2012-11-14T10:14:20-06:00 2011-12-31 861065772 DELOITTE TAX LLP 201 E KENNEDY BLVD SUITE 1200 TAMPA FL 33602 990 2011-01-01 592742907 AVMED INC AVME 3523728400 SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 RANDALL L STUART 3523378730 2012-11-13 1 STEVEN EROVNER P00648526 8132738300 2011 2016-02-24 21:20:13Z AVMED HEALTH PLANS MICHAEL P GALLAGHER SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 1610306694 0 X WWW.AVMED.ORG X 1986 FL TO IMPROVE THE HEALTH & WELLNESS OF OUR MEMBERS BY PROVIDING HIGH QUALITY HEALTH CARE PLANS.TO IMPROVE THE HEALTH AND WELLNESS OF OUR ENROLLEES 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. 12 9 982 0 226 0 0 0 1267790283 1312126001 18732654 17003605 524583 2252586 1287047520 1331382192 4300000 0 0 0 74969552 71518980 0 0 0 1202281767 1318241701 1281551319 1389760681 5496201 -58378489 387395553 347696970 183253103 205560304 204142450 142136666 X THE MISSION OF AVMED, INC. IS TO IMPROVE THE HEALTH AND WELLNESS OF ITS ENROLLEES 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 1275141647 1265444792 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 2,828,728 MEMBER MONTHS OF NETWORK ACCESS, 3,121,463 DRUG PRESCRIPTIONS, AND 92,600 DAYS OF INPATIENT CARE. 49172753 49172753 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, THE HIGHEST RANKING STATUS, 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 81 MEASURES ACROSS 8 DOMAINS OF CARE.FOR 2011, AVMED'S RESULTS WERE RANKED AT THE 75TH PERCENTILE OR HIGHER NATIONALLY FOR 16 OF THE 28 HEALTH CARE MEASURES AND AT THE 50TH PERCENTILE OR HIGHER FOR 23 OF THE 28 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 21 HEALTH CARE MEASURES AND AT THE 50TH PERCENTILE OR HIGHER FOR 16 OUT OF THE 21 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. 80% OF AVMED'S MEMBERS WHO RESPONDED TO THE 2011 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. 1324314400 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 0 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 1 20348 0 1 982 1 0 0 0 0 0 0 X 12 9 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 SR VP & CFO 3523378730 4300 NW 89TH BLVD GAINESVILLE FL 326065688 X JOE G DUNLAP 3.00 X X 55756 18407 0 ROBERT L EPLING 1.00 X X 39054 0 0 GEORGE E WILLIAMSON II 1.00 X X 40425 0 0 JOSEPH W DAVIS 1.00 X 36485 0 0 JOHN M LUDDEN MD 1.00 X 34196 0 0 PAMELA J MOONEY PHD 1.00 X 33325 0 0 PAUL R PHILIP 1.00 X 37004 0 0 HUGH J FLOYD 1.00 X 34523 0 0 ANTONIO L ARGIZ 1.00 X 34306 0 0 GORDON L JOHNSON 1.00 X 34523 0 0 ROBERT C HUDSON 1.00 X 34523 0 0 MICHAEL P GALLAGHER 45.00 X X 0 2101549 252885 EDWIN W HANNUM 60.00 X 1099082 0 14101 STEVEN M ZIEGLER 47.00 X 261721 0 76912 RANDALL L STUART 58.00 X 0 610873 153972 CATHERINE E AYERS 40.00 X 620740 0 136667 GREGORY W FISCHER 50.00 X 434021 0 4839 SUSAN K PINNAS 50.00 X 547583 0 61966 JAMES M REPP 50.00 X 312308 0 72328 ROBERT BRADFORD BENTLEY 50.00 X 326511 0 88390 FRANCIS T JANTZEN 40.00 X 342376 0 14572 EDWIN RODRIGUEZ MD 40.00 X 624222 0 76460 ROBERT D BONNELL MD 40.00 X 384119 0 68680 VINCENZO FERRI 40.00 X 333580 0 22320 BARRY G WAGNER 40.00 X 350824 0 71314 STEPHEN J DEMONTMOLLIN 0.00 X 480468 0 23983 6531675 2730829 1139389 99 1 1 0 BAPTIST HOSPITAL OF MIAMI INC 8900 N KENDALL DRIVE MIAMI FL 33176 MEDICAL 99737808 SOUTH BROWARD HOSPITAL DISTRICT 3501 JOHNSON ST HOLLYWOOD FL 33021 MEDICAL 96517250 SOUTH MIAMI HOSPITAL INC 6200 SW 73RD ST MIAMI FL 33143 MEDICAL 54618740 NORTH FLORIDA MEDICAL CENTER INC PO BOX 406407 ATLANTA GA 30384 MEDICAL 26578182 MOUNT SINAI MEDICAL CENTER OF FLORIDA I 4300 ALTON RD MIAMI FL 33102 MEDICAL 24252664 1062 MEDICAL REVENUE 524114 874093615 874093615 MEDICARE REVENUE 524114 392436595 392436595 SELF-FUNDED ADMIN FEE 524292 22982555 22982555 FEDERAL REVENUE 524114 22613236 22613236 1312126001 7860263 7860263 175449 175449 4494064 5655262 -1161198 -1161198 -1161198 279677314 2559819 272750038 519202 6927276 2040617 8967893 226 8967667 MISCELLANEOUS 900099 2491544 2491544 MANAGEMENT FEES 561000 922240 922240 3413784 1331382192 1314617545 226 16764421 4730907 1738326 2992581 51084700 33487068 17597632 5884480 3443374 2441106 5505680 3427266 2078414 4313213 2835954 1477259 1646208 1646208 10261834 26332 10235502 317250 317250 957480 957480 1269796526 1262389254 7407272 5840606 5833878 6728 8890218 3856959 5033259 4699550 4699550 2659162 2194107 465055 1224871 761551 463320 398151 133330 264821 82045 82045 4062697 2810413 1252284 543206 543206 LICENSES AND FEES 4520450 1058572 3461878 DUES AND ASSESSMENTS 1877515 311824 1565691 COMMUNITY SUPPORT 463932 6192 457740 1389760681 1324314400 65446281 0 10901 44748491 13533483 5059156 36677672 35188809 1617477 2236509 79304074 53246356 26051036 26057718 274143034 203262525 24994413 20036188 10367537 11107574 387395553 347696970 158387257 187715270 11612209 5848367 2010043 2347340 11243594 9649327 183253103 205560304 X 204142450 142136666 204142450 142136666 387395553 347696970 X -58378489 -3627295 X X 0 1 1 X 0 68717 ORGANIZATIONS DIRECT AND INDIRECT POLITICAL CAMPAIGN ACTIVITIES: PART I-A, LINE 1: AVMED MADE DIRECT CONTRIBUTIONS TO GENERAL CAMPAIGN FUNDS OF STATE AND LOCAL POLITICAL CANDIDATES IN 2011. IN ADDITION, AVMED IS A MEMBER OF AMERICA'S HEALTH INSURANCE PLANS (AHIP), AND A PORTION OF FEES PAID TO AHIP ARE ATTRIBUTABLE TO LOBBYING ACTIVITIES AND GRASSROOTS EFFORTS ON BEHALF OF MEMBERS. 0 1 384250 4395800 4780050 1409693 35626564 25142942 11893315 510528 370172 140356 33084239 27625101 5459138 3893000 108141 3784859 26057718 INTECH ENHANCED PLUS FUND 19987722 F PRIVATE INVESTMENTS 48466 C 20036188 CAPITAL LEASE OBLIGATION 792013 BENEFITS PAYABLE 4996725 OTHER LIABILITIES 3328927 DUE TO AFFILIATES 531662 9649327 1331382192 1389760681 -58378489 -408965 -3218330 -3627295 -62005784 1328951438 -40223 -40223 1328991661 2390531 2390531 1331382192 1390598835 838154 838154 1389760681 0 1389760681 PART IV, LINE 2B: INCLUDED IN THIS LINE ARE OBLIGATIONS TO PAY BENEFITS FROM ESCROWED FUNDS ON BEHALF OF SELF-FUNDED HEALTH PLANS. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: AVMED HAD NO UNCERTAIN TAX POSITIONS AS OF DECEMBER 31, 2011. AVMED INCURRED NO INTEREST EXPENSE OR PENALTIES RELATED TO UNCERTAIN INCOME TAX PROVISIONS IN 2011 OR 2010. TAX YEARS 2008 THROUGH 2011 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 8 - OTHER ADJUSTMENTS: CHANGE IN NET ASSETS FOR NONQUALIFIED PENSION PLAN 50,578. INVESTMENT PARTNERSHIP REVENUE REALIZED FOR TAX AND NOT FOR BOOK -2,390,531. INVESTMENT IMPAIRMENT REALIZED FOR BOOK AND NOT FOR TAX -878,377. TOTAL TO SCHEDULE D, PART XI, LINE 8: -3,218,330. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSE RECLASS FOR TAX 838,154. INVESTMENT IMPAIRMENT REALIZED FOR BOOK AND NOT FOR TAX -878,377. PART XII, LINE 4B - OTHER ADJUSTMENTS: INVESTMENT PARTNERSHIP REVENUE REALIZED FOR TAX AND NOT FOR BOOK 2,390,531. PART XIII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSE RECLASS 838,154. X X X 1 1 1 1 0 0 0 0 0 0 0 MICHAEL P GALLAGHER 0 825126 0 795972 0 480451 0 229162 0 23723 0 2354434 0 174240 EDWIN W HANNUM 455100 0 391768 0 252214 0 0 0 14101 0 1113183 0 99429 0 STEVEN M ZIEGLER 252730 0 0 0 8991 0 59043 0 17869 0 338633 0 0 0 RANDALL L STUART 0 351966 0 203275 0 55632 0 133041 0 20931 0 764845 0 34089 CATHERINE E AYERS 300387 0 182761 0 137592 0 104957 0 31710 0 757407 0 59074 0 GREGORY W FISCHER 191893 0 82952 0 159176 0 0 0 4839 0 438860 0 0 0 SUSAN K PINNAS 312383 0 150495 0 84705 0 48594 0 13372 0 609549 0 0 0 JAMES M REPP 238523 0 53922 0 19863 0 53773 0 18555 0 384636 0 9620 0 ROBERT BRADFORD BENTLEY 243436 0 65478 0 17597 0 65140 0 23250 0 414901 0 10564 0 FRANCIS T JANTZEN 182698 0 71506 0 88172 0 0 0 14572 0 356948 0 11859 0 EDWIN RODRIGUEZ MD 275394 0 84593 0 264235 0 48802 0 27658 0 700682 0 27430 0 ROBERT D BONNELL MD 256202 0 77153 0 50764 0 46508 0 22172 0 452799 0 25017 0 VINCENZO FERRI 263486 0 61875 0 8219 0 0 0 22320 0 355900 0 0 0 BARRY G WAGNER 252246 0 54365 0 44213 0 44794 0 26520 0 422138 0 12944 0 STEPHEN J DEMONTMOLLIN 25426 0 0 0 455042 0 23677 0 306 0 504451 0 0 0 PART I, LINE 1A CHARTER FLIGHTS ARE SCHEDULED AS NEEDED BETWEEN GAINESVILLE, FLORIDA AND MIAMI, FLORIDA, THE LOCATIONS OF THE TWO PRINCIPAL OFFICES OF AVMED, INC. TO COINCIDE WITH BOARD OF DIRECTORS AND OTHER CRITICAL MEETINGS. OPEN SEATS ON SUCH FLIGHTS ARE AVAILABLE TO ANY EMPLOYEE NEEDING TO CONDUCT BUSINESS IN THE MIAMI OR GAINESVILLE OFFICE. 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 PART I, LINE 3: MICHAEL P. GALLAGHER IS THE 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, LINES 4A-B LISTED PERSONS RECEIVING A SEVERANCE PAYMENT OR CHANGE OF CONTROL PAYMENT IN THE YEAR: STEPHEN DEMONTMOLLIN RECEIVED $370,540 IN COMPENSATION PAYMENTS DUE TO HIS RESIGNATION AND RETIREMENT FROM EMPLOYMENT IN ACCORDANCE WITH BOARD-APPROVED RESIGNATION AND RETIREMENT AGREEMENTS . GREG FISCHER RECEIVED $125,000 IN COMPENSATION PAYMENTS DUE TO A SEVERANCE AGREEMENT . SCHEDULE J, PART I, LINE 4B: 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. MR. GALLAGHER IS VESTED AND RECEIVED PAYMENTS FROM THE NONQUALIFIED DEFINED CONTRIBUTION RESTORATION AND THE SUPPLEMENTAL RETIREMENT PLANS IN 2011. THE TOTAL AMOUNT OF THESE PAYMENTS WAS $373,453. LISTED PERSONS RECEIVING PAYMENTS FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN THE YEAR: CATHERINE E AYERS RECEIVED $114,039 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2011. STEPHEN J DEMONTMOLLIN RECEIVED $35,992 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2011. EDWIN W HANNUM RECEIVED $219,899 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2011. FRANCIS T JANTZEN III RECEIVED $16,926 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2011 . SUSAN K PINNAS RECEIVED $64,141 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2011. EDWIN RODRIGUEZ RECEIVED $254,832 FROM A FROZEN DEFINED BENEFIT NONQUALIFIED RETIREMENT PLAN AND TWO SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2011. ROBERT BONNELL RECEIVED $31,665 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2011. RANDALL L. STUART RECEIVED $39,583 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2011. R. BRADFORD BENTLEY RECEIVED $13,351 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2011. JAMES REPP RECEIVED $12,095 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2011. BARRY G. WAGNER RECEIVED $29,549 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2011. SUPPLEMENTAL INFORMATION PART III 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 REVENUE 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 2011, 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 << 85% - RANDALL L STUART, SENIOR VICE PRESIDENT & CFO G ED WILLIAMSON II BOARD DIRECTOR G. ED WILLIAMSON, II OWNS MORE THAN 35% OF A CORPORATION THAT PURCHASES HEALTH INSURANCE COVERAGE AT MARKET RATES FROM AVMED. THE AMOUNTS PAID FOR THIS HEALTH INSURANCE COVERAGE VARY FROM MONTH TO MONTH BASED ON THE ENROLLMENT OF THE COMPANY'S EMPLOYEES. 0 GORDON L JOHNSON BOARD DIRECTOR GORDON L. JOHNSON OWNS MORE THAN 35% OF A CORPORATION THAT PURCHASES HEALTH INSURANCE COVERAGE AT MARKET RATES FROM AVMED. THE AMOUNTS PAID FOR THIS HEALTH INSURANCE COVERAGE VARY FROM MONTH TO MONTH BASED ON THE ENROLLMENT OF THE COMPANY'S EMPLOYEES. 0 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 2011 FORM 990 BEGAN WITH PROFESSIONAL DEVELOPMENT OF STAFF (SEVERAL OF WHICH ARE CPAS) WHICH WERE INVOLVED IN THE PREPARATION OF THE 2011 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 2011 FORM 990, DELOITTE TAX LLP REVIEWED THE 2011 FORM 990. A COPY OF THE 2011 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 2011 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 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 2010 FOR CHANGES MADE EFFECTIVE JANUARY 1, 2011. 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/MC/IS_MC_FINANCIAL_EXAMS.ASPX. COMPENSATION PAID BY RELATED ORGANIZATIONS: 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 REVENUE 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 2011, 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 << 85% - RANDALL L STUART, SENIOR VICE PRESIDENT & CFO CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED LOSSES ON INVESTMENTS: -408,965. CHANGE IN NET ASSETS FOR NONQUALIFIED PENSION PLAN 50,578. INVESTMENT PARTNERSHIP REVENUE REALIZED FOR TAX AND NOT FOR BOOK -2,390,531. INVESTMENT IMPAIRMENT REALIZED FOR BOOK AND NOT FOR TAX -878,377. TOTAL TO FORM 990, PART XI, LINE 5: -3,627,295. AUDIT COMMITTEE OVERSIGHT OF THE FINANCIAL STATEMENT AUDIT: 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. AVERAGE HOURS PER WEEK DEVOTED TO RELATED ORGANIZATIONS: FORM 990, PART VII, SECTION A, COLUMN B: MICHAEL P GALLAGHER DEVOTED AN AVERAGE OF 15 HOURS PER WEEK TO RELATED ORGANIZATIONS. STEVEN M ZIEGLER DEVOTED AN AVERAGE OF 16 HOURS PER WEEK TO RELATED ORGANIZATIONS. RANDALL L STUART DEVOTED AN AVERAGE OF 7 HOURS PER WEEK TO RELATED ORGANIZATIONS. CATHERINE E AYERS DEVOTED AN AVERAGE OF 20 HOURS PER WEEK TO RELATED ORGANIZATIONS. JOE G DUNLAP DEVOTED AN AVERAGE OF 1 HOUR PER WEEK TO RELATED ORGANIZATIONS. SANTAFE HEALTHCARE INC PO BOX 749 GAINESVILLE FL 326270749 592317607 MANAGEMENT AND FINANCIAL SUPPORT FOR NOT-FOR-PROFIT AFFILIATES FL 501(C)(3) 11B TYPE II N/A 0 NORTH FLORIDA RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 591912330 RETIREMENT COMMUNITY FL 501(C)(3) 9 N/A 0 NORTH CENTRAL FLORIDA HOSPICE INC PO BOX 749 GAINESVILLE FL 326270749 592490893 HOSPICE CARE FL 501(C)(3) 9 N/A 0 SANTAFE SENIOR LIVING INC PO BOX 749 GAINESVILLE FL 326270749 203700526 MANAGEMENT AND FINANCIAL SUPPORT FOR NOT-FOR-PROFIT AFFILIATES FL 501(C)(3) 11A TYPE I N/A 0 BVG ACQUISITION INC PO BOX 749 GAINESVILLE FL 326270749 203701186 RETIREMENT COMMUNITY FL 501(C)(3) 9 N/A 0 EAST RIDGE RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 590903331 RETIREMENT COMMUNITY FL 501(C)(3) 9 N/A 0 BONITA SPRINGS RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 262386152 RETIREMENT COMMUNITY FL 501(C)(3) 9 N/A 0 SANTAFE SENIOR LIVING FOUNDATION INC PO BOX 749 GAINESVILLE FL 326270749 264464727 CHARITABLE AND EDUCATIONAL PURPOSES FL 501(C)(3) 7 N/A 0 SF HOLDING CORPINC & SUBSIDIARY PO BOX 749 GAINESVILLE FL 326270749 592903901 HOLDING COMPANY FL N/A C 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 1 0 0