Ucare Minnesota

“Eight directors affiliated with the University of Minnesota Medical School, Department of Family Medicine are reported here as not independent. The Medical School/Department is not a traditional parent organization of UCare, and does not directly appoint or elect all of these directors. The Department also does not have direct removal authority for all of these directors, and removal of a director under the bylaws requires the vote of at least one director not affiliated with the Medical School/Department. However, the Medical School/Department has indirect control of the appointment and election process of these eight directors. One director is appointed by the Dean of the Medical School, two directors (including the chair) are on the board by virtue of their positions at the Department, and the chair appoints five physicians on faculty at the Department. UCare's current board includes seven independent directors: six directors who are enrollees of UCare's plans, and an at-large director from the community. Under Minnesota law, the board is charged to act in the best interests of the corporation. See Minn. Stat. Sections 62D.12, subd. 9 and 317A.251. UCare's bylaws describe an executive committee subject to the control of the board and with the authority to only meet between scheduled meetings of the board and to take actions on certain matters. This executive committee rarely is convened and did not meet during 2013.”

“Individuals enrolled in UCare's health plans have the right under the bylaws, and consistent with Minn. Stat. 62D.06, to elect six of the board's directors among the enrolled members. There are no classes of members or other rights.”

“UCare's board of directors consists of 15 directors. Under UCare's bylaws, the chair of the board has the authority to appoint five physician directors from the University of Minnesota Medical School, Department of Family Medicine, and the Dean of the Medical School appoints one director. In addition, two directors (including the chair) are directors by virtue of their positions in the Department.”

“The Form 990 is prepared by the controller and reviewed by an independent accounting firm. UCare provides a copy and reviews the detail of the completed 990 Form with the Board's Finance and Audit Committee. UCare also provides a copy of the completed 990 Form to all members of the Board of Directors via email, and the Board's on-line portal prior to the Finance and Audit Committee's report to the Board. Upon approval by the Board of Directors, the 990 Form is filed with the Internal Revenue Service.”

“UCare requires completion of an annual questionnaire by its board members, officers and senior executives, which is designed to surface potential conflicts of interest. In addition, UCare's policy requires disclosure to the Board Chair and/or CEO of a potential conflict involving a director, officer or management staff when a particular transaction arises. If the Board or a designated Board Committee determines that a potential conflict exists related to a transaction requiring action by the board, the policy calls for the board member with the potential conflict to abstain from voting and for a majority of the disinterested directors to find that the transaction is fair and reasonable to the corporation, and that the organization could not reasonably find a more advantageous transaction from another entity without a potential conflict. In practice, UCare seeks to manage certain business matters so that they are not subject to action by the board or senior executives where a potential conflict exists. For example, the board includes members who are enrolled in UCare's health plans, and the benefit designs and premium amounts of such plans are not brought before the board for action. The policy also requires disclosure of potential conflicts to the board or designated committee even for transactions not requiring board action.”

“On an annual basis, UCare's Compensation Committee reviews and approves the President and CEO's total cash compensation, including base pay and incentive pay. Benefits are reviewed, as described below, every two to three years, with the most recent review in 2012. The Compensation Committee is composed of independent members of the Board of Directors. UCare engages an independent consultant organization that specializes in advising health care organizations about executive compensation issues. The independent consultant organization conducts a comparability analysis that incorporates multiple industry surveys and compensation data for comparable positions at peer organizations. The independent consultant organization then shares the results of this comparability analysis with the Compensation Committee. After deliberation about the comparability analysis and recommendations, the Committee evaluates the annual cash compensation package for the President & CEO. The Committee brings recommendations about CEO salary decisions to the Board for approval, and reports other actions taken by the Committee to the Board. Minutes are recorded contemporaneously to accurately document the Committee's discussions and actions, and the independent consultant organization's report is retained for recordkeeping purposes. The Compensation Committee also participates in the compensation process for other senior executives, including the Treasurer & Chief Financial Officer, the Secretary & General Counsel, the Chief Medical Officer, the Senior Vice President and Chief Administrative Officer, the Senior Vice President of Operations, the Senior Vice President of Public Affairs & Marketing, and the Senior Vice President of Strategy and Product Management. The process for determining compensation for these positions follows a compensation philosophy approved by the Board of Directors. Every two to three years, an independent consultant organization conducts a comparability analysis for these positions, focusing on total compensation data including base pay, incentive pay, and benefits for comparable positions at peer organizations. The President and CEO's position is also included in this comparability analysis. The most recent analysis occurred in 2012. The Compensation Committee receives and discusses the analysis and recommendations with the independent consultant organization, and provides input for the President & CEO in determining cash compensation for the officers and senior executives. The Compensation Committee has delegated specific cash compensation approval for these leaders to the President & CEO, who is an independent person with respect to these compensation determinations, provided that the President & CEO follows the board-approved compensation philosophy, takes into account the comparability analysis, and obtains annual review by the committee. All changes in the benefit structure are approved by the Committee. The Committee's discussion and input are reflected in contemporaneous documentation, and a copy of the independent consultant organization's report is retained.”

“UCare Minnesota's 990 Form is available on the Minnesota Department of Health's website at www.health.state.mn.us/divs/hpsc/mcs/financial.htm and www.guidestar.org in addition to being made available upon request.”

“UCare files its governing documents and Conflict of Interest Policy with the Minnesota Department of Health, and this public information would be available from this agency upon request.”

“Medical Service Expenses: Program service expenses 2,196,987,953. Management and general expenses 0. Fundraising expenses 0. Total expenses 2,196,987,953. Purchased Services: Program service expenses 10,846,647. Management and general expenses 6,150,671. Fundraising expenses 0. Total expenses 16,997,318. Temporary Employees: Program service expenses 3,079,491. Management and general expenses 459,580. Fundraising expenses 0. Total expenses 3,539,071. Mayo Service Fees: Program service expenses 1,768,671. Management and general expenses 859,990. Fundraising expenses 0. Total expenses 2,628,661. Broker Commissions: Program service expenses 3,793,196. Management and general expenses 0. Fundraising expenses 0. Total expenses 3,793,196. Disease Management: Program service expenses 902,448. Management and general expenses 0. Fundraising expenses 0. Total expenses 902,448. Health Promotions: Program service expenses 1,258,696. Management and general expenses 0. Fundraising expenses 0. Total expenses 1,258,696. Outsourced Services: Program service expenses 16,411,222. Management and general expenses 0. Fundraising expenses 0. Total expenses 16,411,222.”