2018-11-14T13:13:51-06:00 2017-12-31 990 2017-01-01 621646734 Covenant Health COVE 8653746864 1420 Centerpoint Blvd Bldg C Knoxville TN 379321960 JOHN T GEPPI EVP/CFO 8655315421 2018-11-14 168.85.177.4 2018-11-14 13:51:49 ES P F4919464179932DABC08F68C8485D564CA479FAE 469132092D82E9B9F729922824776EAC2989A597 2017 2019-02-21 02:37:17Z James D VanderSteeg 100 Ft Sanders W Blvd Knoxville TN 37922 190733754 0 X www.covenanthealth.com X 1996 TN Covenant Health is the parent organization in a community-owned health care system in East Tenn. 20 18 1239 1315 1351179 72280 188606 23075 109945589 118562071 17214717 65794421 218615 160106 127567527 184539673 500000 737483 0 0 70128737 71830744 0 0 0 56764192 56494910 127392929 129063137 174598 55476536 1422118030 1562028002 899719432 889440956 522398598 672587046 X Covenant Health operates primarily as a supporting organization within the meaning of Internal Revenue Code section 509(a)(3). Its mission, which is shared by its member hospitals and other organizations (see Schedule A), is to serve the community by improving the quality of life through better health, regardless of a patient's ability to pay. 0 0 39251187 39251187 Information Technology. See Schedule O for additional details.Information Technology: Expenses - $39,251,187; Revenue - $39,251,187.The Information Technology (IT) division of Covenant Health provides all computing equipment and information management related services to Covenant Health facilities. Information management systems and related application support (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 encompassing patient accounting, materials management, finance, and human resources. IT also manages a centralized data center (and a backup disaster recovery data center) where the hardware equipment is housed to deliver the computing resources for all clinical/business functions on a 24/7 schedule. Additionally, IT is responsible for management of all PC workstations (desktop, laptop, mobile cart), all client to server internal and external network connectivity, as well as telephone services and telephone equipment (PBX, handsets, cell phones, pagers) across the company. It also facilitates project management activities related to meeting regulatory and quality reporting requirements. Key statistics for the year include:*Payroll checks/deposits - 241,504*Pharmacy medication mgmt. system - 2,302,843 orders*Total spam messages blocked - 5,073,607*Network access attempts blocked - 1,083,877,351*PCs supported - 10,081*Overall telephone usage - 33,560,585 calls*Pathway scheduling application - 715,825 appointments*Accounts payable checks - 150,896 15179357 15179357 Business Office. See Schedule O for additional details.Business Office: Expenses - $15,179,357; Revenue - $15,179,357Knoxville Business Office Services is the CBO (Centralized Business Office) 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 2017, CBO submitted over 1,051,900 insurance claims totaling in excess of $4,102,244,600. Bad debt expense for 2017 was approximately 2.4% of gross revenue with bad debt recoveries/collections in excess of $12,865,600. The CBO handled over 128,300 incoming phone calls, followed-up on over 723,900 open accounts and processed over 3.16 million financial transactions. 9465502 9465502 Health Information Management. See Schedule O for additional details.Health Information Management: Expenses - $9,465,502; Revenue - $9,465,502.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 2017 the HIM department transcribed over 63.1 million lines, scanned over 11.8 million pages, and coded 2,322,510 records. 50557256 737483 118858351 In addition to the services previously mentioned, support provided by Covenant Health to its member facilities takes on many other forms, some examples of which are:* Executive leadership, strategic planning, and other planning at the system and organizational level* Financial, management and advisory services* Third party reporting* Integrity compliance program* Real estate management* Risk management* Internal audit* Asset and liability related treasury management functions* Procurement* Clinical quality improvement* Marketing * Human Resources * Centralized management of plant engineering and construction team* External reportingOther services and activities conducted by Covenant Health directly benefit patients and members of the communities served by the supported organizations. Some services are aimed at improving the operational efficiency of and the quality of care provided by the supported organizations, such as 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. Along with those achievements, sterile packs also help reduce setup time, leaving more time for treating patients, and with fewer items to open, reducing the risk of contamination.Other centralized services are provided by the Corporate 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 provided are standardized benefit design and administration, leadership development, succession and continuity, employee relations and retention, and clinical and non-clinical skill development.Through the Learning and Leadership Development (LLD) division, 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 including everything from CPR to Advanced Neurological and Neonatal Intensive Care courses.Covenant Health also has its own internal "staffing agency", Covenant Staffing Services (CSS), which employs 93 RNs who help to cover open staffing needs throughout the system. 50557256 737483 118858351 114453302 1 1 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 0 0 0 0 0 0 1 1 1 1 0 0 1 438 0 1 1239 1 1 1 0 0 0 0 0 0 0 0 0 X 20 18 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 0 X Nancy Beck 8653746864 1420 Centerpoint Blvd Bldg C Knoxville TN 379321960 James D VanderSteeg President & CEO 50.00 0.00 X X 1444249 0 177701 Ed Anderson Director 1.00 0.00 X 1296 0 0 Patrick Birmingham Director/VP of Philanthropy 1.00 50.00 X 13846 0 0 Gerald Boyd Director 1.00 0.00 X 1437 0 0 Dr Willard Campbell Director 1.00 0.00 X 0 0 0 Dr Michael Casey Director 1.00 0.00 X 1971 0 0 Ronni Chandler Director 1.00 0.00 X 1193 0 0 Dr Mitchell Dickson Director 1.00 0.00 X 2014 0 0 James Fitzsimmons Chairman 1.00 0.00 X 1415 0 0 Jim Johnson Jr Director 1.00 0.00 X 948 0 0 Amber Krupacs Director 1.00 0.00 X 1031 0 0 Eddie Mannis Director 1.00 0.00 X 0 0 0 Timothy Matthews Director 1.00 0.00 X 0 0 0 Larry Mauldin Director 1.00 0.00 X 661 0 0 Dr Joseph Metcalf Director 1.00 0.00 X 21836 8121 0 Alvin Nance Director 1.00 0.00 X 1402 0 0 Linda Ogle Director 1.00 0.00 X 0 0 0 Roger Osborne Director 1.00 0.00 X 692 0 0 Carl Storms Director 1.00 0.00 X 1169 0 0 Richard Swanson Director 1.00 0.00 X 0 0 0 David C Verble Director 1.00 0.00 X 0 0 0 John T Geppi EVP/CFO 50.00 0.00 X 884318 0 28575 Anthony L Spezia CEO - Emeritus 40.00 0.00 X 513410 0 27087 Michael R Belbeck Jr EVP - Hospital Operations 50.00 0.00 X 664895 0 36801 Lucas D Johnson EVP - Physician Enterprises 30.00 20.00 X 537227 0 20590 Mark W Browne SVP-Chief Medical Officer 50.00 0.00 X 446372 0 34032 William M Ward SVP-Chief Information Officer 50.00 0.00 X 356034 0 35435 Janice McKinley SVP-Quality, Safety, & Nursing 50.00 0.00 X 340664 0 26075 Neil A Heatherly President/CAO - Parkwest Med Ctr 0.00 50.00 X 450537 0 23701 Keith N Altshuler President/CAO - Fort Sanders Reg 0.00 50.00 X 415286 0 36532 Jeremy H Biggs President/CAO - Methodist 0.00 50.00 X 383345 0 12095 Jennifer L Hanson President/CAO - LeConte 0.00 50.00 X 375331 0 14586 Gordon E Lintz President/CAO - Morristown 0.00 50.00 X 350606 0 19494 7213185 8121 492704 65 0 1 0 Morrison Mgmt Specialists Inc PO Box 102289 Atlanta GA 303682289 Cafeteria management & catering 19851802 OptumRx PO Box 888765 Los Angeles CA 90088 Pharmacy claims services 13738082 Relay Health PO Box 98347 Chicago IL 60693 Software maintenance 4111494 Cardinal Health PO Box 730112 Dallas TX 75373 Pharmacy management 3407280 G4S Secure Solutions USA Inc PO Box 277469 Atlanta GA 30384 Security services 3282949 91 23075 85 23075 Management Fees 561000 105801702 105776706 24996 Transcription Services 900099 7348755 6208714 1140041 Telephone Services 517000 4641718 4641718 Health Information Admin 561499 517734 517734 Other Operating Revenue 621990 134052 134052 118110 118110 118562071 65356442 65356442 26957 26957 232127 164095 68032 68032 68032 2184987 0 1773965 2184987 -1773965 411022 411022 4348095 4256021 92074 92074 184539673 182754397 1351179 411022 737483 737483 5624376 4659417 964959 53686113 44824028 8862085 3829902 3201798 628104 4280021 3578097 701924 4410332 3687038 723294 970463 454162 516301 278000 278000 4752334 4405837 346497 2146126 2146003 123 6417364 6389480 27884 21073505 21073505 1472989 1393715 79274 287235 269147 18088 451674 187112 264562 14192273 14192273 787423 699618 87805 649410 403709 245701 Unrelated Business Inco 81290 81290 Subscriptions 1403121 1163556 239565 Dues and Licenses 767989 719600 48389 Bank Fees 408096 491 407605 355618 267233 88385 129063137 114453302 14609835 0 2298 2000 62048205 42898790 479112 518141 5951465 8449247 119248353 27871575 46698242 91376778 1242779654 1358646999 15592905 15450731 48566149 44685316 1422118030 1562028002 55491682 56120083 817577305 803870967 26650445 29449906 899719432 889440956 X 522398598 672587046 522398598 672587046 1422118030 1562028002 X 55476536 56234752 38477160 X X 0 1 X 1 0 X X 13 Claiborne Medical Center 464420358 3 0 0 0 Covenant Homecare 621623114 10 0 0 0 Cumberland Medical Center 620790132 3 0 0 0 Fort Loudoun Medical Ctr 621373691 3 0 0 0 Fort Sanders Perinatal Ctr 043760551 3 0 0 0 Fort Sanders Regional Med Ctr 620528340 3 0 0 0 LeConte Medical Ctr 621114867 3 0 0 0 Methodist Medical Center 620636239 3 0 0 0 Morristown Hamblen Healthcare System 620545814 3 0 0 0 Parkwest Medical Center 581897274 3 0 0 0 Roane County Medical Center 680673354 3 0 0 0 Thompson Cancer Survival Center 621250943 3 0 0 0 Thompson Oncology Group 621619239 3 0 0 0 13 0 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 include affordable housing, temporary help with food and shelter, initiatives to boost economic development, leadership development, education, youth mentoring, and programs for at risk individuals. 1 1 0 1 0 0 1 7926 0 1 74253 82179 0 Part II-B, Line 1: Covenant Health indirectly conducts lobbying activities through various membership organizations. A portion of membership dues paid is included in the amount on Line 1i. 9604770 9604770 23094331 6842667 16251664 1253692 1185715 67977 22817533 19843193 2974340 62478027 62478027 91376778 Long-Term ASO Agreement 504979 Long-Term Deferred Compensation 7518660 Long-Term Reserve for Malpractice 21426267 29449906 X Part X, Line 2: Note B to the consolidated audited financial statements of Covenant Health reads in part: "Income Taxes: 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 (See Note G). Note G reads in part: "Covenant had no unrecognized tax benefits at December 31, 2017 and 2016. As such, no interest or penalties were recognized in the Consolidated Statements of Operations and Changes in Net Assets related to unrecognized tax benefits. At December 31, 2017, tax returns for 2014 through 2017 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, 2017 or 2016." 1 American Heart Association 4708 Papermill Road Knoxville TN 37909 135613797 501(c)(3) 30000 Sponsorship of Heart Gala East TN Economic Development Agency 10215 Technology Drive Ste 202 Knoxville TN 37932 621158958 501(c)(3) 35000 General support Catholic Charities of East TN 119 Dameron Avenue Knoxville TN 37917 621377551 501(c)(3) 20000 General support Dogwood Arts Festival Inc 123 D Jackson Ave Knoxville TN 37902 626074113 501(c)(3) 20000 Support for the fitness activities of the Dogwood Arts Festival Boys & Girls Club of the TN Valley 967 Irwin St Knoxville TN 37917 620475743 501(c)(3) 8835 Health screenings & general support Morristown-Hamblen Hospital Foundation 1621 West Morris Blvd Morristown TN 37813 621697090 501(c)(3) 5750 Fundraisers benefiting Morristown-Hamblen Healthcare System Fort Sanders Foundation 280 Ft Sanders West Blvd Ste 202 Knoxville TN 37922 621748601 501(c)(3) 10000 Fundraisers benefiting Patricia Neal Rehab. Center, Peninsula, and the Hope Center Great Smoky Mtn Council Boy Scouts of America 1333 Old Weisgarber Rd Knoxville TN 37909 620476811 501(c)(3) 12500 Support for Friends of Scouting Campaign Honor Air Knoxville 7536 Taggart Lane Knoxville TN 37938 262825063 501(c)(3) 30000 Support for flights for veterans to visit Washington, D.C. war memorials Innovation Valley Inc 17 Market Square 201 Knoxville TN 37902 262087582 501(c)(3) 60000 Support for regional economic development Knoxville Symphony Orchestra PO Box 360 Knoxville TN 37901 626008097 501(c)(3) 8900 Support of music and wellness program Knoxville Academy of Medicine Foundation 115 Suburban Road Knoxville TN 37923 621458199 501(c)(3) 11000 General supportGeneral support fundraising Knoxville Medical Missions Foundation 1932 Historic Ferry Way Knoxville TN 37922 300197352 501(c)(3) 15000 General support Knoxville Zoological Gardens Inc 3500 Knoxville Zoo Drive Knoxville TN 37914 621034633 501(c)(3) 10000 Program support Road Runners Club of America Knoxville Track Club PO Box 52266 Knoxville TN 37950 620731345 501(c)(3) 50000 General support: Covenant Health Marathon Komen Knoxville Race for Cure 318 Nancy Lynn Lane 13 Knoxville TN 37919 751835298 501(c)(3) 8000 Race sponsor for organization supporting breast cancer research and awareness Leadership Knoxville 17 Market Square 201 Knoxville TN 37902 621212211 501(c)(3) 11000 General support Robert F Thomas Foundation PO Box 4395 Sevierville TN 37864 581537582 501(c)(3) 8000 Fundraisers to benefit LeConte Medical Center Thompson Cancer Survival Center Foundation 1915 White Avenue Knoxville TN 37916 582130450 501(c)(3) 9500 Fundraisers to benefit Thompson Cancer Survival Center United Way of Greater Knoxville 1301 Hannah Ave Knoxville TN 37921 620475748 501(c)(3) 64144 Support for the Interfaith Health Clinic Variety Children's Charity of East TN 7132 Regal Lane Knoxville TN 37918 331025696 501(c)(3) 20000 Support of programs for special needs children Williams Creek Youth Foundation 2351 Dandridge Avenue Knoxville TN 37915 621845117 501(c)(3) 10000 General support St Mary's Legacy Clinic 805 S Northshore Drive Knoxville TN 379197551 462331706 501(c)(3) 20000 General support Sacred Heart Church 711 S Northshore Drive Knoxville TN 37919 620572260 501(c)(3) 10000 Support for medical mission trip Random Acts of Flowers 3500 Workman Rd Ste 101B Knoxville TN 37917 263006360 501(c)(3) 5500 General support Emergency Medical Service Region II PO Box 75 Gatlinburg TN 37738 463698443 501(c)(3) 8100 General support University of Tennessee Foundation 1551 Lake Loudoun Blvd Knoxville TN 37996 621844686 501(c)(3) 8000 Support of athletic programs and annual fund Knoxville News Sentinel Charities 2332 News Sentinel Drive Knoxville TN 37921 510141541 501(c)(3) 28900 Sponsorship of golf tournament & support of Empty Stocking Fund Change Center 2013 Harriet Tubman St Knoxville TN 37919 383991050 501(c)(3) 125000 Support of Youth at Risk program 29 Part I, Line 2: Eligibility and selection criteria for charitable contributions from Covenant Health are determined by a review of a written proposal or similar documentation submitted by the requesting organization. Intended use of funds must be stated or evident in the proposal/documentation. When an organization is approved for a charitable contribution from Covenant Health, a letter specifying how funds must be used in support of the organization's request is sent to the organization. Recipient organizations generally verify use of funds in one or more of the following ways: follow-up reports or newsletters, sponsor acknowledgement at a program or event, itemized receipts, or year-end summaries. X X X X 1 1 X X X X 1 1 0 0 0 0 0 0 0 James D VanderSteeg President & CEO 915074 0 405000 0 124175 0 154000 0 23701 0 1621950 0 0 0 John T Geppi EVP/CFO 575805 0 214200 0 94313 0 10600 0 17975 0 912893 0 0 0 Anthony L Spezia CEO - Emeritus 216489 0 0 0 296921 0 10600 0 16487 0 540497 0 0 0 Michael R Belbeck Jr EVP - Hospital Operations 472601 0 157500 0 34794 0 10600 0 26201 0 701696 0 0 0 Lucas D Johnson EVP - Physician Enterprises 409459 0 86770 0 40998 0 5231 0 15359 0 557817 0 0 0 Mark W Browne SVP-Chief Medical Officer 332195 0 68000 0 46177 0 10600 0 23432 0 480404 0 0 0 William M Ward SVP-Chief Information Officer 254946 0 50000 0 51088 0 10600 0 24835 0 391469 0 0 0 Janice McKinley SVP-Quality, Safety, & Nursing 220883 0 80000 0 39781 0 10600 0 15475 0 366739 0 0 0 Neil A Heatherly President/CAO - Parkwest Med Ctr 394821 0 50000 0 5716 0 0 0 23701 0 474238 0 0 0 Keith N Altshuler President/CAO - Fort Sanders Reg 321866 0 42024 0 51396 0 10600 0 25932 0 451818 0 0 0 Jeremy H Biggs President/CAO - Methodist 277385 0 60000 0 45960 0 10600 0 1495 0 395440 0 0 0 Jennifer L Hanson President/CAO - LeConte 80549 0 50000 0 244782 0 10600 0 3986 0 389917 0 0 0 Gordon E Lintz President/CAO - Morristown 244971 0 60000 0 45635 0 10600 0 8894 0 370100 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. The allowance is treated as taxable compensation to the recipient. 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. These are treated as taxable compensation to the recipients. In addition, Board members receive tax indemnification payments related to reportable compensation from the spending allowances. These are treated as taxable compensation to the recipients. Part I, Lines 4a-b Part I, Line 4a Jennifer Hanson, President/CAO of LeConte Medical Center, received severance pay of $118,300. Severance amounts are reported as taxable compensation in Part II(B)(iii). Part I, Line 4b James VanderSteeg, President & CEO, was a participant in a nonqualified deferred compensation (NQDC) plan. The NQDC plan was established in 2016. Employer contributions to the plan during 2017 totaled $143,400, which is reported in Col. C of Schedule J, Part II. Interest earned during 2017 of $10,080 is not required to be reported in compensation in Part II, as Mr. VanderSteeg is not vested in the plan. Anthony Spezia, CEO-Emeritus, was a participant in two nonqualified deferred compensation plans, which are referred to as Plan A and Plan B. In 2011 Mr. Spezia vested in Plan A, and the accumulated balance as of August 1, 2011 was included in his 2011 taxable income. An Amendment to Plan A was adopted effective August 1, 2011 which terminated further accruals (contributions) to the plan. However, the Amendment allowed the accrual of interest on undistributed amounts which were subject to risk of forfeiture until such time as indicated in the Amendment. Interest earned by Plan A and Plan B during 2017 was $199,910 and is not required to be reported in compensation in Part II as Mr. Spezia is not vested in the 2017 earnings on Plan A or Plan B. There were no employer contributions to Plan A during 2017. Plan B was established in 2011. Interest earned by Plan B during 2017 is included in the Plan A 2017 earnings amount. It is not required to be reported in compensation in Part II as Mr. Spezia is not vested in the 2017 additions to Plan B. There were no employer contributions to Plan B during 2017. A Health Educ & Housing Facil Brd of Knox Co 621220275 2011-09-15 125000000 See Part VI. 0 0 0 B Health Educ & Housing Facil Brd of Knox Co 621220275 499527BM0 2012-12-13 161291013 See Part VI. 0 0 0 C Health Educ & Housing Facil Brd of Knox Co 621220275 2014-03-17 101740000 See Part VI. 0 0 0 D Health Educ & Housing Facil Brd of Knox Co 621220275 2014-07-30 38665750 See Part VI. 0 0 0 A 125000000 125000000 2010 1 0 1 1 B 25225000 161291013 1291494 159999519 2006 1 0 1 1 C 2140000 101740000 101740000 2006 1 0 1 1 D 6064000 38665750 38665750 2006 1 0 1 1 A 0 0 1 1 0 0.00010 0.00010 0 0 1 D 0 0 1 1 0 0.00010 0.00010 0 0 1 A 0 0 1 0 1 0 0 0 1 B 0 0 1 0 1 0 0 0 1 C 0 0 1 0 1 0 0 0 1 D 0 0 1 0 1 0 0 0 1 A 1 B 1 C 1 D 1 Schedule K, Part I, Bond Issues - description of purpose: The Series 2006B1-B3 Bonds described on Line A of Part I relate to the conversion of a portion of the variable rate bonds issued on December 20, 2006. The Series 2012A and 2012B Bonds described on Line B of Part 1 were issued to refund capital appreciation bonds and capital interest bonds issued on December 12, 2002. The Series 2011A and 2011b Bonds described on Line C of Part 1 were issued for the conversion of bonds issued on March 24, 2011 which had partially refunded bonds issued on December 12, 2002. The 2014A Bonds described on Line D of Part 1 was a refinancing of Cumberland Medical Center (CMC) debt which was acquired through the acquisition of CMC on February 1, 2014. Schedule K, Part I, Entity 2 Bond Issues - description of purpose: The Series 2016B Bonds described on Line A of Part 1 refunded auction rate securities issued 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 and additions at other facilities. Part III.5 - Private business use percentage is not yet available. The Series 2011C Second Amended and Restated Bonds issued on May 2, 2017 described on Line C of Part 1 refunded bonds issued September 15, 2011. A Health Educ & Housing Facil Brd of Knox Co 621220275 2016-11-01 74000000 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 49952MCE4 2017-05-02 135500000 See Part VI. 0 0 0 A 74000000 74000000 2006 1 0 1 1 B 209337980 953741 86786236 121598003 1 0 0 1 C 135500000 135500000 2013 1 0 1 1 B 0 0 1 1 0 0 0 1 C 0 0 1 1 0 0.00010 0.00010 0 0 1 A 0 0 1 0 1 0 0 0 1 B 0 1 0 0 0 0 0 0 1 C 0 0 1 0 1 0 0 0 1 A 1 B 1 C 1 Form 990, Part III, Line 1 2017 Report to the Community Covenant Health is a comprehensive, community-owned, not-for-profit health system serving 23 counties in East Tennessee. Nine acute care hospitals located in Knoxville and surrounding areas comprise the foundation of the health system. Additional outpatient and specialty care departments are located throughout the region providing diagnostic and surgery services, mental health and cancer treatments, and therapy and home health services. Over 10,000 employees and 1,500 affiliated physicians are dedicated to improving the quality of life for the more than one million patients and families served each year. Member organizations: Hospitals Claiborne Medical Center Cumberland Medical Center Fort Loudoun Medical Center Fort Sanders Regional Medical Center LeConte Medical Center Methodist Medical Center of Oak Ridge Morristown-Hamblen Healthcare System Parkwest Medical Center Peninsula Hospital, a division of Parkwest Medical Center Roane County Medical Center Outpatient and Specialty Care Covenant HomeCare and Hospice Covenant and Methodist Therapy Centers Fort Sanders West Diagnostic Center Fort Sanders West Outpatient Surgery Center Morristown Regional Diagnostic Center Patricia Neal Rehabilitation Center Peninsula Outpatient Centers Thompson Cancer Survival Centers Covenant Breast Centers Covenant Joint Centers Covenant Sleep Centers Claiborne Nursing Home Fort Sanders Sevier Nursing Home Physician Services Covenant Medical Group, Inc. Other Programs and Services Fortress Corporation Fort Sanders Health and Fitness Center Nanny's Nursery Covenant Staffing Services Tennessee Wesleyan University - Fort Sanders Nursing Foundations Fort Sanders Foundation Methodist Medical Center Foundation Morristown-Hamblen Hospital Foundation Thompson Cancer Survival Center Foundation Patient Care Summary Population of 23-County Service Area 1,427,213 (2010 Census) 2014 2015 2016 Patient Care Summary 67,235 68,193 68,320 (Excludes nursing home) Inpatient Surgeries 16,908 16,585 17,426 Outpatient Surgeries 29,644 29,265 29,480 ED Visits 317,575 328,360 327,724 Outpatient Visits 1,040,593 1,061,082 1,091,009 Physician Office Visits 499,881 548,210 580,660 Leadership Jim VanderSteeg, Covenant Health's President and CEO, remains committed to the mission of improving the quality of life through better health and a vision of being the region's premier healthcare network through clinical and service excellence. Everyone associated with the health system knows and is committed to the following Pledge of Excellence: * The patient always comes first. Our patients are the reason Covenant Health exists, and it is both a privilege and a high calling to care for them. * We are committed to excellence. Our patients and our coworkers in all areas of the organization deserve nothing less. * First and best choice - Covenant Health will strive to be the organization that our communities instinctively seek out when they need health care. We will continually work to be the best in every aspect of the care we provide. Jim VanderSteeg and the executive leadership team have stated: * We will lead courageously, being proactive in delivering excellent care and meeting the challenges of today's healthcare environment. * We will be honest in our business dealings and in our interactions with co-workers, patients,and the communities we serve. * We will use our resources wisely as we deploy medical services and technology in our local communities. * We will collaborate to create a workplace culture where people know they are valued and how they connect to the mission and vision of Covenant Health. * We will encourage innovative thinking and creative ideas from all employees in order to make Covenant Health the best it can be. Awards Several Covenant Health hospitals received top recognitions from national organizations in 2017: * Cumberland Medical Center in Crossville was named the Upper Cumberland's only "Top 100 Rural & Community Hospital" by iVantage Health Analytics and The Chartis Center for Rural Health. It is one of only two hospitals in Tennessee to earn the 2017 designation. * For the second year in a row, Fort Sanders Regional Medical Center in Knoxville has been named to a national list of "100 Hospitals and Health Systems with Great Oncology Programs" by Becker's Hospital Review. The Becker's editorial team selected hospitals and health systems that lead the way in oncology expertise, outcomes, research and treatment options. * LeConte Medical Center in Sevierville was named among "100 Great Community Hospitals" by Becker's Hospital Review, also for the second year in a row. Hospitals on the list are recognized for quality, patient satisfaction and overall excellence, and play a key role in their communities as the centerpiece for health care. * The transition program at Peninsula, the behavioral health division of Parkwest Medical Center, has been recognized as a Program of Excellence by the Tennessee Association of Mental Health Organizations, and has achieved the lowest readmission rate to Peninsula Hospital compared to the past two years. * Claiborne Health and Rehabilitation Center, affiliated with Claiborne Medical Center in Tazewell, earned a 2017 Bronze National Quality Award from the American Health Care Association and National Center for Assisted Living. The award honors the facility's commitment to improving quality of care for seniors and persons with disabilities. Claiborne Health and Rehabilitation Center was one of 520 long-term facilities in 46 states and one of 10 nursing homes and two assisted living facilities in Tennessee to receive the award. * Fort Sanders Sevier Nursing Home, affiliated with LeConte Medical Center in Sevierville, was named a 2017 Best Nursing Home by U.S. News and World Report. To be included in the list, the nursing home had to earn at least four stars (out of five) on the Centers for Medicare and Medicaid Services "Nursing Home Compare" rating for the 10 months of federal reports ending in August 2017, and had to earn a 4.5 or higher for at least five of those months. Form 990, Part III, Line 1 Achievements Covenant HomeCare has been recognized as the first home health agency in Tennessee and the third in the nation to reach Milestone 5, the highest level of a five-step Home Health Quality Improvement initiative aimed at preventing heart attack and strokes. The HHQI Cardiovascular Health Improvement initiative is an ongoing effort to reduce the incidence of heart attack and stroke among home health patients through a series of best practice interventions. It tracks data on aspirin and tobacco usage, blood pressure and cholesterol levels among home health patients with ischemic vascular disease. Covenant HomeCare offers skilled nursing, certified nursing assistants, physical therapy, speech therapy, occupational therapy and medical social services. It is the area's largest non-profit home health and hospice provider and serves more than 4,700 patients annually in 17 counties through branches in Knoxville, Oak Ridge and Morristown. Covenant HomeCare and Hospice scored 100% on CMS (Centers for Medicare and Medicaid) quality measures for patient care, including evaluation and treatment for symptoms such as pain and shortness of breath, and patients' treatment preferences related to hospice care. Stroke Care Covenant Health has the region's only stroke hospital network for delivering advanced diagnostics and treatment to halt the devastating effects of stroke. Residents in any of the 23 counties served have increased rates of survival due to a hub-and-spoke model for stroke treatment. At the hub of the network are Fort Sanders Regional Medical Center and Patricia Neal Rehabilitation Center. An emergency department physician at any of the Covenant Health hospitals can confer with colleagues and administer the clot-busting drug tPA (tissue plasminogen activator) before transporting the patient to Fort Sanders Regional. * Fort Sanders Regional Medical Center is an accredited Comprehensive Stroke Center, offering both advanced stroke treatment and the stroke rehab services of the Patricia Neal Rehabilitation Center. * Other Covenant Health member hospitals are certified as advanced primary centers for stroke care, or are preparing to be certified as "stroke ready" facilities. * Eighty-three percent of patients with stroke symptoms see an emergency physician within 15 minutes of arrival at Covenant Health hospitals, compared to a national average of 67%. * Seventy-one percent of patients who have a neurological intervention for stroke at Fort Sanders Regional do not need a wheelchair when they are discharged from the hospital. * Fort Sanders Regional Medical Center exceeds the national average of patients who are able to go directly home after stroke treatment. Cancer Care The Covenant Health breast centers offer Digital 3D mammography - also known as tomosynthesis which allows cancer to be detected much earlier. It's a newer technology and especially helpful for women with dense breast tissue because it allows a more detailed look at the breast tissue. With 6 locations across the 23 county service area, patients have access to this new technology close to home. At Covenant Health's breast center locations, patients receive their screening mammography results within 24 hours. When cancer is caught in its earliest stages, patients can undergo a shorter duration of radiation therapy. Covenant Health radiation oncology locations offer partial breast radiation which takes only five days, compared to the traditional whole breast radiation course of four to six weeks. In 2015 Covenant Health began implementing a low dose CT (LDCT) program for lung cancer screening. Now in maturity, the program led to the detection of 20 new cases of lung cancer in 2017. With this LDCT program, patients can receive treatment for earlier stages of lung cancer, improving the chance of sustainability. Cardiac Care Covenant Health's heart hospitals began collaborating in 2012 to offer Transcatheter Aortic Valve Replacement (TAVR). Much has changed in the TAVR world since then. Smaller catheters and surgical instruments have opened new pathways to the heart and opened the procedure to a wider range of candidates. No longer limited to elderly "inoperable" patients, TAVR is now available to younger patients and those deemed "high or intermediate risk." In addition, this therapy and technology are offered locally so patients do not have to travel far. * Covenant Health was the first to bring the life-saving TAVR procedure to our region. * Covenant Health cares for more hearts than any other area health system. * Covenant Health's average door-to-balloon time for STEMI (heart attack) patients is 52 minutes, 42% faster than the national goal. * Covenant Health has more cardiac rehab locations than any other area health system. Spine and Neuro Care Fort Sanders Regional is one of three centers for Covenant Health's spine surgery network, which also has locations at Methodist and Parkwest Medical Centers. The network uses a multidisciplinary team approach that includes neurosurgeons, orthopedic surgeons, nurses, and physical therapists. Surgeons have access to the latest technology and methods for inpatient and outpatient surgeries, including minimally invasive techniques that result in faster recoveries, less postoperative pain, and fewer complications. For patients needing spinal fusion, a neurosurgeon can perform a minimally invasive surgical procedure called Transforaminal Lumbar Interbody Fusion (TLIF) a spinal fusion technique used to treat spondylolisthesis, degenerative disc disease or recurrent disc herniations. * Covenant Health's spine centers perform more than 2,300 elective spine surgeries each year. * The spine centers treat conditions such as spinal cord injuries, herniated or ruptured discs, degenerative disc disease, spine tumors, sciatica, and others. * Ninety-two percent of elective spine surgery patients are able to go directly home after surgery. Form 990, Part III, Line 1 Expansion and Renovation In 2017 Parkwest Medical Center began a $99 million expansion and renovation project to accommodate both patient care improvements and growth on Parkwest's main campus in west Knoxville. Highlights of the project include: * A new patient care tower to better serve the hospital's inpatients and observation patients within specialized units. * Additional operating rooms and an expansion of surgical support space within the existing main surgery area of the hospital. * A dedicated entrance for surgical patients. * Creation of a clinical observation unit to help staff and physicians better serve medical and surgical observation patients who do not need to be admitted as inpatients. * Relocation of the helipad closer to the Emergency Care Center. The new location will allow quicker access for Covenant Health patients across the region who are airlifted to Parkwest for emergency medical care. Physician Relationships Nearly 1,500 physicians are affiliated with Covenant Health hospitals and organizations as members of the health system's medical staffs. These physicians serve in leadership positions at their respective hospitals, and several represent their organizations and communities through membership in Covenant Health's Board of Directors. Covenant Medical Group, Inc,(CMG) comprises the health system's largest group of employed physicians. CMG includes primary care and specialty physicians in more than 100 practice locations. CMG also builds and maintains partnerships with physicians through joint ventures such as surgery centers and the development of service line strategies that focus on improving the quality of patient care. Physician and hospital agendas are aligned so that the first priority is always the patient. The health system's goal is to work side by side with physicians to provide a seamless continuum of care and excellent outcomes. Preparing Future Healthcare Professionals In 2017 Covenant Health welcomed a new group of medical students as part of the health system's partnership with DeBusk College of Osteopathic Medicine at Lincoln Memorial University in Harrogate, Tennessee. It is the second year for the medical student program, which provides clinical experiences at Covenant Health hospitals for aspiring physicians and mid-level providers. Thirty-seven students took part in an orientation highlighted by a traditional "white coat ceremony" in which each student received a personalized white coat to wear during their clinical training at Covenant Health hospitals. Three of Covenant Health's member hospitals - Cumberland Medical Center, Methodist Medical Center and Morristown-Hamblen Healthcare System - serve as core rotation sites for the program. Under the direct supervision of physicians, the medical students interview and examine patients, review clinical information, make hospital rounds, participate in interdisciplinary team meetings, practice appropriate documentation and perform procedures. Covenant Health and LMU-DCOM by the numbers: * Each core rotation site (Cumberland Medical Center, Methodist Medical Center and Morristown-Hamblen Healthcare System) hosts 12 LMU-DCOM medical students for their 3rd and 4th year clinical rotations. * During the 2016-17 clinical year, additional LMU-DCOM students completed electives at seven other Covenant Health locations. * The program depends on approximately 150 physicians throughout Covenant Health who serve as preceptors (teachers). * About 160 LMU medical students have rotated through Covenant Health facilities during the past two years. Healthcare Education at Covenant Health * Covenant Health provided clinical experiences for more than 1,000 students in fall 2017. Students represented 10 colleges and medical specialty areas including nursing, pharmacy, rehabilitation and others. * Sixteen universities routinely place students at Covenant Health facilities for clinical training. * Covenant Health partners with Tennessee Wesleyan University - Fort Sanders Nursing Department to offer a bachelor of science in nursing degree and an RN-to-BSN program. * Covenant Health offers a nurse residency program for recent nursing graduates, and supports advanced certification and continuing education for nurses, and other healthcare professionals. Community Outreach With local community assessment data identifying obesity as a significant health issue throughout East Tennessee, Covenant Health offers a variety of community opportunities to encourage physical activity among all ages. More than 8,000 runners took part in the 13th annual Covenant Health Knoxville Marathon. The two-day event included a Kids Run and 5k race on Saturday evening and a half-marathon, four-person relay and full marathon on Sunday. The 2017 event also included a Fittest Company Challenge and a Corporate Challenge Team of individuals representing area businesses who trained together in pursuit of healthier lifestyles while preparing for marathon events. More than 2,000 children in grades 1-8 participated in the Covenant Kids Run, which included a kick-off event at Zoo Knoxville in January and each child logging "a marathon's worth" of activity during the months leading up to a final one-mile group run. Covenant Health began the second year of the "Dogwood Patch" program in 2017, part of its health and fitness sponsorship of the Dogwood Arts Festival. The health system offered a limited-edition patch for anyone who completed 25 miles on featured Dogwood trails between April 1 and May 31. More than 400 people qualified to receive a patch in 2017. In Hamblen County, Covenant Health and Panther Creek State Park began a fall "Redbud Patch" program, offering a limited-edition patch for walkers who completed 26.2 miles of trails in the park. Several group hikes were held, including an after-turkey-dinner walk on the day after Thanksgiving. The program ended with a New Year's Day group hike on Jan. 1, 2018. The health system sponsored additional group hikes and walking events throughout the year in all counties where Covenant Health hospitals are located. Support for Community Programs As Knoxville's largest employer and a business organization with a significant presence in East Tennessee, Covenant Health is a committed corporate citizen and supports numerous charitable and community organizations in categories such as: * Health-related organizations * Community needs and outreach programs * Children, youth and education programs, including major sponsorship of The Change Center initiative for safe recreation, community activities and job training activities in Knoxville's center city * Economic development * Community leadership development * Arts,recreation and quality of life In addition, Covenant Health and its affiliated Foundations have supported community programs related to cancer outreach services (including mammography screenings), HIV/AIDS, leisure/recreation activities for persons with disabilities, and fitness activities for all ages. Philanthropy Covenant Health has a strong foundation, thanks to generous individuals and businesses across East Tennessee. The fifth class of business and community leaders participated in the Office of Philanthropy's annual Covenant Health Leadership Academy. They got a behind-the-scenes look at health care with tours of Covenant Health facilities, conversations with caregivers and administrators, and opportunities to observe surgical procedures and advanced technology. Several Academy graduates have joined Covenant Health fund raising event committees and Foundation boards, and are connecting Covenant facilities and programs with new philanthropic resources in the community. Covenant's Office of Philanthropy coordinates fund raising efforts at four foundations: * Fort Sanders Foundation (serving the needs of Fort Sanders Regional, Fort Loudoun, Parkwest, Roane,and Cumberland Medical Centers; Peninsula, and the Patricia Neal Rehabilitation Center) * Methodist Medical Center Foundation * Morristown- Hamblen Hospital Foundation * Thompson Cancer Survival Center Foundation 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. The Finance Committee met in regular session in September, 2018, at which meeting executive management reviewed with the committee Form 990 and material information to be included in the form, discussed any material variations in the Form 990 as compared to those to be filed by the organization's affiliates, and answered questions of the committee regarding the Form 990. At the conclusion of review and discussion, the Finance Committee unanimously approved 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. Additionally, managers are required to complete and sign a bi-annual management certification that addresses conflicts of interest. Board members' conflicts of interests are dealt with 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 Integrity Compliance Officer initially reviews all 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. As well, managers and other employees are expected to report conflicts to the Integrity Compliance Officer as they arise. Depending on the nature of the conflict and the circumstances surrounding the conflict and transaction, the Integrity Compliance Officer, Senior Leadership, or the Board of Directors may review the conflict of interest. Where appropriate these bodies 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 Integrity Compliance Officer in conjunction with Executive Leadership determines how to appropriately handle the conflict. In any conflict involving a board member, such member is expected to excuse himself or herself from voting on matters that give rise 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 0-50% 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 audit firm; 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 Key Executives (*1) are set by the Covenant Health Chief Executive Officer (CEO) in consultation with Senior Vice President-Human Resources, subject to approval of the Compensation Committee of the Covenant Health Board of Directors ("the Committee"), 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. (*1) KEY EXECUTIVES: Covenant Health employees: John T. Geppi, EVP-Chief Financial Officer Michael R. Belbeck Jr., EVP-Hospital Operations Lucas D. Johnson Sr., EVP-Physician Enterprises & Ambulatory Services William M. Ward, SVP-Chief Information Officer Mark W. Browne, SVP-Chief Medical Officer Janice McKinley, SVP-Quality, Safety & Nursing Operations 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: Book/Tax Diff in Income(Loss) from Partnerships/Trusts -3,935,847. Return of capital from subsidiaries 61,622,617. Capital contributed to subsidiaries -21,014,950. Change in 457(b) unrealized gain/loss 175,061. Return of capital from investment in subsidiary 1,630,279. Form 990, Part XII, Line 2c: The Audit Committee of the Board of Directors annually selects the external auditors for Covenant Health. There is a joint meeting of the Finance Committee and Audit Committee of the Board of Directors where the audit of the consolidated financial statements are presented. Covenant Ventures LLC 100 Fort Sanders West Blvd Knoxville TN 37922 300913192 Develop healthcare software TN -1770189 1946258 Covenant Health Claiborne Medical Center 1850 Old Knoxville Rd Tazewell TN 378793625 464420358 Acute care hospital TN 501(c)(3) Line 3 Covenant Health 1 Covenant Homecare 3001 Lake Brook Blvd Ste 101 Knoxville TN 37909 621623114 Home health services TN 501(c)(3) Line 10 Covenant Health 1 Cumberland Medical Center 421 S Main St Crossville TN 385555048 620790132 Acute care hospital TN 501(c)(3) Line 3 Covenant Health 1 Fort Loudoun Medical Center 550 Fort Loudoun Medical Center Dr Lenoir City TN 37772 621373691 Acute care hospital TN 501(c)(3) Line 3 Covenant Health 1 Fort Sanders Regional Medical Center 1901 W Clinch Ave Knoxville TN 37916 620528340 Acute care hospital TN 501(c)(3) Line 3 Covenant Health 1 Fort Sanders Foundation 280 Fort Sanders West Blvd Ste 202 Knoxville TN 37772 621748601 Fundraising and patient outreach TN 501(c)(3) Line 12b, II Covenant Health 1 Fort Sanders Perinatal Center Trustees Tower 501 19th St Ste 304 Knoxville TN 37916 043760551 High risk obstetrical services TN 501(c)(3) Line 3 Fort Sanders Regional Medical Center 1 LeConte Medical Center 742 Middle Creek Rd Sevierville TN 37862 621114867 Acute care hospital TN 501(c)(3) Line 3 Covenant Health 1 Methodist Medical Center 990 Oak Ridge Turnpike Oak Ridge TN 37830 620636239 Acute care hospital TN 501(c)(3) Line 3 Covenant Health 1 Morristown-Hamblen Hospital Association 908 W 4th N St Morristown TN 37814 620545814 Acute care hospital TN 501(c)(3) Line 3 Covenant Health 1 Parkwest Medical Center 9352 Park West Blvd Knoxville TN 37923 581897274 Acute care hospital TN 501(c)(3) Line 3 Covenant Health 1 Roane County Medical Center 8045 Roane Medical Center Dr Harriman TN 37748 680673354 Acute care hospital TN 501(c)(3) Line 3 Covenant Health 1 Thompson Cancer Survival Center 1915 White Ave Knoxville TN 37916 621250943 Cancer support center TN 501(c)(3) Line 3 Covenant Health 1 Thompson Oncology Group 1915 White Ave Knoxville TN 37916 621619239 Oncology services TN 501(c)(3) Line 3 Thompson Cancer Survival Center 1 Thompson Cancer Survival Center Foundation 1915 White Ave Knoxville TN 37916 582130450 Fundraising and patient outreach TN 501(c)(3) Line 12b, II Covenant Health 1 Fort Sanders West OP Surgery Center LLC 210 Fort Sanders West Blvd Ste 200 Knoxville TN 37922 621366907 Outpatient surgery center TN Fortress Corp Related -484294 683378 0 1 0.88000 Fort Sanders West Associates 280 Fort Sanders West Blvd Ste 214 Knoxville TN 37922 621384171 Building ownership TN Fortress Corp Related 65121 372866 0 1 0.87540 KOSC Properties LLC 256 Fort Sanders West Blvd Ste 200 Knoxville TN 37922 262444076 Building ownership TN Fortress Corp Related 106448 1965618 0 1 0.25000 Knoxville Orthopaedic Surgery Center LLC 256 Fort Sanders West Blvd Ste 200 Knoxville TN 37922 262437385 Orthodopaedic surgery TN Fortress Corp Related 613545 1012847 0 1 0.25000 KOC 260 Bldg LLC 260 Fort Sanders West Blvd Knoxville TN 37922 465228440 Land and building ownership TN Fortress Corp Related 57473 1879849 0 1 0.25000 Fortress Corporation 280 Fort Sanders West Blvd Ste 214 Knoxville TN 37922 621308885 Management company TN Covenant Health C 16557654 50553013 1.00000 1 Covenant Medical Group Inc 1400 Centerpoint Blvd Ste 100 Bldg Knoxville TN 37932 621282917 Physician practice management TN Fortress Corp C 131017268 19751341 1.00000 1 Knoxville Heart Group 1819 Clinch Ave Ste 108 Knoxville TN 37916 271528941 Cardiology medical practice TN Covenant Medical Group C 11566025 1244571 1.00000 1 East TN Cardiovascular Surgery Group Inc 9125 Cross Park Drive Ste 200 Knoxville TN 37923 621018541 Cardiovascular surgical practice TN Covenant Medical Group C 8074532 2247525 1.00000 1 1 1 1 0 0 1 0 0 0 1 1 1 0 1 1 1 1 1 1 Fort Sanders Regional Medical Center L 27312648 FMV Fort Sanders Regional Medical Center O 51171 FMV Fort Sanders Regional Medical Center P 5975349 Cost Fort Sanders Regional Medical Center Q 184739803 Cost Fort Sanders Regional Medical Center S 163336649 Cash Parkwest Medical Center L 28078943 FMV Parkwest Medical Center P 8070053 Cost Parkwest Medical Center Q 22209421 Cost Parkwest Medical Center S 5760703 Cash Cumberland Medical Center L 3426304 FMV Cumberland Medical Center O 345023 FMV Cumberland Medical Center R 11029816 Cost Cumberland Medical Center Q 7270890 Cost Methodist Medical Center L 14973046 FMV Methodist Medical Center P 3531778 Cost Methodist Medical Center Q 88150043 Cost Methodist Medical Center S 76707375 Cash Morristown-Hamblen Hospital Association L 8527127 FMV Morristown-Hamblen Hospital Association P 2276832 Cost Morristown-Hamblen Hospital Association Q 60730662 Cost Morristown-Hamblen Hospital Association S 54441560 Cash LeConte Medical Center L 8907387 FMV LeConte Medical Center P 1674531 Cost LeConte Medical Center Q 87083664 Cost LeConte Medical Center S 79791649 Cash Roane County Medical Center L 3885750 FMV Roane County Medical Center P 836114 Cost Roane County Medical Center Q 30979539 Cost Roane County Medical Center S 28123426 Cash Fort Loudoun Medical Center L 3375890 FMV Fort Loudoun Medical Center P 802553 Cost Fort Loudoun Medical Center Q 19841495 Cost Fort Loudoun Medical Center S 17229791 Cash Claiborne Medical Center L 1439186 FMV Claiborne Medical Center O 221896 FMV Claiborne Medical Center P 118000 Cost Claiborne Medical Center Q 9164088 Cost Thompson Cancer Survival Center L 1306798 FMV Thompson Cancer Survival Center Q 2181844 Cost Thompson Cancer Survival Center S 917275 Cash Thompson Oncology Group L 356765 FMV Thompson Oncology Group Q 553899 Cost Thompson Oncology Group S 2250735 Cash Covenant Homecare L 1148202 FMV Covenant Homecare J 80646 FMV Covenant Homecare Q 15664677 Cost Covenant Homecare S 14465462 Cash Fort Sanders Perinatal Center Q 9717589 Cost Fort Sanders Perinatal Center S 9489023 Cash Surgery Center of Oak Ridge Q 475305 Cost Knoxville Heart Group L 261470 FMV Knoxville Heart Group Q 6535024 Cost Knoxville Heart Group S 499942 Cash East TN Cardiovascular Surgical Group Q 4428208 Cost Fortress Corporation J 470098 FMV Fortress Corporation L 896644 FMV Fortress Corporation Q 5467617 Cost Fort Sanders West OP Surgery Center Q 1256894 Cost Covenant Medical Group A 232128 FMV Covenant Medical Group L 9154913 FMV Covenant Medical Group P 59529 Cost Covenant Medical Group Q 69605924 Cost Fort Sanders Foundation O 428706 FMV Fortress Corporation F 1700000 Cash