Chmc Surgical Foundation Inc.

“The majority of CHMC Surgical Foundation, Inc.'s (the Foundation's) board members are physicians who are not independent from the Foundation. However, the Foundation is part of an integrated delivery system with Boston Children's Hospital (the Hospital) which does have a community board. The Foundation was organized in 1982. At that time, the board was composed entirely of physicians, a board structure that was approved by the Internal Revenue Service. The Foundation has since adjusted the board structure to make it more responsive to the hospital by adding the Physicians Organization at Children's Hospital, Inc. (the PO) as a member. See Schedule O, Part VI, Questions 3, 6, 7b, and 12 for more details of the PO's rights.”

“The Physicians Organization at Children's Hospital, Inc. (the PO) is a Class "C" member of CHMC Surgical Foundation, Inc. (the Foundation). The PO is responsible for providing management services to the Foundation. The PO has the power to approve the independent auditor and legal counsel of the Foundation from a list of firms mutually agreed to by the PO and the Foundation. The PO also has the right to review, but not to approve, the annual budgets and by-law changes of the Foundation. Lastly, Boston Children's Hospital has the right to review for compliance with applicable law, the general terms of and any modification to physician compensation and benefit plans for all physician employees of the Foundation.”

“CHMC Surgical Foundation, Inc. (the Foundation) has three classes of members. The Chief of the Department of Surgery (the Department) of Boston Children's Hospital (the Hospital) is a Class "A" member. Each person who is a member of the Foundation, other than the Chief of the Foundation, who holds a medical staff appointment under the auspices of the Chief Surgeon from Harvard University Medical School, and who is a full time employee at the Hospital, shall be a Class "B" member. In addition, upon the recommendation of the Chief Surgeon and with the approval of the President of the Hospital or his designee, exceptions may be made to permit other physicians who are members of the Department to be Class "B" members. The Physicians Organization at Children's Hospital, Inc. is a Class "C" member of the Foundation.”

“According to the Articles of Organization, the Chief of the Department of Surgery (the Department) of Boston Children's Hospital is the Class "A" member of CHMC Surgical Foundation, Inc. (the Foundation). Each person who is a member of the Foundation, other than the Chief of the Department, is a Class "B" member of the Foundation. The Class "A and "B" members of the Foundation elect the Board of Directors from nominees presented by the Executive Committee at their annual meeting. Each member is entitled to one vote upon any question at any meeting of the members.”

“The Physicians Organization at Children's Hospital, Inc. (the PO) is a Class "C" member of CHMC Surgical Foundation, Inc. (the Foundation). The PO is responsible for providing management services to the Foundation. The PO has the power to approve the independent auditor and legal counsel of the Foundation from a list of firms mutually agreed to by the PO and the Foundation. The PO also has the right to review, but not to approve, the annual budgets and by-law changes of the Foundation. Lastly, Boston Children's Hospital has the right to review for compliance with applicable laws, the general terms of and any modification to physician compensation and benefit plans for all physician employees of the Foundation. As a Class "C" member of the Foundation, the PO attends the Foundation's annual meeting.”

“The detailed review will be conducted by the President of the Foundation, Steven J. Fishman, MD, and the administrator, Todd Katzman. A copy of the Form 990 will be provided to the board prior to filing. The detailed review will be conducted before filing the return with the Internal Revenue Service.”

“The Physicians Organization at Children's Hospital, Inc. (the PO) and Boston Children's Hospital (the Hospital) administer an annual conflict of interest disclosure process to all of their member Foundations, which asks physicians (officers, top management, and highly compensated employees) and selected Foundation staff to disclose potential conflicts. A disclosure statement will be circulated annually to members of the PO. The audit committee shall determine those individuals (including medical staff members) who shall be required to complete the disclosure statement. The audit committee, at its discretion, may either: 1) refer any or all disclosure statements to the Board of Directors; 2) appoint an ad hoc committee to review and resolve any conflict of interest issues; or 3) review and resolve any conflict of interest issues personally or through a designee(s). Any person not receiving a disclosure statement nevertheless has an affirmative obligation to disclose to the PO President, PO General Counsel, or his/her supervisor whenever he/she believes he/she has or may have a conflict of interest. Similarly, each person completing a disclosure statement has an affirmative obligation to update the statement any time circumstances change and/or he/she believes that a conflict of interest may exist. In the event a conflict of interest is found to exist, the Foundation prohibits the member from voting on any matter to which the conflict relates or otherwise influencing the voting on such matter.”

“Faculty compensation must comply with the Boston Children's Hospital (the Hospital) Physician Compensation Guidelines. These guidelines are developed in consultation with an independent external compensation consulting firm and are approved by the independent Compensation Committee of the Board of Children's Medical Center Corporation and the Hospital. The guidelines set the maximum compensation limits based on a peer group analysis for the Foundation. The maximum compensation limits are based on pediatric specialty, sub-specialty, academic rank and include productivity adjustments. Any proposed compensation that exceeds the limits must be prospectively approved by the independent compensation committee of the Board of the Hospital. Annual compensation for individual faculty members is set by the President of the CHMC Surgical Foundation, Inc. (the Foundation), reviewed and approved by the Foundation in accordance with the Foundation's compensation policies and procedures. The Foundation's President's compensation is reviewed and approved annually on a prospective basis by the Boston Children's Hospital Chief Executive Officer and President/Chief Operating Officer.”

“The Foundation maintains all financial records, conflict of interest policies, and governing documents at its main office at 300 Longwood Avenue, Boston, MA 02115. The documents are available upon request.”

“Pension adjustment -5,459,498.”

“The audit process and scope has not changed from the prior year.”