Ochsner Community Hospitals

“As a subsidiary of Ochsner Health System, Ochsner Community Hospitals is subject to all compliance policies of Ochsner Health System, which includes a written Whistleblower protection policy.”

“When the organization evaluates its participation in a joint venture, the transactions are handled carefully to ensure that the organization's tax-exempt status is intact with regard to the arrangement. The operations of the joint venture are carefully reviewed by management and legal counsel, and the transaction is not entered into unless it is a reflection of the organization's tax-exempt purpose. A clause is inserted into the joint venture agreement that the operations of the joint venture must be performed in a manner that will not jeopardize the organization's tax-exempt status.”

“The Articles of Incorporation provide that no action of the Board may be resolved unless a majority of the independent directors present approve the matter. Thus, even in situations where there is not an absolute majority of independent directors in office, those independent directors in office control Ochsner Community Hospitals' activities.”

“Mr. Hines and Mr. LeCorgne - Business relationship”

“Ochsner Community Hospitals is a wholly owned subsidiary of Ochsner Health System, a related 501(c)(3) organization. Ochsner Community Hospitals is organized exclusively on a membership, non-stock basis. Ochsner Health System is the sole member of Ochsner Community Hospitals.”

“All directors, other than the Chief Executive Officer, shall be elected by the Member.”

“The Articles and Bylaws specify the following actions that require the affirmative vote or written consent of the Member: (1) Election of Directors other than the Chief Executive Officer (2) Amendment to the articles of incorporation of the Corporation (3) Corporate actions (4) Removal and replacement of any Director other than the Chief Executive Officer (5) Preparation or adherence to any capital or operating budget (6) Any expense, debt, or capital expenditure that exceeds the amount budgeted (7) Any action that is anticipated to reduce revenues below the amount budgeted (8) Any purchase or sale of any real property or encumbering any such property to secure a debt, if such action was not included in the budget (9) Guaranteeing the debt or obligation of any other person or entity (10) Beginning the practice of a health care service or specialty not previously engaged in by the Corporation if it was not included in the budget. (11) Causing or permitting the Corporation or any subsidiary of the Corporation to form or become the controlling member of any business entity (12) Amendment of any organizational or governing documents of any subsidiary (13) Establishment of any committee of the Board of Directors of the Corporation”

“One or more members of senior management review the return. The return is also reviewed by Ernst & Young, LLP, the company's tax advisors. The Audit and Oversight Committee, which is comprised of independent directors, is then provided the return prior to the filing date and given the opportunity to review and discuss the return with management/staff. The meeting to review the 2016 return was held on October 30, 2017. A copy of the return is then provided to each member of the Board of Directors electronically and comments are solicited from the entire Board.”

“Officers, directors, trustees, and key employees of Ochsner Health System and its subsidiaries are required to complete an annual conflict of interest disclosure form and when a change in business circumstances occurs. The Conflict of Interest Program Administrator reviews disclosures and determines whether action is necessary or if the disclosure needs to be reviewed by the Conflict of Interest Steering Committee. Ochsner Health System requires annual certification that the relationships disclosed during a preceding calendar year are complete and accurate and to obtain information on any new relationships. The Conflict of Interest Steering Committee will make mitigation recommendations including, but not limited to, divestiture and termination of employment.”

“All CEO and officer compensation and benefits arrangements, including salary and bonus incentive plans, are reviewed and approved by the Executive and Senior Physician Compensation Committee of the Ochsner Health System's Board of Directors (Compensation Committee). No substantive change to the compensation or benefits packages is made until Committee approval is granted in accordance with Intermediate Sanctions guidelines. The Compensation Committee is without conflicts of interest and uses an independent external consultant. Appropriate data is applied to determine the comparability of fair market value pay and all actions are appropriately documented. In order to meet the requirements of the IRS Intermediate Sanctions regulations, the Compensation Committee identified the "disqualified individuals" that are in a position to exercise substantial influence over the company's operations. These individuals are the members of the Executive Officers Committee (EOC), Regional Medical Directors, physician board members and Section Heads for key departments. For disqualified individuals, the compensation review also includes the cost of benefits such as the company portion of medical and dental benefits, malpractice insurance, payments for 401K matching and pension.”

“A different review process is used for Physicians. Annually, the Physician Compensation department reviews the compensation of each employed physician. This review includes a comparison of physician salaries against national survey data for their specialty. The Physician Compensation department compiles the compensation data for each physician including base salary, stipends, on-call pay, etc. Each physician's compensation as well as the total work Relative Value Units (RVUs) are compared to the survey data. Compensation for other non-physician key employees is reviewed by senior executives who take market value research into consideration when determining compensation levels.”

“All governing documents, conflict of interest policy, and financial statements are available upon written request to the Audit Services Department of Ochsner Health System.”

“ADDITIONAL COMPENSATION EXPLANATION - COMPENSATION FROM INTEGRATED HEALTH SYSTEM In 2016, Ochsner Community Hospitals did not compensate any employees directly. Instead, those individuals were compensated by Ochsner Clinic Foundation and the cost of the compensation was reimbursed by Ochsner Community Hospitals. Many of the individuals listed in Part VII and Schedule J hold positions with related 501(c)(3) organizations. For each of these individuals, the compensation listed is received from the related organization, and the compensation is for the individual's role within the related organization and the integrated health system. The amount of time shown for each as "Average Hours Per Week Devoted To Position" consists primarily of his/her time spent on his/her role with Ochsner Community Hospitals. In reality, his/her time is spent on fulfilling responsibilities through their roles with the related organization and/or across all other organizations in the integrated health system, and may be more evenly distributed.”

“COMPENSATION OF DIRECTORS AND AVERAGE HOURS PER WEEK DEVOTED TO POSITION Those directors listed as "Board Member Sr Phys" are compensated entirely due to their role as an employee of a member of the integrated health system. The amount of time shown for those Directors listed as "Board Member Sr Phys" as "average hours per week devoted to position" on the Form 990 for Ochsner Community Hospitals (EIN 20-5297040) consists primarily of their role as an employee of Ochsner Clinic Foundation (EIN 72-0502505). Additional time spent on boards, committees and through fulfilling other responsibilities as a member of one or more Boards of the varied Ochsner organizations is shown as a nominal amount for Ochsner Health System and/or Ochsner Community Hospitals. As a Senior Physician Director of an integrated health system, these individuals devote time to board activities of all 501(c)(3) members of the system to varying degrees including Ochsner Health System, Ochsner Clinic Foundation and Ochsner Community Hospitals. The amount of time shown for those Directors listed as "Community Directors" for "average hours per week devoted to position" on the Form 990 for Ochsner Community Hospitals (EIN 20-5297040) includes time spent on boards, on committees and through fulfilling other responsibilities as a member of the Board of varied Ochsner organizations. As a Community Director of an integrated health system, each Community Director devotes time to all 501(c)(3) members of the system to varying degrees including Ochsner Health System, Ochsner Clinic Foundation and Ochsner Community Hospitals.”

“COMPENSATION OF OFFICERS AND AVERAGE HOURS PER WEEK DEVOTED TO POSITION Compensation for Warner Thomas, Michael Hulefeld, Scott Posecai, Bobby Brannon, and Peter November, includes all compensation related to the integrated Ochsner Health System, which includes Ochsner Health System (OHS, EIN 20-5296918), Ochsner Clinic Foundation (OCF, EIN 72-0502505) and Ochsner Community Hospitals (OCH, EIN 20-5297040), all related 501(c)(3) organizations. Other members of the integrated health system are charged a portion of these amounts. The amount of time shown for each officer as "average hours per week devoted to position" on the Form 990 of the organization that directly employs the individual consists primarily of their role as an Officer of the integrated health system. Additional time spent on boards, committees and through fulfilling other responsibilities as an Officer of the Ochsner organizations is shown on each Form 990. The amount of time on this return is shown as a nominal amount, but in reality the time is more evenly distributed across all entities.”

“KEY EMPLOYEES COMPENSATED BY RELATED ORGANIZATIONS AND AVERAGE HOURS Dr. Aderonke Akingbola, Dr. Richard Guthrie, and Dr. Dawn Puente were employed and compensated by Ochsner Clinic Foundation, 72-0502505, 501(c)(3), a related organization. Dr. Joseph Bisordi and Dr. Robert Hart were employed and compensated by Ochsner Health System, 20-5296918, 501(c)(3), a related organization. Their time is split between the related organization and Ochsner Community Hospitals, but in all other respects they meet the requirements of a Key Employee of Ochsner Community Hospitals. Mr. Mark Eckert, Ms. Sylvia Hartman, Ms. Julie Henry, and Mr. Stephen Robinson, Jr. were employed and compensated by Ochsner Clinic Foundation, but effectively all of their time and compensation relates to their duties as key employees of Ochsner Community Hospitals.”

“Community directors are volunteers and are not paid a stipend or other compensation for their service to ochsner as board members. The compensation of community directors that is reported for 2016 consists of spousal travel and entertainment for attendance at the board retreat, as described in sch j of the organization that paid for the spousal travel and entertainment, ochsner health system 20-5296918, and ochsner clinic foundation, 72-0502505.”

“Ochsner Community Hospitals Merged into Ochsner Clinic Foundation, 72-0502505, a related 501(c)(3) Corporation, on December 31, 2016. Subsequent to the merger, Ochsner Medical Center-Kenner will be operated by Ochsner Clinic Foundation, and will continue to provide patient care services.”

“Net assets released from restrictions-operations - 23334; Merger into Ochsner Clinic Foundation, 72-0502505, a related 501(c)(3) organization 12/31/2016 - 3662230; Increase in Temporarily Restricted Net Assets - 53595; Contributions included in Change in Net Assets - -85154;”

“The process regarding the committee responsible for the audit, review, or compilation of the organization's financial statements and selection of an independent accountant has not changed from the prior year.”