2017-11-13T14:16:49-07:00 2016-12-31 135565207 KPMG LLP 300 North Greene Street Suite 400 Greensboro NC 27401 990 2016-01-01 463160718 Nemours New Jersey Physician Practice PC NEMO 9046974100 1801 Rockland Road Wilmington DE 19803 William Higginbotham II Treasurer 9046975880 2017-11-15 1 KPMG LLP P00000888 3362753394 2017-11-15 199.207.253.101 2016 2017-02-10 21:41:12Z Dr Roy Proujansky MD 1801 Rockland Road Wilmington DE 19803 7321276 0 8516 X www.nemours.org X 2014 NJ Nemours New Jersey Physician Practice PC (Nemours NJ) mission is to provide services to restore and improve the health of children in the State of New Jersey, with one high standard of quality and regardless of the recipient's financial status. 1 0 0 0 0 0 0 0 5033479 5623648 0 0 997618 1697628 6031097 7321276 1600 1825 0 0 6688212 7352368 0 0 0 1452953 1938824 8142765 9293017 -2111668 -1971741 769257 666552 4008574 5877610 -3239317 -5211058 Nemours NJ's mission is to provide services to restore and improve the health of children in the State of New Jersey, with one high standard of quality and regardless of the recipient's financial status. 0 0 9293017 1825 7321276 To engage in activities relating to the aforementioned purposes; and to invest in, receive, hold, use and dispose of all property real or personal, as may be necessary or desirable to carry into effect the aforementioned purposes. Specifically, Nemours NJ is organized and shall at all times be operated exclusively to support and further the mission of its sole member, (The Nemours Foundation, EIN 59-0634433, ("Nemours"), an IRC section 501(c)(3) charitable IRC section 170(b)(1)(A)(iii) health care organization), through the provision of health care to the community. 0 0 0 9293017 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 1 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 1 0 0 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 X 1 0 1 1 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 NJ X Rodney McKendree 9046974100 10140 Centurion Parkway North Jacksonville FL 32256 Roy Proujansky MD President and Director 1 40 X X 0 994396 155726 William W Higginbotham II Treasurer 1 46 X 0 296568 43804 Laura Kowal Secretary 1 40 X 0 211733 33487 0 1502697 233017 0 0 1 0 WEATHERBY LOCUMS INC PO BOX 972633 Dallas TX 75397 Staffing 204114 Innovative Healthcare Services 2 Stable Court Collegeville PA 19426 Process Improvement 118585 2 0 0 0 0 0 0 0 0 Net Patient Service Revenue 621110 5623648 5623648 0 0 0 0 0 0 5623648 0 0 0 0 0 Specialized Services 900099 1670216 1670216 0 0 27412 27412 0 0 1697628 7321276 7321276 0 0 1825 1825 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6129858 6129858 0 0 485367 485367 0 0 408901 408901 0 0 328242 328242 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 365544 365544 0 0 11275 11275 0 0 141049 141049 0 0 8610 8610 0 0 0 0 0 0 223436 223436 0 0 35484 35484 0 0 0 0 0 0 -595 -595 0 0 2165 2165 0 0 0 0 0 0 0 0 0 0 159216 159216 0 0 Provision for bad debts 888053 888053 0 0 104587 104587 0 0 9293017 9293017 0 0 0 0 0 0 0 0 769257 666552 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 769257 666552 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4008574 5877610 4008574 5877610 X -3239317 -5211058 0 0 0 0 -3239317 -5211058 769257 666552 -1971741 0 0 0 0 0 X 0 1 X 1 0 X 0 0 0 0 0 5101330 6031097 7321276 18453703 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5101330 6031097 7321276 18453703 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 18453703 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5101330 6031097 7321276 18453703 X Payable to Nemours 5877610 5877610 X Schedule D, Part X, Line 1 Nemours NJ has a liability due to The Nemours Foundation of approximately $5.8 million. This amount is in support of the charitable purpose of The Nemours Foundation and Nemours NJ in the furtherance of pediatric healthcare. Schedule D, Part X, Line 2 Nemours is exempt from federal income taxes on related income under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3), and is also exempt from state income taxes. Management believes that the unrelated business income generated by Nemours is not material to the combined financial statements. X 1 1 X X X X 0 1 0 0 0 0 0 1 0 Roy Proujansky MD President and Director 0 695031 0 179217 0 120148 0 142553 0 13173 0 1150122 0 0 William W Higginbotham II Treasure 0 262152 0 34056 0 360 0 27587 0 16217 0 340372 0 0 Laura Kowal Secretary 0 202227 0 9240 0 265 0 0 0 33487 0 245219 0 0 Schedule J, Part I, Line 1a Nemours has established and Nemours NJ has adopted a policy for the reimbursement of travel and related expenses incurred by its employees. All transportation and travel arrangements shall be the most economical under the circumstances. Excursion or coach fares shall be ordered whenever available. Approval shall be required for any other class of travel. Each department has the right to limit travel expenditures based on budgetary restrictions and may limit coverage to certain categories of travel expense. First class travel may occur in situations for Nemours employees wherein other fares are not available or travel is for a long period of time or overseas. Board members also have the option of traveling first class. Schedule J, Part I, Line 4 The Nemours Foundation maintained a supplemental employee benefit plan ("SEBP") for most of the members of the Nemours executive team as determined by the Board of Directors. The SEBP provides each participant an employer provided annual "flexible" benefit allowance in the form of dollar credits which the participant may apply to any of the benefits offered under the plan: individual long-term disability insurance, unfunded nonqualified deferred compensation benefits subject to IRC section 457(f). Under the plan, each of the participants makes an annual election allocating his or her flexible benefit allowance for the upcoming year among the component benefits. The amount of the flexible benefit allowance may vary among the participants as determined by Nemours and Nemours may discontinue the flexible benefit allowances at any time. Contributions to the plan are disclosed in Form 990, Part VII, Column F and Schedule J, Part II, Column (C). Schedule J, Part I, Line 7 Certain employees of Nemours and Nemours NJ are eligible for incentive compensation. This compensation is based on qualitative and quantitative organizational goals and the achievement of such goals by its divisions and individuals. Form 990, Part VI, Section A, Line 1a The Nemours Foundation, a Florida nonprofit corporation ("Nemours"), dba Nemours Children's Health System, provides world-class pediatric medical care to children in Florida, Delaware, Pennsylvania, and New Jersey. Because the State of New Jersey has a prohibition on the corporate practice of medicine under New Jersey state statutes and guidelines issued by the New Jersey Board of Medical Examiners (See, for e.g., N.J.S.A. 45:9-5.1), Nemours New Jersey Physician Practice, P.C. ("Nemours NJ"), a separate New Jersey professional corporation wholly controlled by Nemours was incorporated in order to provide pediatric specialty outpatient care to children in New Jersey. The Internal Revenue Service has recognized that professional corporations established in those states with a corporate practice of medicine doctrine, like New Jersey, could qualify as a federal income tax-exempt charitable organization under Section 50l(c)(3) of the Internal Revenue Code. See "Corporate Practice of Medicine" by Charles F. Kaiser III and Marvin Friedlander, Internal Revenue Service TE/GE CPE Manual 2000-F ("Manual"). Nemours NJ has received Section 50l(c)(3) tax-exempt status as a charitable, educational and scientific organization under the "integral part" doctrine as Nemours NJ is performing an essential function for Nemours, i.e., the provision of specialty outpatient medical services to children in New Jersey which services Nemours would otherwise provide directly, if New Jersey did not have the corporate practice of medicine doctrine. The Certificate of Incorporation of Nemours NJ, on page 1, Article 2, expressly states that the Corporation is organized to engage in the business of rendering professional services to the public that a Doctor or Medicine or Osteopathy is authorized to render and will be organized and operated exclusively for charitable, educational and scientific purposes within the meaning of Section 501(c )(3) of the Internal Revenue Code of 1986, as amended (the "Code") and to further the charitable purposes of The Nemours Foundation and its divisions, including but not limited to the Nemours/Alfred I. du Pont Hospital for Children. The Certificate of Incorporation of Nemours NJ on page 2, Article 4, paragraph (d) also provides for distribution of the assets of Nemours NJ upon dissolution to Nemours and not to any shareholder. Nemours NJ has issued all of its shares of stock (100 common shares as authorized in Section 4 of the Certificate of Incorporation of Nemours NJ) to Roy Proujansky, M.D., a physician licensed to practice medicine in New Jersey so as to comply with the corporate practice of medicine doctrine. Dr. Proujansky is also the sole Director and President of Nemours NJ and the Executive Vice President and the Chief Executive in charge of the Delaware and New Jersey operations of Nemours. Under New Jersey's corporate practice of medicine prohibition, only New Jersey licensed physicians can serve as shareholders and directors of the professional corporation which is providing medical services. Accordingly, Nemours NJ only has one Board member and one Voting Board member. However, safeguards have been put in place in the corporate documents and policies of Nemours NJ and in the Stock Succession and Transfer Agreement (described below) and Management Services Agreement (described below) to ensure control of Nemours NJ by Nemours. Form 990, Part VI, Section A, Line 2 Dr. Proujansky, Mr. Higginbotham, Ms. Kowal have a shared business relationship. All are employees of The Nemours Foundation (Nemours). Form 990, Part VI, Section A, Line 3 The Nemours Foundation ("Nemours") is an IRC section 501(c)(3) charitable organization recognized by the IRS as a hospital under IRC section 170(b)(1)(A)(iii). Nemours provides comprehensive management services, administrative personnel, office space, equipment, supplies and non-professional services to Nemours NJ under the Management Services Agreement between Nemours NJ and Nemours, as manager. Nemours conducts all of the administrative and business functions for the Nemours NJ at all locations operated by Nemours NJ. By the provisions of the Management Services Agreement, Nemours has effective control over the operations of Nemours NJ. Form 990, Part VI, Section A, Line 6 Nemours NJ has a close connection with Nemours and Nemours has control over Nemours NJ. The Certificate of Incorporation of Nemours NJ expressly states that the Corporation is organized to engage in the business of rendering professional services to the public that a Doctor or Medicine or Osteopathy is authorized to render and will be organized and operated exclusively for charitable, educational and scientific purposes within the meaning of Section 501 ( c )(3) of the Internal Revenue Code of 1986, as amended (the "Code") and to further the charitable purposes of Nemours and its divisions, including but not limited to the Nemours/Alfred I. duPont Hospital for Children. The inclusion of the Section 501(c)(3) language in the Certificate of lncorporation is not contrary to or incompatible with the language of or the intent of the New Jersey Professional Service Corporation Act, N.J.S.A. §14A-17.1 et seq. The Certificate of lncorporation of Nemours NJ also provides for distribution of the assets of Nemours NJ upon dissolution to Nemours and not to any shareholder. Nemours NJ has issued all of its shares of stock to Roy Proujansky, M.D., a physician licensed to practice medicine in New Jersey so as to comply with the corporate practice of medicine doctrine. Dr. Proujansky is also the sole Director and President of Nemours NJ and the Executive Vice President and the Chief Executive in charge of the Delaware and New Jersey operations of Nemours. Under New Jersey's corporate practice of medicine prohibition, only New Jersey licensed physicians can serve as shareholders and directors of the professional corporation which is providing medical services. However, several safeguards have been put in place in the corporate documents and policies of Nemours NJ and in the Stock Succession and Transfer Agreement and Management Services Agreement to assure control of Nemours NJ by Nemours. Form 990, Part VI, Section A, Line 7a See explanation under Form 990, Part VI, Section A, Line 6. Form 990, Part VI, Section A, Line 7b See explanation under Form 990, Part VI, Section A, Line 6. Form 990, Part VI, Section B, Line 11b Nemours management reviewed a draft of the Form 990 prior to filing. Upon finalization of the return, Management provided a final copy of the return, via email, to Roy Proujansky, MD prior to filing with the IRS. Form 990, Part VI, Section B, Line 12c Nemours NJ has reviewed and adopted the conflict of interest policy established by Nemours. Nemours is committed to the belief that sound business practices start with an absolute commitment from each employee to act ethically in carrying out Nemours business, and to comply with the laws and regulations that impact its business, thus Nemours' employees must avoid participating in activities that create or appear to create a conflict of interest. Nemours has specifically identified the following areas in its policy to be potential conflicts of interest: financial interest, outside employment, paid faculty arrangements, consultant or research contracts, acceptance of gifts, gratuities, business courtesies, travel, lodging and entertainment, misuse of resources or assets, personal gain using undue influence, direct dealings with vendors, use of confidential information, and an individual's support of political causes. Nemours' policy requires certain individuals to disclose participation in activities or circumstances that may present a conflict of interest on an annual basis or if at any time such individual becomes aware of circumstances that may present a conflict of interest. These disclosures are reviewed by the Nemours' Audit and Finance Committee as necessary. Form 990, Part VI, Section B, Line 15 Nemours' Board of Directors designated the People, Compensation and Reputation Committee (PCRC) to serve as the committee responsible for establishing compensation practices which are reasonable and do not violate the private inurement prohibition . The practices and processes are designed to avoid any claim for intermediate sanctions and to satisfy the requirements to obtain the rebuttable presumption. The PCRC annually reviews, in consultation with an independent executive compensation consulting firm specializing in healthcare and the not-for-profit industry, independently sourced benchmark market data to establish the compensation of our officers, senior leadership and key employees and to ensure reasonableness in comparison with peer practices. The Board of Directors reviews and sets forth the compensation for the CEO using the same process as the PCRC. Nemours' compensation philosophy across the board targets the market median for base salaries for all Nemours' Associates, including officers, senior leadership and key employees. Total cash compensation is also generally targeted to be at the median of Nemours' peers. Form 990, Part VI, Section C, Line 19 Generally, Nemours NJ does not make its governing documents or its conflict of interest policy available to the public. The Nemours Foundation (Nemours) 10140 Centurion Parkway North Jacksonville FL 32256 590634433 Healthcare FL 501(c)(3) 509(A)(2) N/A 0 Cruden Bay Risk Retention Group 2366 Airport Road Barre VT 05641 270057453 Risk Retention VT 501(c)(3) 509(a)(3) - Type 1 The Nemours Foundation 0 Pediatric Medical Services of Florida Inc 9145 Narcoossee Road Suite A203 Orlando FL 32827 453584225 Healthcare FL 501(c)(3) 509(a)(2) The Nemours Foundation 0 Dornoch Sutherland Assurance LTD PO BOX 1085 GT Grand Cayman CJ KY1-1102 980404800 Captive Insurance CJ The Nemours Foundation C 0 Alfred I DuPont Testamentary Trust 510 Alfred duPont Place Jacksonville FL 32202 590226560 Investment for Charity FL N/A T 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 The return is being filed on a timely basis. The Nemours NJ filed extensions on a timely basis in manually with the IRS. The tax return software system being used to efile the return generates a reasonable cause statement if extensions are not filed in that system. Accordingly, the return was properly extended and is now being filed timely by its extended due date of November 15, 2017.