2017-11-10T14:49:14-06:00 2016-12-31 363168081 SIKICH LLP 13400 BISHOPS LANE SUITE 300 BROOKFIELD WI 53005 990 2016-01-01 391789197 CHILDREN'S MEDICAL GROUP INC CHIL 4142665420 PO BOX 1997 MS 900 MILWAUKEE WI 532011997 MARC A CADIEUX TREASURER 4142665420 2017-11-10 1 BRYAN L PAUTSCH CPA P00034913 2627549400 2017-11-10 12.155.240.66 2017-11-10 14:01:15 CS P 3C5DB9C78CC6D358BEC105BF24F28AE347207F73 3C5DB9C78CC6D358BEC105BF24F28AE347207F73 2016 2017-02-10 21:41:12Z SEE SCHEDULE O SMRITI KHARE MD PO BOX 1997 MS 900 MILWAUKEE WI 532011997 64176318 0 X WWW.CHW.ORG X 1994 WI PROVIDE QUALITY, ACCESSIBLE PRIMARY HEALTH CARE TO CHILDREN IN THE COMMUNITY. 9 0 506 0 0 0 5859632 11326758 48745732 52503219 -75796 89841 47420 134708 54576988 64054526 150 0 0 0 33776283 41126538 0 0 0 20853790 22926013 54630223 64052551 -53235 1975 12334317 18555289 12336131 18555128 -1814 161 X TO PROVIDE QUALITY, ACCESSIBLE PRIMARY HEALTH CARE SERVICES TO ALL CHILDREN IN OUR COMMUNITY, ADVOCATE FOR THE WELL-BEING OF ALL CHILDREN, EDUCATE CHILDREN, FAMILIES, HEALTH CARE PROFESSIONALS AND OUR COMMUNITY REGARDING THE HEALTH OF CHILDREN. 0 0 52039335 48631647 CHILDREN'S MEDICAL GROUP, INC. ("CMG") IS ORGANIZED AS A NON STOCK NON PROFIT CORPORATION WITH A SOLE MEMBER, CHILDREN'S HOSPITAL AND HEALTH SYSTEM, INC. ("CHHS"), A SECTION 501(C)(3) ORGANIZATION. CMG IS AFFILIATED WITH CHILDREN'S HOSPITAL OF WISCONSIN, INC. ("CHW"), A SECTION 501(C)(3) ORGANIZATION WHICH IS THE ONLY HOSPITAL IN WISCONSIN DEVOTED SOLELY TO THE PROVISION OF MEDICAL SERVICES TO CHILDREN. THE PRIMARY PURPOSE OF CMG, CHHS AND CHW IS TO PROVIDE QUALITY PRIMARY CARE MEDICAL SERVICES TO CHILDREN IN THE COMMUNITY, STATE, AND REGION. THE AFFILIATED GROUP IS ONE OF ONLY A HANDFUL OF ORGANIZATIONS THROUGHOUT THE U.S. THAT FOCUSES SOLELY ON THE CRITICAL MEDICAL NEEDS OF CHILDREN AND THE SPECIAL CARE REQUIRED BY THEM. THE PRINCIPAL FUNCTION OF CMG IS TO PROVIDE PRIMARY MEDICAL DIAGNOSIS AND TREATMENT SERVICES THROUGH OUTPATIENT CLINICS AND COMMUNITY HEALTH SCREENING AND EDUCATION SERVICES. CMG ALSO PARTICIPATES IN PRIMARY CARE MEDICAL EDUCATION AND TRAINING THROUGH THE MEDICAL COLLEGE OF WISCONSIN AND GRADUATE MEDICAL EDUCATION PROGRAMS ALREADY ESTABLISHED AT CHW. CMG PROVIDES CARE TO CHILDREN WHO ARE RESIDENTS OF SOUTHEASTERN WISCONSIN AT LOCATIONS WHERE THERE IS A DEMONSTRATED COMMUNITY NEED FOR MEDICAL DIAGNOSIS AND TREATMENT. IN 2016, CMG HAD 27 PHYSICIAN OFFICES WITH 105 PROVIDERS. AS A GROUP THERE WERE 300,532 PEDIATRIC OFFICE VISITS, HEALTH CHECKS AND IMMUNIZATIONS PROVIDED IN 2016. INCLUDED IN THIS NUMBER ARE 37,977 PEDIATRIC OFFICE VISITS, HEALTH CHECKS AND IMMUNIZATIONS DESCRIBED IN LINE 4B.IN RESPONSE TO THE CHANGING NEEDS OF THE COMMUNITY FOR MEDICAL SERVICES, ADVANCES IN PEDIATRIC MEDICINE AND THE INCREASING EMPHASIS ON PREVENTIVE MEDICAL CARE, CMG PROVIDES SERVICES IN FURTHERANCE OF THE MISSION OF CHW AND OTHER MEMBERS OF THE AFFILIATED GROUP. INCREASINGLY, PATIENTS HAVE BEEN SEEKING PRIMARY MEDICAL CARE THROUGH THE EMERGENCY ROOM FACILITIES OF HOSPITALS. THE EMERGENCY ROOM IS THE MOST COSTLY AND INEFFICIENT METHOD OF PROVIDING SUCH CARE TO PATIENTS. BY MAKING PRIMARY CARE AVAILABLE TO A GREATER PORTION OF THE GENERAL PUBLIC, CMG PROVIDES QUALITY, EFFICIENT PRIMARY PEDIATRIC CARE AT A LOWER COST. CMG IS STRUCTURED TO BETTER SERVE THE RESIDENTS OF SOUTHEASTERN WISCONSIN BY PROVIDING INCREASED ACCESS TO QUALITY MEDICAL CARE, EXPANDING COMMUNITY MEDICAL EDUCATION EFFORTS AND IMPROVING THE QUALITY OF PEDIATRIC CARE. 7984968 4002440 CMG OPERATES CLINICS IN UNDERSERVED AREAS IN THE MILWAUKEE AREA, INCLUDING A SITE LOCATED ON THE NEXT DOOR FOUNDATION CAMPUS IN MILWAUKEE'S CENTRAL CITY, IN ADDITION TO THE MIDTOWN HEALTH CENTER (FKA DOWNTOWN HEALTH CENTER) AND COMMUNITY CLINICS. THESE CLINICS PROVIDE PRIMARY CARE SERVICES INCLUDING PREVENTIVE CARE, PHYSICALS, IMMUNIZATIONS AND TREATMENT FOR ILLNESSES TO AREAS THAT PREVIOUSLY DID NOT HAVE PEDIATRIC PRACTICES AVAILABLE TO ATTEND TO THE COMMUNITY'S NEEDS. ADDITIONALLY, TO MEET THE DENTAL NEEDS OF UNDERSERVED CHILDREN IN THE CITY OF MILWAUKEE, CMG HAS A PEDIATRIC DENTAL PRACTICE, DENTAL CENTER - MIDTOWN (FKA NORTH AVENUE DENTAL). THESE CLINICS OPERATE AT A LOSS, WHICH WAS FUNDED BY CHW, CONTRIBUTIONS RECEIVED VIA THE CHILDREN'S HOSPITAL OF WISCONSIN FOUNDATION, INC. THESE CLINICS HAD 37,977 PEDIATRIC OFFICE VISITS, HEALTH CHECKS AND IMMUNIZATIONS PROVIDED IN 2016, AND APPROXIMATELY 88% OF THE GROSS CHARGES WERE FROM PATIENTS ENROLLED IN MEDICAID. 60024303 1 1 0 0 0 0 0 0 0 0 1 0 0 1 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 0 0 506 1 0 0 0 0 0 0 0 0 0 0 X 9 0 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 WI X MS SARAH KAFKA 4142661887 PO BOX 1997 MS 900 MILWAUKEE WI 532011997 THOMAS SATO MD DIRECTOR/PEDIATRIC PHYSICIAN 1.00 0.00 X 0 0 0 BARBARA CALKINS MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 285158 0 9405 STEVEN JEREB MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 302100 0 39607 SMRITI KHARE MD DIRECTOR/PRESIDENT, CMG 40.00 0.00 X X 0 499206 76613 BRADLEY KIRSCHNER MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 131057 0 1397 BOYD MILLER MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 288925 0 35200 SHARYL PALEY MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 404835 0 41030 YOLANDA REESE MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 153334 0 36749 ROBERT ROHLOFF MD DIRECTOR/DIR, CMG QLTY AND PAT SAFETY 0.00 40.00 X 0 336965 50981 STEPHANIE WHITT MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 287676 0 35249 MARGARET TROY CMG CHAIR & DIRECTOR/CHHS PRESIDENT 0.00 40.00 X X 0 1397228 284889 MARC CADIEUX TREASURER 0.00 40.00 X 0 561468 88059 SHEILA REYNOLDS SECRETARY (THROUGH JUNE 2016) 0.00 40.00 X 0 431489 52139 MICHELLE METTNER SECRETARY (BEGINNING JUNE 2016) 0.00 40.00 X 0 389688 75949 MARY SISNEY VP PRIMARY CARE 40.00 0.00 X 0 207131 50781 JASON FRIEDLANDER MD PEDIATRIC PHYSICIAN 40.00 0.00 X 582919 0 39220 SHERYN ABRAHAM MD PEDIATRIC PHYSICIAN 40.00 0.00 X 576568 0 9938 WILLIAM JERUC MD PEDIATRIC PHYSICIAN 40.00 0.00 X 534578 0 39437 DAVID LAUTZ MD PEDIATRIC PHYSICIAN 40.00 0.00 X 513256 0 40120 CHRISTOPHER SCHWAKE MD PEDIATRIC PHYSICIAN 40.00 0.00 X 487531 0 39530 4547937 3823175 1046293 78 0 1 0 THE MEDICAL COLLEGE OF WISCONSIN 8701 WATERTOWN PLANK RD MILWAUKEE WI 53226 PHYSICIANS AND NURSE PRACTITIONERS 834495 MEDICAL STAFFING NETWORK INC PO BOX 840292 DALLAS TX 75284 TEMPORARY HELP 166555 2 11326758 11326758 NET PATIENT SVC REV 621110 52503219 52503219 52503219 211633 211633 121792 -121792 -121792 -121792 OTHER MISCELLANEOUS 900099 134708 130868 3840 134708 64054526 52634087 0 93681 4914817 4914817 30054105 30052375 1730 1152264 1152264 3131760 3131760 1873592 1873592 3750000 3750000 96 96 1223350 1131056 92294 52432 52432 123133 120579 2554 5867 5867 4987832 4987832 43150 29093 14057 130252 109399 20853 1097628 972761 124867 144285 142901 1384 MEDICAL SUPPLIES 10653267 10653267 OTHER EXPENSES 714721 694212 20509 64052551 60024303 4028248 0 291643 515020 3240482 3899043 52085 39085 1491446 1294171 151969 220636 11653201 3138783 4021222 8514418 3085470 4072916 12334317 18555289 7932359 7569875 704809 789735 3698963 10195518 12336131 18555128 X -1814 161 -1814 161 12334317 18555289 1975 0 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 5504864 1805628 3699236 4549011 1333155 3215856 1599326 1599326 8514418 DEFERRED COMPENSATION PLAN ASSETS 4001225 DEPOSITS 17969 VENDOR REBATES 53722 4072916 DEFERRED COMPENSATION PLAN LIABILITIES 4001225 DUE TO AFFILIATES 5686601 LEASE LIABILITY 507692 10195518 X PART X, LINE 2: FOOTNOTE 2 INCOME TAXES: CHHS EVALUATES ITS UNCERTAIN TAX POSITIONS ON AN ANNUAL BASIS, AND THERE HAVE BEEN NO UNCERTAIN TAX POSITIONS RECORDED FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015. 1 1 0 0 0 0 0 1 0 BARBARA CALKINS MD DIRECTOR/PEDIATRIC PHYSICIAN 235629 0 48769 0 760 0 9000 0 405 0 294563 0 0 0 STEVEN JEREB MD DIRECTOR/PEDIATRIC PHYSICIAN 246719 0 54841 0 540 0 9000 0 30607 0 341707 0 0 0 SMRITI KHARE MD DIRECTOR/PRESIDENT, CMG 0 367966 0 108065 0 23175 0 57600 0 19013 0 575819 0 9948 BOYD MILLER MD DIRECTOR/PEDIATRIC PHYSICIAN 287826 0 0 0 1099 0 9000 0 26200 0 324125 0 0 0 SHARYL PALEY MD DIRECTOR/PEDIATRIC PHYSICIAN 323323 0 80702 0 810 0 9000 0 32030 0 445865 0 0 0 YOLANDA REESE MD DIRECTOR/PEDIATRIC PHYSICIAN 150616 0 2237 0 481 0 6434 0 30315 0 190083 0 0 0 ROBERT ROHLOFF MD DIRECTOR/DIR, CMG QLTY AND PAT SAFET 0 301055 0 22627 0 13283 0 22250 0 28731 0 387946 0 0 STEPHANIE WHITT MD DIRECTOR/PEDIATRIC PHYSICIAN 286866 0 0 0 810 0 9000 0 26249 0 322925 0 0 0 MARGARET TROY CMG CHAIR & DIRECTOR/CHHS PRESIDENT 0 838507 0 439809 0 118912 0 235640 0 49249 0 1682117 0 0 MARC CADIEUX TREASURER 0 382267 0 122655 0 56546 0 61600 0 26459 0 649527 0 0 SHEILA REYNOLDS SECRETARY (THROUGH JUNE 2016) 0 151949 0 87360 0 192180 0 19600 0 32539 0 483628 0 29825 MICHELLE METTNER SECRETARY (BEGINNING JUNE 2016) 0 333471 0 53406 0 2811 0 50950 0 24999 0 465637 0 0 MARY SISNEY VP PRIMARY CARE 0 181432 0 24790 0 909 0 19294 0 31487 0 257912 0 0 JASON FRIEDLANDER MD PEDIATRIC PHYSICIAN 460971 0 103138 0 18810 0 9000 0 30220 0 622139 0 0 0 SHERYN ABRAHAM MD PEDIATRIC PHYSICIAN 456879 0 103009 0 16680 0 9000 0 938 0 586506 0 0 0 WILLIAM JERUC MD PEDIATRIC PHYSICIAN 386378 0 128958 0 19242 0 9000 0 30437 0 574015 0 0 0 DAVID LAUTZ MD PEDIATRIC PHYSICIAN 375399 0 123898 0 13959 0 9000 0 31120 0 553376 0 0 0 CHRISTOPHER SCHWAKE MD PEDIATRIC PHYSICIAN 345227 0 141764 0 540 0 9000 0 30530 0 527061 0 0 0 PART I, LINE 3 CMG RELIED UPON CHILDREN'S HOSPITAL AND HEALTH SYSTEM, INC.("CHHS"), THE CORPORATE MEMBER OF CMG, TO ESTABLISH THE COMPENSATION OF CMG'S PRESIDENT. CHHS USED ITS INDEPENDENT COMPENSATION COMMITTEE, AN INDEPENDENT COMPENSATION CONSULTANT, THE FORM 990 OF OTHER ORGANIZATIONS, COMPENSATION SURVEYS, AND APPROVAL BY THE COMPENSATION COMMITTEE TO DETERMINE THE COMPENSATION. PART I, LINES 4A-B PART I, LINE 4A: UNTIL JUNE 2016, SHEILA REYNOLDS SERVED AS CHHS CORPORATE VP & GENERAL COUNSEL. BY VIRTUE OF THAT ROLE, MS. REYNOLDS SERVED AS THE SECRETARY OF CMG. CHHS PAID CERTAIN AMOUNTS AS SEVERANCE TO MS. REYNOLDS PURSUANT TO A WRITTEN AGREEMENT. CASH PAYMENTS MADE TO MS. REYNOLDS IN 2016 TOTALED $142,931. PART I, LINE 4B: IN 2016, THERE WAS A CHHS EXECUTIVE FLEXIBLE BENEFIT PLAN IN PLACE WHICH WAS A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN (457(F) PLAN). THE CORPORATION CONTRIBUTES 10% OF EACH PARTICIPATING EXECUTIVE'S SALARY. THE AMOUNTS OF EMPLOYER CONTRIBUTIONS TO THIS PLAN FOR PARTICIPATING EXECUTIVES IN 2016 WERE AS FOLLOWS: M. CADIEUX, $42,000; S. KHARE, M.D., $38,000; AND M. METTNER, $34,000. AFTER A VESTING PERIOD, PARTICIPANTS MAY ELECT TO WITHDRAW AMOUNTS PREVIOUSLY CONTRIBUTED AND REPORTED. AMOUNTS WITHDRAWN BY PARTICIPANTS IN 2016 WERE: S. REYNOLDS, $29,825; AND S. KHARE, M.D., $9,948. CHHS HAS REPORTED ADDITIONAL AMOUNTS SET ASIDE FOR A NONQUALIFIED RETIREMENT PLAN ON BEHALF OF ITS PRESIDENT & CEO. THE AMOUNT SET ASIDE IN 2016 WAS $279,443 AND OF THAT, $60,753 WAS PAID AS A VESTED CONTRIBUTION UNDER THE SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN (457(F) PLAN) MENTIONED ABOVE AND IS INCLUDED IN PART II, COLUMN (B)(III). PART I, LINE 7 CERTAIN EXECUTIVES PARTICIPATE IN AN ANNUAL BONUS PLAN THAT PROVIDES COMPENSATION BASED ON ACHIEVING SPECIFIC PRE-DEFINED GOALS. BONUS CRITERIA ARE COMPRISED OF BOTH SYSTEM LEVEL AND EXECUTIVE SPECIFIC COMPONENTS. SUCH CRITERIA PERTAIN TO MATTERS WITHIN THE EXECUTIVE'S AREA OF RESPONSIBILITY, AS WELL AS ACHIEVEMENT OF OVERALL STRATEGIC OBJECTIVES OF THE ORGANIZATION AND ITS AFFILIATES IN ALIGNMENT WITH SYSTEM-WIDE BALANCED MEASURES. FORM 990, PART VII, COLUMN E & SCHEDULE J, PART II: 1. SMRITI KHARE, M.D., PRESIDENT OF CMG, ROBERT ROHLOFF, M.D., DIR, CMG QUALITY & PATIENT SAFETY, AND MARY SISNEY, VP PRIMARY CARE - REPORTABLE COMPENSATION FROM RELATED ORGANIZATIONS AND OTHER COMPENSATION LISTED IN PART VII AND SCHEDULE J WERE PAID FOR SERVICES PROVIDED (40 HOURS PER WEEK) TO CMG. THESE AMOUNTS WERE PAID BY CHHS. SERVICES BY DR. KHARE AND DR. ROHLOFF AS MEMBERS OF THE BOARD OF DIRECTORS WERE PROVIDED ON A PART-TIME VOLUNTARY BASIS. 2. DRS. CALKINS, KIRSCHNER, JEREB, MILLER, PALEY, REESE, AND WHITT - COMPENSATION AND BENEFITS LISTED WERE FOR SERVICES PROVIDED AS FULL-TIME EMPLOYEES OF CMG AS PEDIATRIC PHYSICIANS. SERVICES AS MEMBERS OF THE BOARD OF DIRECTORS WERE PROVIDED ON A PART-TIME VOLUNTARY BASIS. 3. MARGARET TROY, CMG BOARD CHAIR AND PRESIDENT & CEO OF CHHS, MARC CADIEUX, TREASURER OF CMG AND TREASURER & CFO OF CHHS, SHEILA REYNOLDS, SECRETARY OF CMG AND CORPORATE VP & GENERAL COUNSEL OF CHHS (THROUGH JUNE 2016), AND MICHELLE METTNER, SECRETARY OF CMG (BEGINNING JUNE 2016) AND CORP VP GOVT & LEGAL AFFAIRS - REPORTABLE COMPENSATION FROM RELATED ORGANIZATIONS AND OTHER COMPENSATION LISTED IN PART VII AND SCHEDULE J WERE PAID FOR SERVICES PROVIDED (40 HOURS PER WEEK) TO CHHS AND ITS AFFILIATES. THESE AMOUNTS WERE PAID BY CHHS. SERVICES BY MS. TROY AS A MEMBER OF THE BOARD OF DIRECTORS OF CMG WERE PROVIDED ON A PART-TIME VOLUNTARY BASIS. FORM 990, BOX C, DOING BUSINESS AS: CHILDREN'S DENTAL CENTER AND CHILDREN'S HOSPITAL OF WISCONSIN PRIMARY CARE FORM 990, PART V, LINE 1A THE ORGANIZATION DID NOT FILE ANY FORMS 1099 DURING THE TAXABLE YEAR. ALTHOUGH THE ORGANIZATION DID RETAIN INDEPENDENT CONTRACTORS, THE COMPENSATION AMOUNTS OWED TO SUCH CONTRACTORS WERE PROCESSED AND PAID BY A RELATED ENTITY, CHILDREN'S HOSPITAL OF WISCONSIN, INC. ("CHW"), WITH APPROPRIATE INTERCOMPANY ARRANGEMENTS BETWEEN THE ORGANIZATION AND CHW. THE FORMS 1099 FOR SUCH PAYMENTS WERE ISSUED BY CHW, AS THE ENTITY THAT PROCESSED AND MADE THE PAYMENTS TO THE INDEPENDENT CONTRACTORS. FORM 990, PART VI, SECTION A, LINE 6 THE ORGANIZATION HAS A SOLE CORPORATE MEMBER WHICH IS CHHS. FORM 990, PART VI, SECTION A, LINE 7A CHHS, THE SOLE CORPORATE MEMBER OF THE ORGANIZATION, ELECTS THE ORGANIZATION'S GOVERNING BODY. FORM 990, PART VI, SECTION A, LINE 7B THE SOLE CORPORATE MEMBER, CHHS, HAS CERTAIN RESERVE POWERS OVER THE CORPORATION, INCLUDING AMENDMENT OF THE ARTICLES OF INCORPORATION AND BYLAWS; APPROVAL OF MERGER, CONSOLIDATION OR THE CREATION OF ANY SUBSIDIARIES BY THE CORPORATION; AND APPROVAL OF THE ANNUAL BUDGET AND ANY DEBT. THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF CHHS SELECTS THE PRESIDENT. FORM 990, PART VI, SECTION B, LINE 11B THE FORM 990 OF CMG WAS REVIEWED BY THE AUDIT AND COMPLIANCE COMMITTEE OF CHHS BOARD OF DIRECTORS, AND PRIOR TO FILING, A COPY WAS PROVIDED TO ALL DIRECTORS OF CMG. FORM 990, PART VI, SECTION B, LINE 12C ANNUALLY, ALL DIRECTORS, OFFICERS AND KEY EMPLOYEES ARE REQUESTED TO SUBMIT A CONFLICT OF INTEREST DISCLOSURE TO DIRECTOR OF CORPORATE COMPLIANCE. THE COMPLIANCE DEPARTMENT MONITORS AND PERIODICALLY REVIEWS TRANSACTIONS BETWEEN THE ORGANIZATION AND BOARD MEMBERS OR ENTITIES WITH WHICH THEY ARE AFFILIATED. FORM 990, PART VI, SECTION B, LINE 15 THE COMPENSATION OF THE ORGANIZATION'S OFFICERS WAS REVIEWED AND APPROVED BY THE INDEPENDENT COMPENSATION COMMITTEE OF CHHS (THE ORGANIZATION'S CORPORATE MEMBER). WITH THE ASSISTANCE OF AN INDEPENDENT COMPENSATION CONSULTANT AND INFORMATION FROM A VARIETY OF EXTERNAL SOURCES (AS INDICATED ON SCHEDULE J), THE COMMITTEE CONFIRMED THAT TOTAL COMPENSATION AMOUNTS TO BE PAID WERE REASONABLE AND COMPARABLE TO AMOUNTS PAID BY SIMILARLY SITUATED ORGANIZATIONS. THE PROCESS FOLLOWED BY THE COMMITTEE, INCLUDING THE DATA RELIED UPON AND THE COMMITTEE'S DECISIONS, WAS THOROUGHLY AND TIMELY DOCUMENTED. COMPENSATION OF THE KEY EMPLOYEE WAS SET BY SUPERVISORY EXECUTIVES IN CONSULTATION WITH CHHS HUMAN RESOURCES LEADERS. THE PROCESS INCLUDED REVIEW BY INDEPENDENT PERSONS WHO, USING A VARIETY OF EXTERNAL SOURCES (AS INDICATED ON SCHEDULE J), CONFIRMED THAT TOTAL COMPENSATION AMOUNTS TO BE PAID WERE REASONABLE AND COMPARABLE TO AMOUNTS PAID BY SIMILARLY SITUATED ORGANIZATIONS. THE PROCESS AND DATA RELIED ON WERE THOROUGHLY AND TIMELY DOCUMENTED. FORM 990, PART VI, SECTION C, LINE 19 THE GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY AND FINANCIAL INFORMATION OF CMG ARE AVAILABLE TO THE PUBLIC UPON REQUEST THROUGH THE CHHS MARKETING AND COMMUNICATION DEPARTMENT. FORM 990, PART I, LINE 4 AND PART VI, LINE 1B CHILDREN'S MEDICAL GROUP, INC. ("CMG") IS A WISCONSIN NONSTOCK CORPORATION. CMG IS AN AFFILIATE OF CHILDREN'S HOSPITAL AND HEALTH SYSTEM, INC. ("CHHS"), A TAX-EXEMPT WISCONSIN CORPORATION SERVING AS THE PARENT ENTITY OF AN INTEGRATED SYSTEM OF PROVIDER ORGANIZATIONS ADDRESSING THE HEALTH CARE NEEDS OF CHILDREN IN SOUTHEASTERN WISCONSIN AND SURROUNDING AREAS. AS THE CORPORATE MEMBER OF CMG, CHHS HOLDS VARIOUS RESERVE POWERS IN RELATION TO CMG, INCLUDING AUTHORITY TO APPOINT CMG'S BOARD OF DIRECTORS. THE BOARD OF DIRECTORS OF CMG CONSISTS OF CERTAIN PHYSICIANS WHO ARE EMPLOYED BY CMG, ALONG WITH REPRESENTATIVES OF CHHS'S EXECUTIVE LEADERSHIP. AS EMPLOYEES OF EITHER CMG OR CHHS, NONE OF THESE DIRECTORS MAY BE CONSIDERED "INDEPENDENT" FOR PURPOSES OF FORM 990. HOWEVER, AS ACKNOWLEDGED BY THE IRS IN ITS CPE TEXT FOR FISCAL YEAR 1997, IN A MULTI ENTITY HOSPITAL SYSTEM, THE BOARD OF A SUBSIDIARY NON-PROFIT HEALTH CARE ORGANIZATION IS CONSIDERED TO BE COMPRISED OF INDEPENDENT COMMUNITY MEMBERS IF IT IS CONTROLLED BY AN EXEMPT ORGANIZATION WHOSE BOARD IS COMPRISED OF A MAJORITY OF VOTING MEMBERS WHO ARE INDEPENDENT COMMUNITY MEMBERS. CMG MEETS THIS STANDARD BECAUSE IT IS A CONTROLLED SUBSIDIARY OF CHHS, AND CHHS'S GOVERNING BOARD INCLUDES INDEPENDENT COMMUNITY MEMBERS AS A MAJORITY THEREOF. CHILDREN'S HOSPITAL & HEALTH SYSTEM INC PO BOX 1997 MS 900 MILWAUKEE WI 532011997 391500074 AMBULATORY SURGERY CTR, URGENT CARE, & OPERATIONAL SPPT SVCS WI 501(C)(3) LINE 3 N/A 0 CHILDREN'S HOSPITAL OF WISCONSIN INC PO BOX 1997 MS 900 MILWAUKEE WI 532011997 390812532 PEDIATRIC HOSPITAL WI 501(C)(3) LINE 3 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 CHILDREN'S HOSPITAL OF WISCONSIN FOUNDATION INC PO BOX 1997 MS 900 MILWAUKEE WI 532011997 391500075 FUND DEVELOPMENT WI 501(C)(3) LINE 7 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 CHILDREN'S PHYSICIAN GROUP PC PO BOX 1997 MS 900 MILWAUKEE WI 532011997 364303682 PEDIATRIC PHYSICIAN SERVICES IL 501(C)(3) LINE 10 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 CHILDREN'S SERVICE SOCIETY OF WISCONSIN PO BOX 1997 MS 900 MILWAUKEE WI 532011997 390806380 CHILD WELLBEING SERVICES WI 501(C)(3) LINE 7 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 CHILDREN'S COMMUNITY HEALTH PLAN INC PO BOX 1997 MS 900 MILWAUKEE WI 532011997 271494977 WISCONSIN MEDICAID HMO WI 501(C)(3) LINE 10 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 0 0 1 0 0 0 0 0 0 1 1 1 1 0 0 1 0 0 0