2015-08-14T11:05:49-05:00 2014-09-30 381357951 PLANTE & MORAN PLLC 750 TRADE CENTRE WAY STE 300 PORTAGE MI 49002 990 2013-10-01 382146751 MCLAREN NORTHERN MICHIGAN MCLA 2314874094 416 CONNABLE AVENUE PETOSKEY MI 49770 DAVID ZECHMAN PRESIDENT & CEO 2314874094 2015-08-13 1 DAVID LOWENTHAL CPA P00378651 2319477800 2013 2016-03-07 17:11:31Z DAVID ZECHMAN 416 CONNABLE AVENUE PETOSKEY MI 49770 254846928 0 X WWW.MCLAREN.ORG/NORTHERNMICHIGAN/ X 1977 MI MCLAREN HEALTH CARE, THROUGH ITS SUBSIDIARIES, WILL BE THE BEST VALUE IN HEALTH CARE AS DEFINED BY QUALITY OUTCOMES AND COST. 14 11 1562 148 98893 6413 921661 1565201 214954785 220836734 1276103 3719345 9814431 4465517 226966980 230586797 480580 723873 0 0 89816011 87580459 0 0 0 121529055 120718566 211825646 209022898 15141334 21563899 210127830 218946993 72357928 68823339 137769902 150123654 X MCLAREN HEALTH CARE, THROUGH ITS SUBSIDIARIES, WILL BE THE BEST VALUE IN HEALTH CARE AS DEFINED BY QUALITY OUTCOMES AND COST. 0 0 16261367 31828391 THE TREATMENT AND DIAGNOSIS OF CARDIAC DISEASE (DISCHARGES 2,098). 10487030 20690812 THE TREATMENT AND DIAGNOSIS OF GENERAL MEDICINE (DISCHARGES 2,892). 9605643 18816940 THE TREATMENT AND DIAGNOSIS OF GENERAL SURGERY (DISCHARGES 2,058). 109342234 723873 153056704 ALL OTHER PROGRAM SERVICES INCLUDING; ONCOLOGY, ORTHOPEDICS, RADIOLOGY, NUEROLOGY, GASTROENTEROLOGY, REHABILITATION, OBSTETRICS, AND NEUROSURGERY. 109342234 723873 153056704 145696274 1 1 0 1 0 0 0 0 0 1 1 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 0 1 165 0 1 1562 1 1 1 0 0 0 0 0 0 0 0 0 X 14 11 0 0 0 0 1 1 1 1 1 0 0 0 1 1 1 1 1 1 1 0 X DAVID ZECHMAN 2314874009 416 CONNABLE AVENUE PETOSKEY MI 49770 CATHERINE DEVET TRUSTEE & PRESIDENT/CEO - 1ST PART YEAR 11.00 27.90 X X 0 529361 18900 ROBERT FOSTER CHAIRPERSON 2.00 2.00 X X 0 0 0 THOMAS IRWIN SECRETARY 2.50 3.00 X X 0 0 0 DAVID ZECHMAN TRUSTEE & PRESIDENT/CEO - 2ND PART YEAR 11.00 27.90 X X 0 61634 318 DAVE FRESCOLN VICE CHAIR 1.30 1.30 X X 0 0 0 DAVID BUZZELLI TRUSTEE 2.50 3.50 X 0 14000 0 THOMAS MORAN TRUSTEE 2.00 2.00 X 0 0 0 HUGH DEERY MD TRUSTEE 5.00 38.50 X 58220 258400 27617 JOSEPH HANCE MD TRUSTEE - 1ST PART YEAR 1.30 1.30 X 0 0 0 ELISE HAYES TRUSTEE - 1ST PART YEAR 1.30 2.30 X 0 0 0 DAVID RYNBRANDT MD TRUSTEE - 1ST PART YEAR 1.30 1.30 X 0 0 0 PHILIP INCARNATI TRUSTEE 1.30 51.60 X 0 7903842 554218 CINDY DICKSON TRUSTEE 1.00 0.00 X 0 0 0 JIM SHIRILLA MD TRUSTEE 1.00 0.00 X 0 0 0 JILL O'NEILL TRUSTEE 1.00 0.00 X 0 0 0 WILLIAM HAMPTON MD TRUSTEE 0.90 0.00 X 0 0 0 WILLIAM HENRY MD CHIEF OF STAFF TRUSTEE 1.00 0.00 X 0 0 0 ANN STALLKAMP TRUSTEE 2.00 1.30 X 0 0 0 EUGENE KAMINSKI VP OF HUMAN RESOURCES 11.00 26.40 X 209479 0 21919 MARY-ANNE PONTI SECRETARY & COO 11.00 27.60 X 275265 0 23103 CAROLINE SEAGREN CHIEF DEV OFFICER 11.00 43.80 X 134820 44870 28959 JENNIFER WOODS VP CHIEF NURSE EXECUTIVE 11.00 26.90 X 143810 0 20139 KIRK LUFKIN VP CHIEF MEDICAL OFFICER 11.00 35.00 X 302024 0 13819 DAVID BELLAMY TREASURER & VP OF FINANCE/CFO 11.00 29.70 X 322741 0 0 HARRY COLFER PHYSICIAN 9.00 31.00 X 121543 449190 21544 DUANE SCHUIL PHYSICIAN 6.00 34.00 X 88968 484744 28009 JASON RICCI PHYSICIAN 9.00 31.00 X 142059 498617 29045 LOUIS CANNON PHYSICIAN 7.00 33.00 X 101649 513152 27608 PETER LEVANOVICH PHYSICIAN 13.00 27.00 X 172630 380599 27347 2073208 11138409 842545 53 0 1 0 NORTHERN ANESTHESIA PROVIDER 602 JACKSON PETOSKEY MI 49770 PHYSICIAN SERVICES 1184498 NORTHERN MICHIGAN EMERGENCY PHYSICIANS 930 SPRING STREET PETOSKEY MI 49770 PHYSICIAN SERVICES 1051101 MAYO COLLABORATIVE SERVICES DBA MAYO MED PO BOX 9146 MINNEAPOLIS MN 554809146 LABORATORY SERVICES 1042688 AHSA LLC PO BOX 945 TRAVERSE CITY MI 49685 PURCHASED LABOR 793953 CLIENT FINANCIAL SERVICES OF MICHIGAN L 209 S ALLOY DR PO BOX 350 FENTON MI 48430 COLLECTIONS OF PATIENT ACCOUNTS 587082 21 1390754 174447 1565201 PATIENT SERVICE REV 622110 215526762 215526762 EHR REVENUE 900099 2546038 2546038 OTHER RELATED REVENUE 900099 1745257 1745257 CORPORATE ALLOCATION 900099 1018677 1018677 220836734 3839454 3839454 766935 580917 186018 186018 186018 23489300 69805 23651432 27782 -162132 42023 -120109 -120109 FRINGE BENEFIT 900099 2629458 2629458 CAFETERIA SALES 722210 655411 655411 PHARMACEUTICAL RESEARCH 900099 425381 425381 569249 315256 98893 155100 4279499 230586797 224392847 98893 4529856 X 723873 723873 1554300 1554300 71465965 60207969 11257996 1873337 1873337 7766679 5514342 2252337 4920178 4023449 896729 728519 728519 372169 372169 144588 144588 7506 7506 23686377 9846831 13839546 564729 23131 541598 7201214 3081936 4119278 412918 203933 208985 7941656 3932103 4009553 912674 118407 794267 186698 114286 72412 1100638 1100638 7098466 3561214 3537252 1090160 11006 1079154 INCOME TAXES 7387 7387 MEDICAL SUPPLIES/DRUGS 41291423 41146404 145019 CORPORATE ALLOCATION 14128373 14128373 PROVISION FOR BAD DEBT 8603976 8603976 5239095 4583414 655681 209022898 145696274 63326624 0 3093 2943 34954830 37013769 17190572 12006919 81058 51545 8001831 8061742 832593 733795 95638960 20057331 78216712 75581629 15835346 16936612 659806 705692 109312 109312 54242677 67743035 210127830 218946993 20169633 20998106 -43365 90804 52231660 47734429 72357928 68823339 X 134833210 147260417 2936692 2863237 137769902 150123654 210127830 218946993 X 21563899 757497 -9967644 X X 0 1 X 1 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 7506 7506 0 PART II-B, LINE 1: A PORTION OF OUR DUES TO MICHIGAN HEALTH AND HOSPITAL ASSOCIATION SUPPORT LOBBYING ACTIVITIES. 12507 1045 13552 19884 1930 9307 12507 17746 2138 19884 27471 -725 9000 17746 24022 3449 27471 0.00000 1.00000 0.00000 0 1 1 4637348 4637348 52433529 3670098 48763431 1203089 316855 886234 32667131 16070378 16596753 4697863 4697863 75581629 DUE FROM AFFILIATE 58061891 COST REPORT SETTLEMENT RECEIVABLE 61782 BOND ISSUE COSTS 292385 INVESTMENT IN FOUNDATION HELD ASSETS 4178998 DEFERRED EQUIPMENT FEES 5147979 67743035 COST REPORT SETTLEMENT PAYABLE 1516532 INTERCOMPANY PAYABLE 31998445 DUE TO AFFILIATE 3354769 ACCRUED PENSION COST 10864683 47734429 X PART V, LINE 4: MCLAREN NORTHERN MICHIGAN FOUNDATION HOLDS ENDOWMENTS ON BEHALF OF THE HOSPITAL. THE INTENDED PURPOSE OF THE ABOVE ENDOWMENT IS TO ASSIST PEDIATRIC PATIENTS. PART X, LINE 2: THE CORPORATION AND SUBSTANTIALLY ALL OF ITS SUBSIDIARIES ARE NONPROFIT, TAX-EXEMPT ORGANIZATIONS; ACCORDINGLY, NO TAX PROVISION IS REFLECTED IN THE CONSOLIDATED FINANCIAL STATEMENTS. SOME SUBSIDIARIES ARE FOR-PROFIT CORPORATIONS. INCOME TAX PROVISIONS ARE NOT MATERIAL TO THE CONSOLIDATED FINANCIAL STATEMENTS. THE ACCOUNTING STANDARD THAT REFERS TO ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES ADDRESSES THE DETERMINATION OF HOW TAX BENEFITS CLAIMED OR EXPECTED TO BE CLAIMED ON A TAX RETURN SHOULD BE RECORDED ON THE CONSOLIDATED FINANCIAL STATEMENTS. COMPANIES MUST RECOGNIZE THE TAX BENEFIT FROM AN UNCERTAIN TAX POSITION ONLY IF IT IS MORE LIKELY THAN NOT THAT THE TAX POSITION WILL BE SUSTAINED ON EXAMINATION BY THE TAXING AUTHORITIES, BASED ON THE TECHNICAL MERITS OF THE POSITION. THE STANDARD ALSO PROVIDES GUIDANCE ON DERECOGNITION, CLASSIFICATION, INTEREST AND PENALTIES ON INCOME TAXES, AND ACCOUNTING IN INTERIM PERIODS, AND REQUIRES INCREASED DISCLOSURES. THE EVALUATED POTENTIAL EXPOSURE RELATED TO UNCERTAIN TAX POSITIONS WAS FOUND TO BE IMMATERIAL. THE CORPORATION IS SUBJECT TO ROUTINE AUDITS BY TAXING JURISDICTIONS. THE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES WERE AUDITED BY THE IRS FOR THE 2012, 2011, AND 2010 TAX PERIODS. THE AUDITS WERE RECENTLY SETTLED AND CLOSED FOR ALL THE SUBSIDIARIES INVOLVED IN THE AUDIT, WITH THE EXCEPTION OF MHP. THE COMPLETION OF THE IRS AUDIT FOR MHP IS SUBJECT TO COMPLETION OF MHP'S APPLICATION TO BE RECOGNIZED UNDER INTERNAL REVENUE CODE SECTION 501(C)(4). SUBSEQUENT TO YEAR END, MHP HAS SUBMITTED THE APPLICATION REQUESTING EXEMPTION AND IS AWAITING A RESPONSE FROM THE INTERNAL REVENUE SERVICE. IF MHP IS NOT ABLE TO OBTAIN RECOGNITION UNDER SECTION 501(C)(4), THE INTERNAL REVENUE SERVICE COULD POTENTIALLY PROCEED WITH REVOKING THE TAX-EXEMPT STATUS OF MHP FOR THE YEAR ENDED DECEMBER 31, 2010 AND ALL YEARS SUBSEQUENT. THE CORPORATION IS CURRENTLY IN THE PROCESS OF RESPONDING TO THIS PROPOSED ACTION. THE FINANCIAL STATEMENTS HAVE NOT BEEN ADJUSTED FOR ANY POTENTIAL OUTCOMES OF THIS UNCERTAINTY AT SEPTEMBER 30, 2014 AND 2013. MANAGEMENT BELIEVES THE CORPORATION IS NOT SUBJECT TO TAX EXAMINATIONS FOR YEARS PRIOR TO SEPTEMBER 30, 2011. SUBSEQUENT TO ISSUANCE OF THESE FINANCIAL STATEMENTS, THE INTERNAL REVENUE SERVICE APPROVED MHP'S TAX EXEMPT STATUS UNDER IRC SECTION 501(C)(4). AS SUCH, THE AFOREMENTIONED UNCERTAIN TAX POSITION DESCRIBED WITH REGARD TO MHP NO LONGER EXISTS. 1 1 X 1 X 1 X 1 1 1 0 1 1 2613971 2613971 0.01300 21396658 18242412 3154246 0.01570 535235 139034 396201 0.00200 24545864 18381446 6164418 0.03070 277 18594 351087 351087 0.00180 4 14 26631 26631 0.00010 17910601 11298272 6612329 0.03300 1 345110 345110 0.00170 34 365 17556 17556 0.00010 316 18973 18650985 11298272 7352713 0.03670 316 18973 43196849 29679718 13517131 0.06740 26 770 29726 29726 0.00010 3 2970 2970 0.00000 60 415 21381 21381 0.00010 11 64 29369 29369 0.00010 4 50 14108 14108 0.00010 104 1299 97554 97554 0.00040 1 8603976 3085775 90913723 85516868 5396855 X 1 0 1 1 MCLAREN NORTHERN MICHIGAN 416 CONNABLE AVENUE PETOSKEY MI 49770 WWW.MCLAREN.ORG/NORTHERNMICHIGAN/NORTH 1060000053 X X X X MCLAREN NORTHERN MICHIGAN 1 1 X X X X X X X X X 12 1 1 1 X HTTP://WWW.MCLAREN.ORG/NORTHERNMICHIGAN/C X X X X X X X X X X 1 0 1 1 200.000000000000 1 400.000000000000 1 X X X X X X X 1 1 X X X X X X 1 0 X X 1 X X X 0 1 MCLAREN NORTHERN MICHIGAN PART V, SECTION B, LINE 3: A COPY OF THE COMMUNITY HEALTH NEEDS ASSESSMENT IS AVAILABLE ON THE HOSPITALS WEBSITE LOCATED AT HTTP://WWW.MCLAREN.ORG/NORTHERNMICHIGAN/COMMITMENTTOOURCOMMUNITYNM.ASPXMCLAREN NORTHERN MICHIGAN IN CONJUNCTION WITH AREA COMMUNITY HOSPITALS AND DISTRICT HEALTH DEPARTMENTS CONDUCTED A NEEDS ASSESSMENT. IN ADDITION, MORE THAN 40 SECTORS OF THE COMMUNITY PARTICPATED IN COLLECTING DATA, COMMUNITY STATUS, PUBLIC HEALTH SYSTEM ACCESS AND COMMUNITY STRENGTHS ASSESSMENTS. CONDUCTED 22 FOCUS GROUPS (INCLUDING SPECIAL POPULATIONS, SENIORS, PERSONS/FAMILIES WITH PHYSICAL AND MENTAL DEVELOPMENTAL DISABILITIES, AND YOUNG CHILDREN 0 - 5 YRS, AND OTHERS), AND COMMUNITY FORUMS, AND SURVEYED COMMUNITY AND HEALTH CARE PROVIDERS. MCLAREN NORTHERN MICHIGAN PART V, SECTION B, LINE 4: THE COMMUNITY HEALTH NEEDS ASSESSMENT WAS CONDUCTED IN CONJUNCTION WITH CHARLEVOIX AREA HOSPITAL, OTSEGO MEMORIAL HOSPITAL, HEALTH DEPARTMENT OF NORTHWEST MICHIGAN, DISTRICT NO 4 HEALTH DEPARTMENT, AND NORTHERN HEALTH PLAN. CHARLEVOIX AREA HOSPITAL AND OTSEGO MEMORIAL HOSPITAL ARE UNRELATED HOSPITAL FACILITIES. MCLAREN NORTHERN MICHIGAN PART V, SECTION B, LINE 5D: HOSPITAL REPRESENTATIVES PRESENTED THE COMMUNITY HEALTH NEEDS ASSESSMENT RESULTS AND IMPLEMENTATION STRATEGY TO COMMUNITY ADVISORY COUNCILS, BUSINESS LEADERS, AND VARIOUS COMMUNITY GROUPS.A COPY OF THE COMMUNITY HEALTH NEEDS ASSESSMENT IS AVAILABLE ON THE HOSPITALS WEBSITE LOCATED AT HTTP://WWW.MCLAREN.ORG/NORTHERNMICHIGAN/COMMITMENTTOOURCOMMUNITYNM.ASPX MCLAREN NORTHERN MICHIGAN PART V, SECTION B, LINE 7: THE GROUNDWORK FOR DEVELOPING THE COMMUNITY HEALTH IMPROVEMENT PLAN WAS REVIEWING NINE COMMUNITY THEMES THAT RESULTED FROM THE ASSESSMENT; ABUSE AND NEGLECT, ACCESS TO HEALTHCARE, ALCOHOL AND DRUG ABUSE, CHRONIC DISEASE, MATERNAL AND CHILD HEALTH, MENTAL HEALTH, OBESITY, SUBSTANCE ABUSE, AND TOBACCO USE. COMMUNITY WIDE MEETINGS WERE HELD TO REVIEW DATA, DISCUSS KEY ISSUES AND RANK TOP PRIORITIES. THE TOP THREE COMMUNITY HEALTH PRIORITITES IDENTIFIED WERE: 1) OBESITY AND CHRONIC DISEASE PREVENTION, 2) ACCESS TO HEALTHCARE, INCLUDING MENTAL HEALTH SERVICES, SUBSTANCE ABUSE TREATMENT, AND MATERNAL AND CHILD HEALTH, AND 3) SUBSTANCE ABUSE/TOBACCO USE. MCLAREN NORTHERN MICHIGAN ADOPTED THESE THREE IDENTIFIED COMMUNITY PRIORITIES IN THEIR COMMUNITY HEALTH IMPROVEMENT PLAN.A COPY OF THE COMMUNITY HEALTH NEEDS ASSESSMENT IS AVAILABLE ON THE HOSPITALS WEBSITE LOCATED AT HTTP://WWW.MCLAREN.ORG/NORTHERNMICHIGAN/COMMITMENTTOOURCOMMUNITYNM.ASPX MCLAREN NORTHERN MICHIGAN PART V, SECTION B, LINE 18E: THE HOSPITALS WEBSITE AND BILLING STATEMENTS INFORM PATIENTS TO CONTACT THE HOSPITAL FOR FINANCIAL ASSISTANCE INFORMATION. MCLAREN NORTHERN MICHIGAN PART V, SECTION B, LINE 20D: THE FACILITY HAS A POLICY OF ALLOWING A 50% DISCOUNT FOR CASH PAYMENTS AND SIMILARLY USED 50% ON UNINSURED CLAIMS FOR 2013. THIS DISCOUNT WOULD ENSURE FAP-ELIGIBLE INDIVIDIUALS ARE NOT BILLED MORE THAN THOSE WITH INSURANCE. MCLAREN NORTHERN MICHIGAN PART V, SECTION B, LINE 22: FOR PATIENTS THAT HAVE NOT RESPONDED TO CHARITY CARE APPLICATIONS OR STATEMENTS RECEIVED GROSS CHARGES ARE LEFT ON THEIR ACCOUNT. ONCE THEY ARE ELIGIBLE UNDER OUR FAP, WE WOULD ADJUST THEIR ACCOUNT ACCORDING TO OUR POLICIES. PART I, LINE 7: WE UTILIZE A STEP DOWN COSTING METHODOLOGY. FIRST DIRECT EXPENSES ARE REDUCED BY ANY NON PATIENT REVENUES RECEIVED. THEN INDIRECT DEPARTMENTS (THOSE WITHOUT PATIENT CHARGES) ARE ALLOCATED TO DIRECT DEPARTMENTS USING DEPARTMENT SPECIFIC STATISTICS. THE STEP DOWN PROCESS INCLUDES NINE ITERATIONS. WHEN THE COSTING PROCESS IS COMPLETE, COSTS ARE ASSIGNED TO EACH UNIQUE PATIENT. THIS ALLOWS US TO DETERMINE THE ACTUAL COST OF PROVIDING SERVICES TO EACH UNIQUE PATIENT. PART I, LINE 7G: SUBSIDIZED HEALTH SERVICES INCLUDE: ACUTE REHAB, PSYCHIATRY, NEWBORNS, OB, WOMEN'S SERVICES, ACUTE INPATIENT, OUTPATIENT FIXED AND HEMODIALYSIS. PART I, LN 7 COL(F): THE BAD DEBT EXPENSE INCLUDED ON FORM 990, PART IX, LINE 24E - BUT SUBTRACTED FOR PURPOSES OF CALCULATING THE SCHEDULE H, PART I, COLUMN F PERCENTAGE EQUALS $8,603,976. PART II, COMMUNITY BUILDING ACTIVITIES: COMMUNITY BUILDING ACTIVITIES SUPPORT IDENTIFIED COMMUNITY NEEDS AND COMMUNITY COLLABORATIVES SUCH AS POVERTY REDUCTION, TRANSPORTATION, WORKFORCE DEVELOPMENT AND COMMUNITY HEALTH, BY PROVIDING IN-KIND SERVICES, FINANCIAL RESOURCES AND STAFF EXPERTISE FROM THE HOSPITAL. PART III, LINE 2: THE BAD DEBT EXPENSE REPORTED ON PART III, LINE 2, IS THE BAD DEBT EXPENSE REPORTED ON FORM 990, PART IX. PART III, LINE 3: TO DETERMINE THE ESTIMATED AMOUNT OF THE ORGANIZATIONS'S BAD DEBT EXPENSE ATTRIBUTABLE TO PATIENTS UNDER THE ORGANIZATIONS FINANCIAL ASSISTANCE POLICY, ADMINISTRATION ESTIMATED A PERCENTAGE OF INDIVIDUALS WHO DID NOT COMPLETE THE CHARITY CARE APPLICATION PROCESS, OR DID NOT TAKE THE TIME TO APPLY - WHICH AMOUNTS TO $3,085,775. PART III, LINE 4: ACCOUNTS RECEIVABLE FINANCIAL STATEMENT FOOTNOTE:ACCOUNTS RECEIVABLE FROM PATIENTS, INSURANCE COMPANIES, AND GOVERNMENTAL AGENCIES ARE BASED ON GROSS CHARGES. AN ALLOWANCE FOR CONTRACTUAL ADJUSTMENTS AND INTERIM PAYMENT ADVANCES IS BASED ON EXPECTED PAYMENT RATES FROM PAYORS BASED ON CURRENT REIMBURSEMENT METHODOLOGIES. THIS AMOUNT ALSO INCLUDES AMOUNTS RECEIVED AS INTERIM PAYMENTS AGAINST UNPAID CLAIMS BY CERTAIN PAYORS.ACCOUNTS RECEIVABLE ARE REDUCED BY AN ALLOWANCE FOR DOUBTFUL ACCOUNTS. IN EVALUATING THE COLLECTABILITY OF ACCOUNTS RECEIVABLE, THE CORPORATION ANALYZES ITS PAST HISTORY AND IDENTIFIES TRENDS FOR EACH OF ITS MAJOR PAYOR SOURCES OF REVENUE TO ESTIMATE THE APPROPRIATE ALLOWANCE FOR DOUBTFUL ACCOUNTS AND PROVISION FOR BAD DEBTS. MANAGEMENT REGULARLY REVIEWS DATA ABOUT THESE MAJOR PAYOR SOURCES OF REVENUE IN EVALUATING THE SUFFICIENCY OF THE ALLOWANCE FOR DOUBTFUL ACCOUNTS.FOR RECEIVABLES ASSOCIATED WITH SERVICES PROVIDED TO PATIENTS WHO HAVE THIRD-PARTY COVERAGE, THE CORPORATION ANALYZES CONTRACTUALLY DUE AMOUNTS AND PROVIDES AN ALLOWANCE FOR DOUBTFUL ACCOUNTS AND A PROVISION FOR BAD DEBTS, IF NECESSARY (FOR EXAMPLE, FOR EXPECTED UNCOLLECTIBLE DEDUCTIBLES AND COPAYMENTS ON ACCOUNTS FOR WHICH THE THIRD PARTY PAYOR HAS NOT YET PAID, OR FOR PAYORS WHO ARE KNOWN TO BE HAVING FINANCIAL DIFFICULTIES THAT MAKE THE REALIZATION OF AMOUNTS DUE UNLIKELY). FOR RECEIVABLES ASSOCIATED WITH SELF-PAY PATIENTS (WHICH INCLUDES BOTH PATIENTS WITHOUT INSURANCE AND PATIENTS WITH DEDUCTIBLE AND COPAYMENT BALANCES DUE FOR WHICH THIRD PARTY COVERAGE EXISTS FOR PART OF THE BILL), THE CORPORATION RECORDS A SIGNIFICANT PROVISION FOR BAD DEBTS IN THE PERIOD OF SERVICE ON THE BASIS OF ITS PAST EXPERIENCE, WHICH INDICATES THAT MANY PATIENTS ARE UNABLE OR UNWILLING TO PAY THE PORTION OF THEIR BILL FOR WHICH THEY ARE FINANCIALLY RESPONSIBLE. THE DIFFERENCE BETWEEN THE STANDARD RATES (OR THE DISCOUNTED RATES, IF NEGOTIATED) AND THE AMOUNTS ACTUALLY COLLECTED AFTER ALL REASONABLE COLLECTION EFFORTS HAVE BEEN EXHAUSTED IS CHARGED OFF AGAINST THE ALLOWANCE FOR DOUBTFUL ACCOUNTS IN THE PERIOD THEY ARE DETERMINED TO BE UNCOLLECTIBLE. PART III, LINE 8: THE AMOUNTS REPORTED FOR MEDICARE ARE FROM THE MEDICARE COST REPORT, WHICH DO NOT SHOW A SHORTFALL. THIS IS BASED ON THE METHODOLOGY REQUIRED FOR COMPLETING THE MEDICARE COST REPORT. PART III, LINE 9B: THE ORGANIZATION'S WRITTEN DEBT COLLECTION POLICY DOES NOT CONTAIN PROVISIONS ON THE COLLECTION PRACTICES TO BE FOLLOWED FOR PATIENTS WHO ARE KNOWN TO QUALIFY FOR CHARITY CARE BECAUSE IF POSSIBLE WE TRY TO IDENTIFY AND DETERMINE ELIGIBILITY FOR CHARITY CARE BEFORE SERVICES ARE PROVIDED. ALSO, IT IS STATED IN OUR CHARITY CARE POLICY THAT ONCE ELIGIBLE, NO COLLECTION AGENCIES OR OTHER COLLECTION PROCESSES WILL BE FOLLOWED UNLESS THE PATIENT'S FINANCIAL CIRCUMSTANCES MATERIALLY CHANGE. PART VI, LINE 2: MCLAREN NORTHERN MICHIGAN ASSESSES THE NEEDS AND ASSETS OF THE COMMUNITY BY COLLABORATING WITH COMMUNITY AND STRATEGIC PARTNERS, REVIEWING DEMOGRAHICS, HEALTH INDICATORS, MORBIDITY AND MORTALITY DATA, ANALYZING COST DRIVERS, AND CONDUCTING FOCUS GROUPS, SURVEYS, AND COMMUNITY FORUMS. PART VI, LINE 3: AS PATIENTS ARE REGISTERED EITHER IN PERSON OR OVER THE PHONE THEY ARE GIVEN CONTACT INFORMATION FOR PATIENT FINANCIAL SERVICES REPRESENTATIVES IF THEY HAVE NO INSURANCE, ARE UNDER INSURED OR HAVE HIGH CO-PAY'S. THERE ARE PATIENT FINANCIAL SERVICES BROCHURES DISPLAYED AT ALL REGISTRATION AREAS THAT DESCRIBE THE VARIOUS FINANCIAL ASSISTANCE PROGRAMS AVAILABLE. THROUGH OUR CARE COORDINATION PROGRAM ALL PATIENTS WITH NO INSURANCE ARE SEEN TO ASSIST WITH FINANCIAL ASSISTANCE PROGRAMS. PART VI, LINE 4: MCLAREN NORTHERN MICHIGAN, A SUBSIDIARY OF MCLAREN HEALTH CARE, IS A 202-BED REGIONAL REFERRAL CENTER LOCATED IN PETOSKEY, SERVING RESIDENTS IN 22 COUNTIES ACROSS NORTHERN LOWER MICHIGAN AND THE EASTERN PART OF THE UPPER PENINSULA. A MEDICAL STAFF OF NEARLY 200 PHYSICIANS REPRESENTS NEARLY ALL MEDICAL AND SURGICAL SPECIALTIES, ENABLING FULL-SERVICE CARE WITH AN EMPHASIS ON HEART, CANCER, ORTHOPEDICS, AND NEUROSCIENCE SERVICES. WITH A TOTAL MARKET POPULATION OF OVER 440,000, US CENSUS BUREAU DATA (2010) ESTIMATES THAT NEARLY 30% ARE AGE 45-64, AND NEARLY 20% ARE OVER AGE 65. ACCORDING TO THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH, TOP ADULT HEALTH CONCERNS INCLUDE: OVERWEIGHT AND OBESE, HIGH CHOLESTEROL, HIGH BLOOD PRESSURE, SMOKING, DIABETES AND UNINSURED. PREDICATED ON A VISION TO PROVIDE PATIENT-CENTERED CARE, EXTENSIVE EFFORTS IN TARGETING REGIONAL HEALTH CONCERNS HAS LED TO COLLABORATIVE PROGRAMS AND SERVICES IN PRIMARY CARE, HEART, CANCER AND DIAGNOSTICS. THIS APPROACH TO HIGH QUALITY, COST EFFECTIVE HEALTHCARE DELIVERY IN THIS RURAL AND REMOTE AREA HAS BEEN STRENGTHENED BY A LONG STANDING PRACTICE OF SPECIALTY PHYSICIANS HOSTING ON-SITE CLINIC VISITS TO OUTLYING COMMUNITIES. NORTHERN MICHIGAN REGIONAL HOSPITAL IS WORKING TO INFLUENCE BEHAVIOR THROUGH EDUCATION, PREVENTION THROUGH SCREENING, AND PROVIDING ACCESSIBLE TREATMENT THROUGH PHYSICIAN CLINICS AND HEALTH CENTERS THROUGHOUT THE REGION. PART VI, LINE 5: THE HOSPITAL HAS AN ESTABLISHED REGIONAL COMMUNITY ADVISORY BOARD WHICH MEETS TO ACTIVELY ADDRESS HEALTHCARE ISSUES IN THE REGION. THE HOSPITAL PROVIDES COMMUNITY BENEFIT ACTIVITIES INCLUDING COMMUNITY HEALTH IMPROVEMENT AND HEALTH EDUCATION PROGRAMS AND SERVICES TO IMPROVE ACCESS TO HEALTHCARE, PROMOTE HEALTH AND WELLNESS, AND MANAGE CHRONIC DISEASE. PART VI, LINE 6: AFFILIATES OF MCLAREN NORTHERN MICHIGAN INCLUDE THE FOLLOWING ORGANIZATIONS, EACH OF WHICH CONTRIBUTE TO HEALTH PROMOTION IN THE MANNER INDICATED: * MCLAREN NORTHERN MICHIGAN FOUNDATION - RAISES, MANAGES, AND DISPENSES FUNDS TO SUPPORT THE MISSION OF MCLAREN NORTHERN MICHIGAN AND PROVIDE PROGRAMS THAT ENHANCE THE WELL-BEING OF THE COMMUNITY. * COMMUNITY FREE CLINIC - PROVIDES MEDICAL TREATMENT TO THE AREA'S UNINSURED. * BOULDER PARK TERRACE - PROVIDES SKILLED NURSING AND SUB-ACUTE REHABILITATION SERVICES. * VITAL CARE - PROVIDES HOME HEALTH SERVICES, HOME MEDICAL EQUIPMENT AND SUPPLIES, HOSPICE SERVICES, PRIVATE DUTY SERVICES, AND ADULT DAY SERVICES. * PHYSICIAN PRACTICES - OFFER THE OPPORTUNITY FOR SEAMLESS PATIENT CARE WITHIN THE REGION THROUGH A SYSTEM OF WHOLLY-OWNED SPECIALTY MEDICINE PRACTICES: MICHIGAN HEART & VASCULAR SPECIALISTS, NORTHERN MICHIGAN INFECTIOUS DISEASES, NORTHERN MICHIGAN HEMATOLOGY/ONCOLOGY, ROGERS CITY MEDICAL GROUP (PRIMARY CARE), AND NORTHERN MICHIGAN REGIONAL HOSPITAL NEUROSURGERY SERVICES. * PRESCRIPTION SERVICES PHARMACY - OFFERS RETAIL PHARMACY SERVICES. PART VI, LINE 7, REPORTS FILED WITH STATES MI 1 MCLAREN NORTHERN MICHIGAN FOUNDATION 360 CONNABLE AVENUE PETOSKEY MI 49770 382445611 501 (C) (3) 81628 N/A N/A RENT/COLLEAGUE EDUCATION FUNDSRENT PETOSKEY COMMUNITY FREE CLINIC 416 CONNABLE AVENUE PETOSKEY MI 49770 202675817 501 (C) (3) 74717 N/A N/A GENERAL OPERATIONS RW CONSIDINE FOUNDATION 4171 ELY ROAD PELLSTON MI 49769 453715927 501 (C) (3) 160000 COST EQUIPMENT GENERAL OPERATIONS MCLAREN HEALTH CARE CORPORATION 401 S BALLENGER HWY FLINT MI 48532 382397643 501 (C) (3) 407528 N/A N/A GENERAL OPERATIONS 4 0 PART I, LINE 2: GRANTS MADE TO RELATED ORGANIZATIONS ARE MONITORED THROUGH THE MONTHLY ACCOUNTING PROCESSES. 0 1 0 0 0 0 0 0 0 CATHERINE DEVET TRUSTEE & PRESIDENT/CEO - 1ST PART Y 0 406346 0 0 0 123015 0 12750 0 6150 0 548261 0 0 HUGH DEERY MD TRUSTEE 38220 234781 20000 20000 0 3619 0 21349 0 6268 58220 286017 0 0 PHILIP INCARNATI TRUSTEE 0 1479146 0 0 0 6424696 0 543791 0 10427 0 8458060 0 2622986 EUGENE KAMINSKI VP OF HUMAN RESOURCES 184530 0 23897 0 1052 0 15102 0 6817 0 231398 0 0 0 MARY-ANNE PONTI SECRETARY & COO 238418 0 35902 0 945 0 12035 0 11068 0 298368 0 0 0 CAROLINE SEAGREN CHIEF DEV OFFICER 119764 39921 14849 4949 207 0 12474 0 16485 0 163779 44870 0 0 JENNIFER WOODS VP CHIEF NURSE EXECUTIVE 127713 0 15713 0 384 0 6534 0 13605 0 163949 0 0 0 KIRK LUFKIN VP CHIEF MEDICAL OFFICER 292344 0 9000 0 680 0 2092 0 11727 0 315843 0 0 0 DAVID BELLAMY TREASURER & VP OF FINANCE/CFO 0 0 322741 0 0 0 0 0 0 0 322741 0 0 0 HARRY COLFER PHYSICIAN 117092 415144 4451 15779 0 18267 0 15436 0 6108 121543 470734 0 0 DUANE SCHUIL PHYSICIAN 84870 445570 4098 21517 0 17657 0 15447 0 12562 88968 512753 0 0 JASON RICCI PHYSICIAN 122849 411276 19210 64312 0 23029 0 15439 0 13606 142059 527662 0 0 LOUIS CANNON PHYSICIAN 74619 364314 27030 131970 0 16868 0 15042 0 12566 101649 540760 0 0 PETER LEVANOVICH PHYSICIAN 167633 356219 4997 10618 0 13762 0 14866 0 12481 172630 407946 0 0 PART I, LINE 4B MCLAREN HEALTHCARE CORPORATION MAINTAINS TWO SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS FOR A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES (THE "SERPS"). THE OLD SERP WAS CLOSED TO NEW PARTICIPANTS ON OCTOBER 1, 2006, AND THE NEW SERP BECAME EFFECTIVE AS OF JANUARY 1, 2007. NO EMPLOYEE MAY PARTICIPATE IN BOTH OF THE SERPS. THE OLD SERP IS STRUCTURED AS A DEFINED BENEFIT PLAN THAT ESSENTIALLY REPLACES THE BENEFITS THE PARTICIPANT IS NOT PERMITTED TO RECEIVE UNDER MCLAREN'S QUALIFIED RETIREMENT PLAN DUE TO IRS LIMITATIONS APPLICABLE TO QUALIFIED PLANS. THE BENEFIT UNDER THE OLD SERP IS PAYABLE IN EITHER THE FORM OF A LUMP SUM DISTRIBUTION OR IN MONTHLY PAYMENTS EQUAL TO THE ACTUARIAL EQUIVALENT OF THE PARTICIPANT'S ACCRUED BENEFIT. THE BENEFIT IS PAID AT AGE 55, AND IF THE PARTICIPANT REMAINS EMPLOYED, THE BENEFIT IS PAID UPON TERMINATION OF EMPLOYMENT, REDUCED TO TAKE INTO ACCOUNT THE BENEFIT PREVIOUSLY PAID. THE NEW SERP IS STRUCTURED AS A DEFINED CONTRIBUTION PLAN, AND MCLAREN CONTRIBUTES 15 PERCENT OF EACH PARTICIPANT'S COMPENSATION TO THE PLAN EACH YEAR FOR ALLOCATION TO THE PARTICIPANT'S ACCOUNT. PARTICIPANTS IN THE NEW SERP BECOME VESTED IN THEIR ACCOUNTS UPON THE EARLIER OF FIVE YEARS OF PARTICIPATION IN THE PLAN OR ATTAINMENT OF AGE 60. PARTICIPANTS IN THE NEW SERP SELF-DIRECT THE INVESTMENT OF THEIR ACCOUNTS AND HAVE THE ACTUAL INVESTMENT RETURN CREDITED OR DEBITED TO THEIR ACCOUNTS. THE BENEFIT UNDER THE NEW SERP IS EQUAL TO THE PARTICIPANT'S ACCOUNT BALANCE, AND THE BENEFIT IS PAID IN A SINGLE SUM WITHIN 60 DAYS OF THE PARTICIPANT'S TERMINATION DATE. BENEFITS UNDER BOTH SERPS ARE PROVIDED ON A TAX-NEUTRAL BASIS. BOTH SERPS ARE DESIGNED TO COMPLY WITH INTERNAL REVENUE CODE SECTIONS 457(F) AND 409A. THE INDIVIDUALS LISTED IN PART VII WHO PARTICIPATED IN THE OLD SERP ARE: PHILIP INCARNATI. THE INDIVIDUALS LISTED IN PART VII WHO PARTICIPATED IN THE NEW SERP ARE: DAVID ZECHMAN. SCH J, PART I, LINE 3: THE CEO/EXECUTIVE DIRECTOR WAS COMPENSATED BY A RELATED ORGANIZATION, AND THEREFORE NONE OF THE LINE 3 BOXES HAVE BEEN CHECKED. THE RELATED ORGANIZATION USED THE FOLLOWING METHODOLOGIES TO ESTABLISH THE COMPENSATION OF THE CEO/EXECUTIVE DIRECTOR OF THE FILING ORGANIZATION: COMPENSATION COMMITTEE, INDEPENDENT COMPENSATION CONSULTANT, FORM 990 OF OTHER ORGANIZATIONS, WRITTEN EMPLOYMENT CONTRACT, COMPENSATION SURVEY OR STUDY, AND APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE. PART I, LINE 6 MCLAREN HEALTH CARE CORPORATION (MHCC) HAS AN INCENTIVE PROGRAM FOR LEADERS OF THE CORPORATION, SUBSIDIARY EXECUTIVES AND DIRECTORS, AND CORPORATE MANAGERS. THE PROGRAM IS COMPRISED OF QUALITY, OPERATIONAL AND FINANCIAL GOALS. THE PURPOSE OF THE PLAN IS TO ENHANCE THE ORGANIZATION'S ABILITY TO ACHIEVE ITS GOALS BY PROVIDING TOP OFFICIALS AND THE BOARD OF DIRECTORS WITH A TOOL FOR (A) CLEARLY COMMUNICATING PERFORMANCE ON THE PART OF KEY LEADERS, (B) STIMULATING AND REWARDING SUPERIOR LEVELS OF PERFORMANCE ON THE PART OF KEY LEADERS WHICH WILL ULTIMATELY BENEFIT THE COMMUNITIES MHCC SERVES, AND (C) PROTECTING MHCC'S ABILITY TO COMPETE WITH OTHER EMPLOYERS FOR HIGH-TALENT LEADERS. PETOSKEY SURGEONS BOARD MEMBER DAVID RYNBRANDT IS A 20% OWNER OF PETOSKEY SURGEONS. 573449 PETOSKEY SURGEONS PROVIDES NON-INVASIVE VASCULAR IMAGING TO MCLAREN NORTHERN MICHIGAN. IN ADDITION, QUALITY INCENTIVE PAYMENTS WERE PAID TO THE OWNERS OF PETOSKEY SURGEONS. 0 ANTHELIO BOARD MEMBER PHILIP INCARNATI IS A BOARD MEMBER OF ANTHELIO. 2807154 ANTHELIO PROVIDES IT SERVICES TO MCLAREN NORTHERN MICHIGAN. 0 FORM 990, PART VI, SECTION A, LINE 6 MCLAREN HEALTH CARE CORPORATION IS THE SOLE MEMBER OF MCLAREN NORTHERN MICHIGAN. FORM 990, PART VI, SECTION A, LINE 7A THE MEMBER SHALL HAVE THE EXCLUSIVE RIGHT TO ELECT OR APPOINT THE DIRECTORS OF THE CORPORATION. FORM 990, PART VI, SECTION A, LINE 7B THE MEMBER MUST APPROVE THE FOLLOWING ACTIONS AUTHORIZED BY THE BOARD BEFORE THE ACTIONS CAN BECOME EFFECTIVE: (1) ANY AMENDMENT, MODIFICATION OR REPEAL OF THE ARTICLES OF INCORPORATION OR BYLAWS OF THE CORPORATION; (2) THE ACQUISITION OR CREATION OF ALL WHOLLY-OWNED OR CONTROLLED CORPORATIONS AND ANY MERGER, CONSOLIDATION OR AFFILIATION OF THE CORPORATION WITH ANOTHER ENTITY; (3) ANY VOLUNTARY DISSOLUTION OF THE CORPORATION; (4) ANY NEW OR ADDITIONAL MEMBERS OF THE CORPORATION; (5) ANY CHANGE IN THE VOTING POWERS OF MCLAREN AS THE SOLE MEMBER; (6) ANY SALE, LEASE, OR OTHER TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE CORPORATION'S ASSETS OTHER THAN IN THE ORDINARY COURSE OF BUSINESS; (7) THE DISCONTINUANCE OR MATERIAL MODIFICATION OF A MAJOR ACTIVITY, PROGRAM, OR SERVICE OF THE CORPORATION; (8) THE STRATEGIC AND LONG-RANGE PLANS AND THE ANNUAL OPERATING AND CAPITAL EXPENDITURE BUDGETS OF THE CORPORATION, AS DEVELOPED BY THE MANAGEMENT OF THE CORPORATION, WHICH APPROVAL THE MEMBER WILL NOT UNREASONABLY DENY; (9) THE CREATION OF ANY LONG-TERM OBLIGATION OF THE CORPORATION (OTHER THAN INDEBTEDNESS AS DESCRIBED BELOW), IF THE PRINCIPAL AMOUNT EXCEEDS 25% OF THE VALUE OF THE CORPORATION'S NET ASSETS (TOTAL ASSETS MINUS TOTAL LIABILITIES), EXCEPT THAT APPROVAL OF THE MEMBER IS NOT REQUIRED FOR ANY OBLIGATION INCURRED IN THE ORDINARY COURSE OF BUSINESS THAT IS PAYABLE ON DEMAND OR MATURES WITHIN 12 MONTHS FROM THE DATE OF ITS CREATION; (10) THE CORPORATION'S ISSUANCE OF NOTES, BONDS, OR OTHER EVIDENCE OF INDEBTEDNESS; (11) THE SALE, CONVEYANCE, ASSIGNMENT, TRANSFER, ALIENATION, PLEDGE, OR ENCUMBRANCE OF THE CORPORATION'S REAL PROPERTY WITH AN ANNUAL AGGREGATE VALUE IN EXCESS OF $250,000; (12) THE CORPORATION'S PURCHASE OR ACQUISITION OF ADDITIONAL REAL PROPERTY WITH AN ANNUAL AGGREGATE VALUE IN EXCESS OF $250,000; AND (13) APPROVE UNBUDGETED CAPITAL EXPENDITURES IN EXCESS OF $250,000 IN THE ANNUAL AGGREGATE. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 DATA IS PREPARED INTERNALLY AND SUBMITTED TO OUR AUDITING FIRM FOR RETURN PREPARATION. ONCE THE RETURNS HAVE BEEN COMPLETED, THE FORMS ARE REVIEWED BY THE CORPORATE DIRECTOR OF BUDGET, THE CORPORATE SENIOR VICE PRESIDENT AND CFO OF MCLAREN HEALTH CARE CORPORATION (MHCC). COPIES OF THE RETURNS ARE MADE AVAILABLE TO THE MHCC BOARD MEMBERS, WHO SERVE AS THE OVERALL GOVERNING BOARD. RETURNS ARE AVAILABLE FOR ALL CORPORATIONS OF WHICH MHCC IS THE SOLE MEMBER AS WELL AS OTHER RELATED ENTITIES OF THOSE CORPORATIONS FOR REVIEW RATHER THAN HAVING THE LOCAL BOARDS REVIEW THE RETURNS. THE BOARD OF MHCC IS THE ULTIMATE ACCOUNTABLE ORGANIZATION FOR THE SYSTEM; AS SUCH IT IS THE OVERALL GOVERNING BOARD OF OUR SYSTEM WHOSE RESPONSIBILITIES INCLUDES BUT ARE NOT LIMITED TO: APPROVING ALL SUBSIDIARY BOARD MEMBERS, FINANCIAL BUDGETS, AND ISSUANCE OF DEBT. FORM 990, PART VI, SECTION B, LINE 12C THE CORPORATE COMPLIANCE DEPARTMENT, IN ACCORDANCE WITH THE MCLAREN HEALTH CARE (MHC) BOARD CONFLICT OF INTEREST POLICY, ANNUALLY DISTRIBUTES THE CONFLICT OF INTEREST DISCLOSURE SURVEY TO ALL MHC CORPORATE AND SUBSIDIARY ORGANIZATION BOARD MEMBERS, EXECUTIVES AND OTHER LEADERSHIP EMPLOYEES. THE CORPORATE COMPLIANCE DEPARTMENT, THROUGH THE GOVERNANCE COMMITTEE, COMPILES AND ANALYZES SURVEY DATA BY ORGANIZATION, INVESTIGATES, AND REVIEWS POTENTIAL CONFLICTS WITH THE ORGANIZATION'S CEO AND BOARD CHAIR, AND WHEN NECESSARY, RECOMMENDS ACTIONS TO BE TAKEN TO RESOLVE IDENTIFIED CONFLICTS. A COMPLETE REPORT OF ALL CORPORATE AND SUBSIDIARY BOARD MEMBER AND EXECUTIVE DISCLOSURES, CONFLICTS IDENTIFIED AND ACTIONS TAKEN IS REVIEWED BY THE MHC GOVERNANCE COMMITTEE AND EACH SUBSIDIARY CEO AND BOARD CHAIR RECEIVES A REPORT SPECIFIC TO THEIR ORGANIZATION'S BOARD MEMBERS AND EXECUTIVES. CONFLICTS ARE DISCLOSED TO THE FULL BOARD AND BOARD COMMITTEES SO APPROPRIATE ACTIONS CAN BE TAKEN. ACTIONS MAY INCLUDE PROHIBITING A BOARD MEMBER FROM PARTICIPATING IN DELIBERATIONS INVOLVING TRANSACTIONS WITH A COMPANY WITH WHICH THEY CONDUCT FINANCIAL TRANSACTIONS; BOARD MEMBERS FAILING TO COMPLETE A DISCLOSURE SURVEY OR INTENTIONALLY FAILING TO REPORT A KNOWN CONFLICT OF INTEREST ARE ASKED TO RESIGN. FORM 990, PART VI, SECTION B, LINE 15 THE COMPENSATION OF THE CEO IS DETERMINED BY THE COMPENSATION COMMITTEE OF MCLAREN HEALTH CARE CORPORATION BASED UPON THE PERFORMANCE OF THE CEO. THE COMPENSATION OF THE CEO IS WITHIN THE SALARY RANGES DETERMINED BY THE COMPENSATION COMMITTEE OF MCLAREN HEALTH CARE CORPORATION. THE PROCESS OF THE COMPENSATION COMMITTEE IS AS FOLLOWS: THE COMPENSATION COMMITTEE IS APPOINTED BY THE BOARD OF DIRECTORS TO REVIEW THE PERFORMANCE AND RECOMMEND THE TOTAL COMPENSATION PACKAGE OF THE CORPORATION'S CEO TO THE BOARD. FURTHER THE COMMITTEE ESTABLISHES THE SALARY RANGES AND PREREQUISITES OF THE CORPORATION'S OTHER MOST HIGHLY COMPENSATED OFFICERS (MHC VICE-PRESIDENTS AND MHC HOSPITAL/SUBSIDIARY CEO'S) TO THE BOARD. THE MEMBERS OF THE COMMITTEE MUST MEET THE INDEPENDENCE REQUIREMENTS OF THE APPLICABLE PROVISIONS OF SECTION 4958 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED AND FINAL TREASURY REGULATIONS SECTION 53.4958-6(C)(1)(III). THE COMMITTEE RETAINS THE SERVICES OF AN INDEPENDENT FIRM WITH SIGNIFICANT QUALIFICATIONS AND EXPERIENCE TO CONDUCT A REVIEW OF THE CORPORATION'S EXECUTIVE COMPENSATION PROGRAM. THE RETAINED FIRM UTILIZES APPROPRIATE COMPENSATION COMPARABILITY DATA. THE RETAINED FIRM CONDUCTS ANALYSIS OF THE COMPETITIVENESS OF THESE PROGRAMS AND EXPRESSES AN OPINION AS TO THE REASONABLENESS OF THESE COMPENSATION PROGRAMS. ALL DATA UTILIZED BY THE COMMITTEE, DELIBERATIONS OF THE COMMITTEE, AND FINAL COMPENSATION DECISIONS BY THE COMMITTEE ARE DOCUMENTED IN FORMAL REPORTS AND MINUTES. THE CORPORATE COMPENSATION COMMITTEE WORKS UNDER AND ANNUALLY REVIEWS THE MCLAREN HEALTH CARE CORPORATION COMPENSATION COMMITTEE CHARTER AND MCLAREN HEALTH CARE CORPORATION COMPENSATION PHILOSOPHY. THE MOST RECENT TIME THIS PROCESS WAS UNDERTAKEN WAS IN 2014. FORM 990, PART VI, SECTION C, LINE 19 ALL DOCUMENTS ARE AVAILABLE UPON REQUEST. FORM 990, PART IX, LINE 11G PURCHASED PHYSICIAN: PROGRAM SERVICE EXPENSES 4,591,916. MANAGEMENT AND GENERAL EXPENSES 6,351,397. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 10,943,313. OTHER PURCHASED SERVICES: PROGRAM SERVICE EXPENSES 5,169,745. MANAGEMENT AND GENERAL EXPENSES 3,923,714. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 9,093,459. CONSULTING FEES: PROGRAM SERVICE EXPENSES 61,306. MANAGEMENT AND GENERAL EXPENSES 905,977. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 967,283. SERVICE CONTRACTS: PROGRAM SERVICE EXPENSES 14,765. MANAGEMENT AND GENERAL EXPENSES 1,310,751. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 1,325,516. OTHER FEES: PROGRAM SERVICE EXPENSES 6,457. MANAGEMENT AND GENERAL EXPENSES 15,895. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 22,352. COLLECTION FEES: PROGRAM SERVICE EXPENSES 2,642. MANAGEMENT AND GENERAL EXPENSES 788,262. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 790,904. RECRUITMENT FEES: PROGRAM SERVICE EXPENSES 0. MANAGEMENT AND GENERAL EXPENSES 543,550. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 543,550. FORM 990, PART XI, LINE 9: CHANGE IN FOUNDATION HELD ASSETS -73,455. PENSION RELATED CHANGES -9,946,107. TRANSFER FROM RELATED ORGANIZATION UPON DISSOLUTION 51,918. FORM 990, PART XII, LINE 2C: THE FINANCE COMMITTEE OF THE HEALTH SYSTEM ASSUMES RESPONSIBILITY FOR REVIEW OF FINANCIAL STATEMENTS AND OVERSIGHT OF THE CONSOLIDATED AUDIT. THIS PROCESS HAS NOT CHANGED FORM THE PRIOR YEAR. BAY MEDICAL FOUNDATION 1900 COLUMBUS AVE BAY CITY MI 48708 382156534 FOUNDATION MI 501(C)(3) LINE 11A, I BAY REGIONAL MEDICAL CENTER 1 BAY REGIONAL MEDICAL CENTER 1900 COLUMBUS AVE BAY CITY MI 48708 381976271 HOSPITAL MI 501(C)(3) LINE 3 MCLAREN HEALTH CARE CORPORATION 1 BAY REGIONAL MEDICAL CENTER AUXILIARY 1908 COLUMBUS AVENUE BAY CITY MI 48708 386081235 SUPPORTING ORGANIZATION MI 501(C)(3) LINE 11A, I BAY REGIONAL MEDICAL CENTER 1 BAY SPECIAL CARE HOSPITAL 1900 COLUMBUS AVE BAY CITY MI 48708 383161753 HOSPITAL MI 501(C)(3) LINE 3 BAY REGIONAL MEDICAL CENTER 1 CENTRAL MICHIGAN COMMUNITY HOSPITAL 1221 SOUTH DRIVE MT PLEASANT MI 48858 381420304 HOSPITAL MI 501(C)(3) LINE 3 MCLAREN HEALTH CARE CORPORATION 1 CENTRAL MICHIGAN COMMUNITY HOSPITAL RADIATION ONCOLOGY 1000 HARRINGTON MT PLEASANT MI 48858 300312172 HOSPITAL MI 501(C)(3) LINE 3 MCLAREN HEALTH CARE CORPORATION 1 CHARLEVOIX NURSING HOME CORPORATION DBA BOULDER PARK TERRACE 14676 WEST UPRIGHT CHARLEVOIX MI 49720 383038683 SKILLED NURSING FACILITY MI 501(C)(3) LINE 9 MCLAREN NORTHERN MICHIGAN 1 GREAT LAKES CANCER INSTITUTE 401 S BALLENGER HWY FLINT MI 48532 383584572 CANCER CARE CENTER MI 501(C)(3) LINE 7 MCLAREN HEALTH CARE CORPORATION 1 INGHAM REGIONAL HEALTHCARE FOUNDATION 401 S GREENLAWN AVE LANSING MI 48910 382463637 FOUNDATION MI 501(C)(3) LINE 7 INGHAM REGIONAL MEDICAL CENTER 1 INGHAM REGIONAL MEDICAL CENTER 401 S GREENLAWN AVE LANSING MI 48910 381434090 HOSPITAL MI 501(C)(3) LINE 3 MCLAREN HEALTH CARE CORPORATION 1 LAPEER REGIONAL MEDICAL CENTER 1375 N MAIN ST LAPEER MI 48446 382689033 HOSPITAL MI 501(C)(3) LINE 3 MCLAREN HEALTH CARE CORPORATION 1 LAPEER REGIONAL MEDICAL CENTER FOUNDATION 1375 N MAIN ST LAPEER MI 48446 382689603 FOUNDATION MI 501(C)(3) LINE 11A, I LAPEER REGIONAL MEDICAL CENTER 1 MCLAREN HEALTH CARE CORPORATION 401 S BALLENGER HWY FLINT MI 48532 382397643 SUPPORTING ORG MI 501(C)(3) LINE 11A, I N/A 0 MCLAREN HEALTH CARE VILLAGE FOUNDATION 401 S BALLENGER HIGHWAY FLINT MI 48532 262693350 SUPPORTING ORG MI 501(C)(3) LINE 11A, I MCLAREN HEALTH CARE CORPORATION 1 MCLAREN HEALTH PLAN G-3245 BEECHER ROAD FLINT MI 48532 383383640 HEALTH CARE SERVICES MI 501(C)(4) MCLAREN HEALTH CARE CORPORATION 1 MCLAREN MEDICAL MANAGEMENT INC 401 S BALLENGER HWY FLINT MI 48532 382988086 MANAGEMENT COMPANY MI 501(C)(3) LINE 11A, I MCLAREN HEALTH CARE CORPORATION 1 MCLAREN REGIONAL MEDICAL CENTER 401 S BALLENGER HWY FLINT MI 48532 382383119 HOSPITAL MI 501(C)(3) LINE 3 MCLAREN HEALTH CARE CORPORATION 1 MOUNT CLEMENS REGIONAL HEALTHCARE FOUNDATION PO BOX 326 MOUNT CLEMENS MI 48046 382578873 FOUNDATION MI 501(C)(3) LINE 9 MOUNT CLEMENS REGIONAL MEDICAL CENTER 1 MOUNT CLEMENS REGIONAL MEDICAL CENTER 1000 HARRINGTON MOUNT CLEMENS MI 48043 381218516 HOSPITAL MI 501(C)(3) LINE 3 MCLAREN HEALTH CARE CORPORATION 1 NORTH OAKLAND NORTH MACOMB IMAGING INC 355 BARCLAY CIR STE A ROCHESTER HILLS MI 48307 382807040 MRI IMAGING MI 501(C)(3) LINE 3 N/A 1 NORTHERN MICHIGAN HEMATOLOGY AND ONCOLOGY 416 CONNABLE AVENUE PETOSKEY MI 49770 320020293 PHYSICIAN PRACTICE MI 501(C)(3) LINE 3 MCLAREN NORTHERN MICHIGAN 1 NORTHERN MICHIGAN MEDICAL MANAGEMENT 416 CONNABLE AVENUE PETOSKEY MI 49770 208458840 PHYSICIAN PRACTICE MI 501(C)(3) LINE 3 MCLAREN NORTHERN MICHIGAN 1 MCLAREN NORTHERN MICHIGAN FOUNDATION 360 CONNABLE AVENUE PETOSKEY MI 49770 382445611 FUNDRAISING MI 501(C)(3) LINE 11A, I MCLAREN NORTHERN MICHIGAN 1 PETOSKEY COMMUNITY FREE CLINIC 416 CONNABLE AVENUE PETOSKEY MI 49770 203675817 HEALTH SERVICES MI 501(C)(3) LINE 3 MCLAREN NORTHERN MICHIGAN 1 POH REGIONAL MEDICAL CENTER 50 NORTH PERRY STREET PONTIAC MI 48342 381428164 HOSPITAL MI 501(C)(3) LINE 3 MCLAREN HEALTH CARE CORPORATION 1 POH RILEY FOUNDATION 50 NORTH PERRY STREET PONTIAC MI 48342 200442217 FOUNDATION MI 501(C)(3) LINE 11C, III-FI POH REGIONAL MEDICAL CENTER 1 PRIMARY CARE 1900 COLUMBUS AVE BAY CITY MI 48708 202443604 HEALTH CARE SERVICES MI 501(C)(3) LINE 9 BAY REGIONAL MEDICAL CENTER 1 REGIONAL EMERGENCY MEDICAL SERVICE INC 25400 W 8 MILE ROAD SOUTHFIELD MI 48034 383255499 AMBULANCE SERVICE MI 501(C)(3) LINE 9 MCLAREN MEDICAL MANAGEMENT INC 1 THE CARDIAC INSTITUTE DBA MICHIGAN HEART & VASCULAR SPECIALISTS 416 CONNABLE AVENUE PETOSKEY MI 49770 262774689 PHYSICIAN PRACTICE MI 501(C)(3) LINE 3 MCLAREN NORTHERN MICHIGAN 1 VISITING NURSE SERVICE OF MICHIGAN 401 S BALLENGER HWY FLINT MI 48532 383491714 HEALTH CARE SERVICES MI 501(C)(3) LINE 9 MCLAREN HEALTH CARE CORPORATION 1 VITALCARE INC 761 LAFAYETTE AVENUE CHEBOYGAN MI 49721 382527255 HOSPICE CARE/HOME HEALTH SERVICES MI 501(C)(3) LINE 9 MCLAREN NORTHERN MICHIGAN 1 WOMENS HOSPITAL ASSOCIATION OF FLINT MICHIGAN 401 S BALLENGER HIGHWAY FLINT MI 48532 381358053 SUPPORTING ORGANIZATION MI 501(C)(3) LINE 11A, I MCLAREN HEALTH CARE CORPORATION 1 MCLAREN HOSPITALITY HOUSE 401 S BALLENGER HIGHWAY FLINT MI 48532 455567669 HOSPITALITY HOUSE MI 501(C)(3) LINE 7 MCLAREN HEALTH CARE CORPORATION 1 BLUE WATER HEALTH SERVICES 1221 PINE GROVE AVENUE PORT HURON MI 49060 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