2013-01-10T10:03:57-06:00 2011-12-31 861065772 Deloitte Tax LLP 701 Poydras St Suite 4200 New Orleans LA 701394200 990 2011-01-01 205297040 Ochsner Community Hospitals OCHS 5048423400 1514 Jefferson Highway New Orleans LA 70121 Bobby C Brannon 5048423400 2013-01-10 1 Peter A Vernaci P00353578 5045812727 2011 2016-03-07 17:11:31Z Patrick J Quinlan 1514 Jefferson Highway New Orleans LA 70121 695614748 0 X www.ochsner.org X 2006 LA Provides Patient Care via ownership and operation of 2 hospitals in the New Orleans, LA area. 15 9 1693 90 0 0 0 164061 662987788 692379391 4682 6178 1974404 1931719 664966874 694481349 0 0 0 0 68935384 68681712 0 0 158864 604774393 630255825 673709777 698937537 -8742903 -4456188 147143219 144682508 245608219 247687508 -98465000 -103005000 X We Serve, Heal, Lead, Educate and Innovate. Ochsner will be a global medical and academic leader who will save and change lives. We will shape the future of healthcare through our integrated health system, fueled by the passion and strength of our diversified team of physicians and employees. 0 0 676354115 687610652 Patient Care: Ochsner Community Hospitals operates two hospitals that served 18,461 inpatients for a total of 69,947 patient days. Outpatient visits totaled 142,856. There were a total of 1,234 births and 57,789 Emergency Room visits to Ochsner Community Hospital locations. 475521 4680655 Rental from Physical Plant: Ochsner Community Hospitals rents its physical plant to Ochsner Clinic Foundation and Ochsner Health System, related 501(c)(3) organizations. 88084 Equity income from Joint Ventures: Ochsner Community Hospitals owns a 25% share of Louisiana Extended Care Hospital of Kenner, a company that provides long term acute care services and records its share of the equity in the joint venture. 676829636 1 1 0 1 0 0 0 0 0 0 1 0 0 0 1 0 1 1 0 0 0 0 0 0 0 0 1 1 0 0 1 1 0 0 0 0 0 0 0 0 1 1 0 0 0 0 1 1 0 0 0 0 1 152 0 1 1693 1 0 0 0 0 0 0 0 0 0 0 X 15 9 1 0 0 0 1 1 1 1 1 0 1 1 1 1 1 1 1 0 1 1 1 0 X Bobby C Brannon 5048423400 1514 Jefferson Highway New Orleans LA 70121 X Joseph L Breault MD 1.00 X 0 217433 61994 Angele Davis 1.00 X 0 0 0 William H Hines 1.00 X 0 0 0 Yvens G Laborde MD 1.00 X 0 344982 59137 R Parker LeCorgne 1.00 X 0 0 0 Patrick J Quinlan MD 1.00 X X 0 3333304 56107 Suzanne T Mestayer 1.00 X 0 0 0 Richard Milani MD 1.00 X 0 679327 86149 Jefferson G Parker 1.00 X 0 0 0 Robert J Patrick 1.00 X 0 0 0 F R Bobby Rodwig Jr MD 1.00 X 0 443665 55425 Steve Stumpf 1.00 X 0 0 0 Jose S Suquet 1.00 X 0 0 0 Andrew B Wisdom 1.00 X 0 0 0 James E Maurin 1.00 X 0 0 0 Warner L Thomas 1.00 X 0 1929088 913470 Scott J Posecai 1.00 X 0 1458144 120597 Bobby C Brannon 1.00 X X 0 719980 43084 Joseph E Bisordi MD 1.00 X 0 1012718 140624 Ava Jo Collins 1.00 X 92693 86455 23109 Nancy L Davis 1.00 X 0 321092 51501 Mark Eckert 50.00 X 192273 0 38803 Bradley Goodson 50.00 X 193812 0 35463 Sylvia D Hartmann 50.00 X 168401 0 30925 Dawn Puente MD 50.00 X 0 258385 49156 Eddy Ramirez 1.00 X 150358 0 34946 James Tebbe Jr MD 50.00 X 0 229980 45677 Robert Wolterman 50.00 X 314852 0 37619 Paolo Zambito 50.00 X 208078 0 26606 April Brabham 50.00 X 117533 0 24921 Kenneth Lataxes 50.00 X 109949 0 39488 Barries Leung 50.00 X 119180 0 20166 Donna Martin 50.00 X 133949 0 33460 Suzanne Warren 50.00 X 135032 0 35314 Lisa S Colletti 0.00 X 0 250128 25066 1936110 11284681 2088807 30 1 1 0 LOUISIANA STATE UNIVERSITY 433 Bolivar St New Orleans LA 70112 Purchased Physician Services 8611993 ANESTHESIA CONSULTANTS OF THE 2820 Napoleon Ave Ste 650 New Orleans LA 70115 Anesthesia Care 3004240 MORRISON MANAGEMENT 5801 Peachtree Dunwoody Road Atlanta GA 30342 Food Service Consultants and Providers 1490586 VIRTUAL RADIOLOGIC CORPORATION 11995 Singletree Ln Ste 500 Eden Prairie MN 55344 Radiology Service 792954 CANTRELLE COMPANY LLC 2108 Butternut Ave Metairie LA 70001 Construction Contractor 633827 28 41862 122199 164061 Patient Svc Revenue 621110 687610652 687279635 331017 Rent-Rel Exempt Org 531120 4680655 4680655 Equity Income from Joi 621990 88084 88084 692379391 4260 4260 3065118 1133399 1931719 1931719 1931719 1918 0 1918 1918 1918 694481349 687367719 0 6949569 1536787 1536787 57995052 48953730 8962200 79122 1121611 1082559 38783 269 4231671 3297176 916416 18079 3796591 3478073 318503 15 5431251 851348 4541236 38667 12000 12000 35773 35773 14914066 14183460 730605 1 86336 26858 59478 42978329 42223733 752102 2494 244232 212869 31363 7322901 4780577 2524562 17762 14075 1964 12111 95842 29622 66219 1 4642450 4642450 8329598 7357010 970138 2450 1327757 1325206 2550 1 Discounts & Allowances 519842523 519842523 Bad Debt Expense 8565049 8565049 Charity Care-Gross Exp 7687162 7687162 Buldg & Equip Rep & Mnt 4840315 4728774 111538 3 3886166 3559493 326673 698937537 676829636 21949037 158864 162635 7064822 7405344 5259496 122703 49245 28748143 28104126 3603780 3752114 2971754 3159484 126254003 33312793 92924356 92941210 7728979 3475525 4352011 147143219 144682508 99095676 127745369 188605 291217 75286828 74569585 70777113 44554674 259997 526663 245608219 247687508 X -99046000 -103545000 581000 540000 -98465000 -103005000 147143219 144682508 X -4456188 -83812 X X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 67537 67537 676762099 676829636 1000000 250000 0 0 1000000 1000000 1000000 1000000 4000000 6000000 72951 54471 79066 67537 274025 250000 250000 250000 250000 1000000 1500000 13120372 13120372 78359481 16666732 61692749 161109 5370 155739 30402141 16233600 14168541 4210900 407091 3803809 92941210 Lease Liability 50865 Construction Retention 192251 Customer Deposits 91084 Worker's Compensation Liability 189484 Miscellaneous 2979 526663 694481349 698937537 -4456188 -82812 -82812 -4539000 160527000 1170720 1170720 159356280 535125069 535125069 694481349 165025000 0 165025000 533912537 533912537 698937537 Description of Uncertain Tax Positions Under FIN 48: Part X: Ochsner Community Hospitals has reviewed its tax positions and concluded that there are no significant uncertain tax positions requiring recognition in its financial statements under FIN 48. Part XI, Line 8 - Other Adjustments: Changes in Temporary Restricted Net Assets -41,000. Net assets released for capital acquisitions 123,275. Changes in Fund Balances- Contributions -164,061. Other -2,026. Rounding 1,000. Total to Schedule D, Part XI, Line 8: -82,812. Part XII, Line 2d - Other Adjustments: Net Assets Released for Capital Acquisitions 123,275. Revenue items that offset expenses on the Form 990 1,047,445. Part XII, Line 4b - Other Adjustments: Grants and Contributions 164,061. Total Discounts & Allowances 519,842,523. Charity Care 7,687,162. Bad Debt Expense 8,565,049. Rental Expenses on Line 6b -1,133,399. Difference due to Rounding -327. Part XIII, Line 4b - Other Adjustments: Total Discounts & Allowances 519,842,523. Charity Care 7,687,162. Bad Debt Expense 8,565,049. Revenue items that offset expenses on the Form 990 -1,047,445. Intercompany Rental Income on Line 6a -1,133,399. Other -1,353. 1 1 X 1 X 0 1 1 1 0 1 0 624025 624025 0.00090 624025 624025 0.00090 102250 7623 94627 0.00010 3373796 2035392 1338404 0.00190 1060108 323938 736170 0.00110 20351 3634 16717 0.00000 4556505 2370587 2185918 0.00310 5180530 2370587 2809943 0.00400 10932 3233 7699 0.00000 190 95 95 0.00000 17020 47 16973 0.00000 28142 3375 24767 0 3195336 0 29032227 28626440 405787 X 1 1 2 1 Ochsner Medical Center - Kenner LLC

180 West Esplanade Avenue Kenner LA 70065

X X X X 2 Ochsner Baptist Medical Center LLC

2700 Napoleon Avenue New Orleans LA 70115

X X X X Ochsner Medical Center - Kenner LLC 1 1 1 200.000000000000 1 380.000000000000 1 X 1 1 X X 1 X 0 1 X 0 0 Ochsner Baptist Medical Center LLC 2 1 1 200.000000000000 1 380.000000000000 1 X 1 1 X X 1 X 0 1 X 0 0 Part I, Line 3c: Hospital Services for uninsured patients automatically qualify for a discount in 2011, regardless of the patient's financial status. The discount was 60% at Ochsner Baptist Medical Center and 75% at Ochsner Medical Center-Kenner. Part I, Line 6a: The community benefit report prepared by Ochsner Clinic Foundation is representative of the entire health system, including Ochsner Community Hospitals. The amounts reported in Schedule H are those amounts that are either directly incurred by Ochsner Community Hospitals or those that have been allocated to Ochsner Community Hospitals as a reimbursement to another organization. Part I, Line 7: For charity care at cost, the ratio of total patient care cost to total charges from Worksheet C of the Medicare cost reports for each hospital was applied to that hospital's total charity care charges from Worksheet S-10. Part I, Line 7, Column (f): The Bad Debt expense included on Form 990, Part IX, Line 25, Column (A), but subtracted for purposes of calculating the percentage in this column is $ 8565049. Part II: Ochsner endeavors to promote the health of the communities of the hospitals in the system via community building activities. Ochsner Community Hospitals' community building activities promote the health of the communities the organization serves by targeting youth organizations. Ochsner partners with the Junior League of New Orleans, whose purpose includes Children's Wellbeing and Education and Healthy Families. Ochsner also partners with Junior Achievement, which educates young people about economics, business and financial literacy. This will allow them to develop into successful adults, teach them to educate themselves about their circumstances (including their health), and may lead them to join the healthcare workforce. Part III, Line 4: Any discounts provided or payments made to a particular patient account are applied to that patient account prior to any bad debt write-off and are, thus, not included in bad debt expense. The provision for uncollectible accounts is based upon management's assessment of historical and expected net collections considering historical business and economic conditions, trends in health care coverages, and other collection indicators. Periodically, management assesses the adequacy of the allowance for uncollectible accounts based upon historical write-off experience by payor category. The results of this review are then used to make modifications to the provision for uncollectible receivables. After satisfaction of amounts due from insurance, the System follows established guidelines for placing certain past due patient balances with collection agencies, subject to the terms of certain restrictions on collection efforts as determined by the system.Bad debt expense at cost is calculated by applying the ratio of patient care cost to charges to the bad debt expense calculated using the above methodology. Part III, Line 8: Medicare shortfall is not considered community benefit.Total revenue from Medicare has been taken from the E Series in the Medicare Cost Reports. They do not include Medicare Advantage or payments related to Education or Research, in compliance with the instructions. Medicare Allowable Costs were aggregated from the fiscal year cost reports for all hospitals. Worksheet D Part V Line 202 Column 5 was used for outpatient costs and Worksheet D-1 Part II Line 49, and Worksheet D-1 Part III Line 86, and Worksheet E Part A Line 55 was used for inpatient costs.The cost reports used for this schedule were the cost reports for Fiscal Year 2011. The cost report for Ochsner Medical Center - Kenner (Provider No. 19-0274) covers the period 5/1/2010 - 4/30/2011. The cost report for Ochsner Baptist Medical Center (Provider No. 19-0135) covers the period 6/1/2010 - 5/31/2011. Part III, Line 9b: Upon granting approval for 100% assistance, all collection efforts for that account will cease, the account will not be turned over to a collection agency, and Ochsner will not impose extraordinary collection efforts such as garnishments or liens. Ochsner Medical Center - Kenner, LLC Part V, Section B, Line 19d: The maximum amount charged is based on the average of the rates of the two largest commercial insurers. Ochsner Baptist Medical Center, LLC Part V, Section B, Line 19d: The maximum amount charged is based on the average of the rates of the two largest commercial insurers. Part VI, Line 2: Ochsner serves the needs of the community through its commitment is to exemplary patient care, medical research and education. Ochsner Community Hospitals is part of Ochsner Health System, which comprises a total of eight hospitals (including two satellite locations) and approximately 40 health centers, when Ochsner Community Hospitals and Ochsner Clinic Foundation (an affiliated 501(c)(3) corporation) are combined.In order to identify the needs of the community, Ochsner reviews local and state publicly available data regarding the health status and issues in its regions. Ochsner works with community organizations that collect information on their areas of focus to identify trends and areas where Ochsner has expertise that can make an impact. Ochsner collaborates with multiple community stakeholders to identify specific community needs in its regions. Ochsner then reviews these needs and determines where it can best use its resources and expertise to affect those needs. One of Ochsner's main focuses is to develop partnerships to address root causes of issues. One example of this process is a school based health clinic with Jefferson parish schools. Based on the demographics for the students in the public school system, it was identified that a school based clinic was needed at Bonnabel High School in Kenner. Ochsner is the medical partner for the facility (the Bonnabel site opened in 2008). Part VI, Line 3: Ochsner partners with The Outsource Group for Medicaid enrollment. The Outsource Group have representatives on site at each of the hospitals. Ochsner provides to the representatives daily reports of all uninsured in observation, inpatient, outpatient, emergency room and clinic status. The representatives visit with each patient and screen each patient to determine whether or not each patient meets the minimum requirements to qualify for Medicaid. If the minimum requirements are met, additional information is obtained from the patient to file a Medicaid application.If the minimum requirements are not met, the screening form is referred to a financial counselor to discuss payment options and assist the patient with the completion of a financial assistance application to determine if the patient qualifies for any other assistance programs including charity care. Internal customer service departments and external partners including collection agencies provide patients with financial assistance applications if patients express concerns about the inability to pay outstanding balances. Beginning in 2011, Ochsner began placing signs in all facilities with respect to charity care along with brochures and the charity care policy is included in every patient statement. Ochsner also offers no interest payment plan options with payment terms ranging from six to 60 months. Part VI, Line 4: Ochsner Community Hospitals has two multi-specialty hospitals that serve the New Orleans metropolitan area. Therefore, the patients vary in age, gender, and race. The population of the New Orleans region was estimated at approximately 1,191,000 in 2011. The New Orleans metropolitan area has approximately 201,000 uninsured individuals, or approx. 16.9% of the total population.Overall, the state of Louisiana has the fourth highest poverty level in the nation as of 2011 estimates with a poverty level of 18.0%.Ochsner Baptist Medical Center, formerly Baptist Hospital, has a deep-rooted history in Uptown New Orleans. The population of New Orleans was estimated at approximately 361,000 in 2011 based upon the 2010 census. With the additions made recently, including an emergency room, an expanded ICU, and additional patient beds, Ochsner Baptist is capable of handling virtually all medical and surgical cases, with the exception of trauma, obstetrics, andopen-heart and neurological surgery. Estimates for 2011 place the Orleans Parish poverty level at approximately 29.0%. Ochsner Medical Center-Kenner is an acute care community hospital located in Kenner, Louisiana. Kenner is located on the East bank of Jefferson Parish, which had an estimated population of 433,000 in 2011. Approximately 55.3% of the population of Jefferson Parish lives on the East bank (roughly north of the Mississippi River as it runs through the region). Ochsner Medical Center-Kenner encompasses most all of the services that a patient may need, including a renovated 15 bed Level II Emergency Room. Estimates for 2011 place the Jefferson Parish povertylevel at approximately 14.0%. Part VI, Line 5: Having a diverse representation of the community in each of its community hospital governing boards is an important part of making sure all aspects of the community Ochsner serves are being touched by the mission and vision of our organization. While Ochsner Community Hospitals is governed by a board comprised of a majority of independent community directors, each community hospital is managed by a Governing Board that has anywhere from 10 to 19 Directors. The Chief Executive Officer of the hospital serves on the Board by virtue of his or her office; however, a majority of Board members are prominent multi-disciplinary business and community leaders. Their role is primarily to ensure that quality and credentialing of providers is performed in accordance with expectations and within State and Federal laws and regulations. The Chair of each Governing Board is a member of the Chairman's Council of the Ochsner Health System Board of Directors, an informal gathering of each Chair to discuss common themes and challenges in the communities surrounding the hospitals and how each can leverage from the other to meet the needs of the community as a whole.Both Ochsner Medical Center-Kenner, LLC and Ochsner Baptist Medical Center, LLC, disregarded entities of Ochsner Community Hospitals as the sole member, have open medical staff models, continuing the arrangement that has been in place since these two hospitals were acquired in September 2006.To help further promote the health of the community, Ochsner created the Choose Healthy initiative with a local grocery store chain which serves the same geographical region to educate shoppers. Ochsner nutritionists have identified over 500 items in the stores that meet healthy choice standards and these are marked with shelf talkers for easy identification on the aisles. The Choose Healthy initiative offers healthy cooking demonstrations, health screenings, and educational classes in the stores at no charge. There is also a website which offers shopping lists, recipes, healthy living tips and videos. All of this is available to the general public at no charge.Ochsner Health System announced a tobacco free initiative in 2010 in which all of its campuses and clinic locations became tobacco free by mid-2011. Use of all tobacco products is prohibited for all employees, patients and visitors at any Ochsner location. As a healthcare organization, Ochsner is leading by example. Ochsner Health System conducted a mental health survey on residents of areas affected by the Gulf of Mexico oil spill in 2010. The survey results brought attention to the need for mental health assistance for the communities that Ochsner serves.In addition to providing quality medical care to patients who visit Ochsner's hospitals and clinics, Ochsner has embraced the concept that good health doesn't begin at the doctor's office, it begins where you live, learn, work and play. Programs have been developed to promote health in our communities through education and provision of healthcare services. Some significant activities are listed below:Ochsner provides community health fairs in all its regions by organizing our own fairs and by providing staff for events being offered by other organizations. Ochsner also hosts educational forums about specific health related topics through our Hello Health programs. These are held in the community as well as on WLAE TV, a public television station in New Orleans. Ochsner staff members have also attended numerous community group meetings in order to provide health education information.Ochsner provides education and support to the Jefferson parish public school system in nutrition and physical fitness to address the childhood obesity epidemic in LA, which is ranked the 5th worst state in the nation for childhood obesity.Ochsner delivers a newsletter which highlights healthy habits to the families of 11,000 elementary school students in the fourth and fifth grades which highlights healthy habits.Ochsner sponsors and participates in multiple programs that address community economic and workforce development for the greater good. These activities support the community by offering Ochsner's expertise and resources, including sponsoring fund raising events of community organizations, and providing financial support for scholarship programs.Ochsner provides support to numerous schools, both public and parochial, throughout Southeast Louisiana, including three "adopted" schools in the New Orleans/Jefferson Parish area. In addition, Ochsner has developed a dedicated student/outreach lab as an additional resource or training lab for schools in our community. Part VI, Line 6: Ochsner Health System is the supporting organization to Ochsner Clinic Foundation and Ochsner Community Hospitals. While each of the eight hospitals within the System promote the health within the separate geographical communities that they service, many overall community health initiatives are coordinated by Ochsner Health System which is then reimbursed by the respective entities. Part VI, Line 7: The organization does not file a community benefit report with any state. X X X X X 0 1 0 0 0 1 1 1 0 Joseph L Breault MD 0 201546 0 11411 0 4476 0 41619 0 20375 0 279427 0 0 Yvens G Laborde MD 0 283871 0 60270 0 841 0 42599 0 16537 0 404118 0 0 Patrick J Quinlan MD 0 898835 0 712800 0 1721669 0 45300 0 10807 0 3389411 0 1687861 Richard Milani MD 0 434688 0 85000 0 159639 0 66675 0 19475 0 765477 0 0 F R Bobby Rodwig Jr MD 0 372428 0 45000 0 26237 0 38688 0 16737 0 499090 0 0 Warner L Thomas 0 743094 0 538313 0 647681 0 894433 0 19037 0 2842558 0 628489 Scott J Posecai 0 517827 0 306250 0 634067 0 110553 0 10044 0 1578741 0 616669 Bobby C Brannon 0 406274 0 245000 0 68706 0 28800 0 14284 0 763064 0 0 Joseph E Bisordi MD 0 549293 0 443103 0 20322 0 128916 0 11708 0 1153342 0 0 Ava Jo Collins 79307 73969 11894 11094 1492 1392 9075 8465 2881 2688 104649 97608 0 0 Nancy L Davis 0 265781 0 50271 0 5040 0 43837 0 7664 0 372593 0 0 Mark Eckert 177185 0 14376 0 712 0 23300 0 15503 0 231076 0 0 0 Bradley Goodson 177451 0 15000 0 1361 0 19997 0 15466 0 229275 0 0 0 Sylvia D Hartmann 155199 0 12253 0 949 0 28126 0 2799 0 199326 0 0 0 Dawn Puente MD 0 232675 0 24470 0 1240 0 34778 0 14378 0 307541 0 0 Eddy Ramirez 148770 0 0 0 1588 0 17472 0 17474 0 185304 0 0 0 James Tebbe Jr MD 0 215412 0 13200 0 1368 0 26302 0 19375 0 275657 0 0 Robert Wolterman 272573 0 40000 0 2279 0 22693 0 14926 0 352471 0 0 0 Paolo Zambito 203844 0 0 0 4234 0 8069 0 18537 0 234684 0 0 0 Donna Martin 120987 0 12167 0 795 0 15800 0 17660 0 167409 0 0 0 Suzanne Warren 126223 0 7606 0 1203 0 18054 0 17260 0 170346 0 0 0 Lisa S Colletti 0 215701 0 30429 0 3998 0 24042 0 1024 0 275194 0 0 Part I, Line 4b Patrick Quinlan, M.D., Chief Executive Officer; Warner Thomas, President & Chief Operating Officer; Scott Posecai, Chief Financial Officer; and Bobby Brannon, Executive Vice President and Treasurer participate in a Supplemental Executive Retirement Plan (SERP) which is part of the terms and conditions of their employment contracts with Ochsner Health System and Ochsner Clinic Foundation and is based on a targeted replacement of a set percentage of their salary at age 65. The SERP is classified as a Supplemental Non-Qualified Retirement Plan. This benefit is funded in a Trust Account with Capital One Bank. The increases in actuarial value during 2011 were $0; $854,633; $65,253; and $0; respectively. Joseph Bisordi, Chief Medical Officer, participates in a Non-Qualified supplemental plan which is part of the terms and conditions of his employment contract with Ochsner Health System. The retirement calculations is a defined amount as a percent of base pay, calculated annually, and is earned at age 65, as a single vesting period. This benefit is funded in a Trust Account with Capital One Bank. Part I, Line 6 The Physician and Executive Compensation Committee of the OHS Board of Directors reviews and approves all officer executive incentive plans, which include those for the Officers; the CEO, President, CFO, Treasurer, Regional Medical Directors, and Executive Vice Presidents. For the 2010 incentive plan, which was paid in 2011, there were four weighted components: a System Financial Metric which consists of Operating Margin, a Quality and Patient Satisfaction Metric, a Human Capital Metric that consists of turnover and employee engagement survey results, and a Subjective metric based on their personal performance targets. The subjective metric is assigned for the CEO by the Physician and Executive Compensation Committee and assigned for the other executives by the CEO then reviewed by the Physician and Executive Compensation Committee. Metrics other than subjective are built on percent improvement year over year. The CEO and officers did meet annual targets as set by the terms and conditions of their employment contracts and therefore the compensation committee approved the payment of the Annual Incentive Plan which was recorded as part of their compensation in 2011. The Chief Medical Officer also makes recommendations and the committee approves any physician leader incentive plans which also include the same type of metrics regarding financial performance, human capital metrics, patient satisfaction and personal performance evaluation. All the incentive payouts are audited by the Board Internal Audit Committee. Annually, the officers of Ochsner Health System and Ochsner Clinic Foundation review and approve executive incentive plans for the executive and physician leadership group. The plans are developed similar to the officer incentive plans; they include four weighted components: a System Financial Metric which consists of Operating Margin, a Quality and Patient Satisfaction Metric, a Human Capital Metric that consists of turnover and employee engagement survey results, and a Subjective metric based on their personal performance targets. The subjective metric is assigned by the officer responsible for the executive or physician leader as their direct report and the CEO approves all bonuses for this group of management. All bonus amounts are provided in Schedule J Part II in Column B(ii). Part I, Line 7 Subjective components of incentive plan are described in description of Part I, Line 6. Supplemental Information Part III Part II, Column B(iii), Other Reportable Compensation for Patrick Quinlan, M.D., Chief Executive Officer; Warner Thomas, President & Chief Operating Officer; Scott Posecai, Sr. Vice President and Chief Financial Officer; and Bobby Brannon, Executive Vice President and Treasurer includes $1,687,861; $628,489; $616,669; and $0, respectively, as amounts includable in income under Section 457(f) due to vesting. A portion of this amount attributable to prior years has been reported by Ochsner Clinic Foundation in Column C Retirement and Other Deferred Compensation for the taxable years in which the respective amounts were deferred by the employee by section 457(f) but not substantially vested. Supplemental Information Part III ADDITIONAL COMPENSATION INFORMATION - COMPENSATION OF OFFICERS AND AVERAGE HOURS PER WEEK DEVOTED TO POSITION Compensation and average hours worked for Dr. Patrick Quinlan, Warner Thomas, Scott Posecai, and Bobby Brannon include all time related to the Ochsner Health System, which includes Ochsner Health System (OHS, EIN 20-5296918), Ochsner Clinic Foundation (OCF, EIN 72-0502505) and Ochsner Community Hospitals (OCH, EIN 20-5297040), all related 501(c)(3) organizations. Other members of the Ochsner network are charged a portion of these amounts. The amount of time spent by each officer as "average hours per week devoted to position" on the Form 990 of the organization that directly employs the individual consists primarily of role as an Officer of the integrated health system. Additional time spent on boards, committees and through fulfilling other responsibilities as Officer of the Ochsner organizations is shown on each Form 990. The amount of time on this return is shown as a nominal amount, but in reality the time is more evenly distributed across all entities. Supplemental Information Part III KEY EMPLOYEES COMPENSATED BY RELATED ORGANIZATIONS AND AVERAGE HOURS PER WEEK DEVOTED TO POSITION Dr. James Tebbe, Jr. and Dr. Dawn Puente were employed and compensated by Ochsner Clinic Foundation, 72-0502505, 501(c)(3), a related organization. Their time is split between the related organization and with Ochsner Community Hospitals, but in all other respects they met the requirements of a Key Employee of Ochsner Community Hospitals. Nancy Davis and Dr. Joseph Bisordi are employed and compensated by Ochsner Health System, 20-5296918, 501(c)(3), a related organization. Both, in their duties as leaders of the integrated health system, spend a substantial amount of their time on duties pertaining to Ochsner Community Hospitals, and in all other respects meet the requirements of Key Employees of Ochsner Community Hospitals. The amount of time shown for each key employee as "average hours per week devoted to position" on this form of the organization that pays the key employees directly consists primarily of role as a key employee of the integrated health system. Additional time spent on boards, committees and through fulfilling other responsibilities as a key employee of the Ochsner organizations is shown as a nominal amount on the forms of the related organizations, but in reality the time is more evenly distributed across all entities. Louisiana Public Facilities Authority 720895871 546398VQ8 2007-09-12 82014095 PROJ. REFI. ACQ. & FACILITY IMPROV. OCHSNER COMMUNITY HOSPITALS 0 0 0 82014095 4856147 895132 1130000 75846713 2009 0 0 1 1 0 0 1 1 0 1 0 0 0 0 0 0 Schedule K Supplental Information Form 8038 for CUSIP # 546398VQ8 was prepared for the issuance of Revenue Bonds (Ochsner Clinic Foundation Project) Series 2007A and Revenue Bonds (Ochsner Community Hospitals Project) Series 2007B. The bonds had a total Issue Price of $453,076,501.10. $371,062,405.65 of the Issue Price was issued for the benefit of Ochsner Clinic Foundation (EIN# 72-0502505), and the remaining $82,014,095.45 was issued for the benefit of Ochsner Community Hospitals (EIN# 20-5297040). Schedule K, Part II, Line 7: 100% of line 7 relates to issuance cost. Schedule K, Part III, Line 3a: All contracts meet IRS safe harbor rules per 97-13. Louisiana Extended Care Hospital at Kenner Joint Venture 88084 Dr. Tebbe, a key employee of OCF, was Board Chairman of Louisiana Extended Care Hospital at Kenner. Ochsner Community Hospitals participates in a Joint Venture through which it owns 25% of Louisiana Extended Care Hospital at Kenner. 0 Form 990, Part VI, Section A, line 1 1b: The Articles of Incorporation provide that no action of the Board may be resolved unless a majority of the independent directors present approve the matter. Thus, even in situations where there is not an absolute majority of independent directors in office, those independent directors in office control Ochsner Community Hospitals's activities. Form 990, Part VI, Section A, line 2 Dr. Quinlan and Mr. Suquet have a Business Relationship. Form 990, Part VI, Section A, line 6 Ochsner Community Hospitals is a wholly-owned subsidiary of Ochsner Health System, a related 501(c)(3) organization. Ochsner Community Hospitals is organized exclusively on a membership, non-stock basis. Ochsner Health System is the sole member of Ochsner Community Hospitals. Form 990, Part VI, Section A, line 7a All directors, other than the Chief Executive Officer, shall be elected by the Member. Form 990, Part VI, Section A, line 7b The Articles and Bylaws specify the following actions that require the affirmative vote or written consent of the Member: (1) Election of Directors other than the Chief Executive Officer (2) Amendment to the articles of incorporation of the Corporation (3) Corporate actions (4) Removal and replacement of any Director other than the Chief Executive Officer (5) Preparation or adherence to any capital or operating budget (6) Any expense, debt, or capital expenditure that exceeds the amount budgeted (7) Any action that is anticipated to reduce revenues below the amount budgeted (8) Any purchase or sale of any real property or encumbering any such property to secure a debt, if such action was not included in the budget (9) Guaranteeing the debt or obligation of any other person or entity (10) Beginning the practice of a health care service or specialty not previously engaged in by the Corporation if it was not included in the budget. (11) Causing or permitting the Corporation or any subsidiary of the Corporation to form or become the controlling member of any business entity (12) Amendment of any organizational or governing documents of any subsidiary (13) Establishment of any committee of the Board of Directors of the Corporation Form 990, Part VI, Section B, line 11 One or more members of senior management reviews the return. The return is also reviewed by Deloitte Tax LLP, the company's tax advisors. The Audit and Oversight Committee, which is comprised of independent directors, is then provided the return prior to the filing date and given the opportunity to review and discuss the returns with management/staff. The meeting to review the 2011 return was held on December 19, 2012. A copy of the return is then provided to each member of the Board of Directors electronically and comments are solicited from the entire Board. Form 990, Part VI, Section B, line 12c Officers, directors, trustees, and key employees are required to complete a conflicts of interest disclosure form annually, within 30 days of becoming an employee, or within 10 days of a change in business circumstances not previously disclosed. The Vice President of Corporate Integrity reviews disclosures and determines whether action is necessary or if the disclosure needs to be reviewed by the Conflicts of Interest Committee. In addition, employees that do not fall within the scope of the Conflict of Interest Disclosure policy annually certify through the Annual Employee Evaluation process their compliance with the Conflict of Interest policy. Form 990, Part VI, Section B, line 15 All CEO and officer compensation and benefits arrangements, including salary and bonus incentive plans, are reviewed and approved by the Executive and Senior Physician Compensation Committee of the Board of Directors (Compensation Committee). No substantive change to the compensation or benefits packages is made until Committee approval is granted in accordance with Intermediate Sanctions guidelines. The Compensation Committee is without conflicts of interest and uses an independent external consultant. Appropriate data is applied to determine the comparability of fair market value pay and all actions are appropriately documented. In order to meet the requirements of the IRS Intermediate Sanctions regulations, the Compensation Committee identified the "disqualified individuals" that are in a position to exercise substantial influence over the company's operations. These individuals are the members of the Executive Officers Committee (EOC), Regional Medical Directors, physician board members and Section Heads for key departments. For disqualified individuals, the compensation review also includes the cost of benefits such as the company portion of medical and dental benefits, malpractice insurance, payments for 401K matching and pension payments. A different review process is used for Physicians. Annually, the Corporate Integrity department reviews the salary of each employed physician. This review includes a comparison of physician salaries against national survey data for their specialty. Three surveys are used for the review: McGladrey & Pullen, the Medical Group Management Association (MGMA) and American Medical Group Association (AMGA). The Physician Compensation department provides salary data for each physician including base salary, stipends, on-call pay, etc. If it is determined that a physician's compensation is higher than the survey data, the total work Relative Value Units (RVUs) are compared to the survey data. This review is performed to ensure their pay is comparable to the work performed. Comparable benefit survey data is obtained periodically from McGladrey & Pullen. Compensation for other non-physician key employees is reviewed by senior executives who take market value research into consideration when determining compensation levels. Form 990, Part VI, Section C, line 19 All governing documents, conflict of interest policy, and financial statements are available upon written request to the Corporate Integrity Department. Joint Venture Process Part VI, Section B, 16b When the organization evaluates its participation in a joint venture, the transactions are handled carefully to ensure that the organization's tax-exempt status is intact with regard to the arrangement. The operations of the joint venture are carefully reviewed by management and legal counsel, and the transaction is not entered into unless it is a reflection of the organization's tax-exempt purpose. A clause is inserted into the joint venture agreement that the operations of the joint venture must be performed in a manner that will not jeopardize the organization's tax-exempt status. Number of Board Members who are Independent Part VI, Section A, 1b The Articles of Incorporation provide that no action of the Board may be resolved unless a majority of the independent directors present approve the matter. Thus, even in situations where there is not an absolute majority of independent directors in office, those independent directors in office control Ochsner Community Hospitals' activities. Part VII, Section A, Line 1a, Column E Other Reportable Compensation for Patrick Quinlan, M.D., Chief Executive Officer; Warner Thomas, President & Chief Operating Officer; Scott Posecai, Sr. Vice President and Chief Financial Officer; and Bobby Brannon, Executive Vice President and Treasurer includes $1,687,861; $628,489; $616,669; and $0, respectively, as amounts includable in income under Section 457(f) due to vesting. A portion of this amount attributable to prior years has been reported by Ochsner Clinic Foundation as Other Deferred Compensation for the taxable years in which the respective amounts were deferred by the employee by section 457(f) but not substantially vested. ADDITIONAL COMPENSATION EXPLANATION Part VII, Section A, 1a COMPENSATION FROM RELATED ORGANIZATIONS Many of the individuals listed in Part VII and Schedule J hold positions with related 501(c)(3) organizations. For each of these individuals, the compensation listed is received from the related organization, and the compensation is for the individual's role with the related organization or the integrated health system. The amount of time shown for each as "Average Hours Per Week Devoted To Position" consists primarily as his/her time spent on his/her role with Ochsner Community Hospitals. In reality, the rest of his/her time is spent fulfilling responsibilities through roles with the related organization and/or more evenly distributed across all other organizations in the integrated health system. The following is a list of the individuals with such circumstances, each person's title with the related organization, and the related organization that employs each individual. Joseph L. Breault, M.D.; Chairman, IRB; Ochsner Clinic Foundation Yvens G. Laborde, M.D.; VPMA - OMC-Westbank; Ochsner Clinic Foundation Richard Milani, M.D.; Vice Chairman, Department of Cardiology; Ochsner Clinic Foundation Patrick J. Quinlan, M.D.; Chief Executive Officer; Ochsner Health System Francis R. (Bobby) Rodwig, Jr., M.D.; AMD, OMC; Ochsner Clinic Foundation Bobby C. Brannon; Executive Vice President, Director of Finance, and Treasurer; Ochsner Clinic Foundation Scott J. Posecai; Chief Financial Officer; Ochsner Health System Warner L. Thomas; President and Chief Operating Officer; Ochsner Health System Joseph E. Bisordi, MD; EVP Chief Medical Officer; Ochsner Health System Nancy L. Davis; Senior Vice President Patient Care and System Chief Nursing Officer; Ochsner Health System ADDITIONAL COMPENSATION EXPLANATION Part VII, Section A, 1a COMPENSATION OF DIRECTORS AND AVERAGE HOURS PER WEEK DEVOTED TO POSITION Those directors listed as "Board Member Sr Phys" on the Form 990 for Ochsner Clinic Foundation (EIN 72-0502505) are compensated entirely due to their role as an employee of a member of the integrated health system. The amount of time shown for those Directors listed as "Board Member Sr Phys" as "average hours per week devoted to position" on the Form 990 for Ochsner Clinic Foundation (EIN 72-0502505) consists primarily of role as an employee of Ochsner Clinic Foundation. Additional time spent on boards, committees and through fulfilling other responsibilities as a member of one or more Boards of the varied Ochsner organizations is shown as a nominal amount for Ochsner Health System and/or Ochsner Community Hospitals. As a Senior Physician Director of an integrated health system, these individuals devote time to board activities of all 501(c)(3) members of the system to varying degrees including Ochsner Health System, Ochsner Clinic Foundation and Ochsner Community Hospitals. The amount of time shown for those Directors listed as "Community Directors" for "average hours per week devoted to position" on the Form 990 for Ochsner Clinic Foundation (EIN 72-0502505) includes time spent on boards, on committees and through fulfilling other responsibilities as a member of the Board of varied Ochsner organizations. As a Community Director of an integrated health system, each Community Director devotes time to all 501(c)(3) members of the system to varying degrees including Ochsner Health System, Ochsner Clinic Foundation and Ochsner Community Hospitals. ADDITIONAL COMPENSATION EXPLANATION Part VII, Section A, 1a COMPENSATION OF OFFICERS AND AVERAGE HOURS PER WEEK DEVOTED TO POSITION Compensation and average hours worked for Dr. Patrick Quinlan, Warner Thomas, Scott Posecai, and Bobby Brannon include all time related to the Ochsner Health System, which includes Ochsner Health System (OHS, EIN 20-5296918), Ochsner Clinic Foundation (OCF, EIN 72-0502505) and Ochsner Community Hospitals (OCH, EIN 20-5297040), all related 501(c)(3) organizations. Other members of the Ochsner network are charged a portion of these amounts. The amount of time spent by each officer as "average hours per week devoted to position" on the Form 990 of the organization that directly employs the individual consists primarily of role as an Officer of the integrated health system. Additional time spent on boards, committees and through fulfilling other responsibilities as Officer of the Ochsner organizations is shown on each Form 990. The amount of time on this return is shown as a nominal amount, but in reality the time is more evenly distributed across all entities. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Changes in Temporary Restricted Net Assets -41,000. Net assets released for capital acquisitions 123,275. Changes in Fund Balances- Contributions -164,061. Other -2,026. Total to Form 990, Part XI, Line 5: -83,812. Part XII, Line 2c The process regarding the committee responsible for the audit, review, or compilation of the organization's financial statements and selection of an independent accountant has not changed from the prior year. Ochsner Medical Center-Kenner LLC c/o Ochsner Community Hospitals 151 New Orleans LA 70121 205432782 Patient Care LA 89015916 50823951 N/A Ochsner Baptist Medical Center LLC c/o Ochsner Community Hospitals 151 New Orleans LA 70121 205432631 Patient Care LA 68972000 64586372 N/A Ochsner Medical Center-Westbank LLC c/o Ochsner Community Hospitals 151 New Orleans LA 70121 205432716 Patient Care LA 3243000 14571894 N/A OMC-Kenner Holdings LLC c/o Ochsner Community Hospitals 151 New Orleans LA 70121 205432782 25% JV in Louisiana Extended Care Hospital of Kenner LA 88084 337089 Ochsner Medical Center-Kenner LLC Ochsner Health System 1514 Jefferson Highway New Orleans LA 70121 205296918 Health Care support LA 501(c)(3) 509(a)(3) Type II N/A 0 Brent House Corporation 1512 Jefferson Highway New Orleans LA 70121 720872457 Rents hotel rooms to patients/guests of Ochsner facilities. LA 501(c)(3) 509(a)(3) Type II Ochsner Clinic Foundation 0 Ochsner Clinic Foundation 1514 Jefferson Highway New Orleans LA 70121 720502505 Patient Care LA 501(c)(3) 170(b)(1) (A)(iii) Ochsner Health System 0 Ochsner System Protection Company 1514 Jefferson Highway New Orleans LA 70121 271170999 Captive Insurance LA 501(c)(3) 509(a)(3) Type I Ochsner Clinic Foundation 0 0 0 0 0 1 0 0 0 1 0 1 1 0 0 1 1 1 0 Statement Regarding Hurricane Isaac The taxpayer's tax records and its tax professional/practitioner's office were located in New Orleans, LA during and after the devastation caused by Hurricane Isaac. The IRS granted special tax relief in Issue Number IR 2012-70 dated September 5, 2012 by postponing taxpayer filing and payment deadlines until January 11, 2013 for affected taxpayers hit hardest by Hurricane Isaac. Pursuant to Notice 2012-70 dated September 5, 2012 taxpayers who reside in or have a business located in the following parishes qualify for the relief: Ascension, Assumption, East Baton Rouge, East Feliciana, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Washington and West Feliciana. The Louisiana parishes listed above constitute a covered disaster area for purposes of Treas. Reg. Section 301.7508A-1(d)(2) and are entitled to the relief detailed below.Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. Section 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose books, records, or tax professionals' offices are in the covered disaster area, are also entitled to relief. Under section 7508A, the IRS gives affected taxpayers until January 11, 2013 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns) or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after August 26, 2012 and on or before January 11, 2013. The taxpayer respectfully requests that any interest and/or penalties that may be due as a result of the taxpayer filing its tax returns and paying its taxes after the normal extended due dates be waived. The late filing of the returns and payment of taxes after the normal extended due dates for the returns was not due to negligence or willful disregard for the law. The taxpayer has always filed its tax returns and paid its taxes by the due dates. However, due to circumstances beyond its control, the taxpayer was unable to meet the normal due dates for the returns and payments.