2012-06-22T11:09:40-05:00 2011-09-30 DELOITTE TAX LLP 655 WEST BROADWAY SUITE 700 SAN DIEGO CA 921018590 990 2010-10-01 954322584 FACEY MEDICAL FOUNDATION FACE 8183659531 15451 SAN FERNANDO MISSION BLVD No 200 MISSION HILLS CA 913451420 301510 8183659531 2012-06-21 1 Diana J McCutchen 6192326500 2010 2016-02-24 21:20:13Z Bill Gil 15451 SAN FERNANDO MISSION BLVD No 200 MISSION HILLS CA 913451420 184529119 0 X WWW.FACEY.COM X 1991 CA Premier healthcare team providing quality medical service. 10 8 1178 0 13200 0 13531 510 176205101 181929634 3040654 537347 18833 62490 179278119 182529981 45016 71565 0 0 51899769 54734068 0 0 0 123115221 124844908 175060006 179650541 4218113 2879440 55984067 56660436 26882731 25081528 29101336 31578908 We are a premier healthcare team dedicated to providing quality medical service in a caring and professional atmosphere. Each of us is committed to service, innovation, and quality care while serving the needs of the community. 0 0 163774638 71565 180848702 Direct patient medical care - this includes, but is not limited to, face to face provider appointments, laboratory and x-ray services, physical therapy services, immunizations, provided drugs and medications, procedures in Ophthalmology, OB/GYN, and Gastroenterology. Revenues also include income from Hospital & Health Plan Shared Risk, Health Plan Pay for Performance, Stop Loss Recoveries, and 3rd Party Liens. 998983 1080932 Clinical Research: Conducted 44 (9 are active) FDA-regulated studies (119 patients and 1,256 study visits) in various disciplines including Gastroenterology, Endocrinology, Internal Medicine, Oncology, Pediatrics, and Ophthalmology. 996374 Patient Education: 241 Health Education classes, serving 8,133 people, between October 2010 and September 2011. 165769995 1 0 0 1 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 1 166 0 1178 1 1 1 0 0 0 0 0 0 0 0 0 X 10 8 1 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 0 1 1 1 1 CA X Margie J Melby 8188375610 15451 San Fernando Mission Blvd 300 Mission Hills CA 913451420 X Randall Ewig 1.60 X 24939 0 0 Ronald Kaufman MD 1.10 X 12900 0 0 Gary Leary 1.70 X 68160 0 0 Michael Linn 1.20 X 13200 0 0 J Robert Liset 0.80 X 10300 0 0 Mary Odell 1.20 X 13200 0 0 Larry Scherzer 1.40 X 14700 0 0 Michael Lynch MD 0.90 X 11200 0 0 Peter Richman MD 1.00 X 11700 0 0 Jennifer Wortham 0.10 X 800 0 0 James Corwin 40.00 X 305647 0 33927 Teresa David 40.00 X 293514 0 19927 Guillermo Gil 40.00 X 431595 0 20601 Victoria Bayona 40.00 X 122040 0 6454 Magaly Beilke 40.00 X 180807 0 7326 Jacki Delanders 40.00 X 160883 0 24097 Prubjeet Khurana 40.00 X 184058 0 6022 Mari Zagrzejewski 40.00 X 161443 0 10430 David B Day 40.00 X 165217 0 13066 Joung Jeffrey Lee 40.00 X 149138 0 5156 Cathy Hawes 40.00 X 144977 0 599 Margie Melby 40.00 X 147846 0 13352 Susan Slack 40.00 X 147850 0 8812 2654074 0 163315 47 0 1 0 Facey Medical Group 15451 San Fernando Mission Blvd Su Mission Hills CA 91345 Professional Medical Services 77328625 Quest Diagnostics 8401 Fallbrook West Hills CA 91304 Laboratory Services 1784530 Erdman & Associates 350 Interlocken Blvd Bloomfield CO 80021 Constuction & Consulting Services 1594344 Las Casa Maintenance Inc 9018 Balboa Blvd Suite 281 Northridge CA 91325 Janitorial Services 776871 Medical Present Value 5000 Plaza on the Lake Suite 265 Austin TX 78746 Billing Processing Services 250603 13 510 510 Net Patient Services 900099 180848702 180848702 Clinical Research 900099 1080932 1080932 181929634 424863 424863 2100697 10925 1999138 101559 10925 112484 112484 Miscellaneous 900099 49290 49290 Management Fees 812900 13200 13200 62490 182529981 181929634 13200 586637 71565 71565 1997334 496225 1501109 43574371 38558350 5016021 620412 527350 93062 5147131 4346815 800316 3394820 2965063 429757 390782 390782 192346 192346 15147 15147 79549 79549 6080492 6080492 211724 162418 49306 4458549 2065548 2393001 2353525 1764586 588939 14587610 13180503 1407107 226282 179774 46508 53514 19514 34000 19456 19456 4731044 4331994 399050 835744 749641 86103 Medical Fees to FMG 77328614 77328614 0 0 Supplies 10909188 10572870 336318 0 Bad Debt 2368673 2368673 0 0 Misc UBI Expense 2669 2669 0 179650541 165769995 13880546 0 13600 13450 10859926 12619762 8531799 7006182 1722768 1619353 2498773 2971753 53234472 34624193 18631370 18610279 13584331 13678157 141500 141500 55984067 56660436 17381943 16881044 2688884 2289574 486356 538559 6325548 5372351 26882731 25081528 X 29101336 31578908 29101336 31578908 55984067 56660436 X 2879440 -401868 X 0 1 1 X 0 X 0 0 0 0 0 0 0 0 1 15147 15147 0 Explanation of Other Lobbying Activities: Part II-B, Line 1i: Facey Medical Foundation paid membership dues to California Association of Physician Groups ("CAPG"). A portion of the dues paid are utilized by this organization for lobbying activities. 21372858 13504318 7868540 21717352 14803384 6913968 10144262 6316491 3827771 18610279 Medical MalPractice Self-Insured Retention 5372351 5372351 182529981 179650541 2879440 -267012 -134856 -401868 2477572 182136054 -267012 -267012 182403066 126915 126915 182529981 179557793 0 179557793 92748 92748 179650541 Description of Uncertain Tax Positions Under FIN 48: Part X: FMF accounts for income taxes in accordance with Financial Accounting Standards Board (FASB) Accounts Standards Codification (ASC) 740, Income Taxes. FASB ASC 740 prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken, or expects to take, on a tax return. During the years ended September 30, 2011 and 2010, FMF did not record any liability for unrecognized tax benefits. Part XI, Line 8 - Other Adjustments: Imputed interest on unihealth grant obligation -100,689. Book/Tax Difference on K-1 -34,167. PART XII, LINE 4B: Other revenue & expense reclass 92,748 Book/Tax Difference on K-1 34,167 PART XIII, LINE 4B: Other revenue & expense reclass 92,748 1 Providence Holy Cross Foundation 15031 Rinaldi St Mission Hills CA 91345 953544877 501(c)(3) 15856 FMV Building expansion fund Northeast Valley Health Corp 1172 N Maclay Ave San Fernando CA 913401300 277120632 501(c)(3) 26000 FMV To purchase flu vaccines for underserved population Henry Mayo Newhall Memorial Hospital 23845 McBean Parkway Valencia CA 913552083 953849903 501(c)(3) 12500 FMV NICU nurses station California Association of Physician Groups Foundation 915 Wilshire Blvd Suite 1620 Los Angeles CA 90017 470878940 501(c)(3) 6500 FMV Donation to CAPG Foundation in support of health care awareness 4 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: Facey Medical Foundation only makes grants to 501(c)(3) organizations to ensure the funds will be used properly. X X X X 0 0 0 0 0 0 0 1 0 James Corwin 229239 0 71244 0 5164 0 3600 0 30327 0 339574 0 0 0 Teresa David 223299 0 64916 0 5299 0 12881 0 7046 0 313441 0 0 0 Guillermo Gil 315668 0 106589 0 9338 0 19600 0 1001 0 452196 0 0 0 Magaly Beilke 153544 0 26998 0 265 0 5444 0 1882 0 188133 0 0 0 Jacki Delanders 134926 0 25766 0 191 0 5081 0 19016 0 184980 0 0 0 Prubjeet Khurana 158086 0 25920 0 52 0 5520 0 502 0 190080 0 0 0 Mari Zagrzejewski 135084 0 25920 0 439 0 4973 0 5457 0 171873 0 0 0 David B Day 164582 0 0 0 635 0 5174 0 7892 0 178283 0 0 0 Joung Jeffrey Lee 149014 0 0 0 124 0 0 0 5156 0 154294 0 0 0 Margie Melby 124213 0 22928 0 705 0 4535 0 8817 0 161198 0 0 0 Susan Slack 127072 0 20412 0 366 0 2950 0 5862 0 156662 0 0 0 Part I, Line 7 Facey has an administrative incentive plan ("AIP") for executive bonuses, which are determined based on financial performance, clinical performance, patient satisfaction, employee turnover, collection percentage and Facey Medical Group assessment. Financial performance is based on designated net operating income levels. The bonus incentives are based on a fixed formula, however, Facey Medical Group's board of directors assess management performance and as such has the discretion to determine a portion of the bonus. Michael Lynch Board Member 421222 Facey Eye Institute, Inc. provides billing and collection services to Facey Medical Foundation. The $421,222 consists of the gross fees received by Facey Eye Institute, Inc. from Vision Service Plan and is reimbursed to Facey Medical Foundation. The amount also includes reimbursement of overhead expenses from Facey Medical Foundation to Facey Eye Institute, Inc. in an amount that is approximately 5% of the total collections. Michael Lynch is the sole shareholder of Facey Eye Institute. All services are negotiated at market rates and are considered to be at arm's length. 0 Form 990, Part VI, Section A, line 2 Michael Lynch and Peter Richman have a business relationship. Form 990, Part VI, Section B, line 11 The 2010 Form 990 will be reviewed by the Audit Committee prior to filing. Committee Minutes will reflect the review of the tax return for the 2010 tax year. A copy of the return will be distributed to each board member and reviewed at a board meeting. The Board minutes will reflect the review of the Form 990. Form 990, Part VI, Section B, line 12c Officer and Board conduct is reviewed annually, questionnaires are filled out and sworn statements are signed stating whether or not such conflicts exist. The CEO and Board Chairperson are responsible for monitoring and enforcing compliance with the conflict of interest policies. Form 990, Part VI, Section B, line 15 All members of the FMF Administrative Team (FAM) are reviewed by the Compensation Committee which is chaired by Board Members not affiliated with Management. All salaries are compared with multiple external salary surveys and ensure no person is paid in excess of 90% of any credible survey. Form 990, Part VI, Section C, line 19 The organization makes its financial statements and tax returns available upon request. The organization does not make its governing documents or conflict of interest policy available to the public. FORM 990, PART VII: Total compensation reported for Gary Leary on Part VII is $68,160. The $68,160 is composed of $54,360 in legal services fees and the other $13,800 is for board service compensation. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net unrealized losses on investments: -267,012. Imputed interest on unihealth grant obligation -100,689. Book/Tax Difference on K-1 -34,167. Total to Form 990, Part XI, Line 5: -401,868. Form 990, Schedule A, Part I, Line 3 and Schedule H: Although Facey Medical Foundation qualifies for public charity status for Schedule A purposes as an organization providing medical care pursuant to Internal Revenue Code section 170(b)(1)(A)(iii) and Treasury Regulations section 1.170A-9(d)(1)(ii), it is not required to file Schedule H with its Form 990 as it is not an organization that is required to be licensed, registered or similarly recognized by a state as a hospital. Form 990, Part VI, Section B, Line 14: While certain departments within the organization have document retention and destruction guidelines that are followed, the organization does not have a comprehensive policy for all departments that has been approved by its governing Board. Such a policy has been drafted and is awaiting final review and approval by the Board. FORM 990, PART III: The following programs and amounts represent the community benefit provided by Facey Medical Foundation and the costs associated with them for the fiscal year reported on this Form 990: Direct Charitable Write-Offs Charity (Indigent Care) $ 327,403 Medi-Medi/Medi-Cal $1,296,454 Flu Clinics $ 26,000 Community Outreach/Education Programs $ 996,374 Total Community Benefit Costs thru 9/30/11 $2,646,231 In September 2006, FMF entered into a binding grant agreement with UniHealth, whereby FMF is required to pay annual grants to UniHealth of $500,000 for a total aggregate of $5,000,000 over 10 years. In addition to the annual grant obligations, FMF may be required to make additional grant payments equal to 50% of the amount by which FMF's annual net operating income, exceeds 1.5% of FMF's annual net revenue, as defined in the grant agreement. The additional grant payments shall not exceed $5,000,000 in the aggregate for fiscal years 2006 through 2015. For the years ended September 30, 2011 and 2010, respectively, no amounts have been accrued for the additional grant payments, as FMF's operating results have not met the requirements as defined in the grant agreement. The annual grant and additional grant payments, if any, are due 45 days after receipt of FMF's annual audited financial statements. As of September 30, 2011 and 2010, the $5,000,000 grant-net of payments and a $211,000 and $311,000 discount, respectively, is reflected in net assets in the accompanying statements of financial position. The discount rate used, 4.6%, represents the 10-year treasury rate in existence at the date the grant agreement was executed. FMF may prepay the discounted amounts of any remaining grant obligation or additional grant payment at any time during the 10-year period. The grant payable as of September 30, 2011 and 2010, is $2,289,000 and $2,689,000, respectively, and is included in the accompanying statements of financial position. Because the grant was consummated with UniHealth, FMF's then sole corporate member, the transaction was considered a net asset transfer for accounting purposes. FORM 990, PART VI, LINE 16: Facey Medical Foundation has investments in limited partnerships that operate surgical centers. These limited partnerships are controlled by another tax exempt 501(c)(3) organization.