2018-11-05T14:08:54-06:00 2017-12-31 271728945 PKF O'CONNOR DAVIES LLP 500 MAMARONECK AVENUE HARRISON NY 105281633 990 2017-01-01 450553664 HEALTHIX HEAL 8776954749 40 WORTH STREET 5TH FLOOR NEW YORK NY 100132988 JOHN GUASTELLA SVP & CFO 8776954749 2018-11-05 1 GARRETT M HIGGINS P00543209 9143818900 2018-11-05 65.51.112.58 2018-11-05 14:08:52 ES P DA39A3EE5E6B4B0D3255BFEF95601890AFD80709 9616F4B14A694591D1E716C270910E6FA5556DA3 2017 2018-06-14 16:35:46Z THOMAS F CHECK 40 WORTH STREET 5TH FLOOR NEW YORK NY 100132988 16678287 0 X WWW.HEALTHIX.ORG X 2007 NY THE MISSION OF THE COMPANY IS TO CREATE AN ACHIEVABLE, SUSTAINABLE AND REPLICABLE MODEL FOR INTEGRATING CLINICAL INFORMATION ACROSS MULTIPLE HEALTH CARE ORGANIZATIONS WHICH SUPPORTS NEW YORK STATE AND FEDERAL STRATEGIC HEALTH INFORMATION TECHNOLOGY (HIT) PLANS TO (A) IMPROVE ACCESS TO PATIENT DATA AT THE POINT OF CARE; (B) IMPROVE HEALTH CARE QUALITY; AND (C) REDUCE INAPPROPRIATE UTILIZATION AND COST. 17 17 60 20 0 0 16033831 15975015 523020 699890 6251 3382 0 0 16563102 16678287 0 0 0 0 7030651 8729259 0 0 0 8663558 8163140 15694209 16892399 868893 -214112 11302070 11610411 3411911 3934364 7890159 7676047 X THE MISSION OF HEALTHIX INC. IS TO CREATE AN ACHIEVABLE, SUSTAINABLE AND REPLICABLE MODEL FOR INTEGRATING CLINICAL INFORMATION ACROSS MULTIPLE HEALTH CARE ORGANIZATIONS WHICH SUPPORTS NEW YORK STATE AND FEDERAL STRATEGIC HEALTH INFORMATION TECHNOLOGY (HIT) PLANS TO (A) IMPROVE ACCESS TO PATIENT DATA AT THE POINT OF CARE; (B) IMPROVE HEALTH CARE QUALITY; AND (C) REDUCE INAPPROPRIATE UTILIZATION AND COST. 0 0 15169470 699890 HCRA/MEDICAID PROGRAMTHE IT GROUP WORKS WITH HEALTHIX PARTICIPANTS TO INTEGRATE THEM INTO THE HIE AND TO WORK WITH THEM TO DESIGN AND DEVELOP PRODUCTS AND SERVICES THAT HELP THEM TO IMPROVE CARE THROUGH BETTER CARE COORDINATION. IN 2017 WE USED THE FUNDING FROM HCRA/MEDICAID TO SUPPORT STAFF AND TECHNOLOGY FOR THIS WORK. THE IT GROUP WAS LED BY A CIO COVERING FOUR AREAS: INNOVATION, DEVELOPMENT, ENGINEERING AND SECURITY. THE INNOVATION TEAM INCLUDED EIGHT PROJECT MANAGERS, A BUSINESS ANALYST, A SOFTWARE QUALITY ASSURANCE ENGINEER, A DATA ANALYST, A DIRECTOR OF STRATEGIC DATA SERVICES AND A VICE PRESIDENT OF INNOVATION. [SEE CONTINUATION ON SCHEDULE O]THE DEVELOPMENT TEAM INCLUDED EIGHT DEVELOPERS AND A SENIOR DIRECTOR AND THE ENGINEERING TEAM INCLUDED FOUR ENGINEERS. THE DEVELOPMENT TEAM WAS AUGMENTED BY UP TO EIGHT ADDITIONAL DEVELOPERS. SECURITY WAS LED BY A CHIEF INFORMATION SECURITY OFFICER. IN ADDITION, THE FUNDING COVERED DATA CENTER OPERATIONS.ACCOMPLISHMENTSIN 2017 HEALTHIX COMPLETED 486 PROJECTS INCLUDING 411 CUSTOMER PROJECTS AND 75 INTERNAL PROJECTS. THE 411 CUSTOMER PROJECTS INCLUDED CONNECTING NEW PARTICIPANTS TO HEALTHIX AND PROVIDING THEM WITH STANDARD AND CUSTOM SERVICES. THE 75 INTERNAL PROJECTS INCLUDED:- DEVELOPMENT OF NEW PRODUCTS AND SERVICES- IMPROVING THE INFRASTRUCTURE AND SECURITY OF THE SYSTEM- EXPANDING AND IMPROVING THE DATA BEING SENT TO HEALTHIX- IMPROVING THE TECHNICAL INTEGRATION BETWEEN HEALTHIX AND THE ELECTRONIC HEALTH RECORDS SYSTEM THE CONNECT TO US- 2016 ALSO INCLUDED THE FINAL STAGES MERGING TWO LEGACY SYSTEMS INTO A SINGLE PLATFORM.HEALTHIX CUSTOMER PROJECTS IN 2017 WERE WITH THE FOLLOWING TYPES OF FACILITIES:- AMBULATORY 113 PROJECTS- BEHAVIORAL HEALTH ORGANIZATIONS 19 PROJECTS- COMMUNITY BASED ORGANIZATIONS 24 PROJECTS- EMERGENCY MANAGEMENT SERVICES 1 PROJECT- FEDERALLY QUALIFIED HEALTH CENTERS 20 PROJECTS- HEALTH PLANS 2 PROJECTS- HEALTH SYSTEMS AND HOSPITALS 34 PROJECTS- HOME CARE 6 PROJECTS- LABORATORY/RADIOLOGY 3 PROJECTS- LONG TERM CARE 106 PROJECTS- NYS MEDICAID HEALTH HOMES 3 PROJECTS- OTHER NON-CLINICAL 6 PROJECTS- PHARMACY 10 PROJECTS- PHYSICIAN PRACTICES 46 PROJECTS- MISCELLANEOUS 18 PROJECTSDURING THE YEAR ENDED DECEMBER 31, 2017, THE COMPANY RECORDED $15,851,449 IN REVENUE IN CONNECTION WITH THIS PROGRAM.PCORI CDRN PROGRAMTHE PATIENT-CENTERED OUTCOMES RESEARCH INSTITUTE (PCORI) AWARDED A CONTRACT TO WEILL CORNELL MEDICAL COLLEGE FOR THE NEW YORK CITY CLINICAL DATA RESEARCH NETWORK (CDRN) TO:- BUILD INFRASTRUCTURE TO PERFORM COMPARATIVE EFFECTIVENESS RESEARCH- PERFORM TWO OBSERVATIONAL STUDIES ON DIABETES AND CYSTIC FIBROSIS- FACILITATE PATIENT-CENTERED RESEARCH THAT CAN BE LINKED TO A NATIONAL NETWORK- COLLABORATE NATIONALLY WITH 10 OTHER CDRNS TO DEVELOP BEST PRACTICES AND SUPPORT JOIN STUDIESHEALTHIX CONTRIBUTIONTHE NEW YORK GENOME CENTER FUNCTIONS AS A TRUSTED BROKER COMBINING THE CLINICAL DATA FROM MAJOR HEALTH SYSTEMS IN NYC, SEVERAL FEDERALLY QUALIFIED HEALTH CENTERS, AS WELL AS HEALTH PLANS. THE HEALTHIX MASTER PATIENT INDEX (MPI) IS USED TO LINK PATIENT RECORDS FROM ACROSS THESE FACILITIES INTO A COMMON DATA SET FOR RESEARCH. IN 2017 HEALTHIX COMPLETED TWO ROUNDS OF MATCHING. DURING THE YEAR ENDING DECEMBER 31, 2017, THE COMPANY EARNED $62,000 IN REVENUE.HRSATHE NEW YORK STATE DEPARTMENT OF HEALTH (NYSDOH) HAS PARTNERED WITH HEALTHIX, THE LARGEST HIE IN THE STATE. THE COLLABORATION WILL ALLOW THE NYSDOH HIV SURVEILLANCE PROGRAM TO ACCESS ADDITIONAL DATA ON HIV-INFECTED PERSONS FOR A MORE COMPREHENSIVE LOOK AT HEALTH CARE MEASURES IMPORTANT TO THE EPIDEMIC, INCLUDING MEASURES OF HIV TESTING, LINKAGE TO CARE, RETENTION IN CARE, ANTIRETROVIRAL THERAPY, AND VIRAL SUPPRESSION. HEALTHIX MEMBERSHIP IS IN NEW YORK CITY AND THE ADJACENT NASSAU AND SUFFOLK COUNTIES ON LONG ISLAND. THEIR GEOGRAPHIC LOCATION AND SERVICE AREA WILL PROVIDE THE NYSDOH ACCESS TO ADDITIONAL DATA ON INFECTED PERSONS LIVING IN THE REGIONS OF THE STATE WITH THE HIGHEST PREVALENCE OF HIV.DELIVERABLE #1 HEALTHIX CONDUCTED ON-GOING ANALYSIS TO IMPROVE THE QUERY TO SEARCH THE HIE FOR PATIENTS MATCHING CRITERIA FOR INFECTED PERSONS. THIS QUERY IS RUN DAILY TO CREATE AND MAINTAIN A LIST OF PATIENT IDENTIFIERS MEETING THESE CRITERIA. HEALTHIX DETECTS ENCOUNTERS BY THESE PATIENTS AT HEALTHIX FACILITIES. HEALTHIX DEVELOPED A PROCESS TO SEND PATIENT EXPIRATION NOTIFICATIONS FOR PATIENTS MATCHING SELECTION CRITERIA. HEALTHIX MODIFIED THE PROCESS IN WHICH THE UPDATES ARE SENT TO NYSDOH. UPDATES ARE SENT IN REAL-TIME IN HL7 FORMAT USING THE UPHN-LITE AS THE TRANSPORT MECHANISM. HEALTHIX SENDS INITIAL CCDS FOR ANY NEWLY IDENTIFIED PATIENTS MEETING THE SELECTION CRITERIA AGREED UPON BY HEALTHIX AND NYSDOH. HEALTHIX CONTINUES THE DEVELOPMENT OF THE DOCUMENTS PROVIDED TO THE DOH TO MEET THE NEWEST STANDARDS AND TO BE AS COMPREHENSIVE AS POSSIBLE.DELIVERABLE #2 ENRICH THE HEALTHIX DATA COLLECTION TO INCLUDE DATA ELEMENTS THAT ARE MISSING FROM SOME SOURCES: - RACE- ETHNICITY- PREF. LANG.- SMOKING STATUS- PROBLEMS- MEDICATIONS- MED. ALLERGIES- LAB TEST- LAB VALUES- VITALS- CARE PLAN FIELDS- PROCEDURES- CARE TEAM MEMBERS- ENCOUNTER DIAGNOSIS- IMMUNIZATIONS- FUNCTIONAL & COGNITIVE STATUS- DISCHARGE INSTRUCTIONS- PRIMARY PROCEDURE- PRIMARY DIAGNOSIS- RADIOLOGY- EKG- ADVANCE DIRECTIVES- PROVIDER NPI- DISCHARGE DISPOSITION EXPANSION OF THE DATA CAPTURED BY HEALTHIX AND PROVIDED TO THE DOH ENHANCES THE DEPARTMENT'S UNDERSTANDING OF THE PATIENT'S CLINICAL CONDITION AND PROGRESS. HEALTHIX REACHED OUT TO EXISTING PARTICIPANTS TO ADD NEW DATA FEEDS AND ENHANCE EXISTING FEEDS TO FILL THESE GAPS. THE ACTIVITIES INCLUDED:- ANALYSIS CURRENT DATA SOURCES AND GAP ANALYSIS, - OUTREACH TO PARTICIPANTS TO GAIN THEIR SUPPORT FOR NEW PROJECTS, - PROJECT PLANNING, - INTERFACE BUILDING/ENHANCING, - TESTING & DEBUGGING, - DATA QUALITY ASSURANCE AND - DEPLOYMENTDURING THE YEAR ENDED DECEMBER 31, 2017, THE FINAL YEAR OF THE GRANT, THE COMPANY EARNED $105,376 IN REVENUE.CHSLI PPS SUPPORTCATHOLIC HEALTH SERVICES OF LONG ISLAND (CHSLI) WAS SELECTED BY NYS DEPARTMENT OF HEALTH TO BE A PERFORMING PROVIDER SYSTEM (PPS) AS PART OF MEDICAID REFORM. AS PART OF OPERATING THE PPS CHSLI HAD TO EXCHANGE CLINICAL DATA WITH DOZENS OF COMMUNITY PHYSICIAN PRACTICES. THEY CONTRACTED WITH HEALTHIX TO COMPLETE THIS WORK. HEALTHIX COMPLETED 62 PROJECTS FOR CHSLI IN SUPPORT OF THIS PROGRAM. THE PROJECTS INCLUDED INTEGRATING THE PRACTICES WITH HEALTHIX WHICH ALLOWED CHSLI AND THE PRACTICES TO EXCHANGE CLINICAL DATA ON THEIR SHARED PATIENTS. IN ADDITION, THE PROJECTS INCLUDED ALERTS TO THE PRACTICES TO INFORM THEM WHEN THEIR PATIENTS GO TO THE HOSPITAL AND SINGLE SIGN-ON SERVICES TO ALLOW THEM TO LINK TO THE HEALTHIX CLINICAL PORTAL FROM WITHIN THEIR ELECTRONIC HEALTH SYSTEM (EHR).TOTAL REVENUE FOR THIS PROGRAM AS OF DECEMBER 31, 2017 WAS $168,004.HUB GRANTHEALTHIX WAS AWARDED A GRANT BY THE NEW YORK EHEALTH COLLABORATIVE TO BUILD OUT ITS HUB PROGRAM. THE HEALTHIX HUB PROGRAM STARTED AT HEALTHIX ABOUT FIVE YEARS AGO. HEALTHIX LEARNED THAT IT WAS POSSIBLE TO BUILD A SINGLE CONNECTION TO AN ELECTRONIC HEALTH SYSTEM (EHR) AND CONNECT MULTIPLE FACILITIES TO HEALTHIX THROUGH THAT SINGLE CONNECTION. THIS INNOVATION HAS CUT PROJECT TIME AND COST TO A FRACTION OF WHAT IT COSTS TO BUILD INDIVIDUAL CONNECTIONS FOR EACH FACILITY. THE HUB GRANT PROVIDES HEALTHIX WITH FUNDING TO HIRE ADDITIONAL RESOURCES TO BUILD CONNECTIONS WITH FIVE ADDITIONAL HUB EHR VENDORS. THE TOTAL REVENUE FROM THIS PROGRAM AS OF DECEMBER 31, 2017 WAS $104,146. 15169470 1 1 0 0 0 0 0 0 0 0 1 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 9 0 60 1 0 0 0 0 0 0 0 0 0 0 X 17 17 0 1 0 0 1 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 NY X X JOHN GUASTELLA 8776954749 40 WORTH STREET 5TH FLOOR NEW YORK NY 100132988 RICHARD DONOGHUE CHAIR 4.00 X X 0 0 0 JEFFREY KRAUT VICE CHAIRMAN THRU 11/30/17 1.00 X X 0 0 0 MICHAEL ROSENBLUT TREASURER 1.00 X X 0 0 0 MITRA BEHROOZI DIRECTOR 1.00 X 0 0 0 NEIL CALMAN MD DIRECTOR 1.00 X 0 0 0 JAMES CLYNE DIRECTOR 1.00 X 0 0 0 DAVID COHEN MD DIRECTOR 1.00 X 0 0 0 LOUISE COHEN DIRECTOR 1.00 X 0 0 0 THOMAS EARLY DIRECTOR 1.00 X 0 0 0 ROBERT HEATLEY DIRECTOR 1.00 X 0 0 0 MAUREEN GAFFNEY DIRECTOR 1.00 X 0 0 0 ARTHUR GIANELLI DIRECTOR 1.00 X 0 0 0 CHARLES KING DIRECTOR 1.00 X 0 0 0 JOSEPH LAMANTIA DIRECTOR 1.00 X 0 0 0 DAVID LEVENTHAL DIRECTOR 1.00 X 0 0 0 LARRY MCREYNOLDS DIRECTOR 1.00 X 0 0 0 TERENCE O'BRIEN DIRECTOR THRU 11/30/17 1.00 X 0 0 0 DAVID SCHIMEL DIRECTOR 1.00 X 0 0 0 JAY VARMA MD DIRECTOR THRU 11/30/17 1.00 X 0 0 0 ANUP VIDYARTHY DIRECTOR 1.00 X 0 0 0 THOMAS F CHECK PRESIDENT & CEO 40.00 X 409557 0 88070 TODD ROGOW SVP & CIO 40.00 X 322688 0 83808 JOHN GUASTELLA SVP & CFO 40.00 X 242081 0 63617 JOAN CARNEY-CLARK SVP SOLUTIONS & MEMBER ENGAGEMENT 40.00 X 87088 0 15740 THOMAS MOORE VICE PRESIDENT-INNOVATION 40.00 X 262948 0 74695 MATTHEW WEBSTER CHIEF INFO. SECURITY OFFICER 40.00 X 206537 0 54333 VIVIENNE DESTEFANO VP EXTERNAL AFFAIRS & CORP. COMM. 40.00 X 197039 0 42739 MADHAV GONE SR. DIR. OF ARCHITECTURE & ENG. 40.00 X 172153 0 52134 KATHLEEN KAHN SR. DIR. OF BUSINESS DEVELOPMENT 40.00 X 156243 0 34130 JASON THAW SR. DIR. OF MEMBER SERVICES 40.00 X 155833 0 58865 2212167 0 568131 31 0 1 0 J2 INTERACTIVE LLC 2 THIRTEENTH STREET CHARLESTOWN MA 02129 IT CONSULTING 1160738 EPLUS TECHNOLOGY INC PO BOX 404398 ATLANTA GA 30188 IT CONSULTING 448016 PWC ADVISORY SERVICES LLC 300 MADISON AVE NEW YORK NY 10017 PROJECT CONSULTING SERVICES 370000 IBM 1 NEW ORCHARD ROAD ARMONK NY 10504 IT CONSULTING 213615 SYNERGY EXECUTIVE SEARCH GROUP INC 143 LEVERING STREET PHILADELPHIA PA 19127 RECRUITING SERVICE 159558 7 15851449 123566 8420 15975015 CONTRACT REVENUE 518210 699890 699890 699890 2432 2432 950 0 950 950 950 16678287 699890 0 3382 1508665 964331 544334 5984088 5707238 276850 223978 215937 8041 456134 446370 9764 556394 488770 67624 83557 74879 8678 131220 117592 13628 53250 53250 286783 260446 26337 76887 68902 7985 183620 164549 19071 4989965 4547484 442481 888786 796477 92309 129697 116227 13470 39010 34958 4052 1122587 1005996 116591 176659 158311 18348 STORAGE EXPENSE 1119 1003 116 16892399 15169470 1722929 0 810019 308011 2752634 2951760 4658171 5353699 67006 258546 648814 683615 4435620 2434637 2311629 2000983 53797 53797 11302070 11610411 3136469 3646864 275442 287500 3411911 3934364 X 7890159 7676047 7890159 7676047 11302070 11610411 -214112 0 X X 0 1 X 1 1 1 X 8865940 9349985 14689562 16033831 15975015 64914333 2251418 2448114 562140 523020 699890 6484582 11117358 11798099 15251702 16556851 16674905 71398915 0 224645 143303 1231 369179 224645 143303 1231 369179 71029736 11708 5688 36238 6251 2432 62317 11708 5688 36238 6251 2432 62317 2199 331350 5252 338801 11131265 12135137 15293192 16563102 16677337 71800033 0.98930 0.93860 0.00090 0.03340 X SCHEDULE A, PART III, LINE 12, EXPLANATION OF OTHER INCOME: OTHER REVENUE - 2014 AMOUNT: $ 1,130. 2015 AMOUNT: $ 5,252. REFUNDS - 2013 AMOUNT: $ 2,199. RECOVERY OF BAD DEBT - 2014 AMOUNT: $ 330,220. 1781862 786857 995005 2653758 1647780 1005978 2000983 X 16678287 0 16678287 0 16678287 16892399 0 16892399 0 16892399 PART X, LINE 2: THE COMPANY RECOGNIZES THE EFFECT OF INCOME TAX POSITIONS THAT ARE MORE LIKELY THAN NOT TO BE SUSTAINED. MANAGEMENT HAS DETERMINED THAT THE COMPANY HAS NO UNCERTAIN TAX POSITIONS THAT WOULD REQUIRE FINANCIAL STATEMENT RECOGNITION OR DISCLOSURE. THE COMPANY IS NO LONGER SUBJECT TO EXAMINATIONS BY THE APPLICABLE TAXING JURISDICTIONS FOR PERIODS PRIOR TO DECEMBER 31, 2014. X X X X 0 0 0 0 0 0 0 1 0 THOMAS F CHECK PRESIDENT & CEO 354912 0 50000 0 4645 0 63500 0 24570 0 497627 0 50000 0 TODD ROGOW SVP & CIO 287857 0 34386 0 445 0 44782 0 39026 0 406496 0 34386 0 JOHN GUASTELLA SVP & CFO 220789 0 19961 0 1331 0 36777 0 26840 0 305698 0 19961 0 THOMAS MOORE VICE PRESIDENT-INNOVATION 234013 0 27945 0 990 0 37905 0 36790 0 337643 0 27945 0 MATTHEW WEBSTER CHIEF INFO. SECURITY OFFICER 184404 0 21882 0 251 0 29763 0 24570 0 260870 0 21882 0 VIVIENNE DESTEFANO VP EXTERNAL AFFAIRS & CORP. COMM. 180785 0 15198 0 1056 0 30221 0 12518 0 239778 0 15198 0 MADHAV GONE SR. DIR. OF ARCHITECTURE & ENG. 161146 0 10878 0 129 0 15846 0 36288 0 224287 0 10878 0 KATHLEEN KAHN SR. DIR. OF BUSINESS DEVELOPMENT 140714 0 15046 0 483 0 22477 0 11653 0 190373 0 0 0 JASON THAW SR. DIR. OF MEMBER SERVICES 140481 0 15245 0 107 0 23154 0 35711 0 214698 0 0 0 PART I, LINE 7 AN EMPLOYEE MAY RECEIVE AN ANNUAL BONUS EQUAL TO AS MUCH AS 12% OF HIS/HER BASE SALARY (EXCEPT FOR THE CEO, WHOSE ANNUAL BONUS IS SET BY HIS EMPLOYMENT AGREEMENT). THE BONUS WILL BE DETERMINED BASED UPON PERFORMANCE OBJECTIVES OUTLINED BY THE EMPLOYEE'S SUPERVISOR AND DISCUSSED WITH THE EMPLOYEE, IN MOST CIRCUMSTANCES, EARLY IN THE FIRST QUARTER OF THE COMPENSATION YEAR. FOR NEW EMPLOYEES, WHOSE FIRST ANNUAL BONUS IS PRORATED FROM THEIR DATE OF HIRE TO THE END OF THE YEAR, THEIR PERFORMANCE OBJECTIVES ARE DISCUSSED WITH THEM SHORTLY AFTER THEY ARE HIRED. A DOCUMENT OUTLINES AN EMPLOYEE'S PERFORMANCE OBJECTIVES IS MATCHED TO THE COMPANY'S STRATEGIC GOALS FOR EACH YEAR. ONCE THE COMPANY'S FISCAL YEAR HAS ENDED, THE SUPERVISOR PREPARES AN EVALUATION TO SEE IF THE EMPLOYEE HAS MET THE CRITERIA FOR INCENTIVE PAY FOR THE PERFORMANCE OBJECTIVES OUTLINED, AND DETERMINES HOW THE EMPLOYEE HAS PERFORMED. THE OVERALL PERFORMANCE IS DETERMINED AND AN OVERALL RATING IS ASSIGNED TO THE PERFORMANCE. THIS OVERALL RATING IS THE DETERMINING FACTOR FOR THE PERCENTAGE BONUS WHICH THE EMPLOYEE HAS EARNED FOR THE PREVIOUS FISCAL YEAR. A SCHEDULE IS DISTRIBUTED TO ALL EMPLOYEES WHICH SHOWS THE PERCENTAGE BONUS AN EMPLOYEE CAN EARN BASED UPON HOW THEIR PERFORMANCE IS RATED. THIS SCHEDULE ALSO BRIEFLY SUMMARIZES THE COMPANY'S INCENTIVE COMPENSATION PROGRAM. THIS IS DISTRIBUTED TO EMPLOYEES IN THE COMPENSATION YEAR SO THAT EACH EMPLOYEE AND THEIR SUPERVISOR ARE AWARE OF WHAT CAN BE EARNED. PAYMENT OF ANY INCENTIVE COMPENSATION IS WHOLLY DEPENDENT UPON THE COMPANY MEETING ITS OPERATING INCOME TARGET, AS IS ESTABLISHED AT THE BEGINNING OF EACH FISCAL YEAR AND APPROVED BY THE BOARD OF DIRECTORS. ONCE THE COMPANY'S BOOKS ARE CLOSED IN THE SUBSEQUENT PERIOD, AND THE COMPANY HAS RECEIVED CONFIRMATION FROM ITS INDEPENDENT AUDITORS AS TO ITS RESULTS OF OPERATIONS FOR THE COMPENSATION YEAR, THE COMPANY THEN COMPARES ITS ACTUAL OPERATING INCOME TO ITS TARGETED OPERATING INCOME. ASSUMING THE OPERATING INCOME TARGET IS MET OR EXCEEDED, MANAGEMENT THEN INFORMS THE HEALTHIX FINANCE COMMITTEE OF THIS AND RECOMMENDS THAT BONUSES CAN BE PAID. PROPOSED BONUSES ARE THEN SUBMITTED TO THE CEO (OR PREPARED BY HIM FOR HIS DIRECT REPORTS). SUBSEQUENT TO THIS, THE HEALTHIX EXECUTIVE COMMITTEE (WHICH FUNCTIONS AS ITS COMPENSATION COMMITTEE AND HAS RECEIVED THE FINANCE COMMITTEE'S RECOMMENDATION TO PAY OUT BONUSES) MEETS TO DISCUSS AND APPROVE THE SPECIFIC BONUSES TO BE PAID, WHICH USUALLY OCCURS IN APRIL OF THE YEAR FOLLOWING THE YEAR IN WHICH THEY WERE EARNED (THE COMPENSATION YEAR). INCENTIVE COMPENSATION EARNED IN 2016 AND PAID/TAXABLE IN 2017 IS LISTED BELOW (ONLY FOR THOSE EMPLOYEES WHO EARNED OVER $100,000 IN 2016 AND EXCLUDING THE CEO): - TODD ROGOW $34,386 - JOHN GUASTELLA $19,961 - THOMAS MOORE $27,945 - MATTHEW WEBSTER $21,882 - VIVIENNE DESTEFANO $15,198 - MADHAV GONE $10,878 - KATHLEEN KAHN $15,046 - JASON THAW $15,245 FORM 990, PART VI, SECTION A, LINE 3 BEGINNING IN 2015, HEALTHIX, INC. BEGAN USING ADP TOTALSOURCE, A PROFESSIONAL EMPLOYER ORGANIZATION ("PEO"). AS A PROFESSIONAL EMPLOYER ORGANIZATION, TOTALSOURCE PROVIDES PROFESSIONAL EMPLOYER SERVICES TO HEALTHIX, INC. IN THE PEO RELATIONSHIP TOTALSOURCE AND HEALTHIX, INC. SHARE CERTAIN RESPONSIBILITIES AND ALLOCATE OTHER EMPLOYER RESPONSIBILITIES BETWEEN EACH OTHER. HEALTHIX, INC. REMAINS AN EMPLOYER OF THE WORKSITE EMPLOYEES AND TOTALSOURCE IS A CO-EMPLOYER OF HEALTHIX, INC.'S EMPLOYEES. HEALTHIX, INC. HAS: DIRECTION AND CONTROL OVER EMPLOYEES AS IS NECESSARY TO CONDUCT ITS BUSINESS, DISCHARGE AND FIDUCIARY RESPONSIBILITY IT MAY HAVE, OR COMPLY WITH ANY APPLICABLE LICENSURE, REGULATORY OR STATUTORY REQUIREMENT OF HEALTHIX, INC. CONTROL OVER THE DAY TO DAY JOB DUTIES OF EMPLOYEES AND OVER THE JOB SITES AT WHICH, OR FROM WHICH EMPLOYEES PERFORM SERVICES RESPONSIBILITY OVER THE PROFESSIONAL AND LICENSED ACTIVITIES OF EMPLOYEES INCLUDING ENSURING THAT EMPLOYEES ARE SUPERVISED BY LICENSED INDIVIDUALS AS REQUIRED BY LAW AND FOR DETERMINING WHETHER AN APPLICANT OR EMPLOYEE MEETS HEALTHIX, INC.'S HIRING CRITERIA AND IS QUALIFIED TO SAFELY AND COMPLETELY PERFORM HIS OR HER JOB TOTALSOURCE RESERVES A RIGHT OF DIRECTION AND CONTROL OVER EMPLOYEES AS IS NECESSARY TO FULFILL ITS OBLIGATIONS AND PROVIDE ITS SERVICES UNDER AN AGREEMENT BETWEEN HEALTHIX, INC. AND TOTALSOURCE. TOTALSOURCE AND HEALTHIX, INC. HAVE A RIGHT TO HIRE, DISCIPLINE, AND TERMINATE EMPLOYEES AS TO EACH ONE'S EMPLOYMENT RELATIONSHIP WITH EMPLOYEES. THE PEO WAS PAID $83,557 DURING 2017 FOR SERVICES PROVIDED. FORM 990, PART VI, SECTION A, LINE 6 MEMBERSHIP: IN ORDER FOR AN ORGANIZATION OR INDIVIDUAL TO QUALIFY TO BE A PARTICIPANT IN THE REGIONAL HEALTH INFORMATION ORGANIZATION ("RHIO") OPERATED BY THE CORPORATION ("PARTICIPANT"), HE/SHE OR IT MUST ENTER INTO A RHIO SERVICES, PARTICIPATION OR SIMILAR AGREEMENT WITH THE CORPORATION (EACH, A "RHIO SERVICES AGREEMENT"), THE FORM OF WHICH HAS BEEN APPROVED BY THE BOARD OF DIRECTORS OF THE CORPORATION ("BOARD"), TO PARTICIPATE IN A CLINICAL INFORMATION DATA EXCHANGE PROGRAM WITH THE CORPORATION AND TO ACT AS A DATA SOURCE AND/OR DATA USER WITH RESPECT TO THE CORPORATION'S DATA EXCHANGE. A PARTICIPANT'S PARTICIPATION IN THE CORPORATION WILL TERMINATE IF THE RHIO SERVICES AGREEMENT IS TERMINATED FOR ANY REASON. FORM 990, PART VI, SECTION B, LINE 11B AFTER THE FORM IS PREPARED BY OUTSIDE ACCOUNTANTS, IT WILL FIRST BE REVIEWED BY THE SVP & CFO. IF THERE ARE ANY SUGGESTED CHANGES OR MODIFICATIONS, HE WILL COMMUNICATE DIRECTLY WITH THE OUTSIDE ACCOUNTANTS. ONCE THE SVP & CFO IS SATISFIED WITH THE 990, HE WILL PASS IT ON TO THE CEO FOR HIS REVIEW. ONCE THE CEO IS SATISFIED WITH THE 990, THE NEXT STEP IS TO PASS IT ON TO THE TREASURER, WHO IS ALSO THE CHAIRMAN OF THE FINANCE COMMITTEE AND A MEMBER OF THE EXECUTIVE COMMITTEE AND THE BOARD OF DIRECTORS, FOR HIS REVIEW. ONCE THE TREASURER IS SATISFIED WITH THE 990, IT WILL BE PASSED ON TO THE FULL EXECUTIVE COMMITTEE. THIS COMMITTEE IS A SUBSET OF THE FULL HEALTHIX, INC. BOARD AND IS CHARGED WITH MAKING MANY KEY DECISIONS AFFECTING THE COMPANY. IT IS THIS GROUP OF INDIVIDUALS THAT WILL AUTHORIZE THE FILING OF THE 990. ONCE THE EXECUTIVE COMMITTEE IS SATISFIED WITH THE 990 AND HAS AUTHORIZED ITS FILING, THE SVP & CFO WILL PROVIDE AN ELECTRONIC COPY TO THE FULL BOARD OF DIRECTORS PRIOR TO THE EXTENDED DUE DATE OF THE RETURN. THE BOARD WILL BE INFORMED THAT THE EXECUTIVE COMMITTEE HAS REVIEWED AND APPROVED THE 990. IF ANY BOARD MEMBER HAS ANY QUESTIONS OR CONCERNS THEY WILL BE INSTRUCTED TO CONTACT THE SVP & CFO, WHO WILL RESOLVE THEIR INQUIRIES PROMPTLY. FORM 990, PART VI, SECTION B, LINE 12C ALL DIRECTORS, OFFICERS, AND KEY EMPLOYEES WILL, AT LEAST ANNUALLY, FILE A WRITTEN CONFLICT OF INTEREST DISCLOSURE STATEMENT WITH HEALTHIX SENIOR DIRECTOR OF COMPLIANCE. HEALTHIX SENIOR DIRECTOR OF COMPLIANCE WILL PROVIDE COPIES OF ALL COMPLETED STATEMENTS TO THE CHAIR OF THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD. FOR DIRECTORS, THE CONFLICT OF INTEREST DISCLOSURE STATEMENT WILL SPECIFICALLY INCLUDE, AMONG OTHER DISCLOSABLE CONFLICTS OF INTEREST, A STATEMENT IDENTIFYING, TO THE BEST OF THE DIRECTOR'S KNOWLEDGE, ANY ENTITY OF WHICH HE OR SHE IS AN OFFICER, DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIETOR OR A PARTNER), OR EMPLOYEE AND WITH WHICH HEALTHIX HAS A RELATIONSHIP, AND ANY TRANSACTION IN WHICH HEALTHIX IS A PARTICIPANT AND IN WHICH THE DIRECTOR MIGHT HAVE A DISCLOSABLE CONFLICT OF INTEREST. ALL COMPLETED CONFLICT OF INTEREST DISCLOSURE STATEMENTS THAT RAISE AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST, OR THAT CREATE THE APPEARANCE OF AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST, WILL BE FORWARDED BY THE CHAIR OF THE BOARD TO THE INDEPENDENT DIRECTORS ON THE BOARD FOR THEIR CONSIDERATION. THE INDEPENDENT DIRECTORS ON THE BOARD WILL CONDUCT A FULL REVIEW OF ALL MATTERS (E.G., CONTRACTS, TRANSACTIONS OR ARRANGEMENTS) FOR WHICH AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST HAS BEEN IDENTIFIED. IN SO DOING, THE INDEPENDENT DIRECTORS ON THE BOARD WILL: 1. CONSIDER ALL RELEVANT FACTS AND CIRCUMSTANCES INVOLVED IN THE MATTER, AND IN PARTICULAR, WHAT IS FAIR, REASONABLE AND IN THE BEST INTERESTS OF HEALTHIX; 2. EXCLUDE THE AFFECTED INDIVIDUAL(S) FROM BEING PRESENT AT OR PARTICIPATING IN, OR BEING COUNTED IN THE QUORUM FOR, THE DELIBERATIONS OR VOTING ON THE MATTER; 3. PROHIBIT THE AFFECTED INDIVIDUAL(S) FROM ANY ATTEMPT TO INFLUENCE IMPROPERLY THE DELIBERATIONS OR VOTING ON THE MATTER; 4. PERMIT THE AFFECTED INDIVIDUAL(S), UPON REQUEST OF THE INDEPENDENT DIRECTORS ON THE BOARD, TO PRESENT INFORMATION CONCERNING THE MATTER AT A MEETING PRIOR TO COMMENCEMENT OF DELIBERATIONS OR VOTING ON THE MATTER. THE INDEPENDENT DIRECTORS ON THE BOARD WILL MAKE A FINAL AND BINDING DETERMINATION AS TO WHETHER A CONFLICT OF INTEREST EXISTS OR MAY EXIST ON ANY MATTER IN WHICH THERE IS A DISCLOSABLE CONFLICT OF INTEREST, AND WHAT COURSE HEALTHIX WILL TAKE IN CONNECTION WITH THE MATTER. THE INDEPENDENT DIRECTORS ON THE BOARD WILL CONTEMPORANEOUSLY DOCUMENT IN WRITING IN APPROPRIATE MINUTES OF ANY MEETING AT WHICH THE MATTER IS DELIBERATED OR VOTED UPON ALL DELIBERATIONS AND DETERMINATIONS RELATING THERETO, INCLUDING, AT A MINIMUM: 1. THE NAMES AND POSITIONS OF PERSONS WHO DISCLOSED THAT THEY WERE RELATED PARTIES OR OTHERWISE WERE FOUND TO BE RELATED PARTIES OR TO HAVE A CONFLICT OF INTEREST, A DESCRIPTION OF THE NATURE OF THE RELATIONSHIP AND/OR SUBSTANTIAL FINANCIAL INTEREST WHICH GAVE RISE TO SUCH DISCLOSURE OR IDENTIFICATION, AND A DESCRIPTION OF THE CONTRACT, TRANSACTION OR ARRANGEMENT AT ISSUE; 2. THE NAMES OF THE INDEPENDENT DIRECTORS WHO WERE PRESENT DURING THE TAKING OF THE ACTION TO DETERMINE WHETHER A CONFLICT OF INTERESTS WAS PRESENT, AND THE BASIS FOR THERE BEING A QUORUM FOR THE TAKING OF SUCH ACTION WITHOUT INCLUDING ANY RELATED PARTIES OR AFFECTED PARTIES; 3. THE STEPS TAKEN BY THE INDEPENDENT DIRECTORS ON THE BOARD TO DETERMINE WHETHER A CONFLICT OF INTEREST WAS PRESENT; 4. THE BOARD'S DECISION AS TO WHETHER A CONFLICT OF INTERESTS WAS PRESENT AND THE BASIS FOR SUCH DECISION; 5. THE BOARD'S OR COMMITTEE'S DECISION AS TO WHETHER TO PROCEED WITH THE MATTERS (INCLUDING, BUT NOT NECESSARILY LIMITED TO, WHETHER THE MATTER IS AS FAIR AND REASONABLE TO HEALTHIX AS WOULD OTHERWISE THEN BE OBTAINABLE BY HEALTHIX) AND THE NAMES OF THE PERSONS WHO VOTED TO APPROVE THE MATTER. FORM 990, PART VI, SECTION B, LINE 15 CEO COMPENSATION IS SET BY AN EMPLOYMENT AGREEMENT. IN A PRIOR YEAR (2015), THE COMPANY RE-ENGAGED THE SERVICES OF AN INDEPENDENT COMPENSATION CONSULTING COMPANY WHICH IT HAD LAST USED IN 2012, THE "HAY GROUP", WHICH PERFORMED A FORMAL MARKET STUDY AND PROVIDED RANGES FOR SALARIES AND BONUSES FOR CERTAIN EXECUTIVES AND KEY EMPLOYEES OF THE COMPANY. WHERE AN UPWARD SALARY ADJUSTMENT WAS NEEDED TO BRING AN EMPLOYEE TO "MARKET COMPENSATION", SUCH AN ADJUSTMENT WAS MADE IN Q4 2015 TO THOSE AFFECTED EMPLOYEES. NO DOWNWARD SALARY ADJUSTMENTS WERE MADE RESULTING FROM THIS STUDY. THERE WAS NO NEED TO ENGAGE THE COMPENSATION CONSULTANT AGAIN IN 2016 AND 2017. THE SAME PROCESS WAS USED IN 2017 AS IN 2016 FOR DETERMINING BONUSES--NO CHANGES. GOALS WERE SET FOR ALL EMPLOYEES AT THE BEGINNING OF 2017, AND THEIR PERFORMANCE WAS MEASURED AGAINST GOALS AFTER 2017 CONCLUDED. BONUSES WHICH WERE ACCRUED AT 12/31/16 (BASED ON 2016 PERFORMANCE) WERE PAID IN 2017, AND THOSE WHICH ACCRUED AT 12/31/17 (BASED ON 2017 PERFORMANCE) WERE PAID OUT IN 2018. THE INCENTIVE COMPENSATION (I.E. BONUS) PROGRAMS WERE APPROVED BY THE EXECUTIVE COMMITTEE FOR BOTH 2016 & 2017, AND WERE ALSO DISTRIBUTED TO ALL EMPLOYEES. THE BY-LAWS CREATE A COMMITTEE OF THE BOARD WITH FULL POWERS OF THE BOARD TO REVIEW AND APPROVE THE COMPENSATION OF OFFICERS AND OTHER KEY EMPLOYEES. THE COMMITTEE, WHICH IS HEALTHIX'S EXECUTIVE COMMITTEE, CONSISTS OF TRUSTEES WHO HAVE NO CONNECTION TO HEALTHIX EXCEPT AS TRUSTEES AND THEY HAVE NO CONFLICTS AS TO MATTERS THEY CONSIDER. THE COMMITTEE MEETS SEVERAL TIMES A YEAR AS NEEDED AND ALWAYS REVIEWS AND DETERMINES OFFICER AND KEY EMPLOYEE COMPENSATION. FOR PURPOSES OF THEIR REVIEW THE COMMITTEE CONSIDERS THE RECOMMENDATIONS OF THE CEO FOR ALL PERSONS OTHER THAN THE CEO. THIS PROCESS WAS LAST UNDERTAKEN IN 2017. THE BOARD'S APPROVAL FOR THE COMPENSATION OF OFFICERS AND OTHER KEY EMPLOYEES IS DOCUMENTED VIA EMAIL. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS FORM 990 AND FORM 1023 AVAILABLE FOR PUBLIC INSPECTION AS REQUIRED UNDER SECTION 6104 OF THE INTERNAL REVENUE CODE. IT IS POSTED ON GUIDESTAR.ORG AND OTHER SIMILAR TYPES OF WEBSITES. IN ADDITION, THE FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, ARTICLES OF INCORPORATION AND BY-LAWS ARE ALSO AVAILABLE UPON WRITTEN REQUEST OR BY CALLING THE ORGANIZATION DIRECTLY. FORM 990, PART XII, LINE 2C: THE ORGANIZATION'S AUDIT AND COMPLIANCE COMMITTEE ASSUMES RESPONSIBILITY FOR THE OVERSIGHT OF THE AUDIT OF ITS FINANCIAL STATEMENTS AND SELECTION OF ITS INDEPENDENT AUDITORS. THE POLICY FOR SELECTION AND OVERSIGHT OF THE INDEPENDENT AUDITORS HAS NOT CHANGED SINCE LAST YEAR.