2016-11-10T11:11:29-06:00 2015-12-31 ERNST & YOUNG US LLP 155 N WACKER DRIVE 20 FLOOR CHICAGO IL 60606 990 2015-01-01 453864076 Beacon Health System Inc % JEFFREY COSTELLO BEAC 5746473549 615 N MICHIGAN ST SOUTH BEND IN 46601 JEFFREY COSTELLO CFO 5746473549 2016-11-09 true JACOB J ZEHNDER P01564049 3128792702 2015 2017-02-10 21:41:12Z PHILIP NEWBOLD 615 N MICHIGAN ST SOUTH BEND IN 46601 137635664 false X BEACONHEALTHSYSTEM.ORG X 2011 IN BEACON HEALTH SYSTEM, INC. IS COMMITTED TO ENHANCING THE PHYSICAL, MENTAL, EMOTIONAL AND SPIRITUAL WELL-BEING OF THE COMMUNITIES WE SERVE. 13 11 358 3129977 69938 46610 50893100 61191711 14914744 11953490 1357362 1501484 67235144 74693295 334339 827813 0 0 28785761 30110074 0 0 0 28530429 37042635 57650529 67980522 9584615 6712773 668487882 638045691 18057314 14654102 650430568 623391589 X BEACON HEALTH SYSTEM, INC. IS COMMITTED TO ENHANCING THE PHYSICAL, MENTAL, EMOTIONAL AND SPIRITUAL WELL-BEING OF THE COMMUNITIES WE SERVE AS THE COMMUNITY'S PROVIDER OF OUTSTANDING QUALITY, SUPERIOR VALUE AND COMPREHENSIVE HEALTH CARE SERVICES. true false 67623188 827813 61989205 BEACON HEALTH SYSTEM, INC.(BEACON) IS THE PARENT OF ELKHART GENERAL HOSPITAL, INC., BEACON MEDICAL GROUP, INC., MEMORIAL HOSPITAL OF SOUTH BEND, INC., MEMORIAL HEALTH FOUNDATION, INC., AND BEACON HEALTH VENTURES, INC. BEACON PROVIDES COORDINATION FOR THE ORGANIZATIONS WITHIN THE SYSTEM IN SUCH MATTERS AS APPROVING BUDGETS, STRATEGIC PLANNING, MARKETING, ALLOCATING RESOURCES, SECURING TAX-EXEMPT BOND FINANCING AND PROVIDING COMMUNITY EDUCATION. 67623188 true true false true false false false false false true true true false false true false false true false false true false false false false false false true true true false false false false false false false false false false false false true true true true false false true 225 0 true 358 true true true false false false false false false false false false X 13 11 false false false false false true false true true false false true true true true true false true true true true IN X JEFFREY COSTELLO 5746473549 615 N MICHIGAN STREET SOUTH BEND IN 46601 WALTER HALLORAN MD DIRECTOR 2.0 40.0 X 0 1105234 33045 LARRY D HARDING DIRECTOR 2.0 0.0 X 2731 0 0 VINCENT HENDERSON MD DIRECTOR - TERM 10/2015 2.0 40.0 X 0 420446 96246 DANIEL A MORRISON VICE CHAIR 2.0 0.0 X X 0 0 0 VIVIAN SALLIE DIRECTOR 2.0 0.0 X 3989 0 0 J SCOTT TROEGER DIRECTOR 2.0 0.0 X 0 0 0 DAVID VAN RYN MD SECRETARY 2.0 10.0 X X 0 13325 0 JOHN HILER CHAIR 2.0 0.0 X X 2709 0 0 BIPIN DOSHI TREASURER 2.0 0.0 X X 0 0 0 WELLINGTON JONES III DIRECTOR 2.0 0.0 X 0 0 0 DONALD ANDERSON DIRECTOR 2.0 0.0 X 423 0 0 RON FENECH DIRECTOR 2.0 0.0 X 0 0 0 JESSE HSIEH MD DIRECTOR 2.0 0.0 X 0 0 0 JOHN MARTIN DIRECTOR 2.0 4.0 X 0 0 0 PHILIP A NEWBOLD CEO 40.0 8.0 X 1255794 0 186041 JEFFREY P COSTELLO CFO/Asst. Treasurer 40.0 8.0 X 598975 0 180373 MICHAEL O'NEIL Chief Administrative Officer 40.0 0.0 X 382452 0 143200 KREG GRUBER COO 2.0 40.0 X 56218 505970 172638 DANIELLE GAGLIANO CHIEF STRATEGY & PLANNING 40.0 0.0 X 309089 0 66731 STEVEN ELLER VICE PRESIDENT 40.0 0.0 X 344345 0 67237 LORI TURNER CHIEF MARKETING & INNOVATION 40.0 0.0 X 312545 0 66208 DIANE MAAS VICE PRESIDENT 40.0 0.0 X 312245 0 58969 MARK WARLICK VICE PRESIDENT 40.0 0.0 X 232178 0 33397 3813693 2044975 1104085 58 false true false Cerner Corporation 2800 ROCKCREEK PARKWAY KANSAS CITY MO 64117 IS Sftwr Maintenance 8477193 Software Information Systems LLC 165 BARR STREET SUITE 200 LEXINGTON KY 40507 IS Sftwr Maintenance 3257282 McKesson Technologies Inc 5995 WINDWARD PARKWAY ALPHARETTA GA 19087 IS Sftwr Maintenance 2818057 Healthways Inc 701 COOL SPRINGS BLVD FRANKLIN TN 37067 Risk Management 2665742 NORTH AMERICAN BENEFIT 250 KING OF PRUSSIA ROAD RADNOC PA 19087 CONSULTING 2017705 76 46610 46610 MANAGEMENT ADMIN SERVICES 561499 55678482 53246053 2432429 NET PATIENT SERVICE REVENUE 621399 5587557 5587557 JOINT VENTURE LOSSES 621399 -74328 -74328 61191711 9204000 373 9203627 0 0 6815 6815 0 6815 6815 63298668 2393191 60656643 2285726 2642025 107465 2749490 2749490 0 0 0 CHA PAY FOR PERFORMANCE 561499 276000 276000 EXECUTIVE LIFE INSURANCE PAYOUT 561499 107000 107000 MANAGED CARE ACTIVITIES 561499 648966 1500 647466 462703 412994 49709 1494669 74693295 59556776 3129977 11959932 X 216256 216256 611557 611557 0 0 2756686 2756686 0 20506054 20506054 486301 486301 4886054 4886054 1474979 1474979 0 353440 353440 3894 3894 12720 12720 0 93126 93126 23073742 23073742 2074400 2074400 3477591 3477591 138946 138946 0 848689 848689 487044 487044 0 145889 145889 0 0 3292342 3292342 362988 362988 GENERAL DUES & SUBSCRIPTIONS 1296705 1296705 0 0 RECRUITMENT 671438 671438 0 0 HONORARIA 21871 21871 0 0 SIGNAGE 3917 3917 0 0 683893 683893 67980522 67623188 357334 0 275 1494 5625572 502710 0 0 230000 921686 0 0 0 0 0 0 0 0 8808755 6359177 59061530 24429407 31264571 34632123 413065329 417412042 190957871 168794306 7841871 8522452 0 103840 10693638 795861 668487882 638045691 16621376 12872906 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1435938 1781196 18057314 14654102 X 650430568 623391589 0 0 0 0 650430568 623391589 668487882 638045691 X 6712773 -31892988 -1858764 X false true X true false X X X 4 BEACON MEDICAL GROUP INC 351536132 4 true 15628832 0 ELKHART GENERAL HOSPITAL INC 350877574 3 true 67559399 0 MEMORIAL HOSPITAL OF SOUTH BEND INC 350868132 3 true 45599896 0 MEMORIAL HEALTH FOUNDATION 351536129 7 false 307193 0 4 129095320 false false false false false true false false false false false false false false false true true SCHEDULE A, PART I, LINE 11e BEACON HEALTH SYSTEM, INC. RECEIVED A WRITTEN DETERMINATION LETTER THAT IT IS A TYPE III, FUNCTIONALLY INTEGRATED SUPPORTING ORGANIZATION. HOWEVER, THE CONTROL PROVISIONS IN ITS BYLAWS FIT THE TECHNICAL REQUIREMENTS FOR A TYPE I SUPPORTING ORGANIZATION, AS INDICATED IN PART IV OF THIS SCHEDULE, THUS BEACON HEALTH SYSTEM IS CURRENTLY REPORTING AS A TYPE I SUPPORTING ORGANIZATION. SCHEDULE A, PART IV, SECTION A, LINE 1 BEACON HEALTH SYSTEM'S ARTICLES OF INCORPORATION STATE THAT IT IS ORGANIZED TO CONTROL AS A SOLE MEMEBER AN INTEGRATED REGIONAL HEALTH CARE SYSTEM COMPRISED OF ONE OR MORE SUBSIDIARY ORGANIZATIONS, INCLUDING ELKHART GENERAL HOSPITAL, INC. ("EGH"), MEMORIAL HEALTH SYSTEM, INC. (NOW BEACON MEDICAL GROUP) ("BMG"), AND ALL OTHER RESPECTIVE AFFILIATES, WHICH INCLUDES MEMORIAL HOSPITAL OF SOUTH BEND ("MHSB"). EGH, BMG, AND MHSB ARE SPECIFICALLY DESIGNATED BY NAME, AND MEMORIAL HEALTH FOUNDATION IS DESIGNATED BY CLASS, AS IT IS A RESPECTIVE AFFILIATE WITH BEACON HEALTH SYSTEM AS ITS SOLE MEMBER. SCHEDULE A, PART IV, QUESTION 6 BEACON HEALTH SYSTEM (BHS) PROVIDED A SMALL NUMBER OF GRANTS TO SELECT COMMUNITY ORGANIZATIONS WHICH FURTHER THE CHARITABLE PURPOSES OF ITS SUPPORTED ORGANIZATIONS. AS BHS IS THE PARENT OF AN INTEGRATED HEALTH SYSTEM, ITS SUPPORTED ORGANIZATIONS ARE AWARE AND APPROVE OF THESE GRANTS. THE HEALTH SYSTEM IS RE-ALIGNING ITS GRANTMAKING ACTIVITY IN 2016 TO DIRECT ALL GRANTS THROUGH ITS AFFILIATED FOUNDATION AND HOSPITAL ORGANIZATIONS. SCHEDULE A, PART IV, SECTION B, LINE 2 BEACON HEALTH SYSTEM IS CONTROLLED BY ITS AFFILITATED HOSPITALS, ELKHART GENERAL HOSPITAL AND MEMORIAL HOSPITAL OF SOUTH BEND. SEE THE DISCLOSURE IN SCHEDULE O FOR THE CORE FORM 990, PART VI, SECTION A LINE 7a. CONSISTENT WITH ITS EXEMPT PURPOSES AS STATED IN ITS ARTICLES OF INCORPORATION, BEACON HEALTH SYSTEM ALSO SUPPORTED OTHER AFFILIATES WITHIN THE INTEGRATED REGIONAL HEALTH CARE SYSTEM, INCLUDING BEACON MEDICAL GROUP AND MEMORIAL HEALTH FOUNDATION, WHICH DID NOT SHARE IN THE CONTROL OF BEACON HEALTH SYSTEM. MEMORIAL HEALTH FOUNDATION PROVIDES FUNDRAISING AND ENDOWMENT SUPPORT TO BOTH HOSPITALS. BEACON MEDICAL GROUP PROVIDES SUPPORT THROUGH THE OPERATION OF PHYSICIAN PRACTICES. RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED false false false false false false false false true 12720 12720 false false Other Activities Part II B BEACON HEALTH SYSTEM, INC. PAYS FOR THE MEMBERSHIP FEES TO SEVERAL NATIONAL ORGANIZATIONS FOR ITS EMPLOYEES. THESE NATIONAL ORGANIZATIONS INDICATE A PORTION OF THE MEMBERSHIP FEES ARE USED FOR LOBBYING PURPOSES. 29619029 4093832 -1367472 5789367 26556022 27642755 2833644 -142883 714487 29619029 24661171 2180336 1785965 984717 27642755 22198822 1501904 1884305 923860 24661171 0.73340 0.00720 0.25940 false true true 16002651 16002651 3583861 1316530 2267331 679604 635723 43881 38795414 22477154 16318260 34632123 INVESTMENTS ALTERNATIVES 168794306 F 168794306 0 DEFERRED LIABILITY EXEC SERP 1781196 1781196 SCH D, PART V, LINE 4 THE BOARD HAS DISCRETION TO UTILIZE EACH YEAR THE INCOMES, REVENUES AND PROFITS ARISING AND ACCRUING FROM THE ENDOWMENTS IN DEFRAYING COSTS ASSOCIATED WITH THE TRUST AND THE REMAINDER FOR SUPPORT, BETTERMENT, IMPROVEMENT, UPKEEP, EXPANSION AND REPLACEMENT OF BEACON HEALTH SYSTEM, INC. AND ITS CORPORATE AFFILIATES. TERM ENDOWMENTS, WHICH ARE THE TEMPORARILY RESTRICTED NET ASSETS, ARE USED AS DESIGNATED BY THE DONOR. THE PERMANENT ENDOWMENT PROVIDES INCOME TO BE USED FOR HEALTH CARE EDUCATIONAL PURPOSES AND PATIENT CARE. SCH D, PART X, LINE 2 BEACON HEALTH SYSTEM, INC. DID NOT HAVE A FOOTNOTE ADDRESSING FIN 48 (ASC 740) LIABILITIES FOR UNCERTAIN TAX POSITIONS IN ITS CONSOLIDATED FINANCIAL STATEMENTS. BEACON HEALTH SYSTEM, INC. DID NOT HAVE ANY UNCERTAIN TAX POSITIONS RECORDED DURING THE CURRENT TAX YEAR. Central America and the Caribbean 0 0 Investments 87079908 Europe (Including Iceland and Greenland) 0 0 Investments 4169698 0 0 0 0 91249606 91249606 true false true true true false true Chamber of Commerce St Joe County 401 E COLFAX AVE SOUTH BEND IN 46617 350153330 501(C)(6) 64500 CASH GENERAL SUPPORT ECONOMIC DEVELOPMENT CORP OF ELKHART 300 NIBCO PKWY STE 201 ELKHART IN 46516 351973845 501(c)(3) 10000 CASH GENERAL SUPPORT 100 BLACK MEN OF GREATER SOUTH BEND INC 2043 South Bend Ave PMB 345 South Bend IN 46637 270295842 501(c)(3) 6040 CASH GENERAL SUPPORT INDIANA UNIVERSITY SCHOOL OF MEDICINE - SB 1234 Notre Dame Ave South Bend IN 46617 356018940 501(C)(3) 34000 cash GENERAL SUPPORT FOUNDATION FOR THE CENTER FOR HOSPICE 111 Sunnybrook Court South Bend IN 46637 300433147 501(C)(3) 10000 CASH General Support INDIANA UNIVERSITY FOUNDATION PO Box 500 Bloomington IN 47402 356018940 501(C)(3) 50000 CASH GENERAL SUPPORT 6 SCHOLARSHIPS/TUITION REIMBURSEMENT 489 611557 SCHEDULE I, PART I LINE 2 DONATIONS AND GRANTS GIVEN TO ORGANIZATIONS THAT IMPROVE THE HEALTH AND WELL-BEING OF OUR COMMUNITY ARE MONITORED THROUGH OUTCOME MEASUREMENT REPORTS THAT ARE PROVIDED TO BEACON HEALTH SYSTEM BY THE VARIOUS ORGANIZATIONS. THESE REPORTS INFORM US OF HOW THE DONATIONS AND GRANTS WERE USED. SCHEDULE I, PART II CHARITABLE DONATIONS PART OF THE ORGANIZATION'S MISSION IS TO IMPROVE THE HEALTH OF OUR COMMUNITY. IN ORDER TO FULFILL THIS GOAL, OUR ADMINISTRATORS HAVE THE ABILITY TO MAKE DONATIONS TO ORGANIZATIONS THAT IMPROVE THE HEALTH AND WELL BEING OF OUR COMMUNITY. SCHEDULE I, PART III SCHOLARSHIPS/ TUITION REIMBURSEMENT FOR SCHOLARSHIPS THE INDIVIDUAL MUST MEET SEVERAL REQUIREMENTS TO QUALIFY. IN ORDER TO QUALIFY FOR A SCHOLARSHIP THE INDIVIDUAL MUST (1) APPLY ON-LINE (INTRANET) AND WITHIN THE ACCEPTABLE TIME PARAMETERS FOR THE SEMESTER OF FUNDS BEING REQUESTED, (2) MAINTAIN A GRADE OF C OR BETTER, (3) PAY FOR TUITION/BOOKS AND SUBMIT CORRESPONDING ORIGINAL RECEIPTS FOR REIMBURSEMENT, REIMBURSED UP TO THE AMOUNT AWARDED BY THE SCHOLARSHIP COMMITTEE. (4) MEET ANY ADDITIONAL REQUIREMENTS OF THE SPECIFIC SCHOLARSHIP FUND, AND (5) MEET ELIGIBILITY REQUIREMENTS WHICH INCLUDE: (A) eMPLOYED BY BEACON HEALTH SYSTEM, INC. (B) ENROLLED IN A QUALIFIED PROGRAM, (C) SUBMITTED A POSITIVE RECOMMENDATION EACH SEMESTER FROM THE IMMEDIATE SUPERVISOR, AND (D) SUBMITTED A POSITIVE RECOMMENDATION EACH SEMESTER FROM THE SCHOOL. X X X true true X X X X X false true false false false false false true false WALTER HALLORAN MD DIRECTOR 0 861824 0 240830 0 2580 0 10600 0 22445 0 1138279 0 0 VINCENT HENDERSON MD DIRECTOR - TERM 10/2015 0 385659 0 26988 0 7799 0 70376 0 25870 0 516692 0 0 PHILIP A NEWBOLD CEO 767590 0 295000 0 193204 0 165268 0 20773 0 1441835 0 140103 0 JEFFREY P COSTELLO CFO/Asst. Treasurer 432410 0 137200 0 29365 0 160505 0 19868 0 779348 0 0 0 MICHAEL O'NEIL Chief Administrative Officer 292979 0 74320 0 15153 0 128195 0 15005 0 525652 0 0 0 KREG GRUBER COO 41698 375286 12925 116325 1595 14359 14837 133533 2427 21841 73482 661344 0 0 DANIELLE GAGLIANO CHIEF STRATEGY & PLANNING 239500 0 62405 0 7184 0 42332 0 24399 0 375820 0 0 0 STEVEN ELLER VICE PRESIDENT 272251 0 64610 0 7484 0 45528 0 21709 0 411582 0 0 0 LORI TURNER CHIEF MARKETING & INNOVATION 237146 0 62100 0 13299 0 42599 0 23609 0 378753 0 0 0 DIANE MAAS VICE PRESIDENT 236800 0 64605 0 10840 0 46728 0 12241 0 371214 0 0 0 MARK WARLICK VICE PRESIDENT 178499 0 44558 0 9121 0 10503 0 22894 0 265575 0 0 0 PART I, LINE 1A BEACON HEALTH SYSTEM, INC. REIMBURSES DIRECTORS FOR THE TAX EFFECT OF THE 1099 REPORTABLE BENEFITS RELATED TO THE FREE MEMBERSHIP AT BEACON HEALTH SYSTEM'S HEALTH AND LIFESTYLE CENTER, AS WELL AS, THE TAXABLE BENEFITS OF SPOUSAL TRAVEL. BEACON HEALTH SYSTEM ALSO REIMBURSES FOR DIRECT EXPENSES RELATED TO ANY TRAVEL ON THE ORGANIZATION'S BEHALF. SPOUSAL TRAVEL FOR THE FOLLOWING FOUR EMPLOYEES WAS INCLUDED IN TAXABLE COMPENSATION: PHILIP NEWBOLD, JEFFREY COSTELLO, KREG GRUBER, AND MICHAEL O'NEIL. PART I, LINE 4B EXECUTIVE RETENTION PLAN BEACON HEALTH SYSTEM IMPLEMENTED AN EXECUTIVE RETENTION PLAN TO ATTRACT AND RETAIN KEY EMPLOYEES BY PROVIDING ADDITIONAL DEFERRED COMPENSATION. THE CHIEF EXECUTIVE OFFICER WILL PARTICIPATE IN THE PLAN AND WILL SELECT OTHER PARTICIPANTS PURSUANT TO THE GUIDELINES SET BY THE EMPLOYER'S BOARD OF DIRECTORS. THE EMPLOYER MAY MAKE CONTRIBUTIONS UNDER THE PLAN AND HAS SOLE DISCRETION OVER WHETHER TO MAKE A CONTRIBUTION. VESTING OCCURS ON JANUARY 1 OF THE FIFTH YEAR FOR WHICH SUCH CONTRIBUTIONS ARE MADE FOR PARTICIPANTS WHO HAVE BEEN CONTINUOUSLY EMPLOYED. THE PLAN ALSO ALLOWS VESTING TO OCCUR IF THE PARTICIPANT ATTAINS THE AGE OF 62. THE FOLLOWING INDIVIDUAL RECEIVED VESTED PAYMENTS IN 2015, REFLECTED IN COLUMN (B)(III): PHIL NEWBOLD $140,103 IN MARCH 2015. THE FOLLOWING INDIVIDUALS RECEIVED DEFFERED PAYMENTS IN 2015 THAT WILL VEST IN FUTURE YEARS, WHICH ARE REFLECTED IN COLUMN C: - PHIL NEWBOLD, $142,540 - JEFFREY COSTELLO, $77,377 - MICHAEL O'NEIL, $48,978 - KREG GRUBER, $72,770 - STEVEN ELLER, $34,928 - LORI TURNER, $31,999 - DANIELLE GAGLIANO, $31,732 - DIANE MAAS, $31,150 BEACON HEALTH SYSTEM IMPLEMENTED AN EXECUTIVE LONGEVITY BONUS PLAN FOR THE PURPOSE OF PROVIDING A LONGEVITY BONUS FOR ITS DESIGNATED EXECUTIVES. THIS UNFUNDED PLAN WAS EFFECTIVE APRIL 1, 2014. THE PARTICIPANTS MUST REMAIN IN AN ACTIVE EMPLOYMENT STATUS WITH BEACON FOR A PERIOD OF 5 CONSECUTIVE YEARS FROM THE EFFECTIVE DATE TO BE ELIGIBLE TO RECEIVE THE FULL LONGEVITY BONUS AMOUNT AT WHICH TIME VESTING IS 100%. VESTING PRIOR TO THE 5 YEARS IS AT 0%. THE MAXIMUM BONUS AWARD AT 100% VESTING IS $325,000. THE FOLLOWING INDIVIDUALS RECEIVED DEFFERED PAYMENTS IN 2015 THAT WILL VEST IN FUTURE YEARS, WHICH ARE REFLECTED IN COLUMN C: - JEFFREY COSTELLO, $65,000 - KREG GRUBER, $65,000 - GREGORY LOSASSO, $65,000 - MICHAEL O'NEIL, $65,000 PART I, LINE 7 THE ORGANIZATION HAS THREE INCENTIVE PLANS (EMPLOYEE, MANAGEMENT, AND EXECUTIVE) WHICH HAVE A NET OPERATING INCOME TO BUDGET MEASUREMENT FOR THE PAYOUT THRESHOLD. THE EMPLOYEE PLAN SHARES THE EXCESS OVER BUDGET NET OPERATING INCOME WITH THE NON-MANAGEMENT EMPLOYEES FOR BEACON HEALTH SYSTEM, INC. AND THE AFFILIATED ENTITIES. THE EMPLOYEE INCENTIVE HAS A MAXIMUM CAP OF $4,500,000. THE PAYOUT AND AMOUNT OF THE PAYOUT FOR THE EMPLOYEE INCENTIVE PLAN IS MADE AT THE DISCRETION OF THE BOARD. THE MANAGEMENT INCENTIVE PLAN PAYS A SLIDING PERCENTAGE OF BASE COMPENSATION IF THE NET OPERATING INCOME IS EQUAL TO OR GREATER THAN 80% OF THE BUDGETED NET OPERATING INCOME. THE SLIDING SCALE CAPS WHEN OPERATING INCOME REACHES 120% OF THE BUDGETED OPERATING INCOME. THE PAYOUT OF THE MANAGEMENT INCENTIVE IS MADE AT THE DISCRETION OF THE BOARD. EXECUTIVES ARE COVERED UNDER THE BEACON HEALTH SYSTEM EXECUTIVE SHORT-TERM INCENTIVE PLAN (ESTIP). THE ESTIP PLAN PAYS A SLIDING PERCENTAGE OF BASE COMPENSATION IF THE NET OPERATING INCOME IS EQUAL TO OR GREATER THAN 80% OF THE BUDGETED NET INCOME. THE SLIDING SCALE CAPS, WHEN OPERATING INCOME REACHES 120% OF THE BUDGETS OPERATING INCOMES. THE PAYOUT OF THE ESTIP IS MADE AT THE DISCRETION OF THE BOARD. FORM 990, PART III, LINE 2 IN 2015, BEACON HEALTH SYSTEM, INC. ACQUIRED COMMUNITY OCCUPATIONAL MEDICINE, LLC (COM) AND CHA ACO, LLC (CHA ACO). BOTH ENTITIES ARE FOR-PROFIT INDIANA LIMITED LIABILITY COMPANIES. AS A RESULT, THESE ENTITIES ARE NOW WHOLLY OWNED BY BHS AND TREATED AS DISREGARDED ENTITIES FOR TAX PURPOSES. COM PRIMARILY PROVIDES OCCUPATIONAL MEDICINE SERVICES TO LOCAL EMPLOYERS. CHA ACO COORDINATES HIGH-QUALITY CARE FOR MEDICARE BENEFICIARIES PARTICIPATING IN THE MEDICARE SHARED SAVINGS PROGRAMS. THIS PURCHASE HAS RESULTED IN AN OVERALL INCREASE IN PROGRAM SERVICE REVENUE. FORM 990, PART VI, SECTION A, LINE 7A THE 14 MEMBERS OF BOARD OF DIRECTORS OF BEACON HEALTH SYSTEM WERE INITIALLY APPOINTED 50% BY ELKHART GENERAL HOSPITAL, INC. AND 50% BY BEACON MEDICAL GROUP, INC. THE REPRESENTATION WILL CONTINUE FOR A PERIOD OF 7 YEARS FROM THE DATE OF BEACON HEALTH SYSTEM'S FORMATION. SUCCESSOR APPOINTEES TO THE BOARD ARE RECOMMENDED FROM THE RESPECTIVE HOSPITALS, OR A COMMITTEE APPOINTED BY THE RESPECTIVE HOSPITALS TO THE NOMIMATING AND GOVERNANCE COMMITTEE OF THE BOARD, THEN APPOINTED TO THE BOARD. AT THE EXPIRATION OF THIS 7 YEAR TERM, THE BEACON HEALTH SYSTEM BOARD OF DIRECTORS WILL BE APPOINTED BY THE NOMINATING AND GOVERNANCE COMMITTEE. FORM 990, PART VI, SECTION A, LINE 7B SEE PART VI, SECTION A, LINE 7A DISCLOSURE FORM 990, PART VI, SECTION B, LINE 11b THE ORGANIZATION INCORPORATES NUMEROUS PARTIES IN THE PRODUCTION AND REVIEW OF THE FORM 990 AND ASSOCIATED SCHEDULES. SENIOR ACCOUNTING STAFF AND MANAGEMENT COMPLETE THE FORM 990 AND SCHEDULES. SOME FORMS AND SCHEDULES ARE REVIEWED BY THE CONTROLLER. SUBSEQUENT TO THOSE STEPS, THE ORGANIZATION ENGAGED ERNST & YOUNG US, LLP TO REVIEW THE COMPLETED FORM 990 AND APPROPRIATE SCHEDULES. PRIOR TO FILING THE RETURN THE COMPENSATION COMMITTEE OF THE ORGANIZATION AND CEO CONDUCT A GENERAL OVERVIEW OF THE FORM 990 INCLUDING APPLICABLE COMPENSATION SCHEDULES. IN ADDITION, EACH BOARD MEMBER RECEIVES NOTIFICATION OF THE IRS FORM 990 PLACEMENT ON THE ORGANIZATION'S BOARD PORTALS WHICH ALLOWS FOR BOARD MEMBER REVIEW PRIOR TO FILING THE RETURN. FORM 990, PART VI, SECTION B, LINE 12c THERE ARE THREE SEPARATE FORMS THAT ARE SENT OUT THROUGH THE INTERNAL AUDIT DEPARTMENT TO KEY EMPLOYEES OR BOARD MEMBERS REGARDING CONFLICT OF INTEREST. THEY ARE AS FOLLOWS: 1. THE FIRST IS A CONFLICT OF INTEREST STATEMENT THAT IS SENT TO SENIOR LEVEL ADMINISTRATION, MANAGEMENT, AND SELECT STAFF SUCH AS PURCHASING DEPARTMENT EMPLOYEES. THE PURPOSE OF THE STATEMENT IS TO REQUIRE THESE EMPLOYEES TO DISCLOSE ANY POTENTIAL CONFLICT OF INTERESTS THEY MAY HAVE. THE STATEMENTS ARE SENT IN JANUARY OF EACH YEAR FOR THE PREVIOUS YEAR ACTIVITIES AND WE PURSUE THE REPLIES TO GET A 100% RESPONSE RATE. IN THE CURRENT YEAR WE SENT OUT OVER 425 STATEMENTS AND ACHIEVED A 100% RESPONSE RATE. EACH RESPONSE IS REVIEWED BY THE DIRECTOR OF INTERNAL AUDIT AND THE RESULTS ARE REPORTED TO THE CEO OF BEACON HEALTH SYSTEM, THE AUDIT COMMITTEE CHAIRMAN, AS WELL AS THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS. 2.THE SECOND STATEMENT IS THE BOARD DUALITY OF INTEREST STATEMENT THAT IS SENT TO CURRENT BOARD MEMBERS, FORMER BOARD MEMBERS FROM THE LAST FIVE YEARS, AND OTHER KEY EMPLOYEES. THE DUALITY OF INTEREST STATEMENT IS SENT USING THE WEB BASED SURVEY TOOL PROVIDED BY ERNST & YOUNG LLP. THE REPLIES ARE REVIEWED BY THE DIRECTOR OF INTERNAL AUDIT. THE RESULTS OF THE SURVEYS ARE SUMMARIZED USING THE WEB BASED TOOL, AND ARE REVIEWED BY ERNST & YOUNG IN COMPLETING THE FORM 990. THE RESULTS ARE REPORTED TO THE CEO OF BEACON HEALTH SYSTEM, THE AUDIT COMMITTEE CHAIRMAN, AND THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS. 3. THE THIRD STATEMENT IS ENTITLED "CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS." THE STATEMENT REQUIRES AN ACKNOWLEDGMENT FORM TO BE SIGNED BY BEACON HEALTH SYSTEM, INC'S KEY FINANCIAL EMPLOYEES THAT BEACON HEALTH SYSTEMS, INC'S FINANCIAL INFORMATION IS TO THE BEST OF THEIR KNOWLEDGE TRUE AND ACCURATE. THIS STATEMENT WAS SENT OUT IN JANUARY, 2016 AND THE SIGNED ACKNOWLEDGEMENTS ARE KEPT BY THE DIRECTOR OF INTERNAL AUDIT. IN 2016, 22 DESIGNATED EMPLOYEES WERE REQUESTED TO SIGN THE FORM AND 100% COMPLIED WITH THIS REQUEST. ANY POTENTIAL CONFLICTS OF INTERESTS ARE REVIEWED BY INDEPENDENT PARTIES BOTH INTERNAL AND EXTERNAL TO THE ORGANIZATION, AND IF NECESSARY, CORRECTIVE ACTION WOULD BE TAKEN TO RESOLVE A TRUE CONFLICT. THE INDIVIDUAL WITH THE POTENTIAL CONFLICT OF INTEREST WOULD BE EXCLUDED FROM ALL REVIEW PROCEEDINGS. FORM 990, PART VI, SECTION B, LINE 14 BEACON HEALTH SYSTEM'S BOARD OF DIRECTORS HAS NOT SPECIFICALLY ADOPTED A DOCUMENT RETENTION AND DESTRUCTION POLICY, HOWEVER IN PRACTICE IT FOLLOWS THE RELATED POLICY OF MEMORIAL HOSPITAL OF SOUTH BEND, INC. (EIN #:35-0868132) FORM 990, PART VI, SECTION B, LINE 15a & 15b BEACON HEALTH SYSTEM, INC. HAS AN EXTENSIVE EXAMINATION THAT IS CONDUCTED, FOR VICE PRESIDENT AND HIGHER COMPENSATION. VICE PRESIDENT AND HIGHER COMPENSATION IS DETERMINED AFTER AN EXTENSIVE EXAMINATION IS CONDUCTED USING COMPARABLE MARKET DATA AND THEN REVIEWED BY AN INDEPENDENT CONSULTANT HIRED BY, AND REPORTING TO, THE BOARD OF DIRECTORS. HUMAN RESOURCES CONDUCTS THE ANALYSIS AND MAKES RECOMMENDATIONS TO THE CEO WHO THEN MAKES THE RECOMMENDATIONS FOR ALL OTHER EXECUTIVES/OFFICERS TO THE BOARD FOR APPROVAL. THE INDEPENDENT CONSULTING GROUP SEPARATELY MAKES THE RECOMMENDATIONS REGARDING THE CEO'S COMPENSATION TO THE BOARD FOR APPROVAL. RECOMMENDATIONS ARE PRESENTED TO THE COMPENSATION COMMITTEE OF THE BEACON HEALTH SYSTEM, INC. BOARD FOR DELIBERATION AND FINAL DECISION. DELIBERATION AND FINAL DECISION ARE PERFORMED BY THE INDEPENDENT MEMBERS OF THE BOARD. FORM 990, PART VI, SECTION C, LINE 19 THE GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT MADE AVAILABLE TO THE PUBLIC. THE FINANCIAL STATEMENTS ARE DISTRIBUTED QUARTERLY TO THE ELECTRONIC MUNICIPAL MARKET ACCESS (EMMA) WEBSITE AS PART OF THE CONTINUING DISCLOSURES FOR THE BEACON HEALTH SYSTEM, INC. BONDS. FORM 990, PART XI, LINE 9 WRITE OFF INTER COMPANY MEMORIAL HOSPITAL OF SB $ 10,233,525 WRITE OFF INTER COMPANY MEMORIAL HEALTH FOUNDATION $ -174,283 WRITE OFF INTER COMPANY ELKHART GENERAL HOSPITAL $ -6,165,718 WRITE OFF INTER COMPANY BEACON MEDICAL GROUP $ 588,931 WRITE OFF INTER COMPANY BEACON HEALTH VENTURES $ -9,041,088 CAPITAL CONTRIBUTIONS $ -501,000 TRANSFERS TO/FROM AFFILIATES $ 3,200,869 TOTAL $ -1,858,764 FORM 990 PART IX LINE 11G DESCRIPTION:CONSULTING TOTAL FEES:3437461 FORM 990 PART IX LINE 11G DESCRIPTION:EQUIPMENT RENTAL & MAINTENANCE TOTAL FEES:12576228 FORM 990 PART IX LINE 11G DESCRIPTION:RADIOLOGY FEES TOTAL FEES:43549 FORM 990 PART IX LINE 11G DESCRIPTION:LAB READING FEES TOTAL FEES:283961 FORM 990 PART IX LINE 11G DESCRIPTION:OTHER PURCHASED SERVICES TOTAL FEES:6732433 FORM 990 PART IX LINE 11G DESCRIPTION:TRANSCRIPTION TOTAL FEES:110 Community Occupational Medicine 22818 Old US 20 Elkhart IN 46516 352073758 Medical Cent IN -631708 2369108 BHS CHA ACO LLC 53842 Generations Dr South Bend IN 46635 462860087 ACO IN -366025 176935 BHS MEMORIAL HOSPITAL OF SOUTH BEND INC 615 N MICHIGAN ST SOUTH BEND IN 46601 350868132 HOSPITAL IN 501(C)(3) 3 BHS true MEMORIAL HEALTH FOUNDATION INC 615 N MICHIGAN ST SOUTH BEND IN 46601 351536129 FINANCIAL SUP IN 501(C)(3) 7 BHS true ELKHART GENERAL HOSPITAL INC 600 EAST BLVD ELKHART IN 46514 350877574 HOSPITAL IN 501(C)(3) 3 BHS true BEACON MEDICAL GROUP INC 615 N MICHIGAN ST SOUTH BEND IN 46601 351536132 PHY PRACTICES IN 501(C)(3) 9 BHS true MEMORIAL ENDOWMENT FUND FOR MEMORIAL HOS PO BOX 1602 SOUTH BEND IN 46634 356068581 ENDOWMENT IN 501(C)(3) 11D III-O MHSB true BEACON HEALTH VENTURES INC 615 N MICHIGAN ST SOUTH BEND IN 46601 351901068 HOME MEDICAL IN BHS C 33439142 19078971 1.00000 true BEACON HEALTH VENTURES MICHIGAN INC 615 N MICHGIAN ST SOUTH BEND IN 46601 208259773 HOME MEDICAL MI BHS C 569878 2752171 1.00000 true true true true false false false false false false true true true true true true true true true true Elkhart General Hospital c 6165718 WriteoffInterco Memorial Health Foundation b 174283 WriteoffInterco Beacon Health Ventures b 9041088 WriteoffInterco Beacon Medical Group c 588931 WriteoffInterco Memorial Hospital South Bend c 10233525 WriteoffInterco Memorial Hospital South Bend c 3200870 Interco Charges Memorial Hospital South Bend j 153119 Actual Charges Memorial Hospital South Bend l 25686125 Actual Charges Beacon Health Ventures l 2432429 Actual Charges Beacon Medical Group l 10475253 Actual Charges Memorial Health Foundation l 237720 Actual Charges Elkhart General Hospital l 16846956 Actual Charges Memorial Health Foundation n 690958 Actual Charges Memorial Hospital South Bend p 50800000 Actual Charges Elkhart General Hospital p 60600000 Actual Charges Elkhart General Hospital q 67559399 Actual Charges Beacon Medical Group q 15628832 Actual Charges Memorial Health Foundation q 307193 Actual Charges Beacon Health Ventures q 4897473 Actual Charges Memorial Hospital South Bend q 45599896 Actual Charges Memorial Hospital South Bend r 30632273 Actual Charges Elkhart General Hospital r 17675635 Actual Charges Beacon Health Ventures r 7295235 Actual Charges Memorial Health Foundation r 1396003 Actual Charges Beacon Medical Group r 26542463 Actual Charges