2019-11-15T15:59:08-06:00 2018-12-31 ERNST & YOUNG US LLP TWO N CENTRAL AVENUE STE 2300 PHOENIX AZ 85004 990 2018-01-01 463757358 BANNER-UNIVERSITY CARE ADVANTAGE % DAVID BIXBY BANN 6027474000 2901 N CENTRAL AVE Suite 160 PHOENIX AZ 85012 TAMMY MAGALLANES CFO/CO-TREASURER 6027474000 2019-11-15 true PATRICK SHIELDS P01508556 6023223000 74.205.199.241 86597020193195000045 2019-11-15 P C1FB216E02A8E0FF4B10C7F1585D3311BD03F0CC E916E054CBC70DC03C2083CBAF039DB0102E3652 2018 2020-03-31 21:24:44Z KATHLEEN OESTREICH 2901 N CENTRAL AVE SUITE 16 PHOENIX AZ 85012 188607689 false X WWW.UNIVERSITYCAREADVANTAGE.COM X 2013 AZ COORDINATE THE DELIVERY OF HEALTH CARE TO CERTAIN ENROLLEES WHO QUALIFY AS PART OF A SPECIAL NEEDS POPULATION, WHO ARE DUALLY ELIGIBLE FOR BOTH MEDICARE AND MEDICAID BENEFITS. 6 1 0 0 0 0 0 0 110189650 188053709 0 553980 0 0 110189650 188607689 0 0 0 0 3462466 7178438 0 0 0 109737357 182443165 113199823 189621603 -3010173 -1013914 48462660 70015285 37907011 57673550 10555649 12341735 X COORDINATE THE DELIVERY OF HEALTH CARE TO CERTAIN ENROLLEES WHO QUALIFY AS PART OF A SPECIAL NEEDS POPULATION, WHO ARE DUALLY ELIGIBLE FOR BOTH MEDICARE AND MEDICAID BENEFITS. false false 171589801 0 188053709 SEE SCHEDULE O. 171589801 true false false false false false false false false false true false false false true true true true false false false false false false false false false false false true false false false false false false false false false false false false false true true true false false true X 474 0 true 0 false false false false false false false false false false false false X 6 1 false false false false true true true true true false false false true true true true true false false false X DAVID BIXBY 6027474000 2901 N CENTRAL AVE SUITE 160 PHOENIX AZ 85012 X Dennis Laraway CHAIR/DIRECTOR 8.0 48.0 X X 0 1207959 626520 Kathleen Oestreich VICE PRESIDENT/CEO/DIRECTOR 5.0 35.0 X X 0 651362 140883 Charles Lehn CO-TREASURER/DIRECTOR 4.0 44.0 X X 0 986907 315986 Gordon Carr Md Director (as of 7/30/2018) 4.0 44.0 X 0 531103 16755 Thomas Dickson MD CEO UMC TUCSON/DIR.(THRU 7/18) 4.0 44.0 X 0 572429 57485 Larry Goldberg Director (as of 7/30/2018) 4.0 44.0 X 0 963100 237358 Suzie Huhn Director (as of 7/30/2018) 4.0 4.0 X 0 0 0 Andreas Theodorou MD Director (thru 7/30/2018) 40.0 4.0 X 0 520637 69474 Janice Dinner Secretary 4.0 44.0 X 0 300228 24729 Tammy Magallanes CFO/Co-Treasurer 5.0 35.0 X 0 297397 19980 Mary Consie Chief Administrative Officer 5.0 35.0 X 0 344107 23786 Theresa Dorazio Compliance Director 5.0 35.0 X 0 173604 16987 Dennis Dahlen Former Chair 0.0 40.0 X 0 198687 811 Kristina Corlette Former Secretary 0.0 40.0 X 0 256673 22607 0 7004193 1573361 0 true true false NONE 0 0 CAPITATION AND CONTRACT REVENUE 524114 187299636 187299636 0 0 CENPATICO EQUITY EARNINGS 524114 754073 754073 0 0 188053709 553980 553980 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 188607689 188053709 0 553980 X 0 0 0 0 0 0 0 0 136563 0 136563 0 0 0 0 0 6107588 0 6107588 0 136917 0 136917 0 453887 0 453887 0 343483 0 343483 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1188286 0 1188286 0 841789 0 841789 0 520083 0 520083 0 55758 0 55758 0 0 0 0 0 58312 0 58312 0 5568 0 5568 0 0 0 0 0 0 0 0 0 63636 0 63636 0 0 0 0 0 178172 0 178172 0 61748 0 61748 0 MEDICAL CLAIM EXPENSE 171589801 171589801 0 0 CORPORATE ALLOCATION 3108538 0 3108538 0 COLLECTION FEES 277568 0 277568 0 PHARMACY ADMINISTRATION 1827282 0 1827282 0 2666624 2666624 189621603 171589801 18031802 0 0 38994127 60987450 0 0 0 0 2913879 8026838 0 0 0 0 0 0 0 0 57517 216566 1254966 1209291 64575 45675 0 0 0 0 6432562 738756 0 0 0 0 48462660 70015285 1682144 2144842 0 0 0 0 0 0 0 0 0 0 0 0 0 0 36224867 55528708 37907011 57673550 X 10555649 12341735 0 0 0 0 10555649 12341735 48462660 70015285 X -1013914 0 0 0 0 2800000 X false true X true false X 0 0 0 0 0 0 20852012 36636275 86512561 110189650 188053709 442244207 0 0 0 20852012 36636275 86512561 110189650 188053709 442244207 0 0 0 442244207 553980 553980 0 553980 553980 0 0 20852012 36636275 86512561 110189650 188607689 442798187 0.99875 0.00000 0.00125 0.00000 X SCHEDULE A, PART III, COLUMN(B) THE AMOUNTS INCLUDED IN PART III, COLUMN (B) ARE FOR A SHORT PERIOD, 7/01/15-12/31/15. 0 1254966 1209291 45675 45675 0 DUE TO AFFILIATES 28038973 MEDICAL CLAIMS PAYABLE 23687897 DUE TO CTRS FOR MEDICARE & MEDICAID 3007371 OTHER LIABILITIES 794467 55528708 X 188607689 0 0 188607689 0 0 188607689 189621603 0 0 189621603 0 0 189621603 SCHEDULE D, PART X, LINE 2 BUCA IS A NONPROFIT CORPORATION EXEMPT FROM INCOME TAXES UNDER INTERNAL REVENUE SERVICE CODE SECTION 501(C)(3). BUCA HAS NOT RECORDED ANY EXPENSE OR ACCRUED FOR ANY RELATED EXPENSE FOR ANY UNCERTAIN TAX POSITIONS. BUCA'S 2015 THROUGH 2018 TAX YEARS REMAIN SUBJECT TO EXAMINATION FOR FEDERAL INCOME TAX PURPOSES, WHEREAS THE 2014 THROUGH 2018 TAX YEARS REMAIN SUBJECT TO EXAMINATION FOR STATE TAXING JURISDICTIONS IN WHICH BUCA OPERATES. X true true false true false false false false false true false Dennis Laraway CHAIR/DIRECTOR 0 794864 0 390720 0 22375 0 610034 0 16486 0 1834479 0 0 Kathleen Oestreich VICE PRESIDENT/CEO/DIRECTOR 0 379856 0 250324 0 21182 0 114055 0 26828 0 792245 0 0 Charles Lehn CO-TREASURER/DIRECTOR 0 491214 0 475201 0 20492 0 287455 0 28531 0 1302893 0 167607 Gordon Carr Md Director (as of 7/30/2018) 0 374961 0 137248 0 18894 0 7670 0 9085 0 547858 0 0 Thomas Dickson MD CEO UMC TUCSON/DIR.(THRU 7/18) 0 191021 0 373886 0 7522 0 45962 0 11523 0 629914 0 113886 Larry Goldberg Director (as of 7/30/2018) 0 473889 0 227000 0 262211 0 231901 0 5457 0 1200458 0 0 Andreas Theodorou MD Director (thru 7/30/2018) 0 405138 0 94315 0 21184 0 36921 0 32553 0 590111 0 0 Janice Dinner Secretary 0 227595 0 54804 0 17829 0 8969 0 15760 0 324957 0 0 Tammy Magallanes CFO/Co-Treasurer 0 193917 0 88523 0 14957 0 7465 0 12515 0 317377 0 0 Mary Consie Chief Administrative Officer 0 216804 0 110310 0 16993 0 6712 0 17074 0 367893 0 0 Theresa Dorazio Compliance Director 0 152433 0 20339 0 832 0 6011 0 10976 0 190591 0 0 Kristina Corlette Former Secretary 0 194910 0 46657 0 15106 0 8014 0 14593 0 279280 0 0 Dennis Dahlen Former Chair 0 0 0 198687 0 0 0 0 0 811 0 199498 0 198687 SCHEDULE J, PART I, LINE 1A GROSS-UP FOR TAXABLE RELOCATION THE FOLLOWING INDIVIDUAL RECEIVED A ONE-TIME PAYMENT FOR RELOCATION EXPENSES, WHICH INCLUDED A GROSS-UP. THIS AMOUNT IS INCLUDED IN THE INDIVIDUAL'S COMPENSATION AND IS INCLUDED IN SCHEDULE J, PART II, COLUMN (B)(III). THE AMOUNT OF THE PAYMENT IS LISTED BELOW. LARRY GOLDBERG $ 259,799 SCHEDULE J, PART I, LINE 3 THE COMPENSATION OF THE ORGANIZATION'S CEO IS DETERMINED BY A RELATED TAX-EXEMPT ORGANIZATION. SEE SCHEDULE O FOR FORM 990, PART VI, LINES 15A AND 15B FOR THE PROCESS USED BY THE RELATED ORGANIZATION TO DETERMINE COMPENSATION. SCHEDULE J, PART I, LINE 4B THE EXECUTIVE 457(F) PLAN OF BANNER HEALTH COVERS SOME OF THE OFFICERS AND DIRECTORS LISTED ON FORM 990, PART VII, SECTION A, LINE 1A. THIS NONQUALIFIED PLAN IS HELD AT FIDELITY INVESTMENTS. VESTING OCCURS UPON MEETING VESTING REQUIREMENTS (SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE) - EARLIER OF AGE 62, 5 YEARS FROM DATE OF DEPOSIT OR RULE OF 80. THE ONLY CONTRIBUTIONS ALLOWED ARE EMPLOYER CONTRIBUTIONS. PAYOUT AMOUNTS ARE TAXABLE AND INCLUDED IN SCHEDULE J, PART II, COLUMN (B)(III). DEPOSIT AMOUNTS ARE INCLUDED IN SCHEDULE J, PART II, COLUMN (C). NAME 457(F) PAYOUT EMPLOYER 457(F) DEPOSIT CHARLES LEHN $ 0 $ 51,459 THOMAS DICKSON, MD $ 0 $ 38,177 KATHLEEN OESTREICH $ 0 $ 23,055 DENNIS LARAWAY $ 0 $ 13,803 SCHEDULE J, PART I, LINE 7 1. THE INDIVIDUALS IDENTIFIED BELOW PARTICIPATE IN A LONG-TERM INCENTIVE PLAN (LTIP) THREE-YEAR CYCLES FROM 2016-2018, 2017-2019, 2018-2020 AND 2019-2021. THE LTIP WAS DESIGNED AT THE INITIATIVE OF THE BANNER BOARD OF DIRECTORS WITH THE ASSISTANCE OF TOWERS WATSON, AND ALL COMPONENTS WERE APPROVED BY THE BOARD. THE PLANS AREAS OF PERFORMANCE TARGETS INCLUDE: BANNER HEALTH NETWORK COST PER CASE, ELECTRONIC HEALTH RECORD IMPLEMENTATION, COVERED LIVES (POPULATION HEALTH MANAGEMENT) AND HIRING PHYSICIANS. AWARDS ARE CALCULATED AS A PERCENTAGE OF AVERAGE BASE SALARY DURING THE TWO-YEAR OR THREE-YEAR CYCLE, AND OPPORTUNITY VARIES BY POSITION LEVEL. THE PLAN REQUIRES A THRESHOLD LEVEL OF FINANCIAL PERFORMANCE BEFORE ANY AWARDS CAN BE MADE, AND THE AMOUNT OF THE AWARDS VARIES WITH THE DEGREE OF ACHIEVEMENT OF THE TARGETS. THE MAXIMUM LTIP PAYOUT OPPORTUNITY RANGES FROM 20% TO 255% OF THE AVERAGE TWO-YEAR OR THREE-YEAR BASE SALARY. AWARDS HAVE BEEN ACCRUED UNDER THE LTIP, BUT NO PAYMENTS ARE MADE UNTIL AFTER YEAR-END AND ACHIEVEMENT IS VERIFIED BY THE BANNER HEALTH BOARD COMPENSATION COMMITTEE AND APPROVED BY THE FULL BOARD OF DIRECTORS OF BANNER HEALTH. ALL LTIP COMPENSATION PAYMENTS ARE REPORTED IN THE INCENTIVE AND BONUS COMPENSATION SHOWN IN SCHEDULE J, PART II, COLUMN (B)(II). AMOUNTS PAID FOR 2018 FOR THE 2015-2017 CYCLE ARE REPORTED IN SCHEDULE J, PART II, COLUMN (B) AS BONUS & INCENTIVE COMPENSATION. AMOUNTS ACCRUED FOR 2018 FOR THE 2016-2018, 2017-2019 AND 2018-2020 CYCLE (TO BE PAID OUT IN 2019, 2020 AND 2021 RESPECTIVELY) ARE REPORTED IN SCHEDULE J, PART II, COLUMN (C) AS DEFERRED COMPENSATION. NAME LTIP ACCRUAL LTIP PAYS OUT DENNIS LARAWAY $ 595,000 $ 0 CHARLES LEHN $ 224,996 $ 167,607 THOMAS DICKSON, MD $ 0 $ 113,886 ANDREAS THEODOROU, MD $ 25,921 $ 0 DENNIS DAHLEN $ 0 $ 198,687 LARRY GOLDBERG $ 231,900 $ 0 KATHLEEN OESTREICH $ 80,000 $ 0 2. BANNER HEALTH HAS A MANAGEMENT INCENTIVE PLAN (MIP) WHICH IS BASED ON COMPANY ACHIEVEMENT OF SEVERAL FINANCIAL AND NON-FINANCIAL/CLINICAL QUALITY METRICS THAT ARE ESTABLISHED ANNUALLY BY THE BANNER HEALTH BOARD OF DIRECTORS. AWARDS ARE GRANTED AS A PERCENTAGE OF THE PARTICIPANT'S BASE SALARY AND VARY WITH THE POSITION LEVEL OF THE PARTICIPATING EMPLOYEE, RANGING FROM 7% TO 110% OF BASE SALARY. IN 2018, THERE WERE 1,053 MIP PARTICIPANTS. THE MIP WAS ACCRUED IN 2018 FOR THE 2018 MIP, AND PAYOUTS ON THE 2018 MIP WERE PAID IN 2018. MIP COMPENSATION IS INCLUDED IN SCHEDULE J, PART II, COL (B)(II). 3. THE FOLLOWING INDIVIDUALS RECEIVED A ONE-TIME SIGN ON BONUS (INCLUDED IN PART II, COLUMN (B)(II)): DENNIS LARAWAY $ 240,000 LARRY GOLDBERG $ 227,000 FORM 990, PART III, LINE 4A BANNER-UNIVERSITY ("CARE ADVANTAGE") HOLDS A CONTRACT WITH THE CENTERS FOR MEDICARE & MEDICAID SERVICES FOR THE OPERATION OF A MEDICARE ADVANTAGE PRESCRIPTION DRUG HEALTH PLAN. THE PLAN IS A QUALIFIED PLAN UNDER MEDICARE TO PROVIDE COVERAGE TO CERTAIN ENROLLEES WHO QUALIFY AS PART OF A SPECIAL NEEDS POPULATION, WHO ARE DUALLY ELIGIBLE FOR BOTH MEDICARE AND MEDICAID BENEFITS. CARE ADVANTAGE PROMOTES THE HEALTH OF THE COMMUNITY BY ENGAGING THE FOLLOWING: (1) THE PROVISION OF EDUCATION PROGRAMS REGARDING THE BENEFITS PROVIDED BY CARE ADVANTAGE TO ENROLLEES; (2) COUNSELING AND THE PROVISION OF ASSISTANCE TO ENROLLEES MAKING THE TRANSITION TO A NETWORK-BASED MANAGED CARE PLAN; (3) THE PROVISION OF PREVENTATIVE HEALTHCARE PROGRAMS FOR CARE ADVANTAGE ENROLLEES; (4) THE COORDINATION OF HEALTHCARE SERVICES AMONG PROVIDERS IN THE CARE ADVANTAGE PROVIDER NETWORK; AND (5) THE FACILITATION OF ACCESS TO THE CARE ADVANTAGE PROVIDER NETWORK. CARE ADVANTAGE HAS WORKED DILIGENTLY TO DEVELOP AND MAINTAIN A COMPREHENSIVE PROVIDER NETWORK WHICH PROVIDES A FOUNDATION THAT SUPPORTS BOTH INDIVIDUAL MEMBER NEEDS AS WELL AS CARE ADVANTAGE'S MEMBERSHIP IN ITS 10 COUNTY SERVICE AREAS. CARE ADVANTAGE CONTINUALLY STRIVES TO HAVE A HIGH QUALITY CONTRACTED PROVIDER NETWORK THAT EXCEEDS ACCESSIBILITY REQUIREMENTS ISSUED BY REGULATORY AUTHORITIES, IS SERVICE FOCUSED, AND CULTURALLY DIVERSE IN ORDER TO MEET MEMBER NEEDS, BOTH IMMEDIATE AS WELL AS LONG RANGE. CARE ADVANTAGE MAINTAINS A FULLY STAFFED SERVICE CENTER THAT MEMBERS CAN ACCESS IN ORDER TO OBTAIN GUIDANCE ON ACCESSING NEEDED CARE. THE SERVICE CENTER CAN BE ACCESSED AT 877-874-3930. CARE ADVANTAGE CONTRACTS WITH BANNER HEALTH (BH) FOR BH TO PROVIDE PRIMARY HEALTH CARE SERVICES TO CARE ADVANTAGE'S ENROLLEES. BH PROVIDES ALMOST ALL OF THESE SERVICES AT ITS CLINICS THROUGH ITS EMPLOYED HEALTH CARE PROVIDERS. CARE ADVANTAGE ALSO CONTRACTS WITH INDEPENDENT PHYSICIANS ENGAGED IN THE PRIVATE PRACTICE OF MEDICINE TO PROVIDE PRIMARY AND SPECIALTY HEALTH CARE SERVICES TO CARE ADVANTAGE'S ENROLLEES AT THE PHYSICIANS' OWN FACILITIES ON A NON-EXCLUSIVE BASIS. IN ADDITION, CARE ADVANTAGE HAS NEGOTIATED WITH SEVERAL UNRELATED HOSPITALS TO PROVIDE INPATIENT AND OUTPATIENT HOSPITAL SERVICES TO CARE ADVANTAGE'S ENROLLEES. CARE ADVANTAGE ENSURES THAT ENROLLED BENEFICIARIES ARE ADEQUATELY INFORMED ABOUT THEIR HEALTH CARE BENEFITS, PROVIDING COUNSELING AND ASSISTANCE IN MAKING THE TRANSITION TO MANAGED CARE. CARE ADVANTAGE EDUCATES BENEFICIARIES REGARDING ACCESS TO HEALTH CARE, PROVIDING DIRECTION AS TO THE APPROPRIATE UTILIZATION OF HEALTH CARE FACILITIES AND ENCOURAGING THE USE OF PREVENTIVE HEALTH CARE MEASURES. CARE ADVANTAGE ALSO ENSURES THAT ENROLLED MEDICAID BENEFICIARIES OBTAIN APPROPRIATE HEALTH CARE BY ENSURING THAT PROVIDERS ARE AVAILABLE AND THAT SERVICES WILL BE PROVIDED IN A COORDINATED MANNER. FORM 990, PART V, LINE 2A; PART VII, SECTION A, AND PART IX BANNER-UNIVERSITY CARE ADVANTAGE DOES NOT HAVE EMPLOYEES, BUT SHARES THE COST OF PERSONNEL, SERVICES, AND EXPENSES WITH BANNER HEALTH, A RELATED TAX-EXEMPT ORGANIZATION. FORM 990, PART VI, LINE 6 BANNER HEALTH, AN ARIZONA NONPROFIT CORPORATION EXEMPT FROM TAX AS AN ENTITY DESCRIBED UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE, IS THE SOLE MEMBER. FORM 990, PART VI, LINE 7A THE SOLE MEMBER ELECTS THE BOARD OF DIRECTORS. FORM 990, PART VI, LINE 7B THE SOLE MEMBER RESERVES THE AUTHORITY TO APPROVE DECISIONS REGARDING THE FOLLOWING MATTERS: STRATEGIC PLAN, OPERATING AND CAPITAL BUDGETS, INSURANCE AND RISK MANAGEMENT, STAFFING, COMPENSATION, BENEFIT PLANS, AND ANY OTHER MATERIAL ACTION TAKEN OUTSIDE OF THE NORMAL COURSE OF BUSINESS. FORM 990, PART VI, LINE 11B THE 990 IS REVIEWED BY BANNER HEALTH'S LEGAL DEPARTMENT, TAX DEPARTMENT, INTERNAL AUDIT DEPARTMENT AND CERTAIN BANNER-UNIVERSITY CARE ADVANTAGE OFFICERS. A MEETING IS HELD WITH THE TAX PREPARER AND A LINE-BY-LINE REVIEW IS DONE PRIOR TO THE FILING OF THE RETURN. THE FORM 990 WILL BE MADE AVAILABLE TO THE GOVERNING BODY AT THE NEXT REGULARLY SCHEDULED BOARD MEETING AFTER FILING. FORM 990, PART VI, LINE 12C BANNER-UNIVERSITY CARE ADVANTAGE HAS ADOPTED THE BANNER HEALTH CONFLICT OF INTEREST POLICY. THIS POLICY REQUIRES THE INTERNAL AUDIT DEPARTMENT OF BANNER HEALTH TO PROVIDE EACH PARTY WITH A DISCLOSURE QUESTIONNAIRE. THE INTERNAL AUDIT DEPARTMENT PREPARES A SUMMARY FOR THE TAX DEPARTMENT. THIS SUMMARY IS ALSO PRESENTED TO THE AUDIT COMMITTEE. THE TAX DEPARTMENT PREPARES THE FORM 990 DISCLOSURE. THIS DISCLOSURE IS PRESENTED TO THE LEGAL DEPARTMENT FOR REVIEW. PURSUANT TO BANNER HEALTH'S CONFLICT OF INTEREST POLICY, ALL BOARD MEMBERS, OFFICERS AND THE DIRECTOR OF AUDIT SERVICES MUST DISCLOSE THE EXISTENCE OF ANY FINANCIAL INTEREST THAT MAY GIVE RISE TO A CONFLICT OF INTEREST. FORM 990, PART VI, LINES 15A & 15B BANNER-UNIVERSITY CARE ADVANTAGE ("UCA") UTILIZES A COMPENSATION COMMITTEE COMPRISED OF INDEPENDENT DIRECTORS THAT EXERCISES OVERSIGHT OVER ALL ASPECTS OF THE COMPENSATION PAID TO OR FOR THE BENEFIT OF THE CEO AND ALL OTHER SENIOR EXECUTIVES OF BANNER HEALTH AND ANY OF ITS AFFILIATES AND ALL OTHER PERSONS WHO CONSTITUTE "DISQUALIFIED PERSONS" WITH RESPECT TO UCA UNDER CODE SECTION 4958. THE COMMITTEE: - ASSESSES ANNUALLY THE PERFORMANCE OF THE PRESIDENT AND CEO - EXERCISES OVERSIGHT OVER ALL ASPECTS OF COMPENSATION FOR THE PRESIDENT AND CEO - REVIEWS AND DETERMINES THE EXECUTIVE TOTAL COMPENSATION PHILOSOPHY OF UCA - ESTABLISHES THE PERMISSIBLE RANGES OF COMPENSATION FOR SENIOR EXECUTIVES AND DISQUALIFIED PERSONS - REVIEWS AND APPROVES THE DESIGN OF THE COMPONENTS OF COMPENSATION FOR SENIOR EXECUTIVES AND ANY OTHER DISQUALIFIED PERSONS AND MONITORS COMPLIANCE OF BANNER HEALTH WITH THE PHILOSOPHY AND DESIGN COMPONENTS OF EXECUTIVE COMPENSATION - RECEIVES THE CEO'S REPORT CONCERNING THE OVERALL PERFORMANCE AND DEVELOPMENT ASSESSMENT OF THE SENIOR EXECUTIVES - ACTS FOR THE BOARD IN THE ENGAGEMENT AND DIRECT OVERSIGHT OF EXTERNAL INDEPENDENT COMPENSATION CONSULTANTS ENGAGED TO PROVIDE ADVICE AND INFORMATION WITH RESPECT TO THE REASONABLENESS AND COMPETITIVENESS OF THE COMPENSATION PAID TO THE PRESIDENT AND CEO, SENIOR EXECUTIVES AND ANY OTHER DISQUALIFIED PERSONS, WHICH CONSULTANT REPORTS DIRECTLY TO THE COMMITTEE. IN ADDITION, THE COMMITTEE HAS ADOPTED THE FOLLOWING BEST PRACTICES WITH RESPECT TO ITS EXECUTIVE COMPENSATION OVERSIGHT FUNCTION: - REVIEWS ALL INCENTIVE PLANS, BENEFIT PLANS AND PROGRAMS THAT APPLY TO EMPLOYEES AND PHYSICIANS - APPROVES THE PRESIDENT AND CEO'S RECOMMENDATIONS AS TO THE COMPENSATION OF SENIOR EXECUTIVES - USES TALLY SHEETS SUMMARIZING ALL COMPONENTS OF THE PRESIDENT AND CEO'S AND SENIOR EXECUTIVES' COMPENSATION, INCLUDING A THREE-YEAR EARNINGS HISTORY AND THE COST OF ALL COMPENSATION (INCLUDING SPECIFICALLY DEFERRED COMPENSATION) AT THE TIME THAT ANY ACTION IS TAKEN WITH RESPECT TO THE CEO'S OR SENIOR EXECUTIVES' COMPENSATION IN ORDER TO ENSURE THAT THE COMMITTEE IS FULLY INFORMED OF THE COMPLETE COMPENSATION PACKAGE BEFORE TAKING ANY SUCH ACTION - REVIEWS THE ANNUAL FORM 990 DISCLOSURES RELATING TO EXECUTIVE COMPENSATION TO ENSURE THE DISCLOSURES ACCURATELY RECONCILE TO THE COMPENSATION PACKAGES APPROVED BY THE COMMITTEE. AS STATED, THE COMPENSATION COMMITTEE RETAINS AN EXTERNAL INDEPENDENT COMPENSATION CONSULTING FIRM TO ASSIST THE COMMITTEE. IN 2011, THE COMMITTEE ENGAGED A NATIONALLY RECOGNIZED COMPENSATION CONSULTING FIRM WITH SUBSTANTIAL HEALTHCARE EXPERIENCE. THIS FIRM REVIEWED AND OPINED AS TO THE REASONABLENESS OF THE TOTAL COMPENSATION PACKAGE OF THE PRESIDENT AND CEO, SENIOR EXECUTIVE MANAGEMENT, AND OTHER EXECUTIVE MANAGEMENT IDENTIFIED BY THE COMMITTEE AS POTENTIAL DISQUALIFIED PERSONS. THE COMMITTEE PERIODICALLY REVIEWS THE RELATIONSHIP BETWEEN BANNER HEALTH AND EACH CONSULTANT TO ENSURE THE CONSULTANT'S INDEPENDENCE. IN CONNECTION WITH EACH SUCH EVALUATION, THE COMMITTEE REQUESTS A WRITTEN CERTIFICATION FROM EACH CONSULTANT THAT: - INCLUDES AN INDEPENDENCE ATTESTATION AFFIRMING THAT THE CONSULTANT HAS CONDUCTED ITS OWN INTERNAL ASSESSMENT AND, BASED ON SUCH ASSESSMENT AND ITS INTERNAL CONTROLS, CONCLUDED THAT IT HAS PERFORMED ITS SERVICES FOR THE COMMITTEE IN AN INDEPENDENT MANNER AND IS INDEPENDENT AS DEFINED IN THE INTERMEDIATE SANCTION REGULATIONS UNDER CODE SECTION 4958 - CONFIRMS THAT THE CONSULTANT REPORTS TO THE COMMITTEE THROUGH THE CHAIR OF THE COMMITTEE AND THAT ALL CONSULTING ACTIVITY FOR UCA CONDUCTED BY SUCH CONSULTANT DURING THE PRECEDING YEAR WAS CONDUCTED WITH THE KNOWLEDGE AND CONSENT OF THE CHAIR OF THE COMMITTEE - DETAILS THE AMOUNTS PAID BY UCA TO THE CONSULTANT IN ITS CAPACITY AS AN EXTERNAL COMPENSATION CONSULTANT TO THE COMMITTEE, AND THE AMOUNTS PAID BY BANNER HEALTH, IF ANY, TO THE CONSULTANT AND ITS AFFILIATES FOR ANY OTHER ENGAGEMENTS. WITH THE ASSISTANCE OF THE INDEPENDENT COMPENSATION CONSULTANT, THE COMPENSATION COMMITTEE ANNUALLY REVIEWS THE PERFORMANCE OF THE PRESIDENT AND CEO, AND RECOMMENDS ADJUSTMENTS TO HER BASE SALARY AS DEEMED APPROPRIATE BASED UPON THE REVIEW, SUBJECT TO CONFIRMATION FROM THE CONSULTANT (WHO ATTENDS SUCH MEETING) THAT THE RECOMMENDATION IS APPROPRIATE AND WILL NOT RESULT IN THE OVERALL COMPENSATION OF THE PRESIDENT AND CEO BECOMING UNREASONABLE. IN ORDER TO ENSURE THAT THE COMPENSATION DECISION IS SUBJECT TO THE ACTION OF INDEPENDENT DIRECTORS, THE BOARD MAY NOT APPROVE A SALARY ACTION DIFFERENT FROM THAT RECOMMENDED BY THE COMPENSATION COMMITTEE WITHOUT THE CONCURRENCE OF THE COMMITTEE. THE PRESIDENT AND CEO ESTABLISHES THE BASE SALARY OF THE EXECUTIVES WHO DIRECTLY REPORT TO HER, AND THOSE EXECUTIVES IN TURN ESTABLISH THE BASE SALARY OF THOSE INDIVIDUALS WHO REPORT TO THEM. ALL BASE SALARIES ARE, HOWEVER, BASED UPON POSITION-SPECIFIC MARKET DATA PROVIDED BY THE BANNER COMPENSATION AND BENEFITS DEPARTMENT. THESE RANGES ARE ESTABLISHED IN ACCORDANCE WITH AN EXECUTIVE COMPENSATION PHILOSOPHY THAT IS ESTABLISHED, AND PERIODICALLY REVIEWED, BY THE COMPENSATION COMMITTEE. ANNUAL EQUITY ADJUSTMENTS MAY BE MADE UPON APPROVAL OF THE PRESIDENT AND CEO BASED UPON SPECIFIC MARKET DATA. THE COMPENSATION COMMITTEE RECEIVES AN ANNUAL REPORT FROM THE COMPENSATION AND BENEFITS DEPARTMENT SHOWING THAT BASE SALARIES ARE BEING MAINTAINED CONSISTENT WITH THE EXECUTIVE COMPENSATION PHILOSOPHY APPROVED BY THE COMMITTEE. AS STATED IN THE RESPONSE TO SCHEDULE J, PART I, LINE 7, THE SIGNIFICANT NON-FIXED COMPONENTS OF THE COMPENSATION OF THE PRESIDENT AND CEO AND OTHER SENIOR MANAGEMENT ARE ESTABLISHED AND MONITORED BY THE COMPENSATION COMMITTEE WITH THE ASSISTANCE OF THE INDEPENDENT COMPENSATION CONSULTANT AND ARE INCLUDED IN THE ANNUAL REASONABLENESS OPINION RENDERED BY THE INDEPENDENT COMPENSATION CONSULTANT. CONTEMPORANEOUS MINUTES ARE KEPT OF ALL MEETINGS OF THE COMPENSATION COMMITTEE AND OF THE ACTIONS OF THE BOARD OF DIRECTORS IN APPROVING THE COMPENSATION OF THE PRESIDENT AND CEO AND REVIEWING AND MONITORING THE COMPENSATION FOR ALL OTHER SENIOR EXECUTIVES AND TOP MANAGEMENT. THE COMPENSATION REVIEW PROCESS WAS LAST COMPLETED IN 2018. FORM 990, PART VI, LINE 19 THE ORGANIZATION'S GOVERNING DOCUMENTS, AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, AND TAX RETURNS ARE AVAILABLE UPON REQUEST. COPIES ARE MAINTAINED AT EACH ADMINISTRATIVE OFFICE AND IN THE LEGAL AND TAX DEPARTMENTS. FORM 990, PART XI, LINE 9 INTERCOMPANY TRANSFERS - $2,800,000 Banner Health 2901 N Central Ave Suite 160 Phoenix AZ 85012 450233470 Hospital AZ 501(C)(3) 3 NA false Banner Health Foundation 2901 N Central Ave Suite 160 Phoenix AZ 85012 942545356 Support AZ 501(C)(3) 7 BANNER HLTH true Banner Alzheimers Foundation 2901 N Central Ave Suite 160 Phoenix AZ 85012 204862361 Support AZ 501(C)(3) 7 BANNER HLTH true Banner Medical Group 2901 N Central Ave Suite 160 Phoenix AZ 85012 900532830 Medical Svs AZ 501(C)(3) 3 BANNER HLTH true Banner Medical Group Colorado 2901 N Central Ave Suite 160 Phoenix AZ 85012 900532831 Medical Svs CO 501(C)(3) 3 BANNER HLTH true Casa Grande Community Hospital Fdn 1800 E Florence Blvd Casa Grande AZ 85122 311726569 Support AZ 501(C)(3) 7 BANNER HLTH true Banner-University Medical Group 2901 N CENTRAL AVE SUITE 160 PHOENIX AZ 85012 942958258 Medical Svs AZ 501(C)(3) 3 BANNER HLTH true Banner-University Family Care 2901 N Central Ave Suite 160 Phoenix AZ 85012 463766901 Health Ins. AZ 501(C)(3) 10 BANNER HLTH true Partners in Integrated Health LLC SEE PART VII Phoenix AZ 85012 611700965 Management Svs AZ NA N/A Banner Union Hills Surgery Center LLC SEE PART VII Phoenix AZ 85012 901164193 Medical services AZ NA N/A BHSM Rehabilitation LLC SEE PART VII Phoenix AZ 85012 823481322 Medical Services DE NA N/A Banner Atlas JV LLC SEE PART VII Scottsdale AZ 85255 831276122 OP Surgery CTR AZ NA N/A Banner Plan Administration Inc 445 W 5th Place Suite 101 Mesa AZ 85201 860800246 3RD PARTY ADMIN AZ NA C Corp true Banner Indemnity Ltd PO Box 1051 Grand Cayman BWI CJ 450233470 Investments CJ NA Foreign Corp true Banner Health Network 2901 N Central Ave Suite 160 Phoenix AZ 85012 900750689 Accountable Care AZ NA C Corp true THE UNIV OF AZ HEALTH PLANS-U HEALTHCARE 2901 N Central Ave Suite 160 Phoenix AZ 85012 454370907 Health Insurance AZ NA C Corp true false false false false false false false false false false false false true true true true false true false SCHEDULE R, PART III PARTNERS IN INTEGRATED HEALTH, LLC EIN: 61-1700965 ADDRESS: 2901 N. CENTRAL AVENUE, SUITE 160, PHOENIX, AZ 85012 BANNER UNION HILLS SURGERY CENTER, LLC EIN: 90-1164193 ADDRESS: 2901 N. CENTRAL AVENUE, SUITE 160, PHOENIX, AZ 85012 BHSM REHABILITATION, LLC EIN: 82-3481322 ADDRESS: 2901 N. CENTRAL AVENUE, SUITE 160, PHOENIX, AZ 85012 BANNER ATLAS JV, LLC EIN: 83-1276122 ADDRESS: 10554 EAST MORNING STAR DRIVE, SCOTTSDALE, AZ 85255