2015-11-12T18:52:48-06:00 2014-12-31 ERNST & YOUNG US LLP 111 MONUMENT CIRCLE SUITE 4000 INDIANAPOLIS IN 46204 990 2014-01-01 351536132 BEACON MEDICAL GROUP INC % JEFFREY COSTELLO BEAC 5746473549 615 N MICHIGAN STREET SOUTH BEND IN 46601 Jeff Costello CFO 2015-11-12 ANGELA M MOORE P00244342 3176817000 2014 2016-02-25 16:41:14Z PHILIP NEWBOLD 615 N MICHIGAN STREET SOUTH BEND IN 46601 106199563 false X BEACONHEALTHSYSTEM.ORG X 1981 IN BEACON MEDICAL GROUP, INC. IS COMMITTED TO IMPROVING THE QUALITY OF LIFE OF THE PEOPLE IN OUR COMMUNITY. 3 3 1275 0 800105 -141303 2248343 2137912 61434226 102313548 -278777 60968 1398145 1320099 64801937 105832527 0 0 0 0 69256245 116709567 0 0 0 21888073 41675401 91144318 158384968 -26342381 -52552441 62745381 84590564 36744323 56707523 26001058 27883041 BEACON MEDICAL GROUP, INC. IS COMMITTED TO IMPROVING THE QUALITY OF LIFE OF THE PEOPLE IN OUR COMMUNITY. false false 146586487 101994488 BEACON MEDICAL GROUP, INC.(BMG) OPERATES A MULTI-SPECIALTY CARE NETWORK OF PHYSICIANS AND ALSO INCLUDES THE MED-POINT IMMEDIATE CARE CENTERS AND CENTER FOR OCCUPATIONAL HEALTH. IN ADDITION TO THE PHYSICIAN PRACTICES, BMG OPERATES A HIGH COMPLEXITY CORE LABORATORY FOR THE SUPPORT OF ITS EMPLOYED PHYSICIANS. THE CENTER FOR OCCUPATIONAL HEALTH (COH) PROVIDES WORKER'S COMPENSATION SERVICES FOR 1500 CLIENT COMPANIES IN ST. JOSEPH AND LAPORTE COUNTIES. BMG ALSO OPERATES MED-POINT URGENT CARE CENTERS TO SUPPLEMENT THE SERVICES OF THE MEDICAL GROUP AND COH. BMG OPERATES MED-POINT EXPRESS, A RETAIL BASED WALK-IN CLINIC AT VARIOUS RETAIL SUPERCENTERS OR GROCERY STORES. IN ADDITION TO THE CORPORATION'S PRIMARY CARE NETWORK, BMG MANAGES THE OPERATION OF SEVERAL HOSPITAL-BASED PRACTICES FOR THE HOSPITALISTS, TRAUMA ORTHOPEDIC SURGEON, AND PEDIATRIC INTENSIVISTS. 463969 515928 BEACON MEDICAL GROUP, INC. (BMG) OPERATES A MULTI-SPECIALTY CARE NETWORK, AND ALSO OPERATES THE BEACON MEDICAL GROUP CLINICAL RESEARCH INSTITUTE (CLINICAL RESEARCH). "CLINICAL RESEARCH" IS CURRENTLY FOCUSED ON PHARMACOLOGY STUDIES. THE PHARMACOLOGY STUDIES INVOLVE PATIENTS WITH SPECIFIC CONDITIONS OR DISEASES. CLINICAL RESEARCH HAS BROUGHT THE FOLLOWING POSITIVE BENEFITS TO BMG: IMPROVED PATIENT CARE - BRINGS BMG PHYSICIANS AND NURSES CLOSER TO LEADING-EDGE MEDICINE. CORPORATE POSITIONING - CLINICAL RESEARCH CAN ENHANCE BMG'S IDENTITY AND BRAND, IT CAN PROVIDE A MEANS TO MEET PHYSICIANS' ACADEMIC NEEDS AND ENHANCE PHYSICIAN RECRUITMENT. 147050456 true true false true false false false false false true true false true false true false false true false false false false false false false false false false false true false false false false false false false false false false false false false true true true false false true 153 0 true 1275 true true true false false false false false false false false false X 3 3 false false false false true true true true true false false true true true true true true false false true true IN X JEFFREY COSTELLO 5746473549 615 N MICHIGAN STREET SOUTH BEND IN 46601 PETER BARANAY DIRECTOR - CHAIR 2.0 2.0 X X 0 0 0 JOHN K MARTIN DIRECTOR - VICE CHAIR 2.0 2.0 X X 0 0 0 THOMAS R CASSADY JR DIRECTOR - SEC/TREASURER 2.0 2.0 X X 4397 0 0 VINCENT HENDERSON MD ASSISTANT SECRTARY / EMP PHYS 40.0 2.0 X 429449 0 40967 JEFFREY P COSTELLO CFO/Asst. Treasurer 2.0 45.0 X 0 553140 158748 PHILIP A NEWBOLD CEO 2.0 44.0 X 0 1248237 184054 MICHAEL GORDON EXECUTIVE DIRECTOR 40.0 0.0 X 267343 0 37500 CINDY D HAYES EXECUTIVE DIRECTOR 40.0 0.0 X 167089 11946 26139 KREG R GRUBER INTERIM PRESIDENT 20.0 20.0 X 263350 263350 150766 STEPHEN SMITH EMPLOYED PHYSICIAN 40.0 0.0 X 1399826 0 33559 WALTER H HALLORAN EMPLOYED PHYSICIAN 40.0 2.0 X 1086387 48986 32845 WALTER LANGHEINRICH EMPLOYED PHYSICIAN 40.0 0.0 X 1456459 0 34317 ANDREW LOSINIECKI EMPLOYED PHYSICIAN 40.0 0.0 X 1402063 0 27860 JOSEPH SCHNITTKER EMPLOYED PHYSICIAN 40.0 0.0 X 1059045 0 36462 GREG CONRAD ASST SECRETARY THRU MAR 2013 0.0 40.0 X 0 274890 54308 7535408 2400549 817525 206 true true false ELKHART CLINIC LLC PO BOX 2968 ELKHART IN 46515 MEDICAL BILLING 4079726 WOODCOX BLDG CONTRACTORS 51175 PRESCOTT AVE SOUTH BEND IN 46637 CONSTRUCTION MANAGER 3416340 CERNER CORPORATION 2800 ROCKCREEK PKWY KANSAS CITY MO 64117 IS SFTWR MAINTENANCE 3395637 COMPHEALTH MEDICAL STAFFING INC PO BOX 972651 DALLAS TX 75397 TEMPORARY STAFFING 624098 WEATHERBY LOCUMS INC PO BOX 972633 DALLAS TX 75397 TEMPORARY STAFFING 547897 25 4861 2133051 2137912 NET PATIENT REV 621110 99221256 99221256 CLINICAL TRIAL REV 621500 515928 515928 JOINT VENTURES 621110 325818 535459 -209641 MED SVCS FOR AFFILIATES 621110 1090123 1090123 BMG MGMT/ADMIN SERVICES 561499 1024073 140073 884000 136350 66989 69361 102313548 33788 33788 0 0 646075 367036 279039 0 279039 56385 222654 27180 27180 27180 27180 0 0 0 MEDICAL DIRECTORSHIP 621110 844192 844192 EMR / MEANINGUL USE INCENTIVE 621110 127750 127750 VENDOR REBATES 621110 66008 66008 3110 3110 1041060 105832527 101766696 800105 1127814 0 0 0 0 1309614 305514 1004100 0 98451490 95713055 2738435 2504563 2434936 69627 9679249 9410166 269083 4764651 4558736 205915 0 0 31214 9752 21462 19437 19437 0 0 8192547 7516913 675634 33983 27310 6673 2163418 2028833 134585 121672 120738 934 0 4644469 4457239 187230 267017 194800 72217 0 483413 476444 6969 2171 2171 0 3021740 2549582 472158 0 2158348 1882471 275877 BHS/BMG ADMIN FEES 7085607 1979595 5106012 MEDICAL SUPPLIES 6956101 6956101 BAD DEBT EXPENSE 4603670 4603670 PHYSICIAN RECRUITMENT 812386 812386 1078208 990607 87601 158384968 147050456 11334512 0 5756 12648 6440153 12667960 133041 139649 8292780 14772023 0 0 0 0 4406 700324 0 0 381812 406012 60795717 22337973 29780719 38457744 19876 19740 0 0 16462210 16671965 301081 272040 923547 470459 62745381 84590564 8766583 15800529 0 0 18265 4126 0 0 0 0 0 0 0 0 0 0 27959475 40902868 36744323 56707523 X 26001058 27883041 0 0 0 0 26001058 27883041 62745381 84590564 X -52552441 -97 54434521 X false true X true false X 1966424 2628344 2795351 2248343 2137912 11776374 65503947 79153934 84150367 62029993 101699707 392537948 0 0 0 67470371 81782278 86945718 64278336 103837619 404314322 0 0 0 0 19468541 20415589 17211815 57095945 19468541 20415589 17211815 57095945 347218377 4228947 3133702 2527153 571214 746852 11207868 2306385 2071687 2499610 300436 707959 7886077 6535332 5205389 5026763 871650 1454811 19093945 0 325266 319972 382481 317257 844192 2189168 74330969 87307639 92354962 65467243 106136622 425597435 0.81584 0.73885 0.04486 0.05757 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED false false false false false false false false true 19437 19437 false SCH C, PART II-B BEACON MEDICAL GROUP, 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. THE MEMBERSHIP FEES PAID WERE FOR THE FOLLOWING ORGANIZATIONS: -AMERICAN DIETETIC ASSOCIATION -MEDICAL GROUP MANAGEMENT ASSOCIATION -AMERICAN ACADEMY OF FAMILY PHYSICIANS -AMERICAN COLLEGE OF PHYSICIANS -AMERICAN COLLEGE OF CARDIOLOGY -AMERICAN ASSOCIATION OF NEUROLOGICAL SURGEONS -INDIANA STATE MEDICAL SOCIETY -NORTH AMERICAN SPINE SOCIETY -SOCIETY OF THORACIC SURGEONS -AMERICAN COLLEGE OF SURGEONS -AMERICAN SOCIETY OF RADIATION ONCOLOGY -AMERICAN ASSOCIATION OF NURSE PRACTITIONERS 33921099 2833644 330764 714487 125000 17236 36228784 24661171 2180336 1785965 984717 27642755 22198822 1501904 1884305 923860 24661171 21769701 2155236 -543657 1182458 22198822 22665989 1296194 1929600 4122082 21769701 0.74560 0.01630 0.23810 false true true 2429968 2429968 28249026 11172450 17076576 517870 276115 241755 295988853 10889408 18709445 38457744 INVESTMENT IN HOME CARE 12366886 C INVESTMENT IN VHA 200000 C INVESTMENT IN STRATUM MEDICAL 95000 C LAPORTE MEDICAL GROUP SURGICAL 670855 C MEMORIAL SPINE & NEUROSCIENCE 328371 C VALPARAISO MEDICAL DEVELOPMENT 3010853 C 16671965 0 ACCRUED PENSION 40266451 DUE TO AFFILIATES 291858 CAPITAL LEASES 344559 40902868 Sch D SCH. D, PART V, LINE 1 MEMORIAL HEALTH FOUNDATION, INC. (MHF) BOOKED A PLEDGE OF $500,000 IN 2014 THAT WAS INCLUDED ON ITS AUDITED FINANCIAL STATEMENTS, AND WHICH MHF WILL UNBOOK IN 2015 BASED ON INFORMATION RECEIVED FROM MHF IN 2015. FOR MORE ACCURATE REPORTING, MHF HAS NOT INCLUDED THE PLEDGE ON ITS 2014 FORM 990, WHICH WILL RESULT IN A DIFFERENCE FROM ITS AUDITED FINANCIAL STATEMENTS IN 2014 AND 2015 OF $500,000. 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 MEDICAL GROUP, INC. DID NOT HAVE A FOOTNOTE ADDRESSING FIN 48 (ASC 740) LIABILITIES FOR UNCERTAIN TAX POSITIONS IN ITS CONSOLIDATED FINANCIAL STATEMENTS. BEACON MEDICAL GROUP, INC. DID NOT HAVE ANY UNCERTAIN TAX POSITIONS RECORDED DURING THE CURRENT TAX YEAR. false true false false false false false true false VINCENT HENDERSON MD ASSISTANT SECRTARY / EMP PHYS 381518 0 44880 0 3051 0 15814 0 25153 0 470416 0 0 0 JEFFREY P COSTELLO CFO/Asst. Treasurer 0 377534 0 147084 0 28522 0 138880 0 19868 0 711888 0 0 PHILIP A NEWBOLD CEO 0 708507 0 335650 0 204080 0 163973 0 20081 0 1432291 0 154765 MICHAEL GORDON EXECUTIVE DIRECTOR 226022 0 40031 0 1290 0 12769 0 24731 0 304843 0 0 0 STEPHEN SMITH EMPLOYED PHYSICIAN 1398727 0 522 0 577 0 10400 0 23159 0 1433385 0 0 0 WALTER H HALLORAN EMPLOYED PHYSICIAN 584208 48788 499797 0 2382 198 8434 1966 20076 2369 1114897 53321 0 0 WALTER LANGHEINRICH EMPLOYED PHYSICIAN 1454610 0 522 0 1327 0 10400 0 23917 0 1490776 0 0 0 ANDREW LOSINIECKI EMPLOYED PHYSICIAN 1386022 0 522 0 15519 0 10400 0 17460 0 1429923 0 0 0 JOSEPH SCHNITTKER EMPLOYED PHYSICIAN 1056042 0 522 0 2481 0 10400 0 26062 0 1095507 0 0 0 CINDY D HAYES EXECUTIVE DIRECTOR 151069 11906 15527 0 493 40 5981 490 18156 1512 191226 13948 0 0 KREG R GRUBER INTERIM PRESIDENT 189752 189752 66693 66693 6905 6905 63778 63778 11605 11605 338733 338733 0 0 GREG CONRAD ASST SECRETARY THRU MAR 2013 0 205117 0 61800 0 7973 0 39841 0 14467 0 329198 0 0 SCH J PART I, LINE 3 BEACON MEDICAL GROUP, INC. USES A RELATED ORGANIZATION'S (BEACON HEALTH SYSTEM, INC.) COMPENSATION REVIEW PROCESS. THIS REVIEW PROCESS INCLUDES AN EXTENSIVE EXAMINATION USING COMPARABLE MARKET DATA THAT IS THEN REVIEWED BY AN INDEPENDENT CONSULTANT HIRED BY, AND REPORTING TO, THE BOARD OF DIRECTORS. RECOMMENDATIONS ARE PRESENTED TO THE BOARD FOR DELIBERATION AND FINAL DECISION. 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 INDIVIDUALS RECEIVED VESTED PAYMENTS IN 2014, REFLECTED IN COLUMN (B)(III): PHIL NEWBOLD $154,765 IN MARCH 2014. THE FOLLOWING INDIVIDUALS RECEIVED DEFFERED PAYMENTS IN 2014 THAT WILL VEST IN FUTURE YEARS, WHICH ARE REFLECTED IN COLUMN C: PHIL NEWBOLD, $140,103 JEFFREY COSTELLO, $71,368 GREG CONRAD, $27,628 KREG GRUBER, $68,406. 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 2014 THAT WILL VEST IN FUTURE YEARS, WHICH ARE REFLECTED IN COLUMN C: JEFFREY COSTELLO, $48,750 KREG GRUBER, $48,750 PART I, LINE 7 - INCENTIVE PLANS 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 PLAN 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. FACULTY INCENTIVE PLAN FOR FAMILY PRACTICE RESIDENCY CLINICS PROVIDES FOR AN INCENTIVE PAYMENT WHEN COLLECTIONS FOR PERSONALLY RENDERED SERVICES EXCEED A THRESHOLD. THESE INCENTIVES ARE CAPPED. PHYSICIAN RELATIONS INCENTIVE PLAN PROVIDES FOR AN INCENTIVE PAYMENT TO EMPLOYEES IN A PHYSICIANS RELATIONS POSITION BASED UPON ATTAINMENT OF SATISFACTION SCORES. PAID AS A PERCENTAGE OF BASE PAY UP TO 5%. HOSPITALISTS ARE ELIGIBLE FOR AN INCENTIVE PAYMENT BASED UPON ATTAINMENT OF QUALITY MEASURES AND TENURE. THE INCENTIVE IS A COMPONENT OF THE HOSPITALIST PHYSICIAN COMPENSATION PLAN. HOSPITALIST NURSE PRACTITIONER / PHYSICIAN ASSISTANTS ARE ELIGIBLE FOR AN INCENTIVE BASED UPON ATTAINMENT OF QUALITY MEASURES. THE INCENTIVE IS A COMPONENT OF A QUALITY BONUS PLAN. SCH O FORM 990, PART VI, SECTION A, LINE 6: BEACON HEALTH SYSTEM, INC. IS THE SOLE CORPORATE MEMBER OF BEACON MEDICAL GROUP, INC FORM 900, PART VI, SECTION A, LINE 7A: THE CORPORATE MEMBER SHALL APPOINT THE BOARD OF DIRECTORS OF BEACON MEDICAL GROUP, INC. AND SHALL HAVE SUCH POWERS OF ADVANCE APPROVAL REGARDING CORPORATE ACTIONS AS ARE DELINEATED IN THE BY-LAWS OF BEACON MEDICAL GROUP, INC. FORM 990, PART VI, SECTION A, LINE 7B: DECISIONS OF THE BOARD OF DIRECTORS MUST BE APPROVED BY THE CORPORATE MEMBER. THE CORPORATE MEMBER HAS SUCH RIGHTS AND POWERS AS: A)TO MAKE AND APPROVE CHANGES TO THE CORPORATION'S ARTICLES AND BYLAWS B)TO APPOINT AND REMOVE THE MEMBERS OF THE ORPORATION'S GOVERNING BOARD C)TO APPROVE THE INCURRENCE OF DEBT D)TO APPROVE SALES, TRANSFERS, DISOLUTION OR SUBSTANTIAL CHANGE IN USE OF CORPATE ASSETS E)TO APPROVE THE FORMATION OF DISOLUTION OF A SUBSIDIARY ORGANIZATION F)TO APPROVE THE MATERIAL TRANSFER OR ENCUMBRANCE OF THE CORPORATE ASSETS G)TO APPROVE THE ANNUAL OPERATING BUDGET, CAPITAL PLAN, STRATEGIC PLAN AND BUSINESS PLAN H)TO APPROVE THE MISSION AND VISION STATEMENTS I)TO APPROVE ANY MATERIAL TRANSACTIONS NOT INCLUDED IN THE APPROVED OPERATING BUDGET OR CAPITAL PLAN J)TO RESOLVE ANY ISSUES BETWEEN THE CORPORATION AND ANY OF THE CORPORATE MEMBER'S OTHER SUBSIDIARY ORGANIZATIONS K)TO APPROVE ANY MANAGEMENT AGREEMENT FOR THE MANAGEMENT OF ALL OR ANY SUBSTANTIAL PART OF THE CORPORATION 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 TO REVIEW THE COMPLETED FORM 990 AND APPROPRIATE SCHEDULES. PRIOR TO FILING THE RETURN, THE CFO, THE COMPENSATION COMMITTEE OF THE ORGANIZATION, AND THE 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 WE PURSUE THE REPLIES TO GET A 100% RESPONSE RATE. IN THE CURRENT YEAR WE SENT OUT OVER 395 STATEMENTS AND ARE WORKING TO ACHIEVE 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, INC., 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 A WEB BASED SURVEY TOOL PROVIDED BY ERNST & YOUNG. 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 990. The RESULTS ARE REPORTED TO THE CEO OF BEACON HEALTH SYSTEM, INC., THE AUDIT COMMITTEE CHAIMAN, 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 ACKNOWLEDGEMENT FORM TO BE SIGNED BY BEACON HEALTH SYSTEM, INC.'S KEY FINANCIAL EMPLOYEES THAT BEACON'S FINANCIAL INFORMATION IS TO THE BEST OF THEIR KNOWLEDGE TRUE AND ACCURATE. THIS STATEMENT WAS SENT OUT IN EARLY JANUARY, 2015 AND THE SIGNED ACKNOWLEDGEMENTS ARE KEPT BY THE DIRECTOR OF INTERNAL AUDIT. IN 2015, 21 DESIGNATED EMPLOYEES WERE REQUESTED TO SIGN THE FORM AND WE HAD A 100% COMPLIANCE RATE. 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 15A & 15B: BEACON HEALTH SYSTEM, INC., THE PARENT COMPANY OF BEACON MEDICAL GROUP, INC. CONDUCTS THE REVIEW OF ALL 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. 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. VICE PRESIDENT AND HIGHER COMPENSATION IS PAID BY BEACON HEALTH SYSTEM, INC. COMPENSATION OF THE EXECUTIVE DIRECTOR, AND KEY EMPLOYEES IS PAID BY BEACON MEDICAL GROUP, INC. 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 SOUTH BEND $ 66,532,648 WRITE OFF INTER COMPANY MEMORIAL HEALTH FOUNDATION $- 14,284 WRITE OFF INTER COMPANY ELKHART GENERAL HOSPITAL $ 1,930,323 WRITE OFF INTER COMPANY BEACON HEALTH SYSTEM $ 760,543 CHANGE IN PENSION LIABILITY $-14,930,375 BOOK TAX DIFFERENCE ON JV REVENUE $ 155,666 TOTAL $ 54,434,521 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 600 EAST BOULEVARD ELKHART IN 46514 350877574 HOSPITAL IN 501(C)(3) 3 BHS true BEACON HEALTH SYSTEM INC 615 N MICHIGAN ST SOUTH BEND IN 46601 453864076 PARENT ORG IN 501(C)(3) 11a NA false MEMORIAL ENDOWMENT FUND FOR MEMORIAL HOS PO BOX 1602 SOUTH BEND IN 46634 356068581 ENDOWMENT IN 501(c)(3) 11D III-O MHSB false BEACON HEALTH VENTURES INC 615 N MICHIGAN ST SOUTH BEND IN 46601 351901068 HOME MEDICAL IN NA C BEACON HEALTH VENTURES MICHIGAN INC 615 N MICHIGAN ST SOUTH BEND IN 46601 208259773 HOME MEDICAL MI NA C false true true false false false false false true true true false false false false true true true true MEMORIAL HOSPITAL OF SOUTH BEND INC k 1366250 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC c 1930323 WRITEOFFINTERCO MEMORIAL HOSPITAL OF SOUTH BEND INC c 66532648 WRITEOFFINTERCO BEACON HEALTH VENTURES INC k 139599 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC p 55000000 ACTUAL CHARGES MEMORIAL HEALTH FOUNDATION INC p 55492 ACTUAL CHARGES MEMORIAL HEALTH FOUNDATION INC q 107370 ACTUAL CHARGES BEACON HEALTH VENTURES INC q 156862 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC q 51172717 ACTUAL CHARGES BEACON HEALTH VENTURES INC r 136189 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC r 66492733 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC q 1731823 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC r 3500324 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC k 1118187 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC i 1426723 ACTUAL CHARGES