Ahs Midwest Management Inc

“The articles of incorporation and bylaws of the filing organization were amended in 2015 to reflect certain changes to the purposes, membership, and governance of the filing organization as a result of an affiliation agreement entered into between adventist health system sunbelt healthcare corporation (ahsshc) and ascension health on february 1, 2015. Ahsshc is the 501(c)(3) top-tier parent organization of the filing organization and the parent of a system of hospital and other healthcare provider organizations operating in ten states. The system is known as adventist health system (ahs). Under the affiliation agreement entered into between ahsshc and ascension health, a joint operating company, alexian brothers - ahs midwest region health co., was formed. The joint operating company does business under the name, amita health. Alexian brothers - ahs midwest region health co. (joc or amita health) has been recognized by the internal revenue service as a tax-exempt organization under irc section 501(c)(3). The joc provides for the hospitals and other healthcare provider organizations owned and operated in the northwest suburbs of chicago by alexian brothers health system and by ahs to integrate financially and operationally to achieve a more effective and efficient system of delivering healthcare and hospital services to the residents of the communities served. The joc manages and operates its "covered affiliates". The filing organization is one of the covered affiliates of the joc. The membership of the joc is held by adventist midwest health and alexian brothers health system. Adventist midwest health (amh) is a 501(c)(3) second-tier subsidiary of ahsshc. Alexian brothers health system is also exempt from federal income tax under irc section 501(c)(3). Prior to the commencement of the affiliation agreement on february 1, 2015, the sole member of the filing organization was adventist health system/sunbelt, inc. (ahssi). Ahssi is a 501(c)(3) first-tier subsidiary of ahsshc. Ahssi is the sole member of amh. In conjunction with the closing of the affiliation agreement of february 1, 2015, a restructuring occurred whereby the membership of the filing organization was transferred from ahssi to amh. The purposes clause of the filing organization's bylaws was amended in 2015 to reflect the filing organization's status as a covered affiliate of the new joc known as amita health. The governance and reserved powers articles of the bylaws were amended to set forth the rights and reserved powers over the filing organization by the sponsor, ahsshc, by the member, amh, by both members of the joc, namely, amh and alexian brothers health system, and the board of directors of amita health. Please see our response to question 7b of section a of part vi of form 990 for a listing of the powers reserved by the sponsor; by amh (member), by both amh and alexian brothers health system (members), and by the board of directors of amita health, the joc. Prior to amendment of the filing organization's bylaws on 2/1/15, the president of the filing organization was elected by the member. The bylaws, as amended, provide that the president's appointment, retention and removal shall be at the discretion of the ceo of the joc, subject to the sponsor's approval.”

“In connection with the affiliation agreement described above in part vi, section a, line 4, the board of directors of ahssi and of ahsshc approved a restructuring whereby amh became the sole member of the filing organization. Prior to the restructuring, ahssi was the sole member of the filing organization.”

“The members of the board of directors (governing board) of the filing organization are appointed by the corporate member, amh. The corporate member is entitled to elect not less than six (6) and no more than eleven (11) voting members to the board of directors of the filing organization pursuant to the provisions of the bylaws, subject to the ratification of the amita health board of directors.”

“As noted in our response to part vi, section a, line 4, the filing organization is a covered affiliate of the joc known as amita health. The sole member of the filing organization is amh. Amh is also one of two members in amita health. The other member of amita health is alexian brothers health system. The top-tier parent of amh is ahsshc (sponsor). The governing documents of the filing organization, as amended, provide for certain authorities and reserved powers over the filing organization by ahsshc, as sponsor, by amh as member, by both members of the joc, namely, amh and alexian brothers health system (members), and by the board of directors of the joc as follows. Ahsshc, as sponsor has the following authority with respect to the filing organization: a. To direct the disposition of the filing organization's assets with a value not to exceed three million dollars ($3,000,000). B. To ratify, together with the other sponsor of the joc, the annual operating and capital budgets of the filing organization. C. To direct an internal asset transfer between or among the sponsor's covered affiliates (including the filing organization) with a value not in excess of three million dollars ($3,000,000). D. To direct a sale to a third party of part of the filing organization's assets managed and operated by the joc, or a transfer of part of sponsor's membership interest in the filing organization to a third party, subject to a supermajority vote of the joc board of directors. Certain governance powers are reserved to amh, as the member of the filing organization. The reserved powers of amh include the following: a. Faith-based tenets and ethical principles of the filing organization. B. The alteration, restatement or repeal of the articles of incorporation, bylaws or mission statement of the filing organization, provided that such actions are not inconsistent with the joc bylaws or the affiliation agreement. C. The appointment of the filing organization's board of directors, subject to the ratification of the joc board of directors. D. The approval of any joc board recommended waiver or other claim or action against or brought by or on behalf of the filing organization if the uninsured portion of the amount in controversy is in excess of such threshold amount designated in sponsor policy as requiring member approval. Powers reserved to both members of the joc: a. To sell, transfer or otherwise dispose of any real estate or any asset owned by the filing organization with a fair market value in excess of ten million dollars ($10,000,000). B. To direct asset transfers from the filing organization to any of the alexian covered affiliates (or vice versa) in excess of ten million dollars ($10,000,000). C. To approve any operating lease under which the filing organization is the lessee, which operating lease shall be consistent with the operating lease policies of its sponsor. D. Other than with respect to a covered affiliate legacy liability of the member or its sponsor, which matter will be handled by the member and its sponsor, to approve entering into any corporate integrity agreement or similar agreement with a government entity or agency imposing compliance obligations on the joc or the filing organization. E. To acquire any real estate, personal property, membership, ownership or investment interest for the filing organization or make any capital expenditure whether or not pursuant to an annual budget, or substitutions for capital expenditures within a capital budget, which exceed individually, or in the aggregate, ten million dollars ($10,000,000) in any fiscal year; provided, however, that any contribution necessary to fund unbudgeted expenditures by the joc is subject to member approval. Powers of the board of directors of the joc over the filing organization: a. To adopt and modify the annual (and interim if deemed appropriate) operating and capital budgets of the filing organization, which budgets will be subject to ratification by e”

“The filing organization's current year form 990 was reviewed by the ceo and by the cfo prior to its filing with the irs. The review conducted by the ceo and the cfo did not include the review of any supporting workpapers that were used in preparation of the current year form 990, but did include a review of the entire form 990 and all supporting schedules.”

“The conflict of interest policy of the filing organization applies to members of its board of directors and its principal officers (to be known as interested persons). In connection with any actual or possible conflict of interests, any member of the board of directors of the filing organization or any principal officer of the filing organization (i.e. Interested persons) must disclose the existence of any financial interest with the filing organization and must be given the opportunity to disclose all material facts concerning the financial interest/arrangement to the board of directors of the filing organization or to any members of a committee with board delegated powers that is considering the proposed transaction or arrangement. Subsequent to any disclosure of any financial interest/arrangement and all material facts, and after any discussion with the relevant board member or principal officer, the remaining members of the board of directors or committee with board delegated powers shall discuss, analyze, and vote upon the potential financial interest/arrangement to determine if a conflict of interest exists. According to the filing organization's conflict of interest policy, an interested person may make a presentation to the board of directors (or committee with board delegated powers), but after such presentation, shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement that results in a conflict of interest. Each interested person, as defined under the filing organization's conflict of interest policy, shall annually sign a statement which affirms that such person has received a copy of the conflict of interests policy, has read and understands the policy, has agreed to comply with the policy, and understands that the filing organization is a charitable organization that must primarily engage in activities which accomplish one or more of its exempt purposes. The filing organization's conflict of interest policy also requires that periodic reviews shall be conducted to ensure that the filing organization operates in a manner consistent with its charitable purposes.”

“Certain of the filing organization's officers and key employees are not compensated by the filing organization. The ceo and coo are compensated by an unrelated organization, alexian brothers health system. As mentioned in part vi, section a, line 4 alexian brothers health system is a co-member in the joint operating company in which the parent of the filing organization became a member of effective february 1, 2015. All other such individuals are compensated by the related top-tier parent organization of the filing organization. Please see the discussion concerning the process followed by the related top-tier parent organization in determining executive compensation in our response to schedule j, line 3.”

“The filing organization is a part of the system of healthcare organizations known as adventist health system (ahs). Each year, ahs publishes an annual report document that includes a financial report for the relevant year as well as a community benefit report. The financial report and community benefit report are presented on a consolidated basis and represent all of the activities, results of operations, and financial position at year-end of the entire ahs system. In addition, the audited consolidated financial statements of ahs and of the ahs "obligated group" are filed annually with the municipal securities rulemaking board (msrb). The "obligated group" is a group of ahsshc subsidiaries that are jointly and severally liable under a master trust indenture that secures debt primarily issued on a tax-exempt basis. Unaudited quarterly financial statements prepared in accordance with generally accepted accounting principles (gaap) are also filed with msrb for ahs on a consolidated basis and for the grouping of ahs subsidiaries comprising the "obligated group". The filing organization does not generally make its governing documents or conflict of interest policy available to the public.”

“For those board of director members and officers who devote less than full-time to the filing organization (based upon the average number of hours per week shown in column (b) on page 7 of the return) the compensation amounts shown in columns (e) and (f) on page 7 were provided in conjunction with that person's responsibilities and roles in serving in an executive leadership position in conjunction with the affiliation agreement and joint operating company known as amita health. Please see our response to form 990, part vi, section a, line 4.”

“Management fees: program service expenses 0. Management and general expenses 1,250,759. Fundraising expenses 0. Total expenses 1,250,759. Compliance fees: program service expenses 0. Management and general expenses 205,573. Fundraising expenses 0. Total expenses 205,573. Billing & collections services: program service expenses 0. Management and general expenses 459,638. Fundraising expenses 0. Total expenses 459,638. Environmental services: program service expenses 143,553. Management and general expenses 0. Fundraising expenses 0. Total expenses 143,553. Purchased medical services: program service expenses 1,314,408. Management and general expenses 0. Fundraising expenses 0. Total expenses 1,314,408. Recruiting: program service expenses 39,700. Management and general expenses 0. Fundraising expenses 0. Total expenses 39,700. Miscellaneous purchased services: program service expenses 1,340,363. Management and general expenses 0. Fundraising expenses 0. Total expenses 1,340,363. Physician consulting: program service expenses 65,500. Management and general expenses 0. Fundraising expenses 0. Total expenses 65,500. Ehr management fees: program service expenses 0. Management and general expenses 54,729. Fundraising expenses 0. Total expenses 54,729. Electronic medical records fee: program service expenses 1,998,520. Management and general expenses 0. Fundraising expenses 0. Total expenses 1,998,520.”

“Impairment charge - fixed assets -176,024. Tranfer from tax exempt affiliate 2,642,334. Rounding -2.”

“The amounts shown on line 2 of part x of this return include the filing organization's interest in a central investment pool maintained by adventist health system sunbelt healthcare corporation, the filing organization's top-tier parent. The investments in the central investment pool are recorded at market value.”