| FORM 990, PART VI, SECTION A, LINE 6 |
THE ORGANIZATION'S SOLE CORPORATE MEMBER IS LEHIGH VALLEY PHYSICIAN GROUP. |
| FORM 990, PART VI, SECTION A, LINE 7A |
THE ORGANIZATION'S SOLE CORPORATE MEMBER, LEHIGH VALLEY PHYSICIAN GROUP, HAS THE POWER TO ELECT, APPOINT, APPROVE, OR REJECT MEMBERS OF THE ORGANIZATION'S GOVERNING BODY. |
| FORM 990, PART VI, SECTION A, LINE 7B |
THE ORGANIZATION'S SOLE CORPORATE MEMBER, LEHIGH VALLEY PHYSICIAN GROUP, HAS THE POWER TO APPROVE OR REJECT CERTAIN MAJOR OPERATING DECISIONS MADE BY THE ORGANIZATION'S GOVERNING BODY. |
| FORM 990, PART VI, SECTION B, LINE 11B |
THE PROCESS TO REVIEW THE 990'S INCLUDES: DRAFT 1 OF THE RETURNS IS REVIEWED IN DETAIL WITH A FOCUS ON ACCURACY, COMPLETENESS, AND PERSPECTIVE BY THE LVHN VICE-PRESIDENT, FINANCE AND CONTROLLER. DRAFT 2 OF THE RETURNS IS REVIEWED BY THE EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER. ALL COMPENSATION DISCLOSURES ARE REVIEWED BY THE DIRECTOR, COMPENSATION - HUMAN RESOURCES. DRAFT 3 OF THE RETURNS IS REVIEWED TOGETHER WITH THE PRESIDENT & CEO, THE EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER, THE VICE-PRESIDENT, FINANCE AND CONTROLLER AND THE DIRECTOR, TAX. FINAL RETURNS ARE REVIEWED WITH THE LVHN BOARD LEADERSHIP GROUP (THE BOARD CHAIR AND THREE VICE CHAIRS). COPIES OF ALL 990'S ARE PROVIDED TO THE FULL BOARD PRIOR TO FILING. |
| FORM 990, PART VI, SECTION B, LINE 12C |
IN JANUARY 2016, LVHN IMPLEMENTED AN ELECTRONIC TOOL DESIGNED TO SEND NOTIFICATIONS AND TRACK DISCLOSURES REPORTED ON CONFLICT OF INTEREST QUESTIONNAIRES. THE NETWORK ALSO EXPANDED THE SCOPE OF THE CONFLICT OF INTEREST OR COMMITMENT POLICY, SUCH THAT ADDITIONAL COLLEAGUES ARE NOW REQUIRED TO COMPLETE A QUESTIONNAIRE EACH YEAR. PRIOR TO JANUARY, THE VP, INTERNAL AUDIT AND COMPLIANCE SERVICES ISSUED A NOTICE TO BOARD MEMBERS AND MEMBERS OF THE SENIOR MANAGEMENT COUNCIL WHEN IT WAS TIME FOR THEM TO SUBMIT THEIR CONFLICT OF INTEREST QUESTIONNAIRES. THE VP ALSO INSTRUCTED MEMBERS OF THE SENIOR MANAGEMENT COUNCIL TO IDENTIFY AND REQUEST COMPLETED CONFLICT OF INTEREST QUESTIONNAIRES FROM INDIVIDUALS WHO HAD POTENTIAL CONFLICTS OF INTEREST AND TO PROVIDE HER WITH THE IDENTITY OF THOSE INDIVIDUALS. COMPLIANCE SERVICES TRACKED COMPLETION OF THE QUESTIONNAIRES. ALL PHYSICIANS ON LVHN'S MEDICAL STAFF ARE ALSO REQUIRED TO COMPLETE A CONFLICT OF INTEREST QUESTIONNAIRE ANNUALLY. MEDICAL STAFF SERVICES MONITORS THIS PROCESS TO ENSURE THAT ALL PHYSICIANS COMPLY. POTENTIAL CONFLICTS ARE MANAGED BY THE LVHN CONFLICT OF INTEREST COMMITTEE AND/OR BY THE BOARD OF TRUSTEES, DEPENDING ON WHOSE INTEREST(S) POSE THE CONFLICT AND THE NATURE OF THE CONFLICT. |
| FORM 990, PART VI, SECTION B, LINE 15 |
LEHIGH VALLEY HEALTH NETWORK 2021 EXECUTIVE COMPENSATION REVIEW IN COMPLIANCE WITH THE REBUTTABLE PRESUMPTION OF REASONABLENESS PROCESS OUTLINED IN THE INTERMEDIATE SANCTIONS REGULATIONS (ISSUED UNDER SECTION 4958 OF THE INTERNAL REVENUE CODE); SULLIVAN COTTER AND ASSOCIATES, INC. (SULLIVAN COTTER) QUALIFIES AS AN INDEPENDENT EXECUTIVE COMPENSATION EXPERT, SPECIALIZING IN THE HEALTH CARE INDUSTRY. SULLIVAN COTTER PROVIDES ADVICE TO THE LEHIGH VALLEY HEALTH NETWORK EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD OF TRUSTEES TO SUPPORT ITS ATTAINMENT OF THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE INTERMEDIATE SANCTIONS REGULATIONS. THEY ALSO SUPPORT THE COMMITTEE IN ENSURING THAT THE LVHN EXECUTIVE COMPENSATION PROGRAM IS COMPETITIVE AND ALIGNED WITH THE ORGANIZATION'S EXECUTIVE COMPENSATION PHILOSOPHY. CHIEF EXECUTIVE OFFICER TOTAL COMPENSATION REVIEW: PROGRAM ANALYSIS: ANALYZE THE MARKET POSITION OF TOTAL COMPENSATION (BASE SALARY, INCENTIVE, BENEFITS, AND PERQUISITES) FOR LVHN'S PRESIDENT AND CHIEF EXECUTIVE OFFICER (CEO) IN RELATION TO CEO MARKET DATA OBTAINED FOR A DEFINED PEER GROUP OF COMPARABLE HEALTH SYSTEMS. THIS INCLUDES THE PREPARATION OF TALLY SHEETS FOR THE PRESIDENT AND CEO AS WELL AS AN ANALYSIS OF FORM 990 COMPENSATION DATA. THEY ASSESS THE ALIGNMENT OF THE PRESIDENT AND CEO'S COMPENSATION WITH LVHN'S COMPENSATION PHILOSOPHY AND NOTE THE IMPLICATIONS OF THE REVIEW. SULLIVAN COTTER'S ANALYSES AND FINDINGS ARE SUMMARIZED IN A REPORT TO THE COMMITTEE THAT PROVIDES A REASONABLENESS OPINION FOR THE INTERMEDIATE SANCTIONS COMPLIANCE. THE REPORT WAS PROVIDED BY SULLIVAN COTTER AT THE AUGUST 11, 2020 EXECUTIVE COMPENSATION COMMITTEE MEETING. CEO COUNCIL EXECUTIVE TOTAL COMPENSATION REVIEW: PROGRAM ANALYSIS: ANALYZE THE MARKET POSITION OF TOTAL COMPENSATION (SALARIES, INCENTIVES, BENEFITS, AND PERQUISITES) FOR LVHN'S CEO COUNCIL EXECUTIVES (APPROXIMATELY 10 TOTAL POSITIONS) IN RELATION TO COMPARABLE POSITIONS IN PEER ORGANIZATIONS. THIS INCLUDES THE PREPARATION OF TALLY SHEETS FOR EACH INDIVIDUAL. SULLIVAN COTTER'S ANALYSES AND FINDINGS ARE SUMMARIZED IN A REPORT TO THE COMMITTEE THAT ALSO PROVIDES AN OPINION OF REASONABLENESS FOR INTERMEDIATE SANCTIONS COMPLIANCE. THE REPORT WAS PROVIDED BY SULLIVAN COTTER AT THE AUGUST 11, 2020 EXECUTIVE COMPENSATION COMMITTEE MEETING. SUMMARY OF METHODOLOGY TO CONDUCT THIS ANALYSIS, SULLIVAN COTTER: COLLECTED BACKGROUND INFORMATION REGARDING LVHN'S OPERATIONS, STRUCTURE, SIZE AND SCOPE, AS WELL AS EACH POSITION'S DUTIES. COMPILED MARKET DATA FOR CEO COUNCIL EXECUTIVES CONSISTENT WITH THE EXECUTIVE COMPENSATION PHILOSOPHY APPROVED BY THE COMMITTEE DURING ITS SEPTEMBER 18, 2020 MEETING: THE MARKET DATA USED FOR LVHN SYSTEM EXECUTIVES IN THIS ASSESSMENT ARE AN EQUALLY WEIGHTED BLEND OF: (1) LVHN'S COMMITTEE-APPROVED PEER GROUP OF 27 NOT-FOR-PROFIT HEALTH SYSTEMS LOCATED IN THE NORTHEAST (EXCLUDING NEW YORK CITY) WITH NET OPERATING REVENUES BETWEEN $1.8 BILLION AND $7.6 BILLION (MEDIAN OF $2.9 BILLION); AND (2) NATIONAL DATA REFLECTING ORGANIZATIONS OF SIMILAR SCOPE AND SIZE TO LVHN. PEER GROUP AND NATIONAL MARKET DATA WERE ABSTRACTED FROM SULLIVAN COTTER'S 2020 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS, AS WELL AS OTHER PUBLISHED COMPENSATION SURVEYS REFLECTING PAY AT COMPARABLY SIZED ORGANIZATIONS, WHICH INCLUDED NATIONAL HOSPITALS AND NATIONAL MEDICAL GROUPS. COMPILED MARKET DATA FOR THE LVHN CLINICAL CHAIRS PREPARED BY THE ASSOCIATION OF AMERICAN MEDICAL COLLEGES (AAMC) FOR THE CHAIRS OF CLINICAL DEPARTMENTS IN MEDICAL SCHOOLS, LVHN'S TRADITIONAL COMPARATOR GROUP FOR THESE JOBS. ADJUSTED THE MARKET DATA TO AN EFFECTIVE DATE OF JANUARY 1, 2021 AT AN ANNUALIZED RATE OF 3.0% BASED ON SALARY INCREASE TRENDS. COMPARED EACH COMPONENT OF LVHN'S BENEFIT PROGRAM AGAINST TYPICAL MARKET BENEFIT PRACTICES IN HEALTH SYSTEMS AND HOSPITALS BASED ON MULTIPLE PUBLISHED SURVEYS, SUPPLEMENTED BY SULLIVAN COTTER'S PROPRIETARY DATA AND EXPERIENCE. DEVELOPED MARKET TOTAL COMPENSATION DATA BY COMBINING MARKET TCC WITH TYPICAL MARKET BENEFIT COSTS. COMPARED LVHN'S TC TO MARKET RATES AND ASSESSED OVERALL POSITIONING. FOR PHYSICIAN EXECUTIVES HAVING BOTH CLINICAL AND ADMINISTRATIVE ROLES, RELEVANT MARKET DATA WERE COLLECTED BASED ON FTE ALLOCATION. SULLIVAN COTTER HAS NOT COMPLETED AN ASSESSMENT OF THE PHYSICIANS' PRODUCTIVITY OR THE FAIR MARKET VALUE (FMV) OF THEIR CLINICAL COMPENSATION, AS LVHN HAS ADVISED THAT SUCH AMOUNTS ARE APPROPRIATE AND WITHIN FMV. SULLIVAN COTTER USED THE FOLLOWING METHODOLOGY TO ASSESS THE COMPETITIVENESS AND REASONABLENESS OF LVHN'S EXECUTIVE TOTAL COMPENSATION LEVELS: COLLECTED BACKGROUND INFORMATION REGARDING LVHN'S OPERATIONS, STRUCTURE, SIZE AND SCOPE. COLLECTED INFORMATION ON EACH CEO COUNCIL EXECUTIVE MEMBER'S CURRENT COMPENSATION. DATA COLLECTED INCLUDE BASE SALARIES, ANNUAL INCENTIVE OPPORTUNITY LEVELS (TARGET AND MAXIMUM), ACTUAL ANNUAL INCENTIVE PAYOUT AMOUNTS, ANNUAL COSTS OF ALL STANDARD AND SUPPLEMENTAL BENEFITS AND ANNUAL COST AND DESCRIPTION OF EXECUTIVE PERQUISITES. REVIEWED JOB DESCRIPTIONS AND ORGANIZATIONAL CHARTS TO IDENTIFY EACH POSITION'S FUNCTIONAL RESPONSIBILITIES AND REPORTING RELATIONSHIPS. SELECTED THE APPROPRIATE BENCHMARK POSITION MATCH FOR EACH POSITION AND APPLIED PREMIUMS/DISCOUNTS TO THE MARKET DATA IN INSTANCES WHERE LVHN'S JOB DUTIES DIFFER MATERIALLY FROM BENCHMARK POSITION MATCHES. POSITION MATCHES AND MARKET ADJUSTMENTS WERE REVIEWED WITH LVHN'S SENIOR VICE PRESIDENT, HUMAN RESOURCES AND COMPENSATION STAFF. LVHN'S PROJECTED FY2020 NET REVENUES AND PHYSICIAN FTE'S WERE USED AS THE SCOPE SIZE FOR EACH ENTITY. |
| FORM 990, PART VI, SECTION C, LINE 18 |
ANOTHER'S WEBSITE - GUIDESTAR. UPON REQUEST - PRINTED COPIES WITH SENIOR MANAGEMENT AND MARKETING. |
| FORM 990, PART VI, SECTION C, LINE 19 |
THE ORGANIZATION MAKES ITS FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC THROUGH ITS ANNUAL REPORT TO THE COMMUNITY. THE ANNUAL REPORT IS DISTRIBUTED TO ALL ATTENDEES AT THE ORGANIZATION'S ANNUAL PUBLIC MEETING. THE ANNUAL REPORT IS AVAILABLE ON THE ORGANIZATION'S WEBSITE - WWW.LVHN.ORG. IN ADDITION, IT IS DISTRIBUTED VIA MAIL TO MEMBERS OF THE COMMUNITY. THE ORGANIZATIONS GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT MADE AVAILABLE TO THE PUBLIC. |
| FORM 990, PART VI, LINE 1 |
THERE IS AN EXECUTIVE COMMITTEE THAT MEETS AS NEEDED. THE COMMITTEE INCLUDES THE CHAIRMAN, VICE-CHAIRMAN, TREASURER, SECRETARY, AND PRESIDENT/CEO OF THE BOARD OF DIRECTORS. THIS COMMITTEE DOES HAVE THE AUTHORITY TO MAKE DECISIONS, IF NEEDED. |
| FORM 990, PART XI, LINE 9: |
TRANSFERS FROM AFFILIATES 31,750,394. |
Attach to Form 990 or 990-EZ.