Community Hospital of Anderson And

“Management delegated the following actions require, in addition to the approval or recommendation, as applicable, of the board, written approval of chnw, its sole member, which is a 501(c)(3) organization: a) amendment of organizational documents, b) unbudgeted indebtedness - the incurrence of any unbudgeted loans or other indebtedness in an aggregrate amount greater than $750,000, c) significant changes - the formation of legal entities, the sale, transfer or substantial change in use of all or substantially of all the assets of the corporation, or the divesture, dissolution, closure, merger, consolidation or reorganization of the corporation, d) asset acquisitions and sales above $500,000, e) disposition of assets on dissolution, f) capital and operating budgets, plans, or forecasts, g) auditors - the selection, evaluation and termination of the independent auditing firm for the corporation, h) certain compensation for employed physicians, the corporation's president, and senior administrators or leaders of the corporation or independent physicians providing services to the corporation, i) capital improvements greater than the budgeted amount by $500,000 per fiscal year in the aggregate, j) strategic plans, k) president's employment, and l) the lines of business - commencement or discontinuation of any line of business or healthcare services to be provided at the corporation's facilities.”

“Classes of members or stockholders community health network, inc. ("chnw") is the sole member of community hospital of anderson and madison county, inc. ("cha"). Chnw is an exempt organization pursuant to section 501(c)(3).”

“Election of members and their rights cha's board of directors membership is determined as follows: a) the board of directors should have a minimum of five directors and a maximum of thirteen members, with the exact number of directors specified from time to time by resolution of the board. The member, chnw acting through it's board of directors, shall directly appoint and remove a majority of the board. The board shall have the right to appoint and remove the remaining directors. B) no person who has served as a board-appointed director shall serve for more than three successive terms. (a partial term shall not be regarded as a full term). C) at least two-thirds of the members of the board shall be residents of the community and at least a majority of the board must be residents of the community who are not employees of the member or the corporation. All directors shall comply with all requirements imposed by any applicable health care regulatory body and shall be subject to all applicable self-evaluation and qualification requirements of the member.”

“Decisions subject to approval of members the following is required, in addition to the approval or recommendation of the board, to have written approval from chnw, the sole member of cha: a) amendment of organizational documents, b) unbudgeted indebtedness - the incurrence of any unbudgeted loans or other indebtedness in an aggregrate amount greater than $750,000, c) significant changes - the formation of legal entities, the sale, transfer or substantial change in use of all or substantially of all the assets of the corporation, or the divesture, dissolution, closure, merger, consolidation or reorganization of the corporation, d) asset acquisitions and sales above $500,000, e) disposition of assets on dissolution, f) capital and operating budgets, plans, or forecasts, g) auditors - the selection, evaluation and termination of the independent auditing firm for the corporation, h) certain compensation for employed physicians, the corporation's president, and senior administrators or leaders of the corporation or independent physicians providing services to the corporation, i) capital improvements greater than the budgeted amount by $500,000 per fiscal year in the aggregate, j) strategic plans, k) president's employment, and l) the lines of business - commencement or discontinuation of any line of business or healthcare services to be provided at the corporation's facilities.”

“Organization's process to review form 990 chnw has assumed responsibility for cha's audit, compliance, finance and executive compensation matters including specifically the preparation and review of cha's form 990. Chnw's board of directors has delegated authority for the review of cha's form 990 to two committees composed of independent outside directors: a) the network executive compensation committee reviewed the compensation aspects of cha's form 990, and b) the network finance committee reviewed the remainder of the cha's form 990. In addition, cha's outside accounting firm and law firm reviewed the form 990 prior to filing. Cha and chnw utilized this process to ensure that cha's form 990 received substantive review by directors and professionals with specific knowledge of cha's activities and extensive financial, accounting, and tax expertise.”

“Enforcement of conflict of interest policy chnw has assumed responsibility for cha's audit and compliance matters. Chnw has adopted a conflict of interest policy that applies to cha. The conflict of interest policy requires directors, officers, and key employees to submit an annual conflict of interest disclosure. The annual disclosure requires directors, officers, and key employees to disclose, in writing, any known financial interest that the individual (together with family members) has in any business entity that transacts business with cha. In addition, directors, officers, and key employees are required to immediately disclose any possible conflict of interest that arises mid-year in relation to a proposed transaction. The conflict of interest policy requires that any individual with a conflict be recused from the decision making process, that independent directors or committee members determine that the proposed transaction is in the best interest of cha, and the transaction must be approved by a vote of independent directors or committee members without the participation of any interested individual. The annual conflict disclosure statements are submitted to, and reviewed by, chnw's audit committee, composed of independent directors. In addition, the executive staff and general counsel of the network are responsible for monitoring any possible conflict transactions that arise and managing them to ensure that all transactions represent arms length, fair market value terms for the benefit of cha.”

“Compensation process for top official as a member of the network, cha is subject to the executive compensation practices and procedures of chnw, the network parent. Chnw has adopted an executive compensation and intermediate sanctions policy that applies to cha. The purpose of the policy is to ensure that cha's compensation arrangements with related parties are evaluated and entered at arms length and that any compensation that is paid to a related party is reasonable and reflects fair market value. This policy encourages the application of the rebuttable presumption standard of code section 4958 and the related treasury regulations by: a) excluding any interested party from the decision making process, b) requiring disinterested board or committee members to obtain and rely upon comparability data when setting the proposed compensation terms, c) requiring approval of the transaction in advance by disinterested directors or committe members, and d) requiring contemporaneous documentation (i.e. Minutes) reflecting the decision and the process by which it was made. Chnw has delegated authority regarding cha's executive compensation to a) the network executive compensation committee, composed of independent outside directors, which is responsible for applying the terms and process of the executive compensation and intermediate sanctions policy as outlined above, and b) the network chief human resources officer who is responsible for obtaining comparative salary market data for the chief executive officer, officers, and key employees, engaging an independent compensation consultant to provide reasonable compensation analysis and/or confirm the reasonableness of compensation, and providing staff support to the network executive compensation committee. During 2024, the network executive compensation committee followed this process for all senior executive leaders. Form 990, part vi, line 15b - compensation process for officers see part vi, line 15 above. Form 990, part vi, line 16b - joint venture procedure joint venture operating agreements involving cha include provisions to protect cha's tax-exempt status and ensure the joint venture is structured to further the organization's tax-exempt purposes. Each agreement contains specific language related to the provision of health care services with focus on community health benefit and must follow a formal review process prior to contract execution. Cha continually ensures that its tax-exempt status is protected by actively participating in the governance of all joint ventures and ensuring that it has sufficient control over the joint venture to carry out its exempt purpose.”

“Governing documents disclosure explanation a) the articles of incorporation and business entity report are on file with the indiana secretary of state and are available to the public upon request to the indiana secretary of state or free of charge on the secretary of state's website. B) while not available to the public, cha's conflict of interest policy is described in part vi, line 12c. C) cha does not have individually audited financial statements. Its financial results are included in the consolidated financial statements of community health network, inc. And affiliates. As such, there are no individual financial statements to post. Cha does file the 990 tax return on an annual basis which is available upon request and/or available on a delayed basis on guidestar.org. D) community health network, inc. And affiliates provide any document open to public inspection upon request.”

“Part vii, section b - independent contractor disclosure compensation to wr dunkin & son, inc. Includes material costs. Compensation to boston scientific corporation includes products as well as services.”

“Community hospital of anderson and madison county, inc. Does provide assistance to individuals pursuant to chnw's charitable care policy, but such assistance does not show up as an expenditure on the income and expense statement, therefore this question is answered no.”

“Form 1099's were processed under the name and federal identification number of community health network, inc, the parent organization and a 501(c)(3) entity.”

“Professional fees: program service expenses 2,498,722. Management and general expenses 56,010. Fundraising expenses 0. Total expenses 2,554,732. Purchased services: program service expenses 1,399,602. Management and general expenses 4,321,898. Fundraising expenses 0. Total expenses 5,721,500. Hospitalist expense: program service expenses 2,071,325. Management and general expenses 6,396,145. Fundraising expenses 0. Total expenses 8,467,470. Network expenses: program service expenses 9,543,832. Management and general expenses 29,458,685. Fundraising expenses 0. Total expenses 39,002,517.”

“Reclassification of intercompany balances 7,212,055.”