2016-05-12T06:50:26-05:00 2015-06-30 390859910 BAKER TILLY VIRCHOW KRAUSE LLP 1650 MARKET STREET SUITE 4500 PHILADELPHIA PA 19103 990 2014-07-01 232328297 SACRED HEART HEALTHCARE SYSTEM SACR 6107764500 421 W CHEW STREET ALLENTOWN PA 18102 DANIEL C CONFALONE CFO 6107764500 2016-05-06 1 JULIUS C GREEN CPA JD P00350393 2159720701 2014 2016-08-17 19:52:53Z JOHN NESPOLI 421 W CHEW STREET ALLENTOWN PA 18102 23209118 0 X WWW.SHH.ORG X 1984 PA PROVIDING HEALTHCARE AND WELLNESS THROUGH QUALITY SERVICES AND PROGRAMS BASED ON ETHICAL AND RELIGIOUS DIRECTIVES. 10 9 221 20 0 0 0 0 19037999 19373394 116247 363 551786 3835361 19706032 23209118 0 0 0 0 17433862 19580785 0 0 0 7789261 10859985 25223123 30440770 -5517091 -7231652 6363281 8977581 7326530 9488859 -963249 -511278 X SACRED HEART HEALTHCARE SYSTEM IS COMMITTED TO PROVIDING HEALTHCARE AND WELLNESS, FROM CONCEPTION TO NATURAL DEATH, THROUGH QUALITY SERVICES AND PROGRAMS BASED ON THE CATHOLIC ETHICAL AND RELIGIOUS DIRECTIVES.OUR HEALTHCARE NETWORK CONTINUES ITS LEADERSHIP IN THE COMMUNITY THROUGH COLLABORATION AND AFFILIATION WITH RECOGNIZED REGIONAL AND NATIONAL EXPERTS.WE ASSURE THAT THE SYSTEM WILL REMAIN VIABLE BY PROVIDING COST EFFECTIVE AND VALUE-DRIVEN SERVICES. A PROGRAM OF CONTINUOUS PERFORMANCE IMPROVEMENT ENABLES US TO RESPOND TO THE NEEDS OF THE COMMUNITY WHILE GIVING MEANINGFUL EMPLOYMENT, EDUCATION AND TRAINING TO OUR EMPLOYEES.IN FULFILLING THIS MISSION, SACRED HEART HEALTHCARE SYSTEM RECOGNIZES THE DIGNITY AND ETERNAL DESTINY OF EACH INDIVIDUAL WITH SPECIAL CONCERN FOR THE SICK AND THE POOR. 0 0 24131015 20671001 EXPENSES INCURRED IN PROVIDING VARIOUS MEDICALLY NECESSARY HEALTHCARE SERVICES TO ALL INDIVIDUALS IN A NON-DISCRIMINATORY MANNER REGARDLESS OF RACE, COLOR, CREED, SEX, NATIONAL ORIGIN, RELIGION OR ABILITY TO PAY. PLEASE REFER TO THE ORGANIZATION'S COMMUNITY BENEFIT STATEMENT INCLUDED IN SCHEDULE O. 24131015 1 0 0 0 0 0 0 0 0 0 1 0 1 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 1 1 0 0 1 41 0 1 221 1 0 0 0 0 0 0 0 0 0 0 X 10 9 0 1 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 1 PA X BRIAN WESSNER 6107765313 421 W CHEW STREET ALLENTOWN PA 18102 PAUL HUCK CHAIRMAN 1.00 X X 0 0 0 THOMAS J SCALICI FIRST VICE CHAIRMAN 1.00 X X 0 0 0 JOSEPH FITZPATRICK SECOND VICE CHAIRMAN 1.00 X X 0 0 0 NELSON DIAZ DIRECTOR 1.00 X 0 0 0 MIRIAM HUERTAS DIRECTOR 1.00 X 0 0 0 REV THOMAS J KULLER SJ DIRECTOR 1.00 X 0 0 0 JAMES KUSKO DIRECTOR 1.00 X 0 0 0 JAMES M SEITZINGER DIRECTOR 1.00 X 0 0 0 PAUL J SMITH JR DIRECTOR 1.00 X 0 0 0 JOHN L NESPOLI PRESIDENT & CEO 1.00 54.00 X X 0 464099 24793 DANIEL C CONFALONE CFO 1.00 54.00 X 0 37174 19194 GREGORY THOMPSON PHYSICIAN 55.00 X 513616 0 19021 TAMAM HABIB PHYSICIAN 55.00 X 420069 0 16544 JOANN LEAHY PHYSICIAN 55.00 X 414074 0 30705 CLARENCE HOLLAND PHYSICIAN 55.00 X 371546 0 28310 VANKATA KANTHIMATHINATHAN PHYSICIAN 55.00 X 357323 0 5000 2076628 501273 143567 45 0 1 0 QUALITY SYSTEMS INC PO BOX 809390 CHICAGO IL 60680 MEDICAL BILLING 1300180 RENGABHASHYAM MD PC 1855 EMERALD DRIVE OREFIELD PA 18069 ANESTHESIA SERVICES 400756 PARTNERS IN NEUROLOGY PA 1 ELK COURT SEWELL NJ 08080 PHYSICIAN SERVICES 263400 REGNER & ASSOCIATES LLC PO BOX 515 STOCKTON NJ 08559 MANAGEMENT SERVICES 229466 LEHIGH VALLEY PRIMARY CARE 1259 S CEDAR CREST BLVD ALLENTOWN PA 18103 PHYSICIAN SERVICES 200651 8 NET PATIENT SERVICES REVENUE 541900 12532629 12532629 MANAGEMENT REVENUE 541900 3799266 3799266 PHYSICIAN SERVICE REVENUE 541900 2700007 2700007 CAPITATION REVENUE 541900 323478 323478 OTHER HEALTHCARE RELATED REVENUE 541900 18014 18014 19373394 363 363 23994 0 23994 23994 23994 BILLING FEE REVENUE 541200 1425478 1425478 ACCOUNTING FEE REVENUE 541200 1043328 1043328 URGENT CARE CENTER INCOME 621400 737356 737356 605205 560251 44954 3811367 23209118 20671001 0 2538117 X 17033002 14798738 2234264 212263 179207 33056 1373698 995539 378159 961822 773991 187831 475427 475427 49455 49455 84062 84062 5825696 2739895 3085801 30987 21392 9595 171855 126418 45437 72516 28230 44286 203120 187746 15374 3082 1641 1441 70905 63828 7077 25772 25748 24 262308 180815 81493 868861 868861 EQUIPMENT RENTAL 924598 916844 7754 MEDICAL SUPPLIES 850006 848858 1148 BAD DEBT EXPENSE 679448 679421 27 SALES & USE TAX 76888 19909 56979 184999 114445 70554 30440770 24131015 6309755 0 1425 1449 247691 202768 1546209 2141788 17975 101266 121197 189895 309814 4940549 4024952 758466 915597 3037867 2848118 330675 1998616 131812 438234 6363281 8977581 3385816 3535503 1924852 3940714 4028504 7326530 9488859 X -963249 -511278 -963249 -511278 6363281 8977581 X -7231652 7683623 X 0 1 X 1 0 X X X 1 SACRED HEART HOSPITAL 231352208 3 1 0 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 X 1 1 SCHEDULE A PART VI SECTION D LINE 3 TOP MANAGEMENT OFFICIALS (CEO AND CFO) OF THE SACRED HEART HOSPITAL ARE ALSO THE TOP MANAGEMENT OFFICIALS OF SACRED HEART HEALTHCARE SYSTEM. AS SUCH, THE HOSPITAL HAS A SIGNIFICANT VOICE IN THE SYSTEM'S INVESTMENT POLICIES AND IN DIRECTING THE USE OF THE SYSTEM'S INCOME AND ASSETS AT ALL TIMES DURING THE YEAR. SCHEDULE A PART IV SECTION E LINE 3A SACRED HEART HEALTHCARE SYSTEM (SHHS) IS THE PARENT AND SOLE MEMBER OF SACRED HEART HOSPITAL. AS THE SOLE MEMBER, SHHS HAS THE RIGHT TO ELECT THE MEMBERS OF THE HOSPITAL'S BOARD OF DIRECTORS AND HAS CERTAIN RESERVED POWERS AS DEFINED IN THE HOSPITAL'S BYLAWS. SCHEDULE A PART IV SECTION E LINE 3B AS THE PARENT ORGANIZATION AND WITH THE COMMON MEMBERS OF MANAGEMENT, SHHS EXERCISES A SUBSTANTIAL DEGREE OF DIRECTION OVER THE POLICIES, PROGRAMS, AND ACTIVITIES OF THE HOSPITAL. SHHS HAS THE RIGHT TO ELECT THE MEMBERS OF THE HOSPITAL'S BOARD OF DIRECTORS AND HAS CERTAIN RESERVED POWERS AS DEFINED IN THE HOSPITAL'S BYLAWS. 10000 10000 530000 530000 0 1026178 840597 185581 3374371 2654355 720016 915597 INVESTMENT IN SACRED HEART ASSISTED LIVING 2838118 F INVESTMENT IN SACRED HEART PHARMACY 10000 F 2848118 DUE TO AFFILIATES 4028504 4028504 X 30259184 7050066 7050066 23209118 0 23209118 29807213 45891 45891 29761322 679448 679448 30440770 PART X, LINE 2: THE SYSTEM ACCOUNTS FOR UNCERTAINTY IN INCOME TAXES BY PRESCRIBING A RECOGNITION THRESHOLD OF MORE-LIKELY-THAN-NOT TO BE SUSTAINED UPON EXAMINATION BY THE APPROPRIATE TAXING AUTHORITY. MEASUREMENT OF THE TAX UNCERTAINTY OCCURS IF THE RECOGNITION THRESHOLD HAS BEEN MET. THERE WERE NO TAX UNCERTAINTIES THAT MET THE RECOGNITION THRESHOLD IN 2015 OR 2014. SHHS FEDERAL EXEMPT ORGANIZATION BUSINESS INCOME TAX RETURNS IS NO LONGER SUBJECT TO EXAMINATION BY THE INTERNAL REVENUE SERVICE FOR YEARS BEFORE 2012. PART XI, LINE 2D - OTHER ADJUSTMENTS: BAD DEBT EXPENSE NETTED AGAINST REVENUES ON FINANCIAL STATEMENTS -679,448. TRANSFER FROM AFFILIATE 7,729,514. PART XII, LINE 2D - OTHER ADJUSTMENTS: CHANGE IN VALUE OF INTEREST RATE SWAP 45,891. PART XII, LINE 4B - OTHER ADJUSTMENTS: BAD DEBT EXPENSE NETTED AGAINST REVENUES ON FINANCIAL STATEMENTS 679,448. 0 1 0 0 0 0 0 1 0 JOHN L NESPOLI PRESIDENT & CEO 0 411625 0 44950 0 7524 0 5200 0 19593 0 488892 0 0 GREGORY THOMPSON PHYSICIAN 417854 0 95000 0 762 0 0 0 19021 0 532637 0 0 0 TAMAM HABIB PHYSICIAN 419307 0 0 0 762 0 5200 0 11344 0 436613 0 0 0 JOANN LEAHY PHYSICIAN 414028 0 0 0 46 0 5200 0 25505 0 444779 0 0 0 CLARENCE HOLLAND PHYSICIAN 371486 0 0 0 60 0 5200 0 23110 0 399856 0 0 0 VANKATA KANTHIMATHINATHAN PHYSICIAN 245646 0 111623 0 54 0 5000 0 0 0 362323 0 0 0 PART I, LINE 3 A RELATED ORGANIZATION, SACRED HEART FOUNDATION, USES THE FOLLOWING METHODS TO DETERMINE COMPENSATION FOR THE PRESIDENT/CEO: COMPENSATION COMMITTEE, COMPENSATION SURVEY OR STUDY AND APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE. PART I, LINE 4B THE FOLLOWING INDIVIDUALS PARTICIPATE IN A SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN: JOHN NESPOLI AND DAN CONFALONE PART I, LINE 7 CERTAIN INDIVIDUALS INCLUDED IN SCHEDULE J, PART II RECEIVED A BONUS DURING CALENDAR YEAR 2014 AS REPORTED IN COLUMN B(II) HEREIN AND IN EACH INDIVIDUAL'S 2014 FORM W-2 AS TAXABLE WAGES. BONUSES ARE BASED ON OPERATIONAL GROWTH, PATIENT SATISFACTION, AND FINANCIAL AND CLINICAL QUALITY GOALS SET EACH YEAR. FORM 990, PART III, LINE 4A SACRED HEART HEALTHCARE SYSTEM IS THE PARENT ENTITY OF A TAX-EXEMPT INTEGRATED HEALTHCARE DELIVERY SYSTEM, WHICH INCLUDES SACRED HEART HOSPITAL; AN INTERNAL REVENUE CODE SECTION 501(C)(3) TAX-EXEMPT ORGANIZATION AS DESCRIBED BELOW: SACRED HEART HEALTHCARE SYSTEM IS A NOT-FOR-PROFIT ENTITY THAT OPERATES AS THE PARENT ORGANIZATION OF SACRED HEART HOSPITAL, SACRED HEART ANCILLARY SERVICES, INC., SACRED HEART FOUNDATION AND SH REALTY CORPORATION. SACRED HEART HOSPITAL, A NOT-FOR-PROFIT ENTITY, PROVIDES ACUTE CARE SERVICES TO THE LOCAL COMMUNITY. SACRED HEART ANCILLARY SERVICES, INC. IS A PENNSYLVANIA FOR-PROFIT ENTITY PROVIDING PHARMACY AND INFUSION SERVICES TO THE GENERAL PUBLIC. SACRED HEART FOUNDATION IS A NOT-FOR PROFIT ENTITY PROVIDING MANAGEMENT SERVICES. SH REALTY CORPORATION, A NOT-FOR-PROFIT ENTITY, HOLDS REAL ESTATE. SACRED HEART HOSPITAL IS LOCATED IN AN AREA WITH A HIGH CONCENTRATION OF LOW INCOME HOUSEHOLDS. AS A RESULT, THE HOSPITAL PROVIDES CARE TO A LARGE NUMBER OF INDIGENT PATIENTS. IN THE FISCAL YEAR ENDED JUNE 30, 2015 PATIENTS WITH MEDICAID, MA MANAGED CARE OR NO INSURANCE AT ALL MADE UP 29.1% OF SACRED HEART'S INPATIENT VOLUME AND 29.9% OF ITS OUTPATIENT VOLUME. THE HOSPITAL PROVIDES CHARITY CARE TO PATIENTS WHO MEET CERTAIN CRITERIA BY PROVIDING SERVICES AT A REDUCED RATE OR AT NO CHARGE AT ALL. IN FISCAL YEAR 2015 THE HOSPITAL WROTE OFF $318,000 IN CHARGES PURSUANT TO ITS CHARITY CARE POLICY. ALSO, IN RECOGNIZING ITS MISSION TO THE COMMUNITY, THE HOSPITAL PROVIDES CARE TO PERSONS COVERED BY MEDICAL ASSISTANCE WHICH REIMBURSES THE HOSPITAL BELOW INCURRED COSTS. SACRED HEART HOSPITAL ("SHH") IS A GENERAL MEDICAL, SURGICAL AND TEACHING HOSPITAL. SHH IS RECOGNIZED BY THE IRS AS AN INTERNAL REVENUE CODE SECTION 501(C)(3) TAX-EXEMPT ORGANIZATION. SHH IS AN AFFILIATE OF THE SACRED HEART HEALTHCARE SYSTEM; A TAX-EXEMPT INTEGRATED HEALTHCARE DELIVERY SYSTEM. PURSUANT TO ITS CHARITABLE PURPOSES, SHH PROVIDES MEDICALLY NECESSARY HEALTHCARE SERVICES TO ALL INDIVIDUALS IN A NON-DISCRIMINATORY MANNER REGARDLESS OF RACE, COLOR, CREED, SEX, NATIONAL ORIGIN OR ABILITY TO PAY. MOREOVER, SHH OPERATES CONSISTENTLY WITH THE FOLLOWING CRITERIA OUTLINED IN IRS REVENUE RULING 69-545: 1) SHH PROVIDES MEDICALLY NECESSARY HEALTHCARE SERVICES TO ALL INDIVIDUALS REGARDLESS OF ABILITY TO PAY, INCLUDING CHARITY CARE, SELF-PAY, MEDICARE AND MEDICAID PATIENTS; 2) SHH OPERATES AN ACTIVE EMERGENCY DEPARTMENT FOR ALL PERSONS; WHICH IS OPEN 24 HOURS A DAY, 7 DAYS A WEEK, 365 DAYS PER YEAR; 3) SHH MAINTAINS AN OPEN MEDICAL STAFF, WITH PRIVILEGES AVAILABLE TO ALL QUALIFIED PHYSICIANS; AND 4) CONTROL OF SHH RESTS WITH ITS BOARD OF DIRECTORS; WHICH IS COMPRISED OF INDEPENDENT CIVIC LEADERS AND OTHER PROMINENT MEMBERS OF THE COMMUNITY. 5) SURPLUS FUNDS ARE USED TO IMPROVE THE QUALITY OF PATIENT CARE, EXPAND AND RENOVATE FACILITIES AND ADVANCE MEDICAL CARE; PROGRAMS AND ACTIVITIES. THE MISSIONARY SISTERS OF THE MOST SACRED HEART RELIGIOUS ORDER IN GERMANY ARRIVED IN ALLENTOWN ON JUNE 15, 1912 TO HELP CARE FOR THE SICK AND INJURED OF THE SACRED HEART PARISH DURING A WIDESPREAD DIPHTHERIA OUTBREAK. AS DIPHTHERIA RAGED, THE SISTERS GAVE DISPENSARY SERVICES AS WELL AS VISITING NURSE SERVICES. THIS WAS THE ACTUAL "START" OF SACRED HEART HOSPITAL. IN 1915, THE ACTUAL FOUNDING OF SACRED HEART HOSPITAL AS A COMMUNITY INSTITUTION WAS FORMALIZED AND DEDICATED. TWO YEARS LATER, SACRED HEART HOSPITAL WAS OFFICIALLY INCORPORATED UNDER PENNSYLVANIA LAW. IN 1920, SACRED HEART HOSPITAL RECEIVED APPROVAL TO TRAIN INTERNS AND IN 1922 WAS ACCREDITED BY THE AMERICAN COLLEGE OF SURGEONS. SINCE THEN, SACRED HEART HOSPITAL HAS EXPANDED ITS CAMPUS AND ITS REACH ACROSS OUR COMMUNITY. OUR CAMPUS INCLUDES A 215-BED CATHOLIC MEDICAL CENTER WHICH OFFERS A WIDE RANGE OF ADVANCED MEDICAL, SURGICAL AND OUTPATIENT HOSPITAL SERVICES. SACRED HEART HEALTHCARE SYSTEM AND ITS AFFILIATES ("SACRED HEART") PROVIDE A VAST RANGE OF SPECIALTY SERVICES AT OUR 421 CHEW STREET LOCATION IN ALLENTOWN, PA, INCLUDING BARIATRIC SERVICES, BEHAVIORAL HEALTH, CANCER CARE, CARDIAC SERVICES, EMERGENCY SERVICES, ENDOVASCULAR SERVICES, IMAGING SERVICES, LABORATORY SERVICES, LUNG AND RESPIRATORY SERVICES, NEURODIAGNOSTIC TESTING, NEUROLOGY, ORTHOPEDICS, PAIN MANAGEMENT, SENIOR SERVICES, SLEEP DISORDERS, STROKE CARE, SURGICAL SERVICES, TRANSITIONAL CARE, WOMEN'S HEALTH AND WOUND CARE SERVICES. IN ADDITION TO HOSPITAL SERVICES, SACRED HEART PROVIDES AN EXTENSIVE LIST OF MEDICAL SERVICES OUTSIDE OF THE HOSPITAL TO BETTER MEET THE NEEDS OF OUR PATIENTS AND COMMUNITY POPULATIONS. A NETWORK OF PHYSICIAN PRACTICES THROUGHOUT LEHIGH AND NORTHAMPTON COUNTIES PROVIDES COMPLETE PRIMARY MEDICAL CARE TO THE REGION'S RESIDENTS. IN ADDITION TO THE PHYSICIAN PRACTICES, SACRED HEART PROVIDES ACCESS TO OUTPATIENT SERVICES INCLUDING LABORATORY, IMAGING, RETAIL PHARMACY, INFUSION, RESPIRATORY AND OUTPATIENT REHABILITATION. SACRED HEART OFFERS OUTREACH TO COMMUNITY MEMBERS IN NEED OF CARE THROUGH ITS HOME HEALTH PROGRAM REACHING PATIENTS IN THEIR HOME ENVIRONMENT AFTER HOSPITALIZATION OR MEDICAL CARE. SACRED HEART'S HOSPICE PROGRAM SUPPORTS MANY FAMILIES WITH A GOAL OF ENABLING TERMINALLY ILL PATIENTS, YOUNG AND OLD, TO LIVE LIFE TO THE FULLEST IN THEIR HOMES AMONG FAMILY AND FRIENDS. THROUGH PARISH NURSING, SACRED HEART IMPACTS FIVE CONGREGATIONS OF INDIVIDUALS, PROVIDING HOLISTIC NURSING CARE TO FAITH COMMUNITY MEMBERS ACROSS THE LIFE SPAN AND FACILITATES WELLNESS AND THE PROMOTION OF A HEALING COMMUNITY. SACRED HEART ALSO FUNCTIONS AS AN EDUCATOR FOR PARISH NURSES THROUGHOUT THE LEHIGH VALLEY THROUGH THE PARISH NURSING COALITION OF THE GREATER LEHIGH VALLEY. TO HELP ENSURE CHILDREN IN OUR COMMUNITY RECEIVE HIGH QUALITY HEALTHCARE, SACRED HEART PROVIDES CARE THROUGH FIVE SCHOOL-BASED HEALTH CENTERS. OUR GOAL FOR THE CENTERS IS TO PROVIDE ACCESSIBLE AND AFFORDABLE CHILDREN'S HEALTHCARE AND TO OFFER HEALTH EDUCATION TO THE CHILDREN AND THEIR FAMILIES. THESE CENTERS ARE HOUSED IN ELEMENTARY SCHOOLS IN THE ALLENTOWN SCHOOL DISTRICT. IN ADDITION TO SCHOOL-BASED HEALTH CENTERS, SACRED HEART OFFERS A PEDIATRIC PRACTICE TO MEET THE NEEDS OF OUR YOUNGEST CITIZENS. SACRED HEART OFFERS A DENTAL CLINIC TO MEET INCREASED NEED FOR ADULTS AND CHILDREN IN OUR COMMUNITY AS WELL AS AN OB/GYN CLINIC TO MEET THE NEEDS OF WOMEN IN OUR COMMUNITY. THROUGHOUT SACRED HEART HEALTHCARE SYSTEM 259,997 PATIENTS WERE SERVICED FROM JULY 1, 2014 TO JUNE 30, 2015. SACRED HEART HEALTHCARE SYSTEM IS COMMITTED TO PROVIDING HIGH QUALITY HEALTHCARE TO ALL PEOPLE. WE HAVE RECEIVED RECOGNITION IN MANY DIFFERENT AREAS FOR OUR EXCELLENCE IN HEALTHCARE. A SAMPLE OF THESE AWARDS AND RECOGNITIONS ARE BELOW. SACRED HEART HEALTHCARE SYSTEM IS PROUD TO OFFER RESIDENCIES AND EDUCATIONAL PROGRAMS TO PHYSICIANS AND OTHER HEALTHCARE PROFESSIONALS. WE OFFER THREE RESIDENCY PROGRAMS INCLUDING DENTAL MEDICINE, FAMILY MEDICINE, AND GERIATRIC MEDICINE RESIDENCY PROGRAMS. OUR FAMILY MEDICINE RESIDENCY PROGRAM RECENTLY RECEIVED A 4-YEAR ACCREDITATION BY THE ACCREDITATION COUNCIL FOR GRADUATE MEDICAL EDUCATION (ACGME). MOSS REHAB- ACUTE REHABILITATION UNIT, HOLDS A THREE-YEAR ACCREDITATION FOR ITS STROKE SPECIALTY INPATIENT REHABILITATION PROGRAM. MOSS REHAB'S STROKE CENTER IS ONE OF SIX EINSTEIN PROGRAMS RECOGNIZED AS CENTERS OF EXCELLENCE. CERTIFIED FOR ACUTE AND REHABILITATION CARE, MOSS REHAB HAS SPECIALTY PROGRAMS IN GAIT AND MOTION ANALYSIS, ROBOTIC-ASSISTED PHYSICAL THERAPY, AND APHASIA. SACRED HEART HOSPITAL HAS BEEN GRANTED PRIMARY STROKE CENTER CERTIFICATION BY THE JOINT COMMISSION. THE JOINT COMMISSION'S CERTIFICATE OF DISTINCTION FOR PRIMARY STROKE CENTERS RECOGNIZES CENTERS THAT MAKE EXCEPTIONAL EFFORTS TO FOSTER BETTER OUTCOMES FOR STROKE CARE. ACHIEVEMENT OF CERTIFICATION SIGNALS THAT THE SERVICES SACRED HEART HOSPITAL PROVIDES HAVE THE CRITICAL ELEMENTS TO ACHIEVE LONG-TERM SUCCESS IN IMPROVING OUTCOMES. TRANSITIONAL CARE FACILITY (TCF) RECEIVED A "FIVE STAR" RATING BY THE U.S. CENTERS FOR MEDICARE AND MEDICAID SERVICES. TCF WAS ONE OF ONLY TWO FACILITIES IN LEHIGH AND NORTHAMPTON COUNTIES TO RECEIVE THIS HONOR. THE COMMISSION ON CANCER (COC) OF THE AMERICAN COLLEGE OF SURGEONS (ACOS) GRANTED THREE-YEAR APPROVAL WITH COMMENDATION TO THE CENTER FOR CANCER CARE AT SACRED HEART HOSPITAL. THE COC RECOGNIZED THE ONCOLOGY PROGRAM AT SACRED HEART HOSPITAL AS OFFERING HIGH-QUALITY CANCER CARE. ONLY ONE IN FOUR CANCER PROGRAMS AT HOSPITALS ACROSS THE U.S. RECEIVES THIS SPECIAL APPROVAL. IT RECOGNIZES THE QUALITY OF SACRED HEART'S COMPREHENSIVE PATIENT CARE AND OUR COMMITMENT TO PROVIDING PATIENTS WITH ACCESS TO ALL OF THE VARIOUS MEDICAL SPECIALISTS INVOLVED IN DIAGNOSING AND TREATING CANCER. ALL IMAGING MODALITIES AT SACRED HEART HOSPITAL AND SACRED HEART IMAGING NORTHAMPTON HAVE BEEN AWARDED A THREE-YEAR TERM OF ACCREDITATION IN IMAGING BY THE AMERICAN COLLEGE OF RADIOLOGY (ACR). FORM 990, PART III, LINE 4A SACRED HEART PHARMACY WAS GRANTED ACCREDITATION FOR HOME INFUSION THERAPY SERVICES FROM THE COMMUNITY HEALTH ACCREDITATION PROGRAM (CHAP). CHAP IS THE LEADER IN COMMUNITY-BASED HEALTHCARE ACCREDITATION SERVICES IN THE U.S. AND IS AN ALTERNATIVE TO THE JOINT COMMISSION. CHAP IS AN INDEPENDENT AND NON-PROFIT ACCREDITING BODY. CHAP'S GOAL IS FOR HOME CARE TO NOT ONLY PROSPER BUT GAIN STRENGTH IN THE OVERALL HEALTHCARE INDUSTRY. THE VASCULAR LABORATORY HAS BEEN ACCREDITED BY THE INTERSOCIETAL COMMISSION FOR THE ACCREDITATION OF VASCULAR LABS (ICAVL) SINCE 1996 AND WAS GRANTED A THREE-YEAR RE-ACCREDITATION. SACRED HEART HOSPITAL RECEIVED THE GOLD PLUS GET WITH THE GUIDELINES-STROKE ACHIEVEMENT AWARD FOR STROKE RECOGNITION. GET WITH THE GUIDELINES-STROKE HELPS SACRED HEART HOSPITAL'S STAFF DEVELOP AND IMPLEMENT ACUTE AND SECONDARY PREVENTION GUIDELINE PROCESSES TO IMPROVE PATIENT CARE AND OUTCOMES. THE PROGRAM PROVIDES HOSPITALS WITH A WEB BASED PATIENT MANAGEMENT TOOL, BEST PRACTICE DISCHARGE PROTOCOLS AND STANDING ORDERS, ALONG WITH A ROBUST REGISTRY AND REAL-TIME BENCHMARKING CAPABILITIES TO TRACK PERFORMANCE. FORM 990, PART VI, SECTION A, LINE 3 THE ORGANIZATION DELEGATED CONTROL OVER MANAGEMENT DUTIES OF THE CHIEF FINANCIAL OFFICER POSITION TO AN INDEPENDENT FIRM; REGNER & ASSOCIATES, L.L.C. FOR THE FISCAL YEAR ENDED JUNE 30, 2014 AND A PORTION OF FISCAL YEAR 2015. AMOUNTS PAID FOR THESE SERVICES TOTALLED $229,466 FOR CALENDAR 2014 AND WERE RENDERED AT FAIR MARKET VALUE RATES PURSUANT TO ARM'S LENGTH NEGOTIATIONS. ULTIMATELY ALL FINAL DECISIONS WERE MADE BY THE CEO AND BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 11 THE ORGANIZATION IS THE PARENT ENTITY WITHIN THE SACRED HEART HEALTHCARE SYSTEM ("SYSTEM"); A TAX-EXEMPT INTEGRATED HEALTHCARE DELIVERY SYSTEM. THE ORGANIZATION'S FEDERAL FORM 990 WAS PROVIDED TO EACH VOTING MEMBER OF THE ORGANIZATION'S GOVERNING BODY (ITS BOARD OF DIRECTORS) PRIOR TO THE FILING WITH THE IRS. IN ADDITION, THE ORGANIZATION'S FINANCE COMMITTEE ALSO PERFORMED A DETAILED REVIEW OF THE FEDERAL FORM 990 PRIOR TO PROVIDING IT TO EACH VOTING MEMBER OF ITS BOARD OF DIRECTORS. THE ORGANIZATION'S BOARD OF DIRECTORS HAS DELEGATED TO THE AUDIT COMMITTEE THE RESPONSIBILITY TO OVERSEE AND COORDINATE THE FEDERAL FORM 990 PREPARATION AND FILING PROCESS FOR THE TAX-EXEMPT AFFILIATES OF THE SYSTEM. AS PART OF THE ORGANIZATION'S FEDERAL FORM 990 TAX RETURN PREPARATION PROCESS THE ORGANIZATION HIRED A PROFESSIONAL CPA FIRM WITH EXPERIENCE AND EXPERTISE IN BOTH HEALTHCARE AND NOT-FOR-PROFIT TAX RETURN PREPARATION TO PREPARE THE FEDERAL FORM 990. THE CPA FIRM'S TAX PROFESSIONALS WORKED CLOSELY WITH THE ORGANIZATION'S CONTROLLER AND VARIOUS OTHER INDIVIDUALS OF THE SYSTEM TO OBTAIN THE INFORMATION NEEDED IN ORDER TO PREPARE A COMPLETE AND ACCURATE TAX RETURN. THE CPA FIRM PREPARED A DRAFT FEDERAL FORM 990 AND FURNISHED IT TO THE ORGANIZATION'S INTERNAL WORKING GROUP FOR THEIR REVIEW. THE ORGANIZATION'S INTERNAL WORKING GROUP AND OTHER INDIVIDUALS REVIEWED THE DRAFT FEDERAL FORM 990 AND DISCUSSED QUESTIONS AND COMMENTS WITH THE CPA FIRM. REVISIONS WERE MADE TO THE DRAFT FEDERAL FORM 990 WHERE NECESSARY AND A FINAL DRAFT WAS FURNISHED BY THE CPA FIRM TO THE ORGANIZATION'S INTERNAL WORKING GROUP AND VARIOUS OTHER INDIVIDUALS FOR FINAL REVIEW AND APPROVAL PRIOR TO PRESENTATION OF THE FEDERAL FORM 990 TO THE MEMBERS OF THE ORGANIZATION'S FINANCE COMMITTEE. FOLLOWING THE COMMITTEE'S REVIEW THE FINAL FEDERAL FORM 990 WAS PROVIDED TO EACH VOTING MEMBER OF THE ORGANIZATION'S GOVERNING BODY PRIOR TO THE FILING WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C THE ORGANIZATION HAS ADOPTED A CONFLICT OF INTEREST POLICY WHICH SETS FORTH THE ORGANIZATION'S CONFLICT OF INTEREST POLICY AND PROCESSES. ANNUALLY, ALL THOSE SERVING THE ORGANIZATION IN A FIDUCIARY CAPACITY, INCLUDING DIRECTORS, OFFICERS AND KEY EMPLOYEES RECEIVE A COPY OF THE POLICY AND ANNUAL DISCLOSURE STATEMENTS TO BE COMPLETED. IN ACCORDANCE WITH THE POLICY, THOSE DISCLOSURES ARE REVIEWED AND CONSIDERED BY THE ORGANIZATION'S PRESIDENT AND CEO AND, AS APPROPRIATE, THE BOARD OF DIRECTORS. AN INTERESTED PERSON MAY MAKE A PRESENTATION AT THE BOARD OR COMMITTEE MEETING, BUT AFTER SUCH PRESENTATION, HE/SHE SHALL LEAVE THE MEETING DURING THE DISCUSSION OF, AND THE VOTE ON, THE TRANSACTION OR ARRANGEMENT INVOLVING THE POSSIBLE CONFLICT OF INTEREST. AFTER EXERCISING ANY REASONABLE DUE DILIGENCE REQUIRED BY THE CIRCUMSTANCES, THE BOARD OR COMMITTEE SHALL DETERMINE WHETHER SACRED HEART CAN OBTAIN A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT WITH REASONABLE EFFORTS FROM A PERSON OR ENTITY THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST. IF A MORE ADVANTAGEOUS TRANSACTION OR ARRANGEMENT IS NOT REASONABLY ATTAINABLE UNDER CIRCUMSTANCES THAT WOULD NOT GIVE RISE TO A CONFLICT OF INTEREST, THE BOARD OR COMMITTEE SHALL DETERMINE IN GOOD FAITH BY A MAJORITY VOTE OF THE DISINTERESTED DIRECTORS WHETHER THE TRANSACTION OR ARRANGEMENT IS IN SACRED HEART'S BEST INTEREST AND FOR ITS OWN BENEFIT AND WHETHER THE TRANSACTION IS FAIR AND REASONABLE TO SACRED HEART AND SHALL MAKE ITS DECISION AS TO WHETHER TO ENTER INTO THE TRANSACTION OR ARRANGEMENT IN CONFORMITY WITH SUCH DETERMINATION. THE INTERESTED DIRECTOR OR COMMITTEE MEMBER SHALL NOT VOTE REGARDING THE DECISION OF WHETHER TO ENTER INTO THE TRANSACTION OR ARRANGEMENT. IF THE BOARD OF TRUSTEES OR COMMITTEE HAS REASONABLE CAUSE TO BELIEVE THAT AN INTERESTED PERSON HAS FAILED TO DISCLOSE ACTUAL OR POSSIBLE CONFLICTS OF INTEREST, IT SHALL INFORM THE INTERESTED PERSON OF THE BASIS FOR SUCH BELIEF AND AFFORD THE INTERESTED PERSON AN OPPORTUNITY TO EXPLAIN THE ALLEGED FAILURE TO DISCLOSE. IF, AFTER HEARING THE RESPONSE OF THE INTERESTED PERSON AND MAKING SUCH FURTHER INVESTIGATION AS MAY BE WARRANTED IN THE CIRCUMSTANCES, THE BOARD OF TRUSTEES OR COMMITTEE DETERMINES THAT THE INTERESTED PERSON HAS IN FACT FAILED TO DISCLOSE AN ACTUAL OR POSSIBLE CONFLICT OF INTEREST, IT SHALL TAKE APPROPRIATE DISCIPLINARY AND CORRECTIVE ACTION. FORM 990, PART VI, SECTION B, LINE 15 ON AN ANNUAL BASIS THE HUMAN RESOURCES DEPARTMENT OF THE ORGANIZATION PROVIDES THE BOARD WITH COMPENSATION MARKET DATA TO REVIEW AND CONSIDER WITH RESPECT TO ALL KEY EMPLOYEES AND OFFICERS OF THE ORGANIZATION. THE BOARD REVIEWS THE MARKET DATA, APPROVES ANY SALARY ADJUSTMENTS FOR THE EXECUTIVE POPULATION, CONSIDERS BOTH REASONABLENESS AND EFFECTIVENESS OF ALL REMUNERATIVE PROGRAMS AND ESTABLISHES THE DETAILED PERFORMANCE EXPECTATIONS WHICH ARE INCORPORATED INTO THE ORGANIZATION'S INCENTIVE PLANS. ALL OF THESE DISCUSSIONS ARE DOCUMENTED THROUGH THE PROVISION OF MEETING MINUTES. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION'S FILED CERTIFICATE OF INCORPORATION AND ANY AMENDMENTS CAN BE OBTAINED AND REVIEWED THROUGH THE COMMONWEALTH OF PENNSYLVANIA SECRETARY OF STATE. GOVERNING DOCUMENTS, FINANCIAL STATEMENTS, AND CONFLICT OF INTEREST POLICY ARE AVAILABLE UPON REQUEST. FORM 990, PART IX, LINE 11G PROFESSIONAL FEES: PROGRAM SERVICE EXPENSES 370,346. MANAGEMENT AND GENERAL EXPENSES 2,821,204. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 3,191,550. CONTRACTED SERVICES: PROGRAM SERVICE EXPENSES 13,081. MANAGEMENT AND GENERAL EXPENSES 187,530. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 200,611. BILLING & COLLECTION FEES: PROGRAM SERVICE EXPENSES 1,356,475. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 1,356,475. AGENCY FEES: PROGRAM SERVICE EXPENSES 999,993. MANAGEMENT AND GENERAL EXPENSES 77,067. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 1,077,060. FORM 990, PART XI, LINE 9: TRANSFER FROM AFFILIATE 7,729,514. CHANGE IN VALUE OF INTEREST RATE SWAP -45,891. QUALITY PATIENT CARE LLC 421 W CHEW STREET ALLENTOWN PA 18102 472412048 URGENT CARE CENTER PA -312414 2157742 SACRED HEART HEALTHCARE SYSTEM SACRED HEART HOSPITAL 421 W CHEW STREET ALLENTOWN PA 18102 231352208 HEALTH SERVICES PA 501(C)(3) LINE 3 SACRED HEART HEALTHCARE SYSTEM 1 SACRED HEART FOUNDATION 421 W CHEW STREET ALLENTOWN PA 18102 232328300 MANAGEMENT SERVICES PA 501(C)(3) LINE 7 SACRED HEART HEALTHCARE SYSTEM 1 SH REALTY CORPORATION 421 W CHEW STREET ALLENTOWN PA 18102 232384986 TITLE HOLDINGS PA 501(C)(2) N/A SACRED HEART HEALTHCARE SYSTEM 1 SH ASSISTED LIVING PARTNERSHIP 3910 ADLER PLACE SUITE 100 BETHLEHEM PA 19017 232950059 HEALTHCARE SERVICES PA SACRED HEART HEALTHCARE SYSTEM RELATED 45931 994866 0 1 0.50000 SACRED HEART ANCILLIARY SERVICES INC 421 W CHEW STREET ALLENTOWN PA 18102 232384987 HEALTH SERVICES PA SACRED HEART HEALTHCARE SYSTEM C -466549 5479255 1.00000 0 0 0 0 1 1 0 0 0 0 0 1 1 1 0 0 0 0 1 1 SACRED HEART HOSPITAL D 103332 COST SACRED HEART HOSPITAL S 7729514 COST SACRED HEART HOSPITAL L 4451963 COST SACRED HEART FOUNDATION E 473360 COST SACRED HEART FOUNDATION M 159096 COST SACRED HEART REALTY CORPORATION K 242845 COST