2015-11-11T18:49:40-06:00 2014-12-31 271728945 O'CONNOR DAVIES LLP 500 MAMARONECK AVENUE HARRISON NY 105281633 990 2014-01-01 133896624 CATHOLIC HEALTH CARE SYSTEM CATH 6466334700 205 LEXINGTON AVENUE - 2ND FLOOR NEW YORK NY 10016 ANNMARIE COVONE SENIOR VP & CFO 6466334700 2015-11-10 1 GARRETT M HIGGINS P00543209 9143818900 2015-11-10 2014 2016-02-25 16:41:14Z ARCHCARE SCOTT P LA RUE 205 LEXINGTON AVENUE - 2ND FLOOR NEW YORK NY 10016 80125850 0 0928 X WWW.ARCHCARE.ORG X 1996 NY TO FOSTER AND PROVIDE FAITH-BASED HOLISTIC CARE TO FRAIL AND VULNERABLE PEOPLE UNABLE TO FULLY CARE FOR THEMSELVES. THROUGH SHARED COMMITMENTS, ARCHCARE SEEKS TO IMPROVE THE QUALITY OF THE LIVES OF THOSE INDIVIDUALS AND THEIR FAMILIES. 17 17 176 21 0 0 482 4000000 72853578 75724941 19899 315054 45462 85855 72919421 80125850 46920 90400 0 0 18363385 16275359 0 0 0 56817132 59631471 75227437 75997230 -2308016 4128620 21347670 23867073 17376256 25875066 3971414 -2007993 X THE CATHOLIC HEALTH CARE SYSTEM ("CHCS" OR THE "SYSTEM") IS A HEALTH CARE DELIVERY SYSTEM COMPOSED OF HOSPITALS, NURSING HOMES, MANAGED CARE PLANS AND OTHER ENTITIES THAT DELIVER AND PROVIDE FOR THE DELIVERY OF HEALTH CARE SERVICES (THE "CHCS ENTITIES") IN THE GREATER NEW YORK AREA AND THE HUDSON VALLEY. CHCS IS DEDICATED TO PROMOTING HIGH QUALITY PATIENT CARE THROUGHOUT THE SYSTEM, TO CREATING EFFICIENCIES BY STREAMLINING MANAGEMENT AND OPERATIONS, AND TO ENHANCING THE FINANCIAL STRENGTH OF THE CHCS ENTITIES AND THE SYSTEM. CHCS AND THE CHCS ENTITIES ARE COMMITTED TO FULFILLING THE CATHOLIC MISSION COMMON TO EACH. THE PURPOSES AND OPERATIONS OF CHCS SHALL BE CARRIED OUT IN CONFORMITY WITH THE VALUES AND TEACHINGS OF THE ROMAN CATHOLIC CHURCH AND WITH THE ETHICAL AND RELIGIOUS DIRECTIVES FOR CATHOLIC HEALTH CARE SERVICES OF THE NATIONAL CONFERENCE OF CATHOLIC BISHOPS AS INTERPRETED BY THE ARCHBISHOP OF NEW YORK. 0 0 4219198 79700 13685903 THE PROVISION OF MANAGEMENT AND SUPPORT SERVICES TO HEALTH CARE NOT-FOR-PROFIT ORGANIZATIONS OF WHICH IT IS THE SOLE MEMBER. 30824392 10700 41985484 CATHOLIC SPECIAL NEEDS PLAN LLC D/B/A ARCHCARE ADVANTAGE IS A HEALTH PLAN WITH A MEDICARE CONTRACT FOUNDED BY THE CATHOLIC HEALTH CARE SYSTEM OF THE ARCHDIOCESE OF NEW YORK TO PROVIDE MEDICARE COVERAGE FOR INDIVIDUALS WHO REQUIRE NURSING HOME LEVEL OF CARE. AS A MEDICARE ADVANTAGE HEALTH MAINTENANCE ORGANIZATION (HMO) SPECIAL NEEDS PLAN ARCHCARE ADVANTAGE (SNP) SERVES BENEFICIARIES ENTITLED TO MEDICARE PART A AND ENROLLED IN MEDICARE PART B. THE PLAN'S SERVICE AREA INCLUDES BRONX, DUTCHESS, KINGS, NEW YORK, ORANGE, QUEENS, RICHMOND AND WESTCHESTER COUNTIES, AND OFFERS A NETWORK OF DOCTORS, SPECIALISTS, HOSPITALS AND OTHER HEALTH CARE PROVIDERS THAT ENROLLEES CAN USE. SNP IS A COMPREHENSIVE RISK BASED HEALTH MAINTENANCE ORGANZIATION ("HMO") UNDER ARTICLE 44 OF THE PUBLIC HEALTH LAW. IN 2014, SNP HAD 6,867 MEMBER MONTHS AT FIVE FACILITIES (CARMEL RICHMOND NURSING HOME, INC., ST. VINCENT DE PAUL RESIDENCE, FERNCLIFF NURSING HOME COMPANY INC., TERENCE CARDINAL COOKE HEALTH CARE CENTER, AND MARY MANNING WALSH NURSING HOME COMPANY), AND 10,624 MEMBER MONTHS AT UNRELATED ORGANIZATIONS. 13067537 20053554 CHCS ESTABLISHED AS A SELF-INSURED TRUST FOR HEALTH INSURANCE FOR ITSELF AND ITS AFFILIATES IN ORDER TO STREAMLINE SYSTEM ADMINISTRATION AND CONTROL ASSOCIATED EXPENSES. CHCS'S ADMINISTRATIVE DUTIES INCLUDE THE COLLECTION OF HEALTH BENEFIT PREMIUMS FROM THE CHCS INSTITUTIONS AND PAYMENT OF MEDICAL AND PHARMACEUTICAL CLAIMS TO THE THIRD PARTY ADMINISTRATOR FOR THE PROGRAM. 48111127 1 1 0 0 0 0 0 0 0 0 1 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 0 1 33 0 176 1 0 0 0 0 0 0 0 0 0 0 X 17 17 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X ANNMARIE COVONE 6466334702 205 LEXINGTON AVE - 2ND FLOOR NEW YORK NY 10016 BISHOP GERALD WALSH BOARD MEMBER 0.10 1.00 X 0 0 0 ERIC P FELDMANN BOARD MEMBER 0.10 1.00 X 0 0 0 FRANCIS J SERBAROLI ESQ CHAIRMAN 0.10 1.10 X X 0 0 0 GT SWEENEY BOARD MEMBER 0.10 1.10 X 0 0 0 GENNARO VASILE BOARD MEMBER 0.10 1.10 X 0 0 0 JOHN MARINELLI BOARD MEMBER- THRU JUNE 2014 0.10 1.00 X 0 0 0 JOHN T DUNLAP BOARD MEMBER 0.10 1.00 X 0 0 0 JOSEPH P ANDERSON BOARD MEMBER- THRU FEBRUARY 2014 0.10 1.00 X 0 0 0 KARL P ADLER VICE-CHAIRMAN & SECRETARY 0.10 1.40 X X 0 0 0 KATHRYN ROONEY BOARD MEMBER 0.10 1.00 X 0 0 0 MANFRED ALTSTADT BOARD MEMBER- THRU DECEMBER 2014 0.10 1.00 X 0 0 0 MSGR CHARLES J FAHEY BOARD MEMBER 0.10 1.10 X 0 0 0 MSGR GREGORY MUSTACIUOLO BOARD MEMBER 0.10 1.00 X 0 0 0 MSGR WILLIAM BELFORD BOARD MEMBER 0.10 1.00 X 0 0 0 PAUL TRAVERS BOARD MEMBER 0.10 1.00 X 0 0 0 RORY KELLEHER BOARD MEMBER- THRU JULY 2014 0.10 1.10 X 0 0 0 SISTER CECILE SWANTON BOARD MEMBER 0.10 1.00 X 0 0 0 TARA A CORTES BOARD MEMBER 0.10 1.30 X 0 0 0 THOMAS E ALBERTO BOARD MEMBER 0.10 1.30 X 0 0 0 THOMAS J FAHEY JR MD BOARD MEMBER 0.10 1.00 X 0 0 0 THOMAS M O'BRIEN VICE-CHAIR 0.10 1.00 X X 0 0 0 ANNMARIE COVONE SENIOR VP/CFO 37.00 1.50 X 543387 0 124714 SCOTT P LA RUE PRESIDENT/CEO 37.00 1.50 X 951074 0 241930 EVA A ENG SENIOR VP OF BUSINESS DEVELOPMENT 35.00 X 241820 0 73296 FREDRICK T SHERMAN CHIEF MEDICAL OFFICER-THRU JULY 2014 35.00 X 184076 0 10638 HUGO A PIZARRO VP OF HUMAN RESOURCES 35.00 X 309176 0 92214 MITCHELL MARSH VP OF NURSING HOME OPERATIONS 35.00 X 360194 0 81215 RAYMOND M GANNON JR EXECUTIVE DIRECTOR OF SNP & MLTC 35.00 X 370073 0 43546 MARCIA KONRAD EXECUTIVE DIRECTOR OF MLTC 17.50 20.00 X 0 207063 33607 JOHN R WILLIFORD EXECUTIVE DIRECTOR OF SNP 35.00 X 241984 0 1489 MITZE A AMOROSO VP CHIEF INFORMATION OFFICER 35.00 X 292585 0 71538 SARAH D STRUM VP OF COMPLIANCE & REGULATIONS 35.00 X 237688 0 73105 TERENCE GALLAGHER VP OF SUPPORT SERVICES 35.00 X 255002 0 64470 TIMOTHY JOHNSON DIRECTOR OF FINANCE 35.00 X 200988 0 13910 4188047 207063 925672 49 0 1 0 ARCHDIOCESE OF NEW YORK 1011 FIRST AVENUE ROOM 1940 NEW YORK NY 10022 ADMIN./LEGAL SERVICES 595000 TRI-STATE BENEFIT SOLUTIONS 619 OAK STREET FIRST FLOOR CINCINNATI OH 45206 3RD PARTY SERVICE FEE 562352 MILLIMAN PO BOX 536342 PITTSBURGH PA 15253 ACTUARIAL & BID CONSULTING 275867 LAURA PAGE GREIFINGER 15 VERBENA AVENUE SUITE 210 FLORAL PARK NY 11001 CONSULTING 192263 SISTERS OF CHARITY 6301 RIVERDALE AVENUE BRONX NY 10471 PASTORAL CARE SERVICES 179600 13 4000000 4000000 PATIENT SERVICE REV 621300 41985484 41985484 INSURANCE PREMIUMS 900099 20053554 20053554 MGMT SERVICE ASSESSMENTS 561000 13685903 13685903 75724941 315054 315054 REBATES 900099 85855 85855 85855 80125850 75724941 0 400909 X 90400 90400 3061587 3061587 10509037 3205118 7303919 254641 151584 103057 1483933 354618 1129315 966161 277703 688458 796316 796316 79300 79300 26112799 23789342 2323457 89669 89669 333417 333417 387367 387367 1072036 1072036 133771 133771 114594 114594 288248 288248 67438 67438 SELF-INSURED HEALTH INS 13067537 13067537 MEDICAL SUPPLIES 7174825 7174825 RESERVE FOR DUE FROM RE 6800000 6800000 FORGIVENESS OF AMOUNTS 2296283 2296283 817871 817871 75997230 48111127 27886103 0 1394732 2782430 7239650 7254591 29250 2009750 1090921 1110241 169329 139775 4678383 3841345 875442 837038 10548346 9733248 21347670 23867073 7588903 8010767 3578347 3442927 6209006 14421372 17376256 25875066 X 3971414 -2007993 3971414 -2007993 21347670 23867073 X 4128620 -10108027 X X 0 1 X 1 0 X 226700 482 4000000 4227182 63522801 59486598 67684249 72853578 75724941 339272167 63749501 59486598 67684249 72854060 79724941 343499349 0 7365647 7365647 7365647 7365647 336133702 252864 31941 42864 19899 315054 662622 252864 31941 42864 19899 315054 662622 162909 83629 47837 45462 85855 425692 64165274 59602168 67774950 72919421 80125850 344587663 0.97550 0.99440 0.00190 0.00170 X SCHEDULE A, PART III, LINE 12, EXPLANATION OF OTHER INCOME: REBATES - 2010 AMOUNT: $ 162,909. 2011 AMOUNT: $ 83,629. 2012 AMOUNT: $ 47,837. 2013 AMOUNT: $ 45,462. 2014 AMOUNT: $ 85,855. RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 2191645 2139379 52266 2486738 1701966 784772 837038 LETTERS OF CREDIT & ESCROW 758459 DUES AND ASSESSMENT RECEIVABLES FROM RELATED PARTIES 2020522 LOAN RECEIVABLE FROM RELATED PARTIES 790263 SELF INSURED MEDICAL BENEFITS, NET 4164004 LOAN RECEIVABLE FROM EMPIRE STATE HOME CARE SERVICES, INC. 2000000 9733248 ACCRUED PENSION LIABILITY 8539819 INCURRED BUT NOT PAID MEDICAL CLAIMS 2500000 DUE TO RELATED PARTIES 3381553 14421372 X 80791739 665889 665889 80125850 0 80125850 76733458 736228 736228 75997230 0 75997230 PART X, LINE 2: CHCS RECOGNIZES THE EFFECT OF INCOME TAX POSITIONS ONLY IF THOSE POSITIONS ARE MORE LIKELY THAN NOT TO BE SUSTAINED. MANAGEMENT HAS DETERMINED THAT CHCS HAD NO UNCERTAIN TAX POSITIONS THAT WOULD REQUIRE FINANCIAL STATEMENT RECOGNITION OR DISCLOSURE. CHCS IS NO LONGER SUBJECT TO EXAMINATIONS BY THE APPLICABLE TAXING JURISDICTIONS FOR PERIODS PRIOR TO DECEMBER 31, 2011. PART XI, LINE 2D - OTHER ADJUSTMENTS: REVENUE ATTRIBUTABLE TO RELATED ENTITIES 665,889. PART XII, LINE 2D - OTHER ADJUSTMENTS: EXPENSES ATTRIBUTABLE TO CONSOLIDATED ENTITIES 736,228. 1 ALFRED E SMITH MEMORIAL FOUNDATION 1011 FIRST AVENUE NEW YORK NY 10022 131553263 501(C)3 25000 ALFRED SMITH MEMORIAL FOUNDATION GALA PROVIDENCE REST 3304 WATERBURY AVENUE BRONX NY 10465 131740301 501(C)3 9200 SUPPORT FOR ANNUAL GALA LORETTO FOUNDATION 1301 NOTTINGHAM ROAD JAMESVILLE NY 13078 222339225 501(C)3 10000 SUPPORT FOR ANNUAL GALA PARKER JEWISH INSTITUTION FOUNDATION 271-11 76TH AVENUE NEW HYDE PARK NY 11040 113041480 501(C)3 10000 SUPPORT FOR ANNUAL GALA ICAHN SCHOOL OF MEDICINE AT MOUNT SINAI ONE GUSTAVE L LEVY PLACE NEW YORK NY 10029 136171197 501(C)3 20000 SUPPORT FOR SPECIAL EVENT CALVARY HOSPITAL INC 1740 EASTCHESTER ROAD BRONX NY 10461 131740274 501(C)3 10000 SUPPORT FOR ANNUAL GALA 6 FORM 990, SCHEDULE I, PART I THE RECIPIENTS ARE PART OF OUR SYSTEM AND IT IS BASED ON FINANCIAL NEED. X X X X 0 1 0 0 0 0 0 1 0 ANNMARIE COVONE SENIOR VP/CFO 418083 0 74304 0 51000 0 96352 0 28362 0 668101 0 83286 0 SCOTT P LA RUE PRESIDENT/CEO 672383 0 179561 0 99130 0 221400 0 20530 0 1193004 0 150000 0 EVA A ENG SENIOR VP OF BUSINESS DEVELOPMENT 208032 0 25092 0 8696 0 43236 0 30060 0 315116 0 25092 0 FREDRICK T SHERMAN CHIEF MEDICAL OFFICER-THRU JULY 2014 179728 0 0 0 4348 0 0 0 10638 0 194714 0 0 0 HUGO A PIZARRO VP OF HUMAN RESOURCES 252038 0 44388 0 12750 0 63582 0 28632 0 401390 0 44388 0 MITCHELL MARSH VP OF NURSING HOME OPERATIONS 302531 0 44913 0 12750 0 60685 0 20530 0 441409 0 44913 0 RAYMOND M GANNON JR EXECUTIVE DIRECTOR OF SNP & MLTC 298103 0 59221 0 12749 0 13094 0 30452 0 413619 0 56100 0 MARCIA KONRAD EXECUTIVE DIRECTOR OF MLTC 0 207063 0 0 0 0 0 14857 0 18750 0 240670 0 0 JOHN R WILLIFORD EXECUTIVE DIRECTOR OF SNP 198884 0 43100 0 0 0 0 0 1489 0 243473 0 0 0 MITZE A AMOROSO VP CHIEF INFORMATION OFFICER 238364 0 41471 0 12750 0 59762 0 11776 0 364123 0 41471 0 SARAH D STRUM VP OF COMPLIANCE & REGULATIONS 204784 0 24208 0 8696 0 43236 0 29869 0 310793 0 24208 0 TERENCE GALLAGHER VP OF SUPPORT SERVICES 223233 0 19019 0 12750 0 44467 0 20003 0 319472 0 0 0 TIMOTHY JOHNSON DIRECTOR OF FINANCE 195988 0 5000 0 0 0 11400 0 2510 0 214898 0 0 0 PART I, LINE 4B SCOTT P. LA RUE AND ANNMARIE COVONE ALSO PARTICIPATED IN A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN. CATHOLIC HEALTH CARE SYSTEM D/B/A ARCHCARE DISTRIBUTED $99,130 TO SCOTT P. LA RUE AND $38,250 TO ANNMARIE COVONE IN 2014 THROUGH THEIR W-2. PART I, LINE 7 THE FOLLOWING EMPLOYEE RECEIVED A BOARD DISCRETIONARY BONUS IN THEIR 2014 W-2: - SCOTT P. LA RUE $179,561 - ANNMARIE COVONE $74,304 - MITCHELL MARSH $44,913 - HUGO A. PIZARRO $44,388 - MITZE A. AMOROSO $41,471 - EVA A. ENG $25,092 - SARAH D. STRUM $24,208 - RAYMOND M. GANNON JR. $59,221 - TERENCE GALLAGHER $19,019 - TIMOTHY JOHNSON $5,000 - JOHN WILLIFORD $43,100 FORM 990, PART VI, SECTION A, LINE 6 PROVIDENCE HEALTH SERVICES (PROVIDENCE) IS THE SPONSOR (THE SPONSOR) OF CATHOLIC HEALTH CARE SYSTEM (CHCS) AND THE CHCS ENTITIES AND IS THE SOLE CORPORATE MEMBER OF CHCS (MEMBER). FORM 990, PART VI, SECTION A, LINE 7A THE SOLE "MEMBER" HAS THE RIGHT TO APPOINT AND REMOVE WITH OR WITHOUT CAUSE THE MEMBERS OF THE BOARD OF TRUSTEES OF CHCS AND THE CHAIRMAN OF THE BOARD OF TRUSTEES OF CHCS; PROVIDED THAT PROVIDENCE MAY CONSIDER CANDIDATES NOMINATED BY THE BOARD OF TRUSTEES OF CHCS. FORM 990, PART VI, SECTION A, LINE 7B RESERVED POWERS OF PROVIDENCE: A. PROVIDENCE SHALL HAVE SOLE AUTHORITY WITH RESPECT TO THE FOLLOWING MATTERS: (I) AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF CHCS; (II) AMENDMENT TO THE BYLAWS OF CHCS; AND (III) A CHANGE IN THE MISSION OF CHCS; (IV) APPOINTMENT AND REMOVAL WITH OR WITHOUT CAUSE OF THE MEMBERS OF THE BOARD OF TRUSTEES OF CHCS AND THE CHAIRMAN OF THE BOARD OF TRUSTEES OF CHCS; PROVIDED THAT PROVIDENCE MAY CONSIDER CANDIDATES NOMINATED BY THE BOARD OF TRUSTEES OF CHCS. B. PROVIDENCE SHALL HAVE SOLE AUTHORITY OVER THE FOLLOWING MATTERS BUT MAY CONSIDER THE RECOMMENDATIONS OF THE CHCS BOARD OF TRUSTEES IN RESPECT THEREOF: (I)ANY CHCS REAL PROPERTY TRANSACTION OR CAPITAL PROJECTS INVOLVING THE SALE, PLEDGE, TRANSFER OR OTHER ENCUMBRANCE OF REAL PROPERTY OR OTHER FIXED ASSETS OF CHCS EQUAL TO OR ABOVE A VALUE OF $400,000; (V)ANY LEASE OF REAL PROPERTY FOR A PERIOD EQUAL TO OR GREATER THAN NINE (9) YEARS; (VI)ANY DEBT INCURRENCE BY CHCS IN AN AMOUNT EQUAL TO OR GREATER THAN $400,000 SECURED BY THE PROPERTY, REVENUES, OR OTHER ASSETS OF CHCS OR A CHCS INSTITUTION, AND ANY UNSECURED DEBT INCURRENCE BY ANY ONE OF OR GROUP OF THE CHCS ENTITIES, IN AN AMOUNT GREATER THAN $3,000,000; (VII) THE ESTABLISHMENT OF A NEW RELATED ENTITY BY CHCS; (VIII)ANY DISPOSITION OF ARTIFACTS OF SIGNIFICANT HISTORICAL OR ARTISTIC VALUE; (IX)APPROVAL OF ANY MERGER, CONSOLIDATION, PURCHASE OR JOINT OPERATING AGREEMENT INVOLVING THE CORPORATION; AND (X)APPROVAL OF ANY PLAN OF DISSOLUTION OR LIQUIDATION OF THE CORPORATION. FORM 990, PART VI, SECTION B, LINE 11 CATHOLIC HEALTH CARE SYSTEM D/B/A ARCHCARE HAS ITS FORM 990 PREPARED BY AN OUTSIDE ACCOUNTING FIRM AND HAS ESTABLISHED THE FOLLOWING REVIEW PROCESS TO ENSURE THAT THE INFORMATION REPORTED IS COMPLETE AND ACCURATE. WHEN THE FORM 990 HAS BEEN PREPARED, REVIEWED BY MANAGEMENT AND IS READY TO BE FILED WITH THE INTERNAL REVENUE SERVICE, IT IS ELECTRONICALLY SENT TO THE BOARD MEMBERS OF THE ORGANIZATION FOR ANY COMMENTS. ANY COMMENTS ARE THEN GROUPED, SUMMARIZED AND PROVIDED TO THE OUTSIDE ACCOUNTANTS. EACH ISSUE IS DOCUMENTED AND ADDRESSED UNTIL THE RETURN IS FINALIZED AND APPROVED FOR FILING. FORM 990, PART VI, SECTION B, LINE 12C THE POLICY ON CONFLICTS OF INTEREST IS DESIGNED TO PROVIDE GUIDANCE TO ALL MEMBERS OF THE BOARD, THE OFFICERS OF THE ORGANIZATION, AND TO ALL PERSONS EMPLOYED BY THE ORGANIZATION. A BOARD MEMBER OR OFFICER SHALL DISCLOSE ANY CONFLICT OF INTEREST OF WHICH HE OR SHE HAS KNOWLEDGE: (A) PRIOR TO VOTING ON OR OTHERWISE DISCHARGING HIS OR HER DUTIES WITH RESPECT TO ANY MATTER INVOLVING THE CONFLICT WHICH COMES BEFORE THE BOARD OR ANY COMMITTEE OF THE BOARD; (B) PRIOR TO ENTERING INTO ANY CONTRACT OR TRANSACTION INVOLVING THE ORGANIZATION; (C) AS SOON AS POSSIBLE AFTER THE BOARD MEMBER OR OFFICER SHALL LEARN OF A CONFLICT OF INTEREST IN ANY OTHER CONTEXT. DISCLOSURE OF THE MATERIAL FACTS SURROUNDING THE BOARD MEMBER OR OFFICER'S CONFLICT OF INTEREST SHALL BE MADE TO THE SECRETARY OF THE BOARD OF MANAGERS OR, IN THE CASE OF A COMMITTEE, TO THE CHAIRPERSON OF THAT COMMITTEE (WHO SHALL NOTIFY THE SECRETARY). THE SECRETARY OR COMMITTEE CHAIRPERSON SHALL INFORM THE OTHER MEMBERS OF THE BOARD OR COMMITTEES PRIOR TO ANY ACTION THEREON. FAILURE TO DISCLOSE ADEQUATELY A POTENTIAL OR ACTUAL CONFLICT OF INTEREST SHALL CONSTITUTE CAUSE FOR REMOVAL FROM THE BOARD. FOLLOWING RECEIPT OF INFORMATION CONCERNING A CONTRACT OR TRANSACTION INVOLVING A POTENTIAL CONFLICT OF INTEREST, THE BOARD SHALL CONSIDER THE MATERIAL FACTS CONCERNING THE PROPOSED CONTRACT OR TRANSACTION, INCLUDING THE PROCESS BY WHICH THE DECISION WAS MADE TO RECOMMEND ENTERING INTO THE ARRANGEMENT ON THE TERMS PROPOSED. (A) AN INTERESTED PERSON MAY MAKE A PRESENTATION AT THE BOARD OR COMMITTEE MEETING, BUT AFTER SUCH PRESENTATION, HE OR SHE SHALL LEAVE THE MEETING DURING THE DISCUSSION OF, AND VOTE ON, THE TRANSACTION OR ARRANGEMENT THAT RESULTS IN THE CONFLICT OF INTEREST. AN INTERESTED BOARD MEMBER MAY NOT BE COUNTED IN DETERMINING THE PRESENCE OF A QUORUM AT A MEETING OF THE BOARD OR COMMITTEE AT WHICH DISCUSSION OR A VOTE ON THE TRANSACTION OR ARRANGEMENT TAKES PLACE. (B) AN INTERESTED BOARD MEMBER OR OFFICER SHALL NOT USE PERSONAL INFLUENCE WITH REGARD TO THE BOARD'S DETERMINATION THAT A CONFLICT EXISTS OR THE BOARD'S VOTE ON THE MATTER. (C) IF APPROPRIATE, THE CHAIRPERSON SHALL APPOINT A DISINTERESTED PERSON OR A COMMITTEE OF THE BOARD TO CONDUCT AN ASSESSMENT OF FAIR MARKET VALUE FOR A PARTICULAR TRANSACTION, OR TO INVESTIGATE ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT. (D) THE BOARD SHALL APPROVE ONLY THOSE CONTRACTS OR TRANSACTIONS IN WHICH THE TERMS ARE FAIR AND REASONABLE TO THE ORGANIZATION AND THE ARRANGEMENTS ARE CONSISTENT WITH THE BEST INTERESTS OF THE ORGANIZATION. THE MINUTES OF THE BOARD AND OF ALL COMMITTEES WITH BOARD DELEGATED POWERS SHALL CONTAIN THE FOLLOWING WITH REGARD TO CONSIDERATION OF ANY MATTER INVOLVING A CONFLICT OF INTEREST: (A) THE NAMES OF THE PERSONS WHO DISCLOSED OR OTHERWISE WERE FOUND TO HAVE A FINANCIAL OR OTHER INTEREST IN CONNECTION WITH AN ACTUAL OR POSSIBLE CONFLICT OF INTEREST, THE NATURE OF THE CONFLICT OF INTEREST, ANY ACTION TAKEN TO DETERMINE WHETHER A CONFLICT OF INTEREST WAS PRESENT, AND THE BOARD'S OR COMMITTEE'S DECISION AS TO WHETHER A CONFLICT OF INTEREST IN FACT EXISTED; (B) THE NAMES OF THE PERSONS WHO WERE PRESENT FOR DISCUSSION AND VOTES RELATING TO THE TRANSACTION OR ARRANGEMENT, A SUMMARY OF THE CONTENT OF THE DISCUSSION, INCLUDING CONSIDERATION OF ALTERNATIVES TO THE PROPOSED TRANSACTION OR ARRANGEMENT AND THE NATURE OF AND SOURCE OF ANY DATA RELIED UPON IN MAKING AN ASSESSMENT OF FAIR MARKET VALUE, AND A RECORD OF ANY VOTES TAKEN IN CONNECTION THEREWITH; AND (C) IN ANY CASE WHEN THE BOARD APPROVES AN ARRANGEMENT OR TRANSACTION INVOLVING A CONFLICT OF INTEREST, THE MINUTES OF THE MEETING SHALL SET FORTH THE BASIS FOR THE BOARD'S DECISION. AN EMPLOYEE OF THE ORGANIZATION WITH A POTENTIAL CONFLICT OF INTEREST IN A PARTICULAR MATTER SHALL PROMPTLY AND FULLY DISCLOSE THE POTENTIAL CONFLICT TO HIS OR HER SUPERVISOR. THE EMPLOYEE SHALL THEREAFTER REFRAIN FROM PARTICIPATING IN ANY DECISIONS RELATING TO THE MATTER AND FOLLOW THE DIRECTION OF THE SUPERVISOR AS TO HOW THE ORGANIZATION'S DECISIONS WHICH ARE THE SUBJECT OF THE CONFLICT WILL BE DETERMINED. THE COMPLIANCE DIRECTOR OF THE ORGANIZATION SHALL BE RESPONSIBLE FOR DETERMINING THE PROPER WAY FOR THE ORGANIZATION TO HANDLE THE ORGANIZATION'S DECISIONS WHICH INVOLVE UNRESOLVED EMPLOYEE CONFLICTS OF INTEREST. IN MAKING SUCH DETERMINATIONS, THE COMPLIANCE DIRECTOR OF THE ORGANIZATION MAY CONSULT WITH LEGAL COUNSEL, AS APPROPRIATE. THE COMPLIANCE DIRECTOR OF THE ORGANIZATION SHALL REPORT TO THE BOARD AT LEAST ANNUALLY CONCERNING EMPLOYEE CONFLICTS OF INTEREST WHICH HAVE BEEN DISCLOSED AND CONTRACTS AND TRANSACTIONS INVOLVING EMPLOYEE CONFLICTS WHICH THE SECRETARY OF THE ORGANIZATION'S BOARD OF MANAGERS HAS APPROVED. EACH BOARD MEMBER, OFFICER, MEMBER OF A COMMITTEE WITH BOARD DELEGATED POWERS, AND KEY EMPLOYEE OF THE ORGANIZATION SHALL SIGN A STATEMENT WITHIN 30 DAYS OF ASSUMING SUCH RESPONSIBILITY, AND ANNUALLY THEREAFTER, AFFIRMING THAT SUCH PERSON: (A) HAS RECEIVED A COPY OF THE CONFLICT OF INTEREST POLICY; (B) HAS READ AND UNDERSTANDS THE POLICY; (C) HAS AGREED TO COMPLY WITH THE POLICY; AND (D) UNDERSTANDS THAT THE ORGANIZATION CANNOT ENGAGE IN A TRANSACTION OR ENTER INTO A COMPENSATION ARRANGEMENT WITH BOARD MEMBERS, OFFICERS, SENIOR STAFF MEMBERS, OR OTHERS IN A POSITION TO EXERCISE SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE ORGANIZATION THAT PROVIDES AN ECONOMIC BENEFIT TO SUCH PERSON IN EXCESS OF THE CONSIDERATION OR SERVICES THAT THE ORGANIZATION RECEIVES IN RETURN. IN ADDITION, THOSE INDIVIDUALS COMPLETING THE STATEMENT ARE ALSO REQUIRED TO DISCLOSE PERSONAL OR OTHER BUSINESS INTERESTS THAT COULD GIVE RISE TO CONFLICTS WITH THEIR ROLE WITH ARCHCARE. THESE STATEMENTS ARE SUMMARIZED AND PROVIDED TO THE GOVERNING BODY ANNUALLY. FORM 990, PART VI, SECTION B, LINE 15 THE CORPORATION UNDERTAKES A RIGOROUS PROCESS TO ENSURE THAT ITS EXECUTIVE COMPENSATION IS REASONABLE AND COMPETITIVE. TOWARD THAT END, THE BOARD OF TRUSTEES HAS A COMPENSATION COMMITTEE OF INDEPENDENT PERSONS THAT HAVE NO PERSONAL INTEREST IN ANY PROPOSED COMPENSATION ARRANGEMENT. IN 2008, THE BOARD ENGAGED AN INDEPENDENT COMPENSATION CONSULTANT WHO CONDUCTED INDEPENDENT RESEARCH AND UTILIZED A WIDE RANGE OF INDUSTRY DATA TO DEVELOP COMPARABILITY OR BENCHMARKING DATA FOR APPROPRIATE LEVELS OF COMPENSATION FOR TOP MANAGEMENT, OFFICERS, AND KEY EMPLOYEES. IN ADDITION, THE CONSULTANT CREATED A COMPENSATION STRUCTURE FOR ALL OTHER POSITIONS (NON-UNION). THIS STRUCTURE IS REVIEWED EVERY THREE YEARS. THE CONSULTANT REVIEWS EXECUTIVE COMPENSATION ANNUALLY AND REVIEWS THESE RESULTS WITH THE COMPENSATION COMMITTEE. THE CONSULTANT PROJECTED THE DATA FOR THE FOLLOWING THREE YEARS FOR EACH SALARY LEVEL. THE COMPENSATION COMMITTEE, TAKING THE CONSULTANT'S RECOMMENDATIONS UNDER ADVISEMENT, HELD A MEETING AT WHICH CONTEMPORANEOUS MINUTES WERE KEPT AND AT THAT MEETING DETERMINED TO MAKE RECOMMENDATIONS TO THE BOARD OF TRUSTEES. THE BOARD OF TRUSTEES THEN CONSIDERED AND APPROVED THE RECOMMENDATIONS OF THE COMPENSATION COMMITTEE, WHICH APPROVAL WAS RECORDED IN THE MINUTES OF THE MEETING OF THE BOARD OF TRUSTEES. IN 2014, THE CONSULTANT UPDATED ITS REVIEW OF THE COMPENSATION STRUCTURE OF TOP MANAGEMENT, OFFICERS, AND KEY EMPLOYEES FOLLOWING THE METHOD DESCRIBED ABOVE. IN 2015, IT IS PLANNED THAT THE CONSULTANT WILL UPDATE ITS REVIEW OF THE COMPENSATION STRUCTURE FOR ALL OTHER POSITIONS (NON-UNION). 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. THE RETURN IS POSTED ON GUIDESTAR.ORG AND OTHER SIMILAR TYPES OF WEBSITES. IN ADDITION, THE FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, ARTICLES OF INCORPORATION, FORM 990, FORM 1023, AND BY-LAWS ARE ALSO AVAILABLE UPON WRITTEN REQUEST OR BY CALLING THE ORGANIZATION DIRECTLY. FORM 990, PART IX, LINE 11G CONSULTING: PROGRAM SERVICE EXPENSES 189,600. MANAGEMENT AND GENERAL EXPENSES 1,213,566. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 1,403,166. PHARMACY FEES: PROGRAM SERVICE EXPENSES 0. MANAGEMENT AND GENERAL EXPENSES 205,314. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 205,314. TEMPORARY HELP: PROGRAM SERVICE EXPENSES 0. MANAGEMENT AND GENERAL EXPENSES 76,967. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 76,967. CONTRACTED MEDICAL SERVICES: PROGRAM SERVICE EXPENSES 23,599,742. MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 23,599,742. CLAIMS PROCESSING: PROGRAM SERVICE EXPENSES 0. MANAGEMENT AND GENERAL EXPENSES 779,000. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 779,000. ENGINEERING: PROGRAM SERVICE EXPENSES 0. MANAGEMENT AND GENERAL EXPENSES 4,676. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 4,676. HOUSEKEEPING: PROGRAM SERVICE EXPENSES 0. MANAGEMENT AND GENERAL EXPENSES 12,374. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 12,374. SKILLED NURSING: PROGRAM SERVICE EXPENSES 0. MANAGEMENT AND GENERAL EXPENSES 31,560. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 31,560. FORM 990, PART XI, LINE 9: PENSION LIABILITY ADJUSTMENT -6,610,036. EQUITY TRANSFERS TO AFFILIATES -3,497,991. FORM 990, PART XII, LINE 2C: THE ORGANIZATION HAS A COMMITTEE THAT ASSUMES RESPONSIBILITY FOR OVERSIGHT OF THE AUDIT OF ITS FINANCIAL STATEMENTS AND SELECTION OF AN INDEPENDENT ACCOUNTANT. THIS PROCESS DID NOT CHANGE FROM THE PRIOR YEAR. 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