TY 2012 Form 990

(A) Name and Title	(B) Average hours per week (list any hours for related organizations below dotted line)	(C) Position (do not check more than one box, unless person is both an officer and a director/trustee)	(E) Reportable compensation from related organizations (W- 2/1099-MISC)	(F) Estimated amount of other compensation from the organization and related organizations
(1) Wendy S Newell MD........................................................................ Board Member	1.0 .......................	X				0	0
(2) Michel R Samaha MD........................................................................ Board Member	1.0 .......................	X				0	0
(3) Robert Scacheri MD........................................................................ Board Member	1.0 .......................	X				0	0
(4) Mary Jane McClements MD........................................................................ Ex Officio Director	40.0 .......................	X				331,198	30,095
(5) Gary Siegelman........................................................................ SVP & CMO	40.0 .......................	X				519,643	33,600
(6) Bonnie Perratto........................................................................ SVP - Patient Care	40.0 .......................	X				343,835	26,716
(7) Michael E Ashton........................................................................ Administrator	40.0 .......................	X				198,672	32,426
(8) Terry M Murphy........................................................................ Chair & CEO	38.0 .......................2.0	X	X			1,206,572	35,365
(9) Deborah Watson........................................................................ Vice Chair & COO	40.0 .......................	X	X			379,027	35,365
(10) Earl Tanis........................................................................ Treasurer & CFO	38.0 .......................2.0	X	X			534,136	172,384
(11) John Van Gorp........................................................................ SVP Planning & Bus Development	40.0 .......................			X		239,324	34,156
(12) Brad D Kirkes........................................................................ VP Ancillary & Clinical Srvs	40.0 .......................			X		186,866	18,663
(13) John D Mannon MD........................................................................ Physician	40.0 .......................				X	924,246	35,365
(14) Pedro Perez MD........................................................................ Physician	40.0 .......................				X	811,081	35,365
(15) Laeeq Ahmer MD........................................................................ Physician	40.0 .......................				X	787,644	35,365
(16) David Ramos MD........................................................................ Physician	40.0 .......................				X	759,425	35,365
(17) Clifford Turen MD........................................................................ Physician	40.0 .......................				X	744,068	34,582

(A) Name and business address	(B) Description of services	(C) Compensation
WHITING-TURNER CONTRACTORS, 131 Continental Drvie Suite 404NEWARKDE19713	Construction	18,862,663
MCKESSON TECHNOLOGY, 5995 Windward PkwyALPHARETTAGA30005	IS Consulting/Sftwr	4,768,309
BAY ANESTHESIA GROUP, 640 S State StDOVERDE19901	Anesthesia/Med Svcs	4,014,183
Armark Services Inc, 10 Woods RoadVALHALLANY10595	Food Mgmt Services	3,993,519
Gilbane Building Company, 99 Pine STreetNEW YORKNY10005	Architects/Constr	3,105,594
2 Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 of compensation from the organization 260

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 United States. See Part IV, line 21	208,729	208,729
2	Grants and other assistance to individuals in the United States. See Part IV, line 22	0
3	Grants and other assistance to governments, organizations, and individuals outside the United States. See Part IV, lines 15 and 16	0
4	Benefits paid to or for members	0
5	Compensation of current officers, directors, trustees, and key employees ....	5,938,222		5,938,222
6	Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) ....	0
7	Other salaries and wages	175,200,792	138,868,605	36,332,187
8	Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) ....	13,350,958	4,111,006	9,239,952
9	Other employee benefits .......	49,622,394	15,279,647	34,342,747
10	Payroll taxes ...........	12,659,891	3,898,213	8,761,678
11	Fees for services (non-employees):
a	Management ......	0
b	Legal .........	816,293		816,293
c	Accounting ...........	290,971		290,971
d	Lobbying ...........	0
e	Professional fundraising services. See Part IV, line 17	0
f	Investment management fees ......	1,908,467		1,908,467
g	Other (If line 11g amount exceeds 10% of line 25, column (A) amount, list line 11g expenses on Schedule O) ........	3,727,699	3,727,699
12	Advertising and promotion ....	719,139	719,139
13	Office expenses .......	3,009,780	2,017,478	992,302
14	Information technology ......	0
15	Royalties ..	0
16	Occupancy ...........	9,916,630	9,916,630
17	Travel ............	1,000,547	1,000,547
18	Payments of travel or entertainment expenses for any federal, state, or local public officials ......	0
19	Conferences, conventions, and meetings ....	0
20	Interest ...........	7,963,148	7,963,148
21	Payments to affiliates .......	0
22	Depreciation, depletion, and amortization .....	28,425,613	28,155,766	269,847
23	Insurance ..............	3,815,001	783,380	3,031,621
24	Other expenses. Itemize expenses not covered above (List miscellaneous expenses in line 24e. If line 24e amount exceeds 10% of line 25, column (A) amount, list line 24e expenses on Schedule O.)
a	MEDICAL SUPPLIES	75,570,773	43,024,269	32,546,504
b	PROVISION FOR BAD DEBT	36,685,770	36,685,770
c	OTHER PURCHASED SERVICES	29,764,393	29,764,393
d	EQUIP REPAIR & MAINT CONTRACTS	10,006,236	10,006,236
e	All other expenses	13,327,511	13,327,511
25	Total functional expenses. Add lines 1 through 24e	483,928,957	349,458,166	134,470,791	0
26	Joint costs. Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation. Check here if following SOP 98-2 (ASC 958-720).

Part X Balance Sheet Check if Schedule O contains a response to any question in this Part X ...............
	1	Cashnon-interest-bearing .............	0	1	0
2	Savings and temporary cash investments .........	27,653,766	2	29,761,191
3	Pledges and grants receivable, net ...........	0	3	0
4	Accounts receivable, net .............	51,487,127	4	59,448,127
5	Loans and other receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of Schedule L ..................
		0	5	0
6	Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing employers and sponsoring organizations of section 501(c)(9) voluntary employees' beneficiary organizations (see instructions) Complete Part II of Schedule L
		0	6	0
7	Notes and loans receivable, net .............	0	7	0
8	Inventories for sale or use ..............	7,366,736	8	9,062,729
9	Prepaid expenses and deferred charges ..........	9,057,739	9	8,241,066
10a	Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D	10a	523,860,541
b	Less: accumulated depreciation .....	10b	218,654,821	308,314,968	10c	305,205,720
11	Investments—publicly traded securities ..........	382,740,239	11	429,079,575
12	Investments—other securities. See Part IV, line 11 .....	4,797,959	12	4,459,819
13	Investments—program-related. See Part IV, line 11 .....	0	13	0
14	Intangible assets ...............	0	14	0
15	Other assets. See Part IV, line 11 ...........	19,571,390	15	21,185,008
16	Total assets. Add lines 1 through 15 (must equal line 34)......	810,989,924	16	866,443,235
	17	Accounts payable and accrued expenses .........	82,689,056	17	68,768,401
18	Grants payable .................	0	18	0
19	Deferred revenue ................	0	19	0
20	Tax-exempt bond liabilities .............	208,019,094	20	206,317,819
21	Escrow or custodial account liability. Complete Part IV of Schedule D..	0	21	0
22	Loans and other payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified
	persons. Complete Part II of Schedule L..........	0	22	0
23	Secured mortgages and notes payable to unrelated third parties ..	0	23	0
24	Unsecured notes and loans payable to unrelated third parties ....	644,037	24	473,572
25	Other liabilities (including federal income tax, payables to related third parties, and other liabilities not included on lines 17-24). Complete Part X of Schedule D....................	79,542,387	25	65,112,268
26	Total liabilities. Add lines 17 through 25.........	370,894,574	26	340,672,060
		Organizations that follow SFAS 117 (ASC 958), check here and complete lines 27 through 29, and lines 33 and 34.
27	Unrestricted net assets ..............	429,743,994	27	515,580,915
28	Temporarily restricted net assets ...........	4,584,571	28	4,296,958
29	Permanently restricted net assets ...........	5,766,785	29	5,893,302
	Organizations that do not follow SFAS 117 (ASC 958), 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 ...........	440,095,350	33	525,771,175
34	Total liabilities and net assets/fund balances ........	810,989,924	34	866,443,235

- 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

2012

Open to Public
Inspection

Name of the organization

Bayhealth Medical Center Inc

Employer identification number

51-0064318

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 described in 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. See section 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 - Non-functionally integrated

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 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 monetary support
(i) Name of supported organization	(ii) EIN	Yes	No	Yes	No	Yes	No	(vii) Amount of monetary support


Total

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

Cat. No. 11285F

Schedule A (Form 990 or 990-EZ) 2012

Page 2

Part II

Support Schedule for Organizations Described in Sections 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) 2008	(b) 2009	(c) 2010	(d) 2011	(e) 2012	(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) 2008	(b) 2009	(c) 2010	(d) 2011	(e) 2012	(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. Do not include gain or loss from the sale of capital assets (Explain in Part IV.)..
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 2012 (line 6, column (f) divided by line 11, column (f)) .........

Public support percentage for 2011 Schedule A, Part II, line 14 ...............

16a

33 1/3% support test—2012. 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—2011. If the organization did not check a 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—2012. 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—2011. 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) 2012

Page 3

Part III

Support Schedule for Organizations Described in Section 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) 2008	(b) 2009	(c) 2010	(d) 2011	(e) 2012	(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) 2008	(b) 2009	(c) 2010	(d) 2011	(e) 2012	(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.)..

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 2012 (line 8, column (f) divided by line 13, column (f)) .........

Public support percentage from 2011 Schedule A, Part III, line 15 ...............

Section D. Computation of Investment Income Percentage

Investment income percentage for 2012 (line 10c, column (f) divided by line 13, column (f)) ......

Investment income percentage from 2011 Schedule A, Part III, line 17 .............

19a

33 1/3% support tests—2012. 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—2011. 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) 2012

Page 4

Part IV

Supplemental Information. Complete this part to provide the explanations required by Part II, line 10; Part II, line 17a or 17b; and 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) 2012

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, 11a, 11b, 11c, 11d, 11e, 11f, 12a, or 12b
SchDMd Bullet

Attach to Form 990. SchDMd Bullet

See separate instructions.

OMB No. 1545-0047

2012

Open to Public Inspection

Name of the organization

Bayhealth Medical Center Inc

Employer identification number

51-0064318

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 can 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 education) Preservation of an historically important land area

Protection of natural habitat Preservation of a certified historic structure

Preservation of open space

Complete lines 2a through 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, and not on a historic structure listed in the National Register ....................	2d

Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during
the tax 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 section 170(h)(4)(B)(ii)? .......................................

Yes No

In Part XIII, 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 (ASC 958), 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 XIII, the text of the footnote to its financial statements that describes these items.

If the organization elected, as permitted under SFAS 116 (ASC 958), 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 (ASC 958) 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 Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 52283D

Schedule D (Form 990) 2012

Page 2

Part III

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

Using the organization’s acquisition, 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 XIII.

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 XIII and complete the following table:


c	Beginning balance .................................	1c
d	Additions during the year ..............................	1d
e	Distributions during the year .............................	1e
f	Ending balance ...................................	1f

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

Yes No

If “Yes,” explain the arrangement in Part XIII. Check here if the explanation has been provided in Part XIII ........

Part V

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

		(a)Current year	(b)Prior year	b (c)Two years back	(d)Three years back
1a	Beginning of year balance ....	5,766,785	6,072,820	5,398,802	5,031,093
b	Contributions ........
c	Net investment earnings, gains, and losses	126,517	-306,035	674,018	367,709
d	Grants or scholarships .....
e	Other expenditures for facilities and programs ........
f	Administrative expenses ....
g	End of year balance ......	5,893,302	5,766,785	6,072,820	5,398,802

Provide the estimated percentage of the current year end balance (line 1g, column (a)) held as:

Board designated or quasi-endowment SchDMd Bullet

100.000 %

Permanent endowment SchDMd Bullet

Temporarily restricted endowment SchDMd Bullet

The percentages in lines 2a, 2b, and 2c should equal 100%.

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)

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

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

Part VI

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

Description of property		(b)Cost or other basis (other)	(c) Accumulated depreciation	(d) Book value
1a	Land .................	12,489,962		12,489,962
b	Buildings ................	259,768,636	60,963,230	198,805,406
c	Leasehold improvements ............	0	0	0
d	Equipment ................	244,809,833	155,050,566	89,759,267
e	Other .................	6,792,110	2,641,025	4,151,085
Total. Add lines 1a through 1e. (Column (d) must equal Form 990, Part X, column (B), line 10(c).).......				305,205,720

Schedule D (Form 990) 2012

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
Other








Total. (Column (b) must equal Form 990, Part X, col. (B) line 12.)

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) must 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) must 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) Book value
Federal income taxes		0
INTEREST RATE SWAP		2,704,973
ACCRUED POSTRETIREMENT BENEFIT COSTS		46,737,670
ESTIMATED PROFESSIONAL LIABILITY COSTS		11,543,882
ESTIMATED WORKERS COMPENSATION COSTS		4,125,743





Total. (Column (b) must equal Form 990, Part X, col.(B) line 25.)		65,112,268
2. Fin 48 (ASC 740) Footnote. In Part XIII, 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 (ASC 740). Check here if the text of the footnote has been provided in Part XIII .....................................................

Schedule D (Form 990) 2012

Page 4

Part XI Reconciliation of Revenue per Audited Financial Statements With Revenue per Return
1	Total revenue, gains, and other support per audited financial statements .......			1	529,843,620
2	Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a	Net unrealized gains on investments ..........	2a	17,127,636
b	Donated services and use of facilities .........	2b
c	Recoveries of prior year grants ...........	2c
d	Other (Describe in Part XIII.) ............	2d	-21,594,797
e	Add lines 2a through 2d .....................			2e	-4,467,161
3	Subtract line 2e from line 1.....................			3	534,310,781
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	1,908,467
b	Other (Describe in Part XIII.) ...........	4b	1,166,925
c	Add lines 4a and 4b.......................			4c	3,075,392
5	Total revenue. Add lines 3 and 4c. (This must equal Form 990, Part I, line 12.) ......			5	537,386,173

Part XII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return
1	Total expenses and losses per audited financial statements ...........			1	444,167,795
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 XIII.) ............	2d	366,276
e	Add lines 2a through 2d......................			2e	366,276
3	Subtract line 2e from line 1.....................			3	443,801,519
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	1,908,467
b	Other (Describe in Part XIII.) ............	4b	38,218,971
c	Add lines 4a and 4b.......................			4c	40,127,438
5	Total expenses. Add lines 3 and 4c. (This must equal Form 990, Part I, line 18.) ......			5	483,928,957

Part XIII

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, line 2; Part XI, lines 2d and 4b; and Part XII, lines 2d and 4b. Also complete this part to provide any additional information.

Identifier	Return Reference	Explanation
Endowment Funds	Part V	The endowment funds are to be held in perpetuity. The investment income from the funds in not restricted.
Fin 48 (ASC 740) Footnote	Part X, Line 2	The Medical Center follows the accounting guidance for uncertainties in income tax positions which requires that a tax position be recognized or derecognized based on a "more likely than not" threshold. This applies to positions taken or expected to be taken in a tax return. The Medical Center does not believe its financial statements include any material uncertain tax positions. At June 30, 2013, the Medical Center's tax years ended June 30, 2011 through 2013 for the federal tax jurisdiction remain open.
Reconciliation of Revenue	Part XI, Line 2d	Provision for Bad Debt (Reclass) $(36,685,770) Change in fair value of interest rate swap 1,255,357 Change in beneficial interest in net assets of Bayhealth Foundation 1,728,322 Change in benefit obligations 11,980,777 Change in beneficial interest in perpetual trusts 126,517 ---------- Total $(21,594,797) Part XI, Line 4b Expenses From Limited Partnerships (Reclass) $1,533,201 Rental Expenses (Reclass) (366,276) ----------- Total $1,166,925
Reconciliation of Expenses	Part XII, Line 2d	Rental Expenses (Reclass) $366,276 Part XII, Line 4b Provision for Bad Debt (Reclass) $36,685,770 Expenses From Limited Partnerships (Reclass) 1,533,201 ----------- Total $38,218,971

Schedule D (Form 990) 2012

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

2012

Open to Public Inspection

Name of the organization

Bayhealth Medical Center Inc

Employer identification number

51-0064318

Part I

Financial Assistance and Certain Other Community Benefits at Cost

Yes

Did the organization have a financial assistance policy during the tax year? If "No," skip to question 6a ...

Yes

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

Yes

If the organization had multiple hospital facilities, indicate which of the following best describes application of the financial assistance policy to its various hospital facilities during the tax year.

Applied uniformly to all hospital facilities Applied uniformly to most hospital facilities Generally tailored to individual hospital facilities

Answer the following based on the financial assistance eligibility criteria that applied to the largest number of the organization's patients during the tax year.

Did the organization use Federal Poverty Guidelines (FPG) as a factor in determining eligibility for providing free care?

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

Yes

100% 150% 200% Other %

Did the organization use FPG as a factor in determining eligibility for providing discounted care? If "Yes," indicate

which of the following was the family income limit for eligibility for discounted care: .........

200% 250% 300% 350% 400% Other %

If the organization used factors other than FPG in determining eligibility, describe in Part VI the income based criteria for determining eligibility for free or discounted care. Include in the description whether the organization used an asset test or other threshold, regardless of income, as a factor in determining eligibility for free or discounted care.

Did the organization's financial assistance policy that applied to the largest number of its patients during the tax year provide for free or discounted care to the "medically indigent"? ..............

Yes

Did the organization budget amounts for free or discounted care provided under its financial assistance policy during the tax year? ............................

Yes

If "Yes," did the organization's financial assistance expenses exceed the budgeted amount? ......

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

Did the organization prepare a community benefit report during the tax year? ..........

Yes

If "Yes," did 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.

Financial Assistance and Certain Other Community Benefits at Cost

Financial Assistance and Means-Tested Government Programs		(c) Total community benefit expense	(d) Direct offsetting revenue	(e) Net community benefit expense	(f) Percent of total expense
a	Financial Assistance at cost (from Worksheet 1) ..	9,062,200		9,062,200	1.880 %
b	Medicaid (from Worksheet 3, column a) ....
c	Costs of other means-tested government programs (from Worksheet 3, column b) .
d	Total Financial Assistance and Means-Tested Government Programs .	9,062,200		9,062,200	1.880 %
Other Benefits		1,757,110		1,757,110	0.360 %
e	Community health improvement services and community benefit operations (from Worksheet 4) ..	1,757,110		1,757,110	0.360 %
f	Health professions education (from Worksheet 5) ..	3,610,873		3,610,873	0.750 %
g	Subsidized health services (from Worksheet 6) ..	73,390,845	49,137,380	24,253,465	5.030 %
h	Research (from Worksheet 7)	1,402,069		1,402,069	0.290 %
i	Cash and in-kind contributions for community benefit (from Worksheet 8)	4,150,031	690,213	3,459,818	0.720 %
j	Total. Other Benefits ..	84,310,928	49,827,593	34,483,335	7.150 %
k	Total. Add lines 7d and 7j .	93,373,128	49,827,593	43,545,535	9.030 %

For Paperwork Reduction Act Notice, see the Instructions for Form 990. Cat. No. 50192T Schedule H (Form 990) 2012

Schedule H (Form 990) 2012

Page

Part II

Community Building Activities Complete this table if the organization conducted any community building activities during the tax year, and describe in Part VI how its community building activities promoted the health of the communities it serves.

		(a) Number of activities or programs (optional)	(b) Persons served (optional)	(c) Total community building expense	(e) Net community building expense	(f) Percent of total expense
1	Physical improvements and housing
2	Economic development	1		755,875	755,875	0.160 %
3	Community support
4	Environmental improvements
5	Leadership development and training for community members
6	Coalition building	1		834	834
7	Community health improvement advocacy
8	Workforce development	1	655	1,028,865	1,028,865	0.210 %
9	Other
10	Total	3	655	1,785,574	1,785,574	0.370 %

Part III

Bad Debt, Medicare, & Collection Practices

Section A. Bad Debt Expense

Yes

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

Enter the amount of the organization's bad debt expense. Explain in Part VI the methodology used by the organization to estimate this amount. ......

35,294,955

Enter the estimated amount of the organization's bad debt expense attributable to patients eligible under the organization's financial assistance policy. Explain in Part VI the methodology used by the organization to estimate this amount and the rationale, if any, for including this portion of bad debt as community benefit. ......

Provide in Part VI the text of the footnote to the organization’s financial statements that describes bad debt expense or the page number on which this footnote is contained in the attached financial statements.

Section B. Medicare

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

141,713,788

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

180,933,579

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

-39,219,791

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

Did the organization have a written debt collection policy during the tax year? ..........

Yes

If "Yes," did the organization’s collection policy that applied to the largest number of its patients during the tax year contain provisions on the collection practices to be followed for patients who are known to qualify for financial assistance? Describe in Part VI.......................

Yes

Part IV

Management Companies and Joint Ventures(owned 10% or more by officers, directors, trustees, key employees, and physicians—see instructions)

(a) Name of entity	(b) Description of primary activity of entity	(c) Organization's profit % or stock ownership %
1Eden Hill Express	Walk-in Urgent Care	16.667 %
2Premier Purchasing	Group Purchasing	0.360 %
3Dover Surgicenter	Outpatient Surgery Center	27.079 %
4Eden Hill Medical Ct	Real Estate	0.422 %
5
6
7
8
9
10
11
12
13

Schedule H (Form 990) 2012

Page

Part VFacility Information

Section A. Hospital Facilities (list in order of size from largest to smallest—see instructions) How many hospital facilities did the organization operate during the tax year?2 Name, address, and primary website address
1	Kent General Hospital 640 South State Street Dover,DE19901	X	X	X
2	Milford Memorial Hospital 21 West Clarke Ave Milford,DE19963	X	X	X

Schedule H (Form 990) 2012

Page

Part VFacility Information (continued)

Section B. Facility Policies and Practices

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

	Kent General Hospital
Name of hospital facility or facility reporting group

For single facility filers only: line Number of Hospital Facility (from Schedule H, Part V, Section A)

Yes

Community Health Needs Assessment (Lines 1 through 8c are optional for tax years begining on or before March 23, 2012)

During the tax year or either of the two immediately preceding tax years, did the hospital facility conduct a community health needs assessment (CHNA)? If "No," skip to line 9....................

Yes

If “Yes,” indicate what the CHNA report describes (check all that apply):

A definition of the community served by the hospital facility

Demographics of the community

Existing health care facilities and resources within the community that are available to respond to the health needs of the community

How data was obtained

The health needs of the community

Primary and chronic disease needs and other health issues of uninsured persons, low-income persons, and minority groups

The process for identifying and prioritizing community health needs and services to meet the community health needs

The process for consulting with persons representing the community’s interests

Information gaps that limit the hospital facility’s ability to assess the community’s health needs

Other (describe in Part VI)

Indicate the tax year the hospital facility last conducted a CHNA: 20 12

In conducting its most recent CHNA, did the hospital facility take into account input from representatives of the community served by the hospital facility, including those with special knowledge of or expertise in public health? 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 ....................

Yes

Was the hospital facility’s CHNA conducted with one or more other hospital facilities? If “Yes,” list the other hospital facilities in Part VI................................

Yes

Did the hospital facility make its CHNA report widely available to the public? .............

Yes

If “Yes,” indicate how the CHNA report was made widely available (check all that apply):

Hospital facility’s website

Available upon request from the hospital facility

Other (describe in Part VI)

If the hospital facility addressed needs identified in its most recently conducted CHNA, indicate how (check all that apply to date):

Adoption of an implementation strategy that addresses each of the community health needs identified through the CHNA

Execution of the implementation strategy

Participation in the development of a community-wide plan

Participation in the execution of a community-wide plan

Inclusion of a community benefit section in operational plans

Adoption of a budget for provision of services that address the needs identified in the CHNA

Prioritization of health needs in its community

Prioritization of services that the hospital facility will undertake to meet health needs in its community

Other (describe in Part VI)

Did the hospital facility address all of the needs identified in its most recently conducted CHNA? If “No,” explain in Part VI which needs it has not addressed and the reasons why it has not addressed such needs ........

Yes

Did the organization incur an excise tax under section 4959 for the hospital facility's failure to conduct a CHNA as required by section 501(r)(3)? ...........................

If "Yes" to line 8a, did the organization file Form 4720 to report the section 4959 excise tax? ......

If "Yes" to line 8b, what is the total amount of section 4959 excise tax the organization reported on Form 4720 for all of its hospital facilities? $

Schedule H (Form 990) 2012

Page

Part VFacility Information (continued)

Financial Assistance Policy			Yes	No
9	Did the hospital facility have in place during the tax year a written financial assistance policy that:
	Explained eligibility criteria for financial assistance, and whether such assistance includes free or discounted care?	9	Yes
10	Used federal poverty guidelines (FPG) to determine eligibility for providing free care?...........	10	Yes
	If "Yes," indicate the FPG family income limit for eligibility for free care: 200.% If "No," explain in Part VI the criteria the hospital facility used.
11	Used FPG to determine eligibility for providing discounted care?.................	11		No
	If “Yes,” indicate the FPG family income limit for eligibility for discounted care: % If "No," explain in Part VI the criteria the hospital facility used.
12	Explained the basis for calculating amounts charged to patients?.................	12		No
	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)
13	Explained the method for applying for financial assistance?...................	13	Yes
14	Included measures to publicize the policy within the community served by the hospital facility?.......	14	Yes
	If “Yes,” indicate how the hospital facility publicized the policy (check all that apply):
a	The policy was posted on the hospital facility’s website
b	The policy was attached to 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 on admission to the hospital facility
f	The policy was available upon request
g	Other (describe in Part VI)
Billing and Collections
15	Did the hospital facility have in place during the tax year a separate billing and collections policy, or a written financial assistance policy (FAP) that explained actions the hospital facility may take upon non-payment?.......	15	Yes
16	Check all of the following actions against an individual that were permitted under the hospital facility's policies during the tax year before making reasonable efforts to determine the patient’s eligibility under the facility’s FAP:
a	Reporting to credit agency
b	Lawsuits
c	Liens on residences
d	Body attachments
e	Other similar actions (describe in Part VI)
17	Did the hospital facility or an authorized third party perform any of the following actions during the tax year before making reasonable efforts to determine the patient’s eligibility under the facility’s FAP?..........	17		No
	If “Yes,” check all actions in which the hospital facility or a third party engaged:
a	Reporting to credit agency
b	Lawsuits
c	Liens on residences
d	Body attachments
e	Other similar actions (describe in Part VI)

Schedule H (Form 990) 2012

Page

Part VFacility Information (continued)

Indicate which efforts the hospital facility made before initiating any of the actions listed in line 17 (check all that apply):

Notified individuals of the financial assistance policy on admission

Notified individuals of the financial assistance policy prior to discharge

Notified individuals of the financial assistance policy in communications with the patients regarding the patients’ bills

Documented its determination of whether patients were eligible for financial assistance under the hospital facility’s financial assistance policy

Other (describe in Part VI)

Policy Relating to Emergency Medical Care

Yes

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?..........

Yes

If “No,” indicate why:

The hospital facility did not provide care for any emergency medical conditions

The hospital facility’s policy was not in writing

The hospital facility limited who was eligible to receive care for emergency medical conditions (describe in Part VI)

Other (describe in Part VI)

Charges to Individuals Eligible for Assistance under the FAP (FAP-Eligible Individuals)

Indicate how the hospital facility determined, during the tax year, the maximum amounts that can be charged to FAP-eligible individuals for emergency or other medically necessary care.

The hospital facility used its lowest negotiated commercial insurance rate when calculating the maximum amounts that can be charged

The hospital facility used the average of its three lowest negotiated commercial insurance rates when calculating the maximum amounts that can be charged

The hospital facility used the Medicare rates when calculating the maximum amounts that can be charged

Other (describe in Part VI)

During the tax year, did the hospital facility charge any FAP-eligible individuals 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? ............................

If “Yes,” explain in Part VI.

During the tax year, did the hospital facility charge any FAP-eligible individuals an amount equal to the gross charge for any service provided to that individual? .........................

If “Yes,” explain in Part VI.

Schedule H (Form 990) 2012

Page

Part VFacility Information (continued)

Section B. Facility Policies and Practices

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

	Milford Memorial Hospital
Name of hospital facility or facility reporting group

For single facility filers only: line Number of Hospital Facility (from Schedule H, Part V, Section A)

Yes

Community Health Needs Assessment (Lines 1 through 8c are optional for tax years begining on or before March 23, 2012)

During the tax year or either of the two immediately preceding tax years, did the hospital facility conduct a community health needs assessment (CHNA)? If "No," skip to line 9....................

Yes

If “Yes,” indicate what the CHNA report describes (check all that apply):

A definition of the community served by the hospital facility

Demographics of the community

Existing health care facilities and resources within the community that are available to respond to the health needs of the community

How data was obtained

The health needs of the community

Primary and chronic disease needs and other health issues of uninsured persons, low-income persons, and minority groups

The process for identifying and prioritizing community health needs and services to meet the community health needs

The process for consulting with persons representing the community’s interests

Information gaps that limit the hospital facility’s ability to assess the community’s health needs

Other (describe in Part VI)

Indicate the tax year the hospital facility last conducted a CHNA: 20 12

Yes

Was the hospital facility’s CHNA conducted with one or more other hospital facilities? If “Yes,” list the other hospital facilities in Part VI................................

Yes

Did the hospital facility make its CHNA report widely available to the public? .............

Yes

If “Yes,” indicate how the CHNA report was made widely available (check all that apply):

Hospital facility’s website

Available upon request from the hospital facility

Other (describe in Part VI)

If the hospital facility addressed needs identified in its most recently conducted CHNA, indicate how (check all that apply to date):

Adoption of an implementation strategy that addresses each of the community health needs identified through the CHNA

Execution of the implementation strategy

Participation in the development of a community-wide plan

Participation in the execution of a community-wide plan

Inclusion of a community benefit section in operational plans

Adoption of a budget for provision of services that address the needs identified in the CHNA

Prioritization of health needs in its community

Prioritization of services that the hospital facility will undertake to meet health needs in its community

Other (describe in Part VI)

Yes

Did the organization incur an excise tax under section 4959 for the hospital facility's failure to conduct a CHNA as required by section 501(r)(3)? ...........................

If "Yes" to line 8a, did the organization file Form 4720 to report the section 4959 excise tax? ......

If "Yes" to line 8b, what is the total amount of section 4959 excise tax the organization reported on Form 4720 for all of its hospital facilities? $

Schedule H (Form 990) 2012

Page

Part VFacility Information (continued)

Financial Assistance Policy			Yes	No
9	Did the hospital facility have in place during the tax year a written financial assistance policy that:
	Explained eligibility criteria for financial assistance, and whether such assistance includes free or discounted care?	9	Yes
10	Used federal poverty guidelines (FPG) to determine eligibility for providing free care?...........	10	Yes
	If "Yes," indicate the FPG family income limit for eligibility for free care: 200.% If "No," explain in Part VI the criteria the hospital facility used.
11	Used FPG to determine eligibility for providing discounted care?.................	11		No
	If “Yes,” indicate the FPG family income limit for eligibility for discounted care: % If "No," explain in Part VI the criteria the hospital facility used.
12	Explained the basis for calculating amounts charged to patients?.................	12		No
	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)
13	Explained the method for applying for financial assistance?...................	13	Yes
14	Included measures to publicize the policy within the community served by the hospital facility?.......	14	Yes
	If “Yes,” indicate how the hospital facility publicized the policy (check all that apply):
a	The policy was posted on the hospital facility’s website
b	The policy was attached to 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 on admission to the hospital facility
f	The policy was available upon request
g	Other (describe in Part VI)
Billing and Collections
15	Did the hospital facility have in place during the tax year a separate billing and collections policy, or a written financial assistance policy (FAP) that explained actions the hospital facility may take upon non-payment?.......	15	Yes
16	Check all of the following actions against an individual that were permitted under the hospital facility's policies during the tax year before making reasonable efforts to determine the patient’s eligibility under the facility’s FAP:
a	Reporting to credit agency
b	Lawsuits
c	Liens on residences
d	Body attachments
e	Other similar actions (describe in Part VI)
17	Did the hospital facility or an authorized third party perform any of the following actions during the tax year before making reasonable efforts to determine the patient’s eligibility under the facility’s FAP?..........	17		No
	If “Yes,” check all actions in which the hospital facility or a third party engaged:
a	Reporting to credit agency
b	Lawsuits
c	Liens on residences
d	Body attachments
e	Other similar actions (describe in Part VI)

Schedule H (Form 990) 2012

Page

Part VFacility Information (continued)

Indicate which efforts the hospital facility made before initiating any of the actions listed in line 17 (check all that apply):

Notified individuals of the financial assistance policy on admission

Notified individuals of the financial assistance policy prior to discharge

Notified individuals of the financial assistance policy in communications with the patients regarding the patients’ bills

Documented its determination of whether patients were eligible for financial assistance under the hospital facility’s financial assistance policy

Other (describe in Part VI)

Policy Relating to Emergency Medical Care

Yes

If “No,” indicate why:

The hospital facility did not provide care for any emergency medical conditions

The hospital facility’s policy was not in writing

The hospital facility limited who was eligible to receive care for emergency medical conditions (describe in Part VI)

Other (describe in Part VI)

Charges to Individuals Eligible for Assistance under the FAP (FAP-Eligible Individuals)

Indicate how the hospital facility determined, during the tax year, the maximum amounts that can be charged to FAP-eligible individuals for emergency or other medically necessary care.

The hospital facility used its lowest negotiated commercial insurance rate when calculating the maximum amounts that can be charged

The hospital facility used the average of its three lowest negotiated commercial insurance rates when calculating the maximum amounts that can be charged

The hospital facility used the Medicare rates when calculating the maximum amounts that can be charged

Other (describe in Part VI)

If “Yes,” explain in Part VI.

During the tax year, did the hospital facility charge any FAP-eligible individuals an amount equal to the gross charge for any service provided to that individual? .........................

If “Yes,” explain in Part VI.

Schedule H (Form 990) 2012

Page

Part VFacility Information (continued)

Section C. Other Health Care Facilities That Are Not Licensed, Registered, or Similarly Recognized as a Hospital Facility (list in order of size, from largest to smallest) How many non-hospital health care facilities did the organization operate during the tax year?39
Name and address		Type of Facility (describe)
1	Eden Hill Outpatient Imaging Center 200 Banning St Ste 140 Dover,DE19904	Outpatient Diagnostic Center
2	Bayhealth Medical Group Cardiology 1100 Forrest Ave Dover,DE19904	Outpatient Diagnostic Clinic
3	Cardiac Diagnostic Ctr Dover 1100 Forrest Ave Dover,DE19901	Outpatient Diagnostic Center
4	Kent Outpatient Imaging-Dover 540 S Governors Ave Dover,DE19901	Outpatient Diagnostic Center
5	Cardiac Diagnostic Ctr Milford 802 N Dupont Hwy Milford,DE19963	Outpatient Diagnostic Center
6	Milford Outpatient Imaging 1020 Mattlind Way Milford,DE19963	Outpatient Diagnostic Center
7	Smyrna-Clayton Professional Center 401 N Carter Rd Smyrna,DE19977	Outpatient Services Center
8	Bayhealth Maternal Fetal Medicine 1060 S Governors Ave Dover,DE19904	Outpatient Physician Clinic
9	Bayhealth Medical Grp Orthopedic 540 S Governors Ave Ste 201 Dover,DE19901	Outpatient Physician Clinic
10	Bayhealth ENT Dover 826 S Governors Ave Dover,DE19901	Outpatient Physician Clinic
11	Bayhealth Women's Care Assoc 517 S Dupont Hwy Dover,DE19963	Outpatient Physician Clinic
12	Women's Center at Milford 200 Kings Hwy Ste 3 Milford,DE19963	Outpatient Services Center
13	Women's Center - Dover 540 s governors ave Dover,DE19901	Outpatient Services Center
14	Bayhealh Neurology Dover 540 s governors ave Dover,DE19901	Outpatient Physician Clinic
15	Bayhealth Medical Assoc of Harrington 205 Shaw ave harrington,DE19952	Outpatient Physician Clinic
16	Bayhealth ENT of Georgetown 20930 Dupont blvd suite 202 georgetown,DE19947	Outpatient Physician Clinic
17	Bayhealth Urology Dover 200 Banning St suite 350 Dover,DE19904	Outpatient Physician Clinic
18	Bayhealth Medical Grp Urology-Milford 200 Kings Hwy Ste 7 Milford,DE19963	Outpatient Physician Clinic
19	Middletown Medical Center 209 E Main St Middletown,DE19709	Outpatient Services Center
20	Bayhealth Plastic & Aesthetic Surgery 34446-2 King st Row Lewes,DE19958	Outpatient Physician Clinic
21	Milford Occupational Health & Urgentcare 301 Jefferson St Milford,DE19963	Occupational Health Services and walk-in urgent care services
22	Dover Occupational Health 1275 S State st Dover,DE19901	Occupational Health Services
23	Bayhealth Pain Treatment Center 826 S Governors Ave Dover,DE19901	Outpatient Services Center
24	Bayhealth Medical Assoc Milford 305 Jefferson Ave Milford,DE19968	Outpatient Physician Clinic
25	Bayhealth Medical Assoc Milton 630 Mulberry st Milton,DE19968	Outpatient Physician Clinic
26	Bayhealth General Surgery Dover 819 s governors ave Dover,DE19904	Outpatient Physician Clinic
27	Bayhealth Family Practice Georgetown 25 Bridgeville rd georgetown,DE19947	Outpatient Physician Clinic
28	Bayhealth Endocrinology Milford 113 Neurology Way Milford,DE19963	Outpatient Physician Clinic
29	Bayhealth Family Practice Dover 200 Banning St Suite 150 Dover,DE19904	Outpatient Physician Clinic
30	Bayhealth General Surgery Milford 113 Neurology Way Milford,DE19963	Outpatient Physician Clinic
31	Harrington Outpatient Center 201 Shaw Ave harrington,DE19953	Outpatient Service Center
32	Wellness Center at Smyrna High School 500 Duck Creek Parkway Smyrna,DE19977	School Based Wellness Center
33	Milton Outpatient Center 632 Mulberry St Milton,DE19968	Outpatient Service Center
34	Wellness Ctr at Woodbridge High School 307 Laws st Bridgeville,DE19933	School Based Wellness Center
35	Wellness Ctr at Milford High School 1019 N Walnut St Milford,DE19963	School Based Wellness Center
36	Wellness Ctr at Caesar Rodney High Schoo 239 Old North Road Camden,DE19934	School Based Wellness Center
37	Wellness Ctr at Dover High School 1 Pat Lynn Drive Dover,DE19904	School Based Wellness Center
38	Wellness Ctr at Polytech High School 823 Walnut Shade Rd Dover,DE19901	School Based Wellness Center
39	Wellness Ctr at Lake Forest High School 5407 Killens Pond Rd Felton,DE19943	School Based Wellness Center

Schedule H (Form 990) 2012

Page

Part VI

Supplemental Information

Complete this part to provide the following information.

1	Required descriptions. Provide the descriptions required for Part I, lines 3c, 6a, and 7; Part II; Part III, lines 4, 8, and 9b; Part V, Section A; and Part V, Section B, lines 1j, 3, 4, 5c, 6i, 7, 10, 11, 12h, 14g, 16e, 17e, 18e, 19c, 19d, 20d, 21, and 22.
2	Needs assessment. Describe how the organization assesses the health care needs of the communities it serves, in addition to any 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.
8	Facility reporting group(s). If applicable, for each hospital facility in a facility reporting group provide the descriptions required for Part V, Section B, lines 1j, 3, 4, 5c, 6i, 7, 10, 11, 12h, 14g, 16e, 17e, 18e, 19c, 19d, 20d, 21, and 22.

Identifier	ReturnReference	Explanation
Part I		Part I, Line 6a - Related Organization Community Benefit Report The Medical Center provides its community benefit information to the Delaware Healthcare Association, Inc. for use in a state-wide community benefit report.
Part II		Community Building Activities Bayhealth has invested heavily in recruiting primary care and certain specialty physicians to this medical underserved area. To encourage physicians to relocate to its service area, Bayhealth has formed a number of wholly owned physician practices, currently employing more than 55 physicians. Additionally, a hospitalist program was established in 2009 Bayhealth staff members serve on various professional, educational, and community boards throughout Delaware. Examples include the Delaware Chapter of March of Dimes, Delaware Health Mother and Infant Consortium, Brian Injury Association of Delaware, Delaware Cancer Consortium Advisory Board, Delaware Breast Cancer Coalition, and the Hope Medical Clinic, Delaware's only 100% free medical facility.
Part III		Line 4 - Bad Debt Expense The Medical Center provides an allowance for doubtful accounts for estimated losses resulting from the unwillingness or inability of patients to make payments for services. The allowance is determined by analyzing specific accounts and historical data and trends. Patient accounts receivable are charged off against the allowance for doubtful accounts when management determines that recovery is unlikely and the Medical Center ceases collection efforts. In evaluating the collectability of accounts receivable, the Medical Center analyzes its past history and identifies trends for each of its major payor sources of revenue to estimate the appropriate allowance for doubtful accounts and provision for bad debts. Management reviews data about these major payor sources of revenue in evaluating the sufficiency of the allowance for doubtful accounts. For receivables associated with services provided to patients who have third-party coverage, the Medical Center analyzes contractually due amounts and provides an allowance for doubtful accounts and a provision for bad debts, if necessary (for example, for expected uncollectible deductibles and copayments on accounts for which the third-party payor has not yet paid). For receivables associated with self-pay patients, the Medical Center records a significant provision for bad debts on the basis of its past experience, which indicates that many patients are unable or unwilling to pay the portion of their bill for which they are financially responsible. The difference between the billed rates and the amounts actually collected after all reasonable internal collection efforts have been exhausted is charged off against the allowance for doubtful accounts. The Medical Center in 2013 experienced an approximately 6 percent decrease in the allowance for doubtful accounts due to changes in charity care and improved collection efforts. Line 8 Explanation of Shortfall as Community Benefit Bayhealth's service area is experiencing an influx of people from areas with a higher cost of living. Many of these people are senior citizens and are Medicare recipients. Bayhealth provides services to them as part of its mission to care for the entire community. The Medicare losses sustained by Bayhealth are a result of Medicare reimbursing at less than operating costs. The IRS community benefit standard for hospitals serves patients covered by governmental health benefits (including Medicare), it is promoting the health of the community. Therefore, Medicare losses should be counted as a community benefit Net revenue form the Medicare program accounted for approximately 33% of Bayhealth's net patient revenue for the year ended 6/30/13. Line 9b - Provisions on Collection Practices for Qualified Patients BAYHEALTH'S POLICY IS TO COMPLY WITH ALL STATE AND FEDERAL LAW AND THIRD PARTY REGULATIONS AND TO PERFORM ALL CREDIT AND COLLECTION FUNCTIONS IN A DIGNIFIED AND RESPECTFUL MANNER. EMERGENCY SERVICES WILL BE PROVIDED TO ALL PATIENTS REGARDLESS OF ABILITY TO PAY. FINANCIAL ASSISTANCE IS AVAILABLE FOR PATIENTS BASED ON FINANCIAL NEED AS DEFINED IN THE FINANCIAL ASSISTANCE POLICY. BAYHEALTH DOES NOT DISCRIMINATE ON THE BASIS OF AGE, GENDER, RACE, SOCIAL OR IMMIGRATION STATUS, SEXUAL ORIENTATION, OR RELIGIOUS AFFILIATION. PATIENTS WHO ARE UNABLE TO PAY MAY REQUEST A FINANCIAL ASSISTANCE APPLICATION AT ANY TIME PRIOR TO SERVICE AND UP TO 120 DAYS FROM THE BILL DATE. BAYHEALTH MAY REQUEST THE PATIENT TO APPLY FOR MEDICAL ASSISTANCE PRIOR TO APPLYING FOR FINANCIAL ASSISTANCE. OUR ORGANIZATION DOES NOT PURSUE COLLECTION ACTIVITY ON PATIENTS DETERMINED TO BE ELIGIBLE FOR OUR FINANCIAL ASSISTANCE PROGRAM.
Part V - Milford Memorial Hospital		To better understand the health needs in Bayhealth's service area, Bayhealth conducted a Community Health Needs Assessments (CHNA). Bayhealth analyzed a variety of publicly reported data and gathered input from key stakeholders in Sussex County. Diligent attempts were made to collect interview and survey responses from individuals and community-based organizations to gain insight on the needs of vulnerable families in Sussex County. Prior to 2012-2013, the most recent needs assessment was reported to the Bayhealth Board of Directors in 2006. The CHNA is made available on the Hospital's website as follows: www.bayhealth.org/bayhealthcontentpage.aspx?nd=907 The 2013 needs assessment results revealed opportunities for improvement in health promotion, disease prevention and improving access to health care in Sussex, DE. The needs assessment team collated interview and survey responses in order to prioritize identified health needs and develop implementation strategies to fulfill Bayhealth's mission. Description of communities served: Milford Memorial Hospital, one of two hospital facilities owned and operated by Bayhealth, opened its doors in 1938. Since that time, Milford Memorial has grown in size and services to meet the health needs of the communities served, offering a comprehensive array of services to the residents of central and southern Delaware. Sussex County is located in the southern part of the state of Delaware. The county seat is Georgetown. Historically a rural farmland community, Sussex County is attempting to preserve its farmland and natural resources while effectively managing the population growth that is occurring in the county. Sussex County has a population of 203,390, making it the second largest county in the state in terms of the size of its population. The population has grown 30.2% since 2000, which is much higher than the state average rate of approximately 17% for the same time frame. The median age for the county in 2011 was 45.9 years of age, higher than the state as a whole or the U.S. median age for the same time frame. The most prevalent race in Sussex County is white (non-Hispanic), which currently represents over 75% of the total population. The average education level in Sussex County is lower than the state average. Sussex County is home to three acute care hospital facilities: Bayhealth's Milford Memorial, Beebe Medical Center in Lewes, and Nanticoke Health Services in Seaford. These three hospitals are joining with local community and health resources to focus on one mission - to make Sussex County one of the healthiest in the nation. As part of the healthier Sussex county initiative, Bayhealth will focus on addressing important health issues impacting residents of Sussex County. Milford memorial's community health needs assessment focuses on the residents of Sussex County, the home county of the hospital. Approximately 65% of Milford Memorial's patients originate from Sussex County. An additional 30% of patients that utilize Milford memorial come from Kent County, a contiguous county. The 2015 population is forecasted to exceed 220,000 in Sussex County. The median age for the county in 2011 was 45.9 years of age, higher than the state as a whole or the U.S. median age for the same time frame. Who was involved in the assessment: The assessment process was initiated jointly by the education and strategic planning departments of Bayhealth. The assessment was primarily conducted by the education department. To gain feedback from persons with broad knowledge of the community served, Bayhealth sought input from community stakeholders, to include the following: -Hope Medical Center -Delaware Division of public health department of health and social services -Thurman Adams State Service Center -Delaware division of public health office of minority health -Delaware division of public health office of women's health -Delaware division of public health nursing -Delaware division of public health social services -LabRed medical center -Westside family health center -PA mid-Atlantic AIDS training center -Bayhealth High School wellness centers, advance practice nurses -Milford -Woodbridge -Poly Tech -Community Physicians Personal imitations were extended to community partner organizations who interact with low-income groups to participate in one-on-one interviews regarding the health needs of Kent county residents. Focus groups were conducted in multiple locations throughout the county. Wellness center staff, guidance counselors, church staff (including those of minority populations), and public health nurses, were interviewed to ensure information obtained represents the diversity of our community in terms of demographic, socioeconomic, and geographic factors. One-on-one meetings with community physicians were conducted over a two-month period. Community physicians offer a unique perspective and knowledge of the health needs of our population. Physicians who could not attend one-on-one sessions completed a written response assessment. How the assessment was conducted: Quantitative and qualitative analyses methods were utilized to generate a comprehensive assessment to fully understand the health needs of the community served. Quantitative analyses were conducted using the most recent data available from five primary sources: -Delaware Health Tracker (s product of the healthy community network); -County health rankings & roadmaps (a collaboration between the Robert wood Johnson foundation and the university of Wisconsin population health institute); -demographic data from the Delaware population consortium; -Delaware health statistics center; and, -demographic and socioeconomic data from the U.S. Census bureau. To gain insight, Bayhealth reviewed available data to compare health statistics at the state and county levels to identify areas of health disparity. Based on this analysis, the education department of Bayhealth developed discussion topics for a variety of community engagements, including interviews with key stakeholders, focus groups, and online surveys. A variety of community settings were selected with a special emphasis on those persons and areas most impacted by health disparities. Thematic analysis identified health needs based on available quantitative data and responses from interviews and online surveys.
Part V - Kent General Hospital		The 2013 needs assessment results revealed opportunities for improvement in health promotion, disease prevention and improving access to health care in Kent County, DE. The Needs Assessment Team collated interview and survey responses in order to prioritize identified health needs and develop implementation strategies to fulfill Bayhealth's mission. Description of Community Served: Kent County is located in the central part of the state of Delaware. Dover is the county seat and the state's capital. Historically, a rural farmland community, Kent County is attempting to preserves its farmland and natural resources while effectively managing the population growth that is occurring in the county. Kent County has a population of nearly 170,000, making it the smallest county in the state in terms of the size of its population. However, the county population has grown 32% since 2000, which is much higher than the state average rate of approximately 17% for the same time frame. The most prevalent race in Kent County is white, which represent over 60% of the total population. The average Kent County education level is lower than the state average. Kent General Hospital, one of two hospital facilities owned and operated by Bayhealth, opened its doors in 1927. Kent General has grown in size and services to meet the health needs of the communities served. In 2012, Bayhealth invested 130 million dollars to complete Phase II construction of Kent General Hospital, part of Bayhealth's 10 year strategic plan designed to address present and future health care needs. Phase II added 415,000 square feet to the Kent campus constructing a new welcome center, central services building, expanded emergency department, integrated cancer center and parking garage. Bayhealth's CHNA focuses on the residents of Kent County. Approximately 87% of Kent General's patients originate from Kent County. Moreover, Kent County residents rely heavily on Kent General for inpatient services, as evidenced by the approximate 75% of Kent County resident who utilized Bayhealth's Kent General for inpatient in CY 2009 (the most recent data available). Who was Involved in the Assessment: The assessment process was initiated jointly by the Education and Strategic Planning Departments of Bayhealth. The assessment was primarily conducted by the Education Department. To gain feedback from persons with broad knowledge of the community served, Bayhealth sought input from community stakeholders, to include the following: - Hope Medical Clinic - Delaware Division of Public Health Department of Health and Social Services 1. James W. Williams State Service Center 2. Thurman Adams State Service Center 3. Delaware Division of Public Health Office of Minority Health 4. Delaware Division of Public Health Office of Women's Health 5. Delaware Division of Public Health Nursing 6. Delaware Division of Public of Public Health Social Services - LaRed Medical Center - Westside Family Health Center - Bayhealth High School Wellness Centers, Advanced Practice Nurses 1. Caesar Rodney 2. Lake Forrest 3. Dover 4. Milford 5. Smyrna 6. Woodbridge 7. Polytech - Community Physicians Personal invitations were extended to community partner organizations who interact with low-income groups to participate in one-on-one interviews regarding the health needs of Kent County residents. Focus groups were conducted in multiple locations throughout the county. Wellness center staff, guidance counselors, church staff (including those of minority populations), and public health nurses were interviewed to ensure information obtained represents the diversity of our community in terms of demographic, socioeconomic, and geographic factor. One-on-one meetings with community physicians were conducted over a two-month period. Community physicians offer a unique perspective and knowledge of the health needs of our population. Physicians who could not attend one-on-one sessions completed a written response assessment. How the Assessment was conducted: Quantitative and qualitative analyses methods were utilized to generate a comprehensive assessment to fully understand the health needs of the community served. Quantitative analyses were conducted using the most recent data available from five primary sources: - Delaware Health Tracker (a product of the Healthy Community Network); - County Health Rankings & Roadmaps (a collaboration between the Robert Wood Johnson Foundation and the University of Wisconsin Population health Institute); - Demographic data from the Delaware Population Consortium; - Delaware Health Statistics Center; and, - Demographic and socioeconomic data from the U.S. Census Bureau. To gain insight, Bayhealth reviewed available data to compare health statistics at the state and county levels to identify areas of health disparity. Based on this analysis, the Education Department of Bayhealth developed discussions topics for a variety of community engagements, including interviews with key stakeholders, focus groups, and online surveys. A variety of community settings were selected with a special emphasis on those persons and areas most impacted by health disparities. Thematic analysis identified health needs based on available quantitative data and responses from interviews and online surveys. Priority Criteria and Outcomes: The criteria used to evaluate and prioritize the health needs identified through the fact-finding process included: - The seriousness of the issue; - The relative size of the populations affected; - The degree to which the need particularly affected persons living in poverty or reflected health disparities; - Alignment with Bayhealth's mission and vision; and, - Availability of community resources to address the need. After close review of the community data and discussions with medical staff members of Bayhealth, health needs were prioritized jointly the by Education and Strategic Planning Departments. Bayhealth's administration was given the opportunity to discuss and reprioritize as needed. The four health concerns identified as priority issues are: 1. Obesity rates 2. Cancer rates (lung, breast, prostate) 3. Healthcare access 4. Mental health and substance abuse
Part V - Other Information		Part V - Explanation of Number of Facility Type Dover Surgicenter, LLC is licensed by the state, and would qualify as a general medical and surgical facility except that it provides services only on an outpatient, rather than an inpatient, basis, Bayhealth Medical Center is a limited partner. Part V, Line 11 Bayhealth does not have a tiered financial assistance program, all uninsured patients receive a 10% discount on service provided. Part V, Line 14g All patient statements advise patients to call out billing support department if they need financial assistance. Part V, Line 20d Uninsured FAP and Non FAP individuals receive a discount similar to that of our largest commercial payer.
Part VI		Part VI, Line 2 - Community Health Needs Assessment Bayhealth does service-specific needs assessments periodically by using patient surveys. Bayhealth also surveys other not for profits, health organizations, attendees at classes, support groups and screenings to assess the strengths and weaknesses of the programs that Bayhealth offers. Bayhealth has on-going communications with that State of Delaware and with national not-for-profit health organizations. Plans for full-scale state-wide needs assessment are progressing on schedule. Part VI, Line 3 - Patient education of eligibility for assistance All patient or family members who inquire about financial assistance are directed to the Financial Counselor Team of the Patient Access Department (admissions) Self-pay patients are directed to PATHS, a service contracted by Bayhealth that screens them for Medicaid and helps them with financial application papers. Bayhealth invoices state - If you are not able to pay please contact our Billings Support Department to make suitable arrangements. The Patient Billing Guide is distributed by the Patient Finance and Admissions Departments. The booklet describes types of bills, understanding your bill, privacy policy, collection policy, dispute resolution, payment methods, and has a glossary of financial and insurance terms. The billing support/self-pay/financial counselor department's local telephone number and a direct toll-free telephone number is available by calling the main hospital telephone number and is also listed on brochures and on other information material. EMTALA and patient rights information is conspicuously placed for all patients and visitors to see. BAYHEALTH'S FINANCIAL ASSISTANCE POLICY WAS ESTABLISHED TO PROVIDE FINANCIAL RELIEF TO THOSE WHO ARE UNABLE TO MEET THEIR OBLIGATION FOR SERVICES RENDERED, A PATIENT'S INABILITY TO OBTAIN FINANCIAL ASSISTANCE DOES NOT, IN ANY WAY, PRECLUDE THE PATIENT'S RIGHT TO RECEIVE AND HAVE ACCESS TO MEDICAL TREATMENT. OUR FINANCIAL ASSISTANCE POLICY INFORMS PATIENTS AND PERSONS WHO WOULD OTHERWISE BE BILLED FOR SERVICES ABOUT THEIR ELIGIBILITY FOR ASSISTANCE UNDER FEDERAL, STATE OR LOCAL GOVERNMENT PROGRAMS. OUR FINANCIAL ASSISTANCE POLICY AND CONTACT INFORMATION IS POSTED IN ALL ADMISSION AREAS, THE EMERGENCY ROOM AND ALL OTHER OUTPATIENT AREAS THROUGHOUT THE FACILITY. A COPY OF THE POLICY IS INCLUDED UPON PATIENT ADMISSION AND DISCHARGE, AS WELL AS PROVIDED IN PATIENT BILLS AND OUR WEBSITE. BAYHEALTH DISCUSSES WITH PATIENTS THE AVAILABILITY OF VARIOUS GOVERNMENT BENEFITS, SUCH AS MEDICAID OR STATE PROGRAMS, AND EMPLOYS DEDICATED STAFF ON-SITE TO ASSIST PATIENTS WITH QUALIFICATIONS FOR SUCH PROGRAMS. Part VI, Line 4 - Community Information Bayhealth's service area is designated as Medically Underserved Area and a Health Professional Shortage Area, by the federal and state governments. The population of Bayhealth's service area is growing rapidly because of an influx of retirees arriving from higher-cost-of-living areas in neighboring states, and because of retired military families attracted by the proximity of Dover Air Force Base. Kent and Sussex Counties also have a growing population of residents who do not speak English fluently. Teen pregnancy, school drop-out, infant mortality, and cancer rates are relatively high compared to national averages. In recent years, Delaware housing values have increased faster than the rate of inflation. Housing prices are well over 3 times the median household income. Employment growth is fastest in low paying sectors, with most of the growth in jobs sectors paying less than $26,000 annually. The fastest growing job sector in Sussex County averages $16,000 annual salary. In 2012, Kent County median household income was $55,786 and Sussex County was $52,692. Part VI, Line 5 - Promotion of community health Bayhealth is investing heavily in expanding and upgrading its facilities and equipment. Bayhealth Kent General recently completed a major building project, which added a new and expanded Emergency Department and integrated Cancer Center. Plans are under development for a new building at Bayhealth Milford Memorial. Bayhealth's medical staff of 400+ physicians is open to any qualified physician in its service area. Bayhealth hosts students for residencies, internships and clinical studies and assists some students with room and board during the host period. Bayhealth's Education Department offers free blood pressure, diabetes, and osteoporosis screenings; and free or discounted mammograms, prostate, skin, and colorectal screenings to under-insured or uninsured individuals. They also host a variety of free monthly support groups, classes, and information sessions at both hospitals. Bayhealth operates and subsidizes 7 high school wellness centers in Kent and Sussex counties, under an argument with the State of Delaware. To encourage interest in health-related careers, Bayhealth contributes monies and equipment to nearby colleges and universities. Bayhealth staff members deliver lectures and presentations, mentor healthcare students, and work as members of committees to develop healthcare curricula. Bayhealth hosts an Explorer Troop which focuses on medical careers. Bayhealth Kent General supplies operating rooms, medical supplies and health-related staff for the Voluntary Ambulatory Surgical Access Program (VASAP), which provides ambulatory surgical procedures for indigent patients. Bayhealth is an active member of the Kent Economic Partnership, the Downtown Dover Partnership, and six Chambers of Commerce. As Bayhealth representatives, staff members are active in community Rotary Clubs and other service organizations. Bayhealth has invested heavily in recruiting primary care and certain specialty physicians to this medically underserved area. To encourage physicians to relocate to its service area, Bayhealth has formed a number of wholly-owned physician's practices, currently employing more than 55 physicians. Additionally, a hospitalist program was established in 2009. Bayhealth staff members serve on various professional, educational and community boards throughout Delaware, examples include the Delaware Chapter of March of Dimes, Delaware Health Mother and Infant Consortium, Brain Injury Association of Delaware, Delaware Cancer Consortium Advisory Board, Delaware Breast Cancer Coalition, and the Hope Medical Clinic, Delaware's only 100% free medical facility. Part VI, Line 6 - Affiliated Health Care System Bayhealth is a member of the University of Pennsylvania Cancer Network, University of Pennsylvania Health System's Penn Cardiac Care, and Penn Orthopedics of Penn Medicine. These alliances provide direct access to the latest medical research, clinical trials, and specialty care. Part VI, Line 7 - State filing of Community benefit report Delaware Part VI, Line 8 - Facility reporting group As required; Part V, Section B, Line 11 The facilities do not have a tiered financial assistance program, all uninsured patients receive a 10% discount on service provided. As required; Part V, Section B, Line 14g All patient statements advise patients to call out billing support department if they need financial assistance. As required; Part V, Section B, Line 20d Uninsured FAP and Non FAP individuals receive a discount similar to that of our largest commercial payer.

Schedule H (Form 990) 2012

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

2012

Open to Public
Inspection

Name of the organization
Bayhealth Medical Center Inc

Employer identification number
51-0064318

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. Part II can be duplicated if additional space is needed.

(a) Name and address of organization or government	(b) EIN	(d) Amount of cash grant	(h) Purpose of grant or assistance
(1) Delaware Technical Community College 100 Campus Drive Dover,DE19904	51-0246178	25,000	Program Support
(2) American Heart Association 7272 Greenville Ave Dallas,TX75231	13-5613797	20,500	Program Support
(3) Delaware State University 1200 N Dupont Hwy Dover,DE19901		25,500	Program Support
(4) American Cancer Society 250 Williams Street NW Atlanta,GA30303	13-1788491	10,000	Program Support
(5) Central DE Chamber 435 N Dupont Hwy Dover,DE19901	51-0082741	8,740	Program Support
(6) Delaware Breast Cancer Coalition 111 W 11th St Suite 3 Wilmington,DE19801	52-2045298	8,000	Program Support
(7) Wesley College 120 N State Street Dover,DE19901	51-0064335	5,500	Program Support

Enter total number of section 501(c)(3) and government organizations listed in the line 1 table ................ Bullet Image

Enter total number of other organizations listed in the line 1 table ........................ . Bullet Image

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

Cat. No. 50055P

Schedule I (Form 990) 2012

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.
Part III can be duplicated if additional space is needed.

(a)Type of grant or assistance	(b)Number of recipients	(c)Amount of cash grant	(d)Amount of non-cash assistance	(e)Method of valuation (book, FMV, appraisal, other)	(f)Description of non-cash assistance

Part IV

Supplemental Information.

Complete this part to provide the information required in Part I, line 2, Part III, column (b), and any other additional information.

Identifier	Return Reference	Explanation

Schedule I (Form 990) 2012

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

2012

Open to Public Inspection

Name of the organization

Bayhealth Medical Center Inc

Employer identification number

51-0064318

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 or provision of all of the expenses described above? If "No," complete Part III to explain....

Yes

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? .......

Yes

Indicate which, if any, of the following the filing organization used to establish the compensation of the
organization's CEO/Executive Director. Check all that apply. Do not check any boxes for methods
used by a related organization to establish compensation of the CEO/Executive Director, but explain in Part III.

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? ................

Yes

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

Yes

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 ............

Yes

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

Cat. No. 50053T

Schedule J (Form 990) 2012

Page 2

Part II

Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is 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) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual.

(A) Name and Title		(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 as deferred in prior Form 990
(A) Name and Title		(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)	(F) Compensation reported as deferred in prior Form 990
(1)Mary Jane McClements MDEx Officio Director	(i) (ii)	301,811 0	600 0	28,787 0	12,756 0	17,339 0	361,293 0
(2)Gary SiegelmanSVP & CMO	(i) (ii)	392,167 0	115,268 0	12,208 0	15,000 0	18,600	553,243 0
(3)Bonnie PerrattoSVP - Patient Care	(i) (ii)	248,319 0	76,874 0	18,642 0	13,243 0	13,473 0	370,551 0
(4)Michael E AshtonAdministrator	(i) (ii)	178,793 0	15,480 0	4,399 0	12,061 0	20,365 0	231,098 0
(5)Terry M MurphyChair & CEO	(i) (ii)	565,658 0	340,963 0	299,951 0	15,000 0	20,365 0	1,241,937 0
(6)Deborah WatsonVice Chair & COO	(i) (ii)	285,062 0	79,634 0	14,331 0	15,000 0	20,365 0	414,392 0
(7)Earl TanisTreasurer & CFO	(i) (ii)	350,726 0	131,247 0	52,163 0	164,826 0	7,558 0	706,520 0
(8)John Van GorpSVP Planning & Bus Development	(i) (ii)	172,380 0	55,503 0	11,441 0	13,791 0	20,365 0	273,480 0
(9)Brad D KirkesVP Ancillary & Clinical Srvs	(i) (ii)	171,054 0	14,620 0	1,192 0	11,269 0	7,394 0	205,529 0
(10)John D Mannon MDPhysician	(i) (ii)	769,137 0	17,000 0	138,109 0	15,000 0	20,365 0	959,611 0
(11)Pedro Perez MDPhysician	(i) (ii)	294,273 0	373,371 0	143,437 0	15,000 0	20,365 0	846,446 0
(12)Laeeq Ahmer MDPhysician	(i) (ii)	294,273 0	372,945 0	120,426 0	15,000 0	20,365 0	823,009 0
(13)David Ramos MDPhysician	(i) (ii)	294,273 0	391,051 0	74,101 0	15,000 0	20,365 0	794,790 0
(14)Clifford Turen MDPhysician	(i) (ii)	594,555 0	30,000 0	119,513 0	15,000 0	19,582 0	778,650 0
(15)Dennis E KlimaPresident, Bayhealth Inc.	(i) (ii)	0 0	148,954 0	591,303 0	57,006 0	0 0	797,263 0
(16)Jon McDowellFormer VP Human Resources	(i) (ii)	59,659 0	0 0	63,115 0	72,274 0	1,991 0	197,039 0
(17)Gerald L WhitePres Bayhealth Develop. Corp	(i) (ii)	196,588 0	38,289 0	25,065 0	305,570 0	20,365 0	585,877 0

Schedule J (Form 990) 2012

Page 3

Part III

Supplemental Information

Complete this part to provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II.
Also complete this part for any additional information.

Identifier	Return Reference	Explanation
Part I, Line 1	Discretionary Spending Account	Under terms of their employment agreements, certain senior executives participate in a flexible benefit plan. they receive a predetermined amount of additional compensation per quarter, which is intended to be used for automobile expenses, estate planning, legal assistance, tuition, supplemental life & disability insurance, or other expenses.
Part I, Line 4a	Severence/Change of Control Payments	Jon McDowell received a severence payment of $55,290 which is included in his compensation on Schedule J, part II, column (b)(iii).
Part I, Line 4b	Supplemental Nonqualified Retirement Plan	During the Fiscal Year- ended June 30, 2013, certain officers and key employees participated in the Bayhealth Supplemental Nonqualified Retirement Plan. The individuals listed below have not vested in the plan therefore the accrued contribution to the plan for the fiscal year is reported on Schedule J, Part II, Column C, Retirement and Other Deferred Compensation: Gary Siegelman Bonnie Perratto John Van Gorp
Part I, Line 7	Non-fixed Payments	Bonuses paid are based on a number of variables including but not limited to individual goal achievements as well as organization operation achievements. The final determination of the bonus amount is determined and approved by the Board as part of the overall compensation review of the officers and key employees.

Schedule J (Form 990) 2012

Additional Data

Software ID:
Software Version:

- TIN:

Schedule K
(Form 990)

Department of the Treasury
Internal Revenue Service

Supplemental Information on Tax Exempt Bonds

Complete if the organization answered "Yes" to Form 990, Part IV, line 24a. Provide descriptions,
explanations, and any additional information in Part VI.
SchKMediumBullet

Attach to Form 990. SchKMediumBullet

See separate instructions.

OMB No. 1545-0047

2012

Open to Public
Inspection

Name of the organization
Bayhealth Medical Center Inc

Employer identification number
51-0064318

Part I

Bond Issues

(a) Issuer name		(b) Issuer EIN	(c) CUSIP #	(d) Date issued	(e) Issue price	(f) Description of purpose	(g) Defeased		(h) On behalf of issuer		(i) Pool financing
(a) Issuer name		(b) Issuer EIN	(c) CUSIP #	(d) Date issued	(e) Issue price	(f) Description of purpose	Yes	No	Yes	No	Yes	No
A	Delaware Health Facilities Authority		246388QA3	10-31-2009	35,600,000	Replace 2009 B&C Bonds PNC Bank		X		X		X
B	Delaware Health Facilities Authority		246388PZ9	10-31-2009	35,600,000	Replace 2009 B&C Bonds PNC Bank		X		X		X
C	Delaware Health Facilities Authority		246388xxx	10-31-2009	138,490,000	Construction Project		X		X		X

Part II

Proceeds

	A		B		C		D
	1 Amount of bonds retired . . . . . . . . . . . . . .	0		0		0
2 Amount of bonds legally defeased . . . . . . . . . . .	0		0		0
3 Total proceeds of issue . . . . . . . . . . . . . .	37,789,270		37,745,725		136,526,503
4 Gross proceeds in reserve funds . . . . . . . . . . . .	0		0		0
5 Capitalized interest from proceeds . . . . . . . . . . .	0		0		0
6 Proceeds in refunding escrows . . . . . . . . . . . .	37,475,081		37,431,536		18,320,647
7 Issuance costs from proceeds . . . . . . . . . . . .	424,189		424,189		611,817
8 Credit enhancement from proceeds . . . . . . . . . . .	0		0		0
9 Working capital expenditures from proceeds . . . . . . . . .	0		0		0
10 Capital expenditures from proceeds . . . . . . . . . . .	0		0		117,594,038
11 Other spent proceeds . . . . . . . . . . . . . .	0		0		18,320,647
12 Other unspent proceeds . . . . . . . . . . . . . .	0		0		0
13 Year of substantial completion . . . . . . . . . . . .	2012				2012
	Yes	No	Yes	No	Yes	No	Yes	No
14 Were the bonds issued as part of a current refunding issue? . . . . .	X		X			X
15 Were the bonds issued as part of an advance refunding issue? . . . . .		X		X		X
16 Has the final allocation of proceeds been made? . . . . . . . .	X		X		X
17 Does the organization maintain adequate books and records to support the final allocation of proceeds? . . . . . . . . . . . . . .	X		X		X

Part III

Private Business Use

	A		B		C		D
	Yes	No	Yes	No	Yes	No	Yes	No
1 Was the organization a partner in a partnership, or a member of an LLC, which owned property financed by tax-exempt bonds? . . . . . . .		X		X		X
2 Are there any lease arrangements that may result in private business use of bond-financed property? . . . . . . . . .		X		X		X

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

Cat. No. 50193E

Schedule K (Form 990) 2012

Page 2

Part III

Private Business Use (Continued)

	A		B		C		D
	Yes	No	Yes	No	Yes	No	Yes	No
3a Are there any management or service contracts that may result in private business use of bond-financed property? . . . . . . . . . . . .		X		X		X
b If "Yes" to line 3a, does the organization routinely engage bond counsel or other outside counsel to review any management or service contracts relating to the financed property? . . . . . . . . . . . . . . . .
c Are there any research agreements that may result in private business use of bond-financed property? . . . . . . . . . . . . . . .		X		X		X
d If "Yes" to line 3c, does the organization routinely engage bond counsel or other outside counsel to review any research agreements relating to the financed property? .
4 Enter the percentage of financed property used in a private business use by entities other than a section 501(c)(3) organization or a state or local government . .	0%		0%		0%		%
5 Enter the percentage of financed property used in a private business use as a result of unrelated trade or business activity carried on by your organization, another section 501(c)(3) organization, or a state or local government . . . . . . .	%		%		%		%
6 Total of lines 4 and 5 . . . . . . . . . . . . . . .	%		%		%		%
7 Does the bond issue meet the private security or payment test? . . . . .		X		X		X
8a Has there been a sale or disposition of any of the bond financed property to a nongovernmental person other than a 501(c)(3) organization since the bonds were issued?. . . . . . . . . . . . . . . . .		X		X		X
b If “Yes” to line 8a, enter the percentage of bond-financed property sold or disposed of.	%		%		%		%
c If “Yes” to line 8a, was any remedial action taken pursuant to Regulations sections 1.141-12 and 1.145-2? . . . . . . . . . . . . .		X		X		X
9 Has the organization established written procedures to ensure that all nonqualified bonds of the issue are remediated in accordance with the requirements under Regulations sections 1.141-12 and 1.145-2?	X		X		X

Part IV

Arbitrage

	A		B		C		D
	Yes	No	Yes	No	Yes	No	Yes	No
1 Has the issuer filed Form 8038-T? . . . . .		X		X		X
2 If "No" to line 1, did the following apply? . . . .
a Rebate not due yet? . . . . . . . .
b Exception to rebate? . . . . . . . .
c No rebate due? . . . . . . . . . .
If you checked "No rebate due" in line 2c, provide in Part VI the date the rebate computation was performed
3 Is the bond issue a variable rate issue? . . . .	X		X			X
4a Has the organization or the governmental issuer entered into a qualified hedge with respect to the bond issue?		X		X		X
b Name of provider . . . . . . . . .	0		0		0
c Term of hedge . . . . . . . . . .
d Was the hedge superintegrated? . . . . . .
e Was a hedge terminated? . . . . . . .

Schedule K (Form 990) 2012

Page 3

Part IV

Arbitrage (Continued)

	A		B		C		D
	Yes	No	Yes	No	Yes	No	Yes	No
5a Were gross proceeds invested in a guaranteed investment contract (GIC)? . . . . . . . . .		X		X		X
b Name of provider . . . . . . . . .	0		0		0
c Term of GIC . . . . . . . . . .
d Was the regulatory safe harbor for establishing the fair market value of the GIC satisfied? . . . . .
6 Were any gross proceeds invested beyond an available temporary period? . . . . . . . .		X		X		X
7 Has the organization established written procedures to monitor the requirements of section 148? . . .		X		X		X

Part V

Procedures To Undertake Corrective Action

	A		B		C		D
	Yes	No	Yes	No	Yes	No	Yes	No
1 Has the organization established written procedures to ensure that violations of federal tax requirements are timely identified and corrected through the voluntary closing agreement program if self-remediation is not available under applicable regulations?	X		X		X

Part VI

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

Identifier	Return Reference	Explanation
Form 990, Schedule K, Part I, Lines A	0	Issue price - Delaware Health Facilities Authority Bond Issue A was issued under 24 CUSIP Numbers, which are not listed seperated on Schedule K their total was $138,490,000.
Form 990, Schedule K, Part I, Line B & C	0	In June 2012, the Medical Center replaced the 2009B and 2009C bonds with Series 2012 $72,250,000 Variable rate refunding bonds (series 2012), that are direct bank purchase bonds with a national bank. The services 2012 bonds were used to extinguish the Series 2009B and 2009C bonds CUSIP numbers did not change in this transaction.

Schedule K (Form 990) 2012

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

2012

Open to Public
Inspection

Name of the organization

Bayhealth Medical Center Inc

Employer identification number

51-0064318

Identifier	Return Reference	Explanation
Form 990 Review Process	Part VI, Section B, Line 11	The Form 990 is prepared by an international accounting firm under the direction of Bayhealth's accounting and finance department. Once completed, a draft of the Form 990 is reviewed by Bayhealth accounting and finance personnel and also the chief financial officer. After the Form 990 is complete, each board of directors member will receive a copy of such completed Form 990 prior to its filing with the Internal Revenue Service.
Explanation of Monitoring and Enforcement Conflicts	Part VI, Section B, Line 12	Bayhealth regularly and consistently monitors and enforces compliance with its conflict of interest policy for all officers and directors. A conflict of interest questionnaire is distributed to and collected from officers and directors annually. Any potential conflicts of interest are investigated further by Bayhealth's executive team. In the event of an actual or perceived conflict of interst, subsequent recusal and abstention by the officer or director may be necessary. These and other requirements are monitored, reviewed and resolved on an on-going basis pursuant to the conflict of interest policy.
Compensation Review	Form 990, Part VI, Line 15 A & B	For officers and key employees other than CEO, CFO, COO and Chief Medical Officer referred to in the previous question, a variety of techniques are used to determine compensation. The Human Resources Department and an independent consultant provide information and recommendations, using a variety of compensation surveys and studies. Written employment contracts are utilized for some positions. The board of directors and its compensation committee is kept informed of events.
Governing Documents	Form 990, Part VI, Line 19	The governing documents, conflict of interest policy, and financial statements are available upon request.
Change in Net Assets	Form 990, Part XI, Line 9	Change in fair value of interest rate swap $ 1,255,357 Change in beneficial interest in net assets of Bayhealth Foundation 1,728,322 Change in pension benefit obligations 11,980,777 Change in beneficial interest in perpetual trusts 126,517 ---------- Total $15,090,973

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

Cat. No. 51056K

Schedule O (Form 990 or 990-EZ) 2012

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

2012

Open to Public Inspection

Name of the organization

Bayhealth Medical Center Inc

Employer identification number

51-0064318

Part I

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

(a) Name, address, and EIN (if applicable) 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

Part II

Identification of Related Tax-Exempt Organizations (Complete if the organization answered "Yes" to 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 entity?
(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) Bayhealth Foundation Inc 640 South State Street Dover,DE19901 22-2559843	Fundraising	DE	501(c)(3)	7	NA		No

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

Cat. No. 50135Y

Schedule R (Form 990) 2012

Page 2

Part III

Identification of Related Organizations Taxable as a Partnership (Complete if the organization answered "Yes" to 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	(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?
(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

Part IV

Identification of Related Organizations Taxable as a Corporation or Trust (Complete if the organization answered "Yes" to 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)	(f) Share of total income	(g) Share of end-of-year assets	(i) Section 512(b)(13) controlled entity?
(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)	(f) Share of total income	(g) Share of end-of-year assets	Yes	No
(1) Bayhealth Development Corp 640 South State Street Dover,DE19901 51-0281107	Real Estate	DE	na	c corp

Schedule R (Form 990) 2012

Page 3

Part V

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

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

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 or (iv) rent from a controlled entity . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

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

f Dividends from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

g Sale of assets to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

h Purchase of assets from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

i Exchange of assets with related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

l Performance of services or membership or fundraising solicitations for related organization(s) . . . . . . . . . . . . . . . . . . . .

m Performance of services or membership or fundraising solicitations by related organization(s) . . . . . . . . . . . . . . . . . . . .

n Sharing of facilities, equipment, mailing lists, or other assets with related organization(s) . . . . . . . . . . . . . . . . . . . . .

o Sharing of paid employees with related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

p Reimbursement paid to related organization(s) for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

q Reimbursement paid by related organization(s) for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes

r Other transfer of cash or property to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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-s)	(c) Amount involved	(d) Method of determining amount involved

Schedule R (Form 990) 2012

Page 4

Part VI

Unrelated Organizations Taxable as a Partnership (Complete if the organization answered "Yes" to 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)	(e) Are all partners section 501(c)(3) organizations?		(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?
(a) Name, address, and EIN of entity	(b) Primary activity	(c) Legal domicile (state or foreign country)	Yes	No	(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

Schedule R (Form 990) 2012

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

Additional Data

Software ID:
Software Version:

1	Briefly describe the organization’s mission or most significant activities: To improve the health status of all members of the community within Bayhealth's service area.
2	Check this box
3	Number of voting members of the governing body (Part VI, line 1a) ........	3	10
4	Number of independent voting members of the governing body (Part VI, line 1b) .....	4	3
5	Total number of individuals employed in calendar year 2011 (Part V, line 2a) ......	5	3,646
6	Total number of volunteers (estimate if necessary) .............	6	475
7a	Total unrelated business revenue from Part VIII, column (C), line 12 ........	7a	37,807
b	Net unrelated business taxable income from Form 990-T, line 34 .........	7b

		Prior Year	Current Year
8	Contributions and grants (Part VIII, line 1h) .........	1,197,537	1,200,796
9	Program service revenue (Part VIII, line 2g) .........	488,929,454	514,835,988
10	Investment income (Part VIII, column (A), lines 3, 4, and 7d ) ....	32,180,456	18,635,747
11	Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e)	1,265,153	2,713,642
12	Total revenue—add lines 8 through 11 (must equal Part VIII, column (A), line 12)...................	523,572,600	537,386,173
13	Grants and similar amounts paid (Part IX, column (A), lines 1–3 )...	0	208,729
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)	238,283,551	256,772,257
16a	Professional fundraising fees (Part IX, column (A), line 11e).....	0	0
b	Total fundraising expenses (Part IX, column (D), line 25) 0
17	Other expenses (Part IX, column (A), lines 11a–11d, 11f–24e)....	214,752,127	226,947,971
18	Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25)	453,035,678	483,928,957
19	Revenue less expenses. Subtract line 18 from line 12.......	70,536,922	53,457,216
		Beginning of Current Year	End of Year
20	Total assets (Part X, line 16).............	810,989,924	866,443,235
21	Total liabilities (Part X, line 26).............	370,894,574	340,672,060
22	Net assets or fund balances. Subtract line 21 from line 20.....	440,095,350	525,771,175

Sign Here

	Signature of officer	Date

	Type or print name and title


4a	(Code: ) (Expenses $ 349,458,166 including grants of $ ) (Revenue $ 510,096,987 )
	Bayhealth Medical Center, Inc. provides a full range of patient care, emergency services, and wellness services. Bayhealth Medical Center is comprised of a total of 402 beds in two acute-care hospitals, Kent General Hospital in Dover (234 beds) and Milford Memorial Hospital (168 beds). Bayhealth also has outpatient sites throughout the service area. Both hospitals have Level III trauma centers. They provide a full range of surgical and medical care, radiation and medical oncology and chemotherapy, infusion therapy, cardiovascular services, endovascular surgery, electrophysiology, ambulatory surgery, wounded care, perinatology services, and a Level II NICU and PICU. During the twelve months ending June 30, 2013, Bayhealth recorded 90,142 Emergency Room visits,470,307 non-emergency outpatient visits, 2,226 births, and 18,078 patients admitted. Bayhealth has affiliations with the University of Pennsylvania's Penn Health in cardiology, oncology, and orthopedics, it provides physician and medical clinical rotations, housing, and meals for interns and residents from surrounding states. In FY 2013, Bayhealth hosted over 1,762 students from vocational schools, community colleges, and universities for clinical rotations in nursing and other health professions. Because the service area is deemed to be medically underserved, with a shortage of health professionals, Bayhealth actively recruits physicians to the area. In addition, it owns and operates 18 physician practices in Central and Southern Delaware. Bayhealth has an active education program, including health-related classes, supporting groups, free public screenings, free speakers for community groups, and representation at community events Bayhealth Medical Center, Inc. provides care to all patients regardless of their ability to pay for the services rendered.

4b	(Code: ) (Expenses $ including grants of $ ) (Revenue $ )












4c	(Code: ) (Expenses $ including grants of $ ) (Revenue $ )












4d	Other program services (Describe in Schedule O.)
	(Expenses $ including grants of $ ) (Revenue $ )
4e	Total program service expenses349,458,166

1b	Sub-Total................
c	Total from continuation sheets to Part VII, Section A....
d	Total (add lines 1b and 1c)............	9,088,710	0	1,052,018

(A) Name and Title	(B) Average hours per week (list any hours for related organizations below dotted line)		(D) Reportable compensation from the organization (W- 2/1099-MISC)	(E) Reportable compensation from related organizations (W- 2/1099-MISC)	(F) Estimated amount of other compensation from the organization and related organizations
(A) Name and Title
(18) Dennis E Klima........................................................................ President, Bayhealth Inc.	40.0 .......................	X	740,257	0	57,006
(19) Jon McDowell........................................................................ Former VP Human Resources	40.0 .......................	X	122,774	0	74,265
(20) Gerald L White........................................................................ Pres Bayhealth Develop. Corp	40.0 .......................	X	259,942	0	325,935

				(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
b	Membership dues....1b
c	Fundraising events....1c
d	Related organizations...1d
e	Government grants (contributions)1e		1,200,796

f	All other contributions, gifts, grants, and similar amounts not included above1f

g	Noncash contributions included in lines 1a-1f:$
h	Total. Add lines 1a-1f.......			1,200,796
			Business Code
2a	NET PATIENT SERVICE REVENUE		900099	507,635,497	507,635,497
b	PHARMACY		900099	4,739,001			4,739,001
c	HEALTH & WELLNESS PROGRAMS		900099	2,461,490	2,461,490
d
e
f	All other program service revenue .
g	Total. Add lines 2a–2f........			514,835,988
3	Investment income (including dividends, interest, and other similar amounts).......			11,993,320		37,807	11,955,513
4	Income from investment of tax-exempt bond proceeds..			0
5	Royalties...........			0
		(i) Real	(ii) Personal
6a	Gross rents	768,599
b	Less: rental expenses	366,276
c	Rental income or (loss)	402,323	0
d	Net rental income or (loss).......			402,323			402,323
		(i) Securities	(ii) Other
7a	Gross amount from sales of assets other than inventory	153,454,449	1,202,390
b	Less: cost or other basis and sales expenses	146,854,475	1,159,937
c	Gain or (loss)	6,599,974	42,453
d	Net gain or (loss)..........			6,642,427			6,642,427
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..			0
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...			0
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..			0
Miscellaneous Revenue			Business Code
11a	GIFT SHOP/FOOD SALES		900099	1,061,020			1,061,020
b	CHILD CARE		900099	607,691			607,691
c	FITNESS CENTER		900099	295,135			295,135
d	All other revenue ....			347,473			347,473
e	Total. Add lines 11a–11d ......			2,311,319
12	Total revenue. See Instructions......			537,386,173	510,096,987	37,807	26,050,583


				(A) Beginning of year		(B) End of year
1	Cashnon-interest-bearing .............			0	1	0
2	Savings and temporary cash investments .........			27,653,766	2	29,761,191
3	Pledges and grants receivable, net ...........			0	3	0
4	Accounts receivable, net .............			51,487,127	4	59,448,127
5	Loans and other receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of Schedule L ..................
				0	5	0
6	Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing employers and sponsoring organizations of section 501(c)(9) voluntary employees' beneficiary organizations (see instructions) Complete Part II of Schedule L
				0	6	0
7	Notes and loans receivable, net .............			0	7	0
8	Inventories for sale or use ..............			7,366,736	8	9,062,729
9	Prepaid expenses and deferred charges ..........			9,057,739	9	8,241,066
10a	Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D	10a	523,860,541
b	Less: accumulated depreciation .....	10b	218,654,821	308,314,968	10c	305,205,720
11	Investments—publicly traded securities ..........			382,740,239	11	429,079,575
12	Investments—other securities. See Part IV, line 11 .....			4,797,959	12	4,459,819
13	Investments—program-related. See Part IV, line 11 .....			0	13	0
14	Intangible assets ...............			0	14	0
15	Other assets. See Part IV, line 11 ...........			19,571,390	15	21,185,008
16	Total assets. Add lines 1 through 15 (must equal line 34)......			810,989,924	16	866,443,235
17	Accounts payable and accrued expenses .........			82,689,056	17	68,768,401
18	Grants payable .................			0	18	0
19	Deferred revenue ................			0	19	0
20	Tax-exempt bond liabilities .............			208,019,094	20	206,317,819
21	Escrow or custodial account liability. Complete Part IV of Schedule D..			0	21	0
22	Loans and other payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified
	persons. Complete Part II of Schedule L..........			0	22	0
23	Secured mortgages and notes payable to unrelated third parties ..			0	23	0
24	Unsecured notes and loans payable to unrelated third parties ....			644,037	24	473,572
25	Other liabilities (including federal income tax, payables to related third parties, and other liabilities not included on lines 17-24). Complete Part X of Schedule D....................			79,542,387	25	65,112,268
26	Total liabilities. Add lines 17 through 25.........			370,894,574	26	340,672,060
	Organizations that follow SFAS 117 (ASC 958), check here and complete lines 27 through 29, and lines 33 and 34.
27	Unrestricted net assets ..............			429,743,994	27	515,580,915
28	Temporarily restricted net assets ...........			4,584,571	28	4,296,958
29	Permanently restricted net assets ...........			5,766,785	29	5,893,302
	Organizations that do not follow SFAS 117 (ASC 958), 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 ...........			440,095,350	33	525,771,175
34	Total liabilities and net assets/fund balances ........			810,989,924	34	866,443,235