2017-10-10T08:20:25-05:00 2016-12-31 271728945 PKF O'CONNOR DAVIES LLP 500 MAMARONECK AVENUE HARRISON NY 105281633 990 2016-01-01 450553664 HEALTHIX INC HEAL 8776954749 40 WORTH STREET 5TH FLOOR NEW YORK NY 100132988 JOHN GUASTELLA SVP & CFO 8776954749 2017-10-09 1 GARRETT M HIGGINS P00543209 9143818900 2017-10-09 65.51.112.58 2017-10-09 20:59:12 ED P 45D10729E84C80409783239EA0C370A8A08632B7 D3EBBEAD062F6398C3A863A6A52B89C565EE880E 2016 2021-01-29 14:40:06Z THOMAS F CHECK 40 WORTH STREET 5TH FLOOR NEW YORK NY 100132988 16563102 0 X WWW.HEALTHIX.ORG X 2007 NY THE MISSION OF THE COMPANY IS TO CREATE AN ACHIEVABLE, SUSTAINABLE AND REPLICABLE MODEL FOR INTEGRATING CLINICAL INFORMATION ACROSS MULTIPLE HEALTH CARE ORGANIZATIONS WHICH SUPPORTS NEW YORK STATE AND FEDERAL STRATEGIC HEALTH INFORMATION TECHNOLOGY (HIT) PLANS TO (A) IMPROVE ACCESS TO PATIENT DATA AT THE POINT OF CARE; (B) IMPROVE HEALTH CARE QUALITY; AND (C) REDUCE INAPPROPRIATE UTILIZATION AND COST. 18 18 56 18 0 0 14689562 16033831 562140 523020 36238 6251 5252 0 15293192 16563102 0 0 0 0 5933170 7030651 0 0 0 7192940 8663558 13126110 15694209 2167082 868893 10689103 11302070 3667837 3411911 7021266 7890159 X THE MISSION OF HEALTHIX INC. IS TO CREATE AN ACHIEVABLE, SUSTAINABLE AND REPLICABLE MODEL FOR INTEGRATING CLINICAL INFORMATION ACROSS MULTIPLE HEALTH CARE ORGANIZATIONS WHICH SUPPORTS NEW YORK STATE AND FEDERAL STRATEGIC HEALTH INFORMATION TECHNOLOGY (HIT) PLANS TO (A) IMPROVE ACCESS TO PATIENT DATA AT THE POINT OF CARE; (B) IMPROVE HEALTH CARE QUALITY; AND (C) REDUCE INAPPROPRIATE UTILIZATION AND COST. 0 0 13644352 523020 HCRA/MEDICAID PROGRAMTHE IT GROUP WORKS WITH HEALTHIX PARTICIPANTS TO INTEGRATE THEM INTO THE HIE AND TO WORK WITH THEM TO DESIGN AND DEVELOP PRODUCTS AND SERVICES THAT HELP THEM TO IMPROVE CARE THROUGH BETTER CARE COORDINATION. IN 2016 WE USED THE FUNDING FROM HCRA/MEDICAID TO SUPPORT STAFF AND TECHNOLOGY FOR THIS WORK. THE IT GROUP WAS LED BY A CIO COVERING FOUR AREAS: INNOVATION, DEVELOPMENT, ENGINEERING AND SECURITY. THE INNOVATION TEAM INCLUDED FIVE PROJECT MANAGERS, A BUSINESS ANALYST, A SOFTWARE QUALITY ASSURANCE ENGINEER, A DATA ANALYST, A DIRECTOR OF STRATEGIC DATA SERVICES AND A VICE PRESIDENT OF INNOVATAION. [SEE CONTINUATION ON SCHEDULE O]THE DEVELOPMENT TEAM INCLUDED EIGHT DEVELOPERS AND A SENIOR DIRECTOR AND THE ENGINEERING TEAM INCLUDED FOUR ENGINEERS. THE DEVELOPMENT TEAM WAS AUGMENTED BY UP TO EIGHT ADDITIONAL DEVELOPERS. SECURITY WAS LED BY A CHIEF INFORMATION SECURITY OFFICER. IN ADDITION, THE FUNDING COVERED DATA CENTER OPERATIONS.ACCOMPLISHMENTSIN 2016 HEALTHIX COMPLETED 233 PROJECTS INCLUDING 185 CUSTOMER PROJECTS, 45 INTERNAL PROJECTS AND 3 PRODUCTION SUPPORT PROJECTS. THE 185 CUSTOMER PROJECTS INCLUDED CONNECTING NEW PARTICIPANTS TO HEALTHIX AND PROVIDING THEM WITH STANDARD AND CUSTOM SERVICES. THE 45 INTERNAL PROJECTS INCLUDED:- DEVELOPMENT OF NEW PRODUCTS AND SERVICES- IMPROVING THE INFRASTRUCTURE AND SECURITY OF THE SYSTEM- EXPANDING AND IMPROVING THE DATA BEING SENT TO HEALTHIX- IMPROVING THE TECHNICAL INTEGRATION BETWEEN HEALTHIX AND THE ELECTRONIC HEALTH RECORDS SYSTEM THE CONNECT TO US- 2016 ALSO INCLUDED THE FINAL STAGES MERGING TWO LEGACY SYSTEMS INTO A SINGLE PLATFORM.DURING THE YEAR ENDED DECEMBER 31, 2016, THE COMPANY RECORDED $16,016,492 IN REVENUE IN CONNECTION WITH THIS PROGRAM.PCORI CDRN PROGRAMTHE PATIENT-CENTERED OUTCOMES RESEARCH INSTITUTE (PCORI) AWARDED A CONTRACT TO WEILL CORNELL MEDICAL COLLEGE FOR THE NEW YORK CITY CLINICAL DATA RESEARCH NETWORK (CDRN) TO:- BUILD INFRASTRUCTURE TO PERFORM COMPARATIVE EFFECTIVENESS RESEARCH- PERFORM TWO OBSERVATIONAL STUDIES ON DIABETES AND CYSTIC FIBROSIS- FACILITATE PATIENT-CENTERED RESEARCH THAT CAN BE LINKED TO A NATIONAL NETWORK- COLLABORATE NATIONALLY WITH 10 OTHER CDRNS TO DEVELOP BEST PRACTICES AND SUPPORT JOIN STUDIESHEALTHIX CONTRIBUTIONTHE NEW YORK GENOME CENTER FUNCTIONS AS A TRUSTED BROKER COMBINING THE CLINICAL DATA FROM MAJOR HEALTH SYSTEMS IN NYC, SEVERAL FEDERALLY QUALIFIED HEALTH CENTERS, AS WELL AS HEALTH PLANS. THE HEALTHIX MASTER PATIENT INDEX (MPI) IS USED TO LINK PATIENT RECORDS FROM ACROSS THESE FACILITIES INTO A COMMON DATA SET FOR RESEARCH. IN 2016 HEALTHIX COMPLETED ONE ROUND OF MATCHING IN DECEMBER. DURING THE YEAR ENDING DECEMBER 31, 2016, THE COMPANY EARNED $62,000 IN REVENUE.LEGIONELLANYC DEPARTMENT OF HEALTH AND MENTAL HYGIENE (DOHMH) HAS ANALYZED DATA FROM BRONX OF LEGIONELLA BACTERIA-RELATED CASES IN RESPONSE TO OUTBREAK OCCURRING IN LATE 2015. ON 3/22/2016 DOHMH REQUESTED THAT HEALTHIX HELP THEM TO THE DATA ANALYSIS TO 42 ACUTE CARE FACILITIES THAT ARE PART OF THE HEALTHIX HIE. AN INITIAL REPORT WAS SENT ON 9/30/2016 THAT INCLUDED ORDERS AND POSITIVE RESULTS OF PATIENTS FROM 2013-2016. SUBSEQUENTLY A REPORT WAS SENT ON THE 5TH OF EACH MONTH FOR TESTS AND RESULTS OF THE PREVIOUS MONTH.DURING THE YEAR ENDED DECEMBER 31, 2016, THE COMPANY EARNED $800 IN REVENUE.HRSATHE NEW YORK STATE DEPARTMENT OF HEALTH (NYSDOH) HAS PARTNERED WITH HEALTHIX, THE LARGEST HIE IN THE STATE. THE COLLABORATION WILL ALLOW THE NYSDOH HIV SURVEILLANCE PROGRAM TO ACCESS ADDITIONAL DATA ON HIV-INFECTED PERSONS FOR A MORE COMPREHENSIVE LOOK AT HEALTH CARE MEASURES IMPORTANT TO THE EPIDEMIC, INCLUDING MEASURES OF HIV TESTING, LINKAGE TO CARE, RETENTION IN CARE, ANTIRETROVIRAL THERAPY, AND VIRAL SUPPRESSION. HEALTHIX MEMBERSHIP IS IN NEW YORK CITY AND THE ADJACENT NASSAU AND SUFFOLK COUNTIES ON LONG ISLAND. THEIR GEOGRAPHIC LOCATION AND SERVICE AREA WILL PROVIDE THE NYSDOH ACCESS TO ADDITIONAL DATA ON INFECTED PERSONS LIVING IN THE REGIONS OF THE STATE WITH THE HIGHEST PREVALENCE OF HIV.DELIVERABLE #1 - HEALTHIX CONDUCTED ON-GOING ANALYSIS TO IMPROVE THE QUERY TO SEARCH THE HIE FOR PATIENTS MATCHING CRITERIA FOR INFECTED PERSONS. THIS QUERY IS RUN DAILY TO CREATE AND MAINTAIN A LIST OF PATIENT IDENTIFIERS MEETING THESE CRITERIA. HEALTHIX DETECTS ENCOUNTERS BY THESE PATIENTS AT HEALTHIX FACILITIES. HEALTHIX DEVELOPED A PROCESS TO SEND PATIENT EXPIRATION NOTIFICATIONS FOR PATIENTS MATCHING SELECTION CRITERIA. HEALTHIX MODIFIED THE PROCESS IN WHICH THE UPDATES ARE SENT TO NYSDOH. UPDATES ARE SENT IN REAL-TIME IN HL7 FORMAT USING THE UPHN-LITE AS THE TRANSPORT MECHANISM. HEALTHIX SENDS INITIAL CCDS FOR ANY NEWLY IDENTIFIED PATIENTS MEETING THE SELECTION CRITERIA AGREED UPON BY HEALTHIX AND NYSDOH. HEALTHIX CONTINUES THE DEVELOPMENT OF THE DOCUMENTS PROVIDED TO THE DOH TO MEET THE NEWEST STANDARDS AND TO BE AS COMPREHENSIVE AS POSSIBLE.DELIVERABLE #2 - ENRICH THE HEALTHIX DATA COLLECTION TO INCLUDE DATA ELEMENTS THAT ARE MISSING FROM SOME SOURCE: RACE, ETHNICITY, PREF. LANG., SMOKING STATUS, PROBLEMS, MEDICATIONS, MED. ALLERGIES, LAB TEST, LAB VALUES, VITALS, CARE PLAN FIELDS, PROCEDURES, CARE TEAM MEMBERS, ENCOUNTER DIAGNOSIS, IMMUNIZATIONS, FUNCTIONAL & COGNITIVE STATUS, DISCHARGE INSTRUCTIONS, PRIMARY PROCEDURE, PRIMARY DIAGNOSIS, RADIOLOGY, EKG, ADVANCE DIRECTIVES, PROVIDER NPI, AND DISCHARGE DISPOSITION. EXPANSION OF THE DATA CAPTURED BY HEALTHIX AND PROVIDED TO THE DOH ENHANCES THE DEPARTMENT'S UNDERSTANDING OF THE PATIENT'S CLINICAL CONDITION AND PROGRESS. HEALTHIX REACHED OUT TO EXISTING PARTICIPANTS TO ADD NEW DATA FEEDS AND ENHANCE EXISTING FEEDS TO FILL THESE GAPS. THE ACTIVITIES INCLUDED:- ANALYSIS CURRENT DATA SOURCES AND GAP ANALYSIS, - OUTREACH TO PARTICIPANTS TO GAIN THEIR SUPPORT FOR NEW PROJECTS, - PROJECT PLANNING, - INTERFACE BUILDING/ENHANCING, - TESTING & DEBUGGING, - DATA QUALITY ASSURANCE AND - DEPLOYMENTDURING THE YEAR ENDED DECEMBER 31, 2016, THE COMPANY EARNED $52,582 IN REVENUE.MT SINAI - NLM AND AHRQMOUNT SINAI MEDICAL CENTER WAS GRANTED PROJECTS FROM TWO FEDERAL AGENCIES WHICH THEY USED TO UNDERWRITE A CONTRACT WITH HEALTHIX FOR SERVICES IN 2016 RELATED TO THESE GRANTS. THE TWO AGENCIES WERE THE AGENCY FOR HEALTHCARE RESEARCH AND QUALITY AND THE NATIONAL LIBRARY OF MEDICINE.SUBCONTRACT UNDER AGENCY FOR HEALTHCARE RESEARCH AND QUALITYIN ORDER TO MEET REQUIREMENTS FOR ITS AGENCY FOR HEALTH RESEARCH AND QUALITY (AHRQ) GRANT-FUNDED PROJECT, MOUNT SINAI CONTRACTED HEALTHIX TO DEVELOP AND VALIDATE AN HIE-BASED TOOL THAT LEVERAGES THE CURRENT HEALTHIX TECHNICAL INFRASTRUCTURE AND HEALTHIX CLINICAL EVENT NOTIFICATIONS SERVICE. THE TOOL ENABLES IDENTIFICATION OF TWO SPECIFIC COHORTS OF INTEREST: THE FIRST IS EARLY EMERGENCY DEPARTMENT (ED) RETURNS, DEFINED AS PATIENTS RETURNING TO THE ED WITHIN A SPECIFIED NUMBER OF HOURS FOLLOWING PRIOR ED DISCHARGE. THE SECOND COHORT IS FREQUENT ED USERS, DEFINED AS ANY PATIENT WITH GREATER THAN A SPECIFIED NUMBER OF ED VISITS WITHIN A SPECIFIED TIMEFRAME.SUBCONTRACT UNDER THE NATIONAL LIBRARY OF MEDICINECOMPUTER TOMOGRAPHY (CT) USE HAS GROWN DRAMATICALLY IN THE PAST DECADE, SPURRED BY RAPID TECHNOLOGICAL ADVANCES, FASTER IMAGING SPEED, AND WIDESPREAD ACCESS TO CT, WITH USAGE RATES INCREASING BY AN ESTIMATED 70% FROM 2003 TO 2011. WHILE CT IS WIDELY CONSIDERED AMONG THE MOST IMPORTANT ADVANCES IN MEDICINE, THERE ARE ALSO CONCERNS ABOUT APPROPRIATENESS, COST, RESOURCE UTILIZATION AND, BECAUSE CT DELIVERS MUCH HIGHER RADIATION DOSES THAN CONVENTIONAL X-RAYS, THE RISKS TO PATIENTS FROM CUMULATIVE RADIATION EXPOSURE. RADIATION DOSES ASSOCIATED WITH COMMONLY USED CTS RESEMBLE DOSES RECEIVED BY INDIVIDUALS IN WHOM A SMALL BUT REAL INCREASED RISK OF CANCER WAS DOCUMENTED. STUDIES HAVE SHOWN THAT MANY CTS ARE DUPLICATE, MAY BE UNNECESSARY, THAT PROVIDER ACCESS TO HEALTH INFORMATION EXCHANGE (HIE) MAY REDUCE RADIOLOGY UTILIZATION, AND OUR OWN RECENT STUDY SHOWED THAT A SUBSTANTIAL NUMBER OF UNIQUE PATIENTS IN AN HIE HAVE THE EXACT SAME CT PERFORMED AT MULTIPLE SITES. HIE PROVIDES, FOR THE FIRST TIME, REAL-TIME, COMMUNITY-WIDE CLINICAL DATA THAT CAN EMPOWER CARE DELIVERY ACROSS PROVIDER ORGANIZATIONS IN A REGION. UNDER THIS CONTRACT HEALTHIX WAS USED TO MEASURE THE PREVALENCE OF POTENTIALLY UNNECESSARY DUPLICATE CT STUDIES AND IONIZING RADIATION EXPOSURE TO PATIENTS, AND CREATE AND MEASURE THE IMPACT OF A SYSTEM THAT ALERTS PROVIDERS TO THE EXISTENCE OF DUPLICATE CTS ANYWHERE ACROSS THE LARGEST HEALTH INFORMATION EXCHANGE IN THE UNITED STATES. THIS PROJECT ALSO MAPPED PROPRIETARY CT CODES FROM > 40 SITES IN THE HIE TO THE NEWLY DERIVED LOINC/RSNA CONTROLLED TERMINOLOGY AND TO A NEW ANATOMIC SEMANTIC ONTOLOGY THAT WE DERIVED, BOTH NECESSARY PRECURSORS TO ALL OF THE GOALS OF THIS PROPOSAL.DURING THE YEAR ENDED DECEMBER 31, 2016, THE COMPANY EARNED $74,638 IN REVENUE. 13644352 1 1 0 0 0 0 0 0 0 0 1 0 0 0 0 1 1 0 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 0 0 0 0 1 9 0 56 1 0 0 0 0 0 0 0 0 0 0 X 18 18 0 1 0 0 1 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 NY X X JOHN GUASTELLA 8776954749 40 WORTH STREET 5TH FLOOR NEW YORK NY 100132988 RICHARD DONOGHUE CHAIR 4.00 X X 0 0 0 JEFFREY KRAUT VICE CHAIRMAN 1.00 X X 0 0 0 MICHAEL ROSENBLUT TREASURER 1.00 X X 0 0 0 MITRA BEHROOZI DIRECTOR 1.00 X 0 0 0 NEIL CALMAN MD DIRECTOR 1.00 X 0 0 0 DAVID COHEN MD DIRECTOR 1.00 X 0 0 0 LOUISE COHEN DIRECTOR 1.00 X 0 0 0 JIM CLYNE DIRECTOR 1.00 X 0 0 0 THOMAS EARLY DIRECTOR 1.00 X 0 0 0 ROBERT HEATLEY DIRECTOR 1.00 X 0 0 0 ARTHUR GIANELLI DIRECTOR 1.00 X 0 0 0 CHARLES KING DIRECTOR 1.00 X 0 0 0 DAVID LEVENTHAL DIRECTOR 1.00 X 0 0 0 LARRY MCREYNOLDS DIRECTOR 1.00 X 0 0 0 TERENCE O'BRIEN DIRECTOR 1.00 X 0 0 0 DAVID SCHIMEL DIRECTOR 1.00 X 0 0 0 JAY VARMA MD DIRECTOR 1.00 X 0 0 0 ANUP VIDYARTHY DIRECTOR 1.00 X 0 0 0 THOMAS F CHECK PRESIDENT & CEO 40.00 X 389952 0 88729 TODD ROGOW SVP & CIO 40.00 X 307260 0 88019 JOHN GUASTELLA SVP & CFO 40.00 X 237789 0 57770 ADAM BECKER SVP MEMBER SERVICES 40.00 X 294824 0 52820 THOMAS MOORE VICE PRESIDENT-INNOVATION 40.00 X 246712 0 79769 VIVIENNE DESTEFANO VP EXTERNAL AFFAIRS & CORP COMMUNICATIONS 40.00 X 194859 0 37282 MATTHEW WEBSTER CHIEF INFO. SECURITY OFFICER 40.00 X 191224 0 56575 MADHAV GONE SR. DIR. OF ARCHITECTURE & ENGINEERING 40.00 X 156182 0 57253 PUNITA MISRA DIR. OF STRATEGIC DATA SERVICES 40.00 X 153517 0 21874 GERI ALMER CONTROLLER 40.00 X 149453 0 21111 2321772 0 561202 21 0 1 0 J2 INTERACTIVE LLC 2 THIRTEENTH STREET CHARLESTOWN MA 02129 IT CONSULTING 2717143 INTERSYSTEMS CORPORATION PO BOX 84-5809 BOSTON MA 022845809 IT CONSULTING 1013270 NEW YORK EHEALTH COLLABORATIVE 40 WORTH STREET 5TH FLOOR NEW YORK NY 10013 CONSULTING 702864 MEDIBASE 3205 S CHEROKEE LANE SUITE 110 WOODSTOCK GA 30188 IT CONSULTING 310958 EPLUS TECHNOLOGY INC PO BOX 404398 ATLANTA GA 30188 IT CONSULTING 271452 8 16016492 17339 8685 16033831 CONTRACT REVENUE 518210 523020 523020 523020 6251 6251 16563102 523020 0 6251 1711353 1171541 539812 4365775 4042865 322910 185581 170463 15118 288693 288693 479249 435379 43870 61881 53768 8113 103783 90177 13606 48859 48859 474616 417117 57499 129677 112676 17001 132688 115293 17395 5770643 5061369 709274 725373 630277 95096 172290 149703 22587 52494 45612 6882 2166 2166 865858 752345 113513 122111 106102 16009 STORAGE EXPENSE 1119 972 147 15694209 13644352 2049857 0 1749587 810019 2500409 2752634 4000570 4658171 370107 67006 365338 648814 3623679 1312050 1649295 2311629 53797 53797 10689103 11302070 3268288 3136469 146000 275442 253549 0 3667837 3411911 X 7021266 7890159 7021266 7890159 10689103 11302070 868893 0 X X 0 1 X 1 1 1 X 5093277 8865940 9349985 14689562 16033831 54032595 2930892 2251418 2448114 562140 523020 8715584 8024169 11117358 11798099 15251702 16556851 62748179 0 1122754 224645 143303 1490702 1122754 224645 143303 1490702 61257477 2117729 11708 5688 36238 6251 2177614 2117729 11708 5688 36238 6251 2177614 1985 2199 331350 5252 340786 10143883 11131265 12135137 15293192 16563102 65266579 0.93860 0.92670 0.03340 0.04000 X SCHEDULE A, PART III, LINE 12, EXPLANATION OF OTHER INCOME: OTHER REVENUE - 2012 AMOUNT: $ 1,985. 2014 AMOUNT: $ 1,130. 2015 AMOUNT: $ 5,252. REFUNDS - 2013 AMOUNT: $ 2,199. RECOVERY OF BAD DEBT - 2014 AMOUNT: $ 330,220. RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 1458509 481597 976912 2165170 830453 1334717 2311629 X 16563102 0 16563102 0 16563102 15694209 0 15694209 0 15694209 PART X, LINE 2: THE COMPANY RECOGNIZES THE EFFECT OF INCOME TAX POSITIONS THAT ARE MORE LIKELY THAN NOT TO BE SUSTAINED. MANAGEMENT HAS DETERMINED THAT THE COMPANY HAS NO UNCERTAIN TAX POSITIONS THAT WOULD REQUIRE FINANCIAL STATEMENT RECOGNITION OR DISCLOSURE. THE COMPANY IS NO LONGER SUBJECT TO EXAMINATIONS BY THE APPLICABLE TAXING JURISDICTIONS FOR PERIODS PRIOR TO DECEMBER 31, 2013. X X X X 0 0 0 0 0 0 0 1 0 THOMAS F CHECK PRESIDENT & CEO 337645 0 50000 0 2307 0 61713 0 27016 0 478681 0 50000 0 TODD ROGOW SVP & CIO 276461 0 30378 0 421 0 47636 0 40383 0 395279 0 30378 0 JOHN GUASTELLA SVP & CFO 214012 0 22503 0 1274 0 29196 0 28574 0 295559 0 22503 0 ADAM BECKER SVP MEMBER SERVICES 277566 0 16833 0 425 0 13250 0 39570 0 347644 0 16833 0 THOMAS MOORE VICE PRESIDENT-INNOVATION 223301 0 22478 0 933 0 40079 0 39690 0 326481 0 22478 0 VIVIENNE DESTEFANO VP EXTERNAL AFFAIRS & CORP COMMUNICA 176591 0 17259 0 1009 0 24996 0 12286 0 232141 0 17259 0 MATTHEW WEBSTER CHIEF INFO. SECURITY OFFICER 176662 0 14326 0 236 0 29559 0 27016 0 247799 0 0 0 MADHAV GONE SR. DIR. OF ARCHITECTURE & ENGINEERI 148713 0 7356 0 113 0 19012 0 38241 0 213435 0 0 0 PUNITA MISRA DIR. OF STRATEGIC DATA SERVICES 137156 0 16266 0 95 0 21874 0 0 0 175391 0 16266 0 GERI ALMER CONTROLLER 133715 0 15507 0 231 0 20829 0 282 0 170564 0 15507 0 PART I, LINE 7 AN EMPLOYEE MAY RECEIVE AN ANNUAL BONUS EQUAL TO AS MUCH AS 12% OF HIS/HER BASE SALARY (EXCEPT FOR THE CEO, WHOSE ANNUAL BONUS IS SET BY HIS EMPLOYMENT AGREEMENT). THE BONUS WILL BE DETERMINED BASED UPON PERFORMANCE OBJECTIVES OUTLINED BY THE EMPLOYEE'S SUPERVISOR AND DISCUSSED WITH THE EMPLOYEE, IN MOST CIRCUMSTANCES, EARLY IN THE FIRST QUARTER OF THE COMPENSATION YEAR. FOR NEW EMPLOYEES, WHOSE FIRST ANNUAL BONUS IS PRORATED FROM THEIR DATE OF HIRE TO THE END OF THE YEAR, THEIR PERFORMANCE OBJECTIVES ARE DISCUSSED WITH THEM SHORTLY AFTER THEY ARE HIRED. A DOCUMENT OUTLINES AN EMPLOYEE'S PERFORMANCE OBJECTIVES IS MATCHED TO THE COMPANY'S STRATEGIC GOALS FOR EACH YEAR. ONCE THE COMPANY'S FISCAL YEAR HAS ENDED, THE SUPERVISOR PREPARES AN EVALUATION TO SEE IF THE EMPLOYEE HAS MET THE CRITERIA FOR INCENTIVE PAY FOR THE PERFORMANCE OBJECTIVES OUTLINED, AND DETERMINES HOW THE EMPLOYEE HAS PERFORMED. THE OVERALL PERFORMANCE IS DETERMINED AND AN OVERALL RATING IS ASSIGNED TO THE PERFORMANCE. THIS OVERALL RATING IS THE DETERMINING FACTOR FOR THE PERCENTAGE BONUS WHICH THE EMPLOYEE HAS EARNED FOR THE PREVIOUS FISCAL YEAR. A SCHEDULE IS DISTRIBUTED TO ALL EMPLOYEES WHICH SHOWS THE PERCENTAGE BONUS AN EMPLOYEE CAN EARN BASED UPON HOW THEIR PERFORMANCE IS RATED. THIS SCHEDULE ALSO BRIEFLY SUMMARIZES THE COMPANY'S INCENTIVE COMPENSATION PROGRAM. THIS IS DISTRIBUTED TO EMPLOYEES IN THE COMPENSATION YEAR SO THAT EACH EMPLOYEE AND THEIR SUPERVISOR ARE AWARE OF WHAT CAN BE EARNED. PAYMENT OF ANY INCENTIVE COMPENSATION IS WHOLLY DEPENDENT UPON THE COMPANY MEETING ITS OPERATING INCOME TARGET, AS IS ESTABLISHED AT THE BEGINNING OF EACH FISCAL YEAR AND APPROVED BY THE BOARD OF DIRECTORS. ONCE THE COMPANY'S BOOKS ARE CLOSED IN THE SUBSEQUENT PERIOD, AND THE COMPANY HAS RECEIVED CONFIRMATION FROM ITS INDEPENDENT AUDITORS AS TO ITS RESULTS OF OPERATIONS FOR THE COMPENSATION YEAR, THE COMPANY THEN COMPARES ITS ACTUAL OPERATING INCOME TO ITS TARGETED OPERATING INCOME. ASSUMING THE OPERATING INCOME TARGET IS MET OR EXCEEDED, MANAGEMENT THEN INFORMS THE HEALTHIX FINANCE COMMITTEE OF THIS AND RECOMMENDS THAT BONUSES CAN BE PAID. PROPOSED BONUSES ARE THEN SUBMITTED TO THE CEO (OR PREPARED BY HIM FOR HIS DIRECT REPORTS). SUBSEQUENT TO THIS, THE HEALTHIX EXECUTIVE COMMITTEE (WHICH FUNCTIONS AS ITS COMPENSATION COMMITTEE AND HAS RECEIVED THE FINANCE COMMITTEE'S RECOMMENDATION TO PAY OUT BONUSES) MEETS TO DISCUSS AND APPROVE THE SPECIFIC BONUSES TO BE PAID, WHICH USUALLY OCCURS IN APRIL OF THE YEAR FOLLOWING THE YEAR IN WHICH THEY WERE EARNED (THE COMPENSATION YEAR). INCENTIVE COMPENSATION EARNED IN 2015 AND PAID/TAXABLE IN 2016 IS LISTED BELOW (ONLY FOR THOSE EMPLOYEES WHO EARNED OVER $100,000 IN 2016 AND EXCLUDING THE CEO): - TODD ROGOW $30,378 - JOHN GUASTELLA $22,503 - ADAM BECKER $16,833 - THOMAS MOORE $22,478 - VIVIENNE DESTEFANO $17,259 - MATTHEW WEBSTER $14,326 - MADHAV GONE $7,356 - PUNITA MISRA $16,266 - GERI ALMER $15,507 FORM 990, PART VI, SECTION A, LINE 3 BEGINNING IN 2015, HEALTHIX, INC. BEGAN USING ADP TOTALSOURCE, A PROFESSIONAL EMPLOYER ORGANIZATION ("PEO"). AS A PROFESSIONAL EMPLOYER ORGANIZATION, TOTALSOURCE PROVIDES PROFESSIONAL EMPLOYER SERVICES TO HEALTHIX, INC. IN THE PEO RELATIONSHIP TOTALSOURCE AND HEALTHIX, INC. SHARE CERTAIN RESPONSIBILITIES AND ALLOCATE OTHER EMPLOYER RESPONSIBILITIES BETWEEN EACH OTHER. HEALTHIX, INC. REMAINS AN EMPLOYER OF THE WORKSITE EMPLOYEES AND TOTALSOURCE IS A CO-EMPLOYER OF HEALTHIX, INC.'S EMPLOYEES. HEALTHIX, INC. HAS: DIRECTION AND CONTROL OVER EMPLOYEES AS IS NECESSARY TO CONDUCT ITS BUSINESS, DISCHARGE AND FIDUCIARY RESPONSIBILITY IT MAY HAVE, OR COMPLY WITH ANY APPLICABLE LICENSURE, REGULATORY OR STATUTORY REQUIREMENT OF HEALTHIX, INC. CONTROL OVER THE DAY TO DAY JOB DUTIES OF EMPLOYEES AND OVER THE JOB SITES AT WHICH, OR FROM WHICH EMPLOYEES PERFORM SERVICES RESPONSIBILITY OVER THE PROFESSIONAL AND LICENSED ACTIVITIES OF EMPLOYEES INCLUDING ENSURING THAT EMPLOYEES ARE SUPERVISED BY LICENSED INDIVIDUALS AS REQUIRED BY LAW AND FOR DETERMINING WHETHER AN APPLICANT OR EMPLOYEE MEETS HEALTHIX, INC.'S HIRING CRITERIA AND IS QUALIFIED TO SAFELY AND COMPLETELY PERFORM HIS OR HER JOB TOTALSOURCE RESERVES A RIGHT OF DIRECTION AND CONTROL OVER EMPLOYEES AS IS NECESSARY TO FULFILL ITS OBLIGATIONS AND PROVIDE ITS SERVICES UNDER AN AGREEMENT BETWEEN HEALTHIX, INC. AND TOTALSOURCE. TOTALSOURCE AND HEALTHIX, INC. HAVE A RIGHT TO HIRE, DISCIPLINE, AND TERMINATE EMPLOYEES AS TO EACH ONE'S EMPLOYMENT RELATIONSHIP WITH EMPLOYEES. THE PEO WAS PAID $61,881 DURING 2016 FOR SERVICES PROVIDED. FORM 990, PART VI, SECTION A, LINE 6 MEMBERSHIP: IN ORDER FOR AN ORGANIZATION OR INDIVIDUAL TO QUALIFY TO BE A PARTICIPANT IN THE REGIONAL HEALTH INFORMATION ORGANIZATION ("RHIO") OPERATED BY THE CORPORATION ("PARTICIPANT"), HE/SHE OR IT MUST ENTER INTO A RHIO SERVICES, PARTICIPATION OR SIMILAR AGREEMENT WITH THE CORPORATION (EACH, A "RHIO SERVICES AGREEMENT"), THE FORM OF WHICH HAS BEEN APPROVED BY THE BOARD OF DIRECTORS OF THE CORPORATION ("BOARD"), TO PARTICIPATE IN A CLINICAL INFORMATION DATA EXCHANGE PROGRAM WITH THE CORPORATION AND TO ACT AS A DATA SOURCE AND/OR DATA USER WITH RESPECT TO THE CORPORATION'S DATA EXCHANGE. A PARTICIPANT'S PARTICIPATION IN THE CORPORATION WILL TERMINATE IF THE RHIO SERVICES AGREEMENT IS TERMINATED FOR ANY REASON. FORM 990, PART VI, SECTION B, LINE 11B AFTER THE FORM IS PREPARED BY OUTSIDE ACCOUNTANTS, IT WILL FIRST BE REVIEWED BY THE SVP & CFO. IF THERE ARE ANY SUGGESTED CHANGES OR MODIFICATIONS, HE WILL COMMUNICATE DIRECTLY WITH THE OUTSIDE ACCOUNTANTS. ONCE THE SVP & CFO IS SATISFIED WITH THE 990, HE WILL PASS IT ON TO THE CEO FOR HIS REVIEW. ONCE THE CEO IS SATISFIED WITH THE 990, THE NEXT STEP IS TO PASS IT ON TO THE TREASURER, WHO IS ALSO THE CHAIRMAN OF THE FINANCE COMMITTEE AND A MEMBER OF THE EXECUTIVE COMMITTEE AND THE BOARD OF DIRECTORS, FOR HIS REVIEW. ONCE THE TREASURER IS SATISFIED WITH THE 990, IT WILL BE PASSED ON TO THE FULL EXECUTIVE COMMITTEE. THIS COMMITTEE IS A SUBSET OF THE FULL HEALTHIX, INC. BOARD AND IS CHARGED WITH MAKING MANY KEY DECISIONS AFFECTING THE COMPANY. IT IS THIS GROUP OF INDIVIDUALS THAT WILL AUTHORIZE THE FILING OF THE 990. ONCE THE EXECUTIVE COMMITTEE IS SATISFIED WITH THE 990 AND HAS AUTHORIZED ITS FILING, THE SVP & CFO WILL PROVIDE AN ELECTRONIC COPY TO THE FULL BOARD OF DIRECTORS PRIOR TO THE EXTENDED DUE DATE OF THE RETURN. THE BOARD WILL BE INFORMED THAT THE EXECUTIVE COMMITTEE HAS REVIEWED AND APPROVED THE 990. IF ANY BOARD MEMBER HAS ANY QUESTIONS OR CONCERNS THEY WILL BE INSTRUCTED TO CONTACT THE SVP & CFO, WHO WILL RESOLVE THEIR INQUIRIES PROMPTLY. FORM 990, PART VI, SECTION B, LINE 12C ALL DIRECTORS, OFFICERS, AND KEY EMPLOYEES WILL, AT LEAST ANNUALLY, FILE A WRITTEN CONFLICT OF INTEREST DISCLOSURE STATEMENT WITH HEALTHIX SENIOR DIRECTOR OF COMPLIANCE. HEALTHIX SENIOR DIRECTOR OF COMPLIANCE WILL PROVIDE COPIES OF ALL COMPLETED STATEMENTS TO THE CHAIR OF THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD. FOR DIRECTORS, THE CONFLICT OF INTEREST DISCLOSURE STATEMENT WILL SPECIFICALLY INCLUDE, AMONG OTHER DISCLOSABLE CONFLICTS OF INTEREST, A STATEMENT IDENTIFYING, TO THE BEST OF THE DIRECTOR'S KNOWLEDGE, ANY ENTITY OF WHICH HE OR SHE IS AN OFFICER, DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PARTNER), OR EMPLOYEE AND WITH WHICH HEALTHIX HAS A RELATIONSHIP, AND ANY TRANSACTION IN WHICH HEALTHIX IS A PARTICIPANT AND IN WHICH THE DIRECTOR MIGHT HAVE A DISCLOSABLE CONFLICT OF INTEREST. ALL COMPLETED CONFLICT OF INTEREST DISCLOSURE STATEMENTS THAT RAISE AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST, OR THAT CREATE THE APPEARANCE OF AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST, WILL BE FORWARDED BY THE CHAIR OF THE BOARD TO THE INDEPENDENT DIRECTORS ON THE BOARD FOR THEIR CONSIDERATION. THE INDEPENDENT DIRECTORS ON THE BOARD WILL CONDUCT A FULL REVIEW OF ALL MATTERS (E.G., CONTRACTS, TRANSACTIONS OR ARRANGEMENTS) FOR WHICH AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST HAS BEEN IDENTIFIED. IN SO DOING, THE INDEPENDENT DIRECTORS ON THE BOARD WILL: 1. CONSIDER ALL RELEVANT FACTS AND CIRCUMSTANCES INVOLVED IN THE MATTER, AND IN PARTICULAR, WHAT IS FAIR, REASONABLE AND IN THE BEST INTERESTS OF HEALTHIX; 2. EXCLUDE THE AFFECTED INDIVIDUAL(S) FROM BEING PRESENT AT OR PARTICIPATING IN, OR BEING COUNTED IN THE QUORUM FOR, THE DELIBERATIONS OR VOTING ON THE MATTER; 3. PROHIBIT THE AFFECTED INDIVIDUAL(S) FROM ANY ATTEMPT TO INFLUENCE IMPROPERLY THE DELIBERATIONS OR VOTING ON THE MATTER; 4. PERMIT THE AFFECTED INDIVIDUAL(S), UPON REQUEST OF THE INDEPENDENT DIRECTORS ON THE BOARD, TO PRESENT INFORMATION CONCERNING THE MATTER AT A MEETING PRIOR TO COMMENCEMENT OF DELIBERATIONS OR VOTING ON THE MATTER. THE INDEPENDENT DIRECTORS ON THE BOARD WILL MAKE A FINAL AND BINDING DETERMINATION AS TO WHETHER A CONFLICT OF INTEREST EXISTS OR MAY EXIST ON ANY MATTER IN WHICH THERE IS A DISCLOSABLE CONFLICT OF INTEREST, AND WHAT COURSE HEALTHIX WILL TAKE IN CONNECTION WITH THE MATTER. THE INDEPENDENT DIRECTORS ON THE BOARD WILL CONTEMPORANEOUSLY DOCUMENT IN WRITING IN APPROPRIATE MINUTES OF ANY MEETING AT WHICH THE MATTER IS DELIBERATED OR VOTED UPON ALL DELIBERATIONS AND DETERMINATIONS RELATING THERETO, INCLUDING, AT A MINIMUM: 1. THE NAMES AND POSITIONS OF PERSONS WHO DISCLOSED THAT THEY WERE RELATED PARTIES OR OTHERWISE WERE FOUND TO BE RELATED PARTIES OR TO HAVE A CONFLICT OF INTEREST, A DESCRIPTION OF THE NATURE OF THE RELATIONSHIP AND/OR SUBSTANTIAL FINANCIAL INTEREST WHICH GAVE RISE TO SUCH DISCLOSURE OR IDENTIFICATION, AND A DESCRIPTION OF THE CONTRACT, TRANSACTION OR ARRANGEMENT AT ISSUE; 2. THE NAMES OF THE INDEPENDENT DIRECTORS WHO WERE PRESENT DURING THE TAKING OF THE ACTION TO DETERMINE WHETHER A CONFLICT OF INTERESTS WAS PRESENT, AND THE BASIS FOR THERE BEING A QUORUM FOR THE TAKING OF SUCH ACTION WITHOUT INCLUDING ANY RELATED PARTIES OR AFFECTED PARTIES; 3. THE STEPS TAKEN BY THE INDEPENDENT DIRECTORS ON THE BOARD TO DETERMINE WHETHER A CONFLICT OF INTEREST WAS PRESENT; 4. THE BOARD'S DECISION AS TO WHETHER A CONFLICT OF INTERESTS WAS PRESENT AND THE BASIS FOR SUCH DECISION; 5. THE BOARD'S OR COMMITTEE'S DECISION AS TO WHETHER TO PROCEED WITH THE MATTERS (INCLUDING, BUT NOT NECESSARILY LIMITED TO, WHETHER THE MATTER IS AS FAIR AND REASONABLE TO HEALTHIX AS WOULD OTHERWISE THEN BE OBTAINABLE BY HEALTHIX) AND THE NAMES OF THE PERSONS WHO VOTED TO APPROVE THE MATTER. FORM 990, PART VI, SECTION B, LINE 15 CEO COMPENSATION IS SET BY AN EMPLOYMENT AGREEMENT. IN THE PRIOR YEAR (2015), THE COMPANY RE-ENGAGED THE SERVICES OF AN INDEPENDENT COMPENSATION CONSULTING COMPANY WHICH IT HAD LAST USED IN 2012, THE "HAY GROUP", WHICH PERFORMED A FORMAL MARKET STUDY AND PROVIDED RANGES FOR SALARIES AND BONUSES FOR CERTAIN EXECUTIVES AND KEY EMPLOYEES OF THE COMPANY. WHERE AN UPWARD SALARY ADJUSTMENT WAS NEEDED TO BRING AN EMPLOYEE TO "MARKET COMPENSATION", SUCH AN ADJUSTMENT WAS MADE IN Q4 2015 TO THOSE AFFECTED EMPLOYEES. NO DOWNWARD SALARY ADJUSTMENTS WERE MADE RESULTING FROM THIS STUDY. THERE WAS NO NEED TO ENGAGE THE COMPENSATION CONSULTANT AGAIN IN 2016. THE SAME PROCESS WAS USED IN 2016 AS IN 2015 FOR DETERMINING BONUSES--NO CHANGES. CEO COMP IS SET BY EMPLOYMENT AGREEMENT. GOALS WERE SET FOR ALL EMPLOYEES AT THE BEGINNING OF 2016, AND THEIR PERFORMANCE WAS MEASURED AGAINST GOALS AFTER 2016 CONCLUDED. BONUSES WHICH WERE ACCRUED AT 12/31/15 (BASED ON 2015 PERFORMANCE) WERE PAID IN 2016, AND THOSE WHICH ACCRUED AT 12/31/16 (BASED ON 2016 PERFORMANCE) WERE PAID OUT IN 2017. THE INCENTIVE COMPENSATION (I.E. BONUS) PROGRAMS WERE APPROVED BY THE EXECUTIVE COMMITTEE FOR BOTH 2015 & 2016, AND WERE ALSO DISTRIBUTED TO ALL EMPLOYEES. THE BY-LAWS CREATE A COMMITTEE OF THE BOARD WITH FULL POWERS OF THE BOARD TO REVIEW AND APPROVE THE COMPENSATION OF OFFICERS AND OTHER KEY EMPLOYEES. THE COMMITTEE, WHICH IS HEALTHIX'S EXECUTIVE COMMITTEE, CONSISTS OF TRUSTEES WHO HAVE NO CONNECTION TO HEALTHIX EXCEPT AS TRUSTEES AND THEY HAVE NO CONFLICTS AS TO MATTERS THEY CONSIDER. THE COMMITTEE MEETS SEVERAL TIMES A YEAR AS NEEDED AND ALWAYS REVIEWS AND DETERMINES OFFICER AND KEY EMPLOYEE COMPENSATION. FOR PURPOSES OF THEIR REVIEW THE COMMITTEE CONSIDERS THE RECOMMENDATIONS OF THE CEO FOR ALL PERSONS OTHER THAN THE CEO. THIS PROCESS WAS LAST UNDERTAKEN IN 2016. THE BOARD'S APPROVAL FOR THE COMPENSATION OF OFFICERS AND OTHER KEY EMPLOYEES IS DOCUMENTED VIA EMAIL. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS FORM 990 AND FORM 1023 AVAILABLE FOR PUBLIC INSPECTION AS REQUIRED UNDER SECTION 6104 OF THE INTERNAL REVENUE CODE. IT IS POSTED ON GUIDESTAR.ORG AND OTHER SIMILAR TYPES OF WEBSITES. IN ADDITION, THE FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, ARTICLES OF INCORPORATION AND BY-LAWS ARE ALSO AVAILABLE UPON WRITTEN REQUEST OR BY CALLING THE ORGANIZATION DIRECTLY. FORM 990, PART XII, LINE 2C: THE ORGANIZATION'S AUDIT AND COMPLIANCE COMMITTEE ASSUMES RESPONSIBILITY FOR THE OVERSIGHT OF THE AUDIT OF ITS FINANCIAL STATEMENTS AND SELECTION OF ITS INDEPENDENT AUDITORS. THE POLICY FOR SELECTION AND OVERSIGHT OF THE INDEPENDENT AUDITORS HAS NOT CHANGED SINCE LAST YEAR.