2015-11-03T10:57:45-06:00 2014-12-31 KPMG LLP 191 West Nationwide Blvd Ste 500 Columbus OH 432152568 990 2014-01-01 203238867 ALVERNO PROVENA HOSPITAL LABORATORIES INC % STEVE WOJNICKI ALVE 2199893857 2434 INTERSTATE PLAZA DRIVE HAMMOND IN 46324 SAMUEL C TERESE JR PRESIDENT 2199893857 2015-09-30 true Mollie P Longhouse P00294881 6142492300 2014 2016-02-25 16:41:14Z SAMUEL C TERESE JR 2434 INTERSTATE PLAZA DRIVE HAMMOND IN 46324 146018515 false X WWW.PCLALVERNO.COM X 2005 IN BRINGING CHRIST'S MINISTRY TO THOSE WE SERVE THROUGH TIMELY HIGH-QUALITY LAB TESTING TO OUR 25 NOT-FOR-PROFIT HOSPITALS AND AFFILIATES LOCATED THROUGHOUT ILLINOIS AND INDIANA. 8 7 0 7 0 0 0 0 133821464 139355733 201183 1625 0 0 134022647 139357358 0 0 0 0 0 0 0 0 0 134213095 139357358 134213095 139357358 -190448 0 20361818 15076971 20211818 14926971 150000 150000 X BRINGING CHRIST'S MINISTRY TO THOSE WE SERVE THROUGH TIMELY HIGH-QUALITY LABORATORY TESTING TO OUR 25 NOT-FOR-PROFIT HOSPITALS AND AFFILIATES LOCATED THROUGHOUT ILLINOIS AND INDIANA. false false 131810653 139355733 ALVERNO PROVENA HOSPITAL LABORATORIES, INC.'S (APHL) PRIMARY FUNCTION IS TO PROVIDE LABORATORY TESTING SERVICES TO ITS TWENTY-FIVE (25) AFFLIATED NOT-FOR-PROFIT HOSPITALS AND AFFILIATES LOCATED THROUGHOUT ILLINOIS AND INDIANA. THE ORGANIZATION MAINTAINS A STRATEGIC PLAN THAT IS STRUCTURED ON THE FOLLOWING FIVE AREAS: STEWARDSHIP, PEOPLE, SERVICE, GROWTH, AND QUALITY. (CONTINUED IN SCHEDULE O) 131810653 true false false false false false false false false false true true false true true true true false false false false false false false false false false false false true false false false false false false false false false false false false false true false false false true 72 0 true 0 false false false false false false false false false false X 8 7 false false false false true true true true true false false true true true true true true false false false IL IN X STEVE WOJNICKI 2199893857 2434 INTERSTATE PLAZA DRIVE HAMMOND IN 46324 JOEL HOFF SECRETARY 1.0 1.0 X X 0 0 0 THOMAS GRYZBEK CHAIR 1.0 1.0 X X 0 0 0 ROBERT BIEDRON TREASURER 1.0 1.0 X X 0 0 0 DAVID DILORETO MD VICE CHAIR 1.0 1.0 X X 0 0 0 ANTHONY FILER DIRECTOR 1.0 1.0 X 0 0 0 VICKI REZAI MD DIRECTOR 1.0 1.0 X 0 0 0 MARK FRITSCH MD DIRECTOR 1.0 1.0 X 0 0 0 SAMUEL C TERESE JR PRESIDENT 32.0 8.0 X X 0 397013 33170 RICHARD FERRANS MD DIRECTOR 1.0 1.0 X 0 0 0 STEVEN G WOJNICKI CFO 32.0 8.0 X 0 243865 29398 BERNARD H HENRY VP OF HUMAN RESOURCES 32.0 8.0 X 0 206755 9075 ALEX WLODZIMIERSKI LAB DIRECTOR III 40.0 0.0 X 0 134004 20456 DORIAN M CHOICE REGIONAL LAB DIRECTOR 40.0 0.0 X 0 128720 11532 LYNN M CHEESEMAN LAB DIRECTOR III 40.0 0.0 X 0 118274 14530 MARTHA A LAMPMAN REGIONAL LAB DIRECTOR 40.0 0.0 X 0 115640 5095 CAROL A ALKEMA DIR-AUDIT & REGULATORY AFFAIRS 40.0 0.0 X 0 114628 13294 MARSHA H COOPER VP OF HOSPITALS 0.0 0.0 X 0 116903 0 0 1575802 136550 0 true true false PROFESSIONAL CLINICAL LABORATORIES 113 EAST 4TH STREET MICHIGAN CITY IN 46360 LAB & MANAGEMENT 29204885 ALVERNO CLINICAL LABORATORIES LLC 2434 INTERSTATE PLAZA DRIVE HAMMOND IN 46324 LAB & MANAGEMENT 12682043 QUEST DIAGNOSTICS PO BOX 740709 ATLANTA GA 303740709 REFERENCE LAB 2731199 MEDSPEED LLC PO BOX 190 LAKE GENEVA WI 53147 COURIER SERVICES 598883 AMERIPATH INDIANAPOLIS PC 13179 COLLECTION CENTER DRIVE CHICAGO IL 606930131 REFERENCE LAB 561139 9 0 LAB SERVICES FOR PATRON HOSPITALS 621500 139355733 139355733 139355733 1625 1625 0 0 0 0 0 0 0 0 6661157 6661157 0 0 139357358 139355733 1625 0 0 0 0 0 0 0 0 0 0 0 7648 7648 43983 43983 0 0 0 37361236 36088503 1272733 0 477410 477410 80634 80634 0 8411 8411 125150 125150 0 14694 14694 0 0 0 268995 268995 COMPENSATION PAID BY ACL 66748563 62930365 3818198 MEDICAL SUPPLIES 19003983 19003983 REFERENCE LABORATORY 8324724 8324724 EQUIPMENT RENT & MAINTENANCE 2859917 2859917 4032010 1636278 2395732 139357358 131810653 7546705 0 0 0 5100 5038 0 0 104559 11441 0 0 0 0 0 0 264384 1783357 577120 553891 5328 5328 0 0 15289000 10277000 0 0 0 0 4121655 2446244 20361818 15076971 9367315 9900540 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10844503 5026431 20211818 14926971 X 150000 150000 0 0 0 0 150000 150000 20361818 15076971 0 X false true X true false X 5328 5328 MONEY MARKET FUND 10277000 F 10277000 DUE FROM RELATED PARTIES 2446244 2446244 0 DUE TO RELATED PARTIES 3781085 RETIREMENT BENEFIT LIABILITY 1245346 5026431 146018515 6661157 6661157 139357358 139357358 146018515 6661157 6661157 139357358 139357358 SUPPLEMENTAL INFORMATION 1 SCHEDULE D, PART X, LINE 2 APHL INC. HAS ESTABLISHED ITS STATUS AS AN ORGANIZATION EXEMPT FROM INCOME TAXES UNDER THE INTERNAL REVENUE CODE ("THE CODE") SECTION 501(E) AND THE LAWS OF THE STATES IN WHICH IT OPERATES. A TAX POSITION IS RECOGNIZED AS A BENEFIT ONLY IF IT IS "MORE LIKELY THAN NOT" THAT THE TAX POSITION WOULD BE SUSTAINED IN A TAX EXAMINATION BEING PRESUMED TO OCCUR. THE AMOUNT IS THE LARGEST AMOUNT OF TAX BENEFIT THAT IS GREATER THAN 50% LIKELY OF BEING REALIZED ON EXAMINATION. FOR TAX POSITIONS NOT MEETING THE "MORE LIKELY THAN NOT" TEST, NO TAX BENEFIT IS RECORDED. THE COMPANY RECOGNIZES INTEREST AND PENALTIES RELATED TO UNRECOGNIZED TAX BENEFITS IN INTEREST AND INCOME TAX EXPENSE, RESPECTIVELY. THE COMPANY HAS NO AMOUNTS ACCRUED FOR INTEREST OR PENALTIES AS OF DECEMBER 31, 2014 AND 2013. DUE TO ITS TAX-EXEMPT STATUS, THE COMPANY IS NOT SUBJECT TO U.S. FEDERAL INCOME TAX OR STATE INCOME TAX. THE COMPANY DOES NOT EXPECT THE TOTAL AMOUNT OF UNRECOGNIZED TAX BENEFITS TO SIGNIFICANTLY CHANGE IN THE NEXT 12 MONTHS. TAX RETURNS FILED BY THE COMPANY ARE SUBJECT TO EXAMINATION BY THE INTERNAL REVENUE SERVICE (IRS) UP TO THREE YEARS FROM THE EXTENDED DUE DATE OF EACH RETURN. TAX RETURNS FILED BY THE COMPANY ARE NO LONGER SUBJECT TO EXAMINATION FOR THE YEARS ENDED DECEMBER 31, 2010 AND PRIOR. SUPPLEMENTAL INFORMATION 2 SCHEDULE D, PART XI, LINE 2D COST OF GOODS SOLD $6,661,157 SUPPLEMENTAL INFORMATION 3 SCHEDULE D, PART XII, LINE 2D COST OF GOODS SOLD $6,661,157 false false false false false false false SAMUEL C TERESE JR PRESIDENT 0 332550 0 62262 0 2201 0 10400 0 22770 0 430183 0 0 STEVEN G WOJNICKI CFO 0 214749 0 29116 0 0 0 8483 0 20915 0 273263 0 0 BERNARD H HENRY VP OF HUMAN RESOURCES 0 179296 0 25244 0 2215 0 6860 0 2215 0 215830 0 0 ALEX WLODZIMIERSKI LAB DIRECTOR III 0 133305 0 0 0 699 0 5459 0 14997 0 154460 0 0 MARSHA H COOPER VP OF HOSPITALS 0 0 0 0 0 116903 0 0 0 0 0 116903 0 0 SUPPLEMENTAL INFORMATION 1 SCHEDULE J, PART I, LINE 3 ALVERNO CLINICAL LABORATORIES, LLC (ACL), A RELATED ORGANIZATION IS THE PAY AGENT FOR ALVERNO PROVENA HOSPITAL LABORATORIES, INC. (APHL). ACL USED THE FOLLOWING METHODS TO ESTABLISH COMPENSATION FOR APHL'S TOP MANAGEMENT OFFICIALS: -COMPENSATION COMMITTEE -INDEPENDENT COMPENSATION CONSULTANT -COMPENSATION SURVEY OR STUDY -APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE GENERAL STATEMENT 1 PART III, LINE 4A PROGRAM SERVICE ACCOMPLISHMENTS APHL'S LONG TERM OBJECTIVE IS TO CONTINUE TO GROW SO AS TO PROVIDE QUALITY LABORATORY SERVICES TO OUR PATRON FAITH BASED HOSPITALS. IN SO DOING, APHL'S LONG TERM OBJECTIVE IS TO CONTROL COSTS, AND TO INCREASE THE NUMBER OF TESTS AVAILABLE, WITH A FOCUS ON HIGHLY RELIABLE SCIENTIFIC TEST RESULTS WHILE BUILDING A CULTURE OF SERVICE. APHL SEEKS TO ATTRACT A WORK FORCE DEDICATED TO SERVICE OF ITS PATIENTS. APHL'S SHORT TERM OBJECTIVES INCLUDE THE ENHANCEMENT OF THE COST MODEL TO IMPROVE THE RELATIVE VALUE UNIT THAT CAPTURES THE COMPLEXITY AND QUANTITATES THE PRODUCTION COST SO AS TO PROVIDE THE COOPERATIVE WITH AN INTEGRATED DELIVERY SYSTEM TO PROVIDE FOR PATIENT NEEDS ON THE PRODUCTION SIDE. THE USE OF LEAN CONCEPTS PROMOTES THE ELIMINATION OF WASTE AND THE EFFICIENT FLOW OF PRODUCTION. SCORE CARDS ARE IN PLACE AND MONITORED FOR QUALITY INTERVENTION NEED. APPROXIMATELY 11,497 TESTS A DAY ARE PERFORMED AT THE CENTRAL LABORATORY WHILE MAINTAINING RAPID RESPONSE LABORATORIES AT EACH HOSPITAL SITE. EACH LABORATORY SITE IS INSPECTED BY CAP AND PROVIDED A CERTIFICATION IN ADDITION TO THE INTERNAL APHL QUALITY DEPARTMENT INSPECTIONS AND PROGRAMS PROMOTING EXCELLENCE IN LABORATORY SCIENCE. GENERAL STATEMENT 2 PART VI, SECTION A, LINE 6 THE ORGANIZATION HAS TWO CLASSES OF MEMBERS, VOTING AND NON-VOTING. THE ORGANIZATION HAS ONE CLASS OF VOTING MEMBERS, "REFERRED TO AS PARTICIPANT HOSPITALS". EACH "PARTICIPANT" HAS THE RIGHT TO APPOINT BOARD MEMBERS WHO HAVE THE RIGHT TO VOTE ON ALL MATTERS PRESENTED TO THE MEMBERS OF THE CORPORATION, INCLUDING THE ELECTION OF DIRECTORS. THE "PATRONS" DO NOT HAVE VOTING RIGHTS. CURRENTLY, APHL, INC. HAS THREE PARTICIPANTS AND NO PATRONS. GENERAL STATEMENT 3 PART VI, SECTION A, LINE 7A PARTICIPANT HOSPITAL SYSTEM REPRESENTATIVES ARE APPOINTED BY THE PARTICIPANT HOSPITAL SYSTEM OF APHL'S PARENT ORGANIZATIONS. THE PARTICIPANT HOSPITAL SYSTEM REPRESENTATIVES CAN ACT ON BEHALF OF THE PARTICIPANT HOSPITAL SYSTEM CEO ON ALL MATTERS. GENERAL STATEMENT 4 PART VI, SECTION A, LINE 7B THE PARTICIPANT HOSPITAL SYSTEMS SHALL HAVE THE EXCLUSIVE POWER TO: A) APPROVE THE ADMISSION OF ADDITIONAL PARTICIPANTS OF THE CORPORATION; B) APPOINT AND REMOVE DIRECTORS AND FILL VACANCIES ON THE BOARD OF DIRECTORS; C) APPOINT AND REMOVE THE PRESIDENT OF THE CORPORATION; D) APPROVE AMENDMENTS AND/OR RESTATEMENTS FROM TIME TO TIME TO THE ARTICLES PROPOSED BY THE BOARD OF DIRECTORS; E) APPROVE AMENDMENT OR REPEAL OF THE BYLAWS AND THE ADOPTION OF NEW BYLAWS; F) APPROVE THE SALE, LEASE, PURCHASE, EXCHANGE, OR DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE PROPERTY AND ASSETS OF THE CORPORATION OR THE DISPOSITION OF ASSETS OF THE CORPORATION OTHER THAN IN THE ORDINARY COURSE OF BUSINESS; G) APPROVE THE VOLUNTARY DISSOLUTION OF THE CORPORATION OR THE MERGER OR CONSOLIDATION OF THE CORPORATION WITH ANOTHER CORPORATION; H) APPROVE THE PLAN FOR ALLOCATION AND DISTRIBUTION OF THE CORPORATION'S PROPERTY UPON DISSOLUTION IF NOT OTHERWISE PROVIDED FOR UNDER THE BYLAWS; I) APPROVE PARTICIPANTS' REQUIRED CAPITAL CONTRIBUTIONS TO THE CORPORATION OR DUES PAYABLE TO THE CORPORATION; J) APPROVE THE INCURRENCE OF DEBT BY THE CORPORATION IN EXCESS OF AMOUNTS DETERMINED FROM TIME TO TIME BY THE PARTICIPANTS; K) ADOPT THE ANNUAL CAPITAL AND OPERATING BUDGETS OF THE COMPANY, AND ANY MATERIAL DEVIATIONS THEREFROM, SUCH ANNUAL BUDGETS TO INCLUDE ANY PREVIOUSLY APPROVED CAPITAL CONTRIBUTIONS; L) ADOPT THE STRATEGIC PLANS FOR THE CORPORATION AND APPROVE ANY MATERIAL CHANGES TO THE SERVICES OFFERED BY THE CORPORATION WHICH ARE NOT EXPRESSLY IDENTIFIED IN THE PREVIOUSLY APPROVED STRATEGIC PLANS; M) ORGANIZE OR ACQUIRE, OR AUTHORIZE THE ORGANIZATION OR ACQUISITION OF, ANY SUBSIDIARY OR AFFILIATE OF THE CORPORATION; AND N) APPROVE ANY AMENDMENTS TO THE COOPERATIVE SERVICES AGREEMENT AMONG THE CORPORATION AND THE PARTICIPANTS, EFFECTIVE AS OF JULY 1, 2005 OR SUCH OTHER DATE AGREED UPON BY THE PARTICIPANTS. GENERAL STATEMENT 5 PART VI, SECTION B, LINE 11B THE FORM 990 IS REVIEWED IN DETAIL BY THE ORGANIZATION'S MANAGEMENT. THEN A FINAL DRAFT OF THE FULL FORM 990, INCLUDING APPLICABLE SCHEDULES, IS MADE AVAILABLE TO THE FINANCE COMMITTEE AT A REGULARLY SCHEDULED MEETING WITH OUR TAX ADVISORS PRESENT. EACH REMAINING MEMBER OF THE BOARD OF GOVERNANCE IS ALSO PROVIDED A FINAL DRAFT OF THE FULL FORM 990 FOR REVIEW. THESE REVIEWS OCCUR PRIOR TO FILING WITH THE IRS. GENERAL STATEMENT 6 PART VI, SECTION B, LINE 12C COVERED PERSONS: ALL MANAGEMENT PERSONNEL AND MEMBERS OF THE BOARD OF DIRECTORS ARE COVERED UNDER THE ORGANIZATION'S CONFLICT OF INTEREST POLICY. MANAGEMENT PERSONNEL INCLUDE SUPERVISORS THROUGH THE PRESIDENT/CEO OF THE ORGANIZATION. POLICY SUMMARY: THE CONFLICT OF INTEREST POLICY IS SENT OUT TO COVERED PERSONS FOR REVIEW. EACH PERSON IS REQUIRED TO COMPLETE THE CONFLICT OF INTEREST QUESTIONNAIRE AND RETURN IT. IT IS THE RESPONSIBILITY OF HUMAN RESOURCES AND THE EXECUTIVE ASSISTANT TO ENSURE THE QUESTIONNAIRES ARE RETURNED AND COMPLETED. THE COMPLETED QUESTIONNAIRES ARE FORWARDED TO THE VICE PRESIDENT OF HUMAN RESOURCES FOR REVIEW TO DETERMINE IF CONFLICTS EXIST. AN INTERESTED PERSON HAS A CONFLICT OF INTEREST WITH RESPECT TO A CONTRACT, TRANSACTION OR ARRANGEMENT IN WHICH ALVERNO PROVENA HOSPITAL LABORATORIES, INC. (APHL) IS (OR WOULD BE, IF APPROVED) A PARTY IF THE PERSON HAS, DIRECTLY OR INDIRECTLY, THROUGH A BUSINESS, INVESTMENT, FAMILY OR OTHER RELATIONSHIP: A) AN OWNERSHIP OR INVESTMENT INTEREST IN ANY ENTITY INVOLVED IN SUCH CONTRACT, TRANSACTION OR ARRANGEMENT; B) A COMPENSATION ARRANGEMENT WITH AN INDIVIDUAL OR ENTITY INVOLVED IN SUCH CONTRACT, TRANSACTION OR ARRANGEMENT; C) A POTENTIAL OWNERSHIP OR INVESTMENT INTEREST IN, OR COMPENSATION ARRANGEMENT WITH, AN INDIVIDUAL OR ENTITY WITH WHICH APHL IS NEGOTIATING SUCH CONTRACT, TRANSACTION OR ARRANGEMENT; OR D) A FIDUCIARY POSITION (E.G., MEMBER, OFFICER, DIRECTOR, COMMITTEE MEMBER) WITH RESPECT TO AN ENTITY IN SUCH CONTRACT, TRANSACTION OR ARRANGEMENT; OR E) A NON-ECONOMIC AFFILIATION OR RELATIONSHIP, DIRECTLY (OR INDIRECTLY, THROUGH A THIRD PARTY) WITH AN INDIVIDUAL OR ENTITY WITH WHICH APHL IS NEGOTIATING OR MAINTAINS A CONTRACT. TRANSACTION OR ARRANGMENT SUCH THAT THE AFFILIATION OR RELATIONSHIP COULD RENDER THE INTERESTED PERSON INCAPABLE OF MAKING A DECISION WITH ONLY THE BEST INTERESTS OF APHL IN MIND. IN ADDITION, AN INTERESTED PERSON HAS A CONFLICT OF INTEREST IN ANY EXISTING OR POTENTIAL COMPENSATION ARRANGEMENT BETWEEN APHL AND THAT INTERESTED PERSON OR ANY BUSINESS, INVESTMENT OR FAMILY MEMBER RELATED TO THAT PERSON. FOR PURPOSES OF THIS SECTION, COMPENSATION INCLUDES DIRECT AND INDIRECT REMUNERATION, AS WELL AS GIFTS OR FAVORS THAT ARE SUBSTANTIAL IN NATURE. SERVICE OF INDIVIDUALS ON THE BOARD OF DIRECTORS FOR ALVERNO PROVENA HOSPITAL LABORATORIES, INC. (AND COMMITTEES THEREOF), BOARDS OR COMMITTEES OF THE MEMBER ORGANIZATIONS OR EMPLOYMENT BY A MEMBER ORGANIZATION OR ALVERNO CLINICAL LABORATORIES, A RELATED ORGANIZATION, IS NOT CONSIDERED A CONFLICT OF INTEREST, AS DEFINED IN THE POLICY. THE VP OF HUMAN RESOURCES COMPILES THE RESULTS AND FORWARDS THE RESULTS TO THE CEO. THE ASSESSMENTS OF ANY POTENTIAL CONFLICT ARE MADE IN COLLABORATION WITH LEGAL COUNSEL AS APPROPRIATE. THE CEO REVIEWS ANY CONFLICTS WITH THE BOARD DURING A SCHEDULED BOARD MEETING. POLICY VIOLATIONS: IF THE BOARD OR MANAGERS HAS REASON TO BELIEVE THAT AN INTERESTED PERSON HAS FAILED TO COMPLY WITH THE DISCLOSURE OBLIGATIONS OF THIS POLICY, THE BOARD OF MANAGERS SHALL INFORM THAT PERSON OF THE BASIS FOR ITS BELIEF AND PROVIDE THAT PERSON AN OPPORTUNITY TO ADDRESS THE ALLEGED FAILURE TO DISCLOSE. AFTER HEARING THE RESPONSE OF SUCH A PERSON AND CONDUCTING FURTHER INVESTIGATION AS MAY BE WARRANTED UNDER THE CIRCUMSTANCES, THE BOARD OF MANAGERS SHALL DETERMINE WHETHER SUCH PERSON HAS IN FACT, VIOLATED THE DISCLOSURE REQUIREMENTS OF THE CONFLICT OF INTEREST POLICY. IF THE BOARD DETERMINES THAT THERE HAS BEEN A VIOLATION, THE BOARD SHALL TAKE APPROPRIATE DISCIPLINARY AND CORRECTIVE ACTION, WHICH MAY INCLUDE REMOVAL (IF THE INTERESTED PERSON IS A BOARD OR COMMITTEE MEMBER, DIRECTOR OR MANAGEMENT EMPLOYEE) OR TERMINATION (IF THE INTERESTED PERSON IS AN EMPLOYEE OF ALVERNO PROVENA HOSPITAL LABORATORIES, INC., ALVERNO CLINICAL LABORATORES, LLC OR A MEMBER ORGANIZATION). RESTRICTIONS IMPOSED ON PERSONS WITH A CONFLICT ARE DETERMINED ON A CASE BY CASE BASIS BY THE CEO IN COLLABORATION WITH LEGAL COUNSEL. AS OF THIS DATE, NO MATERIAL CONFLICTS OF INTEREST HAVE BEEN IDENTIFIED. IF A MATERIAL CONFLICT IS IDENTIFIED IN THE FUTURE, THAT PERSON WOULD BE REQUIRED TO RECLUSE THEMSELVES FROM PARTICIPATING IN DECISIONS AND/OR VOTING PRIVILEGES DIRECTLY RELATED TO THE CONFLICT. GENERAL STATEMENT 7 PART VI, SECTION B, LINE 15A THE ORGANIZATION'S TOP MANAGMENT OFFICIAL IS PAID BY ALVERNO CLINICAL LABORATORIES, LLC, A RELATED ORGANIZATION; THEREFORE, THIS QUESTION HAS BEEN ANSWERED NO IN ACCORDANCE WITH THE FORM 990 INSTRUCTIONS. THE BOARD OF DIRECTORS APPOINTED A COMPENSATION COMMITTEE, WHICH IS A SUB-COMMITTEE OF THE BOARD. THE BOARD ENGAGED AN OUTSIDE CONSULTING GROUP TO CONDUCT A MARKET REVIEW OF EXECUTIVE COMPENSATION AND PREPARE A COMPARATIVE ANALYSIS BASED ON ALVERNO'S EXECUTIVE PAY LEVELS. AS A RESULT OF THE ANALYSIS, THE CONSULTING GROUP DEVELOPED A REUBTTABLE PRESUMPTION OF REASONABLENESS LETTER UNDER THE INTERMEDIATE SANCTION REGULATIONS OF THE INTERNAL REVENUE SERVICE. THE TOTAL COMPENSATION PACKAGE WAS APPROVED IN ADVANCE BY THE BOARD, AND NO INDIVIDUALS WHO HAD AN ACTUAL OR POTENTIAL CONFLICT OF INTEREST WITH RESPECT TO THE COMPENSATION ARRANGEMENT PARTICIPATED IN THE DELIBERATIONS. THE BOARD ADEQUATELY AND CONTEMPORANEOUSLY DOCUMENTED THE BASIS FOR ITS DETERMINATION. THIS PROCESS IS PERFORMED PERIODICALLY, AND WAS LAST UNDERTAKEN DURING THE FIRST QUARTER OF 2011 FOR THE PRESIDENT/CEO, VICE PRESIDENT OF HUMAN RESOURCES, CHIEF FINANCIAL OFFICER, AND VICE PRESIDENT OF HOSPITALS. IN ADDITION, THE COMPENSATION GUIDELINES AND PHILOSOPHY ACCORDING TO CURRENT INDUSTRY STANDARDS AND THE REBUTTABLE PRESEUMPTION OF REASONABLENESS LETTER. THE BOARD OF DIRECTORS RECOMMENDS THE APPROVAL OF THE LINE-BY-LINE OPERATING BUDGET ON AN ANNUAL BASIS. THESE PROCESSES ARE DOCUMENTED IN THE RESPECTIVE COMPENSATION COMMITTEE/BOARD MEETING MINUTES AND WERE LAST PERFORMED IN 2011. GENERAL STATEMENT 8 PART VI, SECTION B, LINE 15B THE ORGANIZATION'S OTHER OFFICERS AND KEY EMPLOYEES ARE PAID BY ALVERNO CLINICAL LABORATORIES, LLC, A RELATED ORGANIZATION; THEREFORE, THIS QUESTION HAS BEEN ANSWERED NO IN ACCORDANCE WITH THE FORM 990 INSTRUCTIONS. SEE NARRATIVE FOR FORM 990, PART VI, SECTION B, LINE 15A. GENERAL STATEMENT 9 PART VI, SECTION C, LINE 19 THE ORGANIZATION'S GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS ARE MADE AVAILABLE TO THE PUBLIC UPON REQUEST. FORM 990 PART IX LINE 11G DESCRIPTION:PCL LAB SERVICES TOTAL FEES:29961296 FORM 990 PART IX LINE 11G DESCRIPTION:ACL MANAGEMENT SERVICES TOTAL FEES:5711702 FORM 990 PART IX LINE 11G DESCRIPTION:PURCHASED SVC-OTHER TOTAL FEES:1688238 ALVERNO LAB LLC 203240648 MANAGEMENT SVCS IN NA PROF LAB LLC 300711211 MEDICAL SERVICES IN NA false false false true true false false false false false false true true false true false false false false SCHEDULE R, PART III LISTED BELOW ARE THE COMPLETE NAMES AND STREET ADDRESSES FOR PART III: 1) ALVERNO CLINICAL LABS, LLC; 2434 INTERSTATE PLAZA DRIVE; HAMMOND, IN 46324 2) PROFESSIONAL CLINIC LABORATORIES, LLC; 113 E. 4TH ST.; MICHIGAN CITY, IN 46360