Mercy Hospital

“Mary Hood, trustee/officer and Charles Therrien, trustee/officer are board members of Maine Hospital Association.”

“Explanation: Eastern Maine Healthcare Systems (EMHS) has entered into an administrative and management service contract with BE Smith under which an employee was provided for the position of Interim Vice President of Physician Practices for Mercy Hospital.Andrew Flemer, Interim VP, Physician Practices for Mercy Hospital is employed by BE Smith. He provides services as Interim VP for Mercy. His CY2017 compensation and benefits received from BE Smith for services provided to Mercy is $318,240. His position has leadership responsibility for Mercy's physician practice day-to-day operations. He is accountable for strategic planning, budget preparation, providing leadership and directing the hospital's physician practices to ensure that quality patient care is provided.”

“Amended Article X (General Provisions), Section 3 (Fiscal Year) to change the end of the fiscal year of the Corporation from the last Saturday in September to September 30. Amended Article X (General Provisions), Section 4 (Bonding) to remove the Bonding section in its entirety and replace it with: Fidelity Coverage. The Corporation shall maintain appropriate fidelity coverage protecting the Corporation from losses caused by the fraudulent or dishonest acts of individuals handling or directing the use of corporate funds.”

“Mercy Hospital (the Corporation) is a Maine nonprofit corporation. Eastern Maine Healthcare Systems (EMHS), also a Maine nonprofit corporation, is the sole voting corporate member of the Corporation.”

“Each year at their annual meeting, the directors elect replacements for those directors whose terms are expiring. Election of directors is subject to ratification by the EMHS Board of Directors.”

“The EMHS President has authority to appoint and remove the SVP & President of the Corporation. EMHS also has joint and superior authority to approve, disapprove or initiate action with respect to the following matters: I.amendments to the corporations Articles of Incorporation or Bylaws;II.changes in legal form of organization of the Corporation;III.election of the Directors/Trustees of the Corporation;IV.action concerning the Corporations operating budget and capital expenditures;V.the Corporations acquisition of assets or assumption of liabilities of an unaffiliated third party;VI.transfer of 5% or more of the assets of the Corporation;VII.financing transactions concerning the Corporation; VIII.merger, consolidation, sale, lease, mortgage, pledge or other disposition of all or substantially all assets of the Corporation; IX.add or revise a health care service of the Corporation;X.discontinue or close a health care service of the Corporation;XI.action concerning the Corporations role in the EMHS Strategic Plan;XII.action concerning the Corporations participation in key strategic affiliations with third parties not affiliated with EMHS; andXIII.dissolution of the Corporation.”

“Form 990 is reviewed by the VP of Finance of Mercy Hospital. It is also provided to each board member either electronically or in hard copy with an opportunity to ask questions prior to filing with the IRS.”

“The organization requests updates of potential conflicts and relationships from the officers and Board members on an annual basis. The request requires disclosure of all business relationships, board memberships, and family relationships. A database is maintained that is compared to payroll records and the accounts payable vendor list to identify any potential conflicts of interest. Transactions are reviewed for reasonableness as an arm's length transaction.The first agenda item for board meetings and board committee meetings is for members to declare any conflict of interest with upcoming agenda items or deliberations. At any point when consideration is being given to purchase/contract with a party in interest, the member with the conflict is either excused from the discussion and consideration process or abstains from voting on the matter.All transactions identified with parties in interest are disclosed within the Form 990. All are deemed to be arm's length transactions.”

“The President of Mercy and the system President/CEO (President) who serves on the board ex-officio are employed by the system parent, Eastern Maine Healthcare Systems (EMHS).The EMHS Executive Performance Management Committee (the Committee) is responsible to monitor and evaluate the performance of the EMHS President, to set compensation of the EMHS President, and to review recommendations of the EMHS President with respect to compensation of the President of the direct subsidiaries, and other direct reports to the EMHS President. The Committee is comprised entirely of independent Directors per EMHS bylaws.Process:The Committee meets regularly throughout the fiscal year at the discretion of the Committee chair as well as on call of the Chair of the EMHS board. In carrying out its duties pursuant to the Bylaws, the Committee:-Assures that the executive compensation program is administered in a manner consistent with the EMHS executive compensation philosophy.-Reviews and updates the EMHS executive compensation philosophy which serves as the foundation on which all current and future executive compensation decisions are made.-Assures that value of compensation provided by EMHS does not exceed the value of services provided by the executive.-Reviews annual incentive compensation criteria for eligible executives, as defined by the EMHS President.-Reviews periodic compensation survey information and provides expert input to proposed changes to the executive compensation program.-Assures that a formal and timely performance management system is in place for executives.-Reviews incentive compensation criteria scoring and associated pay schedules for officers and key employees.-Provides any public statements regarding executive compensation practices at EMHS deemed appropriate.-Maintains minutes of the meeting and communicates actions to the EMHS Board of Directors.To accomplish this, the committee uses an external consultant with access to comparative data from independent sources and include national as well as regional data points. The EMHS President reviews all direct report compensation actions with the committee. In addition, the EMHS President ensures that any subsidiary policies and practices governing executive compensation are consistent with the committee's philosophy and practices statement.Form 990, Part VI, Line 15b - Compensation Review & Approval Process - Officers & Key EmployeesCompensation of other officers and key employees of the organization is established by the Human Resources department who utilize external market research to establish compensation ranges for specific positions. On an annual basis, the compensation ranges are compared to the updated survey information.The hiring manager will determine where the employee will fall within the ranges established by the Human Resources department based on experience and credentials.”

“Mercy makes its governing documents, conflict of interest policy and financial statements available to the public upon request.”

“OTHER PROGRAM SERVICES 4: Charity care provided (at cost): 1,372 persons served OTHER PROGRAM SERVICES 5: Please see the following excerpt from the EMHS Annual Report to the Community for details of community benefit projects at EMHS members:A New DayIn Maine, we have a tradition of leading the way and using our common sense and Yankee ingenuity to make life better for ourselves, our families, and our communities. It appears in our state motto Dirigo from the Latin word for I lead. We were the first state to elect a woman, Margaret Chase Smith, to both houses of Congress. We are home to the countrys first veterans hospital, and we are the first state to greet a new day as the rays of the sun touch our easternmost peaks and shores before any other place across the continental United States.The light of a new day symbolizes a rebirth or an awakening. And this renewed purpose to make healthcare work for people across our great state is what we are experiencing as we embrace our new name-Northern Light Health.In the pages of this years annual report, you will see examples of how we are rolling up our sleeves to raise quality through innovation, teamwork, and efficiency. We have fostered new clinical relationships with Massachusetts General Hospital, a world-class medical research hospital. We are using population health data in new ways to be smarter about how we deliver care. And we have created new programs that bring healthier locally-sourced foods to our hospitals while supporting the hard-working farmers and fishermen who make up the very core of our identity here in Maine.We are working to make healthcare more accessible and straightforward while also making great strides to reduce our costs and improve our operating margins. We are finding new ways to guide our patients and deliver care based on the needs of each person. Its a New Day in Maine. We invite you to join us on this new journey.M. Michelle Hood, FACHENorthern Light Health President and CEOBarry McCrumNorthern Light Health Board ChairA New LightWelcome to Northern Light HealthOpen up, give me a big ahhh, Sheena Whittaker, MD, a pediatrician at Northern Light Pediatrics in Ellsworth asks of her 12-year old patient, Ellis, as she shines a light in his mouth. They are in a pediatrics exam room where Ellis is getting a check up. The windows allow in a generous amount of light; the walls are warm yellow and decorated with Dr. Seuss decals like the Cat in the Hat. Dr. Whittaker wears many hats too. Not only is she a pediatrician, but she is also the senior physician executive for Northern Light Maine Coast Hospital in Ellsworth.Medicine is very controlled, and its very scientific and careful, and it should be; but kids bring a fun aspect to it, Dr. Whittaker explains. If we can fortify children to be strong mentally, physically, emotionally, and psychologically, were going to produce stronger, kinder, healthier children, a better adult population, and a stronger community.Dr. Whittaker may be based at Maine Coast Hospital, but she is part of Northern Light Health, formerly Eastern Maine Healthcare Systems. In addition to changing its name, Northern Light Health has re-identified its priorities and is becoming more integrated across the entire system which spans from Portland to Presque Isle and Greenville to Blue Hill.Dr. Whittaker sees the move to Northern Light Health as a step in the right direction that helps improve patient care. Being united medically means we have resources from the whole Northern Light Health system. Whether were at Northern Light Maine Coast, Northern Light Blue Hill, or Northern Light Eastern Maine Medical Center, we have access to all of the specialty services easily, consecutively, consistently. So, it doesnt matter which hospital a patient walks into, they are receiving the best medical care they possibly can get, explains Dr. Whittaker.Michelle Hood, FACHE, president and CEO of Northern Light Health, and Matt Weed, senior vice president an”

“Change in net assets held @ EMHS Foundation = $3469019”

“Transfer to exempt parent - Eastern Maine Healthcare Systems = -$1563455”