Upmc

“SECTION A, LINE 1,2,7 SECTION B, LINE 11, 12C SECTION A, LINE 1 ALTHOUGH THE UPMC BOARD OF DIRECTORS IS INDEPENDENT IN FACT, THE BOARD MEMBERS REQUIRED TO BE REPORTED AS NOT INDEPENDENT FOR FORM 990 PURPOSES ARE AS A RESULT OF AFFILIATION WITH COMPANIES PROVIDING SERVICES TO ON THE SAME TERMS AS THOSE OFFERED TO THE GENERAL PUBLIC, OR COMPENSATION PAID FOR OPERATIONAL ROLES FROM THE UNIVERSITY OF PITTSBURGH, ANOTHER 501(C)(3) ORGANIZATION WHICH UPMC SUPPORTS. SECTION A, LINE 2 DID ANY OFFICER, TRUSTEE, OR KEY EMPLOYEE HAVE A FAMILY RELATIONSHIP OR BUSINESS RELATIONSHIP WITH ANY OTHER OFFICER, DIRECTOR, TRUSTEE, OR KEY EMPLOYEE? FOR PURPOSES OF PART VI, LINE 2, UPMC HAS OBTAINED AND REPORTED RELEVANT INFORMATION FROM INTERESTED PERSONS INCLUDING DIRECTORS, OFFICERS, AND KEY EMPLOYEES OF UPMC AND OFFICERS AND KEY EMPLOYEES OF ALL GROUP SUBORDINATES, AND DIRECTORS OF GROUP SUBORDINATE ENTITIES WITH DECISION-MAKING BOARD AUTHORITY THAT IS INDEPENDENT FROM THAT OF UPMC PARENT. MULTIPLE UPMC OFFICERS, DIRECTORS, TRUSTEES, AND/OR KEY EMPLOYEES HAVE RELATIONSHIPS BY VIRTUE OF THE FACT THAT THEY ARE ALSO OFFICERS, DIRECTORS, TRUSTEES, AND/OR KEY EMPLOYEES OF UPMC SUBSIDIARIES AND AFFILIATES. THESE RELATIONSHIPS ARE NOT SEPARATELY DISCLOSED BELOW BECAUSE THEY ARE NOT "BUSINESS RELATIONSHIPS" FOR THE PURPOSES OF FORM 990. THE FOLLOWING UPMC OFFICERS, DIRECTORS, TRUSTEES, AND/OR KEY EMPLOYEES HAVE BUSINESS RELATIONSHIPS, AS REQUIRED TO BE DISCLOSED BY FORM 990 PART VI, SECTION A, LINE 2, BY VIRTUE OF THE FACT THAT THEY ARE ALSO OFFICERS, DIRECTORS, TRUSTEES, OR KEY EMPLOYEES OF OTHER UNRELATED TAXABLE ORGANIZATIONS. BOD MEMBER/OFFICER/KEY EMPLOYEE: MCCRADY RELATIONSHIP: BUSINESS ASSOCIATED PERSON: HAMILTON BOD MEMBER/OFFICER/KEY EMPLOYEE: HAMILTON RELATIONSHIP: BUSINESS ASSOCIATED PERSON: MCCRADY BOD MEMBER/OFFICER/KEY EMPLOYEE: MCGUINN RELATIONSHIP: BUSINESS ASSOCIATED PERSON: BECKWITH BOD MEMBER/OFFICER/KEY EMPLOYEE: BECKWITH RELATIONSHIP: BUSINESS ASSOCIATED PERSON: MCGUINN BOD MEMBER/OFFICER/KEY EMPLOYEE: LASKOW RELATIONSHIP: BUSINESS ASSOCIATED PERSON: BECKWITH BOD MEMBER/OFFICER/KEY EMPLOYEE: BECKWITH RELATIONSHIP: BUSINESS ASSOCIATED PERSON: LASKOW SECTION A, LINE 7 UPMC DOES NOT HAVE MEMBERS OR STOCKHOLDERS. THE UNIVERSITY OF PITTSBURGH HAS THE AUTHORITY TO APPOINT 1/3 OF THE MEMBERS OF THE UPMC BOARD OF DIRECTORS; CERTAIN UPMC HOSPITAL ENTITIES OR ENTITIES AFFILIATED WITH THOSE HOSPTIALS HAVE THE RIGHT TO APPOINT 1/3 OF THE MEMBERS OF THE UPMC BOARD OF DIRECTORS; THE REMAINING 1/3 OF THE BOARD OF DIRECTORS MEMBERS ARE NOMINATED BY A NOMINATING COMMITTEE OF THE BOARD OF DIRECTORS AND ARE ELECTED BY THE BOARD AT LARGE. NO GOVERNANCE DECISIONS OF UPMC ARE RESERVED TO OR SUBJECT TO APPROVAL BY MEMBERS, STOCKHOLDER OR PERSONS OTHER THAN THE BOARD OF DIRECTORS. SECTION B, LINE 11 The completed Form 990 was reviewed by the Chief Financial Officer, members of the Corporate Tax Department, members of the Corporate Legal Department, and other members of UPMC management prior to its filing. Various sections of the 990 were also reviewed by the Chief Executive Officer and committees of the filing organization's Board of Directors, as applicable. For example, the Executive Compensation Committee of the Board reviewed sections related to compensation and related party transactions. In addition, the Board of Directors established a 990 Subcommittee, comprised of the Chairs of the Board, Executive Compensation Committee, Ethics and Compliance Committee, Finance Committee and Audit Committee, which reviewed the entire completed Form 990 prior to filing. Additionally, the Form 990 is reviewed by an outside independent public accounting firm who as part of the process signs the return as Paid Preparer. After this review but prior to filing, the full Board of Directors was notified that the completed Form 990 was available for review on the Board's secure website. Also prior to filing, management provided the opportunity for all board members of the”

“SECTION B, LINE 15A & B, 16A & B Section B, Line 15a and b: As a system-wide practice, to support UPMC's mission and as set forth in the UPMC Bylaws, the Board of Directors has formed an Executive Compensation Committee ("Committee") and delegated to it the responsibility for establishment and implementation of officer and key employee total compensation programs. As part of this responsibility, the Committee reports regularly to the Board of Directors. With Board of Directors approval, the Committee has adopted a formal Charter, which includes the establishment of a compensation philosophy and related policies with respect to the total compensation paid by UPMC to its officers and key employees. The UPMC total compensation program for officers and key employees is predicated upon an incentive compensation component. This component is based upon the accomplishment of predetermined performance goals and objectives which focus on the achievement of multiple annual and three year individual and group performance criteria in the context of appropriate risk taking. These criteria directly support UPMC's mission and include: patient quality and satisfaction, community benefits, operational and financial strength, leadership development, and strategic business initiatives among others. The total compensation program is integrated with and reinforces the UPMC business planning cycle as well as management development and succession planning processes. It is the Committee's judgment that the structure of the total compensation program is vital to, and strongly supportive of, the high level of ongoing success of UPMC and fosters the retention of critical officer and key employee talent. The total compensation determination process utilized by the Committee is intended to satisfy the "rebuttable presumption of reasonableness" as set forth in the regulations to Section 4958 of the Internal Revenue Code ("Code"). This means that compensation programs and levels are approved in advance by the Committee which is composed entirely of outside Directors who do not have a conflict of interest, as defined by the Code, with respect to the compensation program and levels. The Committee obtains and relies upon a broad range of appropriate data as to comparability prior to making its determinations. The Committee then contemporaneously documents, in formal meeting minutes, the basis and reasons for its determinations. The total compensation program is designed and administered in accordance with the UPMC Bylaws, sound business practices, the tenets of common law business judgment and fiduciary responsibility as well as adherence to all relevant federal, state and local laws. In addition to Code Section 4958, as set forth above, this includes but is not limited to Code Section 501(c)(3) and the applicable regulations thereunder as well as all laws and regulations prohibiting private inurement, private benefit transactions and discrimination. Further, the Committee has identified and adopted, as appropriately modified for UPMC, compensation program "best practices" from the business world (e.g. Sarbanes Oxley, other SEC regulations, etc). The Committee believes that while these practices are not required in the tax exempt sector, they are in the best interests of the organization and further support UPMC's nonprofit mission. In accordance with the above, determination of total compensation for the CEO is made exclusively by the Committee. Determination of total compensation for other officers and key employees is recommended by the CEO and subject to review and approval by the Committee. The Committee, which meets at least four times a year, obtains professional advice from its own experts, including accountants, executive compensation consultants and legal counsel. SECTION B, LINE 16A AND B: UPMC has a formal written policy pertaining to joint ventures between UPMC Tax-Exempt entities and taxable entities. The policy employs an internal procedure for r”

“SECTION A AND SECTION B SECTION A Pursuant to Treasury Regulation Section 1.6033-2(d)(5), UPMC has elected to report compensation and Schedule J other information about officers, directors, trustees, key employees and certain other highly paid employees on a consolidated basis for all of the members of the UPMC Group, including this parent organization which is the sponsor or central organization of the Group, on the return of UPMC Group, EIN 20-8295721. SECTION B Pursuant to Treasury Regulation Section 1.6033-2(d)(5), UPMC has elected to report certain professional contractors and certain other contractors on a consolidated basis for all of the members of the UPMC Group, including this parent organization which is the sponsor or central organization of the Group, on the return of UPMC Group, EIN 20-8295721.”

“Line 1 - Contributions and grants: Pursuant to Treasury Regulation Section 1.6033-2(d)(5), UPMC has elected to report information related to its contributions and grants received on a consolidated basis for all of the members of the UPMC Group, including this parent organization, on the return of UPMC Group, EIN 20-8295721.”

“UPMC is the parent organization of a large integrated healthcare delivery system consisting of controlled subsidiaries within the meaning of Section 6033(h). UPMC'S primary mission is the ongoing support of all subsidiaries in order to assist them in accomplishing their exempt educational, healthcare, and research missions. Line 8 - Contributions and grants: Pursuant to Treasury Regulation Section 1.6033-2(d)(5), UPMC has elected to report information related to its contributions and grants received on a consolidated basis for all of the members of the UPMC Group, including this parent organization, on the return of UPMC Group, EIN 20-8295721.”

“UPMC is the premier integrated health system in western Pennsylvania and one of the nations leading academic medical centers. Its central mission is to provide outstanding, accessible care to the people of this region, while shaping tomorrows health care through clinical and technological innovation, research, and education. As the largest non-governmental employer in the Commonwealth with 65,000 employees within the various controlled health care entities, UPMC encompasses more than 25 hospitals and more than 600 outpatient sites, physician offices, and retirement and long-term care facilities. By integrating its health care services with a major insurance division that is focused on promoting the health of its members, UPMC has advanced the quality and efficiency of health care, and developed internationally renowned programs in transplantation, cancer, neurosurgery, psychiatry, orthopaedics, and sports medicine, among others. These highly specialized services draw patients from across the nation and around the world. Closely affiliated with its academic partner, the University of Pittsburgh, UPMC regularly ranks as one of "America's Best Hospitals" in U.S. News & World Reports prestigious annual listing. UPMCs largest operating component is its Health Services Division, encompassing a comprehensive array of clinical capabilities. Serving primarily western Pennsylvania, this division includes academic, community, and regional hospitals; pre- and post-acute care capabilities; specialty service lines such as transplantation services, womens health, behavioral health, pediatrics, cancer care, and rehabilitation services; contract services, such as emergency medicine, pharmacy, and laboratory; and 3,600 employed physicians with associated practices. UPMCs organ transplant center is one of the largest and busiest in the world, performing more than 19,000 transplants since 1981. The UPMC Cancer Center network is also one of the largest in the United States, with more than 50 centers in western Pennsylvania and Ohio and more than 2,000 physicians, researchers, and staff. UPMCs expertise in transplantation and oncology is key to the globalization efforts undertaken through its International Division, which promotes the exchange of scientific knowledge worldwide, while generating revenue that is reinvested in western Pennsylvania. In managing its global health enterprise, UPMC has taken a leadership role in good corporate governance practices - voluntarily achieving Sarbanes-Oxley certification for twelve years in a row, publicly releasing quarterly financial results within 60 days of each quarters close, and creating one of the most stringent industry relationship policies to ensure that pharmaceutical and medical device companies do not negatively influence patient care. These business practices set the stage for decision making that is good for UPMC and the communities it serves. High-Quality, Patient-Focused Care By leveraging resources and expertise across its global network, UPMC has achieved significant gains in the delivery of high-quality, patient-focused care. The Wolff Center at UPMC coordinates and connects quality, safety, patient care and improvement. It partners with colleagues across UPMC to improve health care delivery for patients and members, and supports the transformation and improvement of patient care delivery and outcomes through the dissemination of best practices and use of advanced technology. The Wolff Centers expertise also includes enterprise wide data quality and analytics, patient experience, infection prevention, regulatory support, quality improvement training, emergency preparedness, and pay for performance quality oversight. System-wide quality initiatives during fiscal year 2016 included implementation of 98 projects across the system aimed at keeping patients safe, enhancing the patient experience, taking care of our caregivers, and propelling quality through robust data analytics. Investments in”

“Line 2 - Contributions and grants: Pursuant to Treasury Regulation Section 1.6033-2(d)(5), UPMC has elected to report information related to its contributions and grants on a consolidated basis for all of the members of the UPMC Group, including this parent organization, on the return of UPMC Group, EIN 20-8295721. LINE 12 - AN EXTERNAL AUDIT IS COMPLETED AT A CONSOLIDATED UPMC SYSTEM LEVEL ONLY, INCLUDING UPMC AND ALL TAXABLE AND TAX EXEMPT SUBSIDIARIES. LINE 21 - FOR JUNE 30, 2016 TAX YEAR, UPMC MADE A CASH CONTRIBUTION FOR $5,137,374 TO PITTSBURGH PROMISE, A SECTION 501(C)(3)TAX-EXEMPT ORGANIZATION. THE FISCAL YEAR 2016 CONTRIBUTION IS PART OF A TOTAL $100 MILLION COMMITMENT TO THE PITTSBURGH PROMISE. UNDER UPMC'S ACCOUNTING METHODOLGY, $59.5 MILLION OF THE TOTAL COMMITMENT WAS ACCRUED AND REPORTED AS AN EXPENSE ON PART IX OF UPMC'S JUNE 30, 2013 FORM 990. HOWEVER, ONLY THE AMOUNT OF THE CASH CONTRIBUTION FOR FISCAL YEAR 2013, $4,995,639 WAS REPORTED ON UPMC'S JUNE 30, 2013 FORM 990, SCHEDULE I. IN FISCAL YEAR 2014 AND 2015, A CASH CONTRIBUTION OF $4,896,759 AND $3,345,780 RESPECTIVELY, WAS MADE AND ONLY REPORTED ON SCHEDULE O. IN FISCAL YEAR 2016, A CASH CONTRIBUTION OF $5,137,374 WAS MADE. HOWEVER, BECAUSE OF SOFTWARE LIMITATIONS, UPMC CANNOT REPORT ON SCHEDULE I THE CASH TRANSFER PORTION OF THE PRIOR EXPENSE RECOGNIZED WITHOUT OVER-REPORTING THE EXPENSE ON PART IX. THEREFORE, UPMC IS DISCLOSING THE CASH CONTRIBUTION IN SCHEDULE O HEREIN INSTEAD OF ON SCHEDULE I TO AVOID SUCH OVER-REPORTING.”

“LINE 9 OTHER CHANGES IN NET ASSETS OR FUND BALANCES Return of Capital from Exempt Subsidiary 25,000,000 Minimum Pension Liability (166,874,723) Net Transfers from Exempt Subsidiaries 84,763,680 Dividends/Transfers from Subsidiary 5,145,580 Investment in Affiliate 11,393,653 Other Changes to Fund Balance (44,281) TOTAL OTHER CHANGES IN NET ASSETS OR FUND BALANCES (40,616,091)”

“Question 2b an external audit is completed at a consolidated system level only, including upmc and all taxable and tax-exempt subsidiaries.”