2015-11-13T12:37:51-06:00 2014-12-31 363168081 SIKICH LLP 13400 BISHOPS LANE SUITE 300 BROOKFIELD WI 53005 990 2014-01-01 391789197 CHILDREN'S MEDICAL GROUP INC CHIL 4142665420 9000 W WISCONSIN AVE PO BOX 1997 MILWAUKEE WI 53201 MARC A CADIEUX TREASURER 4142665420 2015-10-30 1 BRYAN L PAUTSCH CPA P00034913 2627549400 2015-10-08 2014 2016-03-07 17:11:31Z SEE SCHEDULE O SMRITI KHARE MD 9000 W WISCONSIN AVE PO BOX 1997 MILWAUKEE WI 53201 50015107 0 X WWW.CHW.ORG X 1994 WI PROVIDE QUALITY, ACCESSIBLE PRIMARY HEALTH CARE TO CHILDREN IN THE COMMUNITY. 9 0 419 0 0 0 771036 1204776 44087861 48629981 346079 116505 65321 63845 45270297 50015107 0 0 0 0 28891633 30653115 0 0 0 17731958 19269527 46623591 49922642 -1353294 92465 11690028 14358666 11731072 14307245 -41044 51421 X TO PROVIDE QUALITY, ACCESSIBLE PRIMARY HEALTH CARE SERVICES TO ALL CHILDREN IN OUR COMMUNITY, ADVOCATE FOR THE WELL-BEING OF ALL CHILDREN, EDUCATE CHILDREN, FAMILIES, HEALTH CARE PROFESSIONALS AND OUR COMMUNITY REGARDING THE HEALTH OF CHILDREN, AND HOLD HONESTY AND INTEGRITY AS ESSENTIAL VALUES AS WE STRIVE TO FULFILL OUR MISSION. 0 0 40911456 42968378 CHILDREN'S MEDICAL GROUP, INC. ("CMG") IS ORGANIZED AS A NON STOCK NON PROFIT CORPORATION WITH A SOLE MEMBER, CHILDREN'S HOSPITAL AND HEALTH SYSTEM, INC. ("CHHS"), A SECTION 501(C)(3) ORGANIZATION. CMG IS AFFILIATED WITH CHILDREN'S HOSPITAL OF WISCONSIN, INC. ("CHW"), A SECTION 501(C)(3) ORGANIZATION WHICH IS THE ONLY HOSPITAL IN WISCONSIN DEVOTED SOLELY TO THE PROVISION OF MEDICAL SERVICES TO CHILDREN. THE PRIMARY PURPOSE OF CMG, CHHS AND CHW IS TO PROVIDE QUALITY HEALTHCARE SERVICES TO CHILDREN IN THE COMMUNITY, STATE, AND REGION. THE AFFILIATED GROUP IS ONE OF ONLY A HANDFUL OF ORGANIZATIONS THROUGHOUT THE U.S. THAT FOCUSES SOLELY ON THE CRITICAL MEDICAL NEEDS OF CHILDREN AND THE SPECIAL CARE REQUIRED BY THEM. THE PRINCIPAL FUNCTION OF CMG IS TO PROVIDE PRIMARY MEDICAL DIAGNOSIS AND TREATMENT SERVICES THROUGH OUTPATIENT CLINICS AND COMMUNITY HEALTH SCREENING AND EDUCATION SERVICES. CMG ALSO PARTICIPATES IN PRIMARY CARE MEDICAL EDUCATION AND TRAINING THROUGH THE MEDICAL COLLEGE OF WISCONSIN AND GRADUATE MEDICAL EDUCATION PROGRAMS ALREADY ESTABLISHED AT CHW. CMG PROVIDES CARE TO CHILDREN WHO ARE RESIDENTS OF SOUTHEASTERN WISCONSIN AT LOCATIONS WHERE THERE IS A DEMONSTRATED COMMUNITY NEED FOR MEDICAL DIAGNOSIS AND TREATMENT. IN 2014, CMG HAD 23 PHYSICIAN OFFICES WITH 77 PROVIDERS. AS A GROUP THERE WERE 286,514 PEDIATRIC OFFICE VISITS, HEALTH CHECKS AND IMMUNIZATIONS PROVIDED IN 2014. INCLUDED IN THIS NUMBER ARE 44,190 PEDIATRIC OFFICE VISITS, HEALTH CHECKS AND IMMUNIZATIONS DESCRIBED IN LINE 4B.IN RESPONSE TO THE CHANGING NEEDS OF THE COMMUNITY FOR MEDICAL SERVICES, ADVANCES IN PEDIATRIC MEDICINE AND THE INCREASING EMPHASIS ON PREVENTIVE MEDICAL CARE, CMG PROVIDES SERVICES IN FURTHERANCE OF THE MISSION OF CHW AND OTHER MEMBERS OF THE AFFILIATED GROUP. INCREASINGLY, PATIENTS HAVE BEEN SEEKING PRIMARY MEDICAL CARE THROUGH THE EMERGENCY ROOM FACILITIES OF HOSPITALS. THE EMERGENCY ROOM IS THE MOST COSTLY AND INEFFICIENT METHOD OF PROVIDING SUCH CARE TO PATIENTS. BY MAKING PRIMARY CARE AVAILABLE TO A GREATER PORTION OF THE GENERAL PUBLIC, CMG PROVIDES QUALITY, EFFICIENT PRIMARY PEDIATRIC CARE AT A LOWER COST. CMG IS STRUCTURED TO BETTER SERVE THE RESIDENTS OF SOUTHEASTERN WISCONSIN BY PROVIDING INCREASED ACCESS TO QUALITY MEDICAL CARE, EXPANDING COMMUNITY MEDICAL EDUCATION EFFORTS AND IMPROVING THE QUALITY OF PEDIATRIC CARE. 7087730 5706768 CMG OPERATES CLINICS IN UNDERSERVED AREAS IN THE MILWAUKEE AREA, INCLUDING A SITE LOCATED ON THE NEXT DOOR FOUNDATION CAMPUS IN MILWAUKEE'S CENTRAL CITY, IN ADDITION TO THE DOWNTOWN HEALTH CENTER AND MARQUETTE COMMUNITY CLINICS. THESE CLINICS PROVIDE PRIMARY CARE SERVICES INCLUDING PREVENTIVE CARE, PHYSICALS, IMMUNIZATIONS AND TREATMENT FOR ILLNESSES TO AREAS THAT PREVIOUSLY DID NOT HAVE PEDIATRIC PRACTICES AVAILABLE TO ATTEND TO THE COMMUNITY'S NEEDS. ADDITIONALLY, TO MEET THE DENTAL NEEDS OF UNDERSERVED CHILDREN IN THE CITY OF MILWAUKEE, CMG HAS A PEDIATRIC DENTAL PRACTICE, CHILDREN'S DENTAL CENTER. THESE CLINICS OPERATE AT A LOSS, WHICH WAS FUNDED BY CHW, CONTRIBUTIONS RECEIVED VIA THE CHILDREN'S HOSPITAL OF WISCONSIN FOUNDATION, INC., AND BY THE TEMPORARY ENHANCED MEDICAID PRIMARY CARE PAYMENTS PROVIDED BY THE ACCOUNTABLE CARE ACT IN 2014. THESE CLINICS HAD 44,190 PEDIATRIC OFFICE VISITS, HEALTH CHECKS AND IMMUNIZATIONS PROVIDED IN 2014, AND APPROXIMATELY 89% OF THE GROSS CHARGES WERE FROM PATIENTS ENROLLED IN MEDICAID. 47999186 1 1 0 0 0 0 0 0 0 0 1 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 1 0 0 0 0 0 0 1 0 0 0 1 X 0 0 419 1 0 0 0 0 0 0 0 0 0 0 X 9 0 1 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 WI X MS SARAH KAFKA 4142661854 9000 W WISCONSIN AVENUE MILWAUKEE WI 53201 THOMAS SATO MD DIRECTOR/PEDIATRIC PHYSICIAN 1.00 0.00 X 0 0 0 SMRITI KHARE MD DIRECTOR/PRESIDENT, CMG 40.00 0.00 X X 0 436299 69550 BRADLEY KIRSCHNER MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 223747 0 28397 JOHN KRAEGEL MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 266671 0 12876 SHARYL PALEY MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 412737 0 34823 YOLANDA REESE MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 192793 0 35180 ROBERT ROHLOFF MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 370313 0 38680 STEPHANIE WHITT MD DIRECTOR/PEDIATRIC PHYSICIAN 40.00 0.00 X 418681 0 9870 MARGARET TROY CMG CHAIR/DIRECTOR/CHHS PRESIDENT 0.00 40.00 X X 0 1438992 261638 WELDON GAGE TREASURER 0.00 40.00 X 0 506220 73208 SHEILA REYNOLDS SECRETARY 0.00 40.00 X 0 402092 86220 DANIEL DORRINGTON MD PEDIATRIC PHYSICIAN 40.00 0.00 X 301962 0 34612 LAURIE GRUNSKE MD PEDIATRIC PHYSICIAN 40.00 0.00 X 261551 0 8831 LEYLA HAMIZADEH MD PEDIATRIC PHYSICIAN 40.00 0.00 X 342993 0 10730 ROBERT HARTMANN MD PEDIATRIC PHYSICIAN 40.00 0.00 X 197594 0 8784 WILLIAM JERUC MD PEDIATRIC PHYSICIAN 40.00 0.00 X 431133 0 32362 AMY LAUTZ MD PEDIATRIC PHYSICIAN 40.00 0.00 X 357858 0 18728 DAVID LAUTZ MD PEDIATRIC PHYSICIAN 40.00 0.00 X 426188 0 36312 CONNIE RICHTER MD PEDIATRIC PHYSICIAN 40.00 0.00 X 368694 0 20448 CHRISTOPHER SCHWAKE MD PEDIATRIC PHYSICIAN 40.00 0.00 X 299764 0 36660 PAUL VELDHOUSE MD PEDIATRIC PHYSICIAN 40.00 0.00 X 371274 0 31259 PATTI-MARIE YOUNG MD PEDIATRIC PHYSICIAN 40.00 0.00 X 337151 0 8510 CHRIS ZUKOWSKI MD PEDIATRIC PHYSICIAN 40.00 0.00 X 342309 0 32662 SHERYN ABRAHAM MD PEDIATRIC PHYSICIAN 40.00 0.00 X 536444 0 8870 JASON FRIEDLANDER MD PEDIATRIC PHYSICIAN 40.00 0.00 X 492674 0 35115 WILLIAM LEACH MD PEDIATRIC PHYSICIAN 40.00 0.00 X 460427 0 34349 KRISTIN BENCIK BOUDREAU MD PEDIATRIC PHYSICIAN 40.00 0.00 X 389531 0 17666 DAVID MELBYE MD PEDIATRIC PHYSICIAN 40.00 0.00 X 385162 0 35610 BARBARA CALKINS MD FORMER KEY EMPLOYEE 40.00 0.00 X 257500 0 8831 CHRISTINE JOLLY MD FORMER KEY EMPLOYEE 40.00 0.00 X 203289 0 8213 MARY LEHRMAN MD FORMER KEY EMPLOYEE 40.00 0.00 X 164665 0 6707 ANDREW LESLIE MD FORMER KEY EMPLOYEE 40.00 0.00 X 350457 0 36610 AMY STOLARSKI MD FORMER KEY EMPLOYEE 40.00 0.00 X 169755 0 36289 SUZANNE VINCENT MD FORMER KEY EMPLOYEE 40.00 0.00 X 178485 0 2916 9511802 2783603 1161516 29 1 1 0 THE MEDICAL COLLEGE OF WISCONSIN 8701 WATERTOWN PLANK RD MILWAUKEE WI 53226 PHYSICIANS AND NURSE PRACTITIONERS 1507771 MARQUETTE UNIVERSITY PO BOX 1881 MILWAUKEE WI 53233 NURSE PRACTITIONERS 152974 2 1204776 1204776 NET PATIENT SVC REV 621110 48629981 48629981 48629981 116505 116505 18680 0 18680 18680 18680 OTHER MISCELLANEOUS 900099 45165 45165 45165 50015107 48675146 0 135185 8758979 8758979 19114031 18873540 240491 420940 417992 2948 1041730 1041730 1317435 1313958 3477 1450000 1450000 18040 18040 4236977 4234833 2144 61710 59296 2414 203053 203053 75967 75528 439 3325845 3325845 37176 30592 6584 61131 48916 12215 592996 443059 149937 213576 213576 MEDICAL SUPPLIES 7953119 7953119 OTHER EXPENSES 1039937 1005170 34767 49922642 47999186 1923456 0 985645 2191314 3791739 4537364 194303 81565 1332017 1519548 125124 134191 6166820 3000058 2901694 3166762 2359506 2727922 11690028 14358666 7500380 9179085 272005 4230692 4856155 11731072 14307245 X -41044 51421 -41044 51421 11690028 14358666 92465 0 X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 4029719 2013630 2016089 1984368 986428 997940 152733 152733 3166762 DEFERRED COMPENSATION PLAN ASSETS 2708335 DEPOSITS 19587 2727922 DEFERRED COMPENSATION PLAN LIABILITIES 2708335 DUE TO AFFILIATES 2147820 4856155 X PART X, LINE 2: FOOTNOTE 2 INCOME TAXES: CHHS EVALUATES ITS UNCERTAIN TAX POSITIONS ON AN ANNUAL BASIS, AND THERE HAVE BEEN NO UNCERTAIN TAX POSITIONS RECORDED FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013. 0 1 0 0 0 0 0 1 0 SMRITI KHARE MD DIRECTOR/PRESIDENT, CMG 0 329034 0 81081 0 26184 0 52590 0 16960 0 505849 0 0 BRADLEY KIRSCHNER MD DIRECTOR/PEDIATRIC PHYSICIAN 223747 0 0 0 0 0 3724 0 24673 0 252144 0 0 0 JOHN KRAEGEL MD DIRECTOR/PEDIATRIC PHYSICIAN 260133 0 0 0 6538 0 8750 0 4126 0 279547 0 0 0 SHARYL PALEY MD DIRECTOR/PEDIATRIC PHYSICIAN 295447 0 117290 0 0 0 8750 0 26073 0 447560 0 0 0 YOLANDA REESE MD DIRECTOR/PEDIATRIC PHYSICIAN 135780 0 57013 0 0 0 6609 0 28571 0 227973 0 0 0 ROBERT ROHLOFF MD DIRECTOR/PEDIATRIC PHYSICIAN 310815 0 45549 0 13949 0 7370 0 31310 0 408993 0 0 0 STEPHANIE WHITT MD DIRECTOR/PEDIATRIC PHYSICIAN 271500 0 147181 0 0 0 8750 0 1120 0 428551 0 0 0 MARGARET TROY CMG CHAIR/DIRECTOR/CHHS PRESIDENT 0 790343 0 365106 0 283543 0 214138 0 47500 0 1700630 0 227818 WELDON GAGE TREASURER 0 389629 0 116051 0 540 0 48635 0 24573 0 579428 0 0 SHEILA REYNOLDS SECRETARY 0 279423 0 74443 0 48226 0 49852 0 36368 0 488312 0 28567 DANIEL DORRINGTON MD PEDIATRIC PHYSICIAN 275220 0 26742 0 0 0 8750 0 25862 0 336574 0 0 0 LAURIE GRUNSKE MD PEDIATRIC PHYSICIAN 230665 0 13751 0 17135 0 8750 0 81 0 270382 0 0 0 LEYLA HAMIZADEH MD PEDIATRIC PHYSICIAN 235849 0 107144 0 0 0 1759 0 8971 0 353723 0 0 0 ROBERT HARTMANN MD PEDIATRIC PHYSICIAN 171500 0 26094 0 0 0 7904 0 880 0 206378 0 0 0 WILLIAM JERUC MD PEDIATRIC PHYSICIAN 282227 0 131406 0 17500 0 8750 0 23612 0 463495 0 0 0 AMY LAUTZ MD PEDIATRIC PHYSICIAN 332103 0 25755 0 0 0 8750 0 9978 0 376586 0 0 0 DAVID LAUTZ MD PEDIATRIC PHYSICIAN 365125 0 50668 0 10395 0 8750 0 27562 0 462500 0 0 0 CONNIE RICHTER MD PEDIATRIC PHYSICIAN 342022 0 26672 0 0 0 8750 0 11698 0 389142 0 0 0 CHRISTOPHER SCHWAKE MD PEDIATRIC PHYSICIAN 261364 0 38400 0 0 0 8750 0 27910 0 336424 0 0 0 PAUL VELDHOUSE MD PEDIATRIC PHYSICIAN 234072 0 119702 0 17500 0 8750 0 22509 0 402533 0 0 0 PATTI-MARIE YOUNG MD PEDIATRIC PHYSICIAN 310300 0 26851 0 0 0 8429 0 81 0 345661 0 0 0 CHRIS ZUKOWSKI MD PEDIATRIC PHYSICIAN 316020 0 8789 0 17500 0 8750 0 23912 0 374971 0 0 0 SHERYN ABRAHAM MD PEDIATRIC PHYSICIAN 446865 0 72444 0 17135 0 8750 0 120 0 545314 0 0 0 JASON FRIEDLANDER MD PEDIATRIC PHYSICIAN 374216 0 100958 0 17500 0 8750 0 26365 0 527789 0 0 0 WILLIAM LEACH MD PEDIATRIC PHYSICIAN 431960 0 28467 0 0 0 7776 0 26573 0 494776 0 0 0 KRISTIN BENCIK BOUDREAU MD PEDIATRIC PHYSICIAN 281704 0 90327 0 17500 0 8750 0 8916 0 407197 0 0 0 DAVID MELBYE MD PEDIATRIC PHYSICIAN 278260 0 106902 0 0 0 8750 0 26860 0 420772 0 0 0 BARBARA CALKINS MD FORMER KEY EMPLOYEE 257500 0 0 0 0 0 8750 0 81 0 266331 0 0 0 CHRISTINE JOLLY MD FORMER KEY EMPLOYEE 166476 0 23289 0 13524 0 8132 0 81 0 211502 0 0 0 MARY LEHRMAN MD FORMER KEY EMPLOYEE 160300 0 4365 0 0 0 6587 0 120 0 171372 0 0 0 ANDREW LESLIE MD FORMER KEY EMPLOYEE 315760 0 17197 0 17500 0 8750 0 27860 0 387067 0 0 0 AMY STOLARSKI MD FORMER KEY EMPLOYEE 129251 0 23004 0 17500 0 7920 0 28369 0 206044 0 0 0 SUZANNE VINCENT MD FORMER KEY EMPLOYEE 160325 0 2781 0 15379 0 0 0 2916 0 181401 0 0 0 PART I, LINE 3 CMG RELIED UPON CHILDREN'S HOSPITAL AND HEALTH SYSTEM, INC.("CHHS"), THE CORPORATE MEMBER OF CMG, TO ESTABLISH THE COMPENSATION OF CMG'S PRESIDENT. CHHS USED ITS INDEPENDENT COMPENSATION COMMITTEE, AN INDEPENDENT COMPENSATION CONSULTANT, THE FORM 990 OF OTHER ORGANIZATIONS, COMPENSATION SURVEYS, AND APPROVAL BY THE COMPENSATION COMMITTEE TO DETERMINE THE COMPENSATION. PART I, LINE 4B IN 2014, THERE WAS A CHHS EXECUTIVE FLEXIBLE BENEFIT PLAN IN PLACE WHICH WAS A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN (457(F) PLAN). THE CORPORATION CONTRIBUTES 10% OF EACH PARTICIPATING EXECUTIVE'S SALARY. THE AMOUNTS OF EMPLOYER CONTRIBUTIONS TO THIS PLAN FOR PARTICIPATING EXECUTIVES IN 2014 WERE AS FOLLOWS: S. KHARE, M.D., $33,440; W. GAGE, $39,885; AND S. REYNOLDS, $30,702. AFTER A VESTING PERIOD, PARTICIPANTS MAY ELECT TO WITHDRAW AMOUNTS PREVIOUSLY CONTRIBUTED AND REPORTED. AMOUNTS WITHDRAWN BY PARTICIPANTS IN 2014 WERE: S. REYNOLDS, $28,567; AND M. TROY, $227,818. CHHS HAS REPORTED ADDITIONAL AMOUNTS SET ASIDE FOR A NONQUALIFIED RETIREMENT PLAN ON BEHALF OF ITS PRESIDENT & CEO. THE AMOUNT SET ASIDE IN 2014 WAS $197,588. PART I, LINE 7 CERTAIN EXECUTIVES PARTICIPATE IN AN ANNUAL BONUS PLAN THAT PROVIDES COMPENSATION BASED ON ACHIEVING SPECIFIC PRE-DEFINED GOALS. BONUS CRITERIA ARE COMPRISED OF BOTH SYSTEM LEVEL AND EXECUTIVE SPECIFIC COMPONENTS. SUCH CRITERIA PERTAIN TO MATTERS WITHIN THE EXECUTIVE'S AREA OF RESPONSIBILITY, AS WELL AS ACHIEVEMENT OF OVERALL STRATEGIC OBJECTIVES OF THE ORGANIZATION AND ITS AFFILIATES IN ALIGNMENT WITH SYSTEM-WIDE BALANCED MEASURES. FORM 990, PART VII, COLUMN E & SCHEDULE J, PART II: SALARIES PAID BY RELATED ORGANIZATIONS: 1. SMRITI KHARE, M.D., PRESIDENT OF CMG - REPORTABLE COMPENSATION FROM RELATED ORGANIZATIONS AND OTHER COMPENSATION LISTED IN PART VII AND SCHEDULE J WERE PAID FOR SERVICES PROVIDED (40 HOURS PER WEEK) TO CMG. THESE AMOUNTS WERE PAID BY CHHS. SERVICES AS A MEMBER OF THE BOARD OF DIRECTORS WERE PROVIDED ON A PART-TIME VOLUNTARY BASIS. 2. DRS. KIRSCHNER, KRAEGEL, OMARI, PALEY, REESE, ROHLOFF, AND WHITT - COMPENSATION AND BENEFITS LISTED WERE FOR SERVICES PROVIDED AS FULL-TIME EMPLOYEES OF CMG AS PEDIATRIC PHYSICIANS. SERVICES AS MEMBERS OF THE BOARD OF DIRECTORS WERE PROVIDED ON A PART-TIME VOLUNTARY BASIS. 3. MARGARET TROY, CMG BOARD CHAIR AND PRESIDENT & CEO OF CHHS, WELDON GAGE, TREASURER OF CMG AND TREASURER & CFO OF CHHS, AND SHEILA REYNOLDS, SECRETARY OF CMG AND CORPORATE VP & GENERAL COUNSEL OF CHHS - REPORTABLE COMPENSATION FROM RELATED ORGANIZATIONS AND OTHER COMPENSATION LISTED IN PART VII AND SCHEDULE J WERE PAID FOR SERVICES PROVIDED (40 HOURS PER WEEK) TO CHHS AND ITS AFFILIATES. THESE AMOUNTS WERE PAID BY CHHS. SERVICES BY MS. TROY AS A MEMBER OF THE BOARD OF DIRECTORS OF CMG WERE PROVIDED ON A PART-TIME VOLUNTARY BASIS. AMY LAUTZ MD KEY EMPLOYEE (D. LAUTZ) 376586 AMY LAUTZ, M.D. IS THE DAUGHTER OF A KEY EMPLOYEE. THE ORGANIZATION PAID HER $376,586 FOR COMPENSATION. 0 DAVID LAUTZ MD KEY EMPLOYEE (A. LAUTZ) 462499 DAVID LAUTZ, M.D. IS THE FATHER OF A KEY EMPLOYEE. THE ORGANIZATION PAID HIM $462,499 FOR COMPENSATION. 0 FORM 990, BOX C, DOING BUSINESS AS: CHILDREN'S DENTAL CENTER AND CHILDREN'S HOSPITAL OF WISCONSIN PRIMARY CARE FORM 990, PART V, LINE 1A THE ORGANIZATION DID NOT FILE ANY FORMS 1099 DURING THE TAXABLE YEAR. ALTHOUGH THE ORGANIZATION DID RETAIN INDEPENDENT CONTRACTORS, THE COMPENSATION AMOUNTS OWED TO SUCH CONTRACTORS WERE PROCESSED AND PAID BY A RELATED ENTITY, CHILDREN'S HOSPITAL OF WISCONSIN, INC. ("CHW"), WITH APPROPRIATE INTERCOMPANY ARRANGEMENTS BETWEEN THE ORGANIZATION AND CHW. THE FORMS 1099 FOR SUCH PAYMENTS WERE ISSUED BY CHW, AS THE ENTITY THAT PROCESSED AND MADE THE PAYMENTS TO THE INDEPENDENT CONTRACTORS. FORM 990, PART VI, SECTION A, LINE 2 FAMILY RELATIONSHIPS EXIST BETWEEN THE FOLLOWING KEY EMPLOYEES: D. LAUTZ AND A. LAUTZ. FORM 990, PART VI, SECTION A, LINE 6 THE ORGANIZATION HAS A SOLE CORPORATE MEMBER WHICH IS CHHS. FORM 990, PART VI, SECTION A, LINE 7A CHHS, THE SOLE CORPORATE MEMBER OF THE ORGANIZATION, ELECTS THE ORGANIZATION'S GOVERNING BODY. FORM 990, PART VI, SECTION A, LINE 7B THE SOLE CORPORATE MEMBER, CHHS, HAS CERTAIN RESERVE POWERS OVER THE CORPORATION, INCLUDING AMENDMENT OF THE ARTICLES OF INCORPORATION AND BYLAWS; APPROVAL OF MERGER, CONSOLIDATION OR THE CREATION OF ANY SUBSIDIARIES BY THE CORPORATION; AND APPROVAL OF THE ANNUAL BUDGET AND ANY DEBT. THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF CHHS SELECTS THE PRESIDENT. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 OF CMG WAS REVIEWED BY THE AUDIT AND COMPLIANCE COMMITTEE OF CHHS BOARD OF DIRECTORS, AND PRIOR TO FILING, A COPY WAS PROVIDED TO ALL DIRECTORS OF CMG. FORM 990, PART VI, SECTION B, LINE 12C ANNUALLY, ALL DIRECTORS, OFFICERS AND KEY EMPLOYEES ARE REQUESTED TO SUBMIT A CONFLICT OF INTEREST DISCLOSURE TO THE CORPORATE VICE PRESIDENT AND GENERAL COUNSEL OF CHHS. A LIST OF POTENTIAL CONFLICTS IS PREPARED AND IS AVAILABLE AT EACH BOARD AND COMMITTEE MEETING. THE COMPLIANCE DEPARTMENT MONITORS AND PERIODICALLY REVIEWS TRANSACTIONS BETWEEN THE ORGANIZATION AND BOARD MEMBERS OR ENTITIES WITH WHICH THEY ARE AFFILIATED. FORM 990, PART VI, SECTION B, LINE 15 THE COMPENSATION OF THE ORGANIZATION'S OFFICERS AND KEY EMPLOYEES WAS REVIEWED AND APPROVED BY THE INDEPENDENT COMPENSATION COMMITTEE OF CHHS (THE ORGANIZATION'S CORPORATE MEMBER). WITH THE ASSISTANCE OF AN INDEPENDENT COMPENSATION CONSULTANT AND INFORMATION FROM A VARIETY OF EXTERNAL SOURCES (AS INDICATED ON SCHEDULE J), THE COMMITTEE CONFIRMED THAT TOTAL COMPENSATION AMOUNTS TO BE PAID WERE REASONABLE AND COMPARABLE TO AMOUNTS PAID BY SIMILARLY SITUATED ORGANIZATIONS. THE PROCESS FOLLOWED BY THE COMMITTEE, INCLUDING THE DATA RELIED UPON AND THE COMMITTEE'S DECISIONS, WAS THOROUGHLY AND TIMELY DOCUMENTED. FORM 990, PART VI, SECTION C, LINE 19 THE GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY AND FINANCIAL INFORMATION OF CMG ARE AVAILABLE TO THE PUBLIC UPON REQUEST THROUGH THE CHHS MARKETING AND COMMUNICATION DEPARTMENT. FORM 990, PART I, LINE 4 AND PART VI, LINE 1B CHILDREN'S MEDICAL GROUP, INC. ("CMG") IS A WISCONSIN NONSTOCK CORPORATION. CMG IS AN AFFILIATE OF CHILDREN'S HOSPITAL AND HEALTH SYSTEM, INC. ("CHHS"), A TAX-EXEMPT WISCONSIN CORPORATION SERVING AS THE PARENT ENTITY OF AN INTEGRATED SYSTEM OF PROVIDER ORGANIZATIONS ADDRESSING THE HEALTH CARE NEEDS OF CHILDREN IN SOUTHEASTERN WISCONSIN, NORTHERN ILLINOIS AND SURROUNDING AREAS. AS THE CORPORATE MEMBER OF CMG, CHHS HOLDS VARIOUS RESERVE POWERS IN RELATION TO CMG, INCLUDING AUTHORITY TO APPOINT CMG'S BOARD OF DIRECTORS. THE BOARD OF DIRECTORS OF CMG CONSISTS OF CERTAIN PHYSICIANS WHO ARE EMPLOYED BY CMG, ALONG WITH REPRESENTATIVES OF CHHS'S EXECUTIVE LEADERSHIP, AND ONE INDEPENDENT DIRECTOR. AS EMPLOYEES OF EITHER CMG OR CHHS, NONE OF THESE DIRECTORS MAY BE CONSIDERED "INDEPENDENT" FOR PURPOSES OF FORM 990. HOWEVER, AS ACKNOWLEDGED BY THE IRS IN ITS CPE TEXT FOR FISCAL YEAR 1997, IN A MULTI-ENTITY HOSPITAL SYSTEM, THE BOARD OF A SUBSIDIARY NON-PROFIT HEALTH CARE ORGANIZATION IS CONSIDERED TO BE COMPRISED OF INDEPENDENT COMMUNITY MEMBERS IF IT IS CONTROLLED BY AN EXEMPT ORGANIZATION WHOSE BOARD IS COMPRISED OF A MAJORITY OF VOTING MEMBERS WHO ARE INDEPENDENT COMMUNITY MEMBERS. CMG MEETS THIS STANDARD BECAUSE IT IS A CONTROLLED SUBSIDIARY OF CHHS, AND CHHS'S GOVERNING BOARD INCLUDES INDEPENDENT COMMUNITY MEMBERS AS A MAJORITY THEREOF. CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 9000 W WISCONSIN AVE PO BOX 1997 MILWAUKEE WI 53201 391500074 OPERATIONAL SUPPORT SERVICES WI 501(C)(3) LINE 3 N/A 0 CHILDREN'S HOSPITAL OF WISCONSIN INC 9000 W WISCONSIN AVE PO BOX 1997 MILWAUKEE WI 53201 390812532 PEDIATRIC HOSPITAL WI 501(C)(3) LINE 3 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 CHILDREN'S HOSPITAL OF WISCONSIN FOUNDATION INC 9000 W WISCONSIN AVE PO BOX 1997 MILWAUKEE WI 53201 391500075 FUND DEVELOPMENT WI 501(C)(3) LINE 7 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 CHILDREN'S PHYSICIAN GROUP PC 9000 W WISCONSIN AVE PO BOX 1997 MILWAUKEE WI 53201 364303682 PEDIATRIC PHYSICIAN SERVICES IL 501(C)(3) LINE 9 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 CHILDREN'S SERVICE SOCIETY OF WISCONSIN 9000 W WISCONSIN AVE PO BOX 1997 MILWAUKEE WI 53201 390806380 CHILD WELLBEING SERVICES WI 501(C)(3) LINE 7 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 CHILDREN'S COMMUNITY HEALTH PLAN INC 9000 W WISCONSIN AVE PO BOX 1997 MILWAUKEE WI 53201 271494977 WISCONSIN MEDICAID HMO WI 501(C)(3) LINE 9 CHILDREN'S HOSPITAL & HEALTH SYSTEM INC 0 VIRTUAL PICU SYSTEMS LLC 401 WYTHE STREET SUITE 101 ALEXANDRIA VA 22314 201414664 QUALITY/OUTCOMES ANALYSIS DE CHILDREN'S HOSPITAL & HEALTH SYSTEM RELATED 0 0 MED-HEALTH FINANCIAL SERVICES INC 9000 W WISCONSIN AVE PO BOX 1997 MILWAUKEE WI 53201 391547907 COLLECTION SERVICES WI CHILDREN'S HOSPITAL & HEALTH SYSTEM C 0 0 0 1 0 0 0 0 0 0 1 1 1 1 0 0 1 0 0 0