2019-05-13T11:33:42-05:00 2018-06-30 990 2017-07-01 205880364 HAZLETON PROFESSIONAL SERVICES HAZL 4848840130 700 E BROAD ST HAZLETON PA 18201 THOMAS MARCHOZZI EXEC. VP & CFO 6104028000 2019-05-13 192.234.106.29 2019-05-13 12:18:09 ED P 8A070E74AE8581237DBB2AD4CBE985160B1554C1 8A070E74AE8581237DBB2AD4CBE985160B1554C1 2017 2019-02-21 02:37:17Z LEHIGH VALLEY PHYSICIAN GROUP-HAZ BRIAN A NESTER 700 E BROAD ST HAZLETON PA 18201 24019578 0 X HTTP://WWW.LVHN.ORG X 2006 PA HAZLETON PROFESSIONAL SERVICES (HPS) DBA LEHIGH VALLEY PHYSICIAN GROUP - HAZLETON PROVIDES PROFESSIONAL, PROFICIENT AND PROACTIVE SERVICES ENCOMPASSING THE TOTAL HEALTHCARE NEEDS OF EVERY PATIENT IN THE COMMUNITY. 11 0 240 0 0 0 0 0 15125908 13938549 1078 74600 13106645 9999281 28233631 24012430 0 0 0 0 21475918 20852037 0 0 0 6758246 7533712 28234164 28385749 -533 -4373319 4365879 1775377 4390814 4716895 -24935 -2941518 X HAZLETON PROFESSIONAL SERVICES DBA LEHIGH VALLEY PHYSICIAN GROUP - HAZLETON, A COMMUNITY, NONPROFIT CORPORATION, PROVIDES PROFESSIONAL, PROFICIENT & PROACTIVE SERVICES ENCOMPASSING THE TOTAL HEALTHCARE NEEDS OF EVERY PATIENT IN THE COMMUNITY BY PROMOTING QUALITY HEALTHCARE INCLUDING AMBULATORY, MEDICAL & RELATED SERVICES FOR THE DIAGNOSIS, TREATMENT & CARE TO ALL THROUGH THE EMPLOYMENT & CONTRACTING OF QUALIFIED PRACTITIONERS. 0 0 25081784 24010950 HAZLETON PROFESSIONAL SERVICES DBA LEHIGH VALLEY PHYSICIAN GROUP-HAZLETON (LVPG-H) PROMOTES THE EFFICIENT DELIVERY OF HIGH QUALITY MEDICAL CARE IN A TRI-COUNTY AREA, ENGAGES IN ACTIVITIES RELATED TO THE PROMOTION OF HEALTH CARE OF PERSONS IN OUR SERVICE AREA, INCLUDING AMBULATORY, MEDICAL AND RELATED SERVICES FOR THE DIAGNOSIS, TREATMENT AND CARE, WITHOUT REGARD TO RACE, CREED, AGE OR GENDER; BY AND THROUGH THE EMPLOYMENT, CONTRACT OR OTHERWISE, OF QUALIFIED PHYSICIANS AND OTHER MEDICAL PROFESSIONALS.HISTORY AND BACKGROUNDHAZLETON PROFESSIONAL SERVICES DBA LEHIGH VALLEY PHYSICIAN GROUP-HAZLETON (LVPG-H) WAS ESTABLISHED IN 2006 AS AN AFFILIATE OF THE LEHIGH VALLEY HOSPITAL - HAZLETON (PREVIOUSLY KNOWN AS HAZLETON GENERAL HOSPITAL). AS A NON-PROFIT CORPORATION WHICH SUPPORTS BOTH THE LEHIGH VALLEY HOSPITAL - HAZLETON (LVH-H) AND LEHIGH VALLEY HEALTH NETWORK, LVPG-H HAS DEVELOPED PHYSICIAN PRACTICES IN CARDIOLOGY, FAMILY AND INTERNAL MEDICINE, HEMATOLOGY AND ONCOLOGY, GASTROENTEROLOGY, PEDIATRICS, PHYSIATRY, AND UROLOGY. WITH A CURRENT SIZE OF 31 PHYSICIANS AND 15 ADVANCED PRACTICE CLINICIANS, LVPG-H OPERATES AS A SINGLE ENTITY WITH SERVICES PROVIDED AT NUMEROUS LOCATIONS WITHIN THE LUZERNE COUNTY REGION. DURING THE YEAR ENDED JUNE 30, 2018, LVPG-H PRACTICES HAD 128,691 PATIENT VISITS, DOWN 11% FROM THE YEAR ENDED JUNE 30, 2017 VISITS OF 144,573.PATIENT CARE PROGRAMSLVPG OFFERS A CONTINUUM OF HEALTH CARE PROMOTION, PREVENTION, DIAGNOSIS, AND TREATMENT TO THE COMMUNITY. OUTPATIENT SERVICES ARE PROVIDED AT LOCATIONS THROUGHOUT THE REGION AND ARE A PART OF A HEALTHCARE NETWORK ESTABLISHED BY LVPG-H AND LVH-H TO MEET THE MEDICAL AND SURGICAL NEEDS OF THE RESIDENTS OF THE LUZERNE COUNTY REGION. LVPG-H SERVES AS A MULTISPECIALTY PHYSICIAN GROUP WITH A SPECIAL FOCUS IN THE FOLLOWING AREAS:CANCER SERVICESCANCER CARE PROGRAMS INCLUDE PREVENTION, DETECTION, DIAGNOSIS, THERAPY, CLINICAL TRIALS, REHABILITATION AND THE EVALUATION OF CANCER-RELATED CARE. CARDIAC SERVICESLVPG-H PHYSICIANS PROVIDE GENERAL AND INVASIVE CARDIOLOGY, HEART STATION, ELECTROPHYSIOLOGY, AND CARDIO THORACIC SURGERY. INTERNAL MEDICINE AND FAMILY MEDICINE PRIMARY CARELVPG-H PHYSICIANS AND PROVIDERS PROVIDE HIGH QUALITY, COMPREHENSIVE, COORDINATED CARE TO ADULTS AND CHILDREN. WE STRIVE TO PROVIDE ACCESS TO CARE AT THE TIME OF NEED, FOCUS ON PREVENTION AND CHRONIC ILLNESS MANAGEMENT AND PROVIDE COORDINATION BETWEEN SPECIALIST AND SERVICE. 25081784 1 0 0 0 0 0 0 0 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 X 34 0 1 240 1 0 0 0 0 0 0 0 0 0 0 X 11 0 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 PA X X X THE ORGANIZATION 4848840130 700 E BROAD ST HAZLETON PA 18201 DAVID BURMEISTER DO TRUSTEE 2.50 37.50 X 0 636588 30794 JOSEPH DEFULVIO DO TRUSTEE 2.50 37.50 X 0 474686 28527 TIMOTHY FRIEL MD TRUSTEE 2.50 37.50 X 0 592588 30212 GRANT GREENBERG MD TRUSTEE 2.50 37.50 X 0 353578 14078 J NATHAN HAGSTROM MD TRUSTEE 2.50 37.50 X 0 515533 18249 THOMAS HUTCHINSON MD TRUSTEE 2.50 37.50 X 0 687767 31563 THOMAS MCLOUGHLIN MD TRUSTEE 2.50 37.50 X 0 759524 30422 EDWARD NORRIS MD TRUSTEE 2.50 37.50 X 0 462237 28321 MICHAEL PASQUALE MD TRUSTEE 2.50 37.50 X 0 886209 34414 MICHAEL ROSSI MD PRESIDENT/TRUSTEE 2.50 37.50 X X 0 1178519 38689 THOMAS V WHALEN MD MMM TRUSTEE 2.50 37.50 X 0 1162765 38422 HAMEED A BUTT MD SURGEON 40.00 X 489492 0 26458 PHILIP J BENYO MD INTERNAL MEDICINE PHYSICIA 40.00 X 563801 0 28745 PETER W KOZICKY MD ORTHOPEDIC SURGEON 40.00 X 530014 0 35248 EDWARD S POLASHENSKI DO GASTROENTEROLOGIST 40.00 X 495376 0 12633 YAQOOB MOHYUDDIN MD CARDIOLOGIST 40.00 X 524523 0 35248 JOHN R FLETCHER FORMER PRESIDENT/TRUSTEE 14.00 46.00 X 0 500108 8571 2603206 8210102 470594 37 1 1 0 NORTH EAST MEDICAL SOLUTIONS 3824 NORTHERN PIKE STE 600 MONROEVILLE PA 15146 BILLING SERVICES 734974 PINNACLE NORTHEAST LLC PO BOX 128 MOUNTAIN TOP PA 18707 CLEANING SERVICES 417937 WEATHERBY HEALTHCARE 6451 N FEDERAL HWY 800 FORT LAUDERDALE FL 33308 MEDICAL SERVICES 356026 3 OUTPATIENT REVENUE 621110 9001994 9001994 INPATIENT REVENUE 621110 4840555 4840555 PROG.SERV.REVENUE-RELATED-990 621110 96000 96000 13938549 1480 1480 80268 7148 73120 73120 73120 PRACTICE SUPPORT REVENUE 621110 9553437 9553437 QUALITY REVENUE 621110 301796 301796 144048 144048 9999281 24012430 24010950 0 1480 X 17385372 16277795 1107577 376090 337570 38520 2118412 1949335 169077 972163 858844 113319 2839704 1298743 1540961 2759 2334 425 176912 153403 23509 138057 7406 130651 1527932 1458670 69262 36287 14828 21459 113973 111354 2619 291100 267143 23957 624044 609099 14945 MEDICAL SUPPLIES 1092254 1090215 2039 BAD DEBT EXPENSE 368980 368980 EQUIPMENT RENTAL & MAIN 243794 221550 22244 77916 54516 23400 28385749 25081784 3303964 0 1752 21267 677710 -1527226 1122634 1522582 71390 117507 2598322 1040183 2207065 1558139 86283 83108 199045 0 4365879 1775377 3589197 2165568 801617 2551327 4390814 4716895 X -24935 -2941518 -24935 -2941518 4365879 1775377 X -4373319 1456736 X 0 1 X 1 0 X 159963 55699 104264 2438359 984484 1453875 1558139 INTERCOMPANY PAYABLE 1729434 PENSION LIABLILITY 136810 INSURANCE LIABILITY 685083 2551327 X PART X, LINE 2: LVHN, ITS HOSPITALS, AND OTHER SUBSIDIARIES ARE GENERALLY EXEMPT FROM FEDERAL INCOME TAXES UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, EXCEPT FOR TAX IMPOSED ON UNRELATED BUSINESS INCOME. THE MOST RECENT DETERMINATION LETTER, RECEIVED BY THE ORGANIZATION, IS DATED MAY 1, 2014. LVHN AND ITS SUBSIDIARIES ACCOUNT FOR UNCERTAIN TAX POSITIONS IN ACCORDANCE WITH ACCOUNTING STANDARDS CODIFICATION (ASC) TOPIC 740. THE ORGANIZATION'S FOR-PROFIT COMPONENTS RECOGNIZE DEFERRED TAX ASSETS AND LIABILITIES FOR THE FUTURE TAX IMPACT OF TEMPORARY DIFFERENCES BETWEEN AMOUNTS RECORDED IN THE CONSOLIDATED FINANCIAL STATEMENTS AND THEIR RESPECTIVE TAX BASES AND THE FUTURE BENEFIT OF UTILIZATION NET OPERATING LOSS CARRYFORWARDS. INCOME TAXES OF THE ORGANIZATION'S TAX-EXEMPT AND FOR-PROFIT COMPONENTS ARE NOT MATERIAL TO THE ACCOMPANYING CONSOLIDATED FINANCIAL STATEMENTS. X X X X X 0 1 0 0 0 0 0 0 0 DAVID BURMEISTER DO TRUSTEE 0 488365 0 109356 0 38867 0 0 0 30794 0 667382 0 0 JOSEPH DEFULVIO DO TRUSTEE 0 441152 0 7993 0 25541 0 0 0 28527 0 503213 0 0 TIMOTHY FRIEL MD TRUSTEE 0 461879 0 101743 0 28966 0 0 0 30212 0 622800 0 0 GRANT GREENBERG MD TRUSTEE 0 301442 0 53625 0 -1489 0 0 0 14078 0 367656 0 0 J NATHAN HAGSTROM MD TRUSTEE 0 403084 0 89534 0 22915 0 0 0 18249 0 533782 0 0 THOMAS HUTCHINSON MD TRUSTEE 0 527425 0 118103 0 42239 0 0 0 31563 0 719330 0 0 THOMAS MCLOUGHLIN MD TRUSTEE 0 591438 0 132437 0 35649 0 0 0 30422 0 789946 0 0 EDWARD NORRIS MD TRUSTEE 0 404371 0 35649 0 22217 0 0 0 28321 0 490558 0 0 MICHAEL PASQUALE MD TRUSTEE 0 681639 0 152523 0 52047 0 0 0 34414 0 920623 0 0 MICHAEL ROSSI MD PRESIDENT/TRUSTEE 0 672266 0 331136 0 175117 0 0 0 38689 0 1217208 0 0 THOMAS V WHALEN MD MMM TRUSTEE 0 666727 0 314718 0 181320 0 0 0 38422 0 1201187 0 0 HAMEED A BUTT MD SURGEON 183790 0 147899 0 157803 0 0 0 26458 0 515950 0 0 0 PHILIP J BENYO MD INTERNAL MEDICINE PHYSICIA 565071 0 0 0 -1270 0 0 0 28745 0 592546 0 0 0 PETER W KOZICKY MD ORTHOPEDIC SURGEON 519806 0 5500 0 4708 0 0 0 35248 0 565262 0 0 0 EDWARD S POLASHENSKI DO GASTROENTEROLOGIST 499887 0 0 0 -4511 0 0 0 12633 0 508009 0 0 0 YAQOOB MOHYUDDIN MD CARDIOLOGIST 458105 0 73923 0 -7505 0 0 0 35248 0 559771 0 0 0 JOHN R FLETCHER FORMER PRESIDENT/TRUSTEE 0 341596 0 105000 0 53512 0 0 0 8571 0 508679 0 0 PART I, LINE 4B JOHN FLETCHER $45,826 DAVID BURMEISTER, DO $42,413 JOSEPH DEFULVIO, DO $27,734 TIMOTHY FRIEL, MD $32,847 J. NATHAN HAGSTROM, MD $27,976 THOMAS HUTCHINSON, MD $33,793 THOMAS MCLOUGHLIN, MD $34,786 EDWARD NORRIS, MD $25,030 MICHAEL PASQUALE, MD $54,209 MICHAEL ROSSI, MD $169,890 THOMAS V. WHALEN, MD, MMM $158,164 FORM 990, PART V, LINE 3B THE ORGANIZATION HAS EVALUATED THE COST OF PROVIDING PARKING TO EMPLOYEES AND DETERMINED THE PRIMARY USE OF ITS PARKING FACILITIES TO BE BY PATIENTS, VISITORS, AND/OR GUESTS, NOT EMPLOYEES. THEREFORE, THE ORGANIZATION HAS NO UNRELATED BUSINESS INCOME TAX DUE RELATED TO EMPLOYEE PARKING. FORM 990, PART VI, SECTION A, LINE 6 THE ORGANIZATION'S SOLE CORPORATE MEMBER IS LEHIGH VALLEY PHYSICIAN GROUP. FORM 990, PART VI, SECTION A, LINE 7A THE ORGANIZATION'S SOLE CORPORATE MEMBER, LEHIGH VALLEY PHYSICIAN GROUP, HAS THE POWER TO ELECT, APPOINT, APPROVE, OR REJECT MEMBERS OF THE ORGANIZATION'S GOVERNING BODY. FORM 990, PART VI, SECTION A, LINE 7B THE ORGANIZATION'S SOLE CORPORATE MEMBER, LEHIGH VALLEY PHYSICIAN GROUP, HAS THE POWER TO APPROVE OR REJECT CERTAIN MAJOR OPERATING DECISIONS MADE BY THE ORGANIZATION'S GOVERNING BODY. FORM 990, PART VI, SECTION B, LINE 11B THE PROCESS TO REVIEW THE 990'S INCLUDES: DRAFT 1 OF THE RETURNS IS REVIEWED IN DETAIL WITH A FOCUS ON ACCURACY, COMPLETENESS, AND PERSPECTIVE BY THE LVHN VICE-PRESIDENT, FINANCE & CONTROLLER AND THE LVHN CORPORATE LEGAL COUNSEL. DRAFT 2 OF THE RETURNS IS REVIEWED BY THE EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER. ALL COMPENSATION DISCLOSURES ARE REVIEWED BY THE DIRECTOR, COMPENSATION - HUMAN RESOURCES. DRAFT 3 OF THE RETURNS IS REVIEWED TOGETHER WITH THE PRESIDENT & CEO, THE EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER, THE VICE-PRESIDENT, FINANCE & CONTROLLER AND THE DIRECTOR, TAX. FINAL RETURNS ARE REVIEWED WITH THE LVHN BOARD LEADERSHIP GROUP (THE BOARD CHAIR AND THREE VICE CHAIRS). COPIES OF ALL 990'S ARE PROVIDED TO THE FULL BOARD PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C IN JANUARY 2016, LVHN IMPLEMENTED AN ELECTRONIC TOOL DESIGNED TO SEND NOTIFICATIONS AND TRACK DISCLOSURES REPORTED ON CONFLICT OF INTEREST QUESTIONNAIRES. THE NETWORK ALSO EXPANDED THE SCOPE OF THE CONFLICT OF INTEREST OR COMMITMENT POLICY, SUCH THAT ADDITIONAL COLLEAGUES ARE NOW REQUIRED TO COMPLETE A QUESTIONNAIRE EACH YEAR. PRIOR TO JANUARY, THE VP, INTERNAL AUDIT AND COMPLIANCE SERVICES ISSUED A NOTICE TO BOARD MEMBERS AND MEMBERS OF THE SENIOR MANAGEMENT COUNCIL WHEN IT WAS TIME FOR THEM TO SUBMIT THEIR CONFLICT OF INTEREST QUESTIONNAIRES. THE VP ALSO INSTRUCTED MEMBERS OF THE SENIOR MANAGEMENT COUNCIL TO IDENTIFY AND REQUEST COMPLETED CONFLICT OF INTEREST QUESTIONNAIRES FROM INDIVIDUALS WHO HAD POTENTIAL CONFLICTS OF INTEREST AND TO PROVIDE HER WITH THE IDENTITY OF THOSE INDIVIDUALS. COMPLIANCE SERVICES TRACKED COMPLETION OF THE QUESTIONNAIRES. ALL PHYSICIANS ON LVHN'S MEDICAL STAFF ARE ALSO REQUIRED TO COMPLETE A CONFLICT OF INTEREST QUESTIONNAIRE ANNUALLY. MEDICAL STAFF SERVICES MONITORS THIS PROCESS TO ENSURE THAT ALL PHYSICIANS COMPLY. POTENTIAL CONFLICTS ARE MANAGED BY THE LVHN CONFLICT OF INTEREST COMMITTEE AND/OR BY THE BOARD OF TRUSTEES, DEPENDING ON WHOSE INTEREST(S) POSE THE CONFLICT AND THE NATURE OF THE CONFLICT. FORM 990, PART VI, SECTION B, LINE 15 LEHIGH VALLEY HEALTH NETWORK 2018 EXECUTIVE COMPENSATION REVIEW IN COMPLIANCE WITH THE REBUTTABLE PRESUMPTION OF REASONABLENESS PROCESS OUTLINED IN THE INTERMEDIATE SANCTIONS REGULATIONS (ISSUED UNDER SECTION 4958 OF THE INTERNAL REVENUE CODE); SULLIVAN COTTER AND ASSOCIATES, INC. (SULLIVAN COTTER) QUALIFIES AS AN INDEPENDENT EXECUTIVE COMPENSATION EXPERT, SPECIALIZING IN THE HEALTH CARE INDUSTRY. SULLIVAN COTTER PROVIDES ADVICE TO THE LEHIGH VALLEY HEALTH NETWORK EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD OF TRUSTEES TO SUPPORT ITS ATTAINMENT OF THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE INTERMEDIATE SANCTIONS REGULATIONS. THEY ALSO SUPPORT THE COMMITTEE IN ENSURING THAT THE LVHN EXECUTIVE COMPENSATION PROGRAM IS COMPETITIVE AND ALIGNED WITH THE ORGANIZATION'S EXECUTIVE COMPENSATION PHILOSOPHY. CHIEF EXECUTIVE OFFICER TOTAL COMPENSATION REVIEW: PROGRAM ANALYSIS: ANALYZE THE MARKET POSITION OF TOTAL COMPENSATION (BASE SALARY, INCENTIVE, BENEFITS, AND PERQUISITES) FOR LVHN'S PRESIDENT AND CHIEF EXECUTIVE OFFICER (CEO) IN RELATION TO CEO MARKET DATA OBTAINED FOR A DEFINED PEER GROUP OF COMPARABLE HEALTH SYSTEMS. THIS INCLUDES THE PREPARATION OF TALLY SHEETS FOR THE PRESIDENT AND CEO AS WELL AS AN ANALYSIS OF FORM 990 COMPENSATION DATA. THEY ASSESS THE ALIGNMENT OF THE PRESIDENT AND CEO'S COMPENSATION WITH LVHN'S COMPENSATION PHILOSOPHY AND NOTE THE IMPLICATIONS OF THE REVIEW. SULLIVAN COTTER'S ANALYSES AND FINDINGS ARE SUMMARIZED IN A REPORT TO THE COMMITTEE THAT PROVIDES A REASONABLENESS OPINION FOR THE INTERMEDIATE SANCTIONS COMPLIANCE. THE REPORT WAS PROVIDED BY SULLIVAN COTTER AT THE AUGUST 15, 2017 EXECUTIVE COMPENSATION COMMITTEE MEETING. CEO COUNCIL EXECUTIVE TOTAL COMPENSATION REVIEW: PROGRAM ANALYSIS: ANALYZE THE MARKET POSITION OF TOTAL COMPENSATION (SALARIES, INCENTIVES, BENEFITS, AND PERQUISITES) FOR LVHN'S CEO COUNCIL EXECUTIVES (APPROXIMATELY 12 TOTAL POSITIONS) IN RELATION TO COMPARABLE POSITIONS IN PEER ORGANIZATIONS. THIS INCLUDES THE PREPARATION OF TALLY SHEETS FOR EACH INDIVIDUAL. SULLIVAN COTTER'S ANALYSES AND FINDINGS ARE SUMMARIZED IN A REPORT TO THE COMMITTEE THAT ALSO PROVIDES AN OPINION OF REASONABLENESS FOR INTERMEDIATE SANCTIONS COMPLIANCE. THE REPORT WAS PROVIDED BY SULLIVAN COTTER AT THE AUGUST 15, 2017 EXECUTIVE COMPENSATION COMMITTEE MEETING. SUMMARY OF METHODOLOGY TO CONDUCT THIS ANALYSIS, SULLIVAN COTTER: COLLECTED BACKGROUND INFORMATION REGARDING LVHN'S OPERATIONS, STRUCTURE, SIZE AND SCOPE, AS WELL AS EACH POSITION'S DUTIES. COMPILED MARKET DATA FOR CEO COUNCIL EXECUTIVES CONSISTENT WITH THE EXECUTIVE COMPENSATION PHILOSOPHY APPROVED BY THE COMMITTEE DURING ITS SEPTEMBER 13, 2017 MEETING: THE MARKET DATA USED FOR LVHN SYSTEM EXECUTIVES IN THIS ASSESSMENT ARE AN EQUALLY WEIGHTED BLEND OF (1) A PEER GROUP OF 30 NOT-FOR-PROFIT HEALTH SYSTEMS LOCATED IN THE NORTHEAST REGION (EXCLUDING NEW YORK CITY) WITH NET OPERATING REVENUES BETWEEN $1.3 BILLION AND $5.0 BILLION (AVERAGE OF $2.4 BILLION), AND (2) NATIONAL DATA REFLECTING ORGANIZATIONS OF SIMILAR SCOPE AND SIZE TO LVHN. NATIONAL DATA ARE USED WHERE PEER GROUP DATA ARE NOT AVAILABLE. PEER GROUP AND NATIONAL MARKET DATA WERE ABSTRACTED FROM SULLIVAN COTTER'S 2016 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS, AS WELL AS OTHER PUBLISHED COMPENSATION SURVEYS REFLECTING PAY AT COMPARABLY SIZED ORGANIZATIONS, WHICH INCLUDED NATIONAL HOSPITALS AND NATIONAL MEDICAL GROUPS. SULLIVAN COTTER NOTES THAT NO MARKET DATA ARE PROVIDED FOR THE SVP, MEDICAL SERVICES AS THE RESPONSIBILITIES OF THAT POSITION ARE UNIQUE, SO NO BENCHMARK DATA ARE AVAILABLE. THEY RECOMMEND THAT THE COMMITTEE ASSESS THE COMPENSATION FOR THAT POSITION BASED ON INTERNAL EQUITY CONSIDERATIONS. COMPILED MARKET DATA FOR THE LVHN CLINICAL CHAIRS PREPARED BY THE ASSOCIATION OF AMERICAN MEDICAL COLLEGES (AAMC) FOR THE CHAIRS OF CLINICAL DEPARTMENTS IN MEDICAL SCHOOLS, LVHN'S TRADITIONAL COMPARATOR GROUP FOR THESE JOBS. ADJUSTED THE MARKET DATA TO AN EFFECTIVE DATE OF JANUARY 1, 2018 AT AN ANNUALIZED RATE OF 3.0% BASED ON SALARY INCREASE TRENDS. COMPARED EACH COMPONENT OF LVHN'S BENEFIT PROGRAM AGAINST TYPICAL MARKET BENEFIT PRACTICES IN HEALTH SYSTEMS AND HOSPITALS BASED ON MULTIPLE PUBLISHED SURVEYS, SUPPLEMENTED BY SULLIVAN COTTER'S PROPRIETARY DATA AND EXPERIENCE. DEVELOPED MARKET TOTAL COMPENSATION DATA BY COMBINING MARKET TCC WITH TYPICAL MARKET BENEFIT COSTS. COMPARED LVHN'S TC TO MARKET RATES AND ASSESSED OVERALL POSITIONING. FOR PHYSICIAN EXECUTIVES HAVING BOTH CLINICAL AND ADMINISTRATIVE ROLES, RELEVANT MARKET DATA WERE COLLECTED BASED ON FTE ALLOCATION. SULLIVAN COTTER HAS NOT COMPLETED AN ASSESSMENT OF THE PHYSICIANS' PRODUCTIVITY OR THE FAIR MARKET VALUE (FMV) OF THEIR CLINICAL COMPENSATION, AS LVHN HAS ADVISED THAT SUCH AMOUNTS ARE APPROPRIATE AND WITHIN FMV. SULLIVAN COTTER USED THE FOLLOWING METHODOLOGY TO ASSESS THE COMPETITIVENESS AND REASONABLENESS OF LVHN'S EXECUTIVE TOTAL COMPENSATION LEVELS: COLLECTED BACKGROUND INFORMATION REGARDING LVHN'S OPERATIONS, STRUCTURE, SIZE AND SCOPE. COLLECTED INFORMATION ON EACH CEO COUNCIL EXECUTIVE MEMBER'S CURRENT COMPENSATION. DATA COLLECTED INCLUDE BASE SALARIES, ANNUAL INCENTIVE OPPORTUNITY LEVELS (TARGET AND MAXIMUM), ACTUAL ANNUAL INCENTIVE PAYOUT AMOUNTS, ANNUAL COSTS OF ALL STANDARD AND SUPPLEMENTAL BENEFITS AND ANNUAL COST AND DESCRIPTION OF EXECUTIVE PERQUISITES. REVIEWED JOB DESCRIPTIONS AND ORGANIZATIONAL CHARTS TO IDENTIFY EACH POSITION'S FUNCTIONAL RESPONSIBILITIES AND REPORTING RELATIONSHIPS. SELECTED THE APPROPRIATE BENCHMARK POSITION MATCH FOR EACH POSITION AND APPLIED PREMIUMS/DISCOUNTS TO THE MARKET DATA IN INSTANCES WHERE LVHN'S JOB DUTIES DIFFER MATERIALLY FROM BENCHMARK POSITION MATCHES. POSITION MATCHES AND MARKET ADJUSTMENTS WERE REVIEWED WITH LVHN'S SENIOR VICE PRESIDENT, HUMAN RESOURCES AND COMPENSATION STAFF. LVHN'S PROJECTED FY2017 NET REVENUES AND PHYSICIAN FTE'S WERE USED AS THE SCOPE SIZE FOR EACH ENTITY. FORM 990, PART VI, SECTION C, LINE 18 ANOTHER'S WEBSITE - GUIDESTAR. UPON REQUEST - HARD COPIES WITH SENIOR MANAGEMENT AND MARKETING. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC THROUGH ITS ANNUAL REPORT TO THE COMMUNITY. THE ANNUAL REPORT IS DISTRIBUTED TO ALL ATTENDEES AT THE ORGANIZATION'S ANNUAL PUBLIC MEETING. IN ADDITION, IT IS DISTRIBUTED VIA MAIL TO MEMBERS OF THE COMMUNITY. THE ORGANIZATION'S GOVERNING DOCUMENTS AND CONFLICTS OF INTEREST POLICY ARE NOT AVAILABLE TO THE PUBLIC. FORM 990, PART IX, LINE 11G CONTRACT LABOR SERVICES : PROGRAM SERVICE EXPENSES 117,874. MANAGEMENT AND GENERAL EXPENSES 1,119,854. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 1,237,728. PHYSICIAN & OTHER MEDICAL SERV : PROGRAM SERVICE EXPENSES 218,343. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 218,343. BILLING & COLLECTION SERVICES : PROGRAM SERVICE EXPENSES 527,029. MANAGEMENT AND GENERAL EXPENSES 330,869. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 857,898. CLEANING SERVICES : PROGRAM SERVICE EXPENSES 433,320. MANAGEMENT AND GENERAL EXPENSES 2,771. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 436,091. OTHER SERVICES : PROGRAM SERVICE EXPENSES 2,176. MANAGEMENT AND GENERAL EXPENSES 87,467. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 89,643. FORM 990, PART XI, LINE 9: TRANSFERS FROM AFFILIATES 1,456,736. LEHIGH VALLEY HEALTH NETWORK 1200 S CEDAR CREST BLVD ALLENTOWN PA 181036202 222458317 PARENT COMPANY PA 501(C)(3) LINE 12C, III-FI N/A 0 LEHIGH VALLEY HOSPITAL 2100 MACK BLVD ALLENTOWN PA 181035622 231689692 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 3 LEHIGH VALLEY HEALTH NETWORK 0 LEHIGH VALLEY HOSPITAL-MUHLENBERG 1200 S CEDAR CREST BLVD ALLENTOWN PA 181036202 232367707 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 3 LEHIGH VALLEY HEALTH NETWORK 0 LEHIGH VALLEY PHYSICIAN GROUP 1200 S CEDAR CREST BLVD ALLENTOWN PA 181036202 232700908 PHYSICIAN PRACTICE ORGANIZATION PA 501(C)(3) LINE 3 LEHIGH VALLEY HEALTH NETWORK 0 MUHLENBERG REALTY CORPORATION 1200 S CEDAR CREST BLVD ALLENTOWN PA 181036202 232245513 REAL ESTATE RENTALS PA 501(C)(3) LINE 12C, III-FI LEHIGH VALLEY HEALTH NETWORK 0 LEHIGH VALLEY HEALTH NETWORK REALTY HOLDING CO 1200 S CEDAR CREST BLVD ALLENTOWN PA 181036202 232586770 REAL ESTATE HOLDING CO. PA 501(C)(2) LEHIGH VALLEY HEALTH NETWORK 0 NORTHEASTERN PENNSYLVANIA HEALTH CORP 700 E BROAD STREET HAZLETON PA 182016835 232421970 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 3 LEHIGH VALLEY HEALTH NETWORK 0 HAZLETON HEALTH & WELLNESS CENTER 700 E BROAD STREET HAZLETON PA 182016835 232580968 STAFFING SERVICES PA 501(C)(3) LINE 12B, II NORTHEASTERN PENNSYLVANIA HEALTH CORP 0 HAZLETON SURGICAL ALLIANCE 700 E BROAD STREET HAZLETON PA 182016835 202038456 SURGICAL SERVICES PA 501(C)(3) LINE 3 NORTHEASTERN PENNSYLVANIA HEALTH CORP 0 SCHUYLKILL HEALTH SYSTEM MEDICAL GROUP INC 700 E NORWEGIAN STREET POTTSVILLE PA 179012710 232866006 PHYSICIAN PRACTICE ORGANIZATION PA 501(C)(3) LINE 10 LEHIGH VALLEY PHYSICIAN GROUP 0 LEHIGH VALLEY HOSPITAL - SCHUYLKILL 420 S JACKSON STREET POTTSVILLE PA 179013625 231352202 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 3 LEHIGH VALLEY HEALTH NETWORK 0 SCHUYLKILL REHABILITATION CENTER INC 420 S JACKSON STREET POTTSVILLE PA 179013625 232440891 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 3 LEHIGH VALLEY HEALTH NETWORK 0 SCHUYLKILL MEDICAL CENTER-EAST NORWEGIAN STREET 700 E NORWEGIAN STREET POTTSVILLE PA 179012710 230880420 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 3 LEHIGH VALLEY HEALTH NETWORK 0 POCONO HEALTHCARE PARTNERS 206 E BROWN STREET EAST STROUDSBURG PA 183013006 233014006 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 3 POCONO HEALTH SYSTEM 0 FAMILY CARE CENTERS INC 206 E BROWN STREET EAST STROUDSBURG PA 183013006 232349341 PHYSICIAN PRACTICE ORGANIZATION PA 501(C)(3) LINE 3 LEHIGH VALLEY PHYSICIAN GROUP 0 POCONO AMBULATORY SERVICES INC 206 E BROWN STREET EAST STROUDSBURG PA 183013006 232611474 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 3 POCONO HEALTH SYSTEM 0 POCONO HEALTH FOUNDATION 206 E BROWN STREET EAST STROUDSBURG PA 183013006 232516451 SUPPORT POCONO HEALTH SYSTEM PA 501(C)(3) LINE 12A, I POCONO HEALTH SYSTEM 0 POCONO HEALTH SYSTEM MEDICAL PROFESSIONAL LIABILITY SELF-INSURANCE TRUST 206 E BROWN STREET EAST STROUDSBURG PA 183013006 206560453 SELF-INSURANCE PA 501(C)(3) LINE 12A, I POCONO HEALTH SYSTEM 0 POCONO MEDICAL CENTER 206 E BROWN STREET EAST STROUDSBURG PA 183013006 240795623 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 3 POCONO HEALTH SYSTEM 0 POCONO VNA-HOSPICE 206 E BROWN STREET EAST STROUDSBURG PA 183013006 232535297 HEALTH CARE ORGANIZATION PA 501(C)(3) LINE 10 POCONO HEALTH SYSTEM 0 POCONO HEALTH SYSTEM 206 E BROWN STREET EAST STROUDSBURG PA 183013006 232336285 SUPPORT POCONO MEDICAL CENTER PA 501(C)(3) LINE 12B, II LEHIGH VALLEY HEALTH NETWORK 0 WEST END COMMUNITY AMBULANCE ASSOCIATION 206 E BROWN STREET EAST STROUDSBURG PA 183013006 232532377 AMBULATORY MEDICAL SERVICES PA 501(C)(3) LINE 10 POCONO HEALTH SYSTEM 0 LVHN RECIPROCAL RISK RETENTION GROUP 151 MEETING STREET STE 301 CHARLESTON SC 294012238 200037118 INSURANCE SERVICES PA N/A HEALTH NETWORK LABORATORIES LLC 794 ROBLE ROAD ALLENTOWN PA 181099110 232932802 LABORATORY SERVICES PA N/A HEALTH NETWORK LABORATORIES LP 794 ROBLE ROAD ALLENTOWN PA 181099110 232948774 LABORATORY SERVICES PA N/A LEHIGH VALLEY IMAGING LLC 1230 S CEDAR CREST BLVD ALLENTOWN PA 181036202 464551937 IMAGING SERVICES PA N/A HAZLETON SURGERY CENTER LLC 17480 DALLAS PARKWAY STE 210 DALLAS TX 752877304 201232531 SURGICAL SERVICES PA N/A SCHUYLKILL HEALTH SYSTEM MEDICAL MALL LP 700 SCHUYLKILL MANOR ROAD POTTSVILLE PA 179013849 232514813 REAL ESTATE RENTALS PA N/A POCONO AMBULATORY SURGERY CENTER LTD 1 STORM STREET STROUDSBURG PA 183602406 232611442 SURGICAL SERVICES PA N/A POCONO HEALTH SYSTEM INVESTMENT COLLABORATIVE LP 206 E BROWN STREET EAST STROUDSBURG PA 183013006 472125419 INVESTMENTS PA N/A LEHIGH VALLEY HEALTH SERVICES INC 2100 MACK BLVD ALLENTOWN PA 181035622 232263665 HEALTH CARE RELATED SERVICES PA N/A C 0 LEHIGH VALLEY ANESTHESIA SERVICES PC 2100 MACK BLVD ALLENTOWN PA 181035622 233906125 ANESTHESIA SERVICES PA N/A C 0 WESTGATE PROFESSIONAL CENTER INC 2100 MACK BLVD ALLENTOWN PA 181035622 231657333 REAL ESTATE RENTALS PA N/A C 0 LEHIGH VALLEY PHYSICIAN HOSPITAL ORGANIZATION INC 2100 MACK BLVD ALLENTOWN PA 181035622 232750430 HEALTH CARE RELATED SERVICES PA N/A C 0 HAZLETON SAINT JOSEPH MEDICAL OFFICE BUILDING INC 700 E BROAD STREET HAZLETON PA 182016835 232500981 MEDICAL OFFICE RENTAL PA N/A C 0 SCHUYLKILL HEALTH SYSTEM DEVELOPMENT CORPORATION 700 E NORWEGIAN STREET POTTSVILLE PA 179012710 232432417 PURSUES, IMPLEMENTS & FURTHERS ACTIVITIES & PURPOSES OF HEALTH NETWORK PA N/A C 0 SCHUYLKILL MEDICAL PLAZA - CONDOMINIUM ASSOCIATION 420 S JACKSON STREET POTTSVILLE PA 179013625 232931821 CONDOMINIUM ASSOCIATION PA N/A C 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 1 1 1 1 1