TY 2010 Form 990

(A) Name and Title	(B) Average hours per week (describe hours for related organizations in Schedule O)	(C) Position (check all that apply)	(E) Reportable compensation from related organizations (W- 2/1099-MISC)
(1) TOM DEMPSTER CHAIRMAN	2.00	X	X	0	0	0
(2) DAVE ROZENBOOM VICE CHAIR	2.00	X	X	0	0	0
(3) FREDRICK W SLUNECKA PRESIDENT & CEO	40.00	X	X	0	941,800	26,824
(4) DAVE KAPASKA DO PRESIDENT & CEO	40.00	X	X	382,913	80,124	23,051
(5) CATHY CLARK BOARD TRUSTEE	2.00	X		0	0	0
(6) MICHAEL BENDER BOARD TRUSTEE	2.00	X		0	0	0
(7) SISTER JANICE KLEIN BOARD TRUSTEE	2.00	X		0	0	0
(8) GENE JONES JR BOARD TRUSTEE	2.00	X		0	0	0
(9) MITCHELL JOHNSON DO BOARD TRUSTEE	2.00	X		0	0	0
(10) SISTER KATHRYN EASLEY BOARD TRUSTEE	2.00	X		0	0	0
(11) KIM PEDERSON MD BOARD TRUSTEE	40.00	X		309,442	0	32,746
(12) SISTER JOAN REICHELT BOARD TRUSTEE	2.00	X		0	0	0
(13) DAVE STRAND MD BOARD TRUSTEE	2.00	X		0	0	0
(14) BRAD THAEMERT MD BOARD TRUSTEE	2.00	X		0	0	0
(15) FRED THURMAN BOARD TRUSTEE	2.00	X		0	0	0
(16) DAVID FLECK BOARD TRUSTEE	2.00	X		0	0	0
(17) JAMES WIEDERRICH BOARD TRUSTEE	2.00	X		0	0	0

(A) Name and Title	(B) Average hours per week (describe hours for related organizations in Schedule O)	(C) Position (check all that apply)	(E) Reportable compensation from related organizations (W- 2/1099-MISC)	(F) Estimated amount of other compensation from the organization and related organizations
(18) BILL ROSSING MD BOARD TRUSTEE	2.00	X				0	0	0
(19) CINDY WALSH BOARD TRUSTEE	2.00	X				0	0	0
(20) DAVID CHICOINE BOARD TRUSTEE	2.00	X				0	0	0
(21) SISTER CANDYCE CHRYSTAL BOARD TRUSTEE	2.00	X				0	0	0
(22) JULIE N NORTON SEC/TREAS & SRVP FINANCE	40.00		X			348,019	0	38,762
(23) JUDY BLAUWET SR VICE PRESIDENT	40.00			X		324,861	0	31,350
(24) DAVID FLICEK SR VICE PRESIDENT	40.00			X		354,350	84,548	34,537
(25) STEVE PETERSEN DIRECTOR-PHARMACY	40.00			X		173,126	0	29,873
(26) PATRICIA JAGOE AVP-SURGERY	40.00			X		173,521	0	29,175
(27) CURT HOHMAN SR VICE PRESIDENT	40.00			X		266,315	0	24,593
(28) MICHAEL PUUMALA MD PHYSICIAN	40.00				X	1,066,397	0	34,602
(29) HAMID ABBASI MD PHYSICIAN	40.00				X	1,260,054	0	37,002
(30) BRIAN KNUTSON MD PHYSICIAN	40.00				X	994,393	0	37,602
(31) DANIEL TYNAN MD PHYSICIAN	40.00				X	1,304,533	0	35,720
(32) STEVEN CONDRON MD PHYSICIAN	40.00				X	1,168,974	0	39,602

(A) Name and business address	(B) Description of services	(C) Compensation
SIOUX FALLS CONSTRUCTION PO BOX 2728 SIOUX FALLS,SD571072728	CONSTRUCTION	25,953,949
AVERA HEALTH 3900 WEST AVERA DRIVE SIOUX FALLS,SD57108	SHARED SERVICES	19,700,213
SANFORD SCHOOL OF MEDICINE 1400 W 22ND ST 120 SIOUX FALLS,SD571051505	PHYSICIAN SERVICES	2,505,659
HENKIN SCHULTZ INC 6201 S PINNACLE PL SIOUX FALLS,SD571045716	ADVERTISING	1,841,402
ASSOCIATED REGIONAL & UNIVERSITY PATHOLO PO BOX 27964 SALT LAKE CITY,UT84127	LAB TESTING	1,720,356
2 Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization 86

Do not include amounts reported on lines 6b, 7b, 8b, 9b, and 10b of Part VIII.	(A) Total expenses	(B) Program service expenses	(C) Management and general expenses	(D) Fundraising expenses
1	Grants and other assistance to governments and organizations in the U.S. See Part IV, line 21	4,025,918	4,025,918
2	Grants and other assistance to individuals in the U.S. See Part IV, line 22	92,500	92,500
3	Grants and other assistance to governments, organizations, and individuals outside the U.S. See Part IV, lines 15 and 16
4	Benefits paid to or for members
5	Compensation of current officers, directors, trustees, and key employees ....	2,035,669	715,178	1,320,491
6	Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) ....	159,354	159,354
7	Other salaries and wages	271,397,519	247,658,681	23,375,560	363,278
8	Pension plan contributions (include section 401(k) and section 403(b) employer contributions) ....	15,962,800	14,142,693	1,793,181	26,926
9	Other employee benefits .......	32,332,544	28,592,137	3,688,448	51,959
10	Payroll taxes ...........	16,716,492	14,976,795	1,714,521	25,176
11	Fees for services (non-employees):
a	Management ......	165,140	165,140
b	Legal .........	344,969	1,890	343,079
c	Accounting ...........	36,200	3,143	33,057
d	Lobbying ...........	40,235		40,235
e	Professional fundraising. See Part IV, line 17..	61,855			61,855
f	Investment management fees ......
g	Other ..........	78,658,728	45,828,184	32,829,972	572
12	Advertising and promotion ....	3,612,945	443,145	3,160,479	9,321
13	Office expenses .......	9,434,876	4,446,167	4,759,175	229,534
14	Information technology ......	7,600,092	974,014	6,626,078
15	Royalties ..
16	Occupancy ...........	19,301,477	13,218,277	6,029,759	53,441
17	Travel ............	2,727,431	2,286,642	435,045	5,744
18	Payments of travel or entertainment expenses for any federal, state, or local public officials ......
19	Conferences, conventions, and meetings ....	1,720,267	1,487,756	231,440	1,071
20	Interest ...........	7,871,945	7,631,092	240,853
21	Payments to affiliates .......
22	Depreciation, depletion, and amortization .....	29,938,840	23,630,213	6,304,414	4,213
23	Insurance ..............	1,177,597	1,176,937	660
24	Other expenses. Itemize expenses not covered above. (Expenses grouped together and labeled miscellaneous may not exceed 5% of total expenses shown on line 25 below.)
a	MEDICAL SUPPLIES	94,557,406	93,935,591	617,135	4,680
b	BAD DEBT	19,596,381	19,569,519	26,862
c	EQUIPMENT LEASE AND REN	4,667,112	3,714,058	953,054
d	LICENSES AND PERMITS	1,170,752	576,036	594,716
e	UBI TAX	354,297	354,297
f	All other expenses	2,943,736	460,491	2,479,542	3,703
25	Total functional expenses. Add lines 1 through 24f	628,705,077	530,265,848	97,597,756	841,473
26	Joint costs. Check here if following SOP 98-2 (ASC 958-720). Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation

Part X Balance Sheet
	1	Cashnon-interest-bearing ..........		1
2	Savings and temporary cash investments .......	24,167,419	2	26,868,405
3	Pledges and grants receivable, net .........	3,781,641	3	3,360,173
4	Accounts receivable, net .........	80,278,346	4	85,293,914
5	Receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of
	Schedule L ..........	58,333	5	120,833
6	Receivables from other disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B). Complete Part II of
	Schedule L ..........		6
7	Notes and loans receivable, net .............	3,496,249	7	3,431,202
8	Inventories for sale or use ..............	11,076,812	8	12,517,902
9	Prepaid expenses and deferred charges ............	5,172,280	9	5,340,257
10a	Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D	10a	619,717,477
b	Less: accumulated depreciation. .....	10b	284,576,477	315,906,702	10c	335,141,000
11	Investments—publicly traded securities ..........	55,378,107	11	23,658,088
12	Investments—other securities. See Part IV, line 11 ......	152,452,866	12	202,453,890
13	Investments—program-related. See Part IV, line 11 ..	5,104,920	13	6,876,999
14	Intangible assets .........	26,488,947	14	42,209,593
15	Other assets. See Part IV, line 11 ...........	12,709,389	15	15,171,850
16	Total assets. Add lines 1 through 15 (must equal line 34)...	696,072,011	16	762,444,106
	17	Accounts payable and accrued expenses .	65,243,074	17	66,443,712
18	Grants payable ..........		18
19	Deferred revenue ..........	2,156,365	19	519,843
20	Tax-exempt bond liabilities ..........	215,394,148	20	211,970,759
21	Escrow or custodial account liability. Complete Part IV of Schedule D..	9,188,968	21	803,045
22	Payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified
	persons. Complete Part II of Schedule L..........		22
23	Secured mortgages and notes payable to unrelated third parties ..	9,305,204	23	26,333,662
24	Unsecured notes and loans payable to unrelated third parties ....		24
25	Other liabilities. Complete Part X of Schedule D.....	32,140,775	25	30,328,663
26	Total liabilities. Add lines 17 through 25.....	333,428,534	26	336,399,684
		Organizations that follow SFAS 117, check here and complete lines 27 through 29, and lines 33 and 34.
27	Unrestricted net assets .....	353,311,977	27	414,988,501
28	Temporarily restricted net assets .....	7,350,458	28	9,034,012
29	Permanently restricted net assets .....	1,981,042	29	2,021,909
	Organizations that do not follow SFAS 117, check here and complete lines 30 through 34.
30	Capital stock or trust principal, or current funds .....		30
31	Paid-in or capital surplus, or land, building or equipment fund .....		31
32	Retained earnings, endowment, accumulated income, or other funds		32
33	Total net assets or fund balances .....	362,643,477	33	426,044,422
34	Total liabilities and net assets/fund balances .....	696,072,011	34	762,444,106

- TIN:

SCHEDULE A
(Form 990 or 990EZ)

Department of the Treasury
Internal Revenue Service

Public Charity Status and Public Support

Complete if the organization is a section 501(c)(3) organization or a section
4947(a)(1) nonexempt charitable trust.

Attach to Form 990 or Form 990-EZ. right arrow

See separate instructions.

OMB No. 1545-0047

2010

Open to Public
Inspection

Name of the organization

AVERA MCKENNAN

Employer identification number

46-0224743

Part I

Reason for Public Charity Status (All organizations must complete this part.) See instructions

The organization is not a private foundation because it is: (For lines 1 through 11, check only one box.)

A church, convention of churches, or association of churches. section 170(b)(1)(A)(i).

A school described in section 170(b)(1)(A)(ii). (Attach Schedule E.)

A hospital or a cooperative hospital service organization described in section 170(b)(1)(A)(iii).

A medical research organization operated in conjunction with a hospital described in section 170(b)(1)(A)(iii). Enter the hospital's name, city, and state:

An organization operated for the benefit of a college or university owned or operated by a governmental unit described in

section 170(b)(1)(A)(iv). (Complete Part II.)

A federal, state, or local government or governmental unit described in section 170(b)(1)(A)(v).

An organization that normally receives a substantial part of its support from a governmental unit or from the general public described in

section 170(b)(1)(A)(vi). (Complete Part II.)

A community trust described in section 170(b)(1)(A)(vi). (Complete Part II.)

An organization that normally receives: (1) more than 331/3% of its support from contributions, membership fees, and gross

receipts from activities related to its exempt functions—subject to certain exceptions, and (2) no more than 331/3% of

its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses

acquired by the organization after June 30, 1975. See section 509(a)(2). (Complete Part III.)

An organization organized and operated exclusively to test for public safety. Seesection 509(a)(4).

An organization organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more publicly supported organizations described in section 509(a)(1) or section 509(a)(2). See section 509(a)(3). Check the box that describes the type of supporting organization and complete lines 11e through 11h.

Type I

Type II

Type III - Functionally integrated

Type III - Other

By checking this box, I certify that the organization is not controlled directly or indirectly by one or more disqualified persons other than foundation managers and other than one or more publicly supported organizations described in section 509(a)(1) or section 509(a)(2).

If the organization received a written determination from the IRS that it is a Type I, Type II or Type III supporting organization, check this box ..................................................

Since August 17, 2006, has the organization accepted any gift or contribution from any of the
following persons?

(i) a person who directly or indirectly controls, either alone or together with persons described in (ii)

Yes

and (iii) below, the governing body of the the supported organization? ................

11g(i)

(ii) a family member of a person described in (i) above? ......................

11g(ii)

(iii) a 35% controlled entity of a person described in (i) or (ii) above? ................

11g(iii)

Provide the following information about the supported organization(s).

(i) Name of supported organization	(ii) EIN	(iv) Is the organization in col. (i) listed in your governing document?		(v) Did you notify the organization in col. (i) of your support?		(vi) Is the organization in col. (i) organized in the U.S.?		(vii) Amount of support?
(i) Name of supported organization	(ii) EIN	Yes	No	Yes	No	Yes	No	(vii) Amount of support?


Total

For Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 11285F

Schedule A (Form 990 or 990-EZ) 2010

Page 2

Part II

Support Schedule for Organizations Described in IRC 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi)
(Complete only if you checked the box on line 5, 7, or 8 of Part I or if the organization failed to qualify under Part III. If the organization fails to qualify under the tests listed below, please complete Part III.)

Section A. Public Support

Calendar year(or fiscal year beginning in)		(a) 2006	(b) 2007	(c) 2008	(d) 2009	(e) 2010	(f) Total
1	Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") ....
2	Tax revenues levied for the organization's benefit and either paid to or expended on its behalf.......
3	The value of services or facilities furnished by a governmental unit to the organization without charge..
4	Total. Add lines 1 through 3..
5	The portion of total contributions by each person (other than a governmental unit or publicly supported organization) included on line 1 that exceeds 2% of the amount shown on line 11, column (f)..
6	Public Support. Subtract line 5 from line 4.

Section B. Total Support

Calendar year(or fiscal year beginning in)		(a) 2006	(b) 2007	(c) 2008	(d) 2009	(e) 2010	(f) Total
7	Amounts from line 4..
8	Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources..
9	Net income from unrelated business activities, whether or not the business is regularly carried on..
10	Other income. (Explain in Part IV.) Do not include gain or loss from the sale of capital assets..
11	Total support (Add lines 7 through 10).

Gross receipts from related activities, etc. (See instructions.) ..................

First Five Years If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a 501(c)(3) organization,
check this box and stop here.......................................... right arrow

Section C. Computation of Public Support Percentage

Public Support Percentage for 2010 (line 6 column (f) divided by line 11 column (f)) .........

Public Support Percentage for 2009 Schedule A, Part II, line 14 ...............

16a

33 1/3% support test—2010. If the organization did not check the box on line 13, and line 14 is 33 1/3% or more, check this box
and stop here. The organization qualifies as a publicly supported organization ...................... right arrow

33 1/3% support test—2009. If the organization did not check the box on line 13 or 16a, and line 15 is 33 1/3% or more, check this
box and stop here. The organization qualifies as a publicly supported organization ..................... right arrow

17a

10%-facts-and-circumstances test—2010. If the organization did not check a box on line 13, 16a, or 16b and line 14
is 10% or more, and if the organization meets the "facts and circumstances" test, check this box and stop here. Explain
in Part IV how the organization meets the "facts and circumstances" test. The organization qualifies as a publicly supported
organization .................................................. right arrow

10%-facts-and-circumstances test—2009. If the organization did not check a box on line 13, 16a, 16b, or 17a and line
15 is 10% or more, and if the organization meets the "facts and circumstances" test, check this box and stop here.
Explain in Part IV how the organization meets the "facts and circumstances" test. The organization qualifies as a publicly
supported organization .............................................. right arrow

Private Foundation If the organization did not check a box on line 13, 16a, 16b, 17a or 17b, check this box and see
instructions ................................................... right arrow

Schedule A (Form 990 or 990-EZ) 2010

Page 3

Part III

Support Schedule for Organizations Described in IRC 509(a)(2)
(Complete only if you checked the box on line 9 of Part I or if the organization failed to qualify under Part II. If the organization fails to qualify under the tests listed below, please complete Part II.)

Section A. Public Support

Calendar year(or fiscal year beginning in)		(a) 2006	(b) 2007	(c) 2008	(d) 2009	(e) 2010	(f) Total
1	Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") .
2	Gross receipts from admissions, merchandise sold or services performed, or facilities furnished in any activity that is related to the organization's tax-exempt purpose......
3	Gross receipts from activities that are not an unrelated trade or business under section 513..
4	Tax revenues levied for the organization's benefit and either paid to or expended on its behalf...
5	The value of services or facilities furnished by a governmental unit to the organization without charge..
6	Total. Add lines 1 through 5.
7a	Amounts included on lines 1, 2, and 3 received from disqualified persons...
b	Amounts included on lines 2 and 3 received from other than disqualified persons that exceed the greater of $5,000 or 1% of the amount on line 13 for the year.
c	Add lines 7a and 7b..
8	Public Support (Subtract line 7c from line 6.)

Section B. Total Support

Calendar year (or fiscal year beginning in)		(a) 2006	(b) 2007	(c) 2008	(d) 2009	(e) 2010	(f) Total
9	Amounts from line 6...
10a	Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources..
b	Unrelated business taxable income (less section 511 taxes) from businesses acquired after June 30, 1975.
c	Add lines 10a and 10b.
11	Net income from unrelated business activities not included in line 10b, whether or not the business is regularly carried on.
12	Other income. Do not include gain or loss from the sale of capital assets (Explain in Part IV.)
13	Total support (Add lines 9, 10c, 11 and 12.).

Section C. Computation of Public Support Percentage

Public Support Percentage for 2010 (line 8 column (f) divided by line 13 column (f)) .........

Public support percentage from 2009 Schedule A, Part III, line 15 ...............

Section D. Computation of Investment Income Percentage

Investment income percentage for 2010 (line 10c column (f) divided by line 13 column (f)) ......

Investment income percentage from 2009 Schedule A, Part III, line 17 .............

19a

33 1/3% support tests—2010. If the organization did not check the box on line 14, and line 15 is more than 33 1/3% and line 17 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization .......... right arrow

33 1/3% support tests—2009. If the organization did not check a box on line 14 or line 19a, and line 16 is more than 33 1/3% and line 18 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization .... right arrow

Private Foundation If the organization did not check a box on line 14, 19a or 19b, check this box and see instructions ..... right arrow

Schedule A (Form 990 or 990-EZ) 2010

Page 4

Part IV

Supplemental Information. Supplemental Information. Complete this part to provide the explanation required by Part II, line 10; Part II, line 17a or 17b; or Part III, line 12. Also complete this part for any additional information. (See instructions).

Facts And Circumstances Test

Explanation

Schedule A (Form 990 or 990-EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

Schedule B
(Form 990, 990-EZ,
or 990-PF)

Department of the Treasury
Internal Revenue Service

Schedule of Contributors

Attach to Form 990, 990-EZ, or 990-PF.

OMB No. 1545-0047

2010

Name of organization

AVERA MCKENNAN

Employer identification number

46-0224743

Organization type (check one):

Filers of:

Section:

Form 990 or 990-EZ

501(c)( ) (enter number) organization

4947(a)(1) nonexempt charitable trust not treated as a private foundation

527 political organization

Form 990-PF

501(c)(3) exempt private foundation

4947(a)(1) nonexempt charitable trust treated as a private foundation

501(c)(3) taxable private foundation

Check if your organization is covered by the General Rule or a Special Rule.
Note. Only a section 501(c)(7), (8), or (10) organization can check boxes for both the General Rule and a Special Rule. See instructions.

General Rule

For an organization filing Form 990, 990-EZ, or 990-PF that received, during the year, $5,000 or more (in money or
property) from any one contributor. Complete Parts I and II.

Special Rules

For a section 501(c)(3) organization filing Form 990 or 990-EZ, that met the 33¹/3% support test of the regulations
under sections 509(a)(1) and 170(b)(1)(A)(vi), and received from any one contributor, during the year, a contribution of the
greater of (1) $5,000 or (2) 2% of the amount on (i) Form 990, Part VIII, line 1h, or (ii) Form 990-EZ, line 1. Complete Parts I and II.

For a section 501(c)(7), (8), or (10) organization filing Form 990, or 990-EZ, that received from any one contributor,
during the year, aggregate contributions of more than $1,000 for use exclusively for religious, charitable,
scientific, literary, or educational purposes, or the prevention of cruelty to children or animals. Complete Parts I, II, and
III.

For a section 501(c)(7), (8), or (10) organization filing Form 990, or 990-EZ, that received from any one contributor,
during the year, contributions for use exclusively for religious, charitable, etc., purposes, but these contributions did
not aggregate to more than $1,000. If this box is checked, enter here the total contributions that were received during
the year for an exclusively religious, charitable, etc., purpose. Do not complete any of the parts unless the General Rule
applies to this organization because it received nonexclusively religious, charitable, etc., contributions of $5,000 or more
during the year. ......................... Arrow Bullet

Caution. An Organization that is not covered by the General Rule and/or the Special Rules does not file Schedule B (Form 990,
990-EZ, or 990-PF), but it must answer “No” on Part IV, line 2 of its Form 990, or check the box in the heading of its
Form 990-EZ, or on line 2 of its Form 990-PF, to certify that it does not meet the filing requirements of Schedule B (Form 990,
990-EZ, or 990-PF).

For Paperwork Reduction Act Notice, see the Instructions
for Form 990, 990-EZ, or 990-PF.

Cat. No. 30613XSchedule B (Form 990, 990-EZ, or 990-PF) (2010)

Name of organization AVERA MCKENNAN
Schedule B (Form 990, 990-EZ, or 990-PF) (2010) Page 1 of 1 of Part I
Part I	Contributors (see Instructions)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
RESTRICTED	RESTRICTED RESTRICTED RESTRICTED RESTRICTED, RESTRICTED RESTRICTED	$RESTRICTED	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
(a) No.	(b) Name, address, and ZIP + 4	(c) Aggregate contributions	(d) Type of contribution
		$	Person Payroll Noncash (Complete Part II if there is a noncash contribution.)
Schedule B (Form 990, 990-EZ, or 990-PF) (2010)

Name of organization AVERA MCKENNAN
Schedule B (Form 990, 990-EZ, or 990-PF) (2010) Page 1 of 1 of Part II
Part II	Noncash Property (see Instructions)
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
(a) No. from Part I	(b) Description of noncash property given	(c) FMV (or estimate) (see instructions)	(d) Date received
		$
Schedule B (Form 990, 990-EZ, or 990-PF) (2010)

Schedule B (Form 990, 990-EZ, or 990-PF) (2010)

Page 1 of 1 of Part III

Name of organization
AVERA MCKENNAN

Employer identification number

46-0224743

Part III

Exclusively religious, charitable, etc., individual contributions to section 501(c)(7), (8), or (10) organizations
aggregating more than $1,000 for the year. (Complete columns (a) through (e) and the following line entry.)
For organizations completing Part III, enter the total of exclusively religious, charitable, etc.,
contributions of $1,000 or less for the year. (Enter this information once. See instructions.) Arrow Bullet

(a) No.
from
Part I

(b)
Purpose of gift

(d)
Description of how gift is held

(e) Transfer of gift
Transferee's name, address, and ZIP 4	Relationship of transferor to transferee

(a) No.
from
Part I

(b)
Purpose of gift

(d)
Description of how gift is held

(e) Transfer of gift
Transferee's name, address, and ZIP 4	Relationship of transferor to transferee

(a) No.
from
Part I

(b)
Purpose of gift

(d)
Description of how gift is held

(e) Transfer of gift
Transferee's name, address, and ZIP 4	Relationship of transferor to transferee

(a) No.
from
Part I

(b)
Purpose of gift

(d)
Description of how gift is held

(e) Transfer of gift
Transferee's name, address, and ZIP 4	Relationship of transferor to transferee

Schedule B (Form 990, 990-EZ, or 990-PF) (2010)

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE C
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Political Campaign and Lobbying Activities

For Organizations Exempt From Income Tax Under section 501(c) and section 527
SchCMd Bullet

Complete if the organization is described below.
SchCMd Bullet

Attach to Form 990 or Form 990-EZ. SchCMd Bullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public
Inspection

If the organization answered “Yes,” to Form 990, Part IV, Line 3, or Form 990-EZ, Part V, line 46 (Political Campaign Activities), then
Round Bullet

Section 501(c)(3) organizations: Complete Parts I-A and B. Do not complete Part I-C.
Round Bullet

Section 501(c) (other than section 501(c)(3)) organizations: Complete Parts I-A and C below. Do not complete Part I-B.
Round Bullet

Section 527 organizations: Complete Part I-A only.
If the organization answered “Yes,” to Form 990, Part IV, Line 4, or Form 990-EZ, Part VI, line 47 (Lobbying Activities), then
Round Bullet

Section 501(c)(3) organizations that have filed Form 5768 (election under section 501(h)) Complete Part II-A. Do not complete Part II-B.
Round Bullet

Section 501(c)(3) organizations that have NOT filed Form 5768 (election under section 501(h)): Complete Part II-B. Do not complete Part II-A.
If the organization answered “Yes,” to Form 990, Part IV, Line 5 (Proxy Tax) or Form 990-EZ, Part V, line 35a (Proxy Tax), then
Round Bullet

Section 501(c)(4), (5), or (6) organizations: Complete Part III.

Name of the organization

AVERA MCKENNAN

Employer identification number

46-0224743

Part I-A

Complete if the organization is exempt under section 501(c) or is a section 527 organization.

Provide a description of the organization's direct and indirect political campaign activities on behalf of or in opposition to candidates for public office in Part IV.

Political expenditures .................................... SchCMd Bullet

Volunteer hours ........................................

Part I-B

Complete if the organization is exempt under section 501(c)(3).

Enter the amount of any excise tax incurred by the organization under section 4955 ......... SchCMd Bullet

Enter the amount of any excise tax incurred by organization managers under section 4955 ...... SchCMd Bullet

If the organization incurred a section 4955 tax, did it file Form 4720 for this year? ..............

Yes No

Was a correction made? .........................................

Yes No

If "Yes," describe in Part IV.

Part I-C

Complete if the organization is exempt under section 501(c) except section 501(c)(3).

Enter the amount directly expended by the filing organization for section 527 exempt function activities SchCMd Bullet

Enter the amount of the filing organization's funds contributed to other organizations for section 527 exempt funtion activities .................................... SchCMd Bullet

Total exempt function expenditures. Add lines 1 and 2. Enter here and on Form 1120-POL, line 17b.. SchCMd Bullet

Did the filing organization file Form 1120-POL for this year? ..........................

Yes No

Enter the names, addresses and employer identification number (EIN) of all section 527 political organizations to which the filing
organization made payments. For each organization listed, enter the amount paid from the filing organization’s funds. Also enter the amount of political contributions received that were promptly and directly delivered to a separate political organization, such as a separate segregated fund or a political action committee (PAC). If additional space is needed, provide information in Part IV.

(a) Name	(b) Address	(c) EIN	(d) Amount paid from filing organization's funds. If none, enter -0-.	(e) Amount of political contributions received and promptly and directly delivered to a separate political organization. If none, enter -0-.

For Privacy Act and Paperwork Reduction Act Notice, see the instructions for Form 990.

Cat. No. 50084S

Schedule C (Form 990 or 990-EZ) 2010

Page 2

Part II-A

Complete if the organization is exempt under section 501(c)(3) and filed Form 5768 (election under section 501(h)).

A Check if the filing organization belongs to an affiliated group.
B Check if the filing organization checked box A and "limited control" provisions apply.

Limits on Lobbying Expenditures (The term "expenditures" means amounts paid or incurred.)		(b) Affiliated Group Totals
1a	Total lobbying expenditures to influence public opinion (grass roots lobbying) ......
b	Total lobbying expenditures to influence a legislative body (direct lobbying) .......
c	Total lobbying expenditures (add lines 1a and 1b) ...................
d	Other exempt purpose expenditures ........................
e	Total exempt purpose expenditures (add lines 1c and 1d) ...............
f	Lobbying nontaxable amount. Enter the amount from the following table in both columns.
	If the amount on line 1e, column (a) or (b) is:The lobbying nontaxable amount is:
	Not over $500,00020% of the amount on line 1e.
	Over $500,000 but not over $1,000,000$100,000 plus 15% of the excess over $500,000.
	Over $1,000,000 but not over $1,500,000$175,000 plus 10% of the excess over $1,000,000.
	Over $1,500,000 but not over $17,000,000$225,000 plus 5% of the excess over $1,500,000.
	Over $17,000,000$1,000,000.

g	Grassroots nontaxable amount (enter 25% of line 1f) .................
h	Subtract line 1g from line 1a. If zero or less, enter -0-. ................
i	Subtract line 1f from line 1c. If zero or less, enter -0-. ................
j	If there is an amount other than zero on either line 1h or line 1i, did the organization file Form 4720 reporting section 4911 tax for this year? ......................................	Yes No

4-Year Averaging Period Under Section 501(h) (Some organizations that made a section 501(h) election do not have to complete all of the five columns below. See the instructions for lines 2a through 2f on page 4.)
Lobbying Expenditures During 4-Year Averaging Period
	Calendar year (or fiscal year beginning in)	(a) 2007	(b) 2008	(c) 2009	(d) 2010	(e) Total

2a	Lobbying non-taxable amount

b	Lobbying ceiling amount (150% of line 2a, column(e))

c	Total lobbying expenditures

d	Grassroots non-taxable amount

e	Grassroots ceiling amount (150% of line 2d, column (e))

f	Grassroots lobbying expenditures

Schedule C (Form 990 or 990-EZ) 2010

Page 3

Part II-B

Complete if the organization is exempt under section 501(c)(3) and has NOT filed Form 5768 (election under section 501(h)).

(a)

Yes

(b)

Amount

During the year, did the filing organization attempt to influence foreign, national, state or local legislation, including any attempt to influence public opinion on a legislative matter or referendum, through the use of:

Volunteers? .........................................

Paid staff or management (include compensation in expenses reported on lines 1c through 1i)? ....

Yes

Media advertisements? ....................................

Mailings to members, legislators, or the public? .........................

Publications, or published or broadcast statements? .......................

Grants to other organizations for lobbying purposes? .......................

Yes

32,249

Direct contact with legislators, their staffs, government officials, or a legislative body? ........

Yes

7,986

Rallies, demonstrations, seminars, conventions, speeches, lectures, or any similar means? ......

Other activities? If "Yes," describe in Part IV ..........................

Total. lines 1c through 1i ...................................

40,235

Did the activities in line 1 cause the organization to be not described in section 501(c)(3)? .....

If "Yes," enter the amount of any tax incurred under section 4912 .................

If "Yes," enter the amount of any tax incurred by organization managers under section 4912 .....

If the filing organization incurred a section 4912 tax, did it file Form 4720 for this year? .......

Part III-A

Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6).

Yes

Were substantially all (90% or more) dues received nondeductible by members? ................

Did the organization make only in-house lobbying expenditures of $2,000 or less? ................

Did the organization agree to carryover lobbying and political expenditures from the prior year? ..........

Part III-B

Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6) if BOTH Part III-A, lines 1 and 2 are answered “No” OR if Part III-A, line 3 is answered “Yes”.

Dues, assessments and similar amounts from members .....................

Section 162(e) non-deductible lobbying and political expenditures (do not include amounts of political
expenses for which the section 527(f) tax was paid).

Current year .........................................

Carryover from last year ....................................

Total ...........................................

Aggregate amount reported in section 6033(e)(1)(A) notices of nondeductible section 162(e) dues .

If notices were sent and the amount on line 2c exceeds the amount on line 3, what portion of the excess does the organization agree to carryover to the reasonable estimate of nondeductible lobbying and political expenditure next year? ................................

Taxable amount of lobbying and political expenditures (see instructions) ..............

Part IV

Supplemental Information

Complete this part to provide the descriptions required for Part l-A, line 1; Part l-B, line 4; Part l-C, line 5; and Part ll-B, line 1i.
Also, complete this part for any additional information.

Identifier	Return Reference	Explanation
EXPLANATION OF OTHER LOBBYING ACTIVITIES:	PART II-B, LINE 1I:	PART II-B LINE 1F AND 1G: AVERA MCKENNAN PARTICIPATES THROUGH VARIOUS HOSPITAL ORGANIZATIONS TO PROMOTE LEGISLATION THAT WOULD RESULT IN STRENGTHENING HEALTH CARE DELIVERY SYSTEMS ON A NATIONAL, REGIONAL, AND LOCAL LEVEL. IN ADDITION, AVERA MCKENNAN REPRESENTATIVES HAVE PROVIDED INFORMATION TO THE LEGISLATORS REGARDING THE PURPOSE OF THE MEDICARE CHRONIC CARE PRACTICE RESEARCH NETWORK (MCCPRN) AND PROMOTED THEIR SUPPORT FOR FINANCING OF MCCPRN. AN EMPLOYEE OF MCKENNAN MET WITH CONGRESSIONAL MEMBERS TO DISCUSS AND PROMOTE THE 340B DRUG PROGRAM. ANOTHER EMPLOYEE OF MCKENNAN ALSO MET WITH CONGRESSIONAL MEMBERS TO DISCUSS DRUG SHORTAGES.

Schedule C (Form 990 or 990EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE D
(Form 990)

Department of the Treasury
Internal Revenue Service

Supplemental Financial Statements

Complete if the organization answered "Yes," to Form 990,
Part IV, line 6, 7, 8, 9, 10, 11, or 12.
SchDMd Bullet

Attach to Form 990. SchDMd Bullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

AVERA MCKENNAN

Employer identification number

46-0224743

Part I

Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Complete if the organization answered "Yes" to Form 990, Part IV, line 6.

		(a) Donor advised funds	(b) Funds and other accounts
1	Total number at end of year .......
2	Aggregate contributions to (during year) ...
3	Aggregate grants from (during year) ...
4	Aggregate value at end of year .......

Did the organization inform all donors and donor advisors in writing that the assets held in donor advised
funds are the organization's property, subject to the organization's exclusive legal control? ............

Yes No

Did the organization inform all grantees, donors, and donor advisors in writing that grant funds may be
used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit. ...................................

Yes No

Part II

Conservation Easements. Complete if the organization answered "Yes" to Form 990, Part IV, line 7.

Purpose(s) of conservation easements held by the organization (check all that apply).

Preservation of land for public use (e.g., recreation or pleasure) Preservation of an historically importantly land area

Protection of natural habitat Preservation of a certified historic structure

Preservation of open space

Complete lines 2a–2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year.


a	Total number of conservation easements .......................	2a
b	Total acreage restricted by conservation easements ..................	2b
c	Number of conservation easements on a certified historic structure included in (a) .....	2c
d	Number of conservation easements included in (c) acquired after 8/17/06 ........	2d

Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during
the taxable year SchDMd Bullet

Number of states where property subject to conservation easement is located SchDMd Bullet

Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and
enforcement of the conservation easements it holds? .............................

Yes No

Staff and volunteer hours devoted to monitoring, inspecting and enforcing conservation easements during the year SchDMd Bullet

Amount of expenses incurred in monitoring, inspecting, and enforcing conservation easements during the year SchDMd Bullet

Does each conservation easement reported on line 2(d) above satisfy the requirements of section
170(h)(4)(B)(i) and 170(h)(4)(B)(ii)? ....................................

Yes No

In Part XIV, describe how the organization reports conservation easements in its revenue and expense statement, and
balance sheet, and include, if applicable, the text of the footnote to the organization’s financial statements that describes
the organization’s accounting for conservation easements.

Part III

Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets.
Complete if the organization answered "Yes" to Form 990, Part IV, line 8.

If the organization elected, as permitted under SFAS 116, not to report in its revenue statement and balance sheet works of
art, historical treasures, or other similar assets held for public exhibition, education or research in furtherance of public service,
provide, in Part XIV, the text of the footnote to its financial statements that describes these items.

If the organization elected, as permitted under SFAS 116, to report in its revenue statement and balance sheet works of art,
historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service,
provide the following amounts relating to these items:

(i)

Revenues included in Form 990, Part VIII, line 1 ........................ SchDMd Bullet

(ii)

Assets included in Form 990, Part X .............................. SchDMd Bullet

If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the
following amounts required to be reported under SFAS 116 relating to these items:

Revenues included in Form 990, Part VIII, line 1 .......................... SchDMd Bullet

Assets included in Form 990, Part X ............................... SchDMd Bullet

For Privacy Act and Paperwork Reduction Act Notice, see the Intructions for Form 990

Cat. No. 52283D

Schedule D (Form 990) 2010

Page 2

Part III

Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued)

Using the organization’s accession and other records, check any of the following that are a significant use of its collection
items (check all that apply):

Public exhibition

Loan or exchange programs

Scholarly research

Other

Preservation for future generations

Provide a description of the organization’s collections and explain how they further the organization’s exempt purpose in
Part XIV.

During the year, did the organization solicit or receive donations of art, historical treasures or other similar
assets to be sold to raise funds rather than to be maintained as part of the organization’s collection?........

Yes No

Part IV

Escrow and Custodial Arrangements. Complete if the organization answered "Yes" to Form 990,
Part IV, line 9, or reported an amount on Form 990, Part X, line 21.

Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not
included on Form 990, Part X? ....................................

Yes No

If "Yes," explain the arrangement in Part XIV and complete the following table:

			Amount
c	Beginning balance .................................	1c	11,634
d	Additions during the year ..............................	1d	126,534
e	Distributions during the year .............................	1e	128,514
f	Ending balance ...................................	1f	9,654

Did the organization include an amount on Form 990, Part X, line 21? .....................

Yes No

If “Yes,” explain the arrangement in Part XIV.

Part V

Endowment Funds. Complete if the organization answered "Yes" to Form 990, Part IV, line 10.

		(a)Current Year	(b)Prior Year	(c)Two Years Back
1a	Beginning of year balance ....	1,981,042	1,897,334	2,160,515
b	Contributions ........
c	Investment earnings or losses ...	40,867	83,708	-263,181
d	Grants or scholarships .....
e	Other expenditures for facilities and programs ........
f	Administrative expenses ....
g	End of year balance ......	2,021,909	1,981,042	1,897,334

Provide the estimated percentage of the year end balance held as:

Board designated or quasi-endowment: SchDMd Bullet

Permanent endowment: SchDMd Bullet

100.000 %

Term endowment: SchDMd Bullet

Are there endowment funds not in the possession of the organization that are held and administered for the
organization by:

Yes

(i) unrelated organizations ........................

3a(i)

(ii) related organizations ........................

3a(ii)

Yes

If "Yes" to 3a(ii), are the related organizations listed as required on Schedule R? .........

Yes

Describe in Part XIV the intended uses of the organization's endowment funds.

Part VI

InvestmentsLand, Buildings, and Equipment. See Form 990, Part X, line 10.

Description of investment		(a) Cost or other basis (investment)	(b)Cost or other basis (other)	(c) Accumulated depreciation	(d) Book value
1a	Land .................	6,159,099	19,064,389		25,223,488
b	Buildings ................	1,313,277	366,696,593	133,692,626	234,317,244
c	Leasehold improvements ............
d	Equipment ................		215,658,349	145,956,990	69,701,359
e	Other .................		10,825,770	4,926,861	5,898,909
Total. Add lines 1a-1e. (Column (d) should equal Form 990, Part X, column (B), line 10(c).)........					335,141,000

Schedule D (Form 990) 2010

Page 3

Part VII

InvestmentsOther Securities. See Form 990, Part X, line 12.

(a) Description of security or category (including name of security)	(b)Book value	(c) Method of valuation: Cost or end-of-year market value
(1)Financial derivatives
(2)Closely-held equity interests
(3)Other (A) ASSETS LIMITED AS TO USE - AVERA POOLED INVESTMENTS	170,814,066	F
(B) AVERA HOME MEDICAL EQUIPMENT, LLC	3,858,658	C
(C) INTEREST IN AVERA HEALTH FOUNDATION	9,923,336	F
(D) INVESTMENTS IN AFFILIATED COMPANIES	4,047,826	C
(E) MIDWEST REGIONAL IMAGING SERVICES, LLC	879,073	C
(F) HEART HOSPITAL OF SOUTH DAKOTA, LLC	12,930,931	C



Total. (Column (b) should equal Form 990, Part X, col.(B) line 12.)	202,453,890

Part VIII

InvestmentsProgram Related. See Form 990, Part X, line 13.

(a) Description of investment type		(b) Book value	(c) Method of valuation: Cost or end-of-year market value









Total. (Column (b) should equal Form 990, Part X, col.(B) line 13.)

Part IX

Other Assets. See Form 990, Part X, line 15.

(a) Description				(b) Book value









Total. (Column (b) should equal Form 990, Part X, col.(B) line 15.)...........

Part X

Other Liabilities. See Form 990, Part X, line 25.

1.(a) Description of Liability		(b) Amount
Federal Income Taxes
OTHER LIABILITIES		3,037,061
DUE TO OTHER ORGANIZATIONS		1,174,897
MARKET VALUE OF INTEREST SWAP		7,333,347
CAPITAL LEASE OBLIGATION		80,692
ESTIMATED THIRD-PARTY PAYOR SETTLEMENTS		13,113,706
DUE TO AFFILATE		5,588,960



Total. (Column (b) should equal Form 990, Part X, col.(B) line 25.)		30,328,663
2. Fin 48 (ASC 740) Footnote. In Part XIV, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC740).

Schedule D (Form 990) 2010

Page 4

Part XI Reconciliation of Change in Net Assets from Form 990 to Financial Statements
1	Total revenue (Form 990, Part VIII, column (A), line 12) ....................	1	677,060,881
2	Total expenses (Form 990, Part IX, column (A), line 25) .....................	2	628,705,077
3	Excess or (deficit) for the year. Subtract line 2 from line 1 .............	3	48,355,804
4	Net unrealized gains (losses) on investments ..........................	4	15,424,833
5	Donated services and use of facilities .............................	5
6	Investment expenses ...................................	6
7	Prior period adjustments ..................................	7
8	Other (Describe in Part XIV) .................................	8	-379,692
9	Total adjustments (net). Add lines 4 - 8 .............................	9	15,045,141
10	Excess or (deficit) for the year per financial statements. Combine lines 3 and 9 .........	10	63,400,945

Part XII Reconciliation of Revenue per Audited Financial Statements With Revenue per Return
1	Total revenue, gains, and other support per audited financial statements .......			1	739,797,892
2	Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a	Net unrealized gains on investments ..........	2a	15,424,833
b	Donated services and use of facilities .........	2b
c	Recoveries of prior year grants ...........	2c
d	Other (Describe in Part XIV): ............	2d	65,215,380
e	Add lines 2a through 2d .....................			2e	80,640,213
3	Subtract line 2e from line 1.....................			3	659,157,679
4	Amounts included on Form 990, Part VIII, line 12, but not on line 1:
a	Investment expenses not included on Form 990, Part VIII, line 7b .	4a
b	Other (Describe in Part XIV): ...........	4b	17,903,202
c	Add lines 4a and 4b.......................			4c	17,903,202
5	Total Revenue. Add lines 3 and 4c. (This should equal Form 990, Part I, line 12.) ......			5	677,060,881

Part XIII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return
1	Total expenses and losses per audited financial statements .............			1	677,284,434
2	Amounts included on line 1 but not on Form 990, Part IX, line 25:
a	Donated services and use of facilities ..........	2a
b	Prior year adjustments ..............	2b
c	Other losses ................	2c
d	Other (Describe in Part XIV): ............	2d	48,579,357
e	Add lines 2a through 2d......................			2e	48,579,357
3	Subtract line 2e from line 1.....................			3	628,705,077
4	Amounts included on Form 990, Part IX, line 25, but not on line 1:
a	Investment expenses not included on Form 990, Part VIII, line 7b ..	4a
b	Other (Describe in Part XIV): ............	4b
c	Add lines 4a and 4b.......................			4c	0
5	Total expenses. Add lines 3 and 4c. (This should equal Form 990, Part I, line 18.) ......			5	628,705,077

Part XIV

Supplemental Information

Complete this part to provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1a and 4; Part lV, lines 1b and 2b;
Part V, line 4; Part X; Part XI, line 8; Part XII, lines 2d and 4b; and Part XIII, lines 2d and 4b. Also complete this part to provide any additional information.

Identifier	Return Reference	Explanation
	PART IV, LINE 1B:	THE ORGANIZATION HOLDS FUNDS IN TRUST ON BEHALF OF ITS LONG-TERM CARE RESIDENTS. MANY SMALL DOLLAR TRANSACTIONS FLOW IN AND OUT OF THIS ACCOUNT. THE ACCOUNT IS MANAGED BY THE NURSING HOME STAFF. THE STATE HAS STRICT GUIDELINES ON HOW THESE ACCOUNTS ARE MANAGED.
	PART IV, LINE 2B:	THE ORGANIZATION HOLDS AN AMOUNT IN TRUST RELATED TO A NON-COMPETE AS PART OF AN EMPLOYMENT AGREEMENT FOR AN EMPLOYED PHYSICIAN. THE AMOUNT WILL BE HELD AND THEN PAID OUT WHEN THE PHYSICIAN REACHES AGE 65 OR EARLIER ACCORDING TO THE WRITTEN TRUST AGREEMENT.
DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS:	PART V, LINE 4:	THE ORGANIZATION'S ENDOWMENT CONSISTS OF A PORTION OF THEIR INTEREST IN THE NET ASSETS OF AVERA HEALTH FOUNDATION. THE AVERA HEALTH FOUNDATION INCLUDES ENDOWMENT FUNDS WHICH HAVE BEEN ESTABLISHED FOR A VARIETY OF PURPOSES. AS REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, NET ASSETS ASSOCIATED WITH ENDOWMENT FUNDS, INCLUDING FUNDS DESIGNATED BY THE BOARD OF DIRECTORS TO FUNCTION AS ENDOWMENTS (IF ANY), ARE CLASSIFIED AND REPORTED BASED ON THE EXISTENCE OR ABSENCE OF DONOR-IMPOSED RESTRICTIONS. THE ORGANIZATION'S PERMANENTLY RESTRICTED ENDOWMENT FUNDS ARE DONOR RESTRICTED. THE ORGANIZATION CURRENTLY DOES NOT HAVE ANY BOARD DESIGNATED ENDOWMENT FUNDS.
DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48:	PART X:	THE ORGANIZATION BELIEVES THAT IT HAS APPROPRIATE SUPPORT FOR ANY TAX POSITIONS TAKEN AFFECTING ITS ANNUAL FILING REQUIREMENTS, AND AS SUCH, DOES NOT HAVE ANY UNCERTAIN TAX POSITIONS THAT ARE MATERIAL TO THE FINANCIAL STATEMENTS. THE ORGANIZATION WOULD RECOGNIZE FUTURE ACCRUED INTEREST AND PENALTIES RELATED TO UNRECOGNIZED TAX BENEFITS AND LIABILITIES IN INCOME TAX EXPENSE IF SUCH INTEREST AND PENALTIES ARE INCURRED. THE ORGANIZATION'S FEDERAL FORM 990T FILINGS ARE NO LONGER SUBJECT TO FEDERAL TAX EXAMINATIONS BY TAX AUTHORITIES FOR YEARS BEFORE 2008.
PART XI, LINE 8 - OTHER ADJUSTMENTS:		BOOK/TAX ADJUSTMENTS ON PARTNERSHIPS -4,060,453. EQUITY TRANSFERS, NET -699,541. CHANGE IN FAIR VALUE OF INTEREST RATE SWAP 1,346,111. INCOME FROM GRANTOR TRUST NOT INCLUDED ON FINANCIAL STATEMENTS 366,789. LOSS ON RETIREMENT OF DEBT -253,242. CHANGE IN ACCOUNTING PRINCIPLES -1,918,602. OTHER CHANGES IN NET ASSETS 318,029. CHANGE IN FAIR VALUE OF INTEREST RATE SWAP DESIGNATED AS HEDGE -718,740. STEP UP BASIS OF ASSETS FROM ACQUISITION OF HEART HOSPITAL OF SOUTH DAKOTA 5,083,056. CHANGE IN NONCONTROLLING INTEREST OF HEART HOSPITAL OF SOUTH DAKOTA LLC 156,901.
PART XII, LINE 2D - OTHER ADJUSTMENTS:		REVENUES OF CONSOLIDATED SUBSIDIARIES CONSOLIDATED FOR FINANCIAL STATEMENTS 61,332,017. OCCUPANCY EXPENSES INCLUDED IN NONOPERATING INCOME ON FINANCIAL STATEMENTS -1,911,822. CHANGE IN FAIR VALUE OF INTEREST RATE SWAP RECORDED IN N/A FOR TAX RETURN 1,346,111. RECLASS OF LOSSES ON INTEREST RATE SWAPS RECORDED IN N/A FOR TAX RETURN -380,740. LOSS FROM RETIREMENT OF DEBT RECORDED IN NET ASSETS FOR TAX RETURN -253,242. STEP UP BASIS OF ASSETS FROM ACQUISITION OF HEART HOSPITAL OF SOUTH DAKOTA 5,083,056.
PART XII, LINE 4B - OTHER ADJUSTMENTS:		CHANGE IN INVESTMENT IN AVERA HEALTH FDTN RECORDED IN FUND BALANCE ON F/S 2,347,440. MINORITY INTEREST SHARE OF GAINS FROM SUBSIDIARIES -46,424. GAIN FROM INVESTMENT IN SUBSIDIARIES RECORDED IN REVENUE FOR TAX RETURN 7,588,472. MANAGEMENT FEES INCLUDED IN EXPENSES ON FINANCIAL STATEMENTS 669,839. BOOK/TAX ADJUSTMENTS ON PARTNERSHIPS 4,060,453. RENTAL EXPENSE INCLUDED IN REVENUES ON FINANCIAL STATEMENTS -843,679. INCOME FROM GRANTOR TRUST NOT INCLUDED ON FINANCIAL STATEMENTS -366,789. CONTRIBUTION OF LONG-LIVED ASSET RECORDED IN NET ASSETS FOR FINANCIAL STMT 4,493,890.
PART XIII, LINE 2D - OTHER ADJUSTMENTS:		EXPENSES OF CONSOLIDATED SUBSIDIARIES CONSOLIDATED FOR FINANCIAL STATEMENTS 50,317,339. MANAGEMENT FEES INCLUDED IN REVENUE FOR TAX RETURN -669,839. RENTAL EXPENSE INCLUDED IN EXPENSES FOR TAX RETURN 843,679. OCCUPANCY EXPENSES INCLUDED IN NONOPERATING INCOME ON FINANCIAL STATEMENTS -1,911,822.

Schedule D (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE G
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Supplemental Information Regarding
Fundraising or Gaming Activities

Complete if the organization answered "Yes" to Form 990, Part IV, lines 17, 18, or 19,
or if the organization entered more than $15,000 on Form 990-EZ, line 6a.
right arrow

Attach to Form 990 or Form 990-EZ. right arrow

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization
AVERA MCKENNAN

Employer identification number

46-0224743

Part I

Fundraising Activities. Complete if the organization answered "Yes" to Form 990, Part IV, line 17.

Indicate whether the organization raised funds through any of the following activities. Check all that apply.

a	Mail solicitations	e	Solicitation of non-government grants
b	Internet and e-mail solicitations	f	Solicitation of government grants
c	Phone solicitations	g	Special fundraising events
d	In-person solicitations

Did the organization have a written or oral agreement with any individual (including officers, directors, trustees

or key employees listed in Form 990, Part VII) or entity in connection with professional fundraising services?

Yes

If “Yes,” list the ten highest paid individuals or entities (fundraisers) pursuant to agreements under which the fundraiser is
to be compensated at least $5,000 by the organization. Form 990-EZ filers are not required to complete this table.

(i) Name and address of individual or entity (fundraiser)	(ii) Activity	(iii) Did fundraiser have custody or control of contributions?		(iv) Gross receipts from activity	(v) Amount paid to (or retained by) fundraiser listed in col. (i)	(vi) Amount paid to (or retained by) organization
	(ii) Activity	Yes	No	(iv) Gross receipts from activity		(vi) Amount paid to (or retained by) organization
JON OIEN 600 EAST SUNNYBROOK DRIVE SIOUX FALLS, SD57105	CONSULTING SERVICES		No	0	19,855	-19,855
THEODORE R MUENSTER 509 LINDEN AVE VERMILLION, SD57069	CONSULTING SERVICES		No	0	42,000	-42,000
Total .................					61,855	-61,855

List all states in which the organization is registered or licensed to solicit funds or has been notified it is exempt from registration or licensing.

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 50083H

Schedule G (Form 990 or 990-EZ) 2010

Page 2

Part II

Fundraising Events. Complete if the organization answered "Yes" to Form 990, Part IV, line 18, or reported more than $15,000 on Form 990-EZ, line 6a. List events with gross receipts greater than $5,000.

			(a) Event #1 (event type)	(b) Event #2 (event type)	(c) Other Events (total number)	(d) Total Events (Add col. (a) through col. (c))
	1	Gross receipts . . .
	2	Less: Charitable contributions . . .
	3	Gross income (line 1 minus line 2) . . .
	4	Cash prizes . . .
	5	Non-cash prizes . .
	6	Rent/facility costs . .
	7	Food and beverages . .
	8	Entertainment . . .
	9	Other direct expenses .
	10	Direct expense summary. Add lines 4 through 9 in column (d) ...........
	11	Net income summary. Combine lines 3 and 10 in column (d)............

Part III

Gaming. Complete if the organization answered "Yes" to Form 990, Part IV, line 19, or reported more than $15,000 on Form 990-EZ, line 6a.

(a) Bingo

(b) Pull tabs/Instant
bingo/progressive bingo

(c) Other gaming

(d) Total gaming (Add col. (a) through col. (c))

Gross revenue . . . .

Cash prizes . . . .

Non-cash prizes . . .

Rent/facility costs . . .

Other direct expenses . .

Volunteer labor . . .

	Yes
	No

	Yes
	No

	Yes
	No

Direct expense summary. Add lines 2 through 5 in column (d) ........... right arrow

Net gaming income summary. Combine lines 1 and 7 in column (d) .......... right arrow

Enter the state(s) in which the organization operates gaming activities:

Is the organization licensed to operate gaming activities in each of these states? ............

YesNo

If "No," Explain:

10a

Were any of the organization's gaming licenses revoked, suspended or terminated during the tax year? .....

YesNo

If "Yes," Explain:

Does the organization operate gaming activities with nonmembers? .................

YesNo

Is the organization a grantor, beneficiary or trustee of a trust or a member of a partnership or other entity

formed to administer charitable gaming? ...........................

YesNo

Schedule G (Form 990 or 990-EZ) 2010

Page 3

Indicate the percentage of gaming activity operated in:

The organization's facility ......................

13a

An outside facility ........................

13b

Provide the name and address of the person who prepares the organization's gaming/special events books and records:

Name

Address

15a

Does the organization have a contract with a third party from whom the organization receives gaming

revenue? ......................................

YesNo

If "Yes," enter the amount of gaming revenue received by the organization right arrow

$ and the

amount of gaming revenue retained by the third party right arrow

$ .

If "Yes," enter name and address:

Name

Address

Gaming manager information:

Name

Gaming manager compensation right arrow

Description of services provided right arrow

Director/officer Employee Independent contractor

Mandatory distributions:

Is the organization required under state law to make charitable distributions from the gaming proceeds to

retain the state gaming license? ............................

YesNo

Enter the amount of distributions required under state law distributed to other exempt organizations or spent

in the organization's own exempt activities during the tax year right arrow

Part IV

Complete this part to provide additional information for responses to quuestion on Schedule G (see instructions.)

Identifier	ReturnReference	Explanation

Schedule G (Form 990 or 990-EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE H
(Form 990)

Department of the Treasury
Internal Revenue Service

Hospitals

Complete if the organization answered "Yes" to Form 990, Part IV, question 20.
MediumBullet

Attach to Form 990. MediumBullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

AVERA MCKENNAN

Employer identification number

46-0224743

Part I

Charity Care and Certain Other Community Benefits at Cost

Yes

Does the organization have a charity care policy? If "No," skip to question 6a...........

Yes

If "Yes," is it a written policy? .......................

Yes

If the organization has multiple hospitals, indicate which of the following best describes application of the charity care policy to the various hospitals.

Applied uniformly to all hospitals Applied uniformly to most hospitals Generally tailored to individual hospitals

Answer the following based on the charity care eligibility criteria that applies to the largest number of the organization's patients.

Does the organization use Federal Poverty Guidelines (FPG) to determine eligibility for providing free care to low

income individuals? If "Yes," indicate which of the following is the FPG family income limit for eligibility for free care:

Yes

100% 150% 200% Other

Does the organization use FPG to determine eligibility for providing discounted care to low income individuals? If

"Yes," indicate which of the following is the family income limit for eligibility for discounted care: .....

Yes

200% 250% 300% 350% 400% Other

If the organization does not use FPG to determine eligibility, describe in Part VI the income based criteria for determining eligibility for free or discounted care. Include in the description whether the organization uses an asset test or other threshold, regardless of income, to determine eligibility for free or discounted care.

Does the organization's policy provide free or discounted care to the "medically indigent"? ......

Yes

Does the organization budget amounts for free or discounted care provided under its charity care policy? ...

Yes

If "Yes," did the organization's charity care expenses exceed the budgeted amount?.........

If "Yes" to line 5b, as a result of budget considerations, was the organization unable to provide free or discounted
care to a patient who was eligibile for free or discounted care?...............

Does the organization prepare an annual community benefit report?.............

Yes

If "Yes," does the organization make it available to the public? ..............

Yes

Complete the following table using the worksheets provided in the Schedule H instructions. Do not submit these worksheets with the Schedule H.

Charity Care and Certain Other Community Benefits at Cost

	(c) Total community benefit expense	(d) Direct offsetting revenue	(e) Net community benefit expense	(f) Percent of total expense
a Charity care at cost (from Worksheets 1 and 2) ..	9,620,376		9,620,376	1.570 %
b Unreimbursed Medicaid (from Worksheet 3, column a) .	61,046,028	50,064,558	10,981,470	1.790 %
c Unreimbursed costs—other means-tested government programs (from Worksheet 3, column b) ....	1,061,747	646,274	415,473	0.070 %
dTotal Charity Care and Means-Tested Government Programs .....	71,728,151	50,710,832	21,017,319	3.430 %
Other Benefits e Community health improvement services and community benefit operations (from (Worksheet 4) ....	2,628,443	236,775	2,391,668	0.390 %
f Health professions education (from Worksheet 5) ..	5,513,068	1,551,377	3,961,691	0.650 %
g Subsidized health services (from Worksheet 6) ..	56,396,742	48,496,107	7,900,635	1.290 %
h Research (from Worksheet 7)	4,685,516	684,087	4,001,429	0.650 %
i Cash and in-kind contributions to community groups (from Worksheet 8) ..	2,581,483		2,581,483	0.420 %
jTotal Other Benefits ...	71,805,252	50,968,346	20,836,906	3.400 %
kTotal. Add lines 7d and 7j. ..	143,533,403	101,679,178	41,854,225	6.830 %

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990. Cat. No. 50192T Schedule H (Form 990) 2010

Schedule H (Form 990) 2010

Page 2

Part II

Community Building Activities Complete this table if the organization conducted any community building activities.

		(c) Total community building expense	(e) Net community building expense	(f) Percent of total expense
1	Physical improvements and housing
2	Economic development	59,457	59,457	0.010 %
3	Community support	950	950	0 %
4	Environmental improvements
5	Leadership development and training for community members
6	Coalition building	5,000	5,000	0 %
7	Community health improvement advocacy
8	Workforce development	269,121	269,121	0.040 %
9	Other
10	Total	334,528	334,528	0.050 %

Part III

Bad Debt, Medicare, & Collection Practices

Section A. Bad Debt Expense

Yes

Does the organization report bad debt expense in accordance with Heathcare Financial Management Association Statement No. 15? ..........................

Yes

Enter the amount of the organization's bad debt expense (at cost).....

10,398,840

Enter the estimated amount of the organization's bad debt expense (at cost) attributable to patients eligible under the organization's charity care policy ..

Provide in Part VI the text of the footnote to the organization's financial statements that describes bad debt expense. In addition, describe the costing methodology used in determining the amounts reported on lines 2 and 3, and rationale for including a portion of bad debt amounts as community benefit.

Section B. Medicare

Enter total revenue received from Medicare (including DSH and IME).....

144,579,444

Enter Medicare allowable costs of care relating to payments on line 5.....

137,438,922

Subtract line 6 from line 5. This is the surplus or (shortfall)........

7,140,522

Describe in Part VI the extent to which any shortfall reported in line 7 should be treated as community benefit.
Also describe in Part VI the costing methodology or source used to determine the amount reported on line 6.
Check the box that describes the method used:

Cost accounting system Cost to charge ratio Other

Section C. Collection Practices

Does the organization have a written debt collection policy? ...............

Yes

If "Yes," does the organization's collection policy contain provisions on the collection practices to be followed for patients who are known to qualify for charity care or financial assistance? Describe in Part VI......

Yes

Part IV

Management Companies and Joint Ventures

(a) Name of entity	(b) Description of primary activity of entity	(c) Organization's profit % or stock ownership %	(d) Officers, directors, trustees, or key employees' profit % or stock ownership%	(e) Physicians' profit % or stock ownership %
1
2
3
4
5
6
7
8
9
10
11
12
13

Schedule H (Form 990) 2010

Page 3

Part VFacility Information

Section A. Hospital Facilities (list in order of size, measured by total revenue per facility, from largest to smallest) How many hospital facilities did the organization operate during the tax year?7 Name and address		Other (Describe)
1	AVERA MCKENNAN 1325 S CLIFF AVE SIOUX FALLS,SD57117	X	X	X	X		X	X	14 PROVIDER BASED CLINICS
2	HEART HOSPITAL OF SOUTH DAKOTA LLC 10720 SIKES PLACE SUITE 300 CHARLOTTE,NC28277	X	X					X	2/3 OWNER IN JOINT VENTURE
3	AVERA MILBANK AREA HOSPITAL 901 VIRGIL AVE MILBANK,SD57252	X	X			X		X	THREE RURAL HEALTH PROVIDER BASED CLINICS
4	AVERA GREGORY HEALTHCARE CENTER 400 PARK AVE GREGORY,SD57533	X	X			X		X	FOUR PROVIDER BASED CLINICS
5	AVERA DELLS AREA HEALTH CENTER 909 N IOWA AVENUE DELL RAPIDS,SD57022	X	X			X		X	THREE PROVIDER BASED CLINICS
6	AVERA FLANDREAU MEDICAL CENTER 214 N PRAIRIE FLANDREAU,SD57028	X	X			X		X	ONE PROVIDER BASED CLINIC
7	AVERA HAND COUNTY MEMORIAL HOSPITAL 300 W 5TH ST MILLER,SD57362	X	X			X		X	ONE PROVIDER BASED CLINIC

Schedule H (Form 990) 2010

Page 4

Part VFacility Information (continued)

Section B. Facility Policies and Practices.

(Complete a separate Section B for each of the hospital facilities listed in Part V, Section A)

Name of Hospital Facility:NOT REQUIRED

Line Number of Hospital Facility (from Schedule H, Part V, Section A):1

				Yes	No
Community Health Needs Assessment (Lines 1 through 7 are optional for 2010)
1	During the tax year or any prior tax year, did the hospital facility conduct a community health needs assessment (“Needs Assessment”)? If “No,” skip to question 8. .....................		1
	If “Yes,” indicate what the Needs Assessment describes (check all that apply):
	a	A definition of the community served by the hospital facility
	b	Demographics of the community
	c	Existing health care facilities and resources within the community that are available to respond to the health needs of the community
	d	How data was obtained
	e	The health needs of the community
	f	Primary and chronic disease needs and other health issues of uninsured persons, low-income persons, and minority groups
	g	The process for identifying and prioritizing community health needs and services to meet those needs
	h	The process for consulting with persons representing the community’s interests
	i	Information gaps that limit the hospital facility’s ability to assess all of the community’s health needs
	j	Other (describe in Part VI)
2	Indicate the tax year the hospital facility last conducted a Needs Assessment: 20
3	In conducting its most recent Needs Assessment, did the hospital facility take into account input from persons who represent the community served by the hospital facility? If “Yes,” describe in Part VI how the hospital facility took into account input from persons who represent the community, and identify the persons the hospital facility consulted.		3
4	Was the hospital facility’s Needs Assessment conducted with one or more other hospital facilities? If “Yes,” list the other hospital facilities in Part VI............................		4
5	Did the hospital facility make its Needs Assessment widely available to the public? ...........		5
	If “Yes,” indicate how the Needs Assessment was made widely available (check all that apply):
	a	Hospital facility’s website
	b	Available upon request from the hospital facility
	c	Other (describe in Part VI)
6	If the hospital facility addressed needs identified in its most recently conducted Needs Assessment, indicate how (check all that apply):
	a	Adoption of an implementation strategy to address the health needs of the hospital facility’s community
	b	Execution of the implementation strategy
	c	Development of a community benefit plan for the facility
	d	Participation in community-wide community benefit plan
	e	Inclusion of a community benefit section in operational plans
	f	Adoption of a budget for provision of services that address the needs identified in the CHNA
	g	Prioritization of health needs in the community
	h	Prioritization of services that the hospital facility will undertake to meet health needs in its community
	i	Other (describe in Part VI)
7	Did the hospital facility address all of the needs identified in its most recently conducted Needs Assessment? If “No,” explain in Part VI which needs it has not addressed together with the reasons why it has not addressed such needs.		7
Financial Assistance Policy
	Did the hospital facility have in place during the tax year a written financial assistance policy that:
8	Explains eligibility criteria for financial assistance, and whether such assistance includes free or discounted care?		8
9	Used federal poverty guidelines (FPG) to determine eligibility for providing free care to low incomeindividuals?..		9
	If “Yes,” indicate the FPG family income limit for eligibility for free care: %

Schedule H (Form 990) 2010

Page 5

Part VFacility Information (continued)

				Yes	No
10	Used FPG to determine eligibility for providing discounted care to low income individuals?.........		10
	If “Yes,” indicate the FPG family income limit for eligibility for discounted care: %
11	Explained the basis for calculating amounts charged to patients?.................		11
	If “Yes,” indicate the factors used in determining such amounts (check all that apply):
	a	Income level
	b	Asset level
	c	Medical indigency
	d	Insurance status
	e	Uninsured discount
	f	Medicaid/Medicare
	g	State regulation
	h	Other (describe in Part VI)
12	Explained the method for applying for financial assistance?...................		12
13	Included measures to publicize the policy within the community served by the hospital facility?.......		13
	If “Yes,” indicate how the hospital facility publicized the policy (check all that apply):
	a	The policy was posted at all times on the hospital facility’s web site
	b	The policy was attached to all billing invoices
	c	The policy was posted in the hospital facility’s emergency rooms or waiting rooms
	d	The policy was posted in the hospital facility’s admissions offices
	e	The policy was provided, in writing, to patients upon admission to the hospital facility
	f	The policy was available upon request
	g	Other (describe in Part VI)
Billing and Collections
14	Did the hospital facility have in place during the tax year a separate billing and collections policy, or a written financial assistance policy that explained actions the hospital facility may take upon non-payment?........		14
15	Check all of the following collection actions against a patient that were permitted under the hospital facility's policies at any time during the tax year:
	a	Reporting to credit agency
	b	Lawsuits
	c	Liens on residences
	d	Body attachments or arrests
	e	Other (describe in Part VI)
16	Did the hospital facility engage in or authorize a third party to engage in any of the following collection actions during the tax year?...................................		16
	If “Yes,” check all collection actions in which the hospital facility or a third party engaged (check all that apply):
	a	Reporting to credit agency
	b	Lawsuits
	c	Liens on residences
	d	Body attachments
	e	Other (describe in Part VI)
17	Indicate which actions the hospital facility took before initiating any of the collection actions checked in question 16 (check all that apply):
	a	Notified patients of the financial assistance policy upon admission
	b	Notified patients of the financial assistance policy prior to discharge
	c	Notified patients of the financial assistance policy in communications with the patients regarding the patients’ bills
	d	Documented its determination of whether a patient who applied for financial assistance under the financial assistance policy qualified for financial assistance
	e	Other (describe in Part VI)

Schedule H (Form 990) 2010

Page 6

Part VFacility Information (continued)

Policy Relating to Emergency Medical Care
				Yes	No
18	Did the hospital facility have in place during the tax year a written policy relating to emergency medical care that requires the hospital facility to provide, without discrimination, care for emergency medical conditions to individuals regardless of their eligibility under the hospital facility’s financial assistance policy?..........		18
	If “No,” indicate the reasons why (check all that apply):
	a	The hospital facility did not provide care for any emergency medical conditions
	b	The hospital facility did not have a policy relating to emergency medical care
	c	The hospital facility limited who was eligible to receive care for emergency medical conditions (describe in Part VI)
	d	Other (describe in Part VI)
Charges for Medical Care
19	Indicate how the hospital facility determined the amounts generally billed to individuals who had insurance covering emergency or other medically necessary care (check all that apply):
	a	The hospital facility used the lowest negotiated commercial insurance rate for those services at the hospital facility
	b	The hospital facility used the average of the three lowest negotiated commercial insurance rates for those services at the hospital facility
	c	The hospital facility used the Medicare rate for those services
	d	Other (describe in Part VI)
20	Did the hospital facility charge any of its patients who were eligible for assistance under the hospital facility’s financial assistance policy, and to whom the hospital facility provided emergency or other medically necessary services, more than the amounts generally billed to individuals who had insurance covering such care?.........		20
	If “Yes,” explain in Part VI.
21	Did the hospital facility charge any of its patients an amount equal to the gross charge for services provided to that patient?...................................		21
	If “Yes,” explain in Part VI.

Schedule H (Form 990) 2010

Page 7

Part VFacility Information (continued)

Section C. Other Facilities That Are Not Licensed, Registered, or Similarly Recognized as a Hospital Facility (list in order of size, measured by total revenue per facility, from largest to smallest) How many non-hospital facilities did the organization operate during the tax year?72
Name and address		Type of Facility (Describe)
1	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
2	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
3	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
4	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
5	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
6	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
7	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
8	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
9	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
10	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
11	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
12	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
13	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
14	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
15	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
16	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
17	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
18	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
19	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
20	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
21	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
22	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
23	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
24	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
25	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
26	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
27	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
28	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
29	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
30	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
31	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
32	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
33	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
34	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
35	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
36	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
37	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
38	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
39	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
40	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
41	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
42	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
43	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
44	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
45	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
46	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
47	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
48	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
49	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
50	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
51	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
52	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
53	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
54	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
55	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
56	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
57	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
58	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
59	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
60	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
61	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
62	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
63	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
64	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
65	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
66	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
67	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
68	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
69	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
70	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
71	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES
72	AVERA MCKENNAN BEHAVIORAL HEALTH CENTER 4400 W 69TH ST SIOUX FALLS,SD57108	INPATIENT & OUTPATIENT BEHAVIORAL HEALTH SERVICES

Schedule H (Form 990) 2010

Page 8

Part VI

Supplemental Information

Complete this part to provide the following information.

1	Required descriptions. Provide the description required for Part I, lines 3c, 6a, and 7; Part II; Part III, lines 4, 8, and 9b; and Part V, Section B, lines 1j, 2, 4c, 6i, 7, 11i, 13i, 17l, 18l, 19e, 21d, 25, and 26.
2	Community health needs assessment. Describe how the organization assesses the health care needs of the communities it serves, in addition to any community health needs assessments reported in Part V, Section B.
3	Patient education of eligibility for assistance. Describe how the organization informs and educates patients and persons who may be billed for patient care about their eligibility for assistance under federal, state, or local government programs or under the organization’s financial assistance policy.
4	Community information. Describe the community the organization serves, taking into account the geographic area and demographic constituents it serves.
5	Promotion of community health. Provide any other information important to describing how the organization’s hospital facilities or other health care facilities further its exempt purpose by promoting the health of the community (e.g., open medical staff, community board, use of surplus funds, etc.).
6	Affiliated health care system. If the organization is part of an affiliated health care system, describe the respective roles of the organization and its affiliates in promoting the health of the communities served.
7	State filing of community benefit report. If applicable, identify all states with which the organization, or a related organization, files a community benefit report.

Identifier	ReturnReference	Explanation
		PART I, LINE 3C: A COMBINATION OF INCOME AND ASSETS TEST IS UTILIZED TO DETERMINE ELIGIBILITY FOR FREE OR DISCOUNTED CARE. POINTS ARE ASSIGNED BASED ON INCOME AS A PERCENTAGE OF FPG AND NET ASSETS OWNED WITH POINTS DEDUCTED FOR ONGOING MEDICAL EXPENSES SUCH AS DRUGS. PATIENTS WITH THE FEWEST POINTS RECEIVE THE LARGEST DISCOUNT. 0-1 POINTS RECEIVE 100% DISCOUNT ON BILLS WHILE REMAINING DISCOUNTS RANGE FROM 10-90% DEPENDING ON POINT TOTALS AND DOLLAR AMOUNT OF CHARGES.
		PART I, LINE 6A: OUR COMMUNITY BENEFIT REPORT IS CONTAINED IN A REPORT PREPARED BY AVERA HEALTH, A RELATED ORGANIZATION. IT IS AVAILABLE THROUGH THE WEBSITE AND REQUESTED MAILING, AND IS FILED WITH THE CATHOLIC HEALTH ASSOCIATION.
		PART I, LINE 7: A COMBINATION OF COSTING METHODOLOGY WAS USED TO CALCULATE THE AMOUNTS REPORTED IN THE TABLE. A COST ACCOUNTING SYSTEM WAS USED TO CALCULATE MEDICAID AND MEANS-TESTED GOVERNMENT PROGRAM EXPENSES AND SHORTFALLS AND SUBSIDIZED HEALTH SERVICES FOR OUR TERTIARY MEDICAL CENTER. A COST TO CHARGE RATIO DERIVED FROM WORKSHEET 2, RATIO OF PATIENT CARE COST-TO-CHARGES WAS USED TO CALCULATE CHARITY CARE AT COST FOR ALL ENTITIES AND MEDICAID AND MEANS-TESTED GOVERNMENT PROGRAM EXPENSES AND SHORTFALLS AND SUBSIDIZED HEALTH SERVICES FOR ANY OPERATIONS OUTSIDE OF THE TERTIARY MEDICAL CENTER. FOR ALL OTHER AMOUNTS, COSTS AND REVENUES AS REFLECTED BY THE GENERAL LEDGER SYSTEM WERE USED.
		PART I, LINE 7G: PHYSICIAN CLINIC COSTS FOR BEHAVIORAL HEALTH SERVICES AND TRANSPLANT SERVICES ARE INCLUDED IN SUBSIDIZED HEALTH SERVICES. REVENUES OF $8,759,020 AND COSTS OF $12,018,332 WERE INCLUDED FOR A NET COMMUNITY BENEFIT OF $3,259,312. OUTSIDE OF THE VETERANS ADMINISTRATION HOSPITAL, WE ARE THE SOLE PROVIDER OF HOSPITAL BEHAVIORAL HEALTH SERVICES TO THE COMMUNITY, OF WHICH THE CLINICS ARE AN INTEGRAL PART OF THESE SERVICES. OUR FACILITY IS ALSO THE PRINCIPAL PROVIDER OF TRANSPLANT SERVICES THROUGHOUT OUR SERVICE AREA AND THE CLINICS ARE A CRUCIAL COMPONENT OF SUCCESSFUL PRE AND POST TRANSPLANT CARE.
		PART I, L7 COL(F): BAD DEBT EXPENSE OF $19,596,381 IS INCLUDED ON FORM 990, PART IX, LINE 25, COLUMN (A) BUT EXCLUDED FOR PURPOSES OF CALCULATING THIS PERCENTAGE.
		PART II: ECONOMIC DEVELOPMENT, COMMUNITY SUPPORT, AND COALITION BUILDING ARE SUPPORTED MAINLY THROUGH MONETARY DONATIONS IN ADDITION TO SERVICE PREPAREDNESS COMMITTEES. THE ORGANIZATION'S WORKFORCE DEVELOPMENT PROGRAM WORKS WITH UNIVERSITIES, TECHNICAL SCHOOLS, AND LOCAL HIGH SCHOOLS TO ADDRESS HEALTHCARE WORKER SHORTFALLS IN THE COMMUNITY. THROUGH PARTNERING WITH THESE ORGANIZATIONS, AVERA MCKENNAN PROVIDES SPEAKERS, WORK EXPERIENCE FOR STUDENTS, SHADOWING, CAREER FAIRS AND INFORMATIONAL LITERATURE TO ENCOURAGE STUDENTS TO CONSIDER A CAREER IN HEALTHCARE AND STAY IN THE COMMUNITY.
		PART III, LINE 4: COSTING METHODOLOGY USED TO REPORT BAD DEBT EXPENSE (AT COST) WAS A COST TO CHARGE RATIO AS OUTLINED IN WORKSHEET 2 RATIO OF PATIENT CARE COSTS TO CHARGES.BAD DEBT EXPENSE IS REPORTED NET OF DISCOUNTS AND CONTRACTUAL ALLOWANCES. A PAYMENT ON AN ACCOUNT PREVIOUSLY WRITTEN OFF REDUCES BAD DEBT EXPENSE IN THE CURRENT YEAR.NOTE FROM FINANCIAL STATEMENT:PATIENT AND RESIDENT RECEIVABLES ARE UNCOLLATERALIZED PATIENT, RESIDENT AND THIRD-PARTY PAYOR OBLIGATIONS. UNPAID PATIENT AND RESIDENT RECEIVABLES, EXCLUDING AMOUNTS DUE FROM THIRD-PARTY PAYORS, WITH INVOICE DATES OVER 90 DAYS OLD HAVE INTEREST ASSESSED AT 1 PERCENT PER MONTH. THESE INTEREST CHARGES ARE RECOGNIZED AS INCOME WHEN CHARGED. PAYMENTS OF PATIENT AND RESIDENT RECEIVABLES ARE ALLOCATED TO THE SPECIFIC CLAIMS IDENTIFIED ON THE REMITTANCE ADVICE OR, IF UNSPECIFIED, ARE APPLIED TO THE EARLIEST UNPAID CLAIM.THE CARRYING AMOUNT OF PATIENT AND RESIDENT RECEIVABLES IS REDUCED BY A VALUATION ALLOWANCE THAT REFLECTS MANAGEMENT'S ESTIMATE OF AMOUNTS THAT WILL NOT BE COLLECTED FROM PATIENTS, RESIDENTS AND THIRD-PARTY PAYORS. MANAGEMENT REVIEWS PATIENT AND RESIDENT RECEIVABLES BY PAYOR CLASS AND APPLIES PERCENTAGES TO DETERMINE ESTIMATED AMOUNTS THAT WILL NOT BE COLLECTED FROM THIRD PARTIES UNDER CONTRACTUAL AGREEMENTS AND AMOUNTS THAT WILL NOT BE COLLECTED FROM PATIENTS AND RESIDENTS DUE TO BAD DEBTS. MANAGEMENT CONSIDERS HISTORICAL WRITE OFF AND RECOVERY INFORMATION IN DETERMINING THE ESTIMATED BAD DEBT PROVISION. MANAGEMENT ALSO REVIEWS ACCOUNTS TO DETERMINE IF CLASSIFICATION AS CHARITY CARE IS APPROPRIATE.PART III, LINES 5, 6, AND 7: THE MEDICARE REVENUES RECEIVED (LINE 5), ALLOWABLE COSTS (LINE 6), AND THE RESULTING SURPLUS (LINE 7) DOES NOT INCLUDE A SIGNIFICANT PORTION OF THE ORGANIZATION'S EXPENSES. THESE LINES REQUIRE USE OF THE MEDICARE COST REPORT AS PREPARED BY THE REQUIRED GUIDELINES WHICH DISALLOWS NUMEROUS COSTS OF HOSPITALS, PARTICULARLY IF THEY ARE PART OF AN INTEGRATED SYSTEM SUCH AS AVERA MCKENNAN. IN THESE CASES THE ENTITY MUST FILE A HOME OFFICE COST REPORT WHICH "STEPS DOWN" OVERHEAD TO NON-COST REPORT ENTITIES DISPROPORTIONATELY TO ACTUAL ALLOWABLE SHARE AND ESSENTIALLY REMOVING THE COSTS FROM THE HOSPITAL'S COST REPORT ENTIRELY. EXAMPLES OF A PORTION OF THESE OVERHEAD COSTS WOULD BE FINANCE, BUSINESS OFFICE, INFORMATION TECHNOLOGY, HUMAN RESOURCES AND ADMINISTRATION. EXAMPLES OF NON-COST REPORT ENTITIES OPERATED BY AVERA MCKENNAN INCLUDE CLINICS, HOME MEDICAL EQUIPMENT STORES, MOBILE IMAGING SERVICES, LONG-TERM CARE FACILITIES, AND OTHER HEALTH CARE RELATED BUSINESSES. THERE ARE ALSO COSTS COMPLETELY DISALLOWED BY COST REPORT RULES SUCH AS BAD DEBT EXPENSE, HOSPITALISTS CARE, MARKETING, CRNA'S, AND INTEREST EXPENSE. SCHEDULE H INSTRUCTIONS ALSO REQUIRE THE EXCLUSION OF $991,045 OF MEDICARE LOSSES BECAUSE THEY ARE INCLUDED IN SCHEDULE H, PART 1, LINE 7G. INCLUDING THE MEDICARE PERCENTAGE OF DISALLOWED COSTS, ENTITIES WHICH DO NOT FILE A COST REPORT BUT NEVERTHELESS CARE FOR MEDICARE PATIENTS, AND THE IMPACT OF THE HOME OFFICE COST REPORT, THE MEDICARE SHORTFALL IS $25,767,954 AS OPPOSED TO A SURPLUS OF $7,140,522.
		PART III, LINE 8: AVERA MCKENNAN FOLLOWS THE CATHOLIC HEALTH ASSOCIATION GUIDELINES IN REPORTING COMMUNITY BENEFITS AND THEREFORE ANY MEDICARE SHORTFALL (AS CALCULATED INCLUDING OUR NON-COST REPORT ENTITIES) IS EXCLUDED FROM OUR COMMUNITY BENEFIT REPORT. HOWEVER, MEDICARE IS THE ORGANIZATION'S LARGEST PAYER AND PATIENTS WITH MEDICARE COVERAGE ARE ACCEPTED REGARDLESS OF WHETHER OR NOT A SURPLUS OR DEFICIT IS REALIZED FROM PROVIDING THE SERVICES. THIS BASIS THEREFORE MEANS PROVIDING MEDICARE SERVICES PROMOTES ACCESS TO HEALTHCARE SERVICES WHICH IS A KEY ADVANTAGE FOR OUR COMMUNITY.MEDICARE ALLOWABLE COSTS OF CARE ARE BASED ON THE MEDICARE COST REPORT. THE MEDICARE COST REPORT IS COMPLETED BASED ON THE RULES AND REGULATIONS SET FORTH BY CMS.
		PART III, LINE 9B: IF THE PATIENT QUALIFIES FOR THE ORGANIZATION'S FINANCIAL ASSISTANCE POLICY FOR LOW-INCOME, UNINSURED PATIENTS AND IS COOPERATING WITH THE ORGANIZATION WITH REGARD TO EFFORTS TO SETTLE AN OUTSTANDING BILL WITHIN A REASONABLE TIME PERIOD, THE ORGANIZATION OR IT'S AGENT SHALL NOT SEND, NOR SUGGEST THAT IT WILL SEND, THE UNPAID BILL TO ANY OUTSIDE AGENCY. AT SUCH TIME AS THE ORGANIZATION SENDS THE UNCOLLECTED ACCOUNT TO AN OUTSIDE COLLECTION AGENCY, THE AMOUNT REFERRED TO THE AGENCY SHALL REFLECT THE REDUCED-PAYMENT LEVEL FOR WHICH THE PATIENT WAS ELIGIBLE UNDER THE ORGANIZATION'S FINANCIAL ASSISTANCE POLICY FOR LOW-INCOME UNINSURED PATIENTS. AVERA DOES NOT REPORT ANY DATA TO ANY OF THE CREDIT AGENCIES; HOWEVER, THE COLLECTION AGENCIES AVERA UTILIZES MAY REPORT TO THE CREDIT AGENCIES. ANY EXTENDED PAYMENT PLANS OFFERED BY A HOSPITAL IN SETTLING THE OUTSTANDING BILLS OF LOW INCOME, UNINSURED PATIENTS WHO QUALIFY FOR FINANCIAL ASSISTANCE SHALL BE INTEREST-FREE SO LONG AS THE REPAYMENT SCHEDULE IS MET.
		PART VI, LINE 2: COMMUNITY NEEDS ASSESSMENT OCCURS AT VARIOUS POINTS IN THE SYSTEM. THROUGH ANNUAL STRATEGIC PLANNING SESSIONS, COMMUNITY LEADERS ARE BROUGHT IN TO UPDATE AND EDUCATE AVERA MCKENNAN BOARD MEMBERS AND ADMINISTRATIVE COUNCIL ON THE SUCCESSES, CHALLENGES, AND SERVICE GAPS IN THE COMMUNITY. EXAMPLES INCLUDE SCHOOL DISTRICT OFFICIALS, STATE HEALTH DEPARTMENT, AND COMMUNITY HEALTH ORGANIZATIONS. LEADERS ALSO SERVE ON BOARDS OF VARIOUS COMMUNITY ORGANIZATIONS WHICH SEEK TO ADDRESS THE HEALTH AND WELL-BEING OF AREA CITIZENS. LOCAL GOVERNING BOARDS AT OUTLYING FACILITIES, WHO ARE MEMBERS OF THE COMMUNITY, DISCUSS AND HELP DIRECT RESOURCES TO AREAS OF TARGETED NEEDS AS WELL.
		PART VI, LINE 3: NOTICES ARE POSTED IN ENGLISH AND SPANISH IN A VISIBLE MANNER IN LOCATIONS WHERE THERE IS A HIGH VOLUME OF INPATIENT OR OUTPATIENT ADMITTING/REGISTRATION, SUCH AS EMERGENCY DEPARTMENTS, BILLING OFFICES, ADMITTING OFFICES, AND OUTPATIENT SERVICE SETTINGS AS WELL AS THE ORGANIZATION WEBSITE. POSTED NOTICES STATE THAT THE ORGANIZATION HAS A FINANCIAL ASSISTANCE POLICY FOR LOW-INCOME UNINSURED PATIENTS WHO MAY NOT BE ABLE TO PAY THEIR BILL AND THAT THIS POLICY PROVIDES FOR CHARITY CARE AND REDUCED-PAYMENT FOR HEALTHCARE SERVICES. THERE IS ALSO IDENTIFICATION OF A CONTACT PHONE NUMBER THAT A PATIENT CAN CALL TO OBTAIN MORE INFORMATION ABOUT THE FINANCIAL ASSISTANCE POLICY AND ABOUT HOW TO APPLY FOR SUCH ASSISTANCE. ADDITIONALLY, ADMITTING STAFF MAKES AVAILABLE A BROCHURE DESIGNED TO HELP PATIENTS UNDERSTAND HOW WE BILL PATIENTS AND PROVIDES SUMMARY INFORMATION ON FINANCIAL ASSISTANCE IF YOU ARE UNABLE TO PAY. PATIENT ADVOCATES WORK WITH UNINSURED PATIENTS IN OUR MAIN TERTIARY FACILITY TO ENROLL THEM IN APPLICABLE SOCIAL PROGRAMS AND IDENTIFY CHARITY ELIGIBILITY, ELIGIBILITY AND ENROLLMENT FOR COUNTY, STATE OR FEDERAL RISK POOLS, AND ELIGIBILITY FOR MODIFIED MEDICARE OR MEDICAID PROGRAMS.
		PART VI, LINE 4: AVERA MCKENNAN'S SERVICE AREA IS A LARGELY RURAL POPULATION. SERVICES ARE PROVIDED THROUGH A HEALTH CARE NETWORK OF 115 LOCATIONS COVERING 54 COMMUNITIES IN FOUR STATES. THE MAIN TERTIARY FACILITY IS LOCATED IN A POPULATION CENTER OF OVER 155,000 SERVED BY ANOTHER NON-PROFIT HOSPITAL OF SIMILAR SIZE, VETERANS ADMINISTRATION HOSPITAL, A HOSPITAL DEDICATED TO DIAGNOSIS AND TREATMENT OF HEART DISEASE, AND A HOSPITAL FOR CHILDREN WITH SPECIAL HEALTH CARE NEEDS. OUTSIDE OF THIS POPULATION CENTER, MOST OF THE COMMUNITIES SERVED HAVE LESS THAN 4,000 RESIDENTS. THE PRIMARY SERVICE AREA INCLUDES FOUR COUNTIES COVERING APPROXIMATELY 2,600 SQUARE MILES AND CONTAINS SEVEN FEDERALLY DESIGNATED MEDICALLY UNDERSERVED AREAS. THE 2010 U.S. CENSUS BUREAU DATA ESTIMATES 10% OF RESIDENTS IN THE PRIMARY SERVICE AREA ARE AT OR BELOW THE POVERTY LEVEL. OUR SECONDARY SERVICE AREA COVERS AN ADDITIONAL 17 COUNTIES IN SOUTH DAKOTA, IOWA AND MINNESOTA WITH AN ESTIMATED TOTAL POPULATION OF 226,000 BASED ON U.S. CENSUS BUREAU PROJECTIONS FOR 2009.
		PART VI, LINE 6: SURPLUS FUNDS ARE REINVESTED IN FACILTIES TO IMPROVE PATIENT CARE.MEDICAL STAFF PRIVILEGES ARE EXTENDED TO ALL QUALIFIED PHYSICIANS IN THE COMMUNITY. THE AVERA MCKENNAN BOARD OF TRUSTEES IS PRINCIPALLY COMPRISED OF COMMUNITY MEMBERS FROM THE PRIMARY SERVICE AREA. MEMBERS COME FROM A VARIETY OF BACKGROUNDS RANGING FROM PRIVATE INDUSTRY AND BANKING TO HEALTHCARE. AVERA MCKENNAN IS A VERIFIED LEVEL II TRAUMA CENTER AND OPERATES AN EMERGENCY CENTER STAFFED 24 HOURS A DAY WITH BOARD-CERTIFIED EMERGENCY SPECIALISTS AND PROVIDES EMERGENCY CARE REGARDLESS OF ABILITY TO PAY. IN ADDITION THE FACILITY OPERATES BOTH FIXED WING AND HELICOPTER MEDICAL AIR TRANSPORTS COVERING A LARGE GEOGRAPHIC AREA PROVIDING ACCESS TO CRITICAL CARE. THROUGH AN INTEGRATED NETWORK OF CLINIC PROVIDERS THE ORGANIZATION PROVIDES NON-EMERGENCY SERVICES TO THE COMMUNITIES IT SERVES. IT MAKES THESE SERVICES ACCESSIBLE TO THE COMMUNITY THROUGH PARTICIPATION IN GOVERNMENT PROGRAMS SUCH AS MEDICARE AND MEDICAID. AVERA MCKENNAN OWNS OR LEASES FIVE RURAL CRITICAL ACCESS HOSPITALS WHICH PROVIDE A BROAD VARIETY OF INPATIENT AND OUTPATIENT SERVICES AND 24-HOUR EMERGENCY ROOMS. TELEMEDICINE CONSULTS ARE ALSO OFFERED AT RURAL LOCATIONS IN A NUMBER OF MEDICAL SPECIALTIES. BOTH IN THE TERTIARY MEDICAL CENTER AND IN RURAL FACILITIES, EICU TECHNOLOGY OFFERS CONSTANT, AROUND-THE-CLOCK MONITORING AND INTERVENTIONS IN THE INTENSIVE CARE UNITS FROM A REMOTE CARE TEAM IN ADDITION TO THE CARE THEY RECEIVE FROM THEIR BEDSIDE TEAM. THE SERVICE IS PROVIDED ON A CONTRACT BASIS TO HOSPITALS SO THERE IS NO ADDITIONAL CHARGE TO THE PATIENT. THIS ENABLES CRITICALLY ILL PATIENTS TO RECEIVE THE HIGHEST QUALITY CARE, CLOSE TO HOME, WITH THE SUPPORT OF FAMILY AND FRIENDS.AVERA MCKENNAN HAS MEDICAL SCHOOL RESIDENTS IN TRAINING AT AVERA MCKENNAN IN INTERNAL MEDICINE, FAMILY PRACTICE, PSYCHIATRY AND TRANSITIONAL RESIDENCY PROGRAMS OFFERED IN PARTNERSHIP WITH THE UNIVERSITY OF SOUTH DAKOTA SANFORD SCHOOL OF MEDICINE. OVER 800 STUDENTS IN NURSING, PHARMACY, PHYSICIAN ASSISTANT PROGRAMS, RADIOLOGY AND RESPIRATORY THERAPY ALSO COMPLETE ROTATIONS AT AVERA MCKENNAN. AVERA MCKENNAN HAS MANY JOINT AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION FOR BOTH CLINICAL AND EDUCATIONAL PROGRAMMING. IN NON-CLINICAL AREAS, AVERA MCKENNAN OFFERS UNPAID INTERNSHIPS IN THE AREAS OF MARKETING, HUMAN RESOURCES, FOUNDATION, NETWORK OPERATIONS AND PROCESS EXCELLENCE, WORKING WITH APPROXIMATELY 22 INSTITUTIONS OF HIGHER EDUCATION.AS A RESEARCH INSTITUTION, AVERA MCKENNAN DRAWS PHYSICIANS WHO ARE COMMITTED TO SEEKING NEW TREATMENTS AND PREVENTIVE MEASURES. THE AVERA RESEARCH INSTITUTE IS CURRENTLY CONDUCTING PRE-CLINICAL RESEARCH TO ADD TO THE BODY OF MEDICAL KNOWLEDGE IN THE AREAS OF KIDNEY DISEASE LINKED TO OBESITY, KIDNEY FILTRATION AND GROWTH, AND NEUROSCIENCE RESEARCH IN REGARD TO STRESS AND ADDICTION. THE AVERA RESEARCH INSTITUTE ALSO CONTINUES ONGOING APPLIED RESEARCH IN THE AREA OF DEVELOPING A NOVEL PHOTOCHEMICAL TISSUE BONDING TECHNOLOGY THAT HAS SEVERAL CLINICAL APPLICATIONS. THROUGH ITS GENETICS LAB, AVERA MCKENNAN IS STUDYING GENETIC PRECURSORS OF MENTAL HEALTH CONDITIONS, WHICH HAS WIDE APPLICATION IN BOTH THE CLINICAL AND RESEARCH ARENAS. THE AVERA RESEARCH INSTITUTE IN 2011 PARTICIPATED IN 90 CLINICAL TRIALS, INVOLVING CANCER, ALZHEIMER'S DISEASE, HYPERCHOLESTEROLEMIA, RHEUMATOID ARTHRITIS, AND MORE.AVERA MCKENNAN IS A REGIONAL LEADER IN OFFERING EDUCATIONAL PROGRAMS FOR A VARIETY OF LEARNERS, LEADERS AND EMPLOYEES. UTILIZING ADVANCED TECHNOLOGY, MANY OF THESE PROGRAMS ARE PROVIDED ELECTRONICALLY THROUGHOUT THE TRI-STATE AREA. EDUCATIONAL SESSIONS ARE OFFERED TO MEDICAL STAFF, EMPLOYEES, HEALTH CARE PROFESSIONALS, STUDENTS AT ALL LEVELS AND THE GENERAL PUBLIC. UTILIZING AVERA MCKENNAN'S EDUCATION CENTER, A BROAD CROSS-SECTION OF CLASSES INVOLVING DIVERSE AUDIENCES ARE PROVIDED AS A COMMUNITY SERVICE EACH YEAR.TO BE WELL: FREE EDUCATION EVENTS WERE HELD ON TOPICS INCLUDING ORTHOPEDICS, CANCER, DIABETES, WEIGHT LOSS/HEALTHY EATING, MULTIPLE SCLEROSIS, ANXIETY AND ACUPUNCTURE. FORUMS: THE AVERA BEHAVIORAL HEALTH CENTER OFFERS FREE FRIDAY FORUMS, IN WHICH SCHOOL COUNSELORS AND THERAPISTS ARE INVITED TO PRESENTATIONS ON CHILDREN'S MENTAL HEALTH TOPICS SUCH AS CONFLICT CYCLES, REACTIVE ATTACHMENT DISORDER, DEPRESSION AND BIPOLAR DISORDER IN CHILDREN, AND TEEN SUBSTANCE USE, ABUSE AND ADDICTION. THESE SESSIONS, HELD NINE TIMES EACH YEAR, ARE ATTENDED IN PERSON BY APPROXIMATELY 85 PEOPLE. THROUGHOUT 2011, VIDEOS OF THESE PRESENTATIONS WERE VIEWED 583 TIMES ONLINE.WOMEN'S & CHILDREN'S SERVICES: AVERA MCKENNAN'S WOMEN'S & CHILDREN'S SERVICES OFFER A NUMBER OF PARENTING AND COMMUNITY EDUCATION OPPORTUNITIES, FOR FREE OR AT A MINIMAL COST. IN FISCAL YEAR 2011, 179 CHILDBIRTH EDUCATION CLASSES WERE HELD WITH 975 ATTENDEES. A TOTAL OF 39 PARENT AND FAMILY EDUCATION CLASSES WERE HELD WITH 693 ATTENDEES. A TOTAL OF 211 CAR SEATS WERE ISSUED THROUGH PROJECT 8, SOUTH DAKOTA GOVERNOR'S CHILD SEAT PROGRAM WITH TRAINING ON THEIR CORRECT USE. FREE BURN EDUCATION WAS PROVIDED TO 2,869 STUDENTS DURING PRESENTATIONS IN SCHOOLS.DAYCARE TRAINING: FREE OF CHARGE, AVERA MCKENNAN OFFERS FOUR IN-SERVICE TRAINING SESSIONS PER MONTH TO DAYCARE PROVIDERS THROUGH THE YWCA, WITH A TOTAL OF 38 SCHEDULED ANNUALLY, AND ADDITIONAL SESSIONS FOR REQUESTED TOPICS. AVERA MCKENNAN OPERATES A 24-HOUR MEDICAL CALL CENTER, THROUGH WHICH PATIENTS HAVE ACCESS TO THE ASK-A-NURSE PROGRAM. PATIENTS CAN CALL A TOLL-FREE NUMBER AND TALK PERSONALLY WITH A REGISTERED NURSE TO ASK HEALTH QUESTIONS OR RECEIVE GENERAL HEALTH INFORMATION. IN 2011, THE MEDICAL CALL CENTER HANDLED 62,472 CALLS. AVERA MCKENNAN'S WEB SITE ALSO PROVIDES AN EXTENSIVE HEALTH LIBRARY THAT CONSUMERS CAN ACCESS FREE OF CHARGE.IN 1992, AVERA MCKENNAN ESTABLISHED A HEALTH CARE CLINIC TO PROVIDE FREE CARE FOR PEOPLE WHO ARE UNINSURED OR UNDERINSURED IN THE COMMUNITY. THE CLINIC IS MANAGED BY A REGISTERED NURSE AND STAFFED BY REGISTERED NURSES, TWO MIDLEVEL PROVIDERS, MEDICAL RESIDENTS AND VOLUNTEER HEALTH CARE PROVIDERS. THE GOAL OF THE CLINIC IS TO PREVENT OR TREAT PATIENTS' MEDICAL CONDITIONS BEFORE THEY BECOME CATASTROPHIC. THE CLINIC AVERAGES 733 VISITS PER MONTH, PROVIDING PREVENTATIVE CARE, DIAGNOSIS AND TREATMENT OF ILLNESSES AND INJURIES, MEDICATION ASSISTANCE AND ASSISTANCE IN OBTAINING SPECIALIST CARE FOR PATIENTS WITH COMPLEX CASES. THE CLINIC ALSO SERVES TO TRAIN PHYSICIANS, NURSES AND OTHER HEALTH CARE STUDENTS. IT PROVIDES A FREE EVENING CLINIC ONE EVENING PER MONTH, STAFFED BY MEDICAL STUDENTS UNDER SUPERVISION OF PHYSICIANS. AVERA MCKENNAN IS THE ONLY HEALTH CARE ORGANIZATION TO PROVIDE FREE SERVICES SUCH AS THIS IN THE STATE OF SOUTH DAKOTA. THE CLINIC HAD 8,794 VISITS IN FISCAL YEAR 2011.AVERA MCKENNAN OFFERS APPROXIMATELY 10 FREE SUPPORT GROUPS. THEY RANGE IN TOPIC FROM CANCER TO LIVER DISEASE, DIABETES, BONE MARROW TRANSPLANT, STROKE AND GRIEF AND LOSS. THE ORGANIZATION PROVIDES FREE MEETING SPACE AS WELL AS SPEAKERS AND LEADERS.AVERA MCKENNAN EMPLOYS TWO FULL-TIME SPANISH INTERPRETERS IN-HOUSE, AND THEIR SERVICES ARE OFFERED TO PATIENTS FREE OF CHARGE. IN ADDITION, IN COOPERATION WITH EXTERNAL AGENCIES, AVERA MCKENNAN IS ABLE TO HANDLE 99 DIFFERENT LANGUAGES AND DIALECTS. AVERA MCKENNAN CONTRACTS FOR AN INBOUND CALL-IN SERVICE FOR SPANISH SPEAKING INDIVIDUALS. THIS IS AVAILABLE AT THE MAIN HOSPITAL SWITCHBOARD, AS WELL AS AVERA MCGREEVY CLINIC AND AVERA WOMEN'S CLINIC. ALL THE ABOVE SERVICES ARE PROVIDED AT NO COST TO THE PATIENT.BECAUSE EARLY AND REGULAR PRENATAL CARE IS IMPORTANT TO PREVENT PREMATURE BIRTH, AVERA MCKENNAN COLLABORATES IN A COMMUNITY EFFORT TO PROVIDE OBSTETRICS CARE FOR WOMEN WHO DO NOT QUALIFY FOR MEDICAID, BUT CANNOT AFFORD HEALTH INSURANCE. THE PROGRAM OFFERS PRENATAL CARE, AND HOSPITAL LABOR AND DELIVERY SERVES FOR A LOW FEE OF $950. WOMEN RECEIVE CARE WHETHER THEY CAN COVER ANY OR ALL OF THE FEE. CARE IS PROVIDED PRIMARILY BY FIRST-YEAR FAMILY PRACTICE RESIDENTS, SUPERVISED BY EXPERIENCED PHYSICIANS. THROUGH THIS PROGRAM IN 2011, AVERA MCKENNAN ASSISTED WITH 93 BIRTHS AND PROVIDED 664 PRENATAL AND POST-PARTUM VISITS.
		PART VI, LINE 7:
		AVERA FAMILY WELLNESS PROGRAM COMBINES POSITIVE ACTIVITIES LIKE VIOLIN LESSONS WITH FAMILY COACHING AT NO CHARGE FOR CHILDREN IN EARLY CHILDHOOD PROGRAMS IN THE SIOUX FALLS SCHOOL DISTRICT. THE GOAL IS TO PREVENT OR LESSEN THE EFFECTS OF BEHAVIORAL HEALTH CONDITIONS ON CHILDREN AND FAMILIES BY FOSTERING A POSITIVE ENVIRONMENT. APPROXIMATELY 200 STUDENTS ARE ENROLLED.THE WALSH FAMILY VILLAGE HOSPITALITY HOUSE COMPLEX ADJACENT TO THE AVERA MCKENNAN CAMPUS PROVIDES A HOME AWAY FROM HOME FOR PATIENTS AND THEIR FAMILIES WHO COME FOR CARE AT AVERA MCKENNAN FROM OUTSIDE OF SIOUX FALLS. THE PROJECT WAS FUNDED BY DONATIONS AND IS OPERATED BY AVERA MCKENNAN. ELEVEN GUEST ROOMS ARE AVAILABLE. AVERA MCKENNAN ALSO DONATES USE OF A BUILDING IN THE COMPLEX FOR A RONALD MCDONALD HOUSE FOR FAMILIES OF PEDIATRIC PATIENTS. IF THEY CAN AFFORD IT, GUESTS ARE CHARGED A LOW FEE OF $46.50 PER NIGHT. IF THEY CANNOT AFFORD THE EXPENSE, THE COST OF THE ROOM IS WAIVED. EMPLOYEES REGULARLY DONATE NON-PERISHABLE FOOD ITEMS TO STOCK A FOOD PANTRY FOR GUESTS. IN 2011, THE WALSH FAMILY VILLAGE SERVED 7,063 GUESTS, STAYING IN 3,593 NIGHTLY ROOMS. IN 2011, AVERA MCKENNAN DELIVERED THREE TRUCKLOADS OF EXCESS MEDICAL EQUIPMENT, FURNITURE, CLOTHING AND SUPPLIES TO INDIAN RESERVATIONS IN SOUTH DAKOTA. WITH TRUCK RENTAL AND FUEL EXPENSE, EACH TRIP COST APPROXIMATELY $1,000 IN ADDITION TO THE DONATIONS.AVERA MCKENNAN REACHES OUT TO PEOPLE AND COMMUNITIES THROUGHOUT EASTERN SOUTH DAKOTA, SOUTHWESTERN MINNESOTA AND NORTHWEST IOWA THROUGH HOME TOWN CONNECTIONS. PROVIDING A CRITICAL FEEDBACK LINK TO LOCAL REFERRING DOCTORS, THIS PROGRAM COMPLETES THE COMMUNICATIONS LINKS NECESSARY TO KEEP LOCAL HEALTH CARE PROVIDERS CURRENT ON THE TREATMENT OF THEIR PATIENTS AT AVERA MCKENNAN.
	PART VI, LINE 6	THE COMMUNITIES IN WHICH THE AVERA SYSTEM OPERATES ALL HAVE UNIQUE HEALTH AND COMMUNITY BENEFIT NEEDS AND IN KEEPING WITH THE CATHOLIC HEALTHCARE ASSOCIATION GUIDELINES EACH HOSPITAL STRIVES TO MEET ITS COMMUNITY'S IDENTIFIED NEEDS. THE AVERA CENTRAL OFFICE ADVOCATES FOR ALL ON COMMUNITY BENEFIT-RELATED MATTERS OF STATE, REGIONAL, AND NATIONAL IMPORTANCE.

Schedule H (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

Schedule I
(Form 990)

Department of the Treasury
Internal Revenue Service

Grants and Other Assistance to Organizations,
Governments and Individuals in the United States

Complete if the organization answered "Yes," to Form 990, Part IV, line 21 or 22.
lBullet

Attach to Form 990

OMB No. 1545-0047

2010

Open to Public
Inspection

Name of the organization
AVERA MCKENNAN

Employer identification number
46-0224743

Part I

General Information on Grants and Assistance

Does the organization maintain records to substantiate the amount of the grants or assistance, the grantees' eligibility for the grants or assistance, and
the selection criteria used to award the grants or assistance? ....................................

Yes No

Describe in Part IV the organization's procedures for monitoring the use of grant funds in the United States.

Part II

Grants and Other Assistance to Governments and Organizations in the United States. Complete if the organization answered "Yes" to
Form 990, Part IV, line 21 for any recipient that received more than $5,000. Check this box if no one recipient received more than $5,000. Use
Part IV and Schedule I-1 (Form 990) if additional space is needed ......................... lBullet

(a) Name and address of organization or government	(b) EIN	(c) IRC Code section if applicable	(d) Amount of cash grant	(e) Amount of non-cash assistance	(f) Method of valuation (book, FMV, appraisal, other)	(g) Description of non-cash assistance	(h) Purpose of grant or assistance
(1) SIOUX FALLS CATHOLIC SCHOOLS3100 W 41ST STREET SIOUX FALLS,SD57105	51-0145184	501(C)(3)	600,000				DONATION
(2) RONALD MCDONALD HOUSE2001 S NORTON SIOUX FALLS,SD57105	46-0371152	501(C)(3)	45,000	147,252	FMV	RENTED SPACE	DONATION
(3) USD FOUNDATION1100 N DAKOTA VERMILLION,SD57069	46-6018891	501(C)(3)	246,000				DONATION
(4) FORWARD SIOUX FALLSPO BOX 907 SIOUX FALLS,SD57101	46-0396647	501(C)(6)	450,265				DONATION
(5) SIOUX EMPIRE UNITED WAY1000 N WEST AVE 120 SIOUX FALLS,SD57104	46-0233701	501(C)(3)	25,215				DONATION
(6) SOUTH DAKOTA STATE UNIVERSITY FOUNDATIONPO BOX 2218 BROOKINGS,SD57007	46-0273801	501(C)(3)	1,050,892				DONATION
(7) CATHOLIC DIOCESE523 N DULUTH AVE SIOUX FALLS,SD57104	46-6000424	501(C)(3)	125,196				DONATION
(8) YWCA300 W 11TH STREET SIOUX FALLS,SD57104	46-0234998	501(C)(3)	35,000				DONATION
(9) FACE IT SIOUX FALLSPO BOX 5127 SIOUX FALLS,SD57117	94-3472044	501(C)(3)	180,830				DONATION
(10) RIVER OF HOPEPO BOX 1597 SIOUX FALLS,SD57101	26-3130719	501(C)(3)	110,000				DONATION
(11) WASHINGTON PAVILIONPO BOX 984 SIOUX FALLS,SD57101	46-0435791	501(C)(3)	44,548				DONATION
(12) HARRISBURG ACTIVITIES FOUNDATIONPO BOX 479 HARRISBURG,SD57032	06-1749081	501(C)(3)	20,000				DONATION
(13) AMERICAN CANCER SOCIETY4904 S TECHNOPOLIS DRIVE SIOUX FALLS,SD57106	13-1788491	501(C)(3)	26,290				DONATION
(14) TRANSITIONAL LIVING CORPORATION2601 S MINNESOTA AVE STE 105-378 SIOUX FALLS,SD57105	20-0293050	501(C)(3)	30,000				DONATION
(15) SOUTH DAKOTA SYMPHONY315 N MAIN AVE SUITE 204 SIOUX FALLS,SD571046078	46-6017026	501(C)(3)	77,000				DONATION
(16) NATIONAL KIDNEY FOUNDATION1100 E 21ST STREET AVERA DOCTORS PLAZA 2 STE 210 SIOUX FALLS,SD57105	46-0448030	501(C)(3)	9,000				DONATION
(17) SIOUX FALLS JAZZ & BLUES SOCIETY123 S MAIN AVE SUITE 204 SIOUX FALLS,SD571046430	46-0418356	501(C)(3)	10,000				DONATION
(18) DAKOTA STATE UNIVERSITY800 N WASHINGTON AVENUE MADISON,SD570421799	23-7299995	501(C)(3)	13,659				DONATION
(19) JUNIOR ACHIEVEMENT OF SOUTH DAKOTA1000 N WEST AVE SUITE 110 SIOUX FALLS,SD57104	46-0306352	501(C)(3)	11,800				DONATION
(20) WORTHINGTON YMCA211 11TH ST WORTHINGTON,MN56187	41-6007596	501(C)(3)	9,600				DONATION
(21) SOUTH DAKOTA HUMANITIES COUNCIL1215 TRAIL RIDGE RD BROOKINGS,SD57006	46-0316222	501(C)(3)	9,000				DONATION
(22) NAMI OF SOUTH DAKOTAPO BOX 88808 SIOUX FALLS,SD57109	36-3593027	501(C)(3)	7,500				DONATION
(23) SOUTH DAKOTA ACHIEVE4100 S WESTERN AVE SIOUX FALLS,SD57105	23-7072116	501(C)(3)	7,500				DONATION
(24) PRESENTATION SISTERS1500 N 2ND ST ABERDEEN,SD57401	46-0253283	501(C)(3)	7,500				DONATION
(25) HELPLINE CENTER1000 N WEST AVE STE 310 SIOUX FALLS,SD57104	23-7424387	501(C)(3)	6,400				DONATION
(26) FURNITURE MISSION OF SOUTH DAKOTA209 N NESMITH SIOUX FALLS,SD57104	81-0584500	501(C)(3)	6,000				DONATION
(27) SALES & MARKETING EXECUTIVESPO BOX 90310 SIOUX FALLS,SD57109	46-6012934	501(C)(6)	5,650				DONATION
(28) FAMILY VISITATION CENTER311 E 14TH ST SIOUX FALLS,SD57104	26-3654937	501(C)(3)	6,000				DONATION
(29) SOUTH DAKOTA CHORALE300 S MINNESOTA AVE SIOUX FALLS,SD57104	46-0225435	501(C)(3)	10,000				DONATION
(30) AMYOTTOPHIC LATERAL SCLEROSIS ASSOCIATION MINNESOTA CHAPTER333 WASHINGTON AVE N STE 105 MINNEAPOLIS,MN554011352	41-1756085	501(C)(3)	50,000				DONATION
(31) ZOOLOGICAL SOCIETY OF SIOUX FALLS GREAT PLAINS ZOO & MUSEUM805 S KIWANIS AVE SIOUX FALLS,SD57104	46-6015015	501(C)(3)	30,000				DONATION
(32) CHILDRENS HOME FOUNDATIONPO BOX 1749 SIOUX FALLS,SD571011749	46-0366277	501(C)(3)	12,000				DONATION
(33) MCCROSSAN BOYS RANCH47135 260TH STREET SIOUX FALLS,SD57107	46-0311913	501(C)(3)	10,834				DONATION
(34) SOUTH DAKOTA ASSOCIATION FOR CAREER AND TECHINICAL EDUCATION INC230 11TH ST N WATERTOWN,SD572012869	46-0427245	501(C)(3)	10,000				DONATION
(35) SOUTH DAKOTA LIONS EYE BANK4501 W 61ST ST N SIOUX FALLS,SD571076411	46-0413527	501(C)(3)	10,000				DONATION
(36) VOLUNTEERS OF AMERICA DAKOTAS1401 W 51ST SIOUX FALLS,SD57105	23-7353508	501(C)(3)	10,000				DONATION
(37) BOYS AND GIRLS CLUB OF THE SIOUX EMPIRE824 E 14TH ST SIOUX FALLS,SD571045221	46-0399482	501(C)(3)	9,000				DONATION
(38) SIOUX EMPIRE BASEBALL ASSOCIATION1601 W 44TH PL SUITE 3 SIOUX FALLS,SD57105	41-1903475	501(C)(3)	8,667				DONATION
(39) SIOUX FALLS STATE THEATRE COMPANY101 N MAIN AVE SIOUX FALLS,SD58101	20-3473359	501(C)(3)	44,983				DONATION

Enter total number of section 501(c)(3) and government organizations ......................... Bullet Image

Enter total number of other organizations ................................ . Bullet Image

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 50055P

Schedule I (Form 990) 2010

Page 2

Part III

Grants and Other Assistance to Individuals in the United States. Complete if the organization answered "Yes" to Form 990, Part IV, line 22.
Use Schedule I-1 (Form 990) if additional space is needed.

(a)Type of grant or assistance	(b)Number of recipients	(c)Amount of cash grant
(1) SCHOLARSHIPS	39	92,500

Part IV

Supplemental Information. Complete this part to provide the information required in Part I, line 2, and any other additional information.

Identifier	Return Reference	Explanation
PROCEDURE FOR MONITORING GRANTS IN THE U.S.:	PART I, LINE 2:	SCHEDULE I, PART I, LINE 2: THE GOVERNING BOARD AND MANAGEMENT DEVELOP PROGRAMS WHICH ENHANCE THE CHARITABLE MISSION OF THE ORGANIZATION. DISBURSEMENT FOR GRANTS OR ASSISTANCE FOR THESE PROGRAMS ARE MADE IN ACCORDANCE WITH PRESCRIBED PROCEDURES AND ARE SUBJECT TO CONDITIONS ESTABLISHED BY THE ORGANIZATION'S GOVERNING BOARD AND MANAGEMENT, WHICH ARE DESIGNED TO ENSURE THAT INDIVIDUALS AND ORGANIZATIONS RECEIVING GRANTS OR ASSISTANCE ARE ADEQUATELY INVESTIGATED TO ENSURE THAT THEY ARE QUALIFIED RECIPIENTS.

Schedule I (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

Schedule J
(Form 990)

Department of the Treasury
Internal Revenue Service

Compensation Information

For certain Officers, Directors, Trustees, Key Employees, and Highest
Compensated Employees
SchJMediumBullet

Complete if the organization answered "Yes" to Form 990,
Part IV, question 23.
SchJMediumBullet

Attach to Form 990. SchJMediumBullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

AVERA MCKENNAN

Employer identification number

46-0224743

Part I

Questions Regarding Compensation

Yes

Check the appropiate box(es) if the organization provided any of the following to or for a person listed in Form
990, Part VII, Section A, line 1a. Complete Part III to provide any relevant information regarding these items.

First-class or charter travel Housing allowance or residence for personal use

Travel for companions Payments for business use of personal residence

Tax idemnification and gross-up payments Health or social club dues or initiation fees

Discretionary spending account Personal services (e.g., maid, chauffeur, chef)

If any of the boxes in line 1a are checked, did the organization follow a written policy regarding payment or reimbursement orprovision of all the expenses described above? If "No," complete Part III to explain....

Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all
officers, directors, trustees, and the CEO/Executive Director, regarding the items checked in line 1a? ....

Indicate which, if any, of the following the organization uses to establish the compensation of the
organization's CEO/Executive Director. Check all that apply.

Compensation committee Written employment contract

Independent compensation consultant Compensation survey or study

Form 990 of other organizations Approval by the board or compensation committee

During the year, did any person listed in Form 990, Part VII, Section A, line 1a with respect to the filing organization or a related organization:

Receive a severance payment or change-of-control payment? ...............

Participate in, or receive payment from, a supplemental nonqualified retirement plan? ........

Participate in, or receive payment from, an equity-based compensation arrangement? ........

If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III.

Only 501(c)(3) and 501(c)(4) organizations only must complete lines 5-9.

For persons listed in form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the revenues of:

The organization? ...........................

Any related organization? .........................

If "Yes," to line 5a or 5b, describe in Part III.

For persons listed in form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the net earnings of:

The organization? ...........................

Any related organization? .........................

If "Yes," to line 6a or 6b, describe in Part III.

For persons listed in Form 990, Part VII, Section A, line 1a, did the organization provide any non-fixed
payments not described in lines 5 and 6? If "Yes," describe in Part III ............

Were any amounts reported in Form 990, Part VII, paid or accured pursuant to a contract that was
subject to the initial contract exception described in Regs. section 53.4958-4(a)(3)? If "Yes," describe
in Part III .............................

If "Yes" to line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section 53.4958-6(c)? .........................

For Privacy Act and Paperwork Reduction Act Notice, see the Intructions for Form 990

Cat. No. 50053T

Schedule J (Form 990) 2010

Page 2

Part II

Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use Schedule J-1 if additional space needed.

For each individual whose compensation must be reported in Schedule J, report compensation from the organization on row (i) and from related organizations, described in the
instructions on row (ii). Do not list any individuals that are not listed on Form 990, Part VII.

Note. The sum of columns (B)(i)-(iii) must equal the applicable column (D) or column (E) amounts on Form 990, Part VII, line 1a.

(A) Name		(B) Breakdown of W-2 and/or 1099-MISC compensation			(C) Retirement and other deferred compensation	(D) Nontaxable benefits	(E) Total of columns (B)(i)-(D)	(F) Compensation reported in prior Form 990 or Form 990-EZ
(A) Name		(i) Base compensation	(ii) Bonus & incentive compensation	(iii) Other reportable compensation	(C) Retirement and other deferred compensation	(D) Nontaxable benefits	(E) Total of columns (B)(i)-(D)
(1) FREDRICK W SLUNECKA	(i) (ii)	0 927,393	0 0	0 14,407	0 12,250	0 16,488	0 970,538	0 0
(2) DAVE KAPASKA DO	(i) (ii)	375,995 79,013	0 0	6,918 1,111	4,900 2,042	13,680 2,737	401,493 84,903	0 0
(3) KIM PEDERSON MD	(i) (ii)	304,993 0	0 0	4,449 0	18,498 0	14,249 0	342,189 0	0 0
(4) JULIE N NORTON	(i) (ii)	347,089 0	0 0	930 0	18,498 0	20,265 0	386,782 0	0 0
(5) JUDY BLAUWET	(i) (ii)	319,089 0	0 0	5,772 0	13,598 0	17,753 0	356,212 0	0 0
(6) DAVID FLICEK	(i) (ii)	352,702 84,267	0 0	1,648 281	13,598 3,062	13,540 4,667	381,488 92,277	0 0
(7) STEVE PETERSEN	(i) (ii)	171,595 0	0 0	1,531 0	9,768 0	20,105 0	202,999 0	0 0
(8) PATRICIA JAGOE	(i) (ii)	172,707 0	0 0	814 0	13,071 0	16,105 0	202,697 0	0 0
(9) CURT HOHMAN	(i) (ii)	265,434 0	0 0	881 0	18,498 0	6,095 0	290,908 0	0 0
(10) MICHAEL PUUMALA MD	(i) (ii)	1,061,335 0	0 0	5,062 0	18,498 0	16,105 0	1,101,000 0	0 0
(11) HAMID ABBASI MD	(i) (ii)	1,257,064 0	0 0	2,990 0	18,498 0	18,505 0	1,297,057 0	0 0
(12) BRIAN KNUTSON MD	(i) (ii)	991,448 0	0 0	2,945 0	18,498 0	19,105 0	1,031,996 0	0 0
(13) DANIEL TYNAN MD	(i) (ii)	1,297,453 0	0 0	7,080 0	18,498 0	17,222 0	1,340,253 0	0 0
(14) STEVEN CONDRON MD	(i) (ii)	1,166,624 0	0 0	2,350 0	18,498 0	21,105 0	1,208,577 0	0 0

Schedule J (Form 990) 2010

Page 3

Part III

Supplemental Information

Complete this part to provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 4c, 5a, 5b, 6a, 6b, 7, and 8. Also complete this part for any additional information.

Identifier	Return Reference	Explanation
SUPPLEMENTAL INFORMATION	PART III	SCHEDULE J, PART I LINE 3: THE PRESIDENT & CEO'S COMPENSATION IS PAID BY A RELATED ORGANIZATION, AVERA HEALTH. AVERA MCKENNAN RELIED ON THE RELATED ORGANIZATION FOR DETERMINING THE COMPENSATION FOR THE PRESIDENT & CEO USING THE METHODS DESCRIBED IN PART I, LINE 3.

Schedule J (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

Schedule L
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Transactions with Interested Persons

Complete if the organization answered
"Yes" on Form 990, Part IV, lines 25a, 25b, 26, 27, 28a, 28b, or 28c,
or Form 990-EZ, Part V lines 38a or 40b.
MediumBullet

Attach to Form 990 or Form 990-EZ. MediumBullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

AVERA MCKENNAN

Employer identification number

46-0224743

Part I

Excess Benefit Transactions (section 501(c)(3) and section 501 (c)(4) organizations only).
Complete if the organization answered "Yes" on Form 990, Part IV, line 25a or 25b, or Form 990-EZ, Part V, line 40b.

1(a) Name of disqualified person	(b) Description of transaction	(c) Corrected?
1(a) Name of disqualified person	(b) Description of transaction	Yes	No

Enter the amount of tax imposed on the organization managers or disqualified persons during the year under section 4958. ......................... Bullet Image

Enter the amount of tax, if any, on line 2, above, reimbursed by the organization ....... Bullet Image

Part II

Loans to and/or From Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 26, or Form 990-EZ, Part V, line 38a.

(a) Name of interested person and purpose	(b) Loan to or from the organization?		(c)Original principal amount	(d)Balance due	(e) In default?		(f) Approved by board or committee?		(g)Written agreement?
(a) Name of interested person and purpose	To	From	(c)Original principal amount	(d)Balance due	Yes	No	Yes	No	Yes	No
(1) MICHAEL PUUMALA PHYSICIAN RECRUITMENT		X	100,000	6,250		No	Yes		Yes
(2) DANIEL TYNAN PHYSICIAN RECRUITMENT		X	100,000	2,083		No	Yes		Yes
(3) HAMID ABBASI PHYSICIAN RECRUITMENT		X	100,000	37,500		No	Yes		Yes
(4) STEVEN CONDRON PHYSICIAN RECRUITMENT		X	200,000	75,000		No	Yes		Yes


Total ............... $				120,833

Part III

Grants or Assistance Benefitting Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 27.

(a) Name of interested person	(b)Relationship between interested person and the organization	(c)Amount of grant or type of assistance

For Privacy Act and Paperwork Reduction Act Notice, see the
Instructions for Form 990 or 990-EZ.

Cat. No. 50056A

Schedule L (Form 990 or 990-EZ) 2010

Page 2

Part IV

Business Transactions Involving Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 28a, 28b, or 28c.

(a) Name of interested person	(b) Relationship between interested person and the organization	(c) Amount of transaction	(d) Description of transaction	(e) Sharing of organization's revenues?
(a) Name of interested person		(c) Amount of transaction	(d) Description of transaction	Yes	No
(1) MICHAEL BENDER	BOARD MEMBER	208,716	PROPERTY LEASE		No
(2) SURGICAL INSTITUTE OF SD	ENTITY CONTROLLED BY TWO BOARD MEMBERS	968,635	TRAUMA CONTRACT AND ACUTE SURGICAL SERVICES CONTRACT		No
(3) VICTORIA PETERSEN	FAMILY OF KEY EMPLOYEE	34,299	EMPLOYEE COMPENSATION		No
(4) AGNES KLEIN	FAMILY OF BOARD MEMBER	31,420	EMPLOYEE COMPENSATION		No
(5) ALEXANDER PETERSEN	FAMILY OF KEY EMPLOYEE	26,570	EMPLOYEE COMPENSATION		No
(6) JAMES HARTUNG	FAMILY OF KEY EMPLOYEE	77,696	EMPLOYEE COMPENSATION		No
(7) SIOUX FALLS CONSTRUCTION CO	BOARD MEMBER IS AN OFFICER OF THE ENTITY	13,156,813	CONSTRUCTION		No
(8) STEVEN REICHELT	FAMILY OF BOARD MEMBER	22,376	EMPLOYEE COMPENSATION		No
(9) NEUROLOGY ASSOCIATES	BOARD MEMBER IS A GREATER THAN 5% PARTNER IN THE ENTITY	492,890	ER CALL COVERAGE		No
(10) US BANK	BOARD MEMBER IS AN OFFICER OF THE ENTITY	797,875	BANK FEES AND INTEREST		No
(11) NEUROLOGY ASSOCIATES	BOARD MEMBER IS A GREATER THAN 5% PARTNER IN THE ENTITY	-769,296	RENTED SPACE AND RENTED EQUIPMENT FROM MCKENNAN		No

Part V

Supplemental Information

Complete this part to provide additional information for responses to questions on Schedule L (see instructions).

Identifier	Return Reference	Explanation

Schedule L (Form 990 or 990-EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE M
(Form 990)

Department of the Treasury

Internal Revenue Service

NonCash Contributions

Complete if the organization answered "Yes" on Form 990, Part IV, lines 29 or 30.
Right pointing arrow large image

Attach to Form 990.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

AVERA MCKENNAN

Employer identification number

46-0224743

Part I

Types of Property

	(a) Check if applicable	(b) Number of Contributions or items contributed	(c) Contribution amounts reported on Form 990, Part VIII, line 1g	(d) Method of determining contribution amounts
1 Art—Works of art ....
2 Art—Historical treasures .
3 Art—Fractional interests ..
4 Books and publications ..
5 Clothing and household goods .......
6 Cars and other vehicles ..
7 Boats and planes ....
8 Intellectual property ...
9 Securities—Publicly traded .
10 Securities—Closely held stock .
11 Securities—Partnership, LLC, or trust interests ....
12 Securities—Miscellaneous ..
13 Qualified conservation contribution—Historic structures .....
14 Qualified conservation contribution—Other ...
15 Real estate—Residential .
16 Real estate—Commercial ..
17 Real estate—Other ...	X	1	1,629,495	INDEPENDENT APPRAISAL
18 Collectibles .....
19 Food inventory ...
20 Drugs and medical supplies .
21 Taxidermy ......
22 Historical artifacts ....
23 Scientific specimens ..
24 Archeological artifacts ...
25 Other ( ECARE EQUIPMENT )	X	1	565,765	COST OF DONATED PROPERTY
26 Other ( )
27 Other ( )
28 Other ( )

Number of Forms 8283 received by the organization during the tax year for contributions
for which the organization completed Form 8283, Part IV, Donee Acknowledgement ...

Yes

30a

During the year, did the organization receive by contribution any property reported in Part I, lines 1-28 that it

must hold for at least three years from the date of the initial contribution, and which is not required to be used

for exempt purposes for the entire holding period? ..................

30a

If "Yes," describe the arrangement in Part II.

Does the organization have a gift acceptance policy that requires the review of any non-standard contributions?

32a

Does the organization hire or use third parties or related organizations to solicit, process, or sell non-cash

contributions? ............................

32a

If "Yes," describe in Part II.

If the organization did not report revenues in column (c) for a type of property for which column (a) is checked,

describe in Part II.

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 51227J

Schedule M (Form 990) 2010

Page 2

Part II

Supplemental Information. Complete this part to provide the information required by Part I, lines 30b,
32b, and 33. Also complete this part for any additional information.

Identifier	Return Reference	Explanation

Schedule M (Form 990) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE O
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Supplemental Information to Form 990 or 990-EZ

Complete to provide information for responses to specific questions on
Form 990 or to provide any additional information.
MediumBullet

Attach to Form 990 or 990-EZ.

OMB No. 1545-0047

2010

Open to Public
Inspection

Name of the organization

AVERA MCKENNAN

Employer identification number

46-0224743

Identifier	Return Reference	Explanation
NEW PROGRAM SERVICES	FORM 990, PART III, LINE 2	AVERA MCKENNAN OPENED THE PRAIRIE CENTER ON ITS MAIN CAMPUS IN THE FALL OF 2010. THIS FIVE-STORY, 260,000-SQUARE-FOOT FACILITY IS HOME TO THE AVERA CANCER INSTITUTE AND AVERA SURGERY CENTER. THE AVERA CANCER INSTITUTE IS A COMPREHENSIVE HEALING ENVIRONMENT, WITH VIRTUALLY ALL CANCER SERVICES PROVIDED UNDER ONE ROOF. PROGRAMS ARE DESIGNED TO SEE PATIENTS THROUGH THE ENTIRE REALM OF CANCER CARE FROM PREVENTION AND DIAGNOSIS TO VARIOUS TREATMENT MODES TO SURVIVORSHIP CARE. THE AVERA SURGERY CENTER IS AN OUTPATIENT SURGERY CENTER WITH EIGHT STATE-OF-THE-ART SURGICAL SUITES. THE DESIGN OFFERS THE CONVENIENCE AND AMENITIES OF A FREE-STANDING SURGICAL CENTER ALONG WITH THE BACKING PROVIDED BY A TERTIARY HOSPITAL. AVERA MCKENNAN EXPANDED OUR OWNED SPECIALTY CLINIC OFFERINGS TO INCLUDE ORTHOPEDICS AND OPHTHALMOLOGY.
PROGRAM SERVICE STATEMENT	FORM 990, PART III, LINE 4A	MAJOR SERVICE LINES INCLUDE ONCOLOGY, SURGERY, ORTHOPEDICS, OBSTETRICS, PEDIATRICS, NEONATOLOGY, EMERGENCY AND TRAUMA, CRITICAL CARE INCLUDING EICU, RADIOLOGY AND DIAGNOSTIC IMAGING, PSYCHIATRY, PULMONARY, NEUROLOGY, CARDIOLOGY, AND GASTROENTEROLOGY. TRANSPLANT SERVICES INCLUDE SOLID ORGAN (KIDNEY AND PANCREAS) AND BONE MARROW TRANSPLANT. THE FOLLOWING ARE SPECIFIC EXEMPT PURPOSE ACHIEVEMENTS FOR AVERA MCKENNAN HOSPITAL: CHARITY AND UNCOMPENSATED CARE: AVERA MCKENNAN PROVIDES NECESSARY MEDICAL SERVICES (DIAGNOSTIC AND TREATMENT) FOR WHOEVER COMES TO US FOR CARE, REGARDLESS OF THEIR ABILITY TO PAY. IN FISCAL YEAR 2011, SERVICES PROVIDED TO THOSE WHO ARE UNABLE TO PAY TOTALED $25,687,000, BASED ON CHARGES FOREGONE. ELIGIBILITY FOR DISCOUNTED OR FREE SERVICES UNDER THE CHARITY CARE POLICY IS BASED ON INCOME LEVELS. GENERALLY, INDIVIDUALS EARNING INCOME OF UP TO 400% OF THE FEDERAL POLICY INCOME GUIDELINES ARE ELIGIBLE FOR VARYING LEVELS OF DISCOUNTS, INCLUDING FULL DISCOUNTS FOR CERTAIN INCOME LEVELS. APPLICATION FOR COVERAGE UNDER THE PROGRAM MAY BE OBTAINED AT ANY AVERA MCKENNAN PATIENT REGISTRATION AREA OR BY CALLING AVERA MCKENNAN PATIENT FINANCIAL SERVICES. ACCESSIBILITY TO HEALTH CARE: AVERA MCKENNAN MAKES MEDICAL CARE ACCESSIBLE TO THE ENTIRE COMMUNITY IT SERVES. IN 2011 AVERA MCKENNAN HAD 20,647 HOSPITAL DISCHARGES, 107,713 PATIENT DAYS AND 205,850 OUTPATIENT VISITS. AVERA MCKENNAN IS A VERIFIED LEVEL II TRAUMA CENTER AND WAS THE FIRST SUCH CENTER IN THE STATE OF SOUTH DAKOTA. AVERA MCKENNAN'S EMERGENCY DEPARTMENT IS STAFFED 24 HOURS A DAY WITH BOARD-CERTIFIED EMERGENCY SPECIALISTS AND PROVIDES EMERGENCY CARE REGARDLESS OF ABILITY TO PAY. AVERA MCKENNAN HAD 24,719 EMERGENCY DEPARTMENT VISITS IN FY 2011. OPERATING BOTH FIXED WING AND HELICOPTER MEDICAL AIR TRANSPORTS, AVERA MCKENNAN'S FLIGHT TEAMS COVER A LARGE GEOGRAPHIC AREA PROVIDING STATE-OF-THE-ART AIR TRANSPORT SERVICES AND ACCESS TO CRITICAL CARE, WITH 1,371 FLIGHTS IN THE PAST YEAR. HEALTH CARE CLINIC: IN 1992, AVERA MCKENNAN ESTABLISHED A HEALTH CARE CLINIC TO PROVIDE FREE CARE FOR PEOPLE WHO ARE UNINSURED OR UNDERINSURED IN THE COMMUNITY. THE CLINIC IS MANAGED BY A REGISTERED NURSE AND STAFFED BY REGISTERED NURSES, TWO MIDLEVEL PROVIDERS, MEDICAL RESIDENTS, AND VOLUNTEER HEALTH CARE PROVIDERS. THE GOAL OF THE CLINIC IS TO PREVENT OR TREAT PATIENTS' MEDICAL CONDITIONS BEFORE THEY BECOME CATASTROPHIC. THE CLINIC AVERAGES 733 VISITS PER MONTH, PROVIDING PREVENTATIVE CARE, DIAGNOSIS AND TREATMENT OF ILLNESSES AND INJURIES, MEDICATION ASSISTANCE AND ASSISTANCE IN OBTAINING SPECIALIST CARE FOR PATIENTS WITH COMPLEX CASES. THE CLINIC ALSO SERVES TO TRAIN PHYSICIANS, NURSES AND OTHER HEALTH CARE STUDENTS. IT PROVIDES A FREE EVENING CLINIC ONE EVENING PER MONTH, STAFFED BY MEDICAL STUDENTS UNDER SUPERVISION OF PHYSICIANS. AVERA MCKENNAN IS THE ONLY HEALTH CARE ORGANIZATION TO PROVIDE FREE SERVICES SUCH AS THIS IN THE STATE OF SOUTH DAKOTA. THE CLINIC HAD 8,794 VISITS IN FISCAL YEAR 2011. RESIDENCY/HEALTH PROFESSIONS TRAINING AND INTERNSHIPS: IN 2011, AVERA MCKENNAN HAD 80 MEDICAL SCHOOL RESIDENTS IN TRAINING AT AVERA MCKENNAN IN INTERNAL MEDICINE, FAMILY PRACTICE, PSYCHIATRY, GERIATRICS AND TRANSITIONAL RESIDENCY PROGRAMS OFFERED IN PARTNERSHIP WITH THE UNIVERSITY OF SOUTH DAKOTA SCHOOL OF MEDICINE. OVER 800 STUDENTS IN NURSING, PHARMACY, PHYSICIAN ASSISTANT PROGRAMS, RADIOLOGY AND RESPIRATORY THERAPY ALSO COMPLETED ROTATIONS AT AVERA MCKENNAN. AVERA MCKENNAN HAS MANY JOINT AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION FOR BOTH CLINICAL AND EDUCATIONAL PROGRAMMING. IN NON-CLINICAL AREAS, AVERA MCKENNAN OFFERED 40 UNPAID INTERNSHIPS IN 2011 IN THE AREAS OF MARKETING, HUMAN RESOURCES, FOUNDATION, NETWORK OPERATIONS AND PROCESS EXCELLENCE, WORKING WITH APPROXIMATELY 22 INSTITUTIONS OF HIGHER EDUCATION. COMMUNITY EDUCATION: AVERA MCKENNAN IS A REGIONAL LEADER IN OFFERING EDUCATIONAL PROGRAMS FOR A VARIETY OF LEARNERS, LEADERS AND EMPLOYEES. UTILIZING ADVANCE TECHNOLOGY, MANY OF THESE PROGRAMS ARE PROVIDED ELECTRONICALLY THROUGHOUT THE TRI-STATE AREA. EDUCATIONAL SESSIONS ARE OFFERED TO MEDICAL STAFF, EMPLOYEES, HEALTH CARE PROFESSIONALS, STUDENTS AT ALL LEVELS AND THE GENERAL PUBLIC. UTILIZING AVERA MCKENNAN'S EDUCATION CENTER, A BROAD CROSS-SECTION OF CLASSES INVOLVING DIVERSE AUDIENCES ARE PROVIDED AS A COMMUNITY SERVICE EACH YEAR. -TO BE WELL FREE EDUCATION EVENTS WERE HELD ON TOPICS INCLUDING ORTHOPEDICS, CANCER, DIABETES, WEIGHT LOSS/HEALTHY EATING, MULTIPLE SCLEROSIS, ANXIETY AND ACUPUNCTURE. - FORUMS: THE AVERA BEHAVIORAL HEALTH CENTER OFFERS FREE FRIDAY FORUMS, IN WHICH SCHOOL COUNSELORS AND THERAPISTS ARE INVITED TO PRESENTATIONS ON CHILDREN'S MENTAL HEALTH TOPICS SUCH AS CONFLICT CYCLES, REACTIVE ATTACHMENT DISORDER, DEPRESSION AND BIPOLAR DISORDER IN CHILDREN, AND TEEN SUBSTANCE USE, ABUSE AND ADDICTION. THESE SESSIONS, HELD NINE TIMES EACH YEAR, ARE ATTENDED IN PERSON BY APPROXIMATELY 85. THROUGHOUT 2011, VIDEOS OF THESE PRESENTATIONS WERE VIEWED 583 TIMES ONLINE. - WOMEN'S & CHILDREN'S SERVICES: AVERA MCKENNAN'S WOMEN'S & CHILDREN'S SERVICES OFFER A NUMBER OF PARENTING AND COMMUNITY EDUCATION OPPORTUNITIES, FOR FREE OR AT A MINIMAL COST. IN FISCAL YEAR 2011, 179 CHILDBIRTH EDUCATION CLASSES WERE HELD WITH 975 ATTENDEES. A TOTAL OF 39 PARENT AND FAMILY EDUCATION CLASSES WERE HELD WITH 693 ATTENDEES. A TOTAL OF 211 CAR SEATS WERE ISSUED THROUGH PROJECT 8, SOUTH DAKOTA GOVERNOR'S CHILD SEAT PROGRAM WITH TRAINING ON THEIR CORRECT USE. FREE BURN EDUCATION WAS PROVIDED TO 2,869 STUDENTS DURING PRESENTATIONS IN SCHOOLS. -DAYCARE TRAINING: FREE OF CHARGE, AVERA MCKENNAN OFFERS FOUR IN-SERVICE TRAINING SESSIONS PER MONTH TO DAYCARE PROVIDERS THROUGH THE YWCA, WITH A TOTAL OF 38 SCHEDULED ANNUALLY, AND ADDITIONAL SESSIONS FOR REQUESTED TOPICS. SUPPORT GROUPS: AVERA MCKENNAN OFFERS APPROXIMATELY 10 FREE SUPPORT GROUPS. THEY RANGE IN TOPIC FROM CANCER TO LIVER DISEASE, DIABETES, BONE MARROW TRANSPLANT, STROKE AND GRIEF AND LOSS. THE ORGANIZATION PROVIDES FREE MEETING SPACE AS WELL AS SPEAKERS AND LEADERS. INFORMATION AND ASSISTANCE: AVERA MCKENNAN OPERATES A 24-HOUR MEDICAL CALL CENTER, THROUGH WHICH PATIENTS HAVE ACCESS TO THE ASK-A-NURSE PROGRAM. PATIENTS CAN CALL A TOLL-FREE NUMBER AND TALK PERSONALLY WITH A REGISTERED NURSE TO ASK HEALTH QUESTIONS OR RECEIVE GENERAL HEALTH INFORMATION. IN 2011, THE MEDICAL CALL CENTER HANDLED 62,472 CALLS. AVERA MCKENNAN'S WEB SITE ALSO PROVIDES AN EXTENSIVE HEALTH LIBRARY THAT CONSUMERS CAN ACCESS FREE OF CHARGE. INTERPRETER SERVICE: AVERA MCKENNAN EMPLOYS TWO FULL-TIME SPANISH INTERPRETERS IN-HOUSE, AND THEIR SERVICES ARE OFFERED TO PATIENTS FREE OF CHARGE. IN ADDITION, IN COOPERATION WITH EXTERNAL AGENCIES, AVERA MCKENNAN IS ABLE TO HANDLE 99 DIFFERENT LANGUAGES AND DIALECTS. AVERA MCKENNAN CONTRACTS FOR AN INBOUND CALL-IN SERVICE FOR SPANISH SPEAKING INDIVIDUALS. THIS IS AVAILABLE AT THE MAIN HOSPITAL SWITCHBOARD, AS WELL AS AVERA MCGREEVY CLINIC AND AVERA WOMEN'S CLINIC. ALL THE ABOVE SERVICES ARE PROVIDED AT NO COST TO THE PATIENT. PRENATAL AND DELIVERY CARE: BECAUSE EARLY AND REGULAR PRENATAL CARE IS IMPORTANT TO PREVENT PREMATURE BIRTH, AVERA MCKENNAN COLLABORATES IN A COMMUNITY EFFORT TO PROVIDE OBSTETRICS CARE FOR WOMEN WHO DO NO QUALIFY FOR MEDICAID, BUT CANNOT AFFORD HEALTH INSURANCE. THE PROGRAM OFFERS PRENATAL CARE, AND HOSPITAL LABOR AND DELIVERY FOR A LOW FEE OF $950. WOMEN RECEIVE CARE WHETHER THEY CAN COVER ANY OR ALL OF THE FEE. CARE IS PROVIDED PRIMARILY BY FIRST-YEAR FAMILY PRACTICE RESIDENTS, SUPERVISED BY EXPERIENCED PHYSICIANS. THROUGH THIS PROGRAM IN 2011, AVERA MCKENNAN ASSISTED WITH 93 BIRTHS AND PROVIDED 664 PRENATAL AND POST-PARTUM VISITS.
		AVERA FAMILY WELLNESS: THIS PROGRAM COMBINES POSITIVE ACTIVITIES LIKE VIOLIN LESSONS WITH FAMILY COACHING AT NO CHARGE FOR CHILDREN IN EARLY CHILDHOOD PROGRAMS IN THE SIOUX FALLS SCHOOL DISTRICT. THE GOAL IS TO PREVENT OR LESSEN THE EFFECTS OF BEHAVIORAL HEALTH CONDITIONS ON CHILDREN AND FAMILIES BY FOSTERING A POSITIVE ENVIRONMENT. APPROXIMATELY 200 STUDENTS ARE ENROLLED. THE WALSH FAMILY VILLAGE: THIS HOSPITALITY HOUSE COMPLEX ADJACENT TO THE AVERA MCKENNAN CAMPUS PROVIDES A HOME AWAY FROM HOME FOR PATIENTS AND THEIR FAMILIES WHO COME FOR CARE AT AVERA MCKENNAN FROM OUTSIDE OF SIOUX FALLS. THE PROJECT WAS FUNDED BY DONATIONS AND IS OPERATED BY AVERA MCKENNAN. ELEVEN GUEST ROOMS ARE AVAILABLE. AVERA MCKENNAN ALSO DONATES USE OF A BUILDING IN THE COMPLEX FOR A RONALD MCDONALD HOUSE FOR FAMILIES OF PEDIATRIC PATIENTS. IF THEY CAN AFFORD IT, GUESTS ARE CHARGED A LOW FEE OF $46.50 PER NIGHT. IF THEY CANNOT AFFORD THE EXPENSE, THE COST OF THE ROOM IS WAIVED. EMPLOYEES REGULARLY DONATE NON-PERISHABLE FOOD ITEMS TO STOCK A FOOD PANTRY FOR GUESTS. IN 2011 THE WALSH FAMILY VILLAGE SERVED 7,063 GUESTS, STAYING IN 3,593 NIGHTLY ROOMS. SUPPORT OF INDIAN RESERVATIONS: IN 2011, AVERA MCKENNAN DELIVERED THREE TRUCKLOADS OF EXCESS MEDICAL EQUIPMENT, FURNITURE, CLOTHING AND SUPPLIES TO INDIAN RESERVATIONS IN SOUTH DAKOTA. WITH TRUCK RENTAL AND FUEL EXPENSE, EACH TRIP COST APPROXIMATELY $1,000 IN ADDITION TO THE DONATIONS. COMMUNITY CONNECTIONS: AVERA MCKENNAN REACHES OUT TO PEOPLE AND COMMUNITIES THROUGHOUT EASTERN SOUTH DAKOTA, SOUTHWESTERN MINNESOTA AND NORTHWEST IOWA THROUGH HOME TOWN CONNECTIONS. PROVIDING A CRITICAL FEEDBACK LINK TO LOCAL REFERRING DOCTORS, THIS PROGRAM COMPLETES THE COMMUNICATIONS LINKS NECESSARY TO KEEP LOCAL HEALTH CARE PROVIDERS CURRENT ON THE TREATMENT OF THEIR PATIENTS AT AVERA MCKENNAN. COMMUNITY BENEFITS: AVERA MCKENNAN PROVIDES ADDITIONAL COMMUNITY BENEFITS INCLUDING: SUPPORT OF YOUTH PROGRAMS; HOMELESS PROGRAMS; COMMUNITY ARTS PROGRAMMING; HEALTH PREVENTION; AWARENESS AND EDUCATION ABOUT CANCER, HEART DISEASE AND OTHER CONDITIONS; AND SUPPORT OF THE SIOUX EMPIRE UNITED WAY AND OTHER SERVICES IN THE REGION. DONATIONS TOWARD THESE EFFORTS TOTALED $2,368,472 IN 2011. PRESCHOOL VISION AND HEARING SCREENING: AVERA MCKENNAN PROVIDED FREE SCREENING FOR 336 PRESCHOOL CHILDREN IN FISCAL YEAR 2011.
PROGRAM SERVICE STATEMENT	FORM 990, PART III, LINE 4B, DESCRIPTION OF PROGRAM SERVICES:	AMONG SERVICES OFFERED BY RURAL HOSPITALS ARE RADIOLOGY AND IMAGING, COLONOSCOPY AND ENDOSCOPY, THERAPY AND REHABILITATION, 24-HOUR EMERGENCY CARE, CHEMOTHERAPY, ORTHOPEDICS, CARDIOVASCULAR TESTING AND CARE, OBSTETRICS, SURGERY, AND DIALYSIS. CHARITY AND UNCOMPENSATED CARE: AS PART OF AVERA MCKENNAN, THESE FACILITIES PROVIDE NECESSARY MEDICAL SERVICES (DIAGNOSTIC AND TREATMENT) FOR WHOEVER COMES TO US FOR CARE, REGARDLESS OF THEIR ABILITY TO PAY. IN FISCAL YEAR 2011, CHARITY AND UNCOMPENSATED CARE PROVIDED BY RURAL HOSPITALS TOTALED $546,000, BASED ON CHARGES FOREGONE. ACCESSIBILITY TO HEALTH CARE: AVERA MCKENNAN REGIONAL HOSPITALS MAKE MEDICAL CARE ACCESSIBLE TO THE ENTIRE COMMUNITY THEY SERVE REGARDLESS OF A PATIENT'S ABILITY TO PAY. IN 2011 RURAL HOSPITALS HAD 1,971 DISCHARGES, 7,899 PATIENT DAYS AND 58,134 OUTPATIENT VISITS. EACH OF THE HOSPITALS PROVIDES 24-HOUR EMERGENCY CARE WITH EEMERGENCY SERVICES THROUGH AVERA MCKENNAN. EICU SERVICES ARE ALSO AVAILABLE AT THESE HOSPITALS, PROVIDING ACCESS TO CRITICAL CARE MEDICINE NEAR HOME AND LESSENING THE NEED FOR TRANSPORT. THERE IS NO ADDITIONAL BILLING TO PATIENTS. TELEMEDICINE CONSULTS ARE ALSO OFFERED AT RURAL LOCATIONS IN A NUMBER OF MEDICAL SPECIALTIES.
PROGRAM SERVICE STATEMENT	FORM 990, PART III, LINE 4C, DESCRIPTION OF PROGRAM SERVICES:	CLINICS PROVIDE PRIMARY CARE AND URGENT CARE, AND AMONG SPECIALITIES ARE CARDIOLOGY; DERMATOLOGY; ENDOCRINOLOGY; GASTROENTEROLOGY; HEMATOLOGY; HEPATOLOGY; INFECTIOUS DISEASE; INTERNAL MEDICINE; NEONATOLOGY; NEPHROLOGY; NEUROLOGY AND NEUROSURGERY; OB/GYN; ONCOLOGY; OPHTHALMOLOGY; ORTHOPEDICS; PAIN MANAGEMENT; PEDIATRICS; PSYCHIATRY; PULMONOLOGY; SPORTS MEDICINE; SURGERY; AND VASCULAR SERVICES. CHARITY AND UNCOMPENSATED CARE: AS PART OF AVERA MCKENNAN, CLINICS PROVIDE NECESSARY MEDICAL SERVICES (DIAGNOSTIC AND TREATMENT) FOR WHOEVER COMES TO US FOR CARE, REGARDLESS OF THEIR ABILITY TO PAY. IN FISCAL YEAR 2011, CHARITY AND UNCOMPENSATED CARE PROVIDED BY CLINICS TOTALED $1,275,000, BASED ON CHARGES FOREGONE. ACCESSIBILITY TO HEALTH CARE: IN ADDITION TO REGULAR CLINIC HOURS, AVERA MCGREEVY CLINIC PROVIDES URGENT CARE, SEEING PATIENTS ON A WALK-IN BASIS AT TWO LOCATIONS DURING THE EVENING HOURS ON WEEKDAYS, AND THROUGHOUT THE DAYTIME HOURS ON SATURDAYS AND SUNDAYS. THIS PROVIDES GREATER ACCESSIBILITY WITHOUT HAVING TO RELY ON EMERGENCY ROOM CARE. IN ADDITION, THROUGH OUR CURAQUICK CLINICS, AVERA OFFERS CONVENIENT, AFFORDABLE CLINIC CARE IN LOCAL HYVEE PHARMACIES. IN 2011, AVERA DONATED APPROXIMATELY 80 CURAQUICK AVERA CARDS, GOOD FOR ONE FREE VISIT, TO STUDENTS OF SIOUX FALLS CATHOLIC SCHOOLS AND YWCA DAYCARE, EACH VALUED AT $59. HEALTH SCREENINGS: AVERA MCKENNAN CLINICS OFFERED THREE FREE HEALTH SCREENINGS IN 2011 INCLUDING A SKIN CANCER SCREENING IN COOPERATION WITH ANOTHER LOCAL HOSPITAL AND PHARMACY, SERVING 151 PERSONS; AND MEN'S AND WOMEN'S HEALTH SCREENINGS, PROVIDING FREE CHOLESTEROL, BLOOD SUGAR, BLOOD PRESSURE AND BODY-MASS INDEX SCORING. THESE SCREENINGS SERVED 105 MEN AND 85 WOMEN.
FORM 990, PART VI, SECTION A, LINE 2		GENE JONES JR., CINDY WALSH, AND FRED THURMAN - BUSINESS RELATIONSHIP DAVE STRAND MD AND BRAD THAEMERT MD - BUSINESS RELATIONSHIP TOM DEMPSTER, FRED SLUNECKA, AND FRED THURMAN - BUSINESS RELATIONSHIP
FORM 990, PART VI, SECTION A, LINE 6		THE SOLE MEMBER OF THE ORGANIZATION IS AVERA HEALTH, A NONPROFIT CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF SOUTH DAKOTA AND EXEMPT UNDER 501(C)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
FORM 990, PART VI, SECTION A, LINE 7A		AVERA HEALTH, AS THE SOLE MEMBER, HAS THE POWER TO APPOINT AND REMOVE, WITH OR WITHOUT CAUSE, MEMBERS OF THE BOARD OF DIRECTORS.
FORM 990, PART VI, SECTION A, LINE 7B		AVERA HEALTH HAS THE FOLLOWING RIGHTS AS THE MEMBER: 1) TO APPROVE THE ADOPTION, AMENDMENT OR REPEAL OF THE STATEMENTS OF PHILOSOPHY, MISSION AND VALUES OF CORPORATION; 2) TO INITIATE THE ADOPTION, AMENDMENT OR REPEAL OF ANY PROVISION OF THE ARTICLES OF INCORPORATION OR BYLAWS OF CORPORATION, AND TO GIVE FINAL APPROVAL OF ANY SUCH ACTION WITH RESPECT THERETO; 3) TO APPROVE AND ACT UPON THE ALIENATION OF REAL PROPERTY AND PRECIOUS ARTIFACTS UNDER THE CANONICAL STEWARDSHIP OF THE SISTERS OF THE PRESENTATION OF THE BLESSED VIRGIN MARY OF ABERDEEN, SOUTH DAKOTA ("PRESENTATION SISTERS") OR THE BENEDICTINE SISTERS OF SACRED HEART MONASTERY ("BENEDICTINE SISTERS"), PURSUANT TO THE POLICIES ESTABLISHED BY THE MEMBER; 4) TO APPROVE ANY PLAN OF MERGER, CONSOLIDATION OR DISSOLUTION OF THE CORPORATION, OR THE DIVESTITURE OF A SPONSORED WORK OR MINISTRY ASSOCIATED WITH THE CORPORATION; 5) TO APPROVE THE CREATION OF NEW SPONSORED WORKS OR MINISTRIES TO BE CONDUCTED BY OR UNDER THE AUTHORITY OF THE CORPORATION; 6) TO APPOINT AND REMOVE, WITH OR WITHOUT CAUSE, THE BOARD OF DIRECTORS OF THE CORPORATION. 7) TO APPOINT AND/OR REMOVE, WITH OR WITHOUT CAUSE, THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE CORPORATION. 8) TO APPROVE OPERATING/CAPITAL BUDGETS AND STRATEGIC PLANS OF THE CORPORATION. 9) TO APPROVE EXPENDITURES OUTSIDE OF OPERATING AND CAPITAL BUDGETS EXCEEDING DEFINED THRESHOLDS ACCORDING TO POLICY WHICH MAY BE ADOPTED FROM TIME TO TIME BY THE MEMBER. 10) TO APPROVE ACQUISITIONS, SALES AND LEASES, ACCORDING TO POLICY WHICH MAY BE ADOPTED FROM TIME TO TIME BY THE MEMBER. 11) TO ESTABLISH AND MAINTAIN EMPLOYEE BENEFIT PROGRAMS. 12) TO ESTABLISH AND MAINTAIN INSURANCE PROGRAMS. 13) TO APPROVE MAJOR COMMUNITY FUND DRIVES. 14) TO APPROVE THE APPOINTMENT OF AUDITORS. 15) TO ADOPT POLICIES DESIGNED TO EFFECTUATE THE RESERVED POWERS OF THE MEMBER.
FORM 990, PART VI, SECTION B, LINE 11		FORM 990 IS REVIEWED BY THE CEO, CFO AND DIRECTOR OF FINANCIAL REPORTING. AFTER THE INITIAL REVIEW, A DRAFT IS PROVIDED TO THE FINANCE COMMITTEE FOR THEIR REVIEW. THE RETURN IS PROVIDED TO THE FULL BOARD PRIOR TO FILING.
	FORM 990, PART VI, SECTION B, LINE 12C	THE CONFLICT OF INTEREST POLICY COVERS BOARD MEMBERS, OFFICERS, AND KEY EMPLOYEES. AT EACH BOARD MEETING, A REQUEST IS MADE FOR ALL BOARD MEMBERS TO DISCLOSE ANY POTENTIAL CONFLICT OF INTEREST PERTAINING TO ANY ITEM LISTED ON THE AGENDA OR PERTAINING TO ANY POTENTIAL ITEM THAT COULD BE DISCUSSED DURING THE COURSE OF THE MEETING. THE DECLARATION OF CONFLICT OF INTEREST IS RECORDED IN THE MEETING MINUTES. THE BOARD MAKES A DETERMINATION OF WHETHER THERE IS A CONFLICT OF INTEREST AND IF SO, IMPLEMENTS THE PROCEDURE FOR EVALUATING THE ISSUE OR TRANSACTION INVOLVED. THE BOARD MEMBER OR OFFICER WITH THE CONFLICT MUST REFRAIN FROM VOTING. A STATEMENT OF CONFLICT OF INTEREST DISCLOSURE IS MADE ON AN ANNUAL BASIS BY OFFICERS AND DIRECTORS. THE INFORMATION IS MAINTAINED IN A DATABASE AND A REPORT IS PROVIDED TO THE BOARD.
	FORM 990, PART VI, SECTION B, LINE 15B	THE CEO IS COMPENSATED BY AVERA HEALTH SYSTEM. ANNUALLY THE COMPENSATION COMMITTEE OF AVERA HEALTH, WHICH IS COMPRISED OF SIX (6) SYSTEM MEMBERS APPOINTED BY THE RELIGIOUS ORDERS, MEETS WITH AN INDEPENDENT CONSULTANT REGARDING FAIR MARKET VALUE FOR COMPENSATION OF OFFICERS AND KEY EMPLOYEES. THE COMPENSATION COMMITTEE APPROVES ALL SALARIES BASED ON COMPARABLE DATA AND DOCUMENTS THE BASIS FOR THEIR DECISION IN MEETING MINUTES. THE CFO AND KEY EMPLOYEES ARE COMPENSATED BY AVERA MCKENNAN. ANNUALLY, THE COMPENSATION COMMITTEE OF AVERA MCKENNAN, WHICH IS COMPRISED OF BOARD MEMBERS, MEETS TO REVIEW THE COMPENSATION OF EXECUTIVES AND PHYSICIANS. AVERA MCKENNAN COMPARES ITS COMPENSATION PLAN TO OTHER HEALTHCARE ORGANIZATIONS SIMILAR IN SIZE AND COMPLEXITY TO AVERA MCKENNAN ON A NATIONAL BASIS TO ENSURE COMPENSATION IS COMPARABLE. AVERA MCKENNAN UTILIZES MULTIPLE SALARY SURVEYS AND AN INDEPENDENT COMPENSATION CONSULTANT TO PROVIDE A MARKET ANALYSIS FOR EACH EXECUTIVE'S SUGGESTED PAY OR PAY RANGE. INDIVIDUAL SALARIES REFLECT RELATED EDUCATION AND EXPERIENCE, AS WELL AS THE SCOPE OF THE DUTIES TO ASSURE AMOUNTS PAID ARE REASONABLE.
	FORM 990, PART VI, SECTION C, LINE 19	THE ORGANIZATION'S GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT MADE AVAILABLE TO THE GENERAL PUBLIC. THE ORGANIZATION'S FINANCIAL STATEMENTS ARE ATTACHED TO THE FORM 990 PER IRS INSTRUCTIONS AND THEREFORE AVAILABLE TO THE GENERAL PUBLIC.
	FORM 990, PART VII, SECTION A, COLUMN (B)	IN ADDITION TO THE AVERAGE OF 2 HOURS PER WEEK THAT SISTER JOAN REICHELT DEDICATES AS A BOARD MEMBER OF AVERA MCKENNAN, SISTER JOAN REICHELT DEDICATES AN AVERAGE OF AN ADDITIONAL 1.3 HOURS PER WEEK AS A BOARD MEMBER TO ANOTHER RELATED ORGANIZATION, AVERA MARSHALL.
CHANGES IN NET ASSETS OR FUND BALANCES:	FORM 990, PART XI, LINE 5:	NET UNREALIZED GAINS ON INVESTMENTS: 15,424,833. BOOK/TAX ADJUSTMENTS ON PARTNERSHIPS -4,060,453. EQUITY TRANSFERS, NET -699,541. CHANGE IN FAIR VALUE OF INTEREST RATE SWAP 1,346,111. INCOME FROM GRANTOR TRUST NOT INCLUDED ON FINANCIAL STATEMENTS 366,789. LOSS ON RETIREMENT OF DEBT -253,242. CHANGE IN ACCOUNTING PRINCIPLES -1,918,602. OTHER CHANGES IN NET ASSETS 318,029. CHANGE IN FAIR VALUE OF INTEREST RATE SWAP DESIGNATED AS HEDGE -718,740. STEP UP BASIS OF ASSETS FROM ACQUISITION OF HEART HOSPITAL OF SOUTH DAKOTA 5,083,056. CHANGE IN NONCONTROLLING INTEREST OF HEART HOSPITAL OF SOUTH DAKOTA LLC 156,901. TOTAL TO FORM 990, PART XI, LINE 5: 15,045,141.
	FORM 990, PART XII, LINE 2C	THE AUDIT COMMITTEE OF AVERA HEALTH, PARENT ORGANIZATION, SELECTS THE AUDITOR AND REVIEWS THE AUDITED FINANCIAL STATEMENTS FOR AVERA MCKENNAN. ALSO, THE FINANCE COMMITTEE AT AVERA MCKENNAN TAKES RESPONSIBILITY FOR REVIEWING THE AUDITED FINANCIAL STATEMENTS.
	FORM 990, PART VI, LINE 16B	THERE IS NO WRITTEN POLICY OR PROCEDURE SINCE IN THE EVENT OF ANY SUCH PROPOSED TRANSACTION THE BOARD OR A COMMITTEE WITH DELEGATED AUTHORITY REVIEWS ALL MATERIALS, VALUATIONS AND OPERATIONAL ASPECTS FOR ANY PROPOSED TRANSACTION. SUCH TRANSACTION WOULD BE EVALUATED IN ACCORDANCE WITH THE EXEMPT STATUS OF THE ORGANIZATION AND ITS APPLICABLE PURPOSES. ANY TRANSACTION ALSO WOULD BE APPROVED BY THE BOARD AND THE MEMBER.
	FORM 990, PART X, LINE 20	THE ISSUE PRICE INCLUDES THE FILING ORGANIZATION'S SHARE OF THE ENTIRE BOND ISSUE, WHICH WAS ISSUED TO AVERA HEALTH ON BEHALF OF THE AVERA OBLIGATED GROUP. THE AVERA OBLIGATED GROUP CONSISTS OF AVERA MCKENNAN, AVERA ST. LUKE'S, AVERA QUEEN OF PEACE, AND AVERA SACRED HEART. IN ACCORDANCE WITH IRS INSTRUCTIONS, INFORMATION RELATED TO THE TAX EXEMPT BOND REPORTING IS BEING REPORTED ON AVERA HEALTH'S TAX RETURN (EIN 46-0422673).

For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.

Cat. No. 51056K

Schedule O (Form 990 or 990-EZ) 2010

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE R
(Form 990)

Department of the Treasury
Internal Revenue Service

Related Organizations and Unrelated Partnerships

Complete if the organization answered "Yes" to Form 990, Part IV, line 33, 34, 35, 36, or 37.
MediumBullet

Attach to Form 990. MediumBullet

See separate instructions.

OMB No. 1545-0047

2010

Open to Public Inspection

Name of the organization

AVERA MCKENNAN

Employer identification number

46-0224743

Part I

Identification of Disregarded Entities (Complete if the organization answered "Yes" on Form 990, Part IV, line 33.)

(a) Name, address, and EIN of disregarded entity	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Total income	(e) End-of-year assets	(f) Direct controlling entity
(1) SIOUX FALLS HOSPITAL MANAGMENT LLC 1325 S CLIFF AVE PO BOX 5045 SIOUX FALLS,SD571175045 56-2141521	MANAGEMENT COMPANY OF HEART HOSPITAL	NC	0	6,415,591	WEST 69TH STREET LLC
(2) WEST 69TH STREET LLC 1325 S CLIFF AVE PO BOX 5045 SIOUX FALLS,SD571175045	HOLDING COMPANY	SD	0	6,415,591	N/A

Part II

Identification of Related Tax-Exempt Organizations (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related tax-exempt organizations during the tax year.)

(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Exempt Code section	(e) Public charity status (if section 501(c)(3))	(f) Direct controlling entity	(g) Section 512(b)(13) controlled organization
(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Exempt Code section	(e) Public charity status (if section 501(c)(3))	(f) Direct controlling entity	Yes	No
(1) AVERA ST ANTHONY'S HOSPITAL 300 N 2ND STREET ONEILL,NE68763 47-0463911	HEALTHCARE SERVICES	NE	501(C)(3)	LINE 3	AVERA HEALTH		No
(2) AVERA HOLY FAMILY 826 NORTH 8TH STREET ESTHERVILLE,IA51334 42-0680370	HEALTHCARE SERVICES	IA	501(C)(3)	LINE 3	AVERA HEALTH		No
(3) AVERA HOLY FAMILY FOUNDATION 826 NORTH 8TH STREET ESTHERVILLE,IA51334 42-1317452	FUNDRAISING	IA	501(C)(3)	LINE 9	AVERA HOLY FAMILY		No
(4) ST BENEDICT HEALTH CENTER 401 WEST GLYNN DRIVE PARKSTON,SD57366 46-0226738	HEALTHCARE SERVICES	SD	501(C)(3)	LINE 3	AVERA HEALTH		No
(5) ST BENEDICT HEALTH CENTER FOUNDATION WEST GLYNN DRIVE PO BOX B PARKSTON,SD57366 46-0458725	SUPPORT HEALTH RELATED SERVICES	SD	501(C)(3)	LINE 11A, I	ST BENEDICT HEALTH CENTER		No
(6) AVERA HEALTH 3900 WEST AVERA DRIVE STE 300 SIOUX FALLS,SD57108 46-0422673	PROMOTION OF HEALTH	SD	501(C)(3)	LINE 9	N/A		No
(7) AVERA QUEEN OF PEACE 525 NORTH FOSTER MITCHELL,SD57301 46-0224604	HEALTHCARE SERVICES	SD	501(C)(3)	LINE 3	AVERA HEALTH		No
(8) SACRED HEART HEALTH SERVICES 501 SUMMIT STREET YANKTON,SD57078 46-0225483	HEALTHCARE SERVICES	SD	501(C)(3)	LINE 3	AVERA HEALTH		No
(9) SACRED HEART RURAL HEALTH CLINICS 501 SUMMIT STREET YANKTON,SD57078 46-0423930	CLINIC SERVICES	SD	501(C)(3)	LINE 3	SACRED HEART HEALTH SERVICES		No
(10) HEALTH MANAGEMENT SERVICES 501 SUMMIT STREET YANKTON,SD57078 46-0399291	ADULT DAYCARE AND HOMEMAKING SERVICES	SD	501(C)(3)	LINE 9	SACRED HEART HEALTH SERVICES		No
(11) LEWIS AND CLARK HEALTH EDUCATION AND SERVICE AGENCY 1000 W 4TH STREET SUITE 9 YANKTON,SD57078 46-0337013	HEALTHCARE EDUCATION	SD	501(C)(3)	LINE 9	SACRED HEART HEALTH SERVICES		No
(12) AVERA ST LUKE'S 305 SOUTH STATE STREET ABERDEEN,SD57401 46-0224598	HEALTHCARE SERVICES	SD	501(C)(3)	LINE 3	AVERA HEALTH		No
(13) AVERA WORKERS' COMPENSATION TRUST 3900 WEST AVERA DRIVE SIOUX FALLS,SD57108 46-0407148	ECONOMICAL COVERAGE OF WORKERS' COMPENSATION CLAIMS	SD	501(C)(3)	LINE 11B, II	AVERA HEALTH		No
(14) AVERA MARSHALL 300 S BRUCE STREET MARSHALL,MN56258 41-0919153	HEALTHCARE SERVICES	MN	501(C)(3)	LINE 3	AVERA HEALTH		No
(15) AVERA MARSHALL FOUNDATION 300 SOUTH BRUCE STREET MARSHALL,MN56258 41-1784801	FUNDRAISING	MN	501(C)(3)	LINE 7	AVERA MARSHALL		No

For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 50135Y

Schedule R (Form 990) 2010

Page 2

Part III

Identification of Related Organizations Taxable as a Partnership (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a partnership during the tax year.)

(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity	(e) Predominant income(related, unrelated, excluded from tax under sections 512-514)	(f) Share of total income	(g) Share of end-of-year assets	(h) Disproprtionate allocations?		(i) Code VUBI amount in box 20 of Schedule K-1 (Form 1065)	(j) General or managing partner?		(k) Percentage ownership
(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity		(f) Share of total income	(g) Share of end-of-year assets	Yes	No	(i) Code VUBI amount in box 20 of Schedule K-1 (Form 1065)	Yes	No
(1) AVERA HOME MEDICAL EQUIPMENT LLC 1325 S CLIFF AVE PO BOX 5045 SIOUX FALLS,SD57117 46-0488198	MEDICAL SERVICES - HOME MEDICAL EQUIPMENT	SD	N/A	RELATED	587,510	4,759,475	Yes		152,794	Yes		78.630 %
(2) MIDWEST REGIONAL IMAGING SERVICES LLC 1325 S CLIFF AVE PO BOX 5045 SIOUX FALLS,SD57117 47-0874983	HEALTH CARE - MEDICAL IMAGING	SD	N/A	RELATED	-131,935	1,312,577		No		Yes		51.000 %
(3) MERSCO MEDICAL OF PIERRE LLC 329 E DAKOTA PIERRE,SD57501 46-0444002	MEDICAL SERVICES - HOME MEDICAL EQUIPMENT	SD	N/A	RELATED	67,242	234,584		No	17,030	Yes		50.000 %
(4) AVERA HOME MEDICAL EQUIPMENT OF FLOYD VALLEY HOSPITAL LLC 714 LINCOLN ST NE LEMARS,IA51031 82-0582350	MEDICAL SERVICES - HOME MEDICAL EQUIPMENT	SD	AVERA HOME MEDICAL EQUIPMENT LLC	RELATED	22,791	86,468	Yes		5,953	Yes		39.320 %
(5) AVERA HOME MEDICAL EQUIPMENT OF ESTHERVILLE LLC PO BOX 5045 SIOUX FALLS,SD57117 20-1686097	MEDICAL SERVICES - HOME MEDICAL EQUIPMENT	SD	AVERA HOME MEDICAL EQUIPMENT LLC	RELATED	27,191	135,786	Yes		7,837	Yes		39.320 %
(6) AVERA HOME MEDICAL EQUIPMENT OF SIOUX CENTER LLC 38 19TH ST SW SIOUX CENTER,IA51250 75-3203100	MEDICAL SERVICES - HOME MEDICAL EQUIPMENT	SD	AVERA HOME MEDICAL EQUIPMENT LLC	RELATED	33,944	93,068	Yes		11,817	Yes		39.320 %
(7) AVERA HOME MEDICAL EQUIPMENT OF MARSHALL LLC 1104 EAST COLLEGE DRIVE MARSHALL,MN56258 20-5271924	MEDICAL SERVICES - HOME MEDICAL EQUIPMENT	SD	AVERA HOME MEDICAL EQUIPMENT LLC	RELATED	68,864	220,928	Yes		19,737	Yes		39.320 %
(8) Q&M PROPERTIES LLC 525 NORTH FOSTER MITCHELL,SD57301 73-1652049	MEDICAL CLINIC BUILDING	SD	AVERA QUEEN OF PEACE	RELATED	-15,277	426,344		No			No	50.000 %
(9) SURGICAL ASSOCIATES ENDOSCOPY CLINIC LLC 310 S PENNSYLVANIA ST ABERDEEN,SD57401 46-0461429	SURGICAL ASSOCIATES	SD	N/A
(10) AVERA HOME MEDICAL EQUIPMENT OF SPENCER HOSPITAL LLC 2400 S MINNESOTA AVENUE 102 SIOUX FALLS,SD57117 80-0619999	MEDICAL SERVICES - HOME MEDICAL EQUIPMENT	SD	AVERA HOME MEDICAL EQUIPMENT LLC	RELATED	-51,943	63,503	Yes		-28,446	Yes		39.320 %
(11) HEART HOSPITAL OF SOUTH DAKOTA LLC 10720 SIKES PLACE SUITE 300 CHARLOTTE,NC28277 56-2143771	HEALTHCARE SERVICES	NC	N/A	RELATED	2,718,435	24,740,500	Yes			Yes		66.670 %

Part IV

Identification of Related Organizations Taxable as a Corporation or Trust (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a corporation or trust during the tax year.)

(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity	(e) Type of entity (C corp, S corp, or trust)
(1) ACCOUNTS MANAGEMENT INC 5132 S CLIFF AVE SUITE 101 SIOUX FALLS,SD57108 46-0373021	COLLECTION AGENCY	SD	N/A	C
(2) AVERA HEALTH PLANS INC 3900 WEST AVERA DRIVE SUITE 101 SIOUX FALLS,SD57108 46-0451539	HEALTH FINANCING AND HEALTH PLAN ADMINISTRATION	SD	N/A	C
(3) AVERA PROPERTY INSURANCE INC 610 W 23RD ST STE 1 PO BOX 38 YANKTON,SD57078 46-0463155	INSURANCE	SD	N/A	C
(4) VALLEY HEALTH SERVICES 501 SUMMIT STREET YANKTON,SD57078 46-0357149	MEDICAL EQUIPMENT	SD	N/A	C

Schedule R (Form 990) 2010

Page 3

Part V

Transactions With Related Organizations (Complete if the organization answered "Yes" on Form 990, Part IV, line 34, 35, 35A, or 36.)

Note. Complete line 1 if any entity is listed in Parts II, III or IV.

Yes

1 During the tax year, did the orgranization engage in any of the following transactions with one or more related organizations listed in Parts II-IV?

a Receipt of (i) interest (ii) annuities (iii) royalties (iv) rent from a controlled entity . . . . . . . . . . . . . . . . . . . . . . .

Yes

b Gift, grant, or capital contribution to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

c Gift, grant, or capital contribution from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

d Loans or loan guarantees to or for other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

e Loans or loan guarantees by other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f Sale of assets to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

g Purchase of assets from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

h Exchange of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

i Lease of facilities, equipment, or other assets to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

j Lease of facilities, equipment, or other assets from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . .

k Performance of services or membership or fundraising solicitations for other organization(s) . . . . . . . . . . . . . . . . . . . . . .

Yes

l Performance of services or membership or fundraising solicitations by other organization(s) . . . . . . . . . . . . . . . . . . . . . .

Yes

m Sharing of facilities, equipment, mailing lists, or other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

n Sharing of paid employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

o Reimbursement paid to other organization for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

p Reimbursement paid by other organization for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

q Other transfer of cash or property to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

r Other transfer of cash or property from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds.

(a) Name of other organization	(b) Transaction type(a-r)	(c) Amount involved	(d) Method of determining amount involved
(1) AVERA HOME MEDICAL EQUIPMENT LLC	A	304,740	INTERCOMPANY DETAIL FROM GL
(2) MIDWEST REGIONAL IMAGING SERVICES LLC	K	104,849	INTERCOMPANY DETAIL FROM GL
(3) AVERA HOME MEDICAL EQUIPMENT LLC	K	134,743	INTERCOMPANY DETAIL FROM GL
(4) MIDWEST REGIONAL IMAGING SERVICES LLC	Q	219,069	INTERCOMPANY DETAIL FROM GL
(5) AVERA HOME MEDICAL EQUIPMENT LLC	Q	4,367,477	INTERCOMPANY DETAIL FROM GL
(6) MIDWEST REGIONAL IMAGING SERVICES LLC	R	577,079	INTERCOMPANY DETAIL FROM GL
(7) AVERA HOME MEDICAL EQUIPMENT LLC	R	4,684,842	INTERCOMPANY DETAIL FROM GL
(8) AVERA HEART HOSPITAL OF SOUTH DAKOTA LLC	R	1,753,245	INTERCOMPANY DETAIL FROM GL
(9) MIDWEST REGIONAL IMAGING SERVICES LLC	C	3,774,357	INTERCOMPANY DETAIL FROM GL
(10) AVERA HOME MEDICAL EQUIPMENT LLC	C	427,350	INTERCOMPANY DETAIL FROM GL
(11) AVERA HEART HOSPITAL OF SOUTH DAKOTA LLC	C	11,428,310	INTERCOMPANY DETAIL FROM GL
(12) AVERA HEART HOSPITAL OF SOUTH DAKOTA LLC	K	924,680	INTERCOMPANY DETAIL FROM GL
(13) AVERA HEART HOSPITAL OF SOUTH DAKOTA LLC	Q	474,158	INTERCOMPANY DETAIL FROM GL

Schedule R (Form 990) 2010

Page 4

Part VI

Unrelated Organizations Taxable as a Partnership (Complete if the organization answered "Yes" on Form 990, Part IV, line 37.)

Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships.

(a) Name, address, and EIN of entity	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Are all partners section 501(c)(3) organizations?		(e) Share of end-of-year assets	(f) Disproprtionate allocations?		(g) Code VUBI amount in box 20 of Schedule K-1 (Form 1065)	(h) General or managing partner?
(a) Name, address, and EIN of entity	(b) Primary activity	(c) Legal domicile (state or foreign country)	Yes	No	(e) Share of end-of-year assets	Yes	No	(g) Code VUBI amount in box 20 of Schedule K-1 (Form 1065)	Yes	No

Schedule R (Form 990) 2010

Page 5

Part VII

Supplemental Information

Complete this part to provide additional information for responses to questions on Schedule R (see instructions).

Identifier	Return Reference	Explanation
	FORM 990, SCHEDULE R, PART V, LINE 2, COLUMN C	THE AMOUNTS REPORTED IN COLUMN C ARE REPORTED BASED ON A REVIEW OF GENERAL LEDGER ACTIVITY IN INTERCOMPANY ACCOUNTS, AND REVIEW OF EQUITY ACCOUNTS FOR CONTRIBUTIONS AND DISTRIBUTIONS.

Additional Data

Software ID:
Software Version:

1	Briefly describe the organization’s mission or most significant activities: PROMOTION OF HEALTH
2	Check this box
3	Number of voting members of the governing body (Part VI, line 1a) ....	3	19
4	Number of independent voting members of the governing body (Part VI, line 1b) ....	4	9
5	Total number of individuals employed in calendar year 2010 (Part V, line 2a) ...	5	6,090
6	Total number of volunteers (estimate if necessary) ....	6	1,100
7a	Total unrelated business revenue from Part VIII, column (C), line 12 ..	7a	4,960,309
b	Net unrelated business taxable income from Form 990-T, line 34 ..	7b	924,940

		Prior Year	Current Year
8	Contributions and grants (Part VIII, line 1h) .........	3,451,139	7,931,949
9	Program service revenue (Part VIII, line 2g) .........	596,067,216	662,236,185
10	Investment income (Part VIII, column (A), lines 3, 4, and 7d ) ....	553,875	5,052,503
11	Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e)	2,763,167	1,840,244
12	Total revenue—add lines 8 through 11 (must equal Part VIII, column (A), line 12)...................	602,835,397	677,060,881
13	Grants and similar amounts paid (Part IX, column (A), lines 1–3 )...	3,322,297	4,118,418
14	Benefits paid to or for members (Part IX, column (A), line 4) ....	0	0
15	Salaries, other compensation, employee benefits (Part IX, column (A), lines 5–10)	311,726,810	338,604,378
16a	Professional fundraising fees (Part IX, column (A), line 11e)....	54,527	61,855
b	Total fundraising expenses (Part IX, column (D), line 25) 841,473
17	Other expenses (Part IX, column (A), lines 11a–11d, 11f–24f)....	256,769,316	285,920,426
18	Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25)	571,872,950	628,705,077
19	Revenue less expenses. Subtract line 18 from line 12......	30,962,447	48,355,804
		Beginning of Current Year	End of Year
20	Total assets (Part X, line 16)............	696,072,011	762,444,106
21	Total liabilities (Part X, line 26)............	333,428,534	336,399,684
22	Net assets or fund balances. Subtract line 21 from line 20 .....	362,643,477	426,044,422

Sign Here

	Signature of officer	Date

	Type or print name and title.

Paid Preparer's Use Only	Preparer's signature	Date	Check if self- employed	Preparer’s taxpayer identification number (see instructions)
	Firm’s name (or yours if self-employed), address, and ZIP + 4			EIN
				Phone no.


4a	(Code: ) (Expenses $ 296,476,547 including grants of $ 4,076,336 ) (Revenue $ 429,657,256 )
	AVERA MCKENNAN HOSPITAL & UNIVERSITY HEALTH CENTERAVERA MCKENNAN PROMOTES THE HEALTH OF THE COMMUNITY BY PROVIDING A VARIETY OF CHARITABLE HEALTH CARE SERVICES. AVERA MCKENNAN OPERATES UNDER THE TENETS OF THE ROMAN CATHOLIC CHURCH AND IN ACCORDANCE WITH THE PHILOSOPHY AND VALUES ESTABLISHED FOR AVERA HEALTH, A SPONSORED MINISTRY OF THE BENEDICTINE AND PRESENTATION SISTERS.

4b	(Code: ) (Expenses $ 33,353,300 including grants of $ 7,183 ) (Revenue $ 44,105,195 )
	RURAL CRITICAL ACCESS HOSPITALSAVERA MCKENNAN OWNS OR LEASES RURAL CRITICAL ACCESS HOSPITALS IN FLANDREAU, GREGORY, DELL RAPIDS, MILBANK AND MILLER (HAND COUNTY), SD. AS SUCH, THEY OPERATE AS A DEPARTMENT OF AVERA MCKENNAN. THE HOSPITALS IN FLANDREAU, GREGORY AND HAND COUNTY SERVE MEDICALLY UNDERSERVED COUNTIES. IN ADDITION TO THE FOLLOWING EXEMPT PURPOSE ACHIEVEMENTS, RURAL HOSPITALS PARTICIPATE IN MANY OF THE ABOVE AS PART OF AVERA MCKENNAN.

4c	(Code: ) (Expenses $ 171,490,344 including grants of $ 34,163 ) (Revenue $ 143,908,502 )
	CLINICSAVERA MCKENNAN PROVIDES CLINICAL CARE, SECONDARY AND PRIMARY, IN 67 OWNED/JOINT VENTURE CLINICS IN SOUTH DAKOTA, NORTHWEST IOWA, SOUTHWEST MINNESOTA AND NORTHEASTERN NEBRASKA. IN ADDITION TO THE FOLLOWING EXEMPT PURPOSE ACHIEVEMENTS, CLINICS PARTICIPATE IN MANY OF THE ABOVE AS PART OF AVERA MCKENNAN. CLINIC VISITS IN 2011 TOTALED 988,817.

	(Code: ) (Expenses $ 28,945,657 including grants of $ 736 ) (Revenue $ 40,266,632 )
	AVERA MCKENNAN ALSO PROVIDES LONG-TERM CARE, HOME MEDICAL EQUIPMENT & OTHER RETAIL, HOME INFUSION, RESEARCH, FITNESS CENTER, REGIONAL LAB, AND MOBILE SERVICES.MEDICAL RESEARCH: AS A RESEARCH INSTITUTION, AVERA MCKENNAN DRAWS PHYSICIANS WHO ARE COMMITTED TO SEEKING NEW TREATMENTS AND PREVENTIVE MEASURES. THE AVERA RESEARCH INSTITUTE IS CURRENTLY CONDUCTING PRE-CLINICAL RESEARCH TO ADD TO THE BODY OF MEDICAL KNOWLEDGE IN THE AREAS OF KIDNEY DISEASE LINKED TO OBESITY, KIDNEY FILTRATION AND GROWTH, AND NEUROSCIENCE RESEARCH IN REGARD TO STRESS AND ADDICTION. THE AVERA RESEARCH INSTITUTE ALSO CONTINUES ONGOING APPLIED RESEARCH IN THE AREA OF DEVELOPING A NOVEL PHOTOCHEMICAL TISSUE BONDING TECHNOLOGY THAT HAS SEVERAL CLINICAL APPLICATIONS. THROUGH ITS GENETICS LAB, AVERA MCKENNAN IS STUDYING GENETIC PRECURSORS OF MENTAL HEALTH CONDITIONS, WHICH HAS WIDE APPLICATION IN BOTH THE CLINICAL AND RESEARCH ARENAS. THE AVERA RESEARCH INSTITUTE IN 2011 PARTICIPATED IN 90 CLINICAL TRIALS, INVOLVING CANCER, ALZHEIMER'S DISEASE, HYPERCHOLESTEROLEMIA, RHEUMATOID ARTHRITIS, AND MORE. IN FISCAL YEAR 2011, AVERA MCKENNAN OPERATED THE AVERA RESEARCH INSTITUTE AT A LOSS OF $2,932,000.

4d	Other program services. (Describe in Schedule O.)
	(Expenses $ 28,945,657 including grants of $ 736 ) (Revenue $ 40,266,632 )
4e	Total program service expenses$ 530,265,848

1b	Sub-Total................
c	Total from continuation sheets to Part VII, Section A....
d	Total (add lines 1b and 1c)............	8,126,898	1,106,472	455,439

				(A) Total revenue	(B) Related or exempt function revenue	(C) Unrelated business revenue	(D) Revenue excluded from tax under sections 512, 513, or 514
1a	Federated campaigns..1a		47,851
b	Membership dues....1b
c	Fundraising events....1c
d	Related organizations...1d		1,520,972
e	Government grants (contributions)1e		1,767,814

f	All other contributions, gifts, grants, and similar amounts not included above1f		4,595,312
g	Noncash contributions included in lines 1a-1f:$ 2,195,260
h	Total. Add lines 1a-1f.......			7,931,949
			Business Code
2a	NET PATIENT SERVICE RE		622,110	614,135,791	614,135,791
b	OTHER PATIENT AND CLIN		621,500	30,951,899	26,840,021	4,111,878
c	INCOME FROM SUBSIDIARI		423,000	8,082,750	7,913,058	169,692
d	INTEREST IN FOUNDATION		900,099	3,042,503	3,042,503
e	PROGRAM RENT		900,099	1,569,295	1,569,295
f	All other program service revenue .			4,453,947	4,436,917	17,030
g	Total. Add lines 2a–2f........			662,236,185
3	Investment income (including dividends, interest
	and other similar amounts).....			328,471			328,471
4	Income from investment of tax-exempt bond proceeds..
5	Royalties............
		(i) Real	(ii) Personal
6a	Gross Rents	939,780
b	Less: rental expenses	843,679
c	Rental income or (loss)	96,101
d	Net rental income or (loss).......			96,101			96,101
		(i) Securities	(ii) Other
7a	Gross amount from sales of assets other than inventory	4,658,124	119,280
b	Less: cost or other basis and sales expenses		53,372
c	Gain or (loss)	4,658,124	65,908
d	Net gain or (loss)..........			4,724,032			4,724,032
8a	Gross income from fundraising events (not including $ of contributions reported on line 1c). See Part IV, line 18 ...
	a
b	Less: direct expenses ...b
c	Net income or (loss) from fundraising events..
9a	Gross income from gaming activities. See Part IV, line 19 ...
	a
b	Less: direct expenses ...b
c	Net income or (loss) from gaming activities...
10a	Gross sales of inventory, less returns and allowances .
	a
b	Less: cost of goods sold ..b
c	Net income or (loss) from sales of inventory..
Miscellaneous Revenue			Business Code
11a	INTEREST INCOME		900,099	1,082,434			1,082,434
b	COMMERCIAL TESTING		621,500	621,607		621,607
c	MANAGEMENT SERVICES		541,610	40,102		40,102
d	All other revenue ....
e	Total. Add lines 11a–11d ......			1,744,143
12	Total revenue. See Instructions....			677,060,881	657,937,585	4,960,309	6,231,038


				(A) Beginning of year		(B) End of year
1	Cashnon-interest-bearing ..........				1
2	Savings and temporary cash investments .......			24,167,419	2	26,868,405
3	Pledges and grants receivable, net .........			3,781,641	3	3,360,173
4	Accounts receivable, net .........			80,278,346	4	85,293,914
5	Receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of
	Schedule L ..........			58,333	5	120,833
6	Receivables from other disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B). Complete Part II of
	Schedule L ..........				6
7	Notes and loans receivable, net .............			3,496,249	7	3,431,202
8	Inventories for sale or use ..............			11,076,812	8	12,517,902
9	Prepaid expenses and deferred charges ............			5,172,280	9	5,340,257
10a	Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D	10a	619,717,477
b	Less: accumulated depreciation. .....	10b	284,576,477	315,906,702	10c	335,141,000
11	Investments—publicly traded securities ..........			55,378,107	11	23,658,088
12	Investments—other securities. See Part IV, line 11 ......			152,452,866	12	202,453,890
13	Investments—program-related. See Part IV, line 11 ..			5,104,920	13	6,876,999
14	Intangible assets .........			26,488,947	14	42,209,593
15	Other assets. See Part IV, line 11 ...........			12,709,389	15	15,171,850
16	Total assets. Add lines 1 through 15 (must equal line 34)...			696,072,011	16	762,444,106
17	Accounts payable and accrued expenses .			65,243,074	17	66,443,712
18	Grants payable ..........				18
19	Deferred revenue ..........			2,156,365	19	519,843
20	Tax-exempt bond liabilities ..........			215,394,148	20	211,970,759
21	Escrow or custodial account liability. Complete Part IV of Schedule D..			9,188,968	21	803,045
22	Payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified
	persons. Complete Part II of Schedule L..........				22
23	Secured mortgages and notes payable to unrelated third parties ..			9,305,204	23	26,333,662
24	Unsecured notes and loans payable to unrelated third parties ....				24
25	Other liabilities. Complete Part X of Schedule D.....			32,140,775	25	30,328,663
26	Total liabilities. Add lines 17 through 25.....			333,428,534	26	336,399,684
	Organizations that follow SFAS 117, check here and complete lines 27 through 29, and lines 33 and 34.
27	Unrestricted net assets .....			353,311,977	27	414,988,501
28	Temporarily restricted net assets .....			7,350,458	28	9,034,012
29	Permanently restricted net assets .....			1,981,042	29	2,021,909
	Organizations that do not follow SFAS 117, check here and complete lines 30 through 34.
30	Capital stock or trust principal, or current funds .....				30
31	Paid-in or capital surplus, or land, building or equipment fund .....				31
32	Retained earnings, endowment, accumulated income, or other funds				32
33	Total net assets or fund balances .....			362,643,477	33	426,044,422
34	Total liabilities and net assets/fund balances .....			696,072,011	34	762,444,106