Pittsburgh Mercy Health System Inc.

“The sole member of pittsburgh mercy health system (pmhs) is trinity health corporation. See line 7 for additional information.”

“Trinity health corporation is the sole member of pmhs. Trinity health corporation has the right to appoint all persons to the board of directors of pmhs.”

“As sole member, trinity health corporation must approve certain decisions of the governing body, including the strategic plan, annual capital plan, and annual operating budget. Trinity health corporation must also approve significant changes such as a merger, dissolution, sale of assets in excess of certain limits, and modifications to governing documents.”

“Prior to filing, the form 990 for pmhs is reviewed by senior management. In addition, certain key sections of the form are reviewed by the finance committee. Each member of the board receives a copy of the return in its final form before it is filed with the internal revenue service.”

“Pmhs has adopted trinity health's governance policy no. 1, which sets forth the organization's conflict of interest policy and processes. It applies to all "interested persons" of pmhs, which includes directors, principal officers, key employees, and members of committees with board-delegated powers. Interested persons are expected to discharge their duties in a manner the person reasonably believes to be in the best interests of pmhs and to avoid situations involving a conflict of interest. On an annual basis, interested persons are required to complete a conflict of interest disclosure statement and to affirm their receipt of the conflict of interest policy, compliance with its requirements, and agree to notify the organization of changes impacting their annual disclosure in accordance with the policy. The annual disclosures are provided to internal legal counsel and the integrity and compliance officer, from which legal counsel prepares a report for the board chair and ceo. A summary of potential conflicts is reviewed with the board of directors of pmhs (or a delegated committee of the board) on a yearly basis. Interested persons are required to make full disclosure to pmhs of any financial or business interests that might result in or have the appearance of a conflict of interest. The board of directors of pmhs (or a delegated committee of the board) is responsible for the review of transactions to determine whether an actual conflict of interest exists. In the event of an actual conflict, the board (or a delegated committee of the board) will either avoid the conflict or appropriately scrutinize the transaction to ensure it is in the best interests of pmhs. Interested persons are required to recuse themselves from discussion and voting on matters involving a conflict of interest. The policy further addresses the proper documentation of the proceedings and potential disciplinary and corrective action for violations of the policy. The policy is available to the public upon request.”

“Question 15a is answered "no" because the compensation for pmhs' ceo is established and paid by trinity health, a related organization. In establishing ceo compensation, trinity health follows a process and policy that is intended to mirror the irc section 4958 guidelines for obtaining a "rebuttable presumption of reasonableness" with regard to compensation and benefits. As part of that process, the compensation and benefits of the ceo of pmhs are reviewed at least annually by the trinity health board or the trinity health human resources and compensation committee (hrcc) of the board, authorized to act on behalf of the board with respect to certain compensation matters. As part of its review process, the hrcc retains an independent firm experienced in compensation and benefit matters for not-for-profit health care organizations to advise it in the determinations it makes on the reasonableness of proposed compensation and benefits arrangements. Question 15b is answered "no" because the compensation for certain officers and key management officials of pmhs is established and paid by mercy life center corporation, a related organization. In establishing cfo compensation, mercy life center corporation has a process for determining compensation which includes the following: the board has an independent committee review and approve all elements of remuneration for all disqualified parties, as well as other key management. The board/committee has an established compensation philosophy which details the objectives of market positioning and pay elements. The committee engages with external consultants to provide market data comparing the organization's roles to similarly health systems utilizing both title and job content comparisons. The committee reviews the market analysis, approves any salary adjustments for the executive population, considers both reasonableness and effectiveness of all remunerative programs and establishes the detailed performance expectations which are incorporated into the incentive plan. All of these discussions and decisions are documented through the provision of meeting minutes.”

“Pmhs is a subsidiary organization in the trinity health system. Trinity health makes certain of its key documents available to the public on its website, www.trinity-health.org, in the "about us" section. In this section, the consolidated audited financial statements are publicly available. Pmhs' governing documents and conflict of interest policy are available upon request.”

“Susan welsh, rsm, is a member of the religious sisters of mercy. Having taken a vow of poverty, sister susan welsh did not receive compensation for the services she provided to pmhs and its affiliates except for insurance benefits of $14,756. Instead, a total of $427,041 was paid by trinity health corporation, a related organization, directly to the religious sisters of mercy for sister susan welsh's services.”

“Equity transfers to/from affiliates -3,446,828. Inherent contribution upon acquisition of subsidiary 2,024,101. Other transactions 416,277.”

“Pmhs' financial statements were included in the fy17 consolidated financial statements of trinity health, which were audited by an independent public accounting firm.”