The Palmerton Hospital

“An executive committee of the board of directors has the broad authority to act on behalf of the governing body. The committee is composed of seven members of the board of directors and includes all four officers of the board.”

“The sole member of the corporation is blue mountain health system, inc., an affiliated pennsylvania nonprofit, nonstock corporation.”

“As sole member, blue mountain health system, inc. Has the power to appoint and remove board members of the hospital.”

“As sole member, blue mountain health system, inc. Has the power to exercise each of the following powers with respect to the hospital, and if any action related to the exercise of any such power is initiated by the hospital, such action will not become effective unless approved by the sole member: 1) the power to require its approval before the hospital is permitted to incur additional debt and the power to require the hospital to participate in the incurrence of debt by the sole member; 2) the power to establish and/or approve the strategic and business plans of the hospital in accordance with the sole member's prescribed objectives; 3) the power to appoint and/or remove the president/ceo of the hospital; 4) the power to require the hospital to make capital contributions to the sole member; 5) the power to establish and approve annual capital expenditure and operating budgets of the hospital; 6) the power to review financial reports, intervene in management and operations and transfer assets to or from the hospital; 7) the power to approve the hospital's participation in alliances, joint ventures, affiliations or other relationships with entities not controlled, directly or indirectly, by the sole member and the power to require the hospital to participate in such relationships; 8) the power to approve or disapprove of the hospital's participation in managed care contracts and/or other health care service contracting arrangements, the power to require the hospital to participate in such contracts or arrangements, and the power to act as the principal representative and negotiating agent for the hospital with regard to such contracts and arrangements; 9) the power to approve or disapprove of additions, revisions or discontinuations in health care services and the power to require the hospital to add, revise, relocate or discontinue health care services; 10) the power to approve the transfer of assets by the hospital outside of the health care system controlled by the sole member; 11) the power to approve the occurrence of the following events: sale, lease, exchange of substantially all assets; merger; consolidation; division; dissolution; or liquidation of the hospital; or amendment of its articles of incorporation; 12) the power to establish and from time to time modify the hospital's strategic plans; 13) the power to establish and from time to time modify investment guidelines applicable to the hospital; 14) the power to approve the selection, retention or termination of the hospital's external auditors; and 15) the power to establish, amend, terminate, merge or consolidate any benefit plans including, without limitation, the power to revise existing benefit plans as necessary to meet the coverage and nondiscrimination requirements of the code and regulations thereunder.”

“The blue mountain health system (bmhs) staff communicated to the finance committee of the board that the forms 990 were prepared by baker tilly virchow krause, llp, as well as communicating the general types of information contained in the filing. The form 990 is reviewed by the ceo, the cfo, and the vp of fund development prior to issuance and the board is provided the details to access the 990 through a secured board "portal" prior to issuance.”

“The conflict statement must be signed on an annual basis by all governing body members, officers, and key employees. This process is monitored by the administrative assistant to the president/ceo. A conflict is considered to be any direct or indirect financial interest, and any conflicts noted are communicated to the compliance committee. There were no conflicts disclosed for this year. If a conflict were to exist, the interested person may not be present during the discussion of, and the vote on, the transaction or arrangement that results in the conflict of interest.”

“Senior management salaries are determined by the executive committee using market values obtained. Human resources participates in various salary surveys to determine the correct salary range. The appalachian hospital human resource society conducts an annual salary survey for all positions. In addition, the hospital association of pennsylvania conducts an annual survey with yaffe associates for senior management employees. The market data is analyzed by human resources and the goal is to pay at the 50th percentile. Salaries of other employees are recommended by human resources and approved by the president and ceo. The executive committee of the board serves as the compensation committee and approves recommendations for salary increases. The executive committee approves increases for the ceo. The review and approval process for salary increases is documented in the commitee minutes. Senior management has received the same general increases as the staff employees received.”

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

“VALUATION LOSS -50,304.”