2012-05-12T10:20:58-05:00 2011-06-30 Ernst & Young US LLP 1901 Sixth Avenue North Suite 1200 Birmingham AL 35203 990 2010-07-01 751837454 Baylor University Medical Center BAYL 2148204135 2001 Bryan Street No 2200 Dallas TX 75201 Jay Whitfield 2148204135 2012-05-12 1 2052512000 2010 2016-02-24 21:20:13Z John McWhorter 3600 Gaston Avenue Ste 150 Dallas TX 75246 1440405643 0 X www.BaylorHealth.com X 1981 TX Faith based acute care hospital providing exemplary patient care, medical education, medical research and community service to residents of the Dallas/Fort Worth ten county region since 1903. 7 6 5958 739 112304 38247 25045649 29225848 1099970332 1109889170 35424440 46738904 12267 24958 1160452688 1185878880 36867093 28714804 0 0 352729532 362334373 0 0 0 577755442 610443555 967352067 1001492732 193100621 184386148 1412182847 1720666550 176223605 184932289 1235959242 1535734261 X Founded as a Christian ministry of healing, Baylor University Medical Center exists to serve all people through exemplary health care, education, research and community service. 0 0 840661540 17269531 1090398542 See Schedule OBaylor University Medical Center (BUMC), a faith-based, non-profit 1,020-bed acute care hospital, is the flagship hospital of Baylor Health Care System (BHCS), a nationally acclaimed network of acute care hospitals and related health care entities providing quality patient care, medical education, medical research and community services to the North Texas region. BUMC is a major patient care, research and medical education center of the Southwest and serves local, national and international patients. BUMC provides inpatient and outpatient medical services to treat individuals with diseases, illnesses and injuries of varying complexities. Services include providing patients with innovative methods of prevention, diagnosis, treatment, education and support consistent with a quality teaching and research hospital with multidisciplinary interaction among physicians, and include comprehensive care for all stages of illness through all stages of life. Some of these clinical services are provided despite a financial loss to BUMC. BUMC operates an emergency department and level 1 trauma center encompassing 78,000 square feet with 87 patient rooms, including four major trauma care beds. This level 1 trauma center is one of only two providing adult trauma services in Dallas County, with more than 100,000 patients during the fiscal year ended June 30, 2011. South Dallas residents are 30 percent more likely to be admitted to a hospital due to diabetes or a diabetes-related condition than other city of Dallas residents. In an effort to improve these conditions, the Diabetes Health and Wellness Institute at Juanita J. Craft Recreation Center (DHWI) was opened during FY 2010 as an affiliate of BHCS. BUMC supported the Institute through community wellness initiatives designed to increase access to care and extend the wellness and quality of life for South Dallas Frazier neighborhood residents with events such as the Dr. Oz Know Your Five health screening, KwanzaaFest, and the Mayors Passport to Health: Family Funfests at Fair Park, all of which served more than 50,000 people. During the year, BUMC admitted 37,580 total patients resulting in a total of 23,806 days of care; 4,251 babies were delivered and there were 87,555 emergency department visits. During the year, BUMC reported community benefits (as reported to the Texas Department of State Health Services and in accordance with the State of Texas Statutory methodology) of $212,557,106. BUMC provided community benefits (as reported on the IRS Form 990, Schedule H) of $83,054,957 during the tax year. The Texas Annual Statement of Community Benefit Standard includes approximately $97,000,000 of unreimbursed cost of Medicare that is not included in the IRS Form 990, Schedule H. 43059913 7982428 See Schedule OBaylor University Medical Center (BUMC) provided medical residency programs for the training of future physicians, nurses and other health professionals in an effort to increase the supply of health care professionals nationwide. During the year, BUMC served 220 medical residency students. Assisting with the preparation of future nurses at entry and advanced levels of nursing is critical to establishing a workforce of qualified nurses. Through their work with six Dallas County schools of nursing, Baylor strengthened and increased the number of affiliations with schools of nursing. During the year, BUMC invested in training 634 undergraduate nurses. Total unreimbursed cost of these programs was $35,077,485. 11445273 11445273 See Schedule OMoving scientific theory from the research bench to clinical trials and ultimately to the patient's bedside is central to the Baylor mission of patient-centered medical research. During the year, BUMC supported clinical research development costs, research papers and studies through Baylor Research Institute at a cost of $11,445,273. At Baylor Research Institute alone, more than 800 patient-focused research projects are under way. 895166726 1 1 0 1 0 0 0 0 0 1 0 1 1 1 1 0 1 0 0 1 0 0 0 0 0 1 1 1 1 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 0 1 636 0 1 5958 1 1 1 0 0 0 0 0 0 0 X 7 6 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 0 1 1 1 1 X Jay Whitfield 2148201913 3500 Gaston Avenue Suite 220 Dallas TX 75246 X Ron Carter 1.00 X 0 0 0 Roy Lamkin 1.00 X 0 315 0 Paul Madeley MD 1.00 X 0 733749 81205 George McCleskey 1.00 X 0 0 0 Timothy Owens 1.00 X 0 0 0 Mark Dyer 1.00 X 0 0 0 Walker Harman 1.00 X 0 4683 0 John McWhorter 40.00 X 1142450 0 155515 James Thaxton 40.00 X 567554 0 60040 Jason Whitfield 40.00 X 305920 0 55956 William Boyd 1.00 X 0 971758 220513 Janeene Jones 40.00 X 369906 0 45097 Gail Maxwell 40.00 X 312986 0 42677 Claudia Wilder 40.00 X 301248 0 49135 Christopher York 40.00 X 274534 0 46205 Donna Bowers 40.00 X 0 319330 50472 Irving Prengler MD 40.00 X 619220 0 88301 Michael Ramsay MD 40.00 X 602720 0 70303 Ronald Jones MD 40.00 X 504996 0 24703 Michael Emmett MD 40.00 X 574835 0 68090 William Sutker 40.00 X 413103 0 30116 Janie Wade X 0 361143 54503 Liz Youngblood X 0 344872 36207 5989472 2735850 1179038 358 1 1 0 Baylor Health Care System 2001 Bryan St Ste 2200 Dallas TX 75201 Management Services 124786332 MEDCO Construction LLC 2001 Bryan St Ste 2200 Dallas TX 75201 Construction Services 29029175 Aramark Services Inc P O Box 651009 Charlotte NC 282651009 Engineering/Food Serv 18823861 HealthTexas Provider Network 2001 Bryan St Ste 2200 Dallas TX 75201 Clinical/Admin Services 18462777 Baylor Heart & Vascular Center LLP 2001 Bryan St Ste 2200 Dallas TX 75201 Clinical Services 15757023 112 25865775 3123101 236972 29225848 Patient Care Revenue 621990 1027665419 1027665419 Affiliate Income 621990 56294444 56292430 2014 Cafeteria 722210 9726502 9726502 Rent 531120 7367756 7367756 EHR Incentive 900099 1549760 1549760 7285289 5085208 110290 2089791 1109889170 20438429 420397 20018032 24958 24958 280674615 152623 254526763 26147852 152623 26300475 26300475 1185878880 1098380970 112304 58159758 28690804 28690804 24000 24000 3432618 3432618 290515326 287523568 2991758 9117657 8926982 190675 42863046 42806369 56677 16405726 15734207 671519 352639 352639 983214 983214 4759 4759 219925541 131203961 88721580 5513210 417798 5095412 188838842 187031628 1807214 33815510 33815510 34871764 33291858 1579906 898904 800468 98436 981198 963440 17758 38830740 38830740 10129967 9728869 401098 Bad Debt 73543120 73543120 Special Functions 528874 357821 171053 Recruiting 518531 518531 Dues & Memberships 326913 318180 8733 Federal Income Tax 14742 14742 365087 271491 93596 1001492732 895166726 106326006 0 117705 87995 109966853 115759834 7354370 6903971 10738716 12199202 439852 380256 769741024 429719618 283559762 340021406 754137093 953881697 118058789 135699066 3508166 5870711 124301541 149862412 1412182847 1720666550 63809314 72894983 16499042 20417305 94801133 90915090 1114116 704911 176223605 184932289 X 1119250120 1393347237 61807827 67204646 54901295 75182378 1235959242 1535734261 1412182847 1720666550 X 184386148 115388871 X 0 1 1 X 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 1 0 0 0 1 35315 1 232298 0 0 267613 0 Part IV, Supplemental Information: Statement Regarding Legislative Activity Health care policy is critical to all Americans, and Baylor University Medical Center ("BUMC") believes that health care providers must participate in forming health care policy by interacting with national, state and local representatives and their staff members to help them better understand the complexities and ramifications of key health care policies including, without limitation, those related to uninsured and indigent patient needs as well as the legislative and regulatory needs to assure the delivery of cost-efficient, quality health care. BUMC has established relationships with persons and industry associations that often communicate BUMC's positions on major health care issues. These contacts may include direct contact, telephone conversations and/or letters. Also, BUMC may attempt to educate the local community on certain legislative initiatives that may impact BUMC's ability to provide quality health care services to the community through direct mailings, media advertising or broadcast statements. The amount of resources (time and money) involved in these activities is insubstantial. BUMC has not intervened in any political campaign. 9842901 9842901 487740839 274803845 212936994 272157284 154915773 117241511 340021406 Investments in Exempt Orgs 10821071 C Inv in Controlled Partnerships 124877995 F 135699066 Grantor Trust 6182220 Physician Guarantee Receivable 704911 Bond Issue Costs 588257 BUMC Assets at BHCS Foundation 142387024 149862412 Physician Guarantee Liability 704911 704911 Description of Uncertain Tax Positions Under FIN 48: Part X: The filing organization does not have separate individual audited financial statements; however, the organization is included in Baylor Health Care System's combined audited financial statements (System). The System follows the provisions of ASC 740 "Income Taxes." As of June 30, 2011 and 2010, the System had no material gross unrecognized tax benefits. Central America and the Caribbean 0 0 Program Services CME 1629 Europe 0 0 Program Services Medical Education/Research 19172 0 0 0 20801 0 20801 0 0 0 0 0 0 1 1 X 1 X 1 X 500.000000000000 1 1 1 0 1 1 46122880 2179924 43942956 0.04190 83243233 119828536 -36585303 0.00000 151032 50703 100329 0.00010 129517145 122059163 7457982 0.00710 3984779 3414 3981365 0.00380 43236005 7982428 35253577 0.03360 12973389 5631754 7341635 0.00700 11445273 0 11445273 0.01090 17588332 13207 17575125 0.01680 89227778 13630803 75596975 0.07210 218744923 135689966 83054957 0.07920 1 27303818 2730382 264964093 299726417 -34762324 X 1 1 1 Baylor Heart & Vascular Center LLP Patient Care 0.51000 0.00000 0.49000 9 1 Baylor University Medical Center

3500 Gaston Avenue Dallas TX 75246

X X X X X 2 Baylor Heart & Vascular Center LLP

621 N Hall Dallas TX 75226

X 3 Frisco Medical Center LLP

5601 Warren Parkway Frisco TX 75034

X X 4 Ft Worth Surgicare Partners Ltd

750 12th Avenue Ft Worth TX 76104

X X 5 North Central Surgical Center LLP

9301 North Central Expressway Ste 100 Dallas TX 75231

X X 6 Trophy Club Medical Center LLP

2850 E State Hwy 114 Trophy Club TX 76262

X X 7 Arlington Orthopedic & Spine Hospital

707 Highlander Blvd Arlington TX 76015

X X 8 MSH Partners LLP

2727 East Lemmon Ave Dallas TX 75204

X X 9 Irving Coppell Surgical Hospital LLP

440 West I-35 Irving TX 75063

X X NA 1 41 Baylor Surgicare at Lewisville

1854 Lakepoint Drive Lewisville TX 75057

Ambulatory Surgery Center Baylor Surgicare at Bedford

1600 Central Drive Suite 180 Bedford TX 76022

Ambulatory Surgery Center Baylor Surgicare at Arlington

2400 Matlock Rd Suite 100 Arlington TX 76015

Ambulatory Surgery Center Baylor Surgicare at Valley View

5744 LBJ Freeway Suite 200 Dallas TX 75240

Ambulatory Surgery Center Baylor Surgicare

3920 Worth Street Dallas TX 75246

Ambulatory Surgery Center Baylor Diagnostic Imaging Center

3900 Junius Suite 100 Dallas TX 75246

Radiology Center Baylor Surgicare at Grapevine

2020 W State Hwy 114 Suite 102 Grapevine TX 76051

Ambulatory Surgery Center Baylor Surgicare at Plano

1701 Ohio Drive Plano TX 75093

Ambulatory Surgery Center Baylor Surgicare at Carrollton

4780 North Josey Lane Carrollton TX 75010

Ambulatory Surgery Center Baylor Surgicare at North Garland

7150 N Georg Bush Highway Garland TX 75044

Ambulatory Surgery Center Rockwall Surgery Center

825 West Yellowjacket Lane Suite 100 Rockwall TX 75087

Ambulatory Surgery Center Baylor Surgicare at Fort Worth I

975 Haskell Street Fort Worth TX 76107

Ambulatory Surgery Center Baylor Surgicare at Fort Worth II

2001 Cooper Street Fort Worth TX 76104

Ambulatory Surgery Center North Texas Surgery Center

7992 West Virginia Drive Suite 1600 Dallas TX 75237

Ambulatory Surgery Center Baylor Surgicare at Denton

350 South I-35 East Denton TX 76205

Ambulatory Surgery Center Baylor Surgicare at Mansfield

280 Regency Parkway Mansfield TX 76063

Ambulatory Surgery Center Baylor Surgicare at Heath

6435 South FM 549 Suite 101 Heath TX 75032

Ambulatory Surgery Center Baylor Surgicare at Granbury

1717 Paluxy Road Granbury TX 76048

Ambulatory Surgery Center Baylor Surgicare at Oakmont

7200 Oakmont Blvd Suite 101 Fort Worth TX 76132

Ambulatory Surgery Center Baylor Surgicare at Garland

530 Clara Barton Suite 100 Garland TX 75042

Ambulatory Surgery Center Baylor Diag Imaging Ctr at N Dallas

9101 N Central Exp Suite 100 Dallas TX 75231

Radiology Center Baylor Ctr for Pain Mgmt at Grapevine

1615 Lancaster Dr Suite 103 Grapevine TX 76051

Pain Center Baylor Breast Imaging Center

3900 Junius Suite 200 Dallas TX 75246

Radiology Center Lone Star Endoscopy Center

180 Bear Creek Parkway Keller TX 76248

Ambulatory Surgery Center Baylor Surgicare at Ennis

2200 Physicians Blvd Suite A Ennis TX 75119

Ambulatory Surgery Center Park Cities Surgery Center

6901 Snider Plaza Suite 300 University Park TX 75205

Ambulatory Surgery Center Tuscan Surgery Center at Las Colinas

701 Tuscan Drive Suite 100 Irving TX 75039

Ambulatory Surgery Center Baylor University Med Ctr at N Dallas

9101 N Central Exp Suite 200 Dallas TX 75231

Radiology Center Baylor Senior Health Ctr Mesquite

1650 Republic Pkwy Suite 150 Mesquite TX 75150

Senior Clinic Baylor Advanced Imaging Center

411 N Washington Suite 1000 Dallas TX 75246

Radiology Center Baylor Geriatrics Center

4004 Worth Street Suite 100 Dallas TX 75246

Senior Clinic Baylor Surgicare at Plano Parkway

4031 W Plano Parkway Suite 100 Plano TX 75093

Ambulatory Surgery Center Baylor Senior Health Ctr at Fair Park

2835 Grand Ave Dallas TX 75215

Senior Clinic Baylor Neuroscience Ctr Headache Center

9101 N Central Exp Suite 400 Dallas TX 75231

Headache Clinic Baylor Martha Foster Lung Care Ctr

4004 Worth Street Suite 300 Dallas TX 75246

Asthma Center Ruth Collins Diabetes Center

4000 Junius Street Dallas TX 75246

Diabetes Center Weight Loss Surgery Clinic

9101 N Central Exp Suite 370 Dallas TX 75231

Bariatric Center Baylor Breast Imaging Ctr at Rockwall

1355 Ridge Road Suite 105 Rockwall TX 75087

Radiology Center Baylor Breast Imag Ctr at Cedar Hill

294 Uptown Blvd Suite 110 Cedar Hill TX 75104

Radiology Center Memory and Alzheimer's Center

9101 N Central Exp Suite 190 Dallas TX 75231

Neuroscience Center Baylor Ambulatory Endoscopy Center

4708 Alliance Blvd Suite 210 Plano TX 75093

Ambulatory Surgery Center Part I, Line 3c: and Line 3b: In addition to providing free care to financially indigent patients at 200% of the federal poverty guidelines ("FPG"), the organization provides discounted care to the medically indigent which is based on both the FPG (up to 500%) and the percentage of the patient's total bills from all providers in relation to the patient's annual income. Pursuant to the charity care policy, a patient's total balance due will not exceed 10% of total annual income if the patient qualifies as medically indigent. The organization also provides discounted care to those individuals whose amount of total bills, after all payments from third parties, exceeds 50% of the patient's annual income (regardless of the level of income) if the patient is unable to pay the remaining bill. Part I, Line 6a: The organization prepares and files an Annual Report of Community Benefit Plan with the Texas Department of State Health Services. These reports are made available through the organization's website at www.baylorhealth.com. Part I, Line 7: A ratio of patient care cost to charges, as determined in Worksheet 2, was used to report the amounts in Part I, Lines 7a - 7d. For amounts reported on lines 7e - 7k, actual expenses for each community benefit activity are tracked and reported using both community benefit software and/or the organization's cost accounting system.Part I, Line 7b, Column (d): Includes payments from the State Medicaid Private Upper Payment Limit Program, which funds are to be used to expand indigent care. Part I, Line 7g: The organization provides palliative care services and operates community senior health centers despite a financial loss after removing the unreimbursed cost of providing charity care and Medicaid. These services are provided to meet an identified community need and otherwise may not be available if not provided by the organization in these underserved areas of the community.Part I, Line 7i, Column (c): Includes charity care payments of $12,895,491 that are made directly to or on the behalf of a local public hospital and/or other nonprofit organizations for the treatment of indigent patients of those organizations.Part I, Line 7, Column (f): The tax software used to prepare and file electronically the Form 990 for the organization may not properly print the percentages in Part 1, Lines 7a-7k, column (f) if the product results in a negative percentage. Part I, L7 Col(f): The amount of bad debt expense included on Form 990, Part IX, line 25, but removed for Schedule H, Part I, Line 7, Column (f) totaled $73,543,120. Part III, Line 4: As stated in the combined audited financial statements, the organization maintains allowances for uncollectible accounts for estimated losses resulting from a payor's inability to make payments on accounts. The organization assesses the reasonableness of the allowance account based on the historical write-offs, cash collections, and the aging of the accounts. Accounts are written off when collection efforts have been exhausted. Management continually monitors and adjusts its allowance associated with its receivable. Bad debt does not include amounts for patients who are known to qualify under the organizations charity care policy. The amount of bad debt at cost was calculated using Worksheet A from Schedule H instructions. The amount of bad debt attributable to patient's accounts is net of contractual allowance, payments received and recoveries of bad debt previously written off. Based on prior experience and certain demographics and other information obtained during admission, the organization believes a portion of the bad debt expenses at cost would be attributable to patients that would otherwise qualify for charity care. Despite all of the effort and ways the organization educates patients about qualifying for its charity care program as demonstrated in Part IV, question 3 below, many uninsured patients either refuse or fail to complete a charity care application or provide sufficient information at the time of admission, during their stay or after being discharged to qualify for assistance under the organization's charity care policy. The amount reported on Part III, Line 3 was estimated by reviewing the average acceptance rate for charity care applications received at certain facilities during the year multiplied by the number of denials that were attributable to those facilities due to insufficient information. Part III, Line 8: The amount reported on Part III, Section B, line 6 was calculated in accordance with the Schedule H instructions utilizing the organization's allowable cost reported in the Medicare cost report based on a cost to charge ratio. However, the allowable costs in the Medicare cost report do not reflect the actual cost of providing care to patients since the Medicare cost report excludes many direct patient care costs that are essential to providing quality care to these patients. For example, certain coverage fees to physicians, cost of Medicare C and D, and other similar direct patient care expenses are specifically excluded as allowable cost in the cost reports. Using the same methodology to calculate the unreimbursed cost of providing charity care and Medicaid (using applicable Schedule H Worksheets) would result in a shortfall of $65,087,427 which is $30,325,104 higher than the shortfall reported on Part III, Section B, Line 7. The organization believes that all of the shortfall should be considered as a community benefit for the following reasons. First, the IRS Community Benefit Standard includes the provision of care to the elderly and Medicare patients. IRS Revenue Ruling 69-545 provides in part, that hospitals serving patients with governmental health benefits, including for example Medicare, is an indication that the hospital operates for the promotion of health in the community. Second, the organization provides care to Medicare patients regardless of this shortfall, i.e., loss, and thereby relieves the state and federal government of the burden of paying the full cost for the care of Medicare beneficiaries. Medicare does not provide sufficient reimbursement to cover the entire cost of providing care to these patients causing the organization to use other surplus funds to cover the shortfall. It is expected that reimbursement under the Medicare program will continue to decline and therefore may further limit access to care due to the anticipated reduction of participating Medicare providers in the community. As a result, the care for these patients will likely continue to increase, and rest on the shoulders of, nonprofit hospitals and/or county hospital districts. Third, many of the Medicare participants have low fixed incomes and therefore would qualify for charity care or other means tested government programs absent being enrolled in the Medicare program. Fourth, Texas nonprofit hospitals must provide a minimum level of community benefit in order to obtain exemption from state and local taxes. According to the current Texas Health and Safety Code, the unreimbursed cost of Medicare is considered to be a community benefit in determining these state statutory requirements as it helps relieve a governmental burden of providing this care that would otherwise be provided through the county hospital system in Texas. Part III, Line 9b: The organization's debt collection policy and procedures prohibit any collection efforts for the portion of the patient account balance that qualifies for financial assistance under the organization's charity care policy. Part VI, Line 2: Like many other nonprofit hospitals in the 12 county North Texas region, the organization has elected to base their service area needs on a report generated by the local county hospital district. The Our Community Health Checkup 2008 for the Dallas/Fort Worth Combined Metropolitan Statistical Area ("Checkup") is a collaborative effort of 16 member hospitals of the Dallas Fort Worth Hospital Council ("DFWHC"). The preparation (including support, research and analysis) of the report was provided by the staffs of the Strategic Planning and Population Medicine Department of the Parkland Health & Hospital System also known as the Dallas County Hospital District, Baylor Health Care System and other health care providers. The Checkup was developed to address issues relative to health pertaining to individuals, families, and communities for use by the residents of the community and the institutions serving them. The Checkup provides a framework by which health needs can be joined with the assets or investments made by the community in its social and physical infrastructure. Overall coordination of this collaboration is under the auspices of the DFWHC. These documents can be found online at www.dfwhc.org. Part VI, Line 3: The organization is committed to promoting health in the community including providing or finding financial assistance programs to assist patients. Patients who may qualify for financial assistance through the organization's charity care program or other federal, state and local government programs are informed and educated about their eligibility in several ways including, but not limited to, the following: 1) posting signs and notices regarding the charity care policy in the emergency departments, admitting areas and business offices located throughout the organization, 2) annual posting regarding the organization's charity care program in the local newspapers, 3) information regarding financial assistance, including the organization's charity care policy, is posted on the organization's website, 4) notices about the organization's financial assistance policies are posted on each bill sent to patients including providing a phone number to access the customer service unit dedicated to answering patients billing questions, as well as provide information regarding financial assistance, and 5) the organization provides free financial counselors to help patients determine how to meet their financial obligations for services provided. Specifically financial counselors assist patients in applying for government assistance programs such as Medicaid or the organization's charity care program. Any patient may request to speak to a financial counselor when being treated at the organization. Uninsured patients who are admitted to the hospital will automatically receive help from a financial counselor. These services are provided in writing and through interpretation services in the primary language of the patient requesting assistance. Though the most often needed alternate language is Spanish, the organization can accommodate multiple languages including American Sign Language. Part VI, Line 4: The organization's primary patient service area includes parts of the North Texas counties of Dallas, Rockwall, Van Zandt and Kaufman. The population of over 4.2 million in the combined primary and secondary service areas has an average household income of $76,740, and 28% have some college education. The organization also treats patients from the surrounding 82 counties, as well as patients from many other states and countries. The largest segment of the population is between 35-54 years of age, with 49.3% White, 28.5% Hispanic and 15.1% Black. During the FY 2011 year, approximately 22% of the total patient encounters were uninsured or Medicaid recipients. More specifically, the organization provides much needed community benefit activities throughout the city of Dallas, including providing a significant amount of unreimbursed care to inner city residents in East Dallas and South Dallas near the organization's primary campus. Residents of this area are often financially and medically indigent and are at highest risk for many diseases due to their social and/or economic conditions. East Dallas, where the organization is located, is an older community inhabited by a diverse racial population with the greatest percentage being Hispanic (42.4%), then White (40.3 %), followed by Black (12.8%), Asian and other (4.5%). In the area of health, the most chronic conditions are: (1) Mental Health, (2) High Cholesterol, (3) High Blood Pressure, (4) Asthma, (5) Obesity, and (6) Diabetes. The prevalence of chronic conditions - asthma and depression/anxiety - is higher for East Dallas than for Dallas County. The majority of the Dallas County population (51%) is privately insured, 26% are uninsured, 9.8% receive Medicare coverage and 12.7% receive Medicaid coverage. South Dallas is the second targeted community service area and one of the poorest areas in Dallas County with the majority of the population being Black (74.5%), followed by Hispanic (19.1%). The majority of Black residents are female senior adults (65 and older) and small children. This area has a very high unemployment rate. In 2008, more than 60 percent of households in South Dallas earned less than $25,000 and nearly 50 percent of the population over the age of 25 did not graduate from high school. According to the 2008 Checkup, in the area of health, the mortality rates in South Dallas were twice the rate of the county's for heart disease, cancer and stroke. Chronic diseases in this area are high blood pressure, obesity, depression/anxiety, and asthma, and occur at a much higher rate in South Dallas than the entire Dallas County, the State of Texas, or the United States. The three highest rates for hospitalization discharge were for adult diabetes with long term complications, congestive heart failure, and bacterial pneumonia. In addition to the three top reasons for death, the mortality rates of HIV/AIDS and chronic kidney disease were high enough to move them into the top six causes of death for South Dallas residents. The South Dallas area has the highest rate of infectious conditions and injuries (including injuries from homicide), in the Dallas area. Low-weight newborns are a growing concern, and the rate continues to increase each year. The rate increased from 3.4 % in 2000 to 7.7 % in 2007. The most important statistic among Dallas County's birth outcomes every year is infant mortality rates. In 2004, South Dallas had an infant mortality rate of 26.4 deaths per 1,000 live births, which is considerably higher when compared to the Dallas County rate of 6.7. Part VI, Line 6: With the oversight of an independent volunteer community board and Baylor Health Care System, the organization's sole member, the organization has promoted health and benefited the community by providing access to more than 20 specialty centers designed to treat a range of medical conditions. The organization's governing body is comprised of volunteer community representatives that provide leadership and governance for the organization. The members of the governing body contribute their wisdom, insights, and expertise to ensure the organization is fulfilling its mission and charitable purpose while providing efficient administrative support services and direction for the System. The members are well respected residents and/or own businesses in the organization's primary or secondary service area and understand the needs of the community. The medical staff of the organization is open to all physicians in the community who meet membership and clinical privileges requirements. Surplus funds are continuously utilized to maintain access to limited patient services or expand access points of care to patients throughout the community including, but not limited to, the following: The organization provides a comprehensive Level I trauma center; one of only two adult trauma centers in Dallas/Fort Worth, covering 15 counties and 6.5 million residents. The trauma services division has dedicated trauma and stroke teams, providing 24-hour coverage of emergency services. The Riggs Emergency Department has more than 75,000 square feet, 85 patient treatment rooms, with dedicated areas specifically for trauma care and minor emergency care.The organization operates a Level III neonatal intensive care unit ("NICU") which is the highest level of care. This provides advanced life-support services and technologies for premature and seriously ill newborns. Staffed by specialized nurses, neonatal nurse practitioners, neonatologists and many other skilled staff, the NICU is designed to promote optimal developmental care for sick infants.Medical education is a crucial part of the organization's mission. During a residency, a physician trains in a particular medical specialty, developing clinical skills and professional competencies and taking on increasing responsibility for patient care. As one of the nation's largest private teaching hospitals, the organization annually trains 167 residents and 51 fellows in 8 specialties and 21 subspecialties. Quality teaching programs add many dimensions to the organization's ability to serve patients. As a renowned teaching hospital, the organization attracts first-rate medical specialists who help improve the level of medical care for the entire community. Teaching programs also aid attending physicians in keeping their own knowledge current. Upon completion of their residency programs at the organization, most physicians remain in North Texas, providing a continuous supply of well-trained medical professionals for the region. Having the designation of a medically underserved area, the organization partners with other organizations to provide access to health care services for an underserved population, those living in poverty, in areas where infant mortality is high and where the ratio of primary care physicians per 1,000 population is low. For example, the organization has teamed with the City of Dallas to improve care for people with diabetes by creating a new care model focused on health care, education and research in South Dallas. By providing financial support, the Diabetes Health and Wellness Institute at Juanita J. Craft Recreation Center (Institute) is the cornerstone of the organization's care model to treat patients in the South Dallas region which opened during FY 2010 to address the region's health care needs relative to diabetes. The goal of the center is to weave diabetes prevention into the fabric of the community so that it is a natural and convenient part of life in this neighborhood. The center provides access to medical care and preventative health education to a historically underserved and low-income community experiencing disparate health outcomes relative to the most commonly-encountered health conditions associated with diabetes. During the year, construction and development continued on a new 467,000 square foot outpatient cancer center - the largest in Texas, offering a patient navigation system, advanced technology and integrative therapies for the treatment of every kind of cancer. With the organization's new cancer center will come expanded cancer research benefitting all patients of means and those of none, including top-tier healthcare providers. The center will educate tomorrow's cancer specialists. The expanded center will include outpatient radiation and chemotherapy as well as expanded support groups, and educational resources and programs.Cancer center education and support are an important part of the cancer treatment process. The organization offers several programs through the Virginia R. Cvetko Patient Education Center to help patients and loved ones understand and manage the physical, emotional, and spiritual challenges of cancer. The Cvetko Center staff includes a medical director, program manager, nurse educator, chaplains, social workers, psychologist, music practitioner and trained cancer survivor volunteers and includes support programs for cancer patients and families, cancer support groups, educational programs and cancer resource areas.Work on The Baylor Cancer Hospital, the first dedicated cancer hospital in North Texas began during the fiscal year and will open in FY 2012 as part of the organizations cancer services expansion. The new inpatient hospital is a major renovation and will house 120 beds,a pharmacy, patient and family support areas, and the bone marrow transplant unit. The hospital will be conncected to the oncology outpatient facility also scheduled for opening in FY 2012. Part VI, Line 7: The organization is part of a large faith based integrated health care delivery system ("System") serving the health care needs of the twelve county Dallas-Fort Worth metroplex area. The System exists to serve all people through exemplary health care, education, research and community service. Community benefits are provided through the provision of charity care, governmental sponsored programs (such as Medicaid and Medicare), medical research, medical education, community health improvement services, donations to other nonprofit health care providers, and many other community service activities. During the year, the affiliated nonprofit hospitals reported community benefits (as reported to the Texas Department of State Health Services, and in accordance with the State of Texas Statutory methodology) in excess of $502,800,000. The System's nonprofit hospitals provided community benefits (as reported on the IRS Form 990, Schedule H) in excess of $151,000,000 during the tax year. The Texas Annual Statement of Community Benefit Standard includes approximately $302,000,000 of unreimbursed cost of Medicare that is not included in the IRS Form 990, Schedule H. The System is comprised of separate legal entities including philanthropic foundations, a research institute, a physician network, acute care hospitals, short-stay hospitals, specialty hospitals, ambulatory surgery centers and other health care providers all which fall under the common control of Baylor Health Care System, the organization's sole member. As part of the System, certain affiliates make grants and/or contributions to other related nonprofit affiliates to help financially support and/or fund worthy community benefits activities. The System has also established a patient transfer system among the affiliated hospitals allowing patients needing a particular level of care to be transferred as needed to a related hospital that can provide that service in an efficient and effective manner. As part of the System, all hospitals and other affiliated health care providers are required to adhere to high standards for medical quality, patient safety and patient satisfaction. These standards hlep ensure consistency and are set forth by Baylor Health Care System, the organization's sole member. Reports Filed With States Part VI, Line 7 TX 1 Southern Sector Health Initiative 4500 Spring Avenue Dallas TX 75210 263087442 501(c)(3) 4350000 N/A N/A Community Benefit Baylor Research Institute 3310 Live Oak Ste 501 Dallas TX 75204 751921898 501(c)(3) 11445273 N/A N/A Research Dallas Academy of Medicine dba Project Access Dallas 140 E 12th Street Dallas TX 75203 750223610 501(c)(3) 816641 N/A N/A Indigent Care Dallas County Indigent Care Corporation PO Box 655999 Dallas TX 75265 260610562 501(c)(3) 12078890 N/A N/A Indigent Care 4 0 Scholarships 28 24000 0 N/A N/A Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: Monitoring Grants & Other Assistance As part of its mission, the organization provides grants and other assistance to related organizations and/or unrelated not-for-profit organizations which are religious, charitable, scientific, or educational in nature, within the meaning of Internal Revenue Code Section 501(c)(3), when the use will further one or more tenets of Baylor's charitable mission and one of the following criteria for use of these funds is met: (1)Fulfills a need identified by a community needs assessment conducted by Baylor Health Care System (BHCS) or a third party (such as Community Health Check Up or by the United Way) and adopted as a priority by BHCS's Community Service Advisory Council, (2) Serves an under-served community or group of people through medical mission work to improve their health status. For related organizations, all grants and other assistance are subject to the policies and procedures set forth by BHCS which ensures all funds are used in accordance with the guidelines set forth above and in accordance with the related organization's exempt purpose. Grants and other assistance provided to unrelated organizations are typically monitored by personal inspection. Examples include providing assistance to entities where the filing organization's employee serves as a Board Member for the recipient organization or through attendance at community events where the filing organization employees work as volunteers or to help coordinate these events. X X X X X 1 1 X X X X 0 1 0 0 0 0 0 1 0 Paul Madeley MD 0 503357 0 0 0 230392 0 67185 0 14020 0 814954 0 226611 John McWhorter 421984 0 293703 0 426763 0 138450 0 17065 0 1297965 0 409228 0 James Thaxton 382861 0 136239 0 48454 0 47428 0 12612 0 627594 0 33114 0 Jason Whitfield 226956 0 70433 0 8531 0 35379 0 20577 0 361876 0 6721 0 William Boyd 0 538151 0 409474 0 24133 0 197632 0 22881 0 1192271 0 0 Janeene Jones 246133 0 99382 0 24391 0 29302 0 15795 0 415003 0 21840 0 Gail Maxwell 201156 0 94777 0 17053 0 30084 0 12593 0 355663 0 14469 0 Claudia Wilder 207606 0 75303 0 18339 0 31891 0 17244 0 350383 0 0 0 Christopher York 198845 0 60154 0 15535 0 30711 0 15494 0 320739 0 14324 0 Donna Bowers 0 211629 0 85643 0 22058 0 34271 0 16201 0 369802 0 20439 Irving Prengler MD 433797 0 135202 0 50221 0 65098 0 23203 0 707521 0 44057 0 Michael Ramsay MD 534360 0 0 0 68360 0 55350 0 14953 0 673023 0 0 0 Ronald Jones MD 437409 0 0 0 67587 0 12250 0 12453 0 529699 0 0 0 Michael Emmett MD 405055 0 36875 0 132905 0 53196 0 14894 0 642925 0 81551 0 William Sutker 319909 0 91015 0 2179 0 12250 0 17866 0 443219 0 0 0 Janie Wade 0 241298 0 99126 0 20719 0 36465 0 18038 0 415646 0 20158 Liz Youngblood 0 228572 0 94270 0 22030 0 33375 0 2832 0 381079 0 17294 Part I, Line 1a Travel for companions - The organization reimburses eligible employees and board members certain reasonable travel expenses associated with spousal travel where the spouse's presence is important to the event. These events may include, for example, board meetings, business meetings, and award ceremonies approved by the organization's governing body and/or President. All spousal travel reimbursements are treated as taxable compensation. Two of the persons listed in the Form 990, Part VII, Section A, received this benefit during the tax year. Part I, Line 1a Tax indemnification and gross up payments-The organization provides tax indemnification where an authorized member of management determines there is justification to reimburse an individual for the tax impact on certain taxable, non-cash benefits provided to them. All tax indemnification payments provided are treated as taxable compensation. Two of the persons listed in the Form 990, Part VII, Section A, received this benefit during the tax year. Part I, Line 1a Discretionary spending account-The organization provides eligible employees who travel frequently in their personal vehicle an auto expense allowance in lieu of reimbursement for business mileage under the organization's business travel and expense reimbursement policy. All auto expense allowances are treated as taxable compensation. Two of the persons listed in the Form 990, Part VII, Section A, received this benefit during the tax year. Part I, Line 1a Health or social club dues or initiation fees-The organization may reimburse eligible employees for dues for a health club and/or a social club where there is a bona fide business need for the membership. For example, as part of the organization's promotion of health, the organization will cover a portion of any employees' fitness center club membership dues paid to an affiliated entity that owns and operates a fitness center. All employees are eligible for this benefit. Such reimbursements are treated as taxable compensation to the extent any part of the membership is used for personal use. One person listed in the Form 990, Part VII, Section A, received this benefit during the tax year. Part I, Line 1a The organization does not provide benefits such as a maid, chauffer or chef; however, the organization does provide eligible senior officers financial planning benefits as part of their total compensation. All financial planning benefits provided to any individual are treated as taxable compensation. One person listed in the Form 990, Part VII, Section A, received this benefit during the tax year. Part I, Line 4b In order to recruit and retain key talent, Baylor Health Care System ("BHCS") offers a supplemental non qualified retirement plan to eligible employees. The plan provides an annual benefit (based on a percentage of compensation) to the employee that is paid to the employee on a future date upon vesting in the plan. The following individual(s) participated in and/or received payments (noted in parenthesis) from BHCS' supplemental non qualified retirement plan during the tax year: Christopher York ($14,324), Donna Bowers ($20,439), Claudia Wilder, Gail Maxwell ($14,469), Irving Prengler ($44,057), James Thaxton ($33,114), Janeene Jones ($21,840), Janie Wade ($20,158), Jason Whitfield ($6,821), John McWhorter ($360,046), Michael Emmett, M.D. ($81,551), Michael Ramsay, M.D., Paul Madeley, M.D. ($226,611), Elizabeth Youngblood ($17,294) and William Boyd. Also, certain senior officers, as designated by the organization's governing body, are eligible to participate in a Long Term Incentive Plan that is designed to recognize key senior leaders value and contribution to the organization as well as align their compensation to the long term strategy of the organization. Performance targets are based upon a percentage of the participants base salary and are developed by independent third party expert(s) using market competitive data within the guides of reasonableness. The plan is based on organization's three-year performance against its peers, determined based on peer rankings or percentile rankings in quality, patient satisfaction and financial performance. At the end of three years, awards are determined by the organization's governing body for participants. Payouts are partially made in cash and the remainder vests over an additional two year period. The following individual(s) participated in and/or received payments (noted in parenthesis) from BHCS' supplemental non qualified retirement plan during the tax year: John McWhorter ($49,182) and William Boyd. Part I, Line 7 The organization has adopted and implemented BHCS's, the organization's sole member, Performance Award Program to provide a market competitive total cash compensation incentive program that is designed to attract and retain key leaders and establish greater individual accountability and alignment to business performance. Payout targets are based upon a percentage of base pay and are developed by independent third party expert(s) using comparable market competitive data within the bounds of reasonableness and that are reviewed and approved by BHCS's governing body. Payout levels are based upon a combination of system, entity, and individual performance using various metrics related to quality, patient satisfaction, employee retention, and financal stewardship. BHCS's governing body may approve modifications to annual incentive awards provided under the program consistent with market comparability data. Supplemental Information Part III Supplemental Information: Governing Body Compensation The members of the governing body serve on a voluntary basis and receive no cash compensation from the organization for these duties as a member of the governing body. Some, but not all, members have received modest benefits incident to their service on the board and/or multiple board committees or received compensation as an employee of a related organization. These benefits include reimbursement for certain reasonable expenses paid on behalf of the member's spouse while accompanying the member on business travel on behalf of the related organization and/or a wellness physical. All such benefits are treated as taxable compensation to the extent required by law and are reported in the Form 990 where applicable. Baylor Health Enterprises LP (BHE) John McWhorter, organization's President, serves as a Board Member of BHE. 1182226 Purchased Services 0 Baylor Heart & Vascular Center LLP (BHVC) John McWhorter, organization's President, serves as a board member of BHVC. 5004683 Rental of real property, management services, provision of charity care to BUMC. 0 Baylor Heart & Vascular Center LLP (BHVC) John McWhorter, organization's President, serves as a board member of BHVC. 15714150 Clinical Services 0 Baylor Heart & Vascular Center LLP (BHVC) John McWhorter, organization's President, serves as a board member of BHVC. 24796858 Investment in Joint Venture 0 Baylor Heart & Vascular Center LLP (BHVC) Tim Owens, organization's board member, serves as a board member of BHVC. 5004683 Rental of real property, management services, provision of charity care to BUMC. 0 Baylor Heart & Vascular Center LLP (BHVC) Tim Owens, organization's board member, serves as a board member of BHVC. 15714150 Clinical Services 0 Baylor Heart & Vascular Center LLP (BHVC) Tim Owens, organization's board member, serves as a board member of BHVC. 24796858 Investment in Joint Venture 0 Schedule L, Part IV, Transactions Involving Interested Persons: The interested persons listed above in Part IV, including Baylor Heart and Vascular Center, LLP (BHVC)and Baylor Health Enterprises, LP (BHE) are controlled affiliates of the organization. The organization's employees and/or community board representatives (John McWhorter and Tim Owens) were appointed by the organization to serve as board members of the controlled affiliates. These individuals were appointed by the organization to serve as board representatives of those controlled affiliates to ensure they are operated in a charitable manner and in accordance with the organization's tax exempt status. The appointment of the community board representatives to serve on the governing body of related partnerships is consistent with IRS guidance such as Revenue Ruling 98-15 and other related rulings requiring the exempt organization to maintain control of partnerships and joint ventures. In those instances, the community board representatives do not have a financial interest in the organization or the related partnership, do not receive any financial benefit from transactions between the organization and the related partnership, and serve only in a voluntary capacity as an independent community board member. Form 990, Part VI, Section A, line 6 Members or stockholders: The organization is a Texas nonprofit membership organization in which BHCS, a tax exempt, Texas nonprofit corporation, is the sole member. Form 990, Part VI, Section A, line 7a Election of members of governing body by members, stockholders, or other persons: The sole member, BHCS, elects and removes the members of the governing body. Form 990, Part VI, Section A, line 7b Governing body decisions subject to approval: All rights and powers are reserved to the sole member, BHCS, except only those rights and powers expressly set forth in the bylaws, required by state or federal law, or to meet the requirements and standards promulgated by joint commission. For example, the member's reserved rights and powers include, without limitation, approval of the organization's articles of incorporation and bylaws and amendments thereto, appointment and removal of members of the organization's governing body, approval of dissolutions and mergers, and other similar decisions over the organization. Form 990, Part VI, Section B, line 11 Process used to review the Form 990: The Form 990 is prepared and reviewed by BHCS's tax department with assistance from a national public accounting firm. During the return preparation process the tax department works with other functional areas including finance, accounting, treasury, legal, human resources, and corporate compliance for advice, information and assistance to prepare a complete and accurate return. Upon completion, the Form 990 is reviewed by the organization's President, financial officer and/or other key officers. A complete final copy of the return is provided to the organization's governing body prior to filing with the IRS. Form 990, Part VI, Section B, line 12c Process used to monitor and enforce compliance with the organization's conflict of interest policy: Persons with the actual or perceived ability to influence the organization have the duty to disclose annually and otherwise promptly as potential conflicts are identified, any familial, professional or financial relationships with entities or individuals that do, or seek to do business with the organization or that compete with the organization. These individuals include the organization's officers, governing body, management, physicians with administrative services agreements and other key personnel who interact with outside organizations or businesses on behalf of the organization. The BHCS Board of Trustees Audit and Compliance Committee and the BHCS Corporate Compliance Committee review all relevant disclosures submitted by these individuals to determine whether a conflict of interest exists and to determine an appropriate resolution, if necessary. The BHCS Compensation and Governance Committee also reviews all relevant disclosures by individuals serving on BHCS's governing body. Any individual with a perceived or potential conflict is prohibited from voting or participating in the decision making process regarding such transaction with that individual. Form 990, Part VI, Section B, line 15 Process for determining compensation: The organiazation, a controlled affiliate of BHCS, recognizes that those chosen to lead the organization are vital to its ongoing success and growth. Thus, it must attract, retain and engage the highest quality officers and key employees to lead the organization and help BHCS maintain its national reputation for achieving high targets for medical quality, patient safety, and patient satisfaction. A significant portion of the organization's officers' and key employees' total compensation is based on significant performance achievements. This strategy, known as the Performance Award Program, works to put a greater emphasis on the importance of the organization achieveing targeted improvements in the areas of people, quality, patient satisfaction and financial stewardship, annually. Total Executive compensation is part of an integrated talent management strategy developed by the BHCS Board of Trustees and its Compensation and Governance Committee (Committee) to attract, motivate, and retain the best leadership resources for the organization. Executive compensation is determined pursuant to guidelines outlined in the intermediate sanction rules under IRC Section 4958 including taking steps to meet the rebuttable presumption standard of reasonableness under Treasury Regulation 53.4958-6, as summarized below. When making compensation decisions, the organization compares itself to similar-sized, and structured businesses including other integrated health care service systems and other similar-sized organizations, both locally and nationally. The BHCS Board of Trustees and Committee, on behalf of the organization, work directly with an independent compensation expert(s) to identify reasonable and competitive market rates as well as provide an annual review of the total compensation of the organization's top management officials and key employees. The Committee is made up of members of the BHCS Board of Trustees, who are independent, community volunteers. Guided by the information provided by the independent compensation expert(s), the Committee approves and recommends to the BHCS Board of Trustees salary increases, earned incentives, and benefit offerings for the organization's President, other officers and/or key employees to be comparable to similar organizations for similar services and/or positions. Furthermore, the Committee is charged with the responsibility of reviewing annually the major elements of the executive compensation program to assure designs remain consistent with the business needs, market practices, and compensation philosophy. As part of the decision making process, the Committee will often meet in executive session to discuss and review recommendations made by the independent compensation expert(s). During the executive session no officer or key employee whose compensation is being reviewed is present during these discussions. All decisions are contemporaneously documented in the Committee minutes which are timely reviewed and approved by the Committee. Form 990, Part VI, Section C, line 19 Process for making governing documents, conflict of interest policy, & financial statements available to the public: The organization's articles of incorporation and amendments thereto are made available to the public by the filing of those documents with the Texas Secretary of State. Also, the organization is included within the combined financial statements of BHCS that are made available to the public by the posting of those documents through DAC Bond and are attached to this return. The organization's other governing documents and conflicts of interest policy are not made available to the public. Form 990, Part VI, Question 14: Document Retention and Destruction Policy: The organization has been following a written Document Retention and Destruction Policy since April 2003 that was approved by management at Baylor Health Care System, the organization's sole member. As a controlled affiliate of Baylor Health Care System, system wide policies are put in place to promote best governance practices and to implement consistent policies among controlled affiliates. Form 990, Part VII: Hours devoted to related organizations: The persons listed below also serve either as a voluntary member of the governing body, an employed officer, or an employee of a related organization. The average hours per week devoted to the related organizations are listed below: William Boyd (40 Hours) Walker Harman (10 Hours) Roy Lamkin (10 Hours) Paul Madeley, M.D. (40 Hours) Janie Wade (40 Hours) Donna Bowers (10 Hours) Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: Net unrealized gains on investments: 86,595,294. Transfers Between Entities Under Common Control 3,360,633. Change in Net Assets Held at BHCS Fdn 25,677,902. Other Adjustment -244,958. Total to Form 990, Part XI, Line 5: 115,388,871. Members: Form 990, Part I, Line 4 and Part VI, Line 1b: Number of Independent Board One of the organization's members of the governing body also serves as a board member of a related partnership that is controlled by the organization. Based on the Form 990 instructions, this relationship results in a reportable transaction on Schedule L since the organization and the related partnership has entered into business transactions in excess of certain thresholds. This member was appointed by BHCS, the organization's sole member, to serve as a community board representative of the related partnership to ensure the partnership is operated in a charitable manner and in accordance with BHCS' and the organization's tax exempt status. The appointment of this member to serve on the governing body of the related partnership is consistent with IRS guidance such as Revenue Ruling 98-15 and other related rulings requiring the exempt organization to maintain control of partnerships and joint ventures. The board member does not have a financial interest in the organization or the related partnership, does not receive any financial benefit from transactions between the organization and the related partnership, and serves only in a voluntary capacity as an independent community board member. Therefore, this member is reflected as an independent board member on Part I, Line 4 and Part VI, Line 1b of the Form 990. Supplemental Information: IRC Section 6038 Statement: BUMC is controlled by BHCS, employer identification number 75-1812652. BHCS also owns and Health Care Insurance Company of Texas, Ltd. (HCIC). HCIC is controlled foreign corporation. BHCS furnishes all information required of BUMC by IRC Section 6038 and the regulations thereunder with respect to HCIC. Therefore, pursuant to Treasury Regulation Sec. 1.6038-2(J)(2), BUMC is excepted from providing such information. BHCS files its Return of Organization Exempt from Income Tax in Ogden, Utah. Baylor Health Care System (BHCS) 2001 Bryan Street Suite 2200 Dallas TX 75201 751812652 Management Services TX 501(c)(3) 11, Type III N/A 0 Baylor Medical Centers at Garland and McKinney 2001 Bryan Street Suite 2200 Dallas TX 75201 751037591 Acute Care TX 501(c)(3) 3 Baylor Health Care System 1 Baylor Medical Center at Irving 2001 Bryan Street Suite 2200 Dallas TX 75201 752586857 Acute Care TX 501(c)(3) 3 Baylor Health Care System 1 Baylor Medical Center at Waxahachie 2001 Bryan Street Suite 2200 Dallas TX 75201 751844139 Acute Care TX 501(c)(3) 3 Baylor Health Care System 1 Baylor Regional Medical Center at Plano 2001 Bryan Street Suite 2200 Dallas TX 75201 820551704 Acute Care TX 501(c)(3) 3 Baylor Health Care System 1 Baylor Regional Medical Center at Grapevine 2001 Bryan Street Suite 2200 Dallas TX 75201 751777119 Acute Care TX 501(c)(3) 3 Baylor Health Care System 1 BIR at Gaston Episcopal Hospital 2001 Bryan Street Suite 2200 Dallas TX 75201 751037226 Rehabilitation Hospital TX 501(c)(3) 3 Baylor Health Care System 1 Baylor Specialty Health Centers 2001 Bryan Street Suite 2200 Dallas TX 75201 751765385 Long Term Care Hospital TX 501(c)(3) 3 Baylor Health Care System 1 Baylor All Saints Medical Center (BASMC) 2001 Bryan Street Suite 2200 Dallas TX 75201 751008430 Acute Care TX 501(c)(3) 3 Baylor Health Care System 1 Baylor Health Care System Foundation 2001 Bryan Street Suite 2200 Dallas TX 75201 751606705 Fundraising TX 501(c)(3) 7 Baylor Health Care System 1 All Saints Health Foundation 2001 Bryan Street Suite 2200 Dallas TX 75201 751947007 Fundraising TX 501(c)(3) 7 Baylor All Saints Medical Center 1 HealthTexas Provider Network 2001 Bryan Street Suite 2200 Dallas TX 75201 752536818 Physicians Practice TX 501(c)(3) 3 Baylor Health Care System 1 Baylor Health Services 2001 Bryan Street Suite 2200 Dallas TX 75201 751917311 Inactive TX 501(c)(3) 3 Baylor Health Care System 1 Baylor Research Institute 2001 Bryan Street Suite 2200 Dallas TX 75201 751921898 Research TX 501(c)(3) 4 Baylor Health Care System 1 Southern Sector Health Initiative 2001 Bryan Street Suite 2200 Dallas TX 75201 263087442 Diabetic Health TX 501(c)(3) 11, Type I Baylor University Medical Center 1 BHCS Employee Benefit Trust 2001 Bryan Street Suite 2200 Dallas TX 75201 751848557 VEBA TX 501(c)(9) Baylor Health Care System 1 Irving Healthcare Foundation 2001 Bryan Street Suite 2200 Dallas TX 75201 751570933 Fundraising TX 501(c)(3) 7 Baylor Medical Center at Irving 1 Careflite 3110 S Great Southwest Pkwy Grand Prairie TX 75052 751657155 Emergency Transport TX 501(c)(3) 11, Type III-Other N/A 0 Dallas County Indigent Care Corporation PO Box 655999 Dallas TX 75265 260610562 Indigent Care TX 501(c)(3) 11, Type I N/A 0 MEDCO Construction LLC 2001 Bryan Street Suite 2200 Dallas TX 75201 205965871 Construction TX N/A Baylor Affiliated Services LLC 2001 Bryan Street Suite 2200 Dallas TX 75201 260614730 Benefit Plans TX N/A Baylor Heart & Vascular Center LLP 2001 Bryan Street 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273578014 Ambulatory Surgery Center TX N/A Baylor Surgicare at Ennis LLC 15305 Dallas Parkway Suite 1600 Addison TX 75001 274202856 Ambulatory Surgery Center TX N/A Baylor Surgicare at Plano Parkway LLC 15305 Dallas Parkway Suite 1600 Addison TX 75001 274282604 Ambulatory Surgery Center TX N/A Baylor Surgicare at Duncanville LLC 15305 Dallas Parkway Suite 1600 Addison TX 75001 273583837 Ambulatory Surgery Center TX N/A BIR JV LLP 4714 Gettysburg Rd Mechanicsburg PA 17055 274586141 Rehabilitation Hospitals TX N/A Baylor Health Enterprises 2001 Bryan Street Suite 2200 Dallas TX 75201 751997378 Fitness, Pharmacy TX N/A C Baylor Health Network Inc 2001 Bryan Street Suite 2200 Dallas TX 75201 752463251 Billing/Collecting TX N/A C BMP Inc 2001 Bryan Street Suite 2200 Dallas TX 75201 751436779 Post Office TX N/A C Health Care Insurance Company of Texas Ltd PO Box GT 720 W Bay Rd Grand Cayman CJ 980403182 Investments CJ N/A C BMC at Grapevine Condo Owner's Association Inc 2001 Bryan Street 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