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.”

“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 2015 return was held on October 31, 2016. 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 are required to complete a conflict of interest disclosure form annually, within 40 days of becoming an employee, or if a current employee has a change in business circumstances not previously disclosed. 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. In addition, employees that do not fall within the scope of the Conflict of Interest Disclosure policy annually complete Conflict of Interest training in compliance with the Conflict of Interest policy. 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 Community Hospitals 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. This review is performed to ensure their pay is comparable to the work performed. 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 Corporate Integrity Department.”

“ADDITIONAL COMPENSATION EXPLANATION - COMPENSATION FROM INTEGRATED HEALTH SYSTEM 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. The following is a list of the individuals with such circumstances, each person's title with the related organization, and the related organization that employs each individual. * Aderonke Akingbola, MD; Sr. Physician, VPMA-OMC-Kenner; Ochsner Clinic Foundation * Joseph E. Bisordi, M.D.; Executive Vice President & Chief Medical Officer; Ochsner Health System * Bobby C Brannon; Exec VP & Treasurer; Ochsner Clinic Foundation * Ava Jo Collins; COO-OBMC; Ochsner Clinic Foundation * Bradley Goodson; CEO-North Shore Region; Ochsner Health System * Richard D Guthrie, Jr., MD; Chief Quality Officer; Ochsner Clinic Foundation * Julie Henry; formerly AVP, Radiology Service Line; Ochsner Clinic Foundation * Michael Hulefeld; Executive Vice President & Chief Operating Officer; Ochsner Health System * George Loss, MD, PhD; Senior Physician, RMD-Baton Rouge Region; Ochsner Clinic Foundation * Donna Martin; Chief Nursing Officer; Ochsner Clinic Foundation * Richard V Milani, MD; Vice Chairman, Department of Cardiology / Chief Clinical Transformation Officer; Ochsner Clinic Foundation * G "Jody" Morris; Sr. Physician-Chair; Ochsner Clinic Foundation * Peter November; Secretary, Executive Vice President, & Chief Administrative Officer; Ochsner Health System * Scott J Posecai; Executive Vice President & Chief Financial Officer; Ochsner Health System * Dawn Puente, MD; RMD N.O. Community Hospitals; Ochsner Clinic Foundation * Patrick J. Quinlan, M.D.; CEO-OCF International Business; Ochsner Health System * Eddy Ramirez; VP Planning; Ochnser Health System * Dana Smetherman, MD; Vice Chairman, Department of Radiology / Section Head, Breast Imaging; Ochsner Clinic Foundation * James Tebbe, Jr, MD; Lead Physician; Ochsner Clinic Foundation * Warner L Thomas; Chief Executive Officer; Ochsner Health System * Robert Wolterman; CEO OMC-Jefferson Hwy; Ochsner Health System”

“COMPENSATION OF DIRECTORS AND AVERAGE HOURS PER WEEK DEVOTED TO POSITION Those directors listed as "Board Member Sr Phys" on the Form 990 for Ochsner Clinic Foundation (EIN 72-0502505) 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. 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 Pete 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 and Dr. Richard Guthrie were employed and compensated by Ochsner Clinic Foundation, 72-0502505, 501(c)(3), a related organization. Dr. Joseph Bisordi was 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.”

“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 2015 consists of ochsner's payments (either directly or as reimbursement) of expenses incurred for meeting or travel expenses for the board.”

“Net assets released from restrictions-operations - 8352; Miscellaneous - -7405; Loss on Defeasance - -2288210;”

“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.”