Claiborne Medical Center

“Covenant Health is the sole member of Claiborne Medical Center.”

“Covenant Health's board of directors also serve as the board of directors for Claiborne Medical Center.”

“Governance decisions of Claiborne Medical Center are subject to approval of the sole member, Covenant Health.”

“The Covenant Health board of directors has delegated to its Finance Committee the full power and authority of the board to receive, review, approve, authorize the filing of, address and resolve audit or review issues, and otherwise take all action required or appropriate relative to IRS Forms 990 and other applicable tax filings. Prior to filing Form 990, management reviews with the committee the returns, discusses any material variations in the Form 990 as compared to those to be filed by the organization's affiliates, and answers any questions. At the conclusion of review and discussion, the Finance Committee approves the Form 990.”

“Board members, officers and employees are required to adhere to rules and policies regarding conflicts of interest. Covenant Health distributes a board-approved Code of Conduct to all employees. The Code covers among other subjects, conflicts of interest, and requires disclosure and resolution of employee conflicts of interest. Additionally, officers, employed physicians, and highly compensated employees are required to complete and sign an annual conflict of interest disclosure statement. Board members' conflicts of interests are addressed in the corporate bylaws, and board members are required to complete and sign a conflict of interest questionnaire on an annual basis. The Integrity-Compliance Office maintains records that contain conflict of interest information obtained from board members, officers and employees. These records are available to be queried prior to engaging in business transactions. The Chief Compliance Officer reviews conflict of interest data. Based on this information, the officer determines what conflicts of interest exist at that point in time. Between times when surveys are collected, board members are expected to disclose any new conflicts that have arisen that affect pending board decisions. Officers and other employees are expected to report conflicts to the Chief Compliance Officer as they arise. Depending on the nature of the conflict and the circumstances surrounding the conflict and transaction, the Chief Compliance Officer, senior leadership, or the board of directors may review the conflict of interest. When appropriate these parties may also consult legal counsel. Restrictions imposed on persons with a conflict of interest are determined on a case by case basis. For Covenant Health employees, the Chief Compliance Officer, in conjunction with Covenant Health Executive Leadership determines how to appropriately manage the conflict. In any conflict involving a board member, such member is expected to recuse himself or herself from voting on matters related to the conflict.”

“Form 990, Part VI, Section B, Line 15a: Overall compensation policies for Claiborne Medical Center, Covenant Health (Parent Company), and affiliates are set by the Covenant Health Chief Executive Officer (CEO) in consultation with appropriate Executive Vice Presidents and the Senior Vice President-Human Resources, after review by and discussion with the executive compensation consultant ("the Consultant") to ensure that total compensation for each executive is reasonable and within a fair market value range. The Covenant Health CEO is compensated by Covenant Health, and a detailed description of the compensation process is included on Covenant Health's 990. The process for Claiborne Medical Center's CEO is included in response to Part VI, Section B, Line 15b. Form 990, Part VI, Section B, Line 15b: Base salary and annual bonus opportunities for Patricia Ketterman, President and Chief Administrative Officer, are set by the Covenant Health CEO in consultation with appropriate Executive Vice Presidents and the Senior Vice President-Human Resources, after review by and discussion with the executive compensation consultant ("the Consultant") to ensure that total compensation is reasonable and within a fair market value range. Salary ranges are based upon the recommendations of the Consultant made after comparison with similar jobs in similar size health systems across the nation. Bonuses are recommended by the CEO and reviewed with the Committee conditioned upon receipt of a written opinion from the Consultant that total compensation for the executive is reasonable and consistent with fair market value. Base salary is initially targeted at the 25th percentile and may vary according to market conditions, performance, tenure, experience, special skills or qualifications, recruitment and retention challenges, and other relevant factors. Annual bonuses are designed to award 0-35% of base salary based upon system performance and accomplishment of certain targets established by the CEO. Base salaries and annual bonus opportunities for other officers and key employees are based on targets established by historical compensation consultant data and the Covenant Health Compensation department. Salary ranges are based upon comparison with similar jobs in similar size health systems across the nation. Base salaries and bonuses are approved by Executive Leadership predicated upon performance, and are reasonable and consistent with fair market value. Base salaries are intially targeted at midpoint and may vary according to market conditions, performance, tenure, experience, special skills or qualifications, recruitment and retention challenges, and other relevant factors. Annual bonuses are designed to award 0-20% of base salary based upon system performance and accomplishment of certain targets established by Executive Leadership.”

“Claiborne Medical Center files a Joint Annual Report containing financial information with the Tennessee Department of Health. Per its tax-exempt bond provisions, Covenant Health, the parent company of the organization, is required to file quarterly and annual consolidated and obligated group financial statements and other documentation with various bond insurers and other agencies, including the Electronic Municipal Market Access (EMMA) service of the Municipal Securities Rulemaking Board (MSRB). Any member of such a repository has access to these financial statements. The organization's governing documents and conflict of interest policy are not made publicly available.”

“In March 2020, the outbreak of the coronavirus disease 2019 ("COVID-19") was declared a public health emergency by the Department of Health and Human Services and declared a national pandemic by the World Health Organization. The COVID-19 pandemic had a major impact on the operations of all hospitals and affiliates included within the Covenant Health System. Three years later, although the overall number of hospital admissions due to the virus is significantly lower than the prior two years, COVID-19 continues to be a long-term problem. The stresses on the System which began in 2020 continue to have long-term and far-reaching implications, creating new challenges for every hospital in the System. The rapid rise in costs for supplies and equipment, unprecedented staffing shortages, and lower patient volumes continue to result in financial stress. Elective surgeries and diagnostic procedures have not yet returned to pre-COVID levels. Government subsidies in 2020 and 2021 helped offset the financial losses caused by significant declines in volumes due to cancelled and postponed procedures. In 2021 and 2022, Federal and state grants continued to be used to subsidize the rising costs of retaining staff and providing quality care. These federal and state grants were helpful but the financial pressures of rising costs across the System are ongoing. Early results from our focus groups for the Community Health Needs Assessments indicate that community problems such as substance abuse, mental illness, asthma and other respiratory diseases, and access to health care have gotten worse since COVID-19, thus stressing the health care System even more than usual. Covenant Health has put in place a number of changes to address these challenges. We are aggressively pursuing cost reductions in supplies across our hospitals and with our vendors. Covenant has increased nurse pay and implemented retention bonuses and other incentives to help reduce staff fatigue and turnover. A number of innovations, including a growing use of Tele-health capabilities, have assured that we continue to reach and serve patients in the community. Patient care continues to be our top priority despite the economic pressures.”