2013-11-12T11:44:22-06:00 2012-12-31 ERNST & YOUNG US LLP 111 MONUMENT CIRCLE STE 2600 INDIANAPOLIS IN 46204 990 2012-01-01 351536132 MEMORIAL HEALTH SYSTEM INC % JEFFREY COSTELLO MEMO 5746473549 615 N MICHIGAN STREET Suite SOUTH BEND IN 46601 JEFFREY COSTELLO 2013-11-11 3176817000 2012 2016-02-24 21:20:13Z PHILIP NEWBOLD 615 N MICHIGAN STREET SOUTH BEND IN 46601 105770347 false X QUALITYOFLIFE.ORG X 1981 IN MEMORIAL HEALTH SYSTEM, INC. IS COMMITTED TO IMPROVING THE QUALITY OF LIFE OF THE PEOPLE IN OUR COMMUNITY. 11 9 1074 0 2499610 2628344 2795351 81205762 86611360 154362 735483 1383530 1116609 85371998 91258803 248560 394509 0 0 73826588 86388443 0 0 0 32526351 35101564 106601499 121884516 -21229501 -30625713 106397632 107729902 61570630 66293075 44827002 41436827 X MEMORIAL HEALTH SYSTEM, INC. IS COMMITTED TO IMPROVING THE QUALITY OF LIFE OF THE PEOPLE IN OUR COMMUNITY. false true 76383211 59089291 MEMORIAL HEALTH SYSTEM, INC. (THE "CORPORATION") OPERATES MEMORIAL MEDICAL GROUP. MEMORIAL MEDICAL GROUP (MMG) IS A MULTI-SPECIALTY CARE NETWORK OF PHYSICIANS AND ALSO INCLUDES THE MED-POINT IMMEDIATE CARE CENTERS AND CENTER FOR OCCUPATIONAL HEALTH. IN ADDITION TO THE PHYSICIAN PRACTICES, MMG OPERATES A HIGH COMPLEXITY CORE LABORATORY FOR THE SUPPORT OF ITS EMPLOYED PHYSICIANS. THE CENTER FOR OCCUPATIONAL HEALTH (COH) PROVIDES WORKER'S COMPENSATION SERVICES FOR 1500 CLIENT COMPANIES IN ST. JOSEPH AND LAPORTE COUNTIES. MMG ALSO OPERATES MED-POINT URGENT CARE CENTERS TO SUPPLEMENT THE SERVICES OF THE MEDICAL GROUP AND COH. MMG OPERATES MED-POINT EXPRESS, A RETAIL BASED WALK-IN CLINIC AT VARIOUS RETAIL SUPERCENTERS OR GROCERY STORES. IN ADDITION TO THE CORPORATION'S PRIMARY CARE NETWORK, MEMORIAL MEDICAL GROUP MANAGES THE OPERATION OF SEVERAL HOSPITAL BASED PRACTICES FOR THE HOSPITALISTS, TRAUMA ORTHOPEDIC SURGEON, AND PEDIATRIC INTENSIVISTS. 22703409 394509 26989010 MEMORIAL HEALTH SYSTEM, INC. (THE "CORPORATION") WAS ESTABLISHED AS THE PARENT CORPORATION OF MEMORIAL HOSPITAL OF SOUTH BEND, INC. (THE "HOSPITAL") IN 1981 TO DEVELOP A FULL SPECTRUM OF HEALTH-RELATED SERVICES FOR NORTH CENTRAL INDIANA AND SOUTHWESTERN MICHIGAN. THE CORPORATION IS COMMUNITY-OWNED AND NOT-FOR-PROFIT. ALONG WITH ITS SUBSIDIARIES, THE CORPORATION SERVES THE GREATER COMMUNITY THROUGHOUT THE CONTINUUM OF CARE FROM HEALTH PROMOTION AND SICKNESS PREVENTION TO DIAGNOSIS, INPATIENT, OUTPATIENT AND HOME CARE SERVICES. IT CONTROLS MEMORIAL HEALTH FOUNDATION, THE HOSPITAL'S PHILANTHROPIC ARM, AND BEACON HEALTH VENTURES, INC., COLLECTIVELY REFERRED TO AS THE "SYSTEM". THE CORPORATION PROVIDES CORPORATE SERVICES TO THE ABOVE MENTIONED AFFILIATED ORGANIZATIONS AND THE HOSPITAL. ALONG WITH ITS OWN AFFILIATED ORGANIZATIONS, MEMORIAL HEALTH SYSTEM, INC. HAS FORMED SEVERAL JOINT VENTURES WHICH FURTHERS ITS WORK IN THE CONTINUUM OF CARE. 365225 532618 MEMORIAL HEALTH SYSTEM, INC. (THE "CORPORATION") OPERATES MEMORIAL MEDICAL GROUP (MMG). ALONG WITH THE PRIMARY CARE NETWORK, MMG ALSO OPERATES THE MEMORIAL MEDICAL GROUP CLINICAL RESEARCH INSTITUTE (CLINICAL RESEARCH). CLINICAL RESEARCH IS CURRENTLY FOCUSED ON PHARMACOLOGY STUDIES. THE PHARMACOLOGY STUDIES INVOLVE PATIENTS WITH SPECIFIC CONDITIONS OR DISEASES. CLINICAL RESEARCH HAS BROUGHT THE FOLLOWING POSITIVE BENEFITS TO MMG: IMPROVED PATIENT CARE - BRINGS MMG PHYSICIANS AND NURSES CLOSER TO LEADING-EDGE MEDICINE. CORPORATE POSITIONING - CLINICAL RESEARCH CAN ENHANCE MMG'S IDENTITY AND BRAND, IT CAN PROVIDE A MEANS TO MEET PHYSICIANS' ACADEMIC NEEDS AND ENHANCE PHYSICIAN RECRUITMENT. 660289 21217 MANAGED CARE SERVICES 660289 21217 100112134 true true false true false false false false false true true false true false true false false true false false false false false false false false false true true true false false false false false false false false false false false false false true true true false false true 206 0 true 1074 true true true false false false false false false false false false X 11 9 false false false false true true true true true false false true true true true true true true true true true IN X JEFFREY COSTELLO 5746473549 615 N MICHIGAN STREET SOUTH BEND IN 46601 JOHN HILER 2.0 1.0 X X 2984 0 0 VIVIAN SALLIE 2.0 1.0 X X 2392 0 0 RAFAT ANSARI MD 2.0 1.0 X 952 0 0 LARRY HARDING 2.0 1.0 X X 2392 0 0 VINCENT HENDERSON MD 40.0 1.0 X 392628 0 21708 TODD SCHURZ 2.0 1.0 X X 3556 0 0 PHILIP NEWBOLD 40.0 4.0 X X 1382738 0 163374 BIPIN DOSHI 2.0 1.0 X 2889 0 0 RICHARD RICE 2.0 1.0 X 2889 0 0 TRACY D GRAHAM 2.0 1.0 X 3742 0 0 NAJEEB KHAN 2.0 0.0 X 0 0 0 WELLINGTON JONES III 2.0 1.0 X 2392 0 0 JEFFREY COSTELLO 40.0 4.0 X 631580 0 82813 MICHAEL O'NEIL 40.0 0.0 X 363113 0 51418 GREG CONRAD 8.0 32.0 X 49879 190437 36995 MICHAEL GORDON 40.0 0.0 X 263666 0 12168 STEPHEN SMITH 40.0 0.0 X 1370687 0 13731 ROBERT YOUNT 40.0 2.0 X 928009 0 18664 RAMANAK MITRA 40.0 0.0 X 955976 0 16421 ANDREW LOSINIECKI 40.0 0.0 X 1013321 0 4744 JOSEPH SCHNITTKER 40.0 0.0 X 892745 0 16043 8268530 190437 438079 143 false true false CERNER CORPORATION 2800 ROCKCREEK PKWY KANSAS CITY MO 64117 IS SFTWR MAINTENANCE 2209751 WOODCOX BLDG CONTRACTORS 51175 PRESCOTT AVE SOUTH BEND IN 46637 CONSTRUCTION MANAGER 2158862 MCKESSON INFORMATION SOLUTIONS LLC PO BOX 98347 CHICAGO IL 60693 IS SFTWR MAINTENANCE 1321587 BVK 250 W COVENTRY COURT MILWAUKEE WI 53217 ADVERTISING 1127961 ORACLE PO BOX 203448 DALLAS TX 75320 IS SFTWR MAINTENANCE 642715 35 215681 2579670 2795351 NET PATIENT REV 621110 59089732 58942238 147494 CLINICAL TRIAL REV 621500 532618 532618 MGT ADMIN SVCS 561499 25567390 23235501 2331889 JOINT VENTURES 621110 816290 813463 2827 AFFILIATE RENT 531120 605330 605330 86611360 163361 163361 0 9010 9010 2354782 1668281 686501 0 686501 686501 12210263 1205122 11772668 1070595 437595 134527 572122 572122 0 0 0 MEDICAL DIRECTORSHIP 621110 315401 315401 PROFESSIONAL CALL VOLUME - ASK A NURSE 621300 67080 67080 MANAGED CARE SERVICES / OTHER 561499 21217 21217 17400 17400 421098 91258803 83545037 2499610 2418805 145896 145896 248613 248613 0 0 3450627 281318 3169309 0 65021729 59340242 5681487 2374189 2077638 296551 11923985 9484369 2439616 3617913 3003657 614256 0 361989 361989 104430 13620 90810 2658 1406 1252 0 0 4937356 3332429 1604927 2438849 1134615 1304234 7184022 4190142 2993880 39241 25732 13509 0 2855867 2510057 345810 395031 240231 154800 0 567382 440336 127046 0 0 4781623 3130841 1650782 1649343 1404494 244849 MEDICAL SUPPLIES 4575669 4575669 BAD DEBT EXPENSE 2807301 2807301 LICENSES & TAXES 1475766 1131526 344240 GENERAL DUES & SUBSCRIPTIONS 516616 335987 180629 408421 256015 152406 121884516 100112134 21772382 0 5781 6031 6626725 5424203 396954 319565 8223770 7646333 0 0 0 0 106522 16406 0 0 5877805 4583000 117883567 55808966 61116841 62074601 3980513 4435922 0 0 16670770 18648935 0 0 3391951 4574906 106397632 107729902 16280847 16196769 0 0 22383 45694 0 0 0 0 0 0 0 0 0 0 45267400 50050612 61570630 66293075 X 44827002 41436827 0 0 0 0 44827002 41436827 106397632 107729902 X -30625713 -125363 27360901 X false true X true true true X 1265409 1791723 1966424 2628344 2795351 10447251 59490587 63984881 65503947 79153934 84150367 352283716 0 0 0 60755996 65776604 67470371 81782278 86945718 362730967 0 0 0 0 0 0 22391069 20657376 19468541 20415589 17211815 100144390 22391069 20657376 19468541 20415589 17211815 100144390 262586577 3258293 2405482 4228947 3133702 2527153 15553577 2977857 2433355 2306385 2071687 2499610 12288894 6236150 4838837 6535332 5205389 5026763 27842471 0 388924 395391 325266 319972 382481 1812034 67381070 71010832 74330969 87307639 92354962 392385472 0.66921 0.64460 0.07096 0.04339 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED false false false false false false false false true 2658 2658 false OTHER ACTIVITIES PART II-B MEMORIAL HEALTH SYSTEM, INC PAYS FOR THE MEMBERSHIP FEES TO SEVERAL NATIONAL ORGANIZATIONS FOR ITS EMPLOYEES. THESE NATIONAL ORGANIZATIONS INDICATE A PORTION OF THE MEMBERSHIP FEES ARE USED FOR LOBBYING PURPOSES. THE MEMBERSHIP FEES PAID WERE FOR THE FOLLOWING ORGANIZATIONS: -AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS -INDIANA CPA SOCIETY -AMERICAN COLLEGE OF HEALTH CARE EXECUTIVES -AMERICAN DIETETIC ASSOCIATION -FINANCIAL EXECUTIVE INSTITUTE -MEDICAL GROUP MANAGEMENT ASSOCIATION -AMERICAN ACADEMY OF FAMILY PHYSICIANS -AMERICAN COLLEGE OF PHYSICIANS -AMERICAN COLLEGE OF CARDIOLOGY -AMERICAN HOSPITAL ASSOCIATION -AMERICAN ASSOCIATION OF NEUROLOGICAL SURGEONS -INDIANA STATE MEDICAL SOCIETY -SOCIETY FOR HUMAN RESOURCE MANAGMENT -CHAMBER OF COMMERCE OF ST JOSEPH COUNTY -NORTH AMERICAN SPINE SOCIETY -SOCIETY OF THORACIC SURGEONS 22198822 1501904 1884305 923860 24661171 21769701 2155236 -543657 1182458 22198822 22665989 1296194 1929600 4122082 21769701 20595396 1076924 3137353 2143684 22665989 28741974 1278996 -6927657 2497917 20595396 0.78390 0.00770 0.20840 false true true 15797940 15797940 53229361 18550260 34679101 1812986 1423126 389860 47043281 35835581 11207700 62074601 INVESTMENT IN HOME CARE 12366886 C INVESTMENT IN VHA 200000 C INVETMENT IN STRATUM MEDICAL 95000 C LAPORTE MEDICAL GROUP SURGICAL 181837 C MEMORIAL SPINE & NEUROSCIENCE 359982 C COMMUNITY HEALTH ALLIANCE 2520138 C VALPARAISO MEDICAL DEVELOPMENT 2925092 C 18648935 0 ACCRUED SUPPLEMENTAL BENEFITS 3790904 ACCRUED PENSION 46259708 50050612 Sch D, PART V, LINE 4 THE BOARD HAS DISCRETION TO UTILIZE EACH YEAR THE INCOMES, REVENUES AND PROFITS ARISING AND ACCRUING FROM THE ENDOWMENTS IN DEFRAYING COSTS ASSOCIATED WITH THE TRUST AND THE REMAINDER FOR SUPPORT, BETTERMENT, IMPROVEMENT, UPKEEP, EXPANSION AND REPLACEMENT OF BEACON HEALTH SYSTEM, INC, AND ITS CORPORATE AFFILIATES. TERM ENDOWMENTS, WHICH ARE THE TEMPORARILY RESTRICTED NET ASSETS, ARE USED AS DESIGNATED BY THE DONOR. THE PERMANENT ENDOWMENT PROVIDES INCOME TO BE USED FOR HEALTH CARE EDUCATIONAL PURPOSES AND PATIENT CARE. SCH D, PART X, LINE 2 MEMORIAL HEALTH SYSTEM, INC, DID NOT HAVE A FOOTNOTE ADDRESSING FIN 48 (ASC 740) LIABILITIES FOR UNCERTAIN TAX POSITIONS IN ITS CONSOLIDATED FINANCIAL STATEMENTS. MEMORIAL HEALTH SYSTEM, INC. DID NOT HAVE ANY UNCERTAIN TAX POSITIONS RECORDED DURING THE CURRENT TAX YEAR. true CODE OF AMERICA LABS INC 155 NINTH ST SAN FRANCISCO CA 94110 271067272 501(c)(3) 25000 DONAT CTY SOUTH BEND CHAMBER OF COMMERCE OF ST JOSEPH COUNTY 401 E COLFAX AVE SOUTH BEND IN 46617 350153330 501(C)(6) 31400 2012 SBDC CONTRIBUTION ELEVATE VENTURES INC 1 NORTH CAPITAL AVE INDIAPOLIS IN 46204 274118692 501(C)(3) 30000 3YR PLEDGE COMMITMENT SOUTH BEND MEDICAL FOUNDATION INC 530 N LAFAYETTE BLVD SOUTH BEND IN 46601 350868178 501(C)(3) 12500 2012 SPONSOR PLEDGE 3 1 SCHOLARSHIPS/TUITION REIMBURSMENT 78 141207 SCHEDULE I, PART II CHARITABLE DONATIONS PART OF THE ORGANIZATION'S MISSION IS TO IMPROVE THE HEALTH OF OUR COMMUNITY. IN ORDER TO FULFILL THIS GOAL, OUR ADMINISTRATORS HAVE THE ABILITY TO MAKE DONATIONS TO ORGANIZATIONS THAT IMPROVE THE HEALTH AND WELL BEING OF OUR COMMUNITY. THESE DONATIONS ARE MONITORED THROUGH OUTCOME MEASUREMENT REPORTS THAT ARE PROVIDED TO MEMORIAL BY THE VARIOUS ORGANIZATIONS. THESE REPORTS INFORM US OF HOW THE DONATIONS WERE USED. SCHEDULE I, PART III SCHOLARSHIPS / TUITION REIMBURSMENT FOR SCHOLARSHIPS THE INDIVIDUAL MUST MEET SEVERAL REQUIREMENTS TO QUALIFY. IN ORDER TO QUALIFY FOR A SCHOLARSHIP THE INDIVIDUAL MUST (1) APPLY ON-LINE (INTRANET) AND WITHIN THE ACCEPTABLE TIME PARAMETERS FOR THE SEMESTER OF FUNDS BEING REQUESTED, (2) MAINTAIN A GRADE OF C OR BETTER, (3) PAY FOR TUITION/BOOKS AND SUBMIT CORRESPONDING ORIGINAL RECEIPTS FOR REIMBURSEMENT. REIMBURSED UP TO THE AMOUNT AWARDED BY THE SCHOLARSHIP COMMITTEE. (4) MEET ANY ADDITIONAL REQUIREMENTS OF THE SPECIFIC SCHOLARSHIP FUND, AND (5) MEET ELIGIBILITY REQUIREMENTS WHICH INCLUDE: (A) EMPLOYED BY MEMORIAL HEALTH SYSTEM, INC. (B) ENROLLED IN A QUALIFIED PROGRAM; (C) SUBMITTED A POSITIVE RECOMMENDATION EACH SEMESTER FROM THE IMMEDIATE SUPERVISOR; AND (D) SUBMITTED A POSITIVE RECOMMENDATION EACH SEMESTER FROM THE SCHOOL. X X X true true X X X X X false true false false false true true true false VINCENT HENDERSON MD 358909 0 27563 0 6156 0 14269 0 7439 0 414336 0 0 0 JEFFREY COSTELLO 336477 0 114704 0 180399 0 78239 0 4574 0 714393 0 0 0 MICHAEL O'NEIL 241952 0 84342 0 36819 0 47891 0 3527 0 414531 0 0 0 PHILIP NEWBOLD 661503 0 326180 0 395055 0 152094 0 11280 0 1546112 0 0 0 MICHAEL GORDON 217493 0 40583 0 5590 0 5515 0 6653 0 275834 0 0 0 GREG CONRAD 48183 144549 40800 1696 5088 8387 25161 862 2585 59128 218183 0 0 STEPHEN SMITH 1368555 0 2132 0 0 0 10000 0 3731 0 1384418 0 0 0 ROBERT YOUNT 901782 0 22663 0 3564 0 10000 0 8664 0 946673 0 0 0 RAMANAK MITRA 927723 0 27563 0 690 0 10000 0 6421 0 972397 0 0 0 ANDREW LOSINIECKI 995462 0 2132 0 15727 0 0 0 4744 0 1018065 0 0 0 JOSEPH SCHNITTKER 888291 0 2132 0 2322 0 5490 0 10553 0 908788 0 0 0 PART I, LINE 1A MEMORIAL HEALTH SYSTEM, INC. REIMBURSES DIRECTORS FOR THE TAX EFFECT OF THE 1099 REPORTABLE BENEFITS FOR HEALTH CLUB MEMBERSHIP, WITH MEMORIAL HEALTH SYSTEM'S HEALTH AND LIFESTYLE CENTER AND SPOUSAL TRAVEL. THIS REPORTING IMPACTS 10 CURRENT VOTING BOARD MEMBERS. MEMORIAL HEALTH SYSTEM ALSO REIMBURSES FOR DIRECT EXPENSES RELATED TO ANY TRAVEL ON THE ORGANIZATION'S BEHALF. SOCIAL CLUB MEMBERSHIPS INCLUDED IN TAXABLE COMPENSATION - 2 EMPLOYEES (JEFFERY COSTELLO, AND MICHAEL O'NEIL) SPOUSAL TRAVEL INCLUDED IN TAXABLE COMPENSATION - 2 EMPLOYEES (PHILIP NEWBOLD & JEFFERY COSTELLO) PART I, LINE 4B EXECUTIVE RETENTION PLAN BEACON HEALTH SYSTEM IMPLEMENTED AN EXECUTIVE RETENTION PLAN TO ATTRACT AND RETAIN KEY EMPLOYEES BY PROVIDING ADDITIONAL DEFERRED COMPENSATION. THE CHIEF EXECUTIVE OFFICER WILL PARTICIPATE IN THE PLAN AND WILL SELECT OTHER PARTICIPANTS PURSUANT TO THE GUIDELINES SET BY THE EMPLOYER'S BOARD OF DIRECTORS. THE EMPLOYER MAY MAKE CONTRIBUTIONS UNDER THE PLAN AND HAS SOLE DISCRETION OVER WHETHER TO MAKE A CONTRIBUTION. VESTING OCCURS ON JANUARY 1 OF THE FIFTH YEAR FOR WHICH SUCH CONTRIBUTIONS ARE MADE FOR PARTICIPANTS WHO HAVE BEEN CONTINUOUSLY EMPLOYED. PART I, LINE 6A & 6B THE ORGANIZATION HAS THREE INCENTIVE PLANS (EMPLOYEE, MANAGEMENT, AND EXECUTIVE) WHICH HAVE A NET OPERATING INCOME TO BUDGET MEASUREMENT FOR THE PAYOUT THRESHOLD. THE EMPLOYEE PLAN SHARES THE EXCESS OVER BUDGET NET OPERATING INCOME WITH THE NON-MANAGMENT EMPLOYEES FOR BEACON HEALTH SYSTEM, INC AND THE AFFILIATED ENTITIES. THE EMPLOYEE INCENTIVE HAS A MAXIMUM CAP OF $3,000,000. THE MANAGEMENT INCENTIVE PLAN PAYS A SLIDING PERCENTAGE OF BASE COMPENSATION IF THE NET OPERATING INCOME IS EQUAL TO OR GREATER THAN 80% OF THE BUDGETED NET OPERATING INCOME. THE SLIDING SCALE CAPS WHEN OPERATING INCOME REACHES 120% OF THE BUDGETED OPERATING INCOME. EXECUTIVES ARE COVERED UNDER THE BEACON HEALTH SYSTEM EXECUTIVE SHORT-TERM INCENTIVE PLAN (ESTIP). THE ESTIP PLAN PAYS A SLIDING PERCENTAGE OF BASE COMPENSATION IF THE NET OPERATING INCOME IS EQUAL TO OR GREATER THAN 80% OF THE BUDGETED NET INCOME. THE SLIDING SCALE CAPS, WHEN OPERATING INCOME REACHES 120% OF THE BUDGETS OPERATING INCOMES. PART I, LINE 7 BRYAN BOYER, MD IS ELIGIBLE FOR AN INCENTIVE BASED UPON EXCEEDING GROSS PROFESSIONAL BILLINGS. THE INCENTIVE IS A COMPONENT OF THE EMPLOYMENT CONTRACT WITH DR. BOYER. HEIDI COLLINS, MD., CHARLES LAMB, MD., AND MICHAEL STEINBERG, MD., IS ELIGIBLE FOR AN INCENTIVE BASED UPON EXCEEDING THE WRVU TARGET. THE INCENTIVE IS A COMPONENT OF THE EMPLOYMENT CONTRACT WITH DR COLLINS, DR LAMB, AND DR STEINBERG. DAVID HORNBACK, MD IS ELIGIBLE FOR AN INCENTIVE BASED UPON NET PROFESSIONAL BILLINGS. THE INCENTIVE IS A COMPONENT OF THE EMPLOYMENT CONTRACT WITH DR HORNBACK. DENNIS NWACHUKWU, MD. IS ELIGIABLE FOR AN INCENTIVE BASED UPON ATTAINMENT OF QUALITYMEASURES AND ATTAINMENT OF SERVICE LINE BUDGETS. THE INCENTIVE IS A COMPONENT OF THE EMPLOYMENT CONTRACT WITH DR NWACHUKWU. FACULTY INCENTIVE FOR FAMILY PRACTICE RESIDENCY CLINICS PROVIDES FOR AN INCENTIVE PAYMENT WHEN COLLECTIONS FOR PERSONALLY RENDERED SERVICES EXCEED A THRESHOLD. THESE INCENTIVES ARE CAPPED. PHYSICIAN RELATIONS INCENTIVE PLAN PROVIDES FOR AN INCENTIVE PAYMENT TO EMPLOYEES IN A PHYSICIANS RELATIONS POSITION BASED UPON ATTAINMENT OF SATISFACTION SCORES. PAID AS A PERCENTAGE OF BASE PAY UP TO 5%. HOSPITALISTS ARE ELIGIBLE FOR AN INCENTIVE PAYMENT BASED UPON ATTAINMENT OF QUALITY MEASURES AND TENURE. THE INCENTIVE IS A COMPONENT OF THE HOSPITALIST PHYSICIAN COMPENSATION PLAN. HOSPITALIST NURSE PRACTITIONER / PHYSICIAN ASSISTANTS ARE ELIGIBLE FOR AN INCENTIVE BASED UPON ATTAINMENT OF QUALITY MEASURES. THE INCENTIVE IS A COMPONENT OF A QUALITY BONUS PLAN. FORM 990, PART III, LINE 3 MEMORIAL HEALTH SYSTEM HELD 35% INTEREST IN PHYSICIAN'S HOSPITAL, LLC, A LONG-TERM ACUTE CARE HOSPITAL. EFFECTIVE DECEMBER 31, 2012 MHS TRANSFERRED THE OWNERSHIP OF PHYSICIAN'S HOSPITAL, LLC TO BEACON HEALTH VENTURES, INC. (BHV IS A RELATED PARTY, SIBLING ENTITY OF MHS). MEMORIAL HEALTH SYSTEM HAS NO INTERST IN PHYSICIAN'S HOSPITAL LLC AS OF DECEMBER 31, 2012, THEREFORE WILL NOT FILE A SCHEDULE H FOR 2012. FORM 990, PART VI, SECTION A, LINE 6 BEACON HEALTH SYSTEM, INC. (FORMERLY ELKHART MEMORIAL TOPCO) IS THE SOLE CORPORATE MEMBER OF MEMORIAL HEALTH SYSTEM, INC. FORM 990, PART VI, SECTION A, LINE 7a THE CORPORATE MEMBER SHALL APPOINT THE BOARD OF DIRECTORS OF MEMORIAL HEALTH SYSTEM AND SHALL HAVE SUCH POWERS OF ADVANCE APPROVAL REGARDING CORPORATE ACTIONS AS ARE DELINEATED IN THE BY-LAWS OF MEMORIAL HEALTH SYSTEM. FORM 990, PART VI, SECTION A, LINE 7b DECISIONS OF THE BOARD OF DIRECTORS MUST BE APPROVED BY THE CORPORATE MEMBER. FORM 990, PART VI, SECTION B, LINE 11b THE ORGANIZATION INCORPORATES NUMEROUS PARTIES IN THE PRODUCTION AND REVIEW OF THE FORM 990 AND ASSOCIATED SCHEDULES. SENIOR ACCOUNTING STAFF AND MANAGEMENT COMPLETE THE FORM 990 AND SCHEDULES. THE FORMS AND SCHEDULES ARE REVIEWED BY THE CONTROLLER AND CFO. SUBSEQUENT TO THOSE STEPS, THE ORGANIZATION ENGAGED ERNST & YOUNG US, LLP TO REVIEW THE COMPLETED FORM 990 AND APPROPRIATE SCHEDULES. PRIOR TO FILING THE RETURN THE COMPENSATION COMMITTEE OF THE ORGANIZATION AND CEO CONDUCT A GENERAL OVERVIEW OF THE FORM 990 INCLUDING APPLICABLE COMPENSATION SCHEDULES. IN ADDITION, THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE WILL RECEIVE A COPY OF THE 990 PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12c THERE ARE THREE SEPARATE FORMS THAT ARE SENT OUT THROUGH THE INTERNAL AUDIT DEPARTMENT TO KEY EMPLOYEES OR BOARD MEMBERS REGARDING CONFLICT OF INTEREST. THEY ARE AS FOLLOWS: 1. THE FIRST IS A CONFLICT OF INTEREST STATEMENT THAT IS SENT TO SENIOR LEVEL ADMINISTRATION, MANAGEMENT, AND SELECT STAFF SUCH AS PURCHASING DEPARTMENT EMPLOYEES. THE PURPOSE OF THE STATEMENT IS TO REQUIRE EMPLOYEES TO DISCLOSE ANY POTENTIAL CONFLICT OF INTERESTS THEY MAY HAVE. THE STATEMENTS ARE SENT IN JANUARY OF EACH YEAR FOR THE PREVIOUS YEAR ACTIVITIES AND WE PURSUE THE REPLIES TO GET A 100% RESPONSE RATE. IN THE CURRENT YEAR WE SENT OUT OVER 250 STATEMENTS AND ACHIEVED A 100% RESPONSE RATE. EACH RESPONSE IS REVIEWED BY THE DIRECTOR OF INTERNAL AUDIT AND THE RESULTS ARE REPORTED TO THE CEO OF BEACON HEALTH SYSTEM, THE AUDIT COMMITTEE CHAIRMAN, AS WELL AS THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS. IT SHOULD BE NOTED THAT IN 2012 THE CONFLICT OF INTEREST STATEMENTS WERE NOT SENT TO ELKHART GENERAL HOSPITAL EMPLOYEES, BUT WILL BE SENT FOR THE CALENDAR YEAR 2013 IN JANUARY 2014. 2.THE SECOND STATEMENT IS THE BOARD DUALITY OF INTEREST STATEMENT THAT IS SENT TO CURRENT BOARD MEMBERS, FORMER BOARD MEMBERS FROM THE LAST FIVE YEARS, THE FIVE HIGHEST COMPENSATED EMPLOYEES FROM THE PREVIOUS YEAR, EMPLOYEES THAT ARE ON THE GRANT AND SCHOLARSHIP COMMITTEES, AND OTHER KEY EMPLOYEES. THE DUALITY OF INTEREST STATEMENT IS SENT USING THE WEB BASED SURVEY TOOL PROVIDED BY ERNST & YOUNG LLP. THE REPLIES ARE REVIEWED BY THE DIRECTOR OF INTERNAL AUDIT. THE RESULTS OF THE SURVEYS ARE SUMMARIZED USING THE WEB BASED TOOL, AND ARE REVIEWD BY ERNST & YOUNG IN COMPLETING THE FORM 990. THE RESULTS ARE REPORTED TO THE CEO OF BEACON HEALTH SYSTEM, THE AUDIT COMMITTEE CHAIRMAN, AND THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS. 3. THE THIRD STATEMENT IS ENTITLED "CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS." THE STATEMENT REQUIRES AN ACKNOWLEDGMENT FORM TO BE SIGNED BY BEACON HEALTH SYSTEM, INC'S KEY FINANCIAL EMPLOYEES THAT BEACON HEALTH SYSTEMS, INC'S FINANCIAL INFORMATION IS TO THE BEST OF THEIR KNOWLEDGE TRUE AND ACCURATE. THIS STATEMENT WAS SENT OUT IN JANUARY, 2013 AND THE SIGNED ACKNOWLEDGEMENTS ARE KEPT BY THE DIRECTOR OF INTERNAL AUDIT. IN 2013, 17 DESIGNATED EMPLOYEES WERE REQUESTED TO SIGN THE FORM AND 100% COMPLIED WITH THIS REQUEST. ANY POTENTIAL CONFLICTS OF INTERESTS ARE REVIEWED BY INDEPENDENT PARTIES BOTH INTERNAL AND EXTERNAL TO THE ORGANIZATION, AND IF NECESSARY, CORRECTIVE ACTION WOULD BE TAKEN TO RESOLVE A TRUE CONFLICT. THE INDIVIDUAL WITH THE POTENTIAL CONFLICT OF INTEREST WOULD BE EXCLUDED FROM ALL REVIEW PROCEEDINGS. FORM 990, PART VI, SECTION B, LINE 15a & 15b VICE PRESIDENT AND HIGHER COMPENSATION IS DETERMINED AFTER AN EXTENSIVE EXAMINATION IS CONDUCTED USING COMPARABLE MARKET DATA AND THEN REVIEWED BY AN INDEPENDENT CONSULTANT HIRED BY, AND REPORTING TO, THE BOARD OF DIRECTORS. RECOMMENDATIONS ARE PRESENTED TO THE COMPENSATION COMMITTEE OF THE BEACON HEALTH SYSTEM, INC BOARD FOR DELIBERATION AND FINAL DECISION. DELIBERATION AND FINAL DECISION ARE PERFORMED BY THE INDEPENDENT MEMBERS OF THE BOARD. FORM 990, PART VI, SECTION C, LINE 19 THE GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT MADE AVAILABLE TO THE PUBLIC. THE FINANCIAL STATEMENTS ARE DISTRIBUTED QUARTERLY TO THE ELECTRONIC MUNICIPAL MARKET ACCESS (EMMA) WEBSITE AS PART OF THE CONTINUING DISCLOSURES FOR THE MEMORIAL HEALTH SYSTEM, INC. BONDS. FORM 990, PART XI, LINE 9 CASH TRANSFERS FROM MEMORIAL HOSPITAL OF SOUTH BEND: $ 41,769,380 WRITE OFF INTER COMPANY MEMORIAL HOSPITAL OF SOUTH BEND $- 3,972,842 WRITE OFF INTER COMPANY MEMORIAL HEALTH FOUNDATION $- 831,954 WRITE OFF INTER COMPANY ELKHART GENERAL HOSPITAL $- 835,052 CHANGE IN PENSION LIABILITY $- 7,324,085 TRANSFER MICHIANA LINEN OWNERSHIP TO ELKHART GENERAL $- 1,444,543 TOTAL $ 27,360,901 MEMORIAL HOSPITAL OF SOUTH BEND INC 615 N MICHIGAN ST SOUTH BEND IN 46601 350868132 HOSPITAL IN 501(C)(3) 3 BEACON HS true MEMORIAL HEALTH FOUNDATION INC 615 N MICHIGAN ST SOUTH BEND IN 46601 351536129 FINANCIAL SUP IN 501(C)(3) 9 BEACON HS true ELKHART GENERAL HOSPITAL 600 EAST BOULEVARD ELKHART IN 46514 350877574 HOSPITAL IN 501(C)(3) 3 BEACON HS true BEACON HEALTH SYSTEM INC 615 N MICHIGAN ST SOUTH BEND IN 46601 453864076 PARENT ORG IN 501(C)(3) 11C-III-FI N/A false MEMORIAL ENDOWMENT FUND FOR MEMORIAL HOS PO BOX 1602 SOUTH BEND IN 46634 356068581 ENDOWMENT IN 501(c)(3) 11D III-O MEM HOSPITAL true BEACON HEALTH VENTURES INC 615 N MICHIGAN ST SOUTH BEND IN 46601 351901068 HOME MEDICAL IN NA C BEACON HEALTH VENTURES MICHIGAN INC 615 N MICHIGAN ST SOUTH BEND IN 46601 208259773 HOME MEDICAL MI NA C true true true false false false false false true true true true true true true true true true BEACON HEALTH VENTURES INC a iv 81781 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC a iv 606455 ACTUAL CHARGES BEACON HEALTH VENTURES INC j 172469 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC j 280769 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC b 835052 ACTUAL CHARGES MEMORIAL HEALTH FOUNDATION INC b 831954 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC b 3972845 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC b 1444543 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC c 41769378 CASH TRANSFERS MEMORIAL HEALTH FOUNDATION INC c 215681 CASH TRANSFERS BEACON HEALTH VENTURES INC k 5030961 PHYSICIAN CHARG MEMORIAL HOSPITAL OF SOUTH BEND INC k 266950119 PHYSICIAN CHARG MEMORIAL HOSPITAL OF SOUTH BEND INC l 21135670 ACTUAL CHARGES BEACON HEALTH VENTURES INC l 1512863 ACTUAL CHARGES MEMORIAL HEALTH FOUNDATION INC l 286116 ACTUAL CHARGES MEMORIAL HEALTH FOUNDATION INC Q 464928 ACTUAL CHARGES BEACON HEALTH VENTURES INC p 3678498 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC p 23000000 ACTUAL CHARGES MEMORIAL HEALTH FOUNDATION INC p 182500 ACTUAL CHARGES MEMORIAL HEALTH FOUNDATION INC q 1167360 ACTUAL CHARGES BEACON HEALTH VENTURES INC q 8586695 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC q 30436726 ACTUAL CHARGES MEMORIAL HEALTH FOUNDATION INC r 1167360 ACTUAL CHARGES BEACON HEALTH VENTURES INC r 7501395 ACTUAL CHARGES MEMORIAL HOSPITAL OF SOUTH BEND INC r 30436726 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC j 38127 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC q 644551 ACTUAL CHARGES ELKHART GENERAL HOSPITAL INC r 644551 ACTUAL CHARGES