2013-07-24T12:42:38-05:00 2012-12-31 232932984 PARENTEBEARD LLC 1650 MARKET STREET SUITE 4500 PHILADELPHIA PA 19103 990 2012-01-01 251767436 HOSPITAL & HEALTHSYSTEM ASSOCIATION OF PENNSYLVANIA HOSP 7175649200 4750 LINDLE ROAD PO BOX 8600 HARRISBURG PA 171058600 MICHAEL A SUCHANICK 7175649200 2013-07-24 1 JULIUS GREEN CPA P00350393 2159720701 2012 2016-02-24 21:20:13Z ANDREW W CARTER 4750 LINDLE ROAD PO BOX 8600 HARRISBURG PA 171058600 18218890 0 X WWW.HAPONLINE.ORG X 1921 PA TO ADVOCATE FOR AND PROVIDE SERVICES TO PENNSYLVANIA'S HOSPITALS AND HEALTH SYSTEMS AS THEY STRIVE TO DELIVER SAFE, EFFICIENT, AND QUALITY HEALTH CARE TO THE PATIENTS AND COMMUNITIES THEY SERVE. 25 25 101 25 0 0 76933 3650687 10181897 12564420 563709 689601 -210553 -256142 10611986 16648566 5500 10500 0 0 7409629 8681883 0 0 0 2604855 4558063 10019984 13250446 592002 3398120 26988995 29525881 6656568 5514901 20332427 24010980 X TO ADVOCATE FOR AND PROVIDE SERVICES TO PENNSYLVANIA'S HOSPITALS AND HEALTH SYSTEMS AS THEY STRIVE TO DELIVER SAFE, EFFICIENT, AND QUALITY HEALTH CARE TO THE PATIENTS AND COMMUNITIES THEY SERVE. 0 0 HAP ADVOCATED ON BEHALF OF PENNSYLVANIA'S HOSPITALS AND HEALTH SYSTEMS FOR APPROPRIATE IMPLEMENTATION OF PAYMENT REFORM UNDER THE AFFORDABLE CARE ACT IMPACTING MEDICAID, MEDICARE AND COMMERCIAL INSURANCE. HAP HELD MEETINGS WITH THE CORBETT ADMINISTRATION LEGISLATIVE LEADERS AND OTHER STATEWIDE ORGANIZATIONS TO ADVOCATE THE HOSPITAL COMMUNITY POSITION REGARDING STATE IMPLEMENTATION OF THE AFFORDABLE CARE ACT AND THE POTENTIAL IMPACT ON HOSPITALS AND COMMUNITIES. IN ADDITION HAP WORKED WITH THE AMERICAN HOSPITAL ASSOCIATION ON THE ADVOCACY RELATED TO THE FEDERAL BUDGET AND DEBT CEILING/DEFICIT REDUCTION TO PREVENT FURTHER MEDICARE AND MEDICAID PAYMENT REDUCTIONS. HAP PARTNERED WITH THE HEALTH CARE IMPROVEMENT FOUNDATION, PENNSYLVANIA SAFETY AUTHORITY, QUALITY INSIGHTS OF PENNSYLVANIA, AND THE PENNSYLVANIA HEALTH CARE QUALITY ALLIANCE TO SECURE A TWO-YEAR CONTRACT WITH CMS AS A STATEWIDE HOSPITAL ENGAGEMENT CONTRACTOR UNDER THE FEDERAL PARTNERSHIP FOR PATIENTS PROGRAM IN REDUCING HARM FROM SERIOUS EVENTS AND PREVENT READMISSIONS. HAP RECRUITED 138 GENERAL ACUTE CARE, REHABILITATION, LONG-TERM ACUTE CARE HOSPITALS, AND AMBULATORY SURGERY FACILITIES TO PARTICIPATE IN PROJECTS LAUNCHED UNDER THE PENNSYLVANIA HOSPITAL ENGAGEMENT NETWORK. THESE PROJECTS INCLUDE WRONG-SITE SURGERY, ADVERSE DRUG EVENTS, FALL PREVENTION, OBSTETRICAL ADVERSE EVENTS, VENOUS THROMBOEMBOLISM, PREVENTABLE READMISSIONS, CENTRAL-LINE ASSOCIATED BLOOD STREAM INFECTIONS (CLABSI), PRESSURE ULCER PROJECTS, SURGICAL SITE INFECTIONS AND VENTILATOR-ASSOCIATED PNEUMONIA PROJECTS. HAP NEGOTIATED AND SECURED A FIVE-YEAR $7 MILLION GRANT FROM THE PENNSYLVANIA DEPARTMENT OF HEALTH (DOH) WITH THE GOAL OF ENHANCING DOH'S ABILITY TO IMPROVE STATEWIDE EMERGENCY SUPPORT FUNCTION OPERATIONS THROUGH THE DEVELOPMENT OF A THREE-TIERED PARTNERSHIP STRUCTURE AMONG HEALTH CARE, EMERGENCY MEDICAL SERVICES, AND PUBLIC HEALTH. HAP AND SIX REGIONAL MANAGERS HIRED IN SUPPORT OF THE GRANT PLAYED A KEY ROLE IN PROVIDING COMPREHENSIVE SUPPORT AND INFORMATION TO DOH, HOSPITALS, AND OTHER HEALTH CARE FACILITIES DURING HURRICANE SANDY. IN ADDITION, HAP SECURED A FIVE-YEAR GRANT FROM DOH FOR REGIONAL EMERGENCY PREPAREDNESS SUPPORT AND SERVICES IN SOUTHEAST PENNSYLVANIA. 0 1 0 1 0 0 0 0 0 1 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 1 38 0 1 101 1 0 0 0 0 1 1 0 X 25 25 0 0 0 0 1 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 X MICHAEL A SUCHANICK 7175649200 4750 LINDLE ROAD HARRISBURG PA 17111 GARRY L SCHEIB 1.40 0.40 X X 0 0 0 STEVEN P JOHNSON 1.20 0.40 X X 0 0 0 SCOTT A BECKER 1.20 0.40 X X 0 0 0 PAUL BACHARACH 1.20 0.40 X X 0 0 0 THOMAS E BEEMAN 0.60 0.40 X 0 0 0 ALAN BRECHBILL 0.60 0.40 X 0 0 0 CORNELIO R CATENA 0.60 0.40 X 0 0 0 JAMES M COLLINS 0.60 0.40 X 0 0 0 LESLIE C DAVIS 1.20 0.40 X 0 0 0 MICHAEL J FARRELL JR 0.60 0.40 X 0 0 0 STUART H FINE 1.20 0.40 X 0 0 0 BARRY R FREEDMAN 0.60 0.40 X 0 0 0 GEORGE A HUBER 0.60 0.40 X 0 0 0 LARRY R KAISER 0.60 0.40 X 0 0 0 KATHLEEN KINSLOW 0.60 0.40 X 0 0 0 JANET LIENERT 0.60 0.40 X 0 0 0 JOHN J LYNCH III 0.60 0.40 X 0 0 0 NORMAN F MITRY 0.60 0.40 X 0 0 0 JOHN R MORAHAN 1.20 0.40 X 0 0 0 EDWARD C PITCHFORD 0.60 0.40 X 0 0 0 JOAN K RICHARDS 1.20 0.40 X 0 0 0 RICHARD L SEIM 0.60 0.40 X 0 0 0 JOHN E SIMODEJKA 1.20 0.40 X 0 0 0 GLENN STEELE JR 0.60 0.40 X 0 0 0 H RAY WELCH JR 1.20 0.40 X 0 0 0 CAROLYN F SCANLAN 37.10 0.40 X 1035233 0 305923 ANDREW W CARTER 37.10 0.40 X 43480 0 0 MICHAEL A SUCHANICK 35.80 1.70 X 377049 0 46969 PAULA A BUSSARD 37.50 0.00 X 337075 0 45889 MICHAEL P STRAZZELLA 37.10 0.40 X 262740 0 36078 SCOTT BISHOP 37.10 0.40 X 233957 0 27936 CURT SCHRODER 37.50 0.00 X 156994 0 18816 THOMAS L GRACE 37.50 0.00 X 176294 0 42630 ROBERT E GREENWOOD 37.50 0.00 X 173593 0 44668 MARTIN CICCOCCIOPPO 37.50 0.00 X 143703 0 13844 LYNN G LEIGHTON 37.50 0.00 X 141926 0 39868 KATHY MEBUS 37.50 0.00 X 140881 0 21397 3222925 0 644018 17 0 1 0 DUANE MORRIS LLP 30 SOUTH 17TH STREET PHILADELPHIA PA 19103 LEGAL SERVICES 417140 WITT KIEFFER FORD HALDEMAN LLOYD 2015 SPRING ROAD OAK BROOK IL 60523 CONSULTANT 215885 SOCIETY OF HOSPITAL MEDICINE 1500 SPRING GARDEN ST 501 PHILADELPHIA PA 19130 CONSULTANT 122667 KURT MECKES 2401 PAXTON RD HARRISBURG PA 17112 BUILDING MAINTENANCE 101827 4 3558578 92109 3650687 PROGRAM FEES 900099 11687593 11687593 GROUP PURCHASING 900099 724981 724981 MANAGEMENT FEES 561000 102000 102000 HEALTH CARE BENEFITS 900099 41455 41455 MEETING FUNCTIONS 900099 8391 8391 12564420 484624 484624 416023 708506 -292483 -292483 -292483 1023795 43000 832497 29321 191298 13679 204977 204977 CASH SURRENDER VALUE 900099 35798 35798 MISCELLANEOUS INCOME 900099 543 543 36341 16648566 12564420 0 433459 X 10500 2781754 3942789 555408 876758 525174 422512 32909 21154 1818009 293145 205620 144785 251952 536844 2062 487017 93894 EMERGENCY PREPAREDNESS 84761 SUBSCRIPTIONS 56599 MEDIA SERVICES 50316 PROFESSIONAL DUES 44066 12418 13250446 1182 792657 1975385 4649301 17500 391084 666013 433620 66684 44848 124927 139223 13796811 10082982 3923508 3713829 14221684 15813649 3491503 920116 2500609 2627554 26988995 29525881 6486065 5370114 136254 113286 34249 31501 6656568 5514901 X 20332427 24010980 20332427 24010980 26988995 29525881 X 3398120 1023311 -742878 X 0 1 X 1 1 1 RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 7141020 1875624 1875624 1875946 -322 851675 851675 8886656 6791423 2095233 431394 113618 317776 3013855 2798246 215609 613231 379695 233536 3713829 ACCOUNTS RECEIVABLE FROM AFFILIATES & SUBSIDIARIES 41212 SECURITY DEPOSITS 100 CASH SURRENDER VALUE OF OFFICERS' LIFE INSURANCE 2586242 2627554 POST-RETIREMENT BENEFIT OBLIGATION 29703 ACCOUNTS PAYABLE TO AFFILIATES & SUBSIDIARIES 1798 31501 X 18386664 1023311 80764 1104075 17282589 -634023 -634023 16648566 13884469 634023 634023 13250446 0 13250446 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: THE ASSOCIATION ACCOUNTS FOR UNCERTAINTY IN INCOME TAXES USING 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 IS MET. MANAGEMENT DETERMINED THERE WERE NO TAX UNCERTAINTIES THAT MET THE RECOGNITION THRESHOLD IN 2012 AND 2011. THE ASSOCIATION'S FEDERAL RETURNS OF ORGANIZATION EXEMPT FROM INCOME TAX AND EXEMPT ORGANIZATION BUSINESS INCOME TAX RETURNS FOR YEARS PRIOR TO 2009 ARE NO LONGER SUBJECT TO EXAMINATION BY THE INTERNAL REVENUE SERVICE. THE ASSOCIATION'S POLICY IS TO RECOGNIZE INTEREST RELATED TO UNRECOGNIZED TAX BENEFITS IN INTEREST EXPENSE AND PENALTIES IN OPERATING EXPENSES. PART XI, LINE 2D - OTHER ADJUSTMENTS: CHANGE IN CASH SURRENDER VALUE OF LIFE INSURANCE 80,764. PART XI, LINE 4B - OTHER ADJUSTMENTS: RENTAL EXPENSES -708,506. RECOVERY OF BAD DEBT EXPENSE 74,483. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES 708,506. RECOVERY OF BAD DEBT EXPENSE -74,483. 1 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: THE ORGANIZATION ONLY PROVIDES GRANTS AND ASSISTANCE TO OTHER TAX-EXEMPT ORGANIZATIONS. NO SINGLE ORGANIZATION WAS PROVIDED MORE THAN $5,000; THEREFORE, PART II OF SCHEDULE I HAS NOTHING TO REPORT. X X X 1 1 X X X X X 0 1 0 CAROLYN F SCANLAN 560178 0 333606 0 141449 0 260768 0 45155 0 1341156 0 110177 0 MICHAEL A SUCHANICK 278504 0 86658 0 11887 0 36704 0 10265 0 424018 0 15235 0 PAULA A BUSSARD 249366 0 79010 0 8699 0 24263 0 21626 0 382964 0 9887 0 MICHAEL P STRAZZELLA 212600 0 48875 0 1265 0 19528 0 16550 0 298818 0 0 0 SCOTT BISHOP 196694 0 36574 0 689 0 0 0 27936 0 261893 0 0 0 CURT SCHRODER 136639 0 19024 0 1331 0 17706 0 1110 0 175810 0 0 0 THOMAS L GRACE 162728 0 11370 0 2196 0 14844 0 27786 0 218924 0 0 0 ROBERT E GREENWOOD 164448 0 5613 0 3532 0 15493 0 29175 0 218261 0 0 0 MARTIN CICCOCCIOPPO 132670 0 10195 0 838 0 11673 0 2171 0 157547 0 0 0 LYNN G LEIGHTON 129116 0 11602 0 1208 0 12189 0 27679 0 181794 0 0 0 KATHY MEBUS 123658 0 11028 0 6195 0 11340 0 10057 0 162278 0 0 0 PART I, LINE 1A TAXABLE COUNTRY CLUB DUES: CAROLYN F. SCANLAN - $7,530 TAXABLE TRAVEL FOR COMPANIONS: CAROLYN F. SCANLAN - $1,580 TAXABLE TAX INDEMNIFICATION AND GROSS-UP PAYMENTS: CAROLYN F. SCANLAN - $5,000 ANDREW W. CARTER - $11,671 KATHY MEBUS - $1,000 PART I, LINE 4B TAXABLE CAPITAL ACCUMULATION BENEFIT PAID IN 2012: CAROLYN F. SCANLAN - $110,177 MICHAEL A. SUCHANICK - $15,235 PAULA BUSSARD - $9,887 THE HAP EXECUTIVE BENEFIT PLAN PROVIDES BENEFITS TO EXECUTIVES THROUGH A FLEXIBLE BENEFIT OPTION. THE FLEXIBLE BENEFIT ALLOWANCES ARE CREDITED TO A TAX-DEFERRED CAPITAL ACCUMULATION ACCOUNT. ACCUMULATIONS ARE PAYABLE AT ELECTED VESTING DATE, DEATH, TERMINATION DUE TO DISABILITY OR INVOLUNTARY TERMINATION WITHOUT CAUSE. IF THE EXECUTIVE LEAVES FOR ANY REASON, A SUBSTANTIAL RISK OF FORFEITURE IN THE FORM OF A 24-MONTH NON-COMPETITION AGREEMENT APPLIES. CONTRIBUTIONS AND EARNINGS ARE TAX SHELTERED UNTIL THE PAYOUT DATE. HAP RETAINS OWNERSHIP OF THE INVESTMENTS WITH THE CAPITAL ACCUMULATION ACCOUNTS. IF HAP BECOMES INSOLVENT, EXECUTIVES ARE UNSECURED CREDITORS AND WILL HAVE NO PREFERRED CLAIM TO ANY ASSETS. FORM 990, PART VI, SECTION A, LINE 6 MEMBERSHIP OF HAP IS DIVIDED INTO THE FOLLOWING CLASSES: 1) GENERAL MEMBERS - INSTITUTIONS, ENTITIES OR ORGANIZATIONS WHICH SUPPORT THE MISSION AND PURPOSE OF HAP TO REPRESENT AND SERVE THE MEMBERSHIP IN ITS ROLE OF PROVIDING QUALITY HEALTH CARE TO ALL THE PEOPLE OF THE COMMONWEALTH AND TO THE IMPROVEMENT OF COMMUNITY-BASED HEALTH THROUGH COST-EFFECTIVE ACCESS TO AN INTEGRATED CONTINUUM OF CARE. GENERAL MEMBERS SHALL BE THE ONLY VOTING MEMBERSHIP CLASS. 2) ASSOCIATE MEMBERS - INSTITUTIONS AND ORGANIZATIONS NOT ELIGIBLE FOR GENERAL MEMBERSHIP, BUT WHICH SUPPORT THE PURPOSE AND OBJECTIVES OF HAP. AT EVERY MEETING OF MEMBERS, EACH GENERAL MEMBER SHALL HAVE ONE VOTE. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 IS PREPARED INTERNALLY BY HAP. HAP'S TAX ADVISORS THEN REVIEW THE FORM 990 AND MAKE ANY NECESSARY CHANGES. AFTER THE TAX ADVISORS' REVIEW, THE FORM 990 IS GIVEN TO THE AUDIT AND FINANCE COMMITTEE OF HAP FOR A DETAILED REVIEW, WITH A COPY GIVEN TO ALL BOARD MEMBERS. ONCE THE AUDIT AND FINANCE COMMITTEE HAS REVIEWED, HAP'S TAX ADVISORS PREPARE THE FINAL FORM 990 AND SEND TO HAP FOR SIGNATURES AND FILING, ALONG WITH A PUBLIC INSPECTION COPY. FORM 990, PART VI, SECTION B, LINE 12C A WRITTEN CONFLICT OF INTEREST POLICY IS DISTRIBUTED TO ALL BOARD MEMBERS ON AN ANNUAL BASIS AND TO EMPLOYEES BI-ANNUALLY WITH REQUESTED DISCLOSURES. THE PURPOSE OF THE CONFLICT OF INTEREST POLICY (THE "CONFLICTS POLICY") IS TO PROTECT THE INTEREST OF THE HOSPITAL & HEALTHSYSTEM ASSOCIATION OF PENNSYLVANIA (THE "ASSOCIATION") WHEN IT CONTEMPLATES ENTERING INTO A TRANSACTION OR ARRANGEMENT THAT MIGHT BENEFIT A PRIVATE INTEREST OF AN OFFICER, DIRECTOR, EMPLOYEE AND THEIR FAMILY MEMBERS AND BUSINESS ASSOCIATES (THE "GROUP") OF HAP. THE CONFLICTS POLICY IS INTENDED TO SUPPLEMENT, BUT NOT REPLACE, ANY APPLICABLE STATE LAWS GOVERNING CONFLICTS OF INTEREST APPLICABLE TO NONPROFIT CORPORATIONS. IN CONNECTION WITH ANY ACTUAL OR POSSIBLE CONFLICTS OF INTEREST, AN OFFICER, DIRECTOR, MANAGER, KEY EMPLOYEE AND THEIR FAMILY MEMBERS, BUSINESS ASSOCIATES OR INTERESTED PERSON MUST DISCLOSE THE EXISTENCE OF HIS OR HER FINANCIAL INTEREST AND MUST BE GIVEN THE OPPORTUNITY TO DISCLOSE ALL MATERIAL FACTS TO THE DIRECTORS AND MEMBERS OF COMMITTEES AND BOARD-DELEGATED POWERS CONSIDERING THE PROPOSED TRANSACTION OR ARRANGEMENT. AN INTERESTED PERSON IS DEFINED AS ANY DIRECTOR, PRINCIPAL OFFICER, OR MEMBER OF A COMMITTEE WITH BOARD-DELEGATED POWERS WHO HAS A DIRECT OR INDIRECT FINANCIAL INTEREST. IF A PERSON IS AN INTERESTED PERSON WITH RESPECT TO THE ASSOCIATION OR ANY OF THE ASSOCIATION'S AFFILIATES, HE OR SHE IS AN INTERESTED PERSON WITH RESPECT TO THE ASSOCIATION AND ALL OF ITS AFFILIATES. AFTER DISCLOSURE OF THE FINANCIAL INTEREST AND ALL MATERIAL FACTS, AND AFTER DISCUSSION WITH THE INTERESTED PERSON, HE/SHE SHALL LEAVE THE BOARD OR COMMITTEE MEETING WHILE THE DETERMINATION OF A CONFLICT OF INTEREST IS DELIBERATED AND VOTED UPON. THE REMAINING BOARD OR COMMITTEE MEMBERS SHALL DECIDE IF A CONFLICT OF INTEREST EXISTS. PROCEDURES FOR ADDRESSING THE CONFLICT OF INTEREST: -AN INTERESTED PERSON MAY MAKE A PRESENTATION CONCERNING THE ACTUAL OR POTENTIAL CONFLICT OF INTEREST AT THE BOARD OR COMMITTEE MEETING, BUT AFTER SUCH PRESENTATION, HE/SHE SHALL LEAVE THE MEETING DURING THE DISCUSSION OF, AND VOTE ON, THE TRANSACTION OR ARRANGEMENT THAT RESULTS IN THE CONFLICT OF INTEREST. -THE CHAIRPERSON OF THE BOARD OR COMMITTEE SHALL, IF APPROPRIATE, APPOINT A DISINTERESTED PERSON OR COMMITTEE TO INVESTIGATE ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT. -AFTER EXERCISING DUE DILIGENCE, THE BOARD OR COMMITTEE SHALL DETERMINE WHETHER THE ASSOCIATION 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 AVOID A CONFLICT OF INTEREST, THE BOARD OR COMMITTEE SHALL DETERMINE BY A MAJORITY VOTE OF THE DISINTERESTED DIRECTORS OR COMMITTEE MEMBERS WHETHER THE TRANSACTION OR ARRANGEMENT IS IN THE ASSOCIATION'S BEST INTEREST AND FOR ITS OWN BENEFIT AND WHETHER THE TRANSACTION IS FAIR AND REASONABLE TO THE ASSOCIATION, AND SHALL MAKE ITS DECISION AS TO WHETHER TO ENTER INTO THE TRANSACTION OR ARRANGEMENT IN CONFORMITY WITH SUCH DETERMINATION. VIOLATIONS OF THE CONFLICTS POLICY: -IF THE BOARD OR COMMITTEE HAS REASONABLE CAUSE TO BELIEVE THAT AN INTERESTED PERSON HAS FAILED TO DISCLOSE AN ACTUAL OR POSSIBLE CONFLICT 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 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 IN FULFILLMENT OF HAP'S COMPENSATION COMMITTEE'S (COMPRISED OF HAP BOARD MEMBERS) RESPONSIBILITIES, SPECIFICALLY IN REGARD TO THE CEO'S COMPENSATION, EACH YEAR HAP'S EXECUTIVE COMPENSATION COMMITTEE AND BENEFITS CONSULTANT, INTEGRATED HEALTHCARE STRATEGIES ("IHS"), CONDUCTS A COMPREHENSIVE REVIEW OF CEO TOTAL COMPENSATION. TO EVALUATE THE TOTAL COMPENSATION PROGRAM FOR HAP'S CEO, IHS ANNUALLY: - COLLECTS AND REVIEWS BACKGROUND DATA, INCLUDING FINANCIAL DATA AND CURRENT COMPENSATION INFORMATION; - COMPILES COMPREHENSIVE DATA FOR CEOS WITH HAP'S SELECT PEER GROUP; - COMPARES THE CEO'S CURRENT SALARY, INCENTIVE BENEFIT AND TOTAL COMPENSATION LEVELS TO PEER GROUP MEDIAN LEVELS; AND - PREPARES, FOR THE COMMITTEE'S REVIEW, A MEMORANDUM DOCUMENTING FINDINGS. THE PROCESS FOR SETTING OTHER OFFICERS' AND KEY EMPLOYEES' COMPENSATION IS THE SAME AS ABOVE. IN FULFILLMENT OF THE COMPENSATION COMMITTEE'S RESPONSIBILITIES, IN REGARD TO OFFICERS' AND OTHER KEY EMPLOYEES' COMPENSATION EACH YEAR, THE EXECUTIVE COMPENSATION AND BENEFITS CONSULTANT, IHS, CONDUCTS A COMPREHENSIVE REVIEW OF OFFICERS' AND OTHER KEY EMPLOYEES' TOTAL COMPENSATION. TO EVALUATE THE TOTAL COMPENSATION PROGRAM FOR OFFICERS AND KEY EMPLOYEES, IHS ANNUALLY: - COLLECTS AND REVIEWS BACKGROUND DATA, INCLUDING FINANCIAL DATA AND CURRENT COMPENSATION INFORMATION; - COMPILES COMPENSATION DATA FOR THE OFFICERS AND KEY EMPLOYEES WITH A SELECT PEER GROUP; - COMPARES THE OFFICERS' AND KEY EMPLOYEES' CURRENT SALARY, INCENTIVE BENEFIT AND TOTAL COMPENSATION LEVELS TO PEER GROUP MEDIAN LEVELS; AND - PREPARES, FOR THE COMMITTEE'S REVIEW, A MEMORANDUM DOCUMENTING FINDINGS. FORM 990, PART VI, SECTION C, LINE 19 THE GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS ARE MADE AVAILABLE TO THE PUBLIC UPON REQUEST. OTHER FEES FORM 990, PART IX, LINE 11G CONSULTANT & PROFESSIONAL FEES: TOTAL EXPENSES 415,994. PHYSICIAN LEADERSHIP ADVISORY FEES: TOTAL EXPENSES 19,000. HOSPITAL ENGAGEMENT NETWORK SUB-CONTRACT SERVICES: TOTAL EXPENSES 1,263,537. EMERGENCY PREPAREDNESS SUB-CONTRACT SERVICES: TOTAL EXPENSES 119,478. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: CHANGE IN CASH SURRENDER VALUE OF LIFE INSURANCE 80,764. EQUITY IN INCOME OF SUBSIDIARY -2,571,388. PENSION AND POST-RETIREMENT BENEFIT LIABILITY ADJUSTMENTS -402,254. TRANSFER OF EQUITY FROM SUBSIDIARY 2,150,000. 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