Montrose Memorial Hospital, Incorporated BOARD OF DIRECTORS A regular meeting of the Board of Directors of Montrose Memorial Hospital, Inc. was held December 15, 2014, at 5:15 p.m. in Conference Room A of the Hospital. Present: MELISSA ALCORN, Ph.D. CASEY CORRIGAN RON COURTNEY KJERSTEN DAVIS, DVM TRICIA DICKINSON JOHN FOECHTERLE DEBI HARMON LANCE LEHIGH DR. MARY VADER, DO

Steve Hannah, CEO Mary Snyder, COO Al White, CFO Joan Napolilli, CNO John Brooks, Attorney Aaron Brooks, Attorney Gerald Parton, QHR Dr. David Dreitlein, Chief of Staff Dr. Darrin Green, Incoming Chief of Staff Leann Tobin Nancy Carlson Jean Hatfield, Exec. Assistant

Item 1. CALL TO ORDER Ms. Harmon called the regular meeting to order at 5:15 pm. Item 2. EXECUTIVE SESSION A motion was made, seconded and passed to move into Executive Session to discuss the following matters: 1. 2. 3. 4. 5. 6.

Approval of Executive Session Minutes from November 19, 2014 Compliance Report Operational Reports Recommendations from Medical Executive Committee QHR – Gerald Parton Claim status / Compliance / Peer Review §12-36.5-104(12) & (13) – Brooks & Brooks, LLC 7. Chairperson Comments The motion carried unanimously. Item 3. RECONVENE INTO REGULAR SESSION At 6:30 p.m. Ms. Harmon reconvened the meeting into Regular Session and confirmed that the only discussions held in Executive Session were in accordance with the agenda and no decisions were made during the meeting. No action was taken by the Board. Item 4. PUBLIC COMMENTS Ms. Harmon confirmed that no one had signed up to give comments. The Board recessed for Dinner.

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Item 5. DINNER PROGRAM – Quarterly Quality Report – Nancy Carlson, Quality/Risk Management Director Item 6. SET AGENDA Ms. Harmon requested the following changes be made to the Agenda: Add Item 9.05 – Competency Verification for Nurses Performing Medical Screening Exams Add Item 9.06 - Approval of Robotic Assisted Surgery Credentialing Policy 2.5 Add Item 10.05 - 2014 Audit Engagement Letter Approval Action: Motion was made by Mr. Lehigh, seconded by Mr. Courtney, and passed unanimously to set the agenda as amended. Item 7. CONSENT AGENDA Action: Motion was made by Mr. Courtney, seconded by Ms. Alcorn, to approve the Consent Agenda as presented. The motion passed unanimously. Item 8. EXECUTIVE OPERATIONAL REPORTS/ACTIONS 8.01 QHR Vision, Mission, Values Mr. Hannah told the Board that he and Mr. White had recently watched a televised conference presentation by Mickey Bilbrey, President of QHR. Mr. Hannah believes the QHR Vision, Mission and Values closely support the mission of MMHI and found it refreshing to see QHR re-focusing corporate efforts on their core business of healthcare management. 8.02 St. Mary’s Initiative/Alliance Mr. Hannah told the Board that the forthcoming Joint Venture Helicopter Transport Service with St. Mary’s Hospital will be a fully integrated endeavor, with MMHI backing up St. Mary’s personnel and vice versa. Staff will be hired and trained by St. Mary’s which will be especially beneficial to critical care patients. The JV will lease the staff from St. Mary’s. He shared that the proposed charges for the Transport Service appear to be 1/4 to 1/3 less than current transport charges, making this new Service alliance even more attractive as a community benefit. Plans are underway for the service to begin April 1, 2015. Mr. Courtney suggested this new Regional Alliance that will provide better care at a lower cost would be an ideal topic to accentuate in future MMHI publicity, while being sensitive to timing because of the current Tri-State contract and apparent displeasure of their management with being replaced. 8.03 MMHI Organizational Chart Mr. Hannah commented that the current edition of the Hospital’s Organizational Chart is a dynamic document and must change as personnel changes. He told the Board that it is shown to new employees upside down as that more accurately reflects his philosophy of how the Hospital operates: Management and Staff Leadership working to support the needs of the staff, patients and community in keeping with our Mission of providing healthcare services to our communities with excellent service, compassion and fiscal responsibility. Action: Motion was made by Mr. Courtney, seconded by Mr. Foechterle, to approve the Hospital Organizational Chart as presented this date. Chairperson called for discussion. The motion passed unanimously.

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At the request of the Board Chairperson, Mr. Hannah gave a brief educational presentation on monetary assistance agreements that the Hospital sometimes offers to physicians in order to bring qualified physicians into the Montrose medical community. Mr. Hannah explained that Stark III laws have a prescriptive mechanism in place with which the Hospital can recruit to replace a physician in the community, to recruit a physician to an existing practice, or to a new practice within the community. Mr. Hannah stressed the importance of the Hospital’s adherence to these rules in order to avoid potential compliance concerns. He also said that QHR had previously assisted MMHI with assessing the community’s need for physicians within the primary service area. The amount of money that can be utilized for recruiting is dependent upon fair market value assessments and a test of reasonableness. Data used at MMHI is that compiled by MGMA (Medical Group Management Association) a national clearinghouse of compensation data. The monetary assistance agreement must include a budget and is structured as a loan that must be paid back to the Hospital if commitments are not fulfilled. Promissory notes and security agreements are signed and monthly documentation is required of the practice to show expenses offset by collected revenue. 8.04 RVFHC Term Sheets Mr. Hannah commented that this Term Sheet had been approved by the Board at the November meeting, and had been presented to River Valley Family Health Center for signature by their Board representative, Debby Harrison-Zarkis. Ms. Zarkis had signed the Term Sheet and therefore the Board was asked to affix a signature as well so that both parties are confident in the terms under consideration. The Term Sheet requests MMHI to assist with recruiting one Family Practice Physician to RVFHC in 2015 and another in 2016. Action: Motion was made by Ms. Dickinson, seconded by Ms. Davis, to authorize the Board’s signature on the Term Sheet with RVFHC. Chairperson called for discussion. The motion passed unanimously. 8.05 Agreement for General Surgery Locums – Dr. David Cox Mr. Hannah commented that the daily rates for Dr. Cox’s services fall within the fair market value for general surgery locums and there were no known adverse considerations regarding Dr. Cox. Action: Motion was made by Mr. Lehigh, seconded by Ms. Dickinson, to accept the Medical Executive Committee’s recommendation to approve the agreement for General Surgery Locums for Dr. David Cox. Chairperson called for discussion. The motion passed unanimously. 8.06 Agreement for General Surgery Locums – Dr. Rachel DePuy Mr. Hannah commented that the daily rates for Dr. DePuy’s services fall within the fair market value for general surgery locums and there were no known adverse considerations regarding Dr. DePuy. Action: Motion was made by Ms. Davis, seconded by Mr. Courtney, to accept the Medical Executive Committee’s recommendation to approve the agreement for General Surgery Locums for Dr. Rachel DePuy. Chairperson called for discussion. The motion passed unanimously. 8.07 Addendum to Montrose Medicine Agreement to Share Recruitment Expenses Ms. Mary Snyder explained to the Board that MMHI has been working with Montrose Medicine (Internal Medicine Specialty Group) to recruit a physician as well as a mid-level provider. Montrose Medicine has identified Angela Miller, a Physician’s Assistant, as a provider they wish to bring into their practice. Under this Addendum, MMHI would assist with tuition loan forgiveness

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payments of $10,000 in the first year and $10,000 in the second year. The Agreement is structured so that Ms. Miller would be obligated to repay MMHI if she fails to perform. Action: Motion was made by Ms. Dickinson, seconded by Mr. Lehigh, to approve the Addendum to the Montrose Medicine Agreement for Loan Forgiveness as it relates to recruiting Ms. Angela Miller, Physician’s Assistant. Chairperson called for discussion. The motion passed unanimously. 8.08 First Contact Medical Specialists Recruiting Stipend Agreement Dr. Dreitlein formally recused himself during the discussion and vote on this Agenda item. Ms. Snyder told the Board that First Contact had identified Dr. Avery MacKenzie as a physician they would like to bring into their practice. Dr. MacKenzie had previously worked a rural rotation with First Contact in Montrose and related well with existing physicians and staff. Dr. MacKenzie had been highly recommended by the University of Colorado and will graduate in 2016. This agreement would extend a $1000/month stipend for a maximum of 18 months to assist Dr. MacKenzie in successful completion of her medical residency requirements. She would become an employee of First Contact Medical Specialists and not of MMHI. Action: Motion was made by Mr. Foechterle, seconded by Ms. Corrigan, to approve the Stipend Agreement with First Contact Medical Specialists. Chairperson called for discuss ion. The motion passed unanimously. 8.09 QHR Report – Gerald Parton Mr. Parton explained to the Board that the monthly “Q-View” newsletter and the QHR Board Report were not included in this month’s Board Packet as the scheduling of MMHI’s Board meeting put it prior to the publication of those documents. He stated they would be included in January’s Board Packet. Mr. Parton distributed an article from USA Today (11/12/14) entitled, “Rural hospitals in critical condition” and opened a discussion about hospital closures in communities where neither the Board nor the community supports the Hospital. He relayed his own professional involvement with St. Vincent’s Hospital in Leadville, CO, a QHR hospital. St. Vincent’s recently closed as a result of ongoing inaction by the community in regards to funding for badly needed repairs and upgrades to the Hospital facilities. Mr. Parton congratulated MMHI’s Board for standing strongly in support of the hospital and taking measures to keep MMHI fiscally sound and in good standing within the community. Item 9. Chief of Staff Reports/Actions 9.01 Chief of Staff Comments: Dr. Dreitlein pointed out to the Board that the Emergency Department has seen an increase of 110 patients YTD over 2013. He did not have further comments to share. 9.02 Recommendation for Reappointment for Dr. Christopher Cook, Advanced Professional Practitioner: Dr. Dreitlein advised the Board that the Medical Executive Committee had recommended reappointment of Dr. Cook with no reservations, other than a requirement for completion of required CME credits. Action: Motion was made by Mr. Courtney, seconded by Ms. Dickinson, to approve the reappointment of Dr. Christopher Cook, pending his completion of required CME credits. Chairperson called for discussion. The motion passed unanimously.

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9.03 Recommendation for Reappointment for Dr. Michael Jay, Active Medical Staff Dr. Dreitlein told the Board that the Medical Executive Committee had recommended reappointment of Dr. Jay with no reservations. Action: Motion was made by Ms. Dickinson, seconded by Ms. Davis, to approve the reappointment of Dr. Michael Jay. Chairperson called for discussion. The motion passed unanimously. 9.04 Recommendation to Grant General Surgery Locums Privileges to Dr. Rachel DePuy Dr. Dreitlein advised the Board Dr. DePuy had not applied for acceptance to the Medical Staff, but only for 6 months’ privileges for general surgery locums services. He stated that the Medical Executive Committee had recommended the granting of 6 months privileges rather than a 2 year time frame. Action: Motion was made by Ms. Dickinson, seconded by Ms. Corrigan, to grant privileges to Dr. Rachel DePuy for 6 months for general surgery locums. Chairperson called for discussion. The motion passed unanimously. 9.05 Recommendation to Approve Competency Verifications for Nurses Performing Medical Screening Exams Dr. Dreitlein stated that the named nurses had been tested and verified as competent to conduct Medical Screening Exams and recommended their approval on behalf of the Medical Executive Committee. Registered Nurses named: Kelli Baker, Linda Bradley, Courtney Cryer, Ashley Fleetwood, Alix Fremgin, Susan Grant, Coral Ann Hackett, Sandy Harris, Jackie Hudson, Carol Jackson, Elaine Jenson, Nina Rea, Ariel Tidwell, and Rainy Tieman. Action: Motion was made by Mr. Courtney, seconded by Mr. Lehigh to approve the competency verifications of the named Registered Nurses. Chairperson called for discussion. The motion passed unanimously. 9.06 Recommendation to Approve the Robotic Assisted Surgery Credentialing Policy 2.5 Dr. Dreitlein confirmed that the Medical Executive Committee had carefully created, appropriately edited and subsequently approved the Robotic Surgery Credentialing policy and requested approval by the Board. Action: Motion was made by Ms. Dickinson, seconded by Ms. Davis, to approve the Robotic Assisted Surgery Credentialing Policy 2.5 as presented. Chairperson called for discussion. The motion passed unanimously. Ms. Dickinson offered her appreciation to Dr. Dreitlein for his several years of dedicated service as Chief of Staff. She congratulated him on having served well and welcomed Dr. Darrin Green as the Incoming Chief of Staff. The entire Board concurred and thanked Dr. Dreitlein for exemplary service. Item 10. Finance Reports/Actions 10.01 Finance Committee Recommendation to Approve Financials for the Month Ending November 30, 2014: Mr. Courtney recommended, on behalf of the Finance Committee, approval of the Financials for the month ending November 30, 2014. Action: Motion was made by Mr. Courtney, seconded by Mr. Lehigh, to approve the November Financials. Chairperson called for discussion. The motion passed unanimously.

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10.02 Resolution 2014-05 Approval and Adoption of the 2015 Budget: Mr. Courtney recommended, on behalf of the Finance Committee, approval and adoption of the 2015 Budget as presented. Action: Motion was made by Mr. Courtney, seconded by Ms. Davis, to approve and adopt the 2015 Budget and to sign Resolution 2014-05. Chairperson called for discussion. The motion passed unanimously. 10.03 Resolution 2014-06 Appropriation of Funding for the 2015 Budget: Mr. Courtney recommended, on behalf of the Finance Committee, appropriation of funding for the 2015 Budget as presented. Action: Motion was made by Mr. Courtney, seconded by Ms. Dickinson, to appropriate funding for the 2015 Budget and to sign Resolution 2014-06. Chairperson called for discussion. The motion passed unanimously. 10.04 Approval of Capital Equipment Requests for November, 2014: Mr. White stated the Finance Committee had reviewed the Capital Equipment Requests submitted and recommended approval of the $486,313 in unbudgeted expenditures as appropriate for November 2014 rather than putting them into the 2015 Budget. Action: Motion was made by Mr. Courtney, seconded by Mr. Lehigh, to approve the requested $486,313 in unbudgeted Capital Equipment requests. Chairperson called for discussion. The motion passed unanimously. 10.05 Approval of 2014 Audit Engagement Letter: Mr. Courtney stated the Finance Committee had reviewed the Audit Engagement Letter from Stockman, Kast & Ryan for a cost of $39,500. This is the final year of the current engagement contract and the Finance Committee recommends approval. Action: Motion was made by Mr. Courtney, seconded by Ms. Alcorn, to approve the 2014 Audit Engagement letter from Stockman, Kast & Ryan. Chairperson called for discussion. The motion passed unanimously. Item 11. Strategic/Quality Discussions Ms. Harmon stated that this item of the Board’s agenda would be utilized in future meetings for meaningful discussion regarding pertinent issues related to Quality, Strategic Planning and other topics as deemed appropriate and necessary. Item 12. BOARD OF TRUSTEES COMMENTS 12.01 Board of Trustees Comments: No one from the Board of Trustees was present at the meeting; no comments given. Item 13. OTHER BUSINESS 13.01 Board Itemized Expenses: No expenses were submitted on behalf of Board Members. 13.02 Steve Hannah Itemized Expenses Ms. Harmon advised the Board there were itemized expenses in the amount of $420.96 submitted by Mr. Hannah for expenses related to recruiting for the COO Position.

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Action: Motion was made by Mr. Lehigh, seconded by Ms. Alcorn, to approve Mr. Hannah’s submitted expenses in the amount of $420.96. Chairperson called for discussion. The motion passed unanimously. Item 14. NEXT MEETING DATES/PLANNING DATES 14.01 Upcoming Dates/Conferences/Events Ms. Harmon reminded Board Members of the January 13 evening training by QHR and asked everyone to be sure to attend. Item 15. CHAIRPERSON COMMENTS Ms. Harmon asked each Board Member to view the recent QHR webinar about communicating during a crisis. She felt it was very worthwhile and pertinent to current affairs at MMHI. Ms. Harmon thanked MMHI Management for the new laptops and the work that had been done to make them ready for Board members’ use this evening. She encouraged Board members to make good use of this powerful technology tool as it could be beneficial in education and training endeavors that are so important for Board Members. She noted that the demographics of the Board of Directors had changed significantly over the last four years and with most Board members now being employed it is even more important to make efficient use of educational and training resources available. She noted the Colorado Trustee Newsletter, CHA Governance Portal, the WHA Newsletter and various QHR publications as examples of valuable resources for Board Members’ edification. Ms. Harmon told the Board that she would implement quarterly self-assessments regarding required knowledge base for all Board members. She urged Board members to avail themselves of every opportunity for education about the Hospital, governance, and healthcare related subjects. Item 13. ADJOURNMENT Ms. Harmon confirmed that time spent on various topics was sufficient and there were appropriate opportunities for comments. At 7:50 p.m. the meeting was adjourned.

____________________________ Ronald D. Courtney Secretary/Treasurer

________________________________ Debra A. Harmon Chairperson

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