees approve the MRH Board of Trustees minutes of the meeting of February 22, 2018, and accept the Finance Committee minutes of the meeting of March 21, Ayes, all. Motion carried. Consent Agenda Projects and equipment as recommended by Finance Committee. Four purchases were presented to the Board of Trustees as informational items and accepted. Verathon. Surgical Services is requesting purchase of a video laryngoscope for anesthesia to provide better visualization at a cost of $12, Healthtronic. Surgical Services is requesting renewal of the urology rental agreement for surgical instruments switching from Advanced Medical Partners (current carrier) to Healthtronics Mobile Solution (HPG vendor). Toshiba Ultrasound Probes. Diagnostic Imaging is requesting purchase of two ultrasound proves for the recently purchased ultrasound machine at a cost of $11, and with twelve months warranty. Rapid Recovery. The Information Technology department is requesting renewal of the contract for the software used to perform system backups at a cost of $9, Medical Staff Privileges. Andy Daniels presented the Medical Staff Privileges. MOTION : Moved by Alman Nicodemus, seconded by Terry Carwile, That the Board of Trustees approve the Medical Staff Privileges as reviewed and recommended by the Credentials Committee on March 1, 2018, and the Med. Executive Committee on March 7, The following files were presented for Provisional appointment: Stephanie D. Ring, MD-OB/GYN Medicine. The committee reviewed the file for Dr. Ring and they unanimously recommended her appointment to the Provisional Provider Staff of The Memorial Hospital.

2 Karen M. Schleehauf, MD- General Surgery Medicine The committee reviewed the file for Dr. Schleehauf and they unanimously recommended her appointment to the Provisional Provider Staff of The Memorial Hospital. The following files were presented for Advancement: Trey Gorham, CRNA-Certified Registered Nurse Anesthetist Medicine. The committee reviewed the file for Trey Gorham and they unanimously recommended his appointment to the Associate Non-Physician Provider Staff of The Memorial Hospital. The following files were presented for Reappointment: Virginia Scroggins Young, MD- Radiology Medicine. The Committee reviewed the file for Dr. Young and they unanimously recommended her reappointment to the Associate Provider Staff of The Memorial Hospital. Michael Lyon, CRNA Certified Registered Nurse Anesthetist. The Committee reviewed the file for Michael Lyon and they unanimously recommended his reappointment to the Associate Non-Physician Provider Staff of The Memorial Hospital. Kevin Borchard, MD- Orthopaedic Surgery Medicine. The Committee reviewed the file for Dr. Borchard and they unanimously recommended his reappointment to the Active Provider Staff of The Memorial Hospital. Ayes, all. Motion carried. Presentation of the 2017 Audit Report. Mike Rowe, CPA, Stockman, Kast, Ryan and Company presented the 2017Audit. MOTION 2018:21 Moved by Kelly Hepworth, seconded by Terry Carwile, That the Board of Trustees approve the 2017 Financial Audit as presented. Ayes, all. Motion carried. Population Health Presentation: Paula Davison, Population Health Director, presented to the Board of Trustees the program definition and goals. Tetra Financial Resolution by Board of Trustees to Master Equipment Contract. Denise Arola, VP of Finance, presented this request for a resolution to the master equipment contract already approved by the Board of Trustees. MOTION 2018:22 Moved by Alman Nicodemus, seconded by Terry Carwile, That the Board of Trustees approve the Tetra Financial Resolution. Ayes, all. Motion carried. February, 2018 Financial Report. Denise Arola, CFO, presented the report. Net loss for February was approx. $319k, below budget by $131 k. Last year's loss in February was $2k. Year to date there is a $239k loss, slightly under budget by $45k. In February of 2017, the year-to-date loss was $88k. Gross patient revenue for February was $6.8m which was below budget by $675k. Net patient revenue was below budget by approximately $456k for February. Compared to February 2017, net patient revenue was $363k higher in Year-to-date net patient revenue is over 2017 by $1.1 m. February's expenses were under budget by $373k. Total labor costs are under budget for February by $343k. Purchased services and miscellaneous expense was higher than budget. Med/Surg admissions were right on budget with the related patient days higher than budget. Swing bed admissions and swing bed patient days were over budget. The Allevant program has been implemented! Ancillary and outpatient volumes were slow in February. Surgeries and

3 scopes, Clinic visits, ER Visits, Physical Therapy, & Cardio were all under budget in February. Lab and Diagnostic Imaging were above budget for February Goals March Andy Daniels presented the CEO Report. 1. Complete the implementation of retail pharmacy and take advantage of 340B retail program: Estimated Completion Date: December 31, 2017 February-2018 Update: Goal complete. 2. Complete process of seeking out funding opportunities and approval to build needed clinical and operational space (i.e. New MOB): Estimated Completion Date: December 31, 2017 February-2018 Update: Goal complete. 3. Complete implementation of ISO9001:2015 Quality Management System AND achieve ISO-9001 Certification! Estimated Completion Date: August 31, 2018 March-2018 Update: Unannounced survey will occur as planned. Plans of Service are in process of being completed. We had a very unsuccessful document sweep on March 2, 2018 which caused undesired chaos and hurt feelings in several areas. I applogized to impacted staff. It is my hope that we learned from this event. Document Control is still a material weakness. The clinic now has taken the challenge to do their own document control strategies and stay within the deadline of March 31, I am personally going to conduct my own audit with Zach Johnson on April 5 th. 4. Complete the set-up of a Federally Qualified Health Center (FQHC) Look-Alike Center. Estimated Completion Date: June 30, 2018 February-2018 Update: Goal tabled. 5. Complete Home Health & Hospice Implementation. Estimated Completion Date: March 31, 2018 March-2018 Update: 855A is still in review by CGS. We are performing survey readiness activities (i.e. standards review, audits of chrts, etc.). Census 4 admitted (1 has passed) current census at 3. Plan to admit 2 more. We have to get this done. We continue to book a loss while we wait because we cannot bill for this service. 6. Obtain interim construction financing, bid and begin construction of the new Medical Office building. Estimated Completion Date: March 31, 2018 March-2018 Update: We had our required pre-construction conference on with USDA, Davis Partnership and Adena. Our interim construction financing was appoved on on a draw down basis from Western Alliance Bank out of Phoenix, AZ. Final hoops : 1) Concurrence by USDA on construction contract 2) Closing instructions issued by the Office of General Counsel and 3) Resolution by Moffat County Commissoners. I suggest that we go ahead and start at-risk even if these final steps are not completed by March end. We would not receive an invoice until the end of April. We have funds to cover an initial draw request. Adena is going to start mobilizing on site the last Thursday in March at which time the front parking lot will be sectioned off.

4 7. Analyze, propose and adopt solutions to correct technical and community perception of billing as it relates to billing clarity, accuracy and timeliness of services. Estimated Completion Date: July 31, 2018 March-2018 Update: Our new Patient Billing Advocate terminated their employment with MRH. We have coverage but we are not heading in the right direction. I also have concerns that we wrote off a substantial amount additional claims related to un-timely filing which should never occur. We also were not successful in getting a project plan developed in March as desired. I spoke with Denise and we agreed that we have cycle that we need to break. We are taking the following four immediate steps: 1) We are implementing a tracking system with notifications for all billing calls. Calls will be logged, tracked, categorized, escalated by time and reported on. This will allow us to measure our time to close and provide better tracking. 2) We are publishing a list of internal department roles and responsibilities (who to call) in an attempt to better organize billing staff inquires. 3) We are getting a resource to fix identified problems - neither Sandy nor Denise believe they have the time to focus on getting issues resolved. 4) A policy is now in place that before anything is put to untimely filing, it must be disclosed to the CEO the who, what, when, and when. 7. With the exception of emergencies, eliminate the use of locums physician coverage beginning with the emergency department. Estimated Completion Date: March-2018 Update: Dr. Melton begins April 1, Dr. Leary begins August 1, Explore, develop and then propose a level 2 nursery service at MRH. If approved, implement. Estimated Completion Date: October 31, 2018 March-2018 Update: It has been requested by Dr. Yarmer that this goal be held and reevaluated after a new peditrican has joined MRH. I am looking for concurrence from the Board. 9. Develop a beginning population health plan that is fiscally responsible with the goal of identifying high cost patients in target area and implementing a structured chronic disease management program. Estimated Completion Date: July 31, 2018 March-2018 Update: We are going to hire a complex care coordinator for our own employee health. This position was not budgeted, but I believe is a needed first step. We have completed a preliminary review of MRH employees and their family members who are high-cost users of MRH s self-funded health insurance plan; of MRH staff to develop the Complex Care Coordinator role who will be responsible for care coordination services of identified high-cost users. 10. Mental Health: Phase I: Explore additional collaboration with existing entities for crisis management, and integrate ongoing behavioral health into primary care clinics. Investigate all possible concepts to use surplus beds for inpatient mental health services in Moffat County while making the entire program breakeven or better for the organization. Estimated Completion Date: April 30, 2018 March-2018 Update: No update. 11. Analyze, propose and, if approved, implement strategic price initiatives in the following three areas: Labs, Imaging and Scopes with a focus on process improvement and internal cost reductions. Estimated Completion Dates: Lab February 28, 2018 Radiology August 31, 2018

5 Scopes May 31, 2018 March-2018 Update: I am heading to Denver on April 6 th for a meeting with Anthem executives to discuss several issues. The first and foremost is related to imaging studies and how we might partner better with Anthem on our pricing and make MRIs and CTs more palatable for local consumers to avoid having customer directed to the front range. I am very pleased with HUB International (or new employee insurance broker) for making these contacts and setting up this meeting on our behalf. I have not progress to report on scopes this month. 12. Enhance the following service lines by re-structuring and adding the necessary components to offer a fuller and profitable pain management, wound care and sleep center service program(s). Estimated Completion Dates: Pain Management June 30, 2018 Wound Care January 31, 2018 Sleep February 28, 2018 March-2018 Update: Pain Management: We sent notice to terminate our existing agreement with Black Mountain Anesthesia Group per the contract. I did let Keith know that we wanted to continue our relationship with Black Mountain but the contract was poorly written. He has received a draft of a new contract for his review. Specifically, we are offering him an exclusive with the exception of pain management procedures. This may allow us the flexibility to attract a provider that will see patients in the clinic setting for pain management, but also do procedures in the operating room. The contract change is to allow the organization more flexibility to build out this service line. Sleep: Dr. Figara has successfully been over-reading completed sleep studies. We had a delay related to computer issues, but this has been resolved. The physician is expressing satisfaction with the work being done by our technician, Selena Hernandez. The program has successfully had 19 cases with 16 more scheduled. The patient wait for scheduled sleep studies is about 16 days. Currently we are looking at adding the second sleep bed and working with nursing to determine where it should be located. Beka s team has done a good job getting this service rebooted and going. 13. Additional Recruiting (not contained within another goal): ENT surgical and allergies, Spine Orthopedics surgical (either full or shared), Internal Medicine Clinic Estimated Completion Date: ENT December 31, 2018 Spine Ortho September 30, 2018 IM September 30, 2018 March-2018 Update: ENT: Dr. Harry Borovik will be onsite the 15 th and 16 th of March. Pediatrics: We have three candidates that Dr. Yarmer is in the process of screening. We are getting dates for on-site visits scheduled. 14. Pursue Microexpansion in Hayden, Baggs & Mobile Clinic. Develop plans, financial proformas and, if approved, implement. Note (one not all TBD) Financial Analysis Estimated Completion Date: March 31, 2018

6 March-2018 Update: April 4 th Dinosaur Clinic to open. 15. Explore possible joint ventures, affiliation agreements and other legal structures to add, expand and participate in the expansion of healthcare services in a win-win format. If approved, pursue and implement. Estimated Completion Date: Ongoing. March-2018 Update: Loan closed on and we are no longer the owners of 745 Russell. Funds were wired into our account on Develop, establish and implement a strategic succession plan for the organization. Estimated Completion Dates: July 31, 2018 March-2018 Update: List will be presented to the board during dinner. The next step is to define skills for each position and get this formally documented. The goal should be completed as scheduled. 17. Develop, propose, adopt and begin a housing solution for support services. Estimated Completion Dates: July 31, 2018 March-2018 Update: Paula held initial design meetings with staff and departments the week of She is putting those together with an intial sketch. We will get an estimate based on her sketch and then discuss estimated costs. Hopefully, we will have that by next months board meeting. I will wait to ask for funds for architect work until April. 18. Report other major operational items to the board. March-2018 Update: Allevant Swing-bed Program: You will notice a pick-up in our swing bed volume and the program is starting to work. We are going to do some further education to make sure people understand this program but so far so good. CFO: We have received a couple of videos to watch and resumes of at least two candidates and we expect at least two more by week end who have made it through initial screening. I suspect that we could start having on-site interviews in April Audit: I am not sure that we will have our audit ready to present at the March board meeting. We are waiting on the completion of the cost report to make final adjustments. The audit is completed in draft, but without the final cost report we cannot close the audit for P.I.E Provider Information Exchange : You and family are cordially invited to Thunder Rolls Bowling Alley on March 30 th from 6:00 to 9:00 PM. It should be a good time to interact with the medical staff. Upcoming Events: New Medical Office Building: Ground breaking April 2 nd, March into Health Community Health Fair: Blood draws all during the month of March and Annual Health Fair to be April 14 th at CNCC. All Board of Trustees invited

7 to participate we will send you out an invitation these labs are at no cost to you. Medicaid Backlog: Denise estimates 6-8 weeks to clean-up the Medicaid backlog of claims due to RHC billing hold. Employee Insurance Broker Change: I have given notice to Novo (formerly Cobecon) as our insurance broker effective I have signed a contract with Hub International for our broker services. We are currently paying $32.19/member/month. The new contract with HUB will be at $30.00/member/month. Big savings will come from our PBM (Pharmacy Benefits Administration) with an analysis that shows at least an annual savings of around 200K. Once this change is made, we can switch out PBM in as little as 90 days. Lastly, HUB is going to partner with us to help with some additional strategic priorities related to contracts and narrow networks that we could not get Novo to propose or provide. Per contract policy, this did not require approval. I believe we will get better service at less cost and a more strategic partner. Nursing Travelers: They are all gone! We are now fully staffed with all MRH employees! Employee Handbook: We are almost complete with a new employee handbook. The organization has lacked an updated handbook for many, many years. We should have it to board in April for review and approval. EMS: We have identified a series of changes that we will be making with EMS which should make this service line break-even or even slightly profitable. We are excited to get going on this project and we will keep the board updated as progress begins CHA Rural Healthcare Conference: Terry Carwile from the Board of Trustees and Michael Morris from Community Clinics Board both attended the training sessions in Golden, Colorado the week of 3/5/18. I believe they both found the opportunity valuable. Rapid Care Clinic: Special thanks to the clinic staff, information technology, facilities, radiology, registration, housekeeping, Michelle Lewis and all those that made this possible. We are open for business on the PT: We have a critical shortage of candidates for PT. We have a traveler, but we are struggling to keep up with demand due to home health, transition care and general orthopedic volumes. We are working to recruit, but have been unsuccessful in finding candidates. Colorado Cancer Foundation: We received a $5, grant from the CO Cancer Foundation to put toward preventative cancer care. Good job Ryan Lucas-keep them coming. Executive Session. At 7:50 p.m. the Board of Trustees entered into Executive Session. MOTION : Moved by Alman Nicodemus, seconded by Forrest Luke, That the Board of Trustees enter Executive Session for the purpose of reviewing matters of negotiation pursuant to C.R.S (4)(e); and Executive Session for the purpose of reviewing personnel matters pursuant to C.R.S (4)(f). Ayes, all. Motion carried. Adjournment. At 9:05 p.m. the board returned to regular session and adjourned at 9:10 p.m. Respectfully submitted, Megan Richardson, Megan Richardson, Recorder