2016-05-13T15:48:19-05:00 2015-06-30 KPMG LLP 1676 International Drive McLean VA 22102 990 2014-07-01 541278830 CHILDREN'S HEALTH SYSTEM INC % DENNIS RYAN CHIL 7576688565 601 Childrens Lane Norfolk VA 23507 DENNIS RYAN CFO/ASST SECRETARY/ASST TREAS 7032868000 2016-05-13 true RAYMOND LY KPMG LLP P01205643 7032868000 2014 2016-08-17 19:52:53Z JAMES DAHLING 601 CHILDRENS LANE NORFOLK VA 23507 43381579 false X www.chkd.org X 1984 VA Children's Health System is a multi- specialty health system serving southeastern virginia and northeastern north carolina. SEE SCHEDULE O. 23 19 35 0 52 0 15263534 12295809 12314382 2696116 717897 275579 1834675 15267504 30130488 0 1745000 0 0 8003088 8245670 0 0 657248 4568302 5125334 12571390 15116004 2696114 15014484 70249784 90195985 30600814 34546660 39648970 55649325 CHILDREN'S HEALTH SYSTEM IS A MULTI-SPECIALTY HEALTH SYSTEM SERVING SOUTHEASTERN VIRGINIA AND NORTHEASTERN NORTH CAROLINA OFFERING COMPREHENSIVE PEDIATRIC CARE FOR CHILDREN FROM BIRTH TO AGE 21. false false 10714406 1745000 14149057 The Health System provided long range planning, management and support services for its subsidiaries in furtherance of their missions. 30 Continuing medical education programs for community physicians and support services for its subsidiary corporations in the furtherance of their missions. 10714436 true true false true false false false false false false true false false true true true false true false false true false false false false false false true false true false false false false false false false false true false false false true true true true false false true 44 0 true 35 true false true BD false false false false false false false false X 23 19 false false false false true true true true true false false true true true true true true true true false NC VA X DENNIS RYAN 7576687000 601 CHILDRENS LANE NORFOLK VA 23507 X ELIZABETH M WELLER TREASURER/DIRECTOR 2.0 2.0 X X 0 0 0 BUFFY BAREFOOT DIRECTOR 1.0 1.0 X 0 0 0 SARAH BISHOP DIRECTOR 1.0 1.0 X 0 0 0 EDWARD A HEIDT JR VICE CHAIR/DIRECTOR 1.0 1.0 X X 0 0 0 CHRISTINE NEIKIRK DIRECTOR 1.0 1.0 X 0 0 0 PAMELA COMBS M ED DIRECTOR 1.0 1.0 X 0 0 0 ELIZABETH D LANOUE MD DIRECTOR 1.0 1.0 X 0 0 0 J CHRISTOPHER PERRY DIRECTOR 1.0 1.0 X 0 0 0 KAREN PRIEST DIRECTOR 1.0 1.0 X 0 0 0 BRIAN SKINNER DIRECTOR 1.0 1.0 X 0 0 0 BETH JOHNSON DIRECTOR 1.0 1.0 X 0 0 0 CONRAD M HALL SECRETARY/DIRECTOR 2.0 2.0 X X 0 0 0 MARK R WARDEN DIRECTOR 1.0 1.0 X 0 0 0 ROLF WILLIAMS DIRECTOR 1.0 1.0 X 0 0 0 CYNTHIA S KELLY MD DIRECTOR 1.0 1.0 X 0 0 0 MICHELLE BRENNR MD DIRECTOR 1.0 41.0 X 0 195935 22627 JOHN R LAWSON II CHAIMAN/DIRECTOR 3.0 1.0 X X 0 0 0 JAMES D DAHLING PRESIDENT/DIRECTOR 41.0 2.0 X X 988459 0 407129 DONALD NUSS MB CH DIRECTOR 1.0 1.0 X 0 0 0 ROBERT OBERMEYER MD DIRECTOR 1.0 41.0 X 0 607728 31512 BLAIR WIMBUSH DIRECTOR 1.0 1.0 X 0 0 0 DOUGLAS D ELLIS SR DIRECTOR 1.0 1.0 X 0 0 0 KATHRYN VAN BUREN DIRECTOR 1.0 1.0 X 0 0 0 TA GRELL JR DIRECTOR 1.0 1.0 X 0 0 0 MARTA SATIN-SMITH MD DIRECTOR 1.0 1.0 X 0 0 0 SVINER TOOR MD DIRECTOR 1.0 1.0 X 0 0 0 KATHRYN CALLAHAN DIRECTOR 1.0 1.0 X 0 0 0 SUSAN EINHORN DIRECTOR 1.0 1.0 X 0 0 0 DENNIS RYAN CFO/ASSIST TREAS/ASSIST SECT 41.0 2.0 X 492647 0 303089 AMY SAMPSON VP PUBLIC RELATIONS/MKTING 40.0 0.0 X 284442 0 124280 SHERRI MATSON VP GENERAL COUNSEL 40.0 0.0 X 365780 0 230183 KATHRYN ABSHIRE VP FINANCE 40.0 0.0 X 216215 0 36659 DEBBIE BARNES VP - IS OPERATIONS 40.0 0.0 X 331223 0 105475 GREGORY JONES DIRECTOR -CONTRACT DEVELOPMENT 40.0 0.0 X 155827 0 25972 STEPHANIE CALLIOTT SENIOR VP, COMMUNITY RELATIONS 40.0 0.0 X 358169 0 155100 TINA ALLEN DIR. COMPLIANCE & INTERNAL AUD 40.0 0.0 X 153073 0 19915 3345835 803663 1461941 11 false true false DAVIS COMPANY 1705 BALTIC AVE VIRGINIA BEACH VA 23455 ADVERTISING 1015925 KPMG LLP 440 MONTICELLO AVENUE SUITE 1900 NORFOLK VA 23510 ACCOUNTING 341974 CHILD HEALTH CORPORATION OF AMERICA 6803 WEST 64TH STREET OVERLAND PARK KS 66202 CONSULTING 206500 WILCOX SAVAGE ONE COMMERICAL PLACE NORFOLK VA 23510 LEGAL 142385 Kaufman and Canoles 150 W Main St Suite 2100 NORFOLK VA 23510 LEGAL 122089 8 15263534 4720286 15263534 MANAGEMENT FEES FROM SUBSIDIARIES 900099 12314382 12314382 12314382 458204 52 458152 0 0 0 0 0 4889505 4629812 259693 259693 259693 0 0 10185202 8621279 1563923 1563923 0 Miscellaneous 900099 270752 270752 270752 30130488 14149057 52 717845 1745000 1745000 0 0 0 2350938 319034 2031904 0 2843015 1673974 829231 339810 2274098 2274098 592317 440090 106619 45608 185302 122234 50463 12605 0 563865 3281 560584 300943 300943 301349 301349 0 0 1299358 1164861 11693 122804 1277177 1277177 14430 11102 1702 1626 0 0 45798 42968 2830 34631 15117 11178 8336 0 12480 6266 6214 0 0 45901 39850 2376 3675 1115070 914942 132196 67932 Supplies 23352 11641 11711 Other Expenses 90980 50509 160 40311 15116004 10714436 3744320 657248 4184186 11119817 0 0 0 0 0 0 0 0 0 0 0 0 0 18503 191907 490334 13725749 466184 210498 13259565 12714919 9631727 0 0 0 0 0 0 52948274 55676039 70249784 90195985 1204037 8023441 0 0 0 0 0 0 0 0 0 0 0 0 0 0 29396777 26523219 30600814 34546660 X 39648970 55649325 0 0 0 0 39648970 55649325 70249784 90195985 15014484 -336681 574150 748402 X false true X true true true X X 1 CHILDREN'S HOSPITAL OF THE KING'S DAUGHTERS INC 540506321 3 false 1745000 0 1 1745000 false false false false false false false false false false false false false false false true true true X true true Part I, Line 11g, Column (vi) The expenses incurred by Children's Health System, Inc. that are reported on Form 990, Part IX were expended to provide support and management to its supported organizations. Part IV, Section A, Line 1 SINCE ITS CREATION IN 1984, THE ORGANIZATION, AS PARENT OF THE HOSPITAL AND ITS AFFILATES, HAS HAD A CLOSE AND CONTINUING HISTORICAL RELATIONSHIP WITH THE HOSPITAL TO PROVIDE SUPPORT TO THE HOSPITAL AND ITS AFFILIATES, SPECIFICALLY TO PROVIDE HEALTHCARE FACILITIES AND SERVICES FOR SICK, INJURED, DISABLED, INDIGENT, OR INFIRM CHILDREN AND OTHER PERSONS, AND PROVIDING FOR THE PRESERVATION OF THE HEALTH AS THE BOARD OF DIRECTORS MAY DETERMINE TO BE APPROPRIATE INCLUDING WITHOUT LIMITATION: HOSPITALS, AMBULATORY CARE SERVICES, PROGRAMS INVOLVING RESEARCH, PREVENTATIVE HEALTH ACTIVITIES, AND HEALTH-RELATED EDUCATION. Part IV, Section D, Line 3 Pursuant to the hospital's bylaws and as permitted by Virginia Code Section 13.1-852.1 the supported organization hospital is managed by its sole member, the system parent with the power to appoint and remove a majority of the board. THE HEALTH SYSTEM PARENT ACTS AS THE BOARD OF DIRECTORS OF THE SUPPORTED ORGANIZATION HOSPITAL. BECAUSE OF THIS GOVERNANCE STRUCTURE, THE SUPPORTED ORGANIZATION HOSPITAL IS ABLE TO HAVE A SIGNIFICANT VOICE IN THE INVESTMENT POLICIES OF ORGANIZATION AND IN DIRECTING THE USE OF ITS INCOME AND ASSETS FOR THE BENEFIT OF THE HEALTH OF CHILDREN AND OTHER PERSONS. Part IV, Section E, Line 3a Pursuant to the hospital's bylaws and as permitted by Virginia Code Section 13.1-852.1 the supported organization hospital is managed by its sole member, the system parent with the power to appoint and remove a majority of the board. BECAUSE OF THIS GOVERNANCE STRUCTURE THE ORGANIZATION HAS THE POWER TO REGULARLY APPOINT OR ELECT A MAJORITY OF THE OFFICERS OR DIRECTORS OF ITS SUPPORTED ORGANIZATION. ORGANIZATION. Part IV, Section E, Line 3b AS A PARENT ORGANIZATION OF AN INTEGRATED HEALTH CARE SYSTEM, CHILDREN'S HEALTH SYSTEM, INC. EXERCISES A SUBSTANTIAL DEGREE OF DIRECTION OVER THE POLICES, PROGRAMS, AND ACTIVITIES OF ITS SUPPORTED ORGANIZATION AND AFFILIATES. RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED true true false false false false true 365602 false false 365602 false Part II-B CHILDREN'S HEALTH SYSTEM (CHS) TAKES THE WELFARE OF THE CHILDREN THAT ARE CARED FOR WITHIN THE CHS FAMILY AS A PRIORITY. AS SUCH, THERE ARE MANY LEGISLATIVE ISSUES THAT OUR STATE AND FEDERAL GOVERNMENTS HANDLE THAT COULD AFFECT CHS. CHS RELIES ON VOLUNTEERS FROM THE NORFOLK CITY UNION OF THE KINGS DAUGHTERS, INC. (NCUKD) TO ASSIST IN LETTER-WRITING, EXERCISING THE PERSONAL RIGHTS TO VOTE AND IN SPREADING EDUCATION ON LEGISLATIVE ISSUES AFFECTING THE ORGANIZATION. ADDITIONALLY, CHS HAS PAID STAFF AND MANAGEMENT ALONG WITH MEMBERSHIP IN HEALTHCARE ASSOCIATIONS AND RETENTION OF PROFESSIONAL LOBBYING FIRMS THAT WORK ON LOBBYING ISSUES AND HAVE DIRECT CONTACT WITH LEGISLATORS, GOVERNMENT OFFICIALS AND OTHER MEMBERS OF LEGISLATIVE INFLUENCE. ISSUES THAT ARE ADDRESSED INCLUDE DISPROPORTIONATE SHARE HOSPITAL FUNDING, BECAUSE A HIGH PERCENTAGE OF PATIENTS CARED FOR IN THE CHS FAMILY ARE COVERED BY MEDICAID, CHILDRENS HOSPITALS GRADUATE MEDICAL EDUCATION REAUTHORIZATION, BUDGET AND FUNDING, TRICARE FUNDING FOR CHILDREN'S HEALTH ISSUES, LEGISLATIVE PROPOSAL REGARDING MEDICALLY COMPLEX CARE OF CHILDREN, DEVELOPMENTS RELATED TO ebola OUTBREAKS, 340B, ICD-10 AND HEALTH IT, 21ST CENTURY CURE LEGISLATION, AND CHARITABLE GIVING TAX REFORM. 5855569 5855569 3617753 98346 3519407 807679 367838 439841 3444748 3444748 13259565 INVESTMENT IN JOINT VENTURE 2 CSV OF LIFE INSURANCE 236326 INTERCOMPANY RECEIVABLE 929574 INVESTMENT IN SUBSIDIARIES 43147015 ACCOUNTS RECEIVABLE MISC 87933 INSURANCE RECOVERABLE 6112560 457B/TOPHAT INVESTMENT 5162629 55676039 0 INSURANCE IBNR 379684 EXEC CAP APPREC ACCT (CAA) 759146 SERP (ACCRUED BENEFIT) 13471035 ACCRUED TAIL COVERAGE 584563 IBNE INSURANCE CLAIMS 6112560 457B/TOPHAT LIAB 5162629 INTERCOMPANY LIABILITIES 13515 OTHER MISC LIABILITIES 40087 26523219 X ASC 740 FOOTNOTE FROM CONSOLIDATED AUDIT REPORT Part X Line 2 CHS recognizes any benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. If applicable, the tax benefits recognized in the consolidated financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. CHS does not believe its consolidated financial statements include any uncertain tax positions. Central America and the Caribbean Investments 3418474 3418474 3418474 true false true false false false true Children's Hospital of the King's Daughters 601 Childrens Lane Norfolk VA 23507 540506321 501 (C) (3) 1745000 Support Mission 1 X true true X X X X false true false false false false false true false MICHELLE BRENNR MD DIRECTOR 0 195704 0 0 0 231 0 8060 0 14567 0 218562 0 0 JAMES D DAHLING PRESIDENT/DIRECTOR 876076 0 0 0 112383 0 377028 0 30101 0 1395588 0 57394 0 DENNIS RYAN CFO/ASSIST TREAS/ASSIST SECT 459170 0 0 0 33477 0 260751 0 42338 0 795736 0 19440 0 ROBERT OBERMEYER MD DIRECTOR 0 607352 0 0 0 376 0 10400 0 21112 0 639240 0 0 AMY SAMPSON VP PUBLIC RELATIONS/MKTING 248600 0 0 0 35842 0 110704 0 13576 0 408722 0 24563 0 SHERRI MATSON VP GENERAL COUNSEL 322953 0 0 0 42827 0 220158 0 10025 0 595963 0 25614 0 KATHRYN ABSHIRE VP FINANCE 196922 0 0 0 19293 0 12945 0 23714 0 252874 0 8018 0 DEBBIE BARNES VP - IS OPERATIONS 297316 0 0 0 33907 0 68844 0 36631 0 436698 0 6995 0 GREGORY JONES DIRECTOR -CONTRACT DEVELOPMENT 128835 0 12625 0 14367 0 5927 0 20045 0 181799 0 0 0 STEPHANIE CALLIOTT SENIOR VP, COMMUNITY RELATIONS 331787 0 0 0 26382 0 145048 0 10052 0 513269 0 12346 0 TINA ALLEN DIR. COMPLIANCE & INTERNAL AUD 125197 0 13119 0 14757 0 5757 0 14158 0 172988 0 0 0 FORM SCH J PART I LINE 1A In connection with a retirement program, tax gross-up payments are provided to certain directors whose employer funded contributions are immediately taxable, in order to provide them with benefits that are tax-equivalent to benefits of participants whose contributions are not immediately taxable. Form Sch J Part I Line 4b Children's Health System sponsors a supplemental executive retirement plan (the plan). The plan is designed to retain executives in positions essential to the success of Children's Health System. DURING tHE YEAR, THE FOLLOWING INDIVIDUALS WERE PARTICIPANTS IN A SPONSORED SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN AND RECEIVED THE FOLLOWING PAYMENTS WHICH ARE INCLUDED IN SCHEDULE J PART II COLUMN (C): James Dahling $292,283 Dennis Ryan $228,347 Amy Sampson $ 79,025 Stephanie Calliott $106,762 Sherri Matson $182,452 Kathryn Abshire $(869) Deborah Barnes $ 51,841 PREVIOUSLY, CERTAIN EXECUTIVES UNVESTED DEFERRED COMPENSATION EARNED OR ACCRUED IN EACH CALENDAR YEAR WAS DERIVED AND REPORTED IN COLUMN C BASED UPON THE CHANGE IN VALUE FROM YEAR TO YEAR OF THE DISABILITY BENEFIT ASSOCIATED WITH THE PARTICIPANT'S ACCRUED BENEFIT, AS A BEST EFFORT TO DETERMINE THE ANNUAL ACCRUAL IN THE ASSOCIATED SUPPLEMENTAL NONQUALIFIED DEFINED PROGRAM IN WHICH THE EXECUTIVES PARTICIPATE. THESE AMOUNTS DO NOT BECOME VESTED UNTIL 7 YEARS OF PARTICIPATION ARE EARNED. BASED UPON A NEWLY discovered EXAMPLE 4 PROVIDED IN THE SCHEDULE J INSTRUCTIONS, THE SPONSOR HAS DETERMINED TO BASE THE REPORTED ANNUAL ACCRUAL ON A PRO RATA PORTION OF THE EVENTUAL VESTED ACCRUED BENEFIT. THE AMOUNTS REPORTED IN COLOUMN C BEGINNING THIS YEAR, MAY APPEAR ANOMALOUS TO PRIOR YEAR REPORTING - BUT THESE AMOUNTS will reflect requisite adjustments to transition the reported annual accrual to align with example 4. FORM SCH J PART I LINE 7 Officers and vice presidents may receive additional compensation based on criteria set up by the compensation committee of the board of directors. Department directors may receive additional compensation based on criteria set by management and approved by the board of directors. X 1 4070910 Fair Market Value X VAR THRIFT STORE ASSETS 493 649376 BOOK VALUE false true true SCHEDULE M, LINE 32A CHILDREN'S HEALTH SYSTEM PAYS SYR, INC. MANAGEMENT FEES TO MANAGE THRIFT STORES FOR THE BENEFIT OF THE ORGANIZATION. organization's mission PART I, Line 1 CHILDREN'S HEALTH SYSTEM IS A MULTI-SPECIALTY HEALTH SYSTEM SERVING SOUTHEASTERN VIRGINIA AND NORTHEASTERN NORTH CAROLINA OFFERING COMPREHENSIVE PEDIATRIC CARE FOR CHILDREN FROM BIRTH TO AGE 21. Part VI, Lines 6 & 7 Children's Health System, Inc. has two classes of members: 1) Class A members (i.e., the then current members in good standing of The Norfolk City Union of the King's Daughters, Inc., a Virginia non-stock not-for-profit corporation); and 2) Class B members (i.e., the then current directors on the Board of Directors of Children's Health System, Inc.). Line 7a The Class A members of Children's Health System, Inc. (i.e., the then current members in good standing of The Norfolk City Union of the King's Daughters, Inc., a Virginia non-stock not-for-profit corporation) elect one third of the elected directors of Children's Health System, Inc. The Class B members of Children's Health System, Inc. (i.e., the then current directors on the Board of Directors of Children's Health System, Inc.) elect two thirds of the elected directors of Children's Health System, Inc. Line 7b The following decisions of the Board of Directors of Children's Health System, Inc. are subject to approval by the Class A and Class B members of Children's Health System, Inc.: 1) any amendments to the Articles of Incorporation of the corporation; and 2) any proposed merger or consolidation of the corporation, or any sale, lease, exchange, mortgage, pledge or other disposition of all, or substantially all, of the property and assets of the corporation. Part VI, LINE 11 The 990 is prepared using the annual financial statements that are reviewed by the board and audited annually as a part of the consolidated financial statements of Children's Health System, Inc. Upon completion of the draft of the return, a detail review is performed by several members of staff and management. Prior to filing with the IRS, the board is provided a copy to review. Policies and Disclosure Items Part VI, Section B, Line 12a Conflict Policy Considerations CHS conflict of interest policy includes officers, members of the Board of Directors and Board Committees, key employees, all other employees, Professional Staff and substantial donors. Annually, a questionnaire is distributed and collected from officers, members of the Board of Directors and Board committees and key employees. Responses to the questionnaires are reviewed by the Legal and Finance Departments. For known conflicts, the person involved recuses himself or herself from deliberations regarding the transaction. Violations of the Conflicts of Interest Policy are reported to the CHS Board Chair or the CHS Compliance Officer, as applicable, and may require corrective action up to and including termination of employment. Part VI, Section B, Line 15a & 15b Compensation Process Considerations An Independent compensation consultant approved and retained by the Compensation Committee of the Board annually, usually in April, provides education and presents to the full Board comparative salaries and salary ranges from a database comprised of Children's Hospitals and other applicable hospitals for officers and executives for the Board to review. The Compensation Committee with the aid of the consultant reviews and makes decisions as to executive salaries of CHS and its subsidiaries. Those salary changes and approvals are contemporaneously documented by minutes maintained by the Compensation Committee and signed by the Chairman of the Board. Part VI, C, Line 19 Financial statements (part of the consolidated financial statements of Children's Health System, Inc.) along with governing documents of the organization including the conflict of interest policy are available to the public through direct inquiry and request. CHKD THRIFT STORES LLC 601 CHILDRENS LANE NORFOLK VA 23507 THRIFT STORES VA 10185202 1744600 CHS INC CHILDREN'S REAL ESTATE 601 CHILDRENS LANE NORFOLK VA 23507 LESSOR VA 15012180 CHS INC CHILDREN'S HSPITAL OF THE KING'S DAUGHT 601 CHILDRENS LANE NORFOLK VA 23507 540506321 HEALTHCARE VA 501(C)(3) 3 NA true CHILDREN'S HEALTH FOUNDATION INC 601 CHILDRENS LANE NORFOLK VA 23507 541278865 SUPP CHKD VA 501(C)(3) 11a NA true CHILDREN'S SURGICAL SPECIALTY GROUP INC 601 CHILDRENS LANE NORFOLK VA 23507 311610834 HEALTHCARE VA NA C CORP 19754300 2911625 1.00000 true CHILDREN'S MEDICAL GROUP INC 601 CHILDRENS LANE NORFOLK VA 23507 541778786 HEALTHCARE VA NA C CORP 69783539 22258625 1.00000 true CMG OF NORTH CARLOINA INC 601 CHILDRENS LANE NORFOLK VA 23507 561960102 HEALTHCARE NC NA C CORP 2652345 1033136 1.00000 true CHILDREN'S HEALTH SYSTEM INSURANCE LTD 4TH FLOOR 41 CEDAR AVENUE HAMILTON BD HM12 INSURANCE BD NA C CORP 536461 4360270 1.00000 true false true true true false false false true false true false false true true true true true true false CHS CORPORATE SUPPORT FOR SUBSIDIARY CHKD q 11803795 BOOK VALUE CHS CORPORATE SUPPORT FOR SUBSIDIARY CSSG q 510587 BOOK VALUE INTERCOMPANY RECEIVABLE FROM CHKD d 883569 BOOK VALUE CHILDREN'S HOSPITAL OF THE KING'S DAUGHTERS b 1745000 BOOK VALUE CHILDREN'S HOSPITAL OF THE KING'S DAUGHTERS C 4070910 FMV CHILDREN'S HOSPITAL OF THE KING'S DAUGHTERS c 9500000 CASH CHILDREN'S HOSPITAL OF THE KING'S DAUGHTERS c 649376 BOOK VALUE CHILDREN'S HOSPITAL OF THE KING'S DAUGHTERS c 1043248 CASH CHILDREN'S HOSPITAL OF THE KING'S DAUGHTERS m 574150 BOOK VALUE TRANSFER OF CASH TO CHSIL r 536047 BOOK VALUE