2023-11-13T12:21:39-06:00 2022-12-31 990 2022-01-01 621646734 Covenant Health COVE 8653743140 1420 Centerpoint Blvd Bldg C Knoxville TN 379321960 Joseph C Dolan EVP/CFO 8653746872 2023-11-08 Joseph Dolan XXX-XX-XXXX 0 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z James D VanderSteeg 244 Ft Sanders W Blvd Knoxville TN 37922 224946121 0 X https://www.covenanthealth.com/ X 1996 TN Covenant Health is the parent organization in a community-owned health care system in East Tenn. 23 22 1410 22 52990 42871 1421208 242395 140384005 150160776 46255546 69761345 156704 105383 188217463 220269899 445422 433696 0 0 88615892 95053511 0 0 388011 73961490 84719143 163022804 180206350 25194659 40063549 1927401864 1741953217 1008959379 1153941621 918442485 588011596 X Covenant Health supports its member hospitals and other organizations (see Schedule A) serve the community by improving the quality of life through better health, regardless of a patient's ability to pay. 0 0 162636824 433696 219654435 Covenant Health is a comprehensive, community-owned health system dedicated to improving the health of the people it serves. Established in 1996 by the consolidation of Fort Sanders Health System, Knoxville, Tennessee, and MMC HealthCare System in Oak Ridge, Covenant Health is governed by a voluntary board of directors comprised of community leaders and medical professionals. With more than 11,000 employees, affiliated physicians and volunteers, Covenant Health is the Knoxville area's largest employer and has been named a Best Employer by Forbes. Covenant Health includes nine acute care hospitals in East Tennessee; Methodist Medical Center of Oak Ridge, Fort Sanders Regional Medical Center and Parkwest Medical Center in Knoxville, Fort Loudoun Medical Center in Lenoir City, LeConte Medical Center in Sevierville, Morristown-Hamblen Healthcare System in Morristown, Roane Medical Center in Harriman, Claiborne Medical Center in Tazewell and Cumberland Medical Center in Crossville. It also includes Peninsula, a division of Parkwest Medical Center, a behavioral health hospital in Blount County, Tennessee. The health system also includes Covenant Medical Group, which includes more than 200 physicians and advanced practice clinicians in office locations throughout East Tennessee.Affiliated organizations include Thompson Cancer Survival Center, Thompson Oncology Group, Fortress Corporation and Subsidiaries, Covenant HomeCare, and Fort Sanders Perinatal Center. Philanthropic organizations include Fort Sanders Foundation and the Thompson Cancer Survival Center Foundation in Knoxville, Methodist Medical Center Foundation in Oak Ridge, Dr. Robert F. Thomas Foundation in Sevierville, and Morristown-Hamblen Hospital Foundation in Morristown. Funds raised by the foundations provide services, equipment and other resources for excellence in patient care.SERVICECovenant Health's various system-level divisions operationally support and facilitate the health system's not-for-profit mission of improving the region's quality of life through better health. These divisions include information technology, business office and health information management, along with system-wide departments such as human resources, learning and leadership development, and others. 162636824 1 0 0 1 0 0 0 0 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 1 1 1 0 0 1 270 0 1 1410 1 1 1 0 0 0 0 0 0 0 1 0 X 23 22 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 1 X Amy DeLong 8653743140 1420 Centerpoint Blvd Bldg C Knoxville TN 379321960 Gerald Boyd Director 1.00 0.00 X 0 0 0 Willard Campbell MD Director 1.00 0.00 X 0 0 0 Michael Casey MD Director 1.00 0.00 X 0 0 0 Ronni Chandler Director 1.00 0.00 X 0 0 0 Mitchell Dickson MD Director 1.00 0.00 X 268 0 0 Stephanie Flood Director 1.00 0.00 X 849 0 0 James Gibson Director 1.00 0.00 X 74 0 0 Edgar Gray Director 1.00 0.00 X 1432 0 0 Leslye Hartsell Director 1.00 0.00 X 889 0 0 Donald Hickman Director 1.00 0.00 X 1538 0 0 Timothy Matthews Director 1.00 0.00 X 906 0 0 Janice McKinley Director 1.00 0.00 X 1097 0 0 Dave Miller Director 1.00 0.00 X 1208 0 0 Bill Myers Director 1.00 0.00 X 0 0 0 Alvin Nance Director 1.00 0.00 X 0 0 0 Linda Ogle Director 1.00 0.00 X 0 0 0 King Purnell Director/Chair 1.00 0.00 X X 1050 0 0 Jorge Sanabria Director 1.00 0.00 X 1485 0 0 William Seale Director 1.00 0.00 X 1251 0 0 Cosby Stone Director 1.00 0.00 X 1408 0 0 Joe Sutter Director 1.00 0.00 X 979 0 0 James Tramontana MD Director 1.00 0.00 X 1208 0 0 James D VanderSteeg President & CEO 50.00 0.00 X X 2346646 0 316057 John T Geppi EVP/CFO 50.00 0.00 X 1099851 0 33916 Kathleen F Zitzman Chief Compliance Officer 50.00 0.00 X 369567 0 42454 Barry J Lindeman Fmr Dir. Int. Aud.(through Aug 2022) 50.00 0.00 X 102781 0 18876 Philip V Schmidt Director - Internal Audit 50.00 0.00 X 103159 0 34402 Michael R Belbeck Jr EVP-Hosp Ops/Interim Pres & CAO-PWMC 30.00 20.00 X 898340 0 88783 M Douglas Campbell Jr General Counsel 50.00 0.00 X 770403 0 69788 Lucas D Johnson Sr EVP - Physician Enterprise 50.00 0.00 X 835157 0 31825 Mark W Browne MD SVP - Chief Medical Officer 50.00 0.00 X 607755 0 41785 Debra A Welch SVP - Human Resources 50.00 0.00 X 553822 0 33243 William M Ward SVP - Chief Information Officer 50.00 0.00 X 529114 0 44879 Debra R Honey SVP - Chief Nursing Officer 50.00 0.00 X 498870 0 22406 Amanda G Halford MD SVP - Chief Med Informatic Officer 50.00 0.00 X 475922 0 40674 William C Clabough SVP - Business Development 50.00 0.00 X 442049 0 13499 Teresa A Giles SVP - Finance 50.00 0.00 X 437289 0 41917 Keith N Altshuler President/CAO - Fort Sanders Reg 0.00 50.00 X 653393 0 34275 Jeremy H Biggs President/CAO - Methodist Med Ctr 0.00 50.00 X 533789 0 41284 Gordon E Lintz President/CAO - Morristown-Hamblen 0.00 50.00 X 481299 0 23477 David V Bunch Fmr Pres/CAO - CMC(through Aug 2022) 0.00 50.00 X 436865 0 23935 Neil A Heatherly Fmr Pres/CAO - Parkwest 0.00 0.00 X 480721 0 24684 12672434 0 1022159 150 1 1 0 Vaya Workforce Solutions LLC 5930 Cornerstone Court West Ste 30 San Diego CA 92121 Contract labor 59768348 Cardinal Health Pharmacy Services LLC 13651 Dublin Ct Strafford TX 77477 Pharmacy management 59315209 OptumRx 11000 Optum Circle Eden Prairie MN 55344 Pharmacy claims services 27104101 Morrison Mgmt Specialists Inc 400 Northridge Road Suite 600 Atlanta GA 30350 Cafeteria management & catering 23604035 Cerner Corporation 2800 Rock Creek Parkway North Kansas City MO 64117 Consulting & software maintenance 12189896 96 242395 242395 Management Fees 561000 148702027 148702027 Telephone Services 517000 613046 613046 Health Information Admin 561499 524673 524673 Other Program Services 900099 315807 315807 Transcription Fees 518210 5223 5223 150160776 69347534 69347534 93732 93732 232128 184361 47767 47767 47767 320079 0 320079 320079 320079 4549477 4491861 57616 57616 220269899 219654435 52990 320079 433696 433696 10960772 9855314 1105458 67542487 60130670 7112844 298973 2970280 2862017 108263 7888968 7092163 796805 5691004 5097836 593168 706040 706040 426054 426054 15063416 14021685 1038278 3453 3844096 115611 3719991 8494 827521 821574 5947 24978395 24978395 1646865 1223309 405224 18332 265413 198897 61180 5336 484736 223484 256731 4521 26934932 26934932 447174 320322 126852 1097934 1097934 Unrelated Business Inco 5500 5500 Minor Equipment 4236643 4158582 38056 40005 Subscriptions 1370886 1298757 71977 152 Business Dues & License 1368924 1320431 45695 2798 1014614 451215 563399 180206350 162636824 17181515 388011 2000 2000 173581308 173414799 1387249 1408886 16760041 16556613 78104168 34516546 37442470 43587622 1618337125 1430006888 43581775 40693038 36309896 36283371 1927401864 1741953217 63375744 78103347 10000000 884849518 1012579985 60734117 53258289 1008959379 1153941621 X 918442485 588011596 918442485 588011596 1927401864 1741953217 X 40063549 -234937614 -135556824 X 0 1 X 1 1 1 X X 13 Claiborne Medical Center 464420358 3 0 0 0 Covenant HomeCare 621623114 10 0 2608553 0 Cumberland Medical Center 620790132 3 0 1000000 0 Fort Loudoun Medical Ctr 621373691 3 0 0 0 Fort Sanders Perinatal Ctr 043760551 3 0 620648 0 Fort Sanders Regional Med Ctr 620528340 3 0 19779545 0 LeConte Medical Ctr 621114867 3 0 0 0 Methodist Medical Center 620636239 3 0 8434923 0 Morristown Hamblen Healthcare System 620545814 3 0 3403243 0 Parkwest Medical Center 581897274 3 0 1595181 0 Roane County Medical Center 680673354 3 0 0 0 Thompson Cancer Survival Center 621250943 3 0 53667636 0 Thompson Oncology Group 621619239 3 0 8018557 0 13 99128286 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 Part I, Line 12(g)(IV) Covenant Health is operated or controlled in connection with all of the listed supported organizations, and its articles of organization require that it be operated to support or benefit these organizations. These organizations are referred to in the articles by group and are not named individually. All of the identified organizations are governed by a board of directors with 100% overlap of board membership. Part I, Line 12(g)(v): Covenant Health operates to serve the interests of its member hospitals and the other nonprofit health organizations named in Schedule A, Part I (the "Supported Organizations"). The organization's activities have been discussed in detail on Schedule O in response to Form 990, Part III, Lines 4a thru 4d. Covenant Health may also pay expenses on behalf of, provide operating cash to, or make a grant to one of its Supported Organizations. See Schedule R, Part V for information about transfers to controlled organizations. Part IV, Section A, Line 1: Supported organizations are designated by class. Articles of Amendment to the Charter of Covenant Health, adopted on June 7, 2004, state that the corporation will "promote and support the interests and purposes of each of the nonprofit corporations for which the Corporation's board of directors serves as the board of directors". Part IV, Section A, Line 6: Covenant Health makes charitable contributions to organizations for community building activities as these activities seek to address many of the root causes of health problems such as poverty and homelessness. The activities supported affordable housing, temporary help with food and shelter, initiatives to boost economic development, leadership development, education, youth mentoring, and programs for at-risk individuals. 0 1 0 1 0 0 1 182197 0 1 7429 189626 0 Part II-B, Line 1: Covenant Health government relations staff and senior leadership spend time in contact with Federal and state government officials on matters that directly impact hospitals and health care reform. Covenant Health engaged a third-party professional firm during 2022 for government relations and general strategy. Additionally, Covenant Health pays membership dues to professional organizations such as the American Hospital Association. A portion of the dues is designated for lobbying activities by this organization. 9449397 9449397 28518481 10378727 18139754 302966 286791 16175 30514149 23851028 6663121 9319175 9319175 43587622 Due to Affiliates, Net 8890664 Long-Term ASO Agreement 2397188 Long-Term Deferred Compensation 10526962 Long-Term Reserve for Malpractice 30266562 Long-Term Reserve for Workers Comp 1011844 Operating Lease Liability 165069 53258289 X Part X, Line 2: Excerpt from the consolidated audited financial statements of Covenant Health (Covenant): Covenant and certain of its subsidiaries or controlled entities are exempt from income taxes pursuant to Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes on qualifying activities has been made for these entities in the accompanying consolidated financial statements. However, certain entities and operations are subject to income taxes. Covenant had no unrecognized tax benefits at December 31, 2022 and 2021. As such, no interest or penalties were recognized in the consolidated financial statements related to unrecognized tax benefits. At December 31, 2022 and 2021, tax returns for 2019 through 2022 are subject to examination by the Internal Revenue Service. Covenant has no uncertain tax positions that would require financial statement recognition or disclosure under GAAP at December 31, 2022 and 2021. 1 American Heart Association PO Box 4002900 Des Moines IA 503402900 135613797 501c(3) 10000 0 Southeast Gala 2022 Boys and Girls Club of the Tennessee Valley 967 Irwin Street Knoxville TN 37917 620475743 501c(3) 34000 0 General support Congressional Medal of Honor Society PO Box 30121 Knoxville TN 37920 862242424 501c(3) 24076 0 Medal of Honor Celebration Fort Sanders Foundation 280 Ft Sanders West Blvd Ste 202 Knoxville TN 37922 621748601 501c(3) 37650 0 Support for fundraisers benefitting Covenant Health hospitals Honor Air Knoxville PO Box 12990 Knoxville TN 37912 262825063 501c(3) 10000 0 Sponsorship for October 12, 2022 flight Knox Education Foundation 912 S Gay St Ste L210 Knoxville TN 37902 621865303 501c(3) 100000 0 General support for The Great Schools Partnership Knoxville Academy of Medicine Foundation 115 Suburban Rd Knoxville TN 37923 621458199 501c(3) 11000 0 General support Knoxville Track & Field Club PO Box 52266 Knoxville TN 37950 620731345 501c(3) 50000 0 Sponsorship of fundraiser marathon Leadership Knoxville 17 Market Square 201 Knoxville TN 37902 621212211 501c(3) 21000 0 General support Pellissippi State Community College Foundation 10915 Hardin Valley Rd PO Box 22990 Knoxville TN 37933 581493050 501c(3) 10000 0 Support for education center Region II Emergency Medical Services Directors Association PO Box 75 Gatlinburg TN 37738 463698443 501c(3) 8250 0 Sponsorship of program for Emergency Mgmt Service Directors United Way of Greater Knoxville Inc 1301 Hannah Ave Knoxville TN 37921 620475748 501c(3) 60000 0 Support for Interfaith Health Clinic 12 0 Part I, Line 2: Grant funds are provided to charitable organizations for the purpose of enhancing and promoting health care and improving quality of life in the community. The organization has guidelines in place to review the eligibility of grantees and how funds will be used, and all grants require written documentation and appropriate levels of approval. When an organization receives a charitable contribution from Covenant Health, a letter confirming how funds must be used to support the organization's request is sent to the organization. Recipient organizations typically verify contributions in one or more of the following ways: follow-up letters, reports or newsletters, sponsor acknowledgement at a program/event or on their organization's website; itemized receipts, or year-end summaries. X X X X 1 1 X X X X X 1 1 0 0 0 0 0 0 0 James D VanderSteeg President & CEO 1425507 0 742500 0 178639 0 284975 0 31082 0 2662703 0 0 0 John T Geppi EVP/CFO 679719 0 309084 0 111048 0 11600 0 22316 0 1133767 0 0 0 Michael R Belbeck Jr EVP-Hosp Ops/Interim Pres & CAO-PWMC 549996 0 243955 0 104389 0 55427 0 33356 0 987123 0 0 0 Lucas D Johnson Sr EVP - Physician Enterprise 525752 0 231469 0 77936 0 11600 0 20225 0 866982 0 0 0 M Douglas Campbell Jr General Counsel 480885 0 212541 0 76977 0 49783 0 20005 0 840191 0 0 0 Keith N Altshuler President/CAO - Fort Sanders Reg 443841 0 142464 0 67088 0 11600 0 22675 0 687668 0 0 0 Mark W Browne MD SVP - Chief Medical Officer 415133 0 129771 0 62851 0 11600 0 30185 0 649540 0 0 0 Debra A Welch SVP - Human Resources 370373 0 122852 0 60597 0 11600 0 21643 0 587065 0 0 0 Jeremy H Biggs President/CAO - Methodist Med Ctr 353136 0 118933 0 61720 0 11600 0 29684 0 575073 0 0 0 William M Ward SVP - Chief Information Officer 356256 0 100500 0 72358 0 11600 0 33279 0 573993 0 0 0 Debra R Honey SVP - Chief Nursing Officer 327878 0 104250 0 66742 0 0 0 22406 0 521276 0 0 0 Amanda G Halford MD SVP - Chief Med Informatic Officer 322052 0 103746 0 50124 0 11600 0 29074 0 516596 0 0 0 Neil A Heatherly Fmr Pres/CAO - Parkwest 0 0 0 0 480721 0 11600 0 13084 0 505405 0 0 0 Gordon E Lintz President/CAO - Morristown-Hamblen 314946 0 105813 0 60540 0 11600 0 11877 0 504776 0 0 0 Teresa A Giles SVP - Finance 282220 0 101000 0 54069 0 11600 0 30317 0 479206 0 0 0 David V Bunch Fmr Pres/CAO - CMC(through Aug 2022) 178018 0 96132 0 162715 0 3783 0 20152 0 460800 0 0 0 William C Clabough SVP - Business Development 293417 0 96826 0 51806 0 11600 0 1899 0 455548 0 0 0 Kathleen F Zitzman Chief Compliance Officer 246396 0 78073 0 45098 0 11600 0 30854 0 412021 0 0 0 Part I, Line 1a Officers and board members attending official board retreats are offered a discretionary spending allowance that may be used for incidental spending and/or companion travel. Amounts are included in taxable compensation. In addition, board members receive tax indemnification payments related to reportable compensation from the spending allowances, which are also included in taxable compensation. Tax gross-up payments related to deferred compensation and reimbursement of fees for personal services for legal and financial planning are provided to certain executives and managers. Amounts are included in taxable compensation. Part I, Lines 4a-b Neil Heatherly, Former President/CAO of Parkwest Medical Center, received a severance payment of $430,116 during 2022. The amount is included in taxable compensation. His termination date was November 22, 2021. David Bunch, Former President/CAO of Cumberland Medical Center, received a severance payment of $120,200 during 2022. The amount is included in taxable compensation. His termination date was August 5, 2022. Covenant Health maintains a nonqualified deferred compensation ("NQDC") plan intended to support retention of President and CEO, James D. VanderSteeg. Employer contributions of $273,375 are reported as deferred compensation on Schedule J, Part II, Column C. Contributions along with 2022 earnings of $70,560 are subject to a substantial risk of forfeiture. Amounts are combined with other compensation and considered for reasonableness. Compensation procedures are discussed in detail in Schedule O (Form 990, Part VI, Section B, Line 15a). Covenant Health maintains a nonqualified deferred compensation ("NQDC") plan intended to support retention of General Counsel, M. Douglas Campbell, Jr. Employer contributions of $38,183 are reported as deferred compensation on Schedule J, Part II, Column C. Contributions along with 2022 earnings of $1,301 are subject to a substantial risk of forfeiture. Amounts are combined with other compensation and considered for reasonableness. Covenant Health maintains a nonqualified deferred compensation ("NQDC") plan intended to support retention of EVP of Hospital Operations, Michael R. Belbeck. Employer contributions of $43,827 are reported as deferred compensation on Schedule J, Part II, Column C. Contributions along with 2022 earnings of $1,493 are subject to a substantial risk of forfeiture. Amounts are combined with other compensation and considered for reasonableness. A Health Educ & Housing Facil Brd of Knox Co 621220275 499527BM0 2012-12-13 161291013 See Part VI. 0 0 0 B Health Educ & Housing Facil Brd of Knox Co 621220275 499527CH0 2016-11-10 207742114 See Part VI. 0 0 0 C Health Educ & Housing Facil Brd of Knox Co 621220275 NoneAvail 2019-12-20 534171750 See Part VI. 0 0 0 A 86395000 161291013 1291494 159999519 2006 1 0 1 1 B 2320000 212509102 953741 124769125 86786236 2020 1 0 1 1 C 2590000 535223100 76051350 459171750 2022 1 0 1 1 B 0 0 1 1 0 0 0 1 C 0 0 1 1 0 0 0 1 A 0 0 1 0 1 0 0 0 1 B 0 0 0 1 0 0 0 1 1 C 0 1 0 0 1 0 0 0 1 A 1 B 1 C 1 Schedule K, Part I, Bond Issues - description of purpose: The Series 2012A and 2012B Bonds described on Line A of Part 1 were issued to refund capital appreciation bonds and capital interest bonds issued on December 12, 2002. The Series 2016A Bonds described on Line B of Part 1 were issued to refund capital appreciation bonds issued December 20, 2006 and auction rate securities issued December 12, 2002. All other proceeds were designated for expansion projects at Fort Sanders Regional Medical Center and Parkwest Medical Center and for various facility and equipment improvements. Part III.5 - Private business use is less than 1%. Part IV.6 - The proceeds of the 2016A Bonds were not fully expended by the end of the applicable three-year temporary period, but the unspent proceeds were invested at a yield less than the yield on the Series 2016A Bonds after the temporary period ended. The Series 2019 Bonds described on Line C of Part I were issued to refund (a) the 2011A and 2011B Bonds issued on March 24, 2011, (b) the 2011C Second Amended and Restated Bonds issued on May 2, 2017, (c) the 2014A Bonds issued on July 30, 2014, (d) the 2006B1-B3 Third Supplemental Bonds issued on August 10, 2018 and (e) the 2016B Bonds issued on November 1, 2016. All other proceeds were designated for expansion projects at Fort Sanders Regional Medical Center and Morristown Hamblen Hospital and for various facility and equipment improvements and additions at other facilities. Part III.5 - Private business use is less than 1%. Aaron M Browne Family member of Mark W. Browne, M.D. - SVP, Chief Medical Officer 77193 Key employee Mark W. Browne, M.D., has a family relationship with Aaron Browne, an employee of Covenant Health. Amount represents fair market value compensation paid during 2022 for services rendered to the organization. 0 W Chad Halford MD Family member of Amanda G. Halford, M.D.- SVP Chief Med Informatics Officer 368776 Key employee Amanda G. Halford, M.D., has a family relationship with W. Chad Halford, M.D., an employee of Covenant Health. Amount represents fair market value compensation paid during 2022 for services rendered to the organization. 0 Form 990, Part III, Line 4a Information Technology The Information Technology (CovIT) division of Covenant Health provides all computing equipment, information management solutions, and related support services to Covenant Health business entities across 9 acute care hospitals, a behavioral health hospital, 104 physician practices/clinics, and corporate operational support areas. Information management systems and related application support services (install, upgrade, help desk) services are available on a 24/7 basis spanning healthcare functions across core patient-care clinical systems, physician, nursing, and associated ancillary systems (lab, radiology, pharmacy, therapy), as well as supporting business functions comprising patient accounting, materials management, finance, and human resources. CovIT also provides project management support related to analyzing, understanding and implementing solutions to satisfy regulatory and quality reporting requirements. While Cerner provides remote hosting of the core clinical applications, CovIT has primary support for the respective clinical applications and also manages a centralized data center (as well as a backup disaster recovery data center) where hardware equipment is housed. This combination of remote-hosted and on-premise infrastructure enables the delivery of computing resources for all Covenant Health clinical/business functions on a 24/7 schedule. Additionally, CovIT is responsible for management of all PC workstations (desktop, laptop, tablets/iPads, mobile cart), all client-to-server internal and external network connectivity, and telephone services and equipment (PBX, handsets, cell phones, pagers) across the company. Key statistics for 2022 include: - In-patient admissions (Cerner, MedHost, MediTech) - 74,452 - Total orders (Cerner, MedHost, MediTech) - 25,544,147 - Total pharmacy orders - 8,445,314 - Total Tele-ICU Interactions - 116,801 - Total secure clinical text messages - 2,182,713 - Accounts payable checks - 114,402 - Payroll checks/deposits - 235,192 - Helpdesk tickets processed - 183,116 - PCs supported - 11,764 - Total email messages received - 15,772,158 - Total email rejected (viruses and spam) - 5,295,599 - Total number of Zoom meetings/participants/minutes - 66,769/335,207/11,097,858 - Overall telephone calls - 26,448,357 - Average monthly network access attempts blocked (reputation & foreign) - over 1.15 Billion Business Office Knoxville Business Office Services is the Centralized Business Office (CBO) for Covenant Health, providing accounts receivable management for Fort Sanders Regional Medical Center, Parkwest Medical Center, Fort Loudoun Medical Center, LeConte Medical Center, Methodist Medical Center, Morristown-Hamblen Hospital Association and Roane Medical Center. These services include, but are not limited to, customer service, payment collection, financial posting, refund processing, and insurance billing and follow-up. During 2022, CBO submitted over 1,010,000 insurance claims totaling in excess of $5,045,000. Bad debt expense for 2022 was approximately 2.0% of gross revenue, with bad debt recoveries/collections in excess of $15,000,000. The CBO handled over 119,000 incoming phone calls, following-up on over 470,000 open accounts and processed over 3.0 million financial transactions. Health Information Management The central Health Information Management (HIM) department encompasses all areas of traditional medical records, including transcription, coding, release of information, a 24/7 call center, central scanning, records preparation, regulatory compliance, clinical documentation improvement, and privacy protection. Services are provided for acute care hospitals, both inpatient and outpatient; home health; physician offices; and behavioral health. The objective of HIM is to provide comprehensive services that are available to all Covenant Health hospitals and facilities on a 24/7 basis. This enables the hospitals and facilities to provide more efficient and timely service at less cost. In 2022, the HIM department transcribed 2.5 million lines, scanned over 6.2 million pages, and coded 1.3 million records. Form 990, Part III, Line 4a IMPACT OF COVID-19 In March 2020, the outbreak of the coronavirus disease 2019 ("COVID-19") was declared a public health emergency by the Department of Health and Human Services and declared a national pandemic by the World Health Organization. The COVID-19 pandemic had a major impact on the operations of all hospitals and affiliates included within the Covenant Health System. Three years later, although the overall number of hospital admissions due to the virus is significantly lower than the prior two years, COVID-19 continues to be a long-term problem. The stresses on the System which began in 2020 continue to have long-term and far-reaching implications, creating new challenges for every hospital in the System. The rapid rise in costs for supplies and equipment, unprecedented staffing shortages, and lower patient volumes continue to result in financial stress. Elective surgeries and diagnostic procedures have not yet returned to pre-COVID levels. Government subsidies in 2020 and 2021 helped offset the financial losses caused by significant declines in volumes due to cancelled and postponed procedures. In 2021 and 2022, Federal and state grants continued to be used to subsidize the rising costs of retaining staff and providing quality care. These federal and state grants were helpful but the financial pressures of rising costs across the System are ongoing. Early results from our focus groups for the Community Health Needs Assessments indicate that community problems such as substance abuse, mental illness, asthma and other respiratory diseases, and access to health care have gotten worse since COVID-19, thus stressing the health care System even more than usual. Covenant Health has put in place a number of changes to address these challenges. We are aggressively pursuing cost reductions in supplies across our hospitals and with our vendors. Covenant has increased nurse pay and implemented retention bonuses and other incentives to help reduce staff fatigue and turnover. A number of innovations, including a growing use of Tele-health capabilities, have assured that we continue to reach and serve patients in the community. Patient care continues to be our top priority despite the economic pressures. Form 990, Part III, Line 4a In addition to the services previously mentioned, Covenant Health facilitates patient healthcare operations across the health system through a variety of support services. Examples include: - Executive leadership, strategic planning, and other planning at both system and organizational levels - Financial, management and advisory services - Third-party reporting - Integrity compliance program - Real estate management - Risk management - Internal audit - Asset and liability-related management functions - Procurement - Clinical quality improvement - Marketing and public relations - Covenant Health Call Center physician referral and information center - Rapid Access Center available 24/7 to facilitate patient transfers to Covenant Health hospitals - Human resources - Centralized management of plant engineering and construction - External reporting Other system-wide support services directly benefit patients and community members who receive care at Covenant Health's member organizations. These services enhance operational efficiency and quality of care. An example is the production of sterile packs. Covenant Health Sterile Solutions produces surgical sterile packs for distribution to Covenant Health's supported organizations. The use of custom-built sterile packs helps reduce surgical pack supply costs, reduce inventory levels, and minimize waste in keeping with the organization's green initiatives. Sterile packs also help reduce set-up time, leaving more time for treating patients, and with fewer items to open, reducing the risk of contamination. Other centralized services are provided by Covenant Health's Human Resources division. This division is responsible for system-wide programs, policies and procedures, regulatory and legal compliance, and assists with the hiring process for all system employees. Other services include standardized benefit design and administration, employee relations and retention, clinical and non-clinical skill development, and leadership development, succession and continuity. Through its Learning and Leadership Development (LLD) department, Human Resources provides both e-learning and classroom-based courses. LLD offers more than 100 clinical nursing courses from both in-house and vendor sourcing. It also manages a host of clinical training opportunities, ranging from CPR to advanced neurological and neonatal intensive care courses. Form 990, Part VI, Section B, line 11b The Covenant Health board of directors has delegated to its Finance Committee the full power and authority of the board to receive, review, approve, authorize the filing of, address and resolve audit or review issues, and otherwise take all action required or appropriate relative to IRS Forms 990 and other applicable tax filings. Prior to filing Form 990, management reviews with the committee the returns, discusses any material variations in the Form 990 as compared to those to be filed by the organization's affiliates, and answers any questions. At the conclusion of review and discussion, the Finance Committee approves the Form 990. Form 990, Part VI, Section B, line 12c Board members, officers and employees are required to adhere to rules and policies regarding conflicts of interest. Covenant Health distributes a board-approved Code of Conduct to all employees. The Code covers among other subjects, conflicts of interest, and requires disclosure and resolution of employee conflicts of interest. Additionally, officers, employed physicians, and highly compensated employees are required to complete and sign an annual conflict of interest disclosure statement. Board members conflicts of interests are addressed in the corporate bylaws, and board members are required to complete and sign a conflict of interest questionnaire on an annual basis. The Integrity-Compliance Office maintains records that contain conflict of interest information obtained from board members, officers, and employees. These records are available to be queried prior to engaging in business transactions. The Chief Compliance Officer reviews conflict of interest data. Based on this information, the officer determines what conflicts of interest exist at that point in time. Between times when surveys are collected, board members are expected to disclose any new conflicts that have arisen that affect pending board decisions. Officers and other employees are expected to report conflicts to the Chief Compliance Officer as they arise. Depending on the nature of the conflict and the circumstances surrounding the conflict and transaction, the Chief Compliance Officer, senior leadership, or the board of directors may review the conflict of interest. When appropriate, these parties may also consult legal counsel. Restrictions imposed on persons with a conflict of interest are determined on a case by case basis. For Covenant Health employees, the Chief Compliance Officer in conjunction with Covenant Health Executive Leadership determines how to appropriately manage the conflict. In any conflict involving a board member, such member is expected to recuse himself or herself from voting on matters related to the conflict. Form 990, Part VI, Section B, line 15 Form 990, Part VI, Section B, Line 15a: Annual compensation for Covenant Health's President and Chief Executive Officer ("CEO"), James D. VanderSteeg, is determined by the Compensation Committee of the Covenant Health board of directors, ("the Committee") which is composed of independent members of the board and chaired by the chairman of the board. The Committee is guided in its decision-making process by an independent, nationally recognized executive compensation consultant experienced in advising nonprofit hospital boards (the "Consultant") whose services include: (1) providing pay comparisons with market comparables; (2) recommending salary ranges and annual base salary adjustments; (3) designing incentive compensation and deferred compensation components of the CEO's total compensation package; (4) reviewing benefits and perquisites; and (5) certifying as to the reasonableness of total annual compensation. The Consultant analyzes and makes recommendations with respect to the CEO's total compensation package through analysis of CEO compensation data for comparable nonprofit health systems in the United States. The systems selected for comparison are similar to Covenant Health in revenue, total assets, number of hospitals, full time employees and services provided. Covenant Health's current compensation methodology includes setting base salary around the 50th percentile of the market. Base salaries for individual executives will vary based on market conditions, performance, tenure, experience, special skills or qualifications, recruitment and retention challenges, and other relevant factors. In addition, annual incentive compensation may be awarded upon achievement of goals established by the Committee at the beginning of each fiscal year which reflect quality of care, patient safety and service excellence in addition to financial performance and other measures. Incentive opportunity levels will be positioned at or slightly above median or average levels in the market. Annual incentive opportunity ranges from 0-60% of base salary depending upon the CEO's performance. Overall, total compensation levels (all forms of cash compensation and benefits) will be positioned up to or around the 75th percentile of the market, based on individual and organizational performance. As a part of its CEO performance evaluation process, on behalf of the Committee, an independent consultant asks each member of the board of directors to submit a written evaluation of the CEO's performance using an evaluation form prepared by an independent audit firm. This information is collected, collated, and reported to the Committee by the SVP of Human Resources and verified by the General Counsel; results are "blinded" so that individual board members are not identified. The blinded results are shared with the CEO as part of the evaluation process. Any increase in base salary, award of annual incentive, or changes in overall compensation methodology are made by the Committee after discussion with and advice of the Consultant and conditioned upon the Consultant's determination that such decisions result in total annual compensation that is reasonable and within a fair market value range. Once the annual performance evaluation is completed, the chairman meets with the CEO and shares the Committee and board's evaluation of his prior year's performance. He also informs him of the Committee's actions with respect to any annual incentive award for the prior year and any base salary adjustment for the upcoming year. The performance goals for the upcoming year are determined by executive leadership and communicated to and adopted by the board at a board meeting. The annual performance of the CEO is documented adequately and concurrently with the compensation committee's determination. Written and/or electronic records of the compensation committee include, when prepared, the date all relevant actions were taken; terms of the approved compensation; the members of the compensation committee who were present during debate or discussion of the matter and the vote of each member of the compensation committee; the comparability data obtained and relied upon by the compensation committee (including from whom and when obtained, as outlined above); and actions taken with respect to any compensation committee member with a conflict of interest in the matter under consideration (consistent with board conflict of interest policies). The foregoing documentation is prepared before the later of the next meeting of the compensation committee or 60 days after the meeting of the compensation committee approving the matter, and approved by the compensation committee as reasonable, accurate and complete within a reasonable time period thereafter. Form 990, Part VI, Section B, Line 15b: Base salaries and annual bonus opportunities for other officers and key employees are set by the Covenant Health Chief Executive Officer (CEO) in consultation with Senior Vice President-Human Resources, after review by and discussion with the executive compensation consultant ("the Consultant") to ensure that total compensation for each executive is reasonable and within a fair market value range. Salary ranges for each executive position are based upon the recommendations of the Consultant made after comparison with similar jobs in similar size health systems across the nation. Bonuses are recommended by the CEO and approved by the Committee conditioned upon receipt of a written opinion from the Consultant that total compensation for each Key Executive is reasonable and consistent with fair market value. Base salaries are initially targeted at midpoint and vary according to market conditions, performance, tenure, experience, special skills or qualifications, recruitment and retention challenges, and other relevant factors. Annual bonuses are designed to award 0 - 45% for the Executive Vice Presidents (EVP), and 0 - 35% for the Senior Vice Presidents (SVP) and Chief Administrative Officers (CAO) of base salary based upon system performance and accomplishment of certain targets established by the CEO. Form 990, Part VI, Section C, line 19 Per its tax exempt bond provisions, Covenant Health is required to file quarterly and annual consolidated and obligated group financial statements and other documentation with various bond insurers and other agencies, including the Electronic Municipal Market Access (EMMA) service of the Municipal Securities Rulemaking Board (MSRB). Any member of such a repository has access to these financial statements. The organization's governing documents and conflict of interest policy are not made publicly available. Form 990, Part XI, line 9: Capital contributions from subsidiaries 30,670,599. Capital contributions to subsidiaries -163,916,523. Book to tax differences in income(loss) from partnerships & trusts -2,310,900. 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Thompson Cancer Survival Center 1420 Centerpoint Blvd Bldg C Knoxville TN 379321960 621250943 Cancer support center TN 501(c)(3) Line 3 Covenant Health 1 Thompson Oncology Group 1420 Centerpoint Blvd Bldg C Knoxville TN 379321960 621619239 Oncology services TN 501(c)(3) Line 3 Thompson Cancer Survival Center 1 Thompson Cancer Survival Center Foundation 1420 Centerpoint Blvd Bldg C Knoxville TN 379321960 582130450 Fundraising and patient outreach TN 501(c)(3) Line 12b, II Covenant Health 1 The Dr Robert F Thomas Foundation Inc 1420 Centerpoint Blvd Bldg C Knoxville TN 379321960 581537582 Fundraising and patient outreach TN 501(c)(3) Line 12a, I Covenant Health 1 Covenant-AmSurg ASC Ventures LLC 1A Burton Hills Blvd Nashville TN 37215 884134388 Management Company TN N/A 0 1 Covenant-KEC ASC Ventures LLC 1A Burton Hills Blvd Nashville TN 37215 920539400 Management Company TN N/A 0 1 TEC North LLC 1A Burton Hills Blvd Nashville TN 37215 201871076 Physician Services TN N/A 0 1 The Endoscopy 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