xt7hhm52h222 https://exploreuk.uky.edu/dips/xt7hhm52h222/data/mets.xml The Frontier Nursing Service, Inc. 1994 bulletins  English The Frontier Nursing Service, Inc. Contact the Special Collections Research Center for information regarding rights and use of this collection. Frontier Nursing Service Quarterly Bulletins Frontier Nursing Service, Vol. 70, No. 1, September, Summer 1994 text Frontier Nursing Service, Vol. 70, No. 1, September, Summer 1994 1994 2014 true xt7hhm52h222 section xt7hhm52h222 FRONTIER NURSING SERVICE
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 US ISSN 0016-2116
Table of Contents
Notes from the School - Kate McHugh 1
Field Notes - Susie Hudgins 2
Courier News - Barb Gibson 5
Miscellaneous — Barb Gibson 6
Sixty—Ninth Annual Report 8
Letter of Appeal 27
In Memoriam - Barb Gibson 28
In Honor Of - Barb Gibson 30
In Memoriam Contribution Cards 31
Urgent Needs — Barb Gibson inside back cover
Cover: Top Photo: J. G. Morgan cutting rock for steps to hospital hill
in 1977 (Photo by Gabrielle Beasley). Bottom Photo: J. G. Morgan
supervising clearing project on hospital hill during August, 1994. Also
pictured, the faithful old red jeep used to do the clearing. J. G. says the
project could not have been done without it. (Photo by Barb Gibson).
Frontier Nursing Service Quarterly Bulletin
US ISSN 0016-2116
Published at the end of each quarter by the Frontier Nursing Service, lnc.
Wendover, Kentucky 41775
Subscription Price $ 5.00 a Year for Donors
Subscription Price $10.00 a Year for Institutions
Editor's Office, Wendover, Kentucky 41775
VOLUME 70 NUMBER 1 September 1, 1994 Summer 1994
Second-class postage paid at Wendover, KY 41775 and at additional mailing offices.
POSTMASTER: Send address changes to Frontier Nursing Service, Wendover, KY 41775.
Copyright Frontier Nursing Service, lnc.1994/All Rights Reserved

Notes from the School - The Real Faces of CNEP
Sometimes we can get lost in the numbers. Being part of the oldest,
largest and most innovative school of nurse-midwifery in the
country involves lots of business-like organization of grades,
exams, clinical sites, student problems and faculty.
In this newsletter I'd like to take you "behind the scenes at CNEP"
and let you get to know a few of our fresh, brand-new students in
Class 9. The 45 new student nurse-midwives came to the Mid-
wifery Bound orientation meeting on August 4th. This is what they
had to say about themselves:
Diane Connors, Pittsburgh, PA: "I am the Director of Nursing at
the Allegheny County Jail in Pittsburgh. I am hoping to practice at
the jail as a nurse-midwife."
Peg Dunn, Traverse City, MI: "I have enjoyed working in obstet-
rics in small rural hospitals for my entire career. I am beginning
efforts to start a birth center in my community."
Windi Hoffman-Mirkovic, Astoria, NY: "I enjoy working with
the indigent immigrants with limited English, complicated high
risk women and their families who need the extras! I hope one day
to have a birth center and home birth options in the most rural of
settings." (Windi came to Midwifery Bound with her 5-month-old
nursing baby!)
Carol Davis Terwilliger, Dayton Beach, FL: "Over the years I
have lived in many places - from New York City to San Francisco
to West Virginia and Jamaica, but rural midwifery calls to my
Peachie Barton-Dougherty, Cookson, OK: "I‘ve always worked
in matemal-infant nursing. I`m very interested in the new health
‘ care reform and its impact on the rural communities and the Indian
h Health Service."

Sharon Akes-Caves, Friendswood, TX: "I recently retumed from
an overseas assignment on an island 13,000 miles from Hyden. A
family practice physician, a physician's assistant and I were the
only licensed health providers for the 1500 Chamorro natives and _
we delivered around 30 pregnant families. I am THRILLED at the
idea of becoming more involved in more home—centered births."
These wonderful women and their classmates represent the best of
nursing. When we asked them we found out that for the whole class
there was an average of 13 years of nursing experience per student,
and their collective years of yeaming to be midwives added up to
a whopping total of 522 years! —Kate McHugh
Field Notes p
It has been a much busier summer than usual, but filled i
with interesting people and events. The Couriers started the month
of May by throwing a Der—B-Que and potluck for the staff and
various other Wendover friends. Everyone socialized while the »
Couriers grilled up chicken and pork chops. Such a feast we had!
The evening was perfect for eating out on the patio and a wonderful
time was had by all.
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The Chef "Boy-R-Dan " and Tommy Doran

Mid-May brought us Jay and Fern Ingersol, friends of
Mrs. Marvin Patterson. Having lived and worked world wide, they
instilled in each of us the need to keep our eyes open and to dare
r' to take a chance. We were all sorry to see them move on, but they
left us with some new wisdom we will carry forever. A few days
later we had a nurse from South Africa and her escort as our guests.
_ They spent a day out on Home Health rounds, met the hospital
staff and spent a day with Heidi Frornke at the Wooton Clinic.
§ Though here for only a few days Ithink they gained from learning
  about our rural healthcare here in the mountains.
  The staff did some quick changing of beds and we
§ welcomed Larry Kruckman, his wife Carolyn and their son from
  Pennsylvania. The Kruckmans had both worked here and came
  down to visit with old friends.
  The first weekend in June a local couple held their
  wedding reception at the Big House and at the end of June another
H local couple were married in the livingroom. Wendover could not
Q have been prettier for both events.
Q July was rather quiet but August brought with it a number
of other guests. First, Noel Smith-Frendez of New York State
  came for a week to renew memories. She had been a social worker
. here in the 60‘s and wanted to touch base with old friends. She was
M great fun and we enjoyed her tales of FNS 30 years ago.
* Next to arrive were nine of the FSMFN faculty for a
’ Midwifery Bound weekend. Somehow we managed to find beds
  for everyone and on Friday night had tea and dinner for the newly
  admitted class. Tea was served on the patio, as the evening was
  ' lovely, then we served dinner to all 56. We seem to be hosting more
Q and more large dinners and the staff has leamed how to have these
{ _ affairs run like clockwork! We always enjoy the students and their
i enthusiasm about being at Wendover.
Nancy and Bob Muhlbach and her brother, John Kooser,
were guests for a few days. Their father, Dr. John Kooser, was the
. second medical director at FNS. Both were bom at the old hospital
and lived in Joy House in the late 30's. Meals were fascinating as
they recalled bits and pieces of the past. One memory would lead
to another and it was hard to go back to work!

In between all of this, we have had various friends land on  
our doorstep for a night or two. Throughout this time we have had  
student nurses with us for the clinical portion of their training. I j
have done several tours for students and groups who were just  
visiting for the day. E
The maintenance men started the season building the new  
fire escape from the second floor of the Garden House. This one  
is a real set of stairs coming from the side of the porch and  
connecting to the bottom portion of the existing steps. Everyone is  
resting easier knowing that the Couriers will not have to try and  
navigate down the metal ladder should there be a need.  
No sooner had that been finished when J. G. Morgan was  
called to supervise the cleaning of the hospital hill mountain. What {
a monumental task this has been! Steps and handrails that seemed [
to lead to nowhere are now part of the original paths that had been  
lost to the growth. The drive below Aunt Hattie's Barn can now be {
seen and connects to the drive at Joy House. The whole mountain  
has been cleared. J. G. has had the job of encouraging the crew and l
trying to figure out just where to put all the debris. But it does look I
wonderful! The entire community is talking about this latest j
project and everyone is thrilled that it's finally being done.
The Cool Hut located behind the Big House kitchen has
been completely secured from the weather and four-footed friends.
After thorough cleaning, the hut was painted from ridgepole to l
floor and what seems like acres of new shelves were built. Cassie
and the kitchen staff are delighted to have the new storage area.
The winter damage of broken pipes to the Upper Shelf was
repaired and the whole place was painted. Kate McHugh, Penny ”
Armstrong and Elizabeth Parr were the first to enjoy the  _
refurbishings of the house during Midwifery Bound in August.  E
Life at Wendover has not been dull and the summer has "
flown by. -Susie Hudgins

I Courier News
i, The summer group of Couriers are slowly drifting out and
I a new group will arrive September 6. Greg George from Porter,
. Indiana, was here from May 20 until July 23. He has one more year
l— at Dartmouth College before applying to medical schools. Jessica
Rice, Grove City, Pennsylvania, was here from June l2 until
August 5. She will return to Grove City College in the Fall. Dascha
Weir, Cambridge, Massachuetts, and Anne Kelsey, Lewiston,
Maine, were here from June 20 until August 15. Dascha attends
Dartmouth and Anne attends Bowdoin College. Michael Todd,
Hanover, New Hampshire, was here from June 20 until mid-
September. He graduated from Dartmouth and plans to attend
medical school. Many thanks to Jim Harris who was not a
Courier but a volunteer archivist who came down from Indiana
University, Pennsylvania to do preservation of our photograph
We are looking forward to the arrival of Jennifer Shade,
Houston, TX, Katherine Aldrich, Barrytown, NY, Julie Cross,
Chapel Hill, NC, and Julia Swanson, Farmington, MN.
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~ Left to Right: Dascha Weir, Michael Todd, Jessica Rice, Greg
g George and Anne Kelsey

Miscellaneous E
We had a really nice visit this sununer with Mr. John H. ?.
Kooser II, Mrs. Nancy Muhleach and her husband Bob. John  
and Nancy are the son and daughter of Dr. John H. Kooser, the  
second medical director at the Frontier Nursing Service. We had  
a great time at dinner listening to them reminisce about their early  
years at FNS. Nancy and John were bom in the old hospital and I
Mrs. Breckinridge was Nancy's godmother.
Their father, Dr. Kooser, came to FNS and volunteered  
for a summer doing pediatric clinics. He was here for five weeks.  
After Dr. Capps, the first medical director, left for post graduate §
work, Mrs. Breckinridge began looking for another medical direc-  
tor. She asked Dr. Kooser to become the medical director during [
January 1932. Dr. Kooser felt that he didn't have enough experi-  
ence in obstetrics so Mrs. Breckinridge arranged for him to spend  
several months at the Presbyterian Medical Center in New York  
with Dr. Benjamin P. Watson, who was a member of our National |
Medical Council. Dr. Kooser practiced at the FNS for ll years  
until he left in the surmner of 1943 to volunteer for the Medical Q
Corps of the United States Navy. Dr. Kooser established a hospital
while stationed in the South Pacific for two years then became a  
small town physican in the town of Erwin, Pennsylvania, until §
1973 when he retired. I
After 26 years of dedicated service, J.G. Morgan has  
decided to retire from his job as maintenance supervisor at  
Wendover. He's finishing the major project of clearing hospital j
hill before he goes. As you can see in the photo on the cover page,
the hill is really looking great! 2
J .G. began working at FNS in 1968 at Wendover and then  
moved to hospital maintenance for several years. He came back to ?
Wendover in 1990 and has since brought it back to the way it »
should look, following in the footsteps of his father and grandfa- ¥
ther who worked at Wendover many years ago.

i We will miss J .G.'s dedication to Wendover and we are
j hoping to maintain the grounds just as he did or he may come visit
E, us. J .G. plans to relax and spend his time going fishing in his new
T boat. -Barb Gibson
E Over the years, Kate Ireland has contributed many great
things to FNS but what some of you may not know is her
contribution to the happiness of Joyful and a local bull.
  -Deanna Severance
  To: Skip Spell
I From: Katie
j Subject: Joyful and a local Bull
  It is OK with Wendover if you want to breed Joyful to a local bull
{ at Red Bird as long as you are positive that the bull has been Bangs
E tested within the last year and is tagged accordingly. Also, the bull
) should have been TB tested within the last three years.
i As it stands now, the FNS is paying your seed hay bill for Joyful
and paying you a milk subsidy until five days after Joyful calves.
As is written on your Cow Routine, the calf should be weaned after
six weeks. As Iunderstand it, you want to raise the calf regardless
of sex as a beefer. This is all right, but you will be responsible for
· it's feed and hay after it is weaned. The FNS will continue to pay
for J oyf11l's dairy feed but we will have to split the cost of the hay.
` I presume you will fatten the beefer on oats or com or some other
  type of feed that won't get confused with the dairy feed.
- I am still trying to get in touch with the State Technician to Bangs
~ test our cows and I will warn you when he is coming. If you have
V any other questions, please write me.
cc. Miss Browne & Miss Lewis

of the I
for the Fiscal Year E
May 1, 1993 to April 30, 1994 g
As has been our custom since we were one year old, we present our ’
annual report of the fiscal affairs and of the field operations of the  
Frontier Nursing Service, Incorporated. I
We have, as in previous years, divided our report into two sections. ;
One section is about money, and one is about work. 1
The figures that follow are taken from the Balance Sheet, the  
Exhibits and Schedules ofthe Audit for the fiscal year which ended I `
April 30, 1994. T

  iu     I Suite 2100 I Phono: $02 SBS I400
400 West Market Street Fas: 502 584 4221
Ltmutwtllt-, Kenturky 40202
i 4
ii Report of Independent Auditors
Board of Governors
FNS, Inc.
We have audited the accompanying combined balance sheets of FNS, Inc. and affiliates
(as listed in Note 1) as of April 30, 1994 and 1993, and the related combined statements
of revenue and expenses, changes in fund balances and cash flows for the years then
ended. These fmancial statements are the responsibility of FNS, Inc.'s management. Our
responsibility is to express an opinion on these fmancial statements based on our audits.
, We conducted our audits in accordance with generally accepted auditing standards. Those
I standards require that we plan and perform the audit to obtain reasonable assurance about
[ whether the Fmancial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
fmancial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall fmancial
statement presentation. We believe that our audits provide a reasonable basis for our
In our opinion, the fmancial statements referred to above present fairly, in all material
respects, the combined financial position of FNS, Inc. and affiliates at April 30, 1994 and
1993, and the combined results of their operations, changes in their fund balances and
their cash flows for the years then ended in conformity with generally accepted
, accounting principles.
[ éawc 4 LLP
li _
p June 17, 1994

FNS, Inc.  
Combined Balance Sheets g
April 30 Q`
1994 1993 *
Assets Q
General Funds j ‘
Current assets:  
Cash and cash equivalents $ 707,503 S 371,056 I
Accounts receivable-patients-less allowances for g
uncollectible accounts of $449,000 in 1994 and 1
$310,000 in 1993 1,753,926 1,097,926  
Accounts receivab1e—students tuition 1,406,327 1,186,300 1
Current portion of assets whose use is limited - 1,0()0,000 {
Due from third-party programs 33,000 -  
Inventories 178,839 143,126 I
Prepaid expenses and other current assets 695,774 466,746
Total current assets 4,775,369 4,265,154 ,
Long—term portion of accounts receivable—students tuition 566,250 360,762  
Property and equipment: i
Land 141,163 135,163 I
Buildings 3,566,737 3,563,261 ,
Equipment 4,468,274 4,328,937  
8,176,174 8,027,361  
Less accumulated depreciation 5,913,429 5,532,830  
2,262,745 2,494,531  
Assets whose use is limited, net of current portion 8,957,452 7,970,696  
Total general fund assets S 16,561,816 S 15,091,143  
Restricted Funds   ·
Cash and investments S 2,477,956 $ 1,776,720 g
Student loan receivables 64,196 58,019  
Total restricted fund assets S 2,542,152 S 1,834,739  

Q` April 30
{ 1994 1993
I Liabilities and fund balances
Q` General Funds
  Current liabilities:
§ Accounts payable S 1,144,030 S 1,257,876
? Accrued salaries and withholdings 146,964 109,321
Q Accrued vacation expense 299,545 219,082
  Deferred tuition—students 1,579,424 1,153,220
Unexpended special purpose funds 345,262 467,000
  Payable to third-party programs - 241,500
  Other current liabilities 777,542 615,220
i Total current liabilities 4,292,767 4,063,219
  Long—term portion of deferred tuition-students 566,250 360,762
  Fund Balance 11,702,799 10,667,162
  Commitments and contingencies
E Total general fund liabilities and fund balances S 16,561,816 S 15,091,143
i Restricted Funds
  Fund Balance $ 2,542,152 $ 1,834,739
E? Total restricted fund balances $ 2,542,152 $ 1,834,739
5 See accompanying notes.

 FNS, mc. {
Combined Statements of Revenue and Expenses  
Year ended April 30 Q`
1994 1993  
Net patient service revenue $ 11,250,654 $ 9,264,161  ·
Education revenues:  
Tuition and educational fees 1,870,862 1,441,981  
Federal grants 247 0 104,600  
2,118,742 1,546,581  
Other revenue 292,646 566,27 1 {
Unrestricted donations 1,126§73 715,364 ?
Total revenue 14,788,915 12,092,377 é
Salaries and wages 7,003,768 6,909,380 j
Fringe benefits 1,336,080 1,238,434  
Medical services, supplies and other expenses 4,159,930 3,884,685 {
Facility costs 1,252,890 1,076,617  
Provider taxes 217,772 -  
Provision for bad debts 598,286 280,360  
Total expenses 14,568,726 13,389,476  
Income (loss) from operations 220,189 (1,297,099) 3
Nonoperating gains:  
Investment income 301,155 492,860 {
Gain on sale of investments 446é34 344,466 {
747g89 837,326  
Excess of revenue and gains over (under) expenses $ 967,578 $ $459,773) {
See accompanying notes.   Y

   FNS, mc.
  Combined Statements of Changes in Fund Balances
5 _ General Restricted
  Funds Funds
· i
j. Balances at April 30, 1992 $ 11,108,460 $1,577,807
  Excess of (expenses) over revenue and gains (459,773) —
S Restricted contributions used for purchase of property and
·   equipment 18,475 —
I Contributions restricted for specific purpose — 212,962
j Gain on sale of endowment fund investments - 40,938
-   Restricted endowment fund revenue -— 3,032
$ Balances at April 30, 1993 10,667,162 1,834,739
  Excess of revenue and gains over expenses 967,578 -
E Restricted contributions used for purchase of property and
  equipment 68,059 —
  Contributions restricted for specific purpose - 663,042
  Gain on sale of endowment ftmd investments - 44é7l
E Balances at April 30, 1994 $ 1lg702g799 $ 2§542z152
-   S ee accompanying notes.
‘ t
. I
, t

FNS, Inc. ,
Combined Statements of Cash Flows—General Funds  
Year ended April 30 `,_,
1994 1993 ,
Cash flow from operating activities and gains  
Revenue and gains over (under) expenses $ 967,578 $ (459,773) i`
Adjustments to reconcile revenue and gains over (imder) Q
expenses to net cash provided by operating activities and é
gains: g
Provision for bad debts 598,286 280,360 j
Depreciation 380,599 362,693  
Accounts receivable—patients (1,254,286) (298,818) ‘
Accounts receivable—students tuition (425,515) (525,282)
Other assets (264,742) (316,171) i
Accounts payable (113,846) 411,959 ¥
Payable to third party programs (274,500) (104,762) j
Deferred tuition—students 631,692 549,595 i
Other 158,691 413,286
Net cash provided by operating activities and gains 403,957 313,087 ,
Cash flows from investing activities A
Purchases of property and equipment (148,813) (277,231)  
Restricted contributions 68,059 18,475 F
Cash withdrawn from (invested in) assets whose use is i
limited 13,244 (307,235) i
Net cash used in investing activities (67,510) (565,991)  
Net increase (decrease) in cash and cash equivalents 336,447 (252,904)  
Cash and cash equivalents at beginning of year 371,056 623,960 ;
Cash and cash equivalents at end of year S 707,503 $ 371,056  
See accompanying notes.

   FNS, mc.
  Notes to Combined Financial Statements
i April 30, 1994
  I 1. Organization and Summary of Accounnng Policies
V" Organization
  FNS, Inc. (the Service) was organized in 1925 as a nonprofit charitable organization. The
  Service's original purpose was to provide needed health services in the Appalachian area.
  During its early years, the Service was the only provider of health services in the area and
l it remains the largest provider of health services in Leslie County and the portion of
‘ surrounding counties comprising its service area. In 1939, the Service established a
  midwifery school. The Service currently operates an accredited midwifery and family
nursing school, a home health agency, a hospital, and provides primary care services
i through the Hyden Clinic, the Kate Ireland Women's Health Care Center, and District
f Nursing Clinics. The Service has historically been dependent on charitable contributions
  to fund a significant portion of the costs of services and programs.
, Principles of Combination
i The Service consists of the following nonprofit entities:
  FNS, Ine,—Parent holding company of the Service.
t Meg; Breekinridge I-lealgheare, Ine,—Entity responsible for operating the hospital,
  home health agency and clinics.
  Frontier Sehggl ef Miglwifeg end Family Ngirsin g, Ine,—Entity responsible for
i operating the midwifery and family nursing school.
in Frgntier Nggeing Serviee Fegngiggign, Ine,—Entity responsible for maintaining the
` investment portfolio of the Service.
  ENS Reg! Emte, Ine,—Emity responsible for holding and managing the real estate and
[ fixed assets owned by the Service.
  The combined financial statements include the accounts and transactions of the above
i entities. Significant intercompany transactions and accounts have been eliminated in
E combination.

 FNS, mc.  
Notes to Combined Financial Statements (continued)  
1. Organization and Summary of Accounting Policies (continued)  
Cash and Cash Equivalents  
Cash and cash equivalents consists of cash and highly liquid investments having a {
maturity at the date of acquisition of 90 days or less, excluding amounts whose use is  
limited by board designation.  
Inventories _
Inventories, principally medical supplies, are stated at cost (first-in, first-out method) i
which is not in excess of market. V
Property and Equipment
Property and equipment is stated at cost, or fair market value at date of donation for items (
donated to the Service. Depreciation has been computed on the straight-line method over
the estimated useful lives of the respective assets. t
Investments in marketable equity securities are stated in the financial statements at the l
lower of their aggregate cost or market value. Investments, other than equity securities,
are stated in the financial statements at cost, or if donated, at fair market value at the date
of donation. Gain or loss from sale of investments is the difference between proceeds ,
received and the carrying value of the investment sold. 2
Assets Whose Use is Limited  
Unrestricted resources which are designated by the Service for special uses are reported A
as assets whose use is limited The Board of Govemors has designated the following p”
funds to accumulate monies for the indicated purposes. {
The Consolidated Fund accumulates funds for such operating and general purposes as  
the Board may determine.  
The Education Fund includes all donations specified by the donor for this fund and  
unrestricted legacies and bequests received from May 1981 through April 1985. It i
accumulates funds until such time as they are needed for scholarships and educational  

   FNS, mc.
  Notes to Combined Financial Statements (continued)
l, 1. Organization and Summary of Accounting Policies (continued)
i Assets Whose Use is Limited (continued)
i   ` The Kate Ireland Women's Health Care Center Fund accumulates funds until such
5 i time as they are needed for the operation of the Kate Ireland Women‘s Health Care
i Center.
. The David D. Knox Fund accumulates funds for such uses as the Board may
) I determine, except that no amounts are to be expended from such fund through 1994.
* The Mary Breclcinridge Chair Fund provides income to fund the salary of a faculty
` member of the midwifery and family nursing school.
I Income from the principal portion of the Consolidated Fund is to be used to subsidize
5 care for indigent patients unless such income is specifically designated by the Board for
I other uses. Income from the Education, Kate Ireland Women's Health Care Center, Mary
  Breckinridge Chair and David D. Knox Funds is retained with the frmds until expended
  for the designated purposes.
i Restricted Funds
· Restricted funds represent several endowments received from donors, the principal of
’ which cannot be expended. Income from such endowments is available for operating
; I purposes and is reported as revenue when earned in accordance with the donor's
  Resources restricted by donors for additions to property are recorded as increases to the
. general fund balance when expended for the purposes intended. Resources restricted by
I 4; donors for specific operating purposes are credited to revenue when expended for the
{ J purposes intended.
  Accounts Receivable—Students and Deferred Tuition—Students
s *·
  The Service provides a midwifery training program to eligible students. ’I'he program
i generally takes 24 months to complete. The tuition for the midwifery program is due
I Z ratably every six months. The Service's policy is to recognize tuition revenue ratably over
E i 24 months.

 FNS, Inc.
Notes to Combined Financial Statements (continued)
1. Organization and Summary of Accounting Policies (continued) .
Statement of Revenue and Expenses of General Funds
For purposes of presentation, transactions deemed by management to be ongoing, major `
or central to the provision of health and education services are reported as revenue and
expenses. Peripheral or incidental transactions are reported as gains and losses.
Charity Care
The Service provides care to patients who meet certain criteria under its charity care
policy, without charge or at amounts less than its established rates. Because the Service
does not pursue collection of amounts determined to qualify as charity care, they are not
reported as revenue. Charges foregone based on established rates for charity care,
determined at or near the time of service rendered by the Service were approximately
$905,0()0 and $396,000 in 1994 and 1993, respectively. The Service recorded $581,000
of revenue in 1994 from the Commonwealth of Kentucky for reimbursement of certain
services provided to indigent patients. This amount is included in patient revenue. See
Note 2 for further discussion of the program.
Net Patient Service Revenue
Net patient service revenue is reported at the established net realizable amounts from
patients, third-party payors, and others for services rendered, including estimated
retroactive adjustments under reimbursement agreements with third-party payors.
Retroactive adjustments are accrued on an estimated basis in the period the related
services are rendered and adjusted in future periods as final settlements are determined.
Net patient service rendered consists of the following:
Year ended April 30 Q
1994 1993
Gross patient service revenue · $ 14,221,547 S 11,048,345 `
Less charity and contractual adjustments 2g0,893 1,784,184
Net patient service revenue $ 11,250,654 $9,264,161
Unrestricted Donations and Grants
Donations and grants which are not restricted by donors are reported as operating
revenue. Bequests under wills are recorded when received by the Service.

 FNS, Inc.
Notes to Combined Financial Statements (continued)
. 1. Organization and Summary of Accounting Policies (continued)
Tax Status
` The Service has received a determination from the Intemal Revenue Service (IRS) that
each of the nonprofit entities qualifies as tax-exempt under applicable Internal Revenue
Code (IRC) sections.
2. Medicare and Medicaid Programs
; The Service participates in the Medicare and Medicaid Programs. During 1994
; approximately 31% and 23%, respectively, of the Service's net patient service revenue
L were derived from services to patients covered by these Programs. Comparable
, percentages for 1993 were 31% and 34%, respectively. The Hospital settled certain prior
i year Medicaid cost reports during 1993 which resulted in an increase in net patient
I service revenue approximating $425,000.
; Medicare
Medicare payments for inpatient services are made based upon the patient's diagnosis
(DRG), irrespective of cost. The diagnosis upon which payment is based is subject to
review by Program representatives. The Program reimburses the Hospital for certain
1 outpatient services including rural health clinics and home health agency services based
1 upon cost. Such reimbursable costs are determined hom annual cost reports tiled with the
Program, which are subject to audit by the Program.
1 Medicaid
The Medicaid Program reimburses the Hospital on a prospectively determined rate per
_ patient day for inpatient services and on the basis of cost for certain outpatient services
` including rural health clinics and home health agency services .
The Hospital participated in the Commonwealth of Kentucky Hospital Indigent Care
` Assurance Program (HICAP) through June 30, 1993 when HICAP was discontinued. The
Hospital was assessed a tax based upon a percentage of operating expenses and received a
benefit payment based upon its Medicaid days. The statements of revenue and expenses
for the years ended April 30, 1994 and 1993 include a benefit under HICAP of
approximately $38,000 and $275,000, respectively.

FNS, Inc.
Notes to Combined Financial S