Altarum Institute

“MONITORING AND ENFORCEMENT OF COMPLIANCE WITH CONFLICT OF INTEREST POLICY ANNUALLY, EACH MEMBER OF THE BOARD OF TRUSTEES AND EVERY OFFICER MUST COMPLETE AND SUBMIT A DISCLOSURE FORM TO THE DIRECTOR OF LEGAL AND COMPLIANCE. INCLUDED IN THE DISCLOSURE FORM IS ANY EMPLOYMENT, BOARD MEMBERSHIP, COMPENSATORY ARRANGEMENTS, MATERIAL INTERESTS, ETC. WITH OTHER ENTITIES. THE DIRECTOR OF LEGAL AND COMPLIANCE INPUTS ALL OF THE INFORMATION INTO A DATABASE SO THAT MATERIAL TRANSACTIONS CAN BE CHECKED AGAINST ALL OF THE DATA PROVIDED IN THE DISCLOSURE FORMS. ALSO, PURSUANT TO POLICY, THE BOARD MEMBERS AND OFFICERS HAVE TO DISCLOSE ANY INTERESTS IN OR RELATIONSHIP WITH AN ENTITY THAT ALTARUM IS PURSUING A TRANSACTION WITH (AT THE TIME OF THE BOARD MEMBER OR OFFICER BECOMing AWARE OF THE POTENTIAL ALTARUM RELATIONSHIP). UPON THE IDENTIFICATION OF A POTENTIAL CONFLICT OF INTEREST, THE INTERESTED PERSON MUST DISCLOSE ALL MATERIAL FACTS, AND THE DISINTERESTED BOARD MEMBERS (IN THE ABSENCE OF THE INTERESTED PERSON) DISCUSS AND VOTE UPON WHETHER OR NOT AN ACTUAL CONFLICT OF INTEREST EXISTS. IF A CONFLICT OF INTEREST EXISTS, THEN ALTERNATIVE TRANSACTIONS OR ARRANGEMENTS WILL BE SOUGHT OUT AND CONSIDERED. IF NO ALTERNATIVE TRANSACTION IS SUITABLE, THE DISINTERESTED MEMBERS OF THE BOARD DETERMINE WHETHER OR NOT THE CONFLICTED TRANSACTION IS IN ALTARUM'S BEST INTERESTS AND DETERMINE IF THE TERMS OF THE TRANSACTION ARE FAIR AND REASONABLE, WITHOUT THE PARTICIPATION OR VOTE BY THE PARTY INVOLVED IN THE CONFLICT OF INTEREST. UPON A CONFLICT OF INTEREST OCCURRING THAT WAS NOT DISCLOSED, THE INTERESTED PERSON MUST EXPLAIN THE FAILURE TO DISCLOSE THE ALLEGED CONFLICT. AFTER HEARING THE EXPLANATION AND CONDUCTING ANY NECESSARY FURTHER INVESTIGATION, THE BOARD WILL TAKE APPROPRIATE DISCIPLINARY AND CORRECTIVE ACTION.”

“Offices & positions for which process was used, & year process has begun the altarum institute audit and compensation committee meets every year for the purpose of reviewing, determining and approving compensation for the executive employees of altarum institute. The committee meets in february to evaluate the reasonableness of the amount and conformity with altarum institute policies and prior committee approvals. Review of prior year total compensation also occurs at the february meeting. Executive positions included in review are: 1. President & ceo 2. Chief financial officer 3. All other executives of the organization. The following information is considered as part of the determination of compensation: 1. Current salary survey information compiled by independent firms: mercer, towers watson, prm, and guidestar. 2. Independent market compensation data report prepared by pearl meyer. 3. 13-firm non-profit peer group selected by audit and compensation committee. 4. Review of employee performance evaluation data summarized by the president and ceo, for all non-president and ceo executives. After discussion, all members of the compensation committee vote on the compensation presented. If the committee approves the compensation packages presented as reasonable and in conformity with the altarum institute policies, then the compensation committee submits the compensation provisions outlined for endorsement by the board of trustees. After reviewing the compensation provisions approved by the compensation committee, the board of trustees votes the recommendations.”

“PROCESS FOR MAKING DOCUMENTS AVAILABLE TO THE PUBLIC ALL AVAILABLE UPON REQUEST FORM 990, PART VII, SECTION A MR. FISH'S EMPLOYER, FLETCHER SPAGHT, INC., REQUIRED HIM TO FORGO THE TRUSTEE FEES REPORTED IN PART VII, SECTION A IN ORDER TO SERVE ON ALTARUM INSTITUTE'S BOARD. FLETCHER SPAGHT, INC. HAS DONE BUSINESS WITH ALTARUM INSTITUTE IN THE PAST, AND ITS CONFLICT OF INTEREST POLICY PROHIBITED MR. FISH FROM RECEIVING ANY TRUSTEE FEES DIRECTLY IF HE WANTED TO SERVE ON THE ALTARUM INSTITUTE BOARD. MR. FISH ENTERED INTO AN AGREEMENT WITH ALTARUM INSTITUTE WHEREBY HE DIRECTED THAT THE TRUSTEE FEES BE PAID DIRECTLY TO FLETCHER SPAGHT, INC. INSTEAD. FOR PURPOSES OF FULL DISCLOSURE, THE FEES ARE REPORTED IN PART VII, SECTION A AS IF PAID TO HIM DIRECTLY. Part IX, Line 11g Other fee for services SUBCONTRACT Fees $14,594,980 Consulting $ 866,614 WorK order labor $ 45,781 HONORARIA/INCENTIVES $ 190,267 Other $ 83,132 Total $15,780,774”

“DURING 2017 ALTARUM SUPPORTING ORGANIZATION (ASO) A WHOLLY OWNED SUBSIDIARY OF ALTARUM INSTITUTE MERGED INTO ALTARUM INSTITUTE. AS A RESULT OF THE ASO MERGER, ALTARUM INSTITUTE LEASES CERTAIN FACILITES AND EQUIPMENT TO UNRELATED THIRD PARTIES. THIS ACTIVITY IS REPORTED AS OTHER REVENUE ON PART VIII. THE FACILITY BEING RENTED IS DEBT FINANCED RESULTING IN UNRELATED BUSINESS INCOME THAT IS REFLECTED ON FORM 990-T. IN DECEMBER OF 2017 HEALTH CARE INCENTIVES IMPROVEMENT INSTITUTE INC (HCI3), AN UNRELATED NONPROFIT HEALTH CARE CONSULTING ORGANIZATION WAS MERGED INTO ALTARUM INSTITUTE. AS A RESULT OF THE HCI3 MERGER, ALTARUM INSTITUTE HAS PERFORMED ON HCI3 CONTRACTS WHICH ARE WORKING ON A COMPENSATION APPROACH DEVELOPED TO ANALYZE MEDICAL EPISODES OF CARE FROM CLAIMS DATA USING PROMETHEUS ANALYTICS SOFTWARE TO CREATE AN EPISODE INFORMED CASE RATE BUDGET THAT CAN BE USED FOR VALUE BASED PAYMENT MODELS AND PERFORMANCE. PART VI, SECTION B., LINE 11B process for review of form 990 by organization 1. irs FORM 990 IS PREPARED EXTERNALLY BY ALTARUM'S TAX ACCOUNTING FIRM. THE PROCESS IS MANAGED BY THE OFFICE OF THE CHIEF FINANCIAL OFFICER. WITH APPROPRIATE GUIDANCE FROM THE TAX ACCOUNTANTS, INFORMATION GATHERING AND REPORTING IS PRIMARILY CONDUCTED BY THE CHIEF FINANCIAL OFFICER AND DIRECTOR OF ACCOUNTING. AS PART OF THE INFORMATION GATHERING PROCESS, THE CHIEF FINANCIAL OFFICER AND DIRECTOR OF ACCOUNTING WORKS WITH ALTARUM INSTITUTE OFFICERS AND OTHER MANAGERS AS NECESSARY. 2. THE CHIEF FINANCIAL OFFICER PRESENTS THE COMPLETED DRAFT FORM 990 TO THE AUDIT AND COMPENSATION COMMITTEE OF THE ALTARUM INSTITUTE BOARD OF TRUSTEES. THIS COMMITTEE HAS BEEN DESIGNATED BY THE BOARD TO REVIEW THE FORM 990 TO EITHER APPROVE AS WRITTEN OR MAKE SUGGESTED MODIFICATIONS, DRAWING UPON WHATEVER BOARD COMMITTEES OR INDIVIDUAL TRUSTEES IT DEEMS NECESSARY. Concurrently, the full board of trustees is provided access to the Form 990 and are invited to the audit and compensation committee meeting to review the form with management and the external tax accountants. 3. once reviewed and approved for submission, the chief financial officer is notified that the form is ready for submission to the irs. 4. the chief financial officer provides a copy of the form 990 to each member of the board of directors prior to filing. 5. the chief financial officer instructs the external tax accountants to finalize the irs form 990 and present it for signature and filing with the irs.”

“INCOME FROM SUBSIDIARIES $ 4,117,626 DIVESTURE OF BUSINESS DIVISION CONSTITUTING A COMMON CONTROL TRANSACTION $ 3,724,834 Total $ 7,842,460”

“Required audit single audit completed in accordance with uniform guidance”