2014-10-08T09:14:02-05:00 2013-12-31 861065772 DELOITTE TAX LLP 201 E KENNEDY BLVD SUITE 1200 TAMPA FL 33602 990 2013-01-01 592742907 AVMED INC AVME 3523728400 SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 RANDALL L STUART ASSISTANT TREASURER 3523378730 2014-09-30 1 STEVEN EROVNER P00648526 8132738300 2013 2015-11-30 17:44:51Z AVMED HEALTH PLANS MICHAEL P GALLAGHER SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 922881025 0 X WWW.AVMED.ORG X 1986 FL TO HELP OUR MEMBERS LIVE HEALTHIER BY PROVIDING HIGH QUALITY HEALTH CARE PLANS.TO HELP OUR MEMBERS LIVE HEALTHIER BY PROVIDING HIGH QUALITY, COST-EFFECTIVE HEALTH CARE PLANS AND SERVICES TO THE EMPLOYERS AND MEMBERS WE SERVE. SEE PART III, LINE 1 FOR MORE INFORMATION. 9 8 852 0 2148 0 0 0 953854151 830505714 14256856 10613152 3251226 2589384 971362233 843708250 5000000 12500000 0 0 69075825 68575587 0 0 0 874676379 752528316 948752204 833603903 22610029 10104347 318299641 324019338 150919491 146988326 167380150 177031012 X THE MISSION OF AVMED, INC. IS TO HELP ITS MEMBERS LIVE HEALTHIER BY PROVIDING ACCESS TO HIGH QUALITY, AFFORDABLE HEALTH CARE SERVICES THROUGH A NETWORK OF CREDENTIALED HEALTH CARE PROVIDERS LOCATED THROUGHOUT AVMED INC.'S SERVICE AREAS. AVMED PROVIDES AFFORDABLE, NON-COMMERCIAL-TYPE HEALTH BENEFITS CONTRACTS, EDUCATES ITS ENROLLEES ABOUT HEALTH ISSUES, PROVIDES WELLNESS AND DISEASE PREVENTION PROGRAMS, CONDUCTS HEALTH FAIRS, PROVIDES DISEASE AND CHRONIC CARE MANAGEMENT PROGRAMS, MANAGES COMPLEX CASES, AND PROVIDES PRESCRIPTION DRUGS AND CERTAIN MEDICAL RESEARCH PROGRAMS. AVMED OFFERS ITS PROGRAM OF SERVICES AT AFFORDABLE FIXED PRICES TO FLORIDA EMPLOYERS AND VULNERABLE POPULATIONS INCLUDING INDIVIDUALS, SMALL EMPLOYER GROUPS AND SENIOR CITIZENS THROUGH THE MEDICARE ADVANTAGE PROGRAM (INCLUDING PRESCRIPTION DRUGS). 0 0 726698524 798009522 AVMED INC. (AVMED OR DBA AVMED HEALTH PLANS) PROVIDED HEALTH MAINTENANCE ORGANIZATION SERVICES TO EMPLOYERS AND INDIVIDUALS, INCLUDING SMALL EMPLOYER GROUPS AND SENIOR CITIZENS, REPRESENTING 1,334,742 MEMBER MONTHS OF NETWORK ACCESS, 1,992,190 DRUG PRESCRIPTIONS, AND 60,461 DAYS OF INPATIENT CARE. 34872015 34872015 AVMED PROVIDED EDUCATION, WELLNESS AND DISEASE PREVENTION, HEALTH FAIRS, DISEASE AND CHRONIC CARE MANAGEMENT, MANAGEMENT OF COMPLEX CASES, CLINICAL EDUCATION AND COORDINATION, AND OTHER HEALTH IMPROVEMENT SERVICES. AVMED MAINTAINED ITS "EXCELLENT" ACCREDITATION STATUS FOR ITS MEDICARE PRODUCT AND "COMMENDABLE" FOR ITS COMMERCIAL PRODUCTS FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA) FOR ITS PROGRAMS OF HEALTH CARE. AVMED ANNUALLY MEASURES THE HEALTH CARE PERFORMANCE OF ITS NETWORK OF PROVIDERS THROUGH THE HEALTHCARE EFFECTIVENESS DATA AND INFORMATION SET (HEDIS) PROCESS. HEDIS INCLUDES 80 MEASURES ACROSS 5 DOMAINS OF CARE.FOR HEDIS 2013, AVMED'S RESULTS WERE RANKED AT THE 75TH PERCENTILE OR HIGHER NATIONALLY FOR 11 OF THE 31 HEALTH CARE MEASURES AND AT THE 50TH PERCENTILE OR HIGHER FOR 23 OF THE 31 HEALTH CARE MEASURES USED IN THE NCQA ACCREDITATION SCORING FOR ITS COMMERCIAL PRODUCTS. FOR THE MEDICARE PRODUCT, AVMED'S RESULTS WERE RANKED AT THE 75TH PERCENTILE OR HIGHER FOR 14 OF THE 22 HEALTH CARE MEASURES AND AT THE 50TH PERCENTILE OR HIGHER FOR 18 OUT OF THE 22 HEALTH CARE MEASURES USED IN THE NCQA ACCREDITATION SCORING.AVMED ALSO ANNUALLY MEASURES THE SATISFACTION OF ITS MEMBERS THROUGH THE CONSUMER ASSESSMENT OF HEALTHCARE PROVIDERS AND SYSTEMS (CAHPS) SURVEY. THE SURVEY PROVIDES INFORMATION ON THE EXPERIENCES OF AVMED MEMBERS WITH THE HEALTH PLAN AND HOW WELL THE HEALTH PLAN MEETS MEMBERS' EXPECTATIONS. AN OVERWHELMING MAJORITY OF AVMED'S MEMBERS WHO RESPONDED TO THE 2013 ANNUAL SURVEY RATED AVMED OVERALL AS A HEALTH PLAN AT 8, 9, OR 10 ON A SCALE OF 0 TO 10, WHERE 10 IS THE HIGHEST RATING (74.56% OF COMMERCIAL MEMBERS AND 88.4% OF MEDICARE MEMBERS). 12500000 12500000 AVMED MADE GRANTS TOTALING $12,500,000 TO SANTAFE HEALTHCARE, INC., ITS NOT-FOR-PROFIT SUPPORTING ORGANIZATION, IN SUPPORT OF SANTAFE HEALTHCARE'S EXEMPT PURPOSES. 774070539 0 0 1 0 0 0 0 1 0 1 1 0 0 1 1 1 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 1 21175 0 1 852 1 1 1 0 0 0 0 0 X 9 8 0 0 0 0 0 1 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 X RANDALL L STUART ASST TREASURER 3523378730 4300 NW 89TH BLVD GAINESVILLE FL 326065688 X JOE G DUNLAP CHAIRMAN/DIRECTOR 3.00 1.00 X X 72756 18949 0 ROBERT L EPLING VICE CHAIRMAN/TREASURER/DIRECTOR 1.00 X X 55227 0 0 JOSEPH W DAVIS SECRETARY/DIRECTOR 1.00 X X 57950 0 0 PAMELA J MOONEY PHD DIRECTOR 1.00 X 49127 0 0 PAUL R PHILIP DIRECTOR 1.00 X 54331 0 0 HUGH J FLOYD DIRECTOR 1.00 X 51850 0 0 GORDON L JOHNSON DIRECTOR 1.00 X 54246 0 0 ROBERT C HUDSON DIRECTOR 1.00 X 49127 0 0 MICHAEL P GALLAGHER CHIEF EXECUTIVE OFFICER/PRESIDENT/DIRECTOR 45.00 15.00 X X 0 2238682 269719 STEVEN M ZIEGLER SR VP GENERAL COUNSEL/ASST SECRETARY 47.00 16.00 X 508883 0 130033 RANDALL L STUART SR VP AND CFO/ASST TREASURER 58.00 7.00 X 0 775275 157949 CATHERINE E AYERS SR VP MEMBER SERVICES/ASST SECRETARY 40.00 20.00 X 648455 0 150751 SUSAN K PINNAS SR VP NETWORK 50.00 X 657171 0 65441 JAMES M REPP SR VP SALES AND MARKETING 50.00 X 514058 0 117739 ROBERT BRADFORD BENTLEY SR VP UNDERWRITING AND REGULATORY AFFAIRS 50.00 X 496579 0 136692 ANN O WEHR MD SR VP AND CHIEF MEDICAL OFFICER 50.00 X 387182 0 112669 ROBERT D BONNELL MD REGIONAL MEDICAL DIRECTOR 40.00 X 547628 0 57343 EDWIN RODRIGUEZ MD REGIONAL MEDICAL DIRECTOR 40.00 X 441870 0 66647 VINCENZO FERRI VP INFORMATION SYSTEMS 40.00 X 446863 0 66499 JAVIER MENDOZA VP STRATEGIC PLANS AND MARKETING 40.00 X 443850 0 62563 WINSTON LONSDALE VP MEDICARE AND INTERNAL OPERATIONS 40.00 X 435946 0 77049 EDWIN W HANNUM FORMER PRESIDENT AND CHIEF OPERATING OFFICER 0.00 X 124259 0 25000 6097358 3032906 1496094 83 1 1 0 SOUTH BROWARD HOSPITAL DISTRICT PO BOX 538527 ATLANTA GA 303538527 MEDICAL 104785212 BAPTIST HOSPITAL OF MIAMI INC 8900 N KENDALL DRIVE MIAMI FL 33176 MEDICAL 94004899 SOUTH MIAMI HOSPITAL INC 6200 SW 73RD ST MIAMI FL 331434679 MEDICAL 51678178 NORTH FLORIDA MEDICAL CENTER INC PO BOX 406407 ATLANTA GA 303846407 MEDICAL 31658257 ADVENTIST HEALTH SYSTEMS PO BOX 538700 ORLANDO FL 328538700 MEDICAL 25941216 1051 MEDICARE REVENUE 524114 427528435 427528435 MEDICAL REVENUE 524114 335753878 335753878 SELF-FUNDED ADMIN FEE 524292 47404574 47404574 FEDERAL REVENUE 524114 19818827 19818827 830505714 4834953 4834953 110310 110310 4657354 5846242 -1188888 -1188888 -1188888 74508111 4486311 72900682 425851 1607429 4060460 5667889 2148 5665741 FEE CREDITS AND SETTLEMENTS 900099 2375823 2375823 MANAGEMENT FEES 561000 1337089 1337089 MISCELLANEOUS REBATES 900099 65360 65360 3778272 843708250 832881537 2148 10824565 X 12500000 12500000 4173679 2385555 1788124 50189708 30711774 19477934 3748241 1837031 1911210 6306924 3768568 2538356 4157035 2628798 1528237 3028368 3028368 112906 8882 104024 578615 578615 688996 688996 707802121 702496649 5305472 6319839 6319839 9398906 3162550 6236356 8677202 544170 8133032 2733938 2343976 389962 979032 570530 408502 323548 93261 230287 115373 115373 4949321 3538123 1411198 444282 444282 LICENSES AND FEES 5077317 943741 4133576 DUES AND ASSESSMENTS 989781 217092 772689 COMMUNITY SUPPORT 308771 308771 833603903 774070539 59533364 0 28836362 36795686 3720103 1357059 52921574 41710931 1605661 2339352 97381236 58224811 28572710 39156425 164927448 161538100 18970505 25018174 18745278 16103611 318299641 324019338 125357010 108927430 6882675 3736503 4202631 8126264 14477175 26198129 150919491 146988326 X 167380150 177031012 167380150 177031012 318299641 324019338 X 10104347 2654913 -3108398 X X 0 1 X 1 0 5500 PART I-A, LINE 1: AVMED MADE DIRECT CONTRIBUTIONS TO GENERAL CAMPAIGN FUNDS OF STATE AND LOCAL POLITICAL CANDIDATES IN 2013. 0 1 X 384250 4395800 4780050 1409693 37596374 28785015 10221052 506251 454809 51442 42380683 28864207 13516476 10708185 120780 10587405 39156425 INTECH ENHANCED PLUS FUND 24819821 F PRIVATE INVESTMENTS 198353 C 25018174 CAPITAL LEASE OBLIGATION 1896714 BENEFITS PAYABLE 5037212 OTHER LIABILITIES 3110800 DUE TO AFFILIATES 248220 DUE TO SELF-INSURED GROUPS 60236 EQUIPMENT FINANCING 15844947 26198129 X 841415817 735766 735766 840680051 3028199 3028199 843708250 821911890 807987 807987 821103903 12500000 12500000 833603903 PART IV, LINE 2B: INCLUDED IN THIS LINE ARE OBLIGATIONS TO PAY BENEFITS FROM ESCROWED FUNDS ON BEHALF OF SELF-FUNDED HEALTH PLANS. PART X, LINE 2: AVMED HAD NO UNCERTAIN TAX POSITIONS AS OF DECEMBER 31, 2013. AVMED INCURRED NO INTEREST EXPENSE OR PENALTIES RELATED TO UNCERTAIN INCOME TAX PROVISIONS IN 2013 OR 2012. TAX YEARS 2010 THROUGH 2012 ARE SUBJECT TO EXAMINATION BY FEDERAL AND STATE TAXING AUTHORITIES AND THERE ARE NO INCOME TAX EXAMINATIONS IN PROCESS AS OF THE DATE OF THIS REPORT. PART XI, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSE RECLASS FOR TAX 807,987. INVESTMENT IMPAIRMENT REALIZED FOR BOOK AND NOT FOR TAX -72,221. PART XI, LINE 4B - OTHER ADJUSTMENTS: INVESTMENT PARTNERSHIP REVENUE REALIZED FOR TAX AND NOT FOR BOOK 3,028,199. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSE RECLASS 807,987. PART XII, LINE 4B - OTHER ADJUSTMENTS: DISTRIBUTION TO SANTAFE HEALTHCARE, INC. 12,500,000. 1 SANTAFE HEALTHCARE INC PO BOX 749 GAINESVILLE FL 326270749 592317607 501(C)(3) 12500000 AVMED, INC. PROVIDED ITS SUPPORTING ORGANIZATION (SANTAFE HEALTHCARE, INC.) A GRANT IN THE AMOUNT OF $12,500,000 TO SUPPORT AND FURTHER THE MISSION AND TAX EXEMPT PURPOSES OF SANTAFE HEALTHCARE, INC. 1 0 PART I, LINE 2: AVMED, INC. AND SANTAFE HEALTHCARE, INC. SHARE COMMON MANAGEMENT. AS A RESULT, MANAGEMENT ENSURES THE USE OF GRANT FUNDS BY SANTAFE HEALTHCARE IS CONSISTENT WITH THEIR INTENDED PURPOSE. X X 1 1 0 1 0 0 0 0 0 0 0 MICHAEL P GALLAGHER CHIEF EXECUTIVE OFFICER/PRESIDENT/DI 0 879090 0 870216 0 489376 0 244268 0 25451 0 2508401 0 204750 STEVEN M ZIEGLER SR VP GENERAL COUNSEL/ASST SECRETARY 315764 0 182501 0 10618 0 99376 0 30657 0 638916 0 29521 0 RANDALL L STUART SR VP AND CFO/ASST TREASURER 0 372556 0 236136 0 166583 0 134571 0 23378 0 933224 0 70359 CATHERINE E AYERS SR VP MEMBER SERVICES/ASST SECRETARY 311271 0 206569 0 130615 0 118061 0 32690 0 799206 0 61694 0 SUSAN K PINNAS SR VP NETWORK 324063 0 197157 0 135951 0 50953 0 14488 0 722612 0 0 0 JAMES M REPP SR VP SALES AND MARKETING 307957 0 171066 0 35035 0 94782 0 22957 0 631797 0 18931 0 ROBERT BRADFORD BENTLEY SR VP UNDERWRITING AND REGULATORY AF 297588 0 172782 0 26209 0 104484 0 32208 0 633271 0 19347 0 ANN O WEHR MD SR VP AND CHIEF MEDICAL OFFICER 369126 0 0 0 18056 0 83805 0 28864 0 499851 0 0 0 ROBERT D BONNELL MD REGIONAL MEDICAL DIRECTOR 261208 0 102555 0 183865 0 33318 0 24025 0 604971 0 26296 0 EDWIN RODRIGUEZ MD REGIONAL MEDICAL DIRECTOR 272786 0 112444 0 56640 0 34616 0 32031 0 508517 0 28832 0 VINCENZO FERRI VP INFORMATION SYSTEMS 272321 0 144125 0 30417 0 40976 0 25523 0 513362 0 13630 0 JAVIER MENDOZA VP STRATEGIC PLANS AND MARKETING 218081 0 126007 0 99762 0 34044 0 28519 0 506413 0 0 0 WINSTON LONSDALE VP MEDICARE AND INTERNAL OPERATIONS 247783 0 142735 0 45428 0 48192 0 28857 0 512995 0 0 0 EDWIN W HANNUM FORMER PRESIDENT AND CHIEF OPERATING 0 0 124259 0 0 0 25000 0 0 0 149259 0 0 0 PART I, LINE 1A CERTAIN DIRECTORS AND THEIR COMPANIONS ATTENDED COMPANY PAID INDUSTRY SEMINARS AND TRADE CONVENTIONS AT THE REQUEST OF AVMED, INC. ALL BUSINESS COSTS, INCLUDING TRAVEL COSTS, PAID DIRECTLY BY THE ORGANIZATION OR REIMBURSED TO THE LISTED PERSON, WERE ACCOUNTED FOR UNDER AN ACCOUNTABLE PLAN UTILIZED BY THE ORGANIZATION. NO PART OF ANY TRAVEL COST WAS DEEMED A BENEFIT FOR ANY PERSON LISTED IN FORM 990, PART VII. INCIDENTAL EXPENSES ARE NOT REIMBURSED BY THE ORGANIZATION. TAX GROSS-UP PAYMENTS OCCUR FOR GROUP VARIABLE LIFE INSURANCE PREMIUMS PAID ON BEHALF OF THE LISTED AND OTHER EMPLOYEES. EMPLOYER PAID PREMIUMS ARE DEEMED TO BE TAXABLE COMPENSATION AND ARE GROSSED-UP FOR THE TAX IMPACT PRIOR TO BEING ADDED AS IMPUTED INCOME TO AN EMPLOYEE'S YEAR-END FORM W-2. TAX GROSS-UP PAYMENTS ARE PROVIDED FOR VESTED DISTRIBUTIONS FROM THE DEFINED CONTRIBUTION AND (NOW FROZEN) DEFINED BENEFIT PENSION RESTORATION PLANS. PART I, LINE 3 MICHAEL P GALLAGHER IS THE PRESIDENT AND CHIEF EXECUTIVE OFFICER (CEO) OF AVMED, INC. MR. GALLAGHER IS COMPENSATED BY SANTAFE HEALTHCARE, INC. (SANTAFE), A RELATED SUPPORTING ORGANIZATION. SANTAFE UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: ANNUALLY, THE SANTAFE BOARD OF DIRECTORS RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE CEO'S TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES AND LONG TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISON TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. THE INDEPENDENT CONSULTING FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS ESTABLISHES THE FINAL COMPENSATION AND BENEFIT PACKAGE FOR THE CEO TAKING INTO CONSIDERATION THE MARKET COMPETITIVENESS REVIEW AND FINAL RECOMMENDATION OF THE INDEPENDENT CONSULTING FIRM. THE INDEPENDENT CONSULTING FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF THE CEO'S FINAL COMPENSATION AND BENEFITS PACKAGE. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. PART I, LINE 4B LISTED PERSONS ARE EMPLOYEES OF AVMED OR RELATED ORGANIZATIONS AND ARE COVERED UNDER A SEVERANCE POLICY FOR THEIR RESPECTIVE RELATED ORGANIZATION. THE SEVERANCE POLICY INCLUDES MONTHLY PAYMENTS UP TO A MAXIMUM OF 12 MONTHS UNDER QUALIFYING CIRCUMSTANCES. NO ONE LISTED RECEIVED SEVERANCE OR CHANGE OF CONTROL PAYMENTS DURING 2013. LISTED PERSONS PARTICIPATING IN A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN THE YEAR: AVMED, INC. MAINTAINS TWO ACTIVE NONQUALIFIED DEFERRED COMPENSATION RETIREMENT PLANS FOR A CERTAIN GROUP OF EXECUTIVES TO INCLUDE THOSE LISTED EMPLOYEES OF THE ORGANIZATION OR RELATED ORGANIZATIONS. ONE PLAN RESTORES RETIREMENT BENEFITS EQUIVALENT TO QUALIFIED 401(K) BENEFITS ON INCOME EARNED IN EXCESS OF THE INTERNAL REVENUE SERVICE CODE SECTION 401(A)(17) RECOGNIZABLE PAY LIMITS (A DEFINED CONTRIBUTION RESTORATION PLAN.)VESTING FOR THIS PLAN IS ACHIEVED AT AGE 55 AND 10 YEARS OF SERVICE OR AT AGE 65 AND 5 YEARS OF SERVICE. THE SECOND SUPPLEMENTAL DEFINED CONTRIBUTION PLAN PROVIDES ADDITIONAL RETIREMENT INCOME BASED ON A PERCENTAGE OF BASE SALARY AND VESTS AT THREE AND FIVE YEARS OF SERVICE. LISTED PERSONS RECEIVING PAYMENTS FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN THE YEAR: CATHERINE E AYERS RECEIVED $105,481 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2013. R BRADFORD BENTLEY RECEIVED $22,724 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2013. SUSAN K PINNAS RECEIVED $110,074 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2013. JIM REPP RECEIVED $20,277 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2013. ROBERT BONNELL RECEIVED $161,588 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2013. VINCENZO FERRI RECEIVED $10,905 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2013. JAVIER MENDOZA RECEIVED $82,248 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2013. WINSTON LONSDALE RECEIVED $24,949 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2013. EDWIN RODRIGUEZ RECEIVED $45,152 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2013. MICHAEL P GALLAGHER AND RANDALL L STUART ARE EMPLOYEES OF SANTAFE HEALTHCARE, INC. (SANTAFE) A RELATED SUPPORTING ORGANIZATION. THEY PARTICIPATE IN TWO NONQUALIFIED DEFERRED COMPENSATION RETIREMENT PLANS SPONSORED BY SANTAFE FOR A CERTAIN GROUP OF EXECUTIVES. ONE PLAN RESTORES RETIREMENT BENEFITS EQUIVALENT TO QUALIFIED 401(K) BENEFITS ON INCOME EARNED IN EXCESS OF THE INTERNAL REVENUE SERVICE CODE SECTION 401 (A) (17) RECOGNIZABLE PAY LIMITS (A DEFINED CONTRIBUTION RESTORATION PLAN). VESTING IS ACHIEVED AT AGE 55 AND 10 YEARS OF SERVICE OR AT AGE 65 AND 5 YEARS OF SERVICE. THE SECOND SUPPLEMENTAL DEFINED CONTRIBUTION PLAN PROVIDES ADDITIONAL RETIREMENT INCOME BASED ON A PERCENTAGE OF BASE SALARY AND VESTS AT THREE AND FIVE YEARS OF SERVICE. MR. GALLAGHER RECEIVED $378,945 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2013. MR. STUART RECEIVED $149,343 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2013. SCHEDULE J, PART II: CERTAIN SENIOR EXECUTIVES ARE ACCOUNTABLE FOR AND PERFORM SERVICES FOR SANTAFE HEALTHCARE, INC. AND EACH OF ITS AFFILIATES. SANTAFE HEALTHCARE AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH $2 BILLION IN GROSS RECEIPTS AND APPROXIMATELY 2,000 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY EITHER SANTAFE HEALTHCARE, INC. OR AVMED, INC. AND THEIR COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATE BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2013, THE FOLLOWING PERCENTAGES OF EACH EXECUTIVE'S COMPENSATION AND BENEFITS (FOR THOSE SENIOR EXECUTIVES PAID BY A RELATED ORGANIZATION) IS APPORTIONED AND CHARGED TO AVMED, INC. AS FOLLOWS: 75% - MICHAEL P. GALLAGHER, PRESIDENT & CEO 89% - RANDALL L. STUART, SENIOR VICE PRESIDENT & CFO FORM 990, PART VI, SECTION A, LINE 7A SANTAFE HEALTHCARE, INC., A 501(C)(3) SUPPORTING ORGANIZATION TO AVMED, INC., HAS RESERVED POWERS AS DELINEATED IN THE ARTICLES OF INCORPORATION AND BYLAWS THAT PERMITS IT TO ELECT ONE OR MORE MEMBERS OF THE GOVERNING BODY OF AVMED, INC. FORM 990, PART VI, SECTION A, LINE 7B THE RESERVED POWERS OF SANTAFE HEALTHCARE, INC., AS DELINEATED IN THE ARTICLES OF INCORPORATION AND BYLAWS, PERMIT IT TO APPROVE OR RATIFY THE GOVERNING BODY'S DECISIONS RELATED TO BOARD MEMBER ELECTIONS OR REMOVALS, THE DECISION TO DISSOLVE THE ORGANIZATION AND OTHER MATTERS THAT MAY COME BEFORE THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 11 THE ORGANIZATION'S PROCESS FOR ENSURING THE ACCURATE PREPARATION, REVIEW AND APPROVAL OF THE 2013 FORM 990 BEGAN WITH PROFESSIONAL DEVELOPMENT OF STAFF (SEVERAL OF WHICH ARE CPAS) WHICH WERE INVOLVED IN THE PREPARATION OF THE 2013 FORM 990. IN ADDITION TO STAFF DEVELOPMENT, WHICH INCLUDED ATTENDING TAX SEMINARS AND CLASSES, MANAGEMENT ALSO CONSULTED WITH INDEPENDENT ACCOUNTING FIRMS AND TAX LEGAL COUNSEL REGARDING THE IRS FORM 990 CODE AND FILING REQUIREMENTS. THE ORGANIZATION ALSO PREVIOUSLY EDUCATED ITS MANAGEMENT TEAM, OFFICERS AND DIRECTORS, WITH THE ASSISTANCE OF DELOITTE TAX LLP, REGARDING THE FORM 990 AND THEIR INVOLVEMENT IN REVIEWING THE RETURN. FOLLOWING MANAGEMENT'S PREPARATION OF THE 2013 FORM 990, DELOITTE TAX LLP REVIEWED THE 2013 FORM 990. A COPY OF THE 2013 FORM 990 AND ATTACHMENTS WERE PROVIDED TO THE ORGANIZATION'S CURRENT BOARD OF DIRECTORS FOR THEIR REVIEW AND COMMENT. EXECUTIVE MANAGEMENT ADDRESSED ANY QUESTIONS RAISED BY THE BOARD MEMBERS PRIOR TO FILING THE 2013 FORM 990 AND ATTACHMENTS WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C AVMED HAS A POLICY FOR MONITORING AND ENFORCING COMPLIANCE WITH ITS CONFLICT OF INTEREST POLICY. THE POLICY DETAILS THAT THE CORPORATE SECRETARY HAS RESPONSIBILITY FOR DELIVERY AND RECEIPT OF DIRECTOR AND OFFICER CONFLICT OF INTEREST STATEMENTS. THE HUMAN RESOURCES DEPARTMENT OBTAINS AN ACKNOWLEDGMENT OF UNDERSTANDING OF THE CONFLICT OF INTEREST POLICY FROM EVERY NEW EMPLOYEE AT THE DATE OF HIRE AND FROM ALL EMPLOYEES ANNUALLY. ANNUAL CONFLICT OF INTEREST STATEMENTS ARE REVIEWED BY INTERNAL STAFF TO ENSURE RECORDS ARE COMPLETE. AS PART OF THE CORPORATE CONTRACT REVIEW PROCESS, CONSIDERATION IS GIVEN TO ANY POTENTIAL CONFLICTS OF INTEREST INVOLVING OPERATIONAL OR FINANCIAL TRANSACTIONS. ALL EMPLOYEES AND BOARD MEMBERS ARE EXPECTED TO NOTIFY THE CORPORATE COMPLIANCE OFFICER IF A POTENTIAL CONFLICT EXISTS. IF A CASE IS DISCOVERED OR REPORTED, THE CORPORATE COMPLIANCE OFFICER MAKES A REPORT TO THE LEGAL DEPARTMENT AND THE CHAIRMAN OF THE BOARD AS TO THE FACTS AND CIRCUMSTANCES SURROUNDING THE INCIDENT. MEMORANDUMS (OR MINUTES) ARE MADE OF EVERY FINAL DECISION, INCLUDING THE REASONS THEREFORE AND THE ACTION TAKEN, WHETHER THE QUESTION IS DETERMINED TO BE SUBSTANTIAL OR NOT; AND A COPY OF SUCH MEMORANDUM (OR MINUTES) IS FILED WITH THE CORPORATE SECRETARY FOR EXAMINATION BY THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 15 LINE 15A: MICHAEL P GALLAGHER IS THE PRESIDENT AND CHIEF EXECUTIVE OFFICER (CEO) OF AVMED, INC. MR. GALLAGHER IS COMPENSATED BY SANTAFE HEALTHCARE, INC. (SANTAFE), A RELATED SUPPORTING ORGANIZATION. SANTAFE UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: THE SANTAFE BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE CEO'S TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES, AND LONG TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISON TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. THE INDEPENDENT CONSULTING FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS ESTABLISHES THE FINAL COMPENSATION AND BENEFIT PACKAGE FOR THE CEO TAKING INTO CONSIDERATION THE MARKET COMPETITIVENESS REVIEW AND FINAL RECOMMENDATION OF THE INDEPENDENT CONSULTING FIRM. THE INDEPENDENT CONSULTING FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF THE FINAL COMPENSATION AND BENEFITS PACKAGE. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. FORM 990, PART VI, SECTION B, LINE 15B: PROCESS FOR DETERMINING COMPENSATION FOR ALL EMPLOYEE OFFICERS AND KEY EMPLOYEES OF AVMED, INC. IS AS FOLLOWS: THE SANTAFE HEALTHCARE, INC. (SANTAFE) BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS FIRM (FIRM) TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF ALL AVMED, INC. (AVMED) OFFICERS' AND KEY EMPLOYEES' TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES, AND LONG-TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISONS TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. AFTER COMPLETION OF ITS REVIEW, THE FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE SANTAFE BOARD OF DIRECTORS. THE FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF TOTAL DIRECT COMPENSATION AND EXECUTIVE BENEFITS. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETINGS. THE SANTAFE BOARD OF DIRECTORS RETAINS AN INDEPENDENT THIRD PARTY CONSULTANT TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF AVMED BOARD OF DIRECTORS' (INCLUDING OFFICER POSITIONS) COMPENSATION EVERY TWO TO THREE YEARS. THE COMPETITIVENESS ANALYSIS INCLUDES COMPARISONS TO BOTH NOT-FOR-PROFIT AND PUBLIC COMPANY (EXCLUDING EQUITY COMPONENT) DATA FOR COMPANIES WITHIN THE SAME OR SIMILAR INDUSTRY. ANY COMPENSATION CHANGES ARE APPROVED BY THE SANTAFE BOARD OF DIRECTORS BASED ON THE MARKET COMPETITIVENESS STUDY. A MARKET COMPETITIVENESS STUDY WAS CONDUCTED IN NOVEMBER 2012 FOR CHANGES MADE EFFECTIVE JANUARY 1, 2013. FORM 990, PART VI, SECTION C, LINE 19 AVMED'S PROCESS FOR MAKING ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC ARE AS FOLLOWS: AVMED, INC.'S CONFLICT OF INTEREST POLICY STATEMENT IS INCLUDED IN ITS CODE OF ETHICAL BUSINESS CONDUCT AND IS AVAILABLE TO THE GENERAL PUBLIC AT HTTP://WWW.AVMED.ORG. THE ARTICLES OF INCORPORATION ARE AVAILABLE FOR PUBLIC INSPECTION ONLINE AT THE STATE OF FLORIDA, DIVISION OF CORPORATIONS WEBSITE WWW.SUNBIZ.ORG. THE FLORIDA OFFICE OF INSURANCE REGULATION SERVES AS THE OVERSIGHT AND LICENSING ENTITY FOR FLORIDA HEALTH MAINTENANCE ORGANIZATIONS AND CONDUCTS ROUTINE AND REGULAR EXAMINATIONS OF THE FINANCIAL AND OPERATING CONDITIONS OF LICENSED ENTITIES. THE EXAMINATION REPORTS INCLUDE FINANCIAL STATEMENT DETAILS AND ANALYSIS, AS WELL AS EVALUATION AND OPINIONS ON THE ENTITY'S GOVERNING DOCUMENTS AND GOVERNING BODY OPERATIONS AND MEETINGS. THE GENERAL PUBLIC HAS ACCESS TO THE FULL EXAMINATION REPORTS AT HTTP://WWW.FLOIR.COM/SECTIONS/LANDH/MANAGEDCARE/IS_MC_FINANCIAL_EXAMS.ASPX FORM 990, PART VII, SECTION A, LINE 1A: CERTAIN SENIOR EXECUTIVES ARE ACCOUNTABLE FOR AND PERFORM SERVICES FOR SANTAFE HEALTHCARE, INC. AND EACH OF ITS AFFILIATES. SANTAFE HEALTHCARE AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH $2 BILLION IN GROSS RECEIPTS AND APPROXIMATELY 2,000 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY EITHER SANTAFE HEALTHCARE, INC. OR AVMED, INC. AND THEIR COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATE BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2013, THE FOLLOWING PERCENTAGES OF EACH EXECUTIVE'S COMPENSATION AND BENEFITS (FOR THOSE SENIOR EXECUTIVES PAID BY A RELATED ORGANIZATION) IS APPORTIONED AND CHARGED TO AVMED, INC. AS FOLLOWS: 75% - MICHAEL P. GALLAGHER, PRESIDENT & CEO 89% - RANDALL L. STUART, SENIOR VICE PRESIDENT & CFO FORM 990, PART IX, LINE 11G HEALTH CARE SERVICES : PROGRAM SERVICE EXPENSES 678,894,049. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 678,894,049. AGENT/BROKER COMMISSIONS AND INCENT : PROGRAM SERVICE EXPENSES 17,517,217. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 17,517,217. CONSULTING AND OUTSIDE SERVICES: PROGRAM SERVICE EXPENSES 4,356,803. MANAGEMENT AND GENERAL EXPENSES 4,360,311. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 8,717,114. TEMPORARY HELP : PROGRAM SERVICE EXPENSES 1,728,580. MANAGEMENT AND GENERAL EXPENSES 341,857. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 2,070,437. RECRUITING AND TESTING SERVICES : PROGRAM SERVICE EXPENSES 0. MANAGEMENT AND GENERAL EXPENSES 603,304. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 603,304. FORM 990, PART XI, LINE 9: CHANGE IN NET ASSETS FOR NONQUALIFIED PENSION PLAN -7,978. INVESTMENT PARTNERSHIP REVENUE REALIZED FOR TAX AND NOT FOR BOOK -3,028,199. INVESTMENT IMPAIRMENT REALIZED FOR BOOK AND NOT FOR TAX -72,221. FORM 990, PART XII, LINE 2C: THERE HAS BEEN NO CHANGE FROM THE PRIOR YEAR TO THE PROCESS RELATED TO AUDIT OVERSIGHT AND SELECTION OF THE INDEPENDENT ACCOUNTANT FOR THE ORGANIZATION. 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