Brainerd Lakes Integrated Health System

“Business relationship: key employees, michael larson and peter henry, md, have a business relationship in brainerd lakes surgery center, llc.”

“Members of organization: essentia health is the sole member of essentia health central and may elect one or more members of the governing body as described in schedule o, part vi, line 7a. Essentia health and benedictine sisters benevolent association have reserved powers with respect to essentia health central as described in schedule o, part vi, line 7b.”

“Member with right to elect governing body: essentia health appoints and removes essentia health central's governing body.”

“Members with right to approve governing body decision: essentia health central is a subsidiary of essentia health, whose board of directors has reserved powers with respect to this corporation and its subsidiaries, and all of the other direct and indirect subsidiaries of essentia health (collectively, the "system"). Essentia health's reserved powers are as follows: strategic and business plans. Authority to create, and to approve, the system's strategic and business plans. Mission. Authority to create, and to approve, the mission, purpose and vision statements for all entities in the system by the affirmative vote of at least 67% of the essentia health board of directors. Debt. Approval of the incurrence of debt by, and the creation of all mortgages, liens, security interests, or other encumbrances on the assets of, all entities in the system in excess of the single or annual aggregate dollar limits prescribed in writing by the essentia health board of directors, and the authority to cause all entities in the system to participate in system borrowing. Governing instruments. Authority to cause, and to approve, amendments of the articles of incorporation and bylaws and/or the certificates of formation and operating agreements of all entities in the system. Mergers and acquisitions. Authority to cause, and to approve, all mergers, consolidations, and dissolutions of all entities in the system. Affiliations and joint ventures. Authority to cause, and to approve, all affiliations, joint ventures and other alliances with third parties of all entities in the system. Transfer of assets within the system. Authority to transfer assets, including cash, between and among entities within the system; provided, however, that essentia health shall not have authority to require any entity in the system to transfer assets (a) that would cause such entity to be in default of its covenants or obligations under any bond or other financing documents; (b) from the catholic entities to the secular entities or from the secular entities to the catholic entities in a manner or to an extent that would cause the catholic entities to be in violation of the ethical and religious directives for catholic health care services (erds) in the judgment of the local ordinary; or (c) such that money generated by services at secular facilities within the system by procedures that are contrary to the erds would be used at the catholic entities or money generated by catholic entities would be used in the providing of services contrary to the erds at secular facilities within the system. Transfer of assets outside the system. Authority to cause, and to approve, the sale, lease or other transfer of assets of all entities in the system to parties outside of the system when the asset's value exceeds the single or annual aggregate dollar limits prescribed in writing by the essentia health board of directors. Services. Authority to cause, and to approve, the discontinuance of services and service locations within all entities in the system. Budgets. Approval of capital and operating budgets of all entities in the system. Professional services. Selection of the general legal counsel and external auditors of all entities in the system. Acquisitions. Authority to cause, and to approve, all acquisitions by and formations of entities in the system. Marketing. Authority to implement system-wide marketing and promotional activities. Compliance plans. Authority to create, and to approve, corporate compliance, safety and risk management plans for entities within the system. Quality plan. Authority to create, and to approve, the system's quality plan. Non-budgeted purchases. Approval of non-budgeted capital purchases and leases in excess of the single or annual aggregate dollar limits prescribed in writing by essentia health for entities within the system. Human resources. Authority to create human resource policies and procedures within the system. Reserved powers. Authority to creat”

“The benedictine sisters benevolent association ("bsba") also has certain reserved powers over essentia health's catholic facilities. Bsba's reserved powers are as follows: mission. Authority to approve the mission and purpose statements for catholic facilities and entities within the system. *adherence to ethical and religious directives for catholic health care services (erds). Authority to approve the methods, policies and procedures pertaining to the adherence of catholic facilities and entities within the system to the erds. *official catholic directory. Authority to oversee the listing of qualified entities and facilities within the system in the official catholic directory, subject to the approval of applicable catholic authorities. *catholic health association. Authority to require catholic facilities and entities within the system to join the membership of the catholic health association of the united states. Alienation of stable patrimony or ecclesiastical goods. Authority to approve alienation of either stable patrimony or other ecclesiastical goods within the system if such goods involved in a specific transaction approved by essentia health pursuant to the affiliation agreement have a dollar value equal to or greater than 70% of the amount established from time to time that requires approval from the holy see; provided, however, that it is the intent of the parties that this provision not be applied to restrict or to impede essentia health from acting and making decisions on behalf of the system in the ordinary course of business but be applied to prevent the transfer of substantial assets of catholic entities within the system to support the secular entities within the system without the prior approval of bsba. *mission effectiveness. Authority to approve annual plans and evaluations relating to mission effectiveness and chaplaincy for catholic facilities and entities within the system, including the use of religious symbols and prayers. Amendments. Authority to approve any amendments to the governing documents of essentia health, essentia health east (smdc), essentia health central (blihs), essentia health west (innovis) or critical access group (cag), that would alter the number of duluth benedictines or bsba board of director members or other appointees of the duluth benedictines serving as members of such entity's board of directors; authority to approve any amendments to the governing documents of the catholic cag subsidiaries, the catholic smdc subsidiaries, the catholic blihs subsidiaries or the catholic subsidiaries of innovis, which could materially affect such entity's identity as a catholic institution, including without limitation any amendment that would alter the number of duluth benedictines or bsba board of director members or other appointees of the duluth benedictines serving as members of such entity's board of directors; and authority to cause essentia health to make amendments to the governing documents of the catholic subsidiaries of essentia health's direct subsidiaries, which amendments bsba determines in good faith are necessary to preserve such entity's identity as a catholic institution. Mergers and dissolution. Subject to the approval of the duluth benedictines, authority to approve a proposed merger, consolidation, liquidation, or dissolution of st. Mary's medical center (smmc) and st. Joseph's medical center (sjmc) or the disposition of all or substantially all the assets of smmc and sjmc. Bsba sponsorship. Authority to establish, accept, transfer or terminate bsba sponsorship or co-sponsorship of a healthcare facility. *reserved power currently delegated to the sponsorship council. Note: some of the reserved powers of the bsba board listed above may also be reserved to the chapter of the bsba. Prior to these matters going to the bsba chapter, ordinarily they will be considered and acted upon by the bsba board. The following actions of the bsba board are subject to approval by the bsb”

“Form 990 review process: the 2018 form 990, including all schedules, was reviewed by essentia health central's management and governing body prior to filing with the internal revenue service. Each current director of the governing body received a final copy of the 2018 form 990. Essentia health central's finance leader reviewed the form and schedules and any questions were discussed.”

“Monitoring and enforcing conflict of interest policy: essentia health's comprehensive conflict of interest program prevents, detects, and resolves actual conflicts of interests or the actual or potential appearance of such. Fiduciaries, defined as an essentia health board member/trustee, officer, board committee member, senior management employee, or any others considered to be in a position of influence, are covered under essentia health's conflict of interest program. Upon initial appointment, each fiduciary must complete an initial conflict of interest statement and disclosure questionnaire. At the conclusion of each calendar year, each fiduciary must complete an annual conflict of interest statement and disclosure questionnaire. As needed, a fiduciary will update his/her most recently completed questionnaire each time the fiduciary becomes aware of a financial interest, a potential conflict, or change to any information that the fiduciary previously reported. Essentia health's chief compliance officer will collect the questionnaires and evaluate the disclosures. If a fiduciary has a potential conflict of interest, the chief compliance officer or designee may request additional information from the fiduciary, the management team, and others. During the evaluation process, the chief compliance officer may also consult with essentia health's board and audit committee chairs, senior management, legal department, or appropriate representatives from essentia health. The chief compliance officer reports to the essentia health audit committee and the essentia health board of directors any actual or potential conflicts of interest disclosed by the fiduciary, along with recommended actions. The essentia health board of directors (or designee) will then determine whether to approve the situation or to implement special controls to manage the potential conflict of interest. The chief compliance officer will then officially notify the fiduciary in writing of the board's decision. The decision of whether or not the disclosure constitutes a conflict will be at the essentia health board of director's (or designee) sole discretion, and its concern must be the welfare of essentia health and its affiliate(s) and the advancement of its purposes. When the essentia health board of directors (or designee) considers a fiduciary's disclosure as a conflict of interest, special controls will be identified to manage, eliminate or reduce the likelihood and/or appearance of a conflict arising. Controls may include, but are not limited to: a. If the conflict involves an on-going matter or relationship, the fiduciary must not participate in board, board committee, or management discussions related to the conflict and must recuse themselves and if appropriate, withdraw, from any board meeting or portion thereof where the matter is being discussed and during the vote on the potential conflict of interest. The fiduciary may answer questions at the board's or the board committee's request. B. If the conflict involves a specific transaction or decision, the fiduciary will fully disclose their interest and all related material facts. The board or committee of the board will determine whether the contemplated transaction may be authorized as just, fair, and reasonable to essentia health or its affiliate(s). If the board determines a conflict does not exist, the fiduciary may proceed with the transaction; however, he or she will not be eligible to vote on related issues should they arise. If the board determines a conflict does exist, the fiduciary will be notified of the decision regarding whether the contemplated transaction will be authorized as just, fair, and reasonable.”

“Process for determining compensation: the independent executive compensation committee of essentia health's board of directors is authorized to fulfill the board's responsibilities regarding executive compensation consistent with essentia's mission, values and tax-exempt status, and the executive compensation committee's charter. The executive compensation committee meets at least twice annually to carry out its responsibilities, which include, but are not limited to, establishing, reviewing and modifying, as appropriate, reasonable compensation and benefits for designated essentia executives who are officers or key employees of essentia or any of its affiliates which may be paid by related organizations. The executive compensation committee engages qualified independent compensation advisors to provide objective and impartial comparative data and to express opinions on total compensation reasonableness. The executive compensation committee may request its independent advisors to: monitor comparability data and marketplace trends; make appropriate recommendations regarding salary ranges; and periodically review the market competitiveness of essentia executive compensation packages. Prior to establishing or adjusting executive compensation, the executive compensation committee will obtain and rely upon appropriate data as to comparability of the proposed compensation or adjustments. The executive compensation committee will adequately document the basis for its determination concurrently with making those determinations. The executive compensation committee minutes will include: the terms of the approved compensation and the date approved; the executive compensation committee members present during the review, discussion and approval of the proposed compensation and those who voted on the proposed compensation; identification of the comparability data obtained and relied upon by the executive compensation committee and how the data was obtained; any actions by a member of the executive compensation committee having a conflict of interest; and documentation of the basis for the determination. The year this process was last undertaken for essentia health central's president, vice president of finance, chief nursing officer, chief medical officer, and vice presidents of operations was 2019.”

“Availability of governing documents, conflict of interest policy, & financial statements to the public: governing documents, conflict of interest policy, and financial statements are made available to the public upon request for the same period of disclosure as set forth in section 6104(d).”