Sentara Enterprises and Subsidiary

“The organization's officers and directors served together on the boards of other organizations within the sentara healthcare system ("the system"), as well as joint ventures in which the system had an ownership interest. See schedule r for a listing of such entities.”

“The organization's sole member was sentara healthcare, a virginia nonstock corporation and section 501(c)(3) tax exempt entity.”

“The board of directors, which served as the organization's governing body, was elected by its sole member, sentara healthcare, a virginia nonstock corporation and the section 501(c)(3) tax exempt parent of the sentara health system.”

“As sole member, sentara healthcare, a virginia nonstock corporation and the 501(c)(3) tax exempt parent of the sentara health system, is entitled to one vote on all matters and has the right to elect and remove members of the organization's governing body; approve any alteration, amendment or repeal of its governing documents; approve the annual operating and capital budget and all formal long-range plans; approve any single capital expenditure exceeding $1 million; approve all borrowing or indebtedness which in any one transaction or related series of transactions exceeds $500,000; approve any plan of merger or consolidation, any sale, lease, exchange, mortgage, pledge or other disposition of all, or substantially all, the property and assets of the organization, the voluntary dissolution of the organization, or revocation of voluntary dissolution proceedings; review the books and records, conduct audits, and approve the selection of auditors chosen to conduct audits of the organization; and approve the creation or acquisition of any subsidiary of the organization, or the creation of any other corporation of which the organization is to be a member, and to approve any dissolution or other change in any such legal relationship previously approved by sentara healthcare.”

“The organization was part of the sentara health system ("the system"), and as such, used the system's in-house tax department, headed by a licensed certified public accountant, to both prepare and review its form 990. During the preparation and review process, the tax department worked closely with other system departments, such as legal, compensation and benefits, compliance, finance, and marketing, to ensure that a complete and accurate return was filed. The parent of the system is sentara healthcare, a virginia nonstock corporation and 501(c)(3) tax exempt entity.”

“Directors, board-nominated officers, and key employees are requested to submit an annual conflict of interest questionnaire and certify to the completion and accuracy of the information disclosed. Additionally, each organization's governing board or appropriate body monitors transactions involving disclosed potential conflicts of interest.”

“As part of the sentara health system ("the system"), the organization followed processes and procedures set forth in its governing documents to ensure compliance with its obligations as a 501(c)(3) healthcare organization to pay disqualified persons reasonable compensation. Such processes and procedures are intended to establish the rebuttable presumption of reasonableness under the internal revenue code section 4958 regulations. The compensation philosophy of the system as a whole is to base overall compensation and benefits for executives on not-for-profit market comparables, adjusted as applied to each executive, taking into consideration the individual skills, experience, tenure and performance of the executive being compensated and overall performance of the organization. In line with this philosophy, the system performed substantial due diligence as to market comparables. The system's compensation committee, which consists of system board members without conflicts of interests, engaged an outside consultant, who reports to the compensation committee, to conduct a study assessing the competitiveness of total compensation (including cash compensation, benefits and perquisites) of its senior executives prior to making decisions regarding annual base salary adjustments, approving incentive awards, or considering programmatic changes. The study compared the compensation of the system's senior executives to compensation data from multiple published survey sources based on the senior executive's functional responsibility. In conducting the study, the consultant targeted other not-for-profit health systems of similar size based on net revenue and complexity. For health plan positions, health plans with similar premiums, or members, were targeted. The consultant also conducts a review of the organization's performance relative to a group of not-for-profit health systems of comparable size and scope of operations every year. The most recent study compared sentara's performance to 29 not-for-profit healthcare systems based on net revenue growth, operating margin, various clinical quality metrics and patient satisfaction. Overall, the consultant determined that sentara's pay was aligned with its relative performance. The compensation study was presented to the system's compensation committee, which made its compensation decisions based on a)its review and analysis of the performance of both the organization and its senior executives and, b) a reasonableness of compensation analysis and opinion from an external expert in the compensation of executives in the tax-exempt health care field. The committee's bases for its decisions were documented in committee minutes taken during the meeting and then circulated for review and approval. All decisions regarding compensation were made by the committee, which consists of system board members without conflict of interests. This process was used to establish compensation for the organization's president, chairman and treasurer. The chairman and treasurer also served as president and ceo and executive vice president and cfo of the system, respectively. The process was last undertaken during the current tax year for the positions listed.”

“The consolidated financial statements for sentara healthcare and subsidiaries were made publicly available through the use of dac bond (disclosure dissemination agent) and can be found on the internet at www.dacbond.com. The organization's governing documents and conflicts of interest policy are generally not made available to the public.”

“Sentara healthcare i. Sentara healthcare - your not-for-profit healthcare partner sentara healthcare celebrates more than 131 years in pursuit of its mission - we improve health every day. Named to ibm watson health's 2018 "top 15 health systems," sentara is an integrated, not-for-profit system of 12 hospitals in virginia and northeastern north carolina, including a level i trauma center, the nationally ranked sentara heart hospital, two orthopedic hospitals, accredited sentara cancer network and the sentara neurosciences institute. The sentara family also includes four medical groups, nightingale regional air ambulance and ground medical transport, senior care, home care and hospice, nursing rehabilitation centers, ambulatory outpatient campuses, advanced imaging and diagnostic centers, a clinically integrated network, the sentara college of health sciences and the optima health plan serving 450,000 members in virginia, north carolina and ohio. With nearly 28,000 employees and ranked one of forbes "america's best employers" in 2018, sentara is strategically focused on clinical quality and safety, innovation and creating an extraordinary healthcare experience for our patients and members. Efforts are centered on providing the right care in the right setting at the right time and adding value to the communities we serve. We strive to serve all of our communities through health outreach programs, education, and financial support of other not for profit organizations with similar health missions. Ii. Commitment to the community a. Sentara has provided much in the way of community benefit and charity care on an annual basis. The 2019 value of community benefit totaled $309.5m. Sentara provided $239,251,000 in net uncompensated patient care costs; $45,011,000 in net unfunded costs of teaching programs; and $25,261,000 in incurred costs for community benefit programs. In 2019, an average of 34 individuals sought care at sentara hospitals who have no ability to pay for care. These services range from emergency visits to life saving trauma care. B. Sentara developed a corporate social responsibility (csr) program to support the needs of the communities we serve in the most impactful way. Sentara committed $5m in 2019. The csr program will deliver economic, social and environmental benefits for stakeholders across all sentara markets and increase our community connection. It will build on sentara recognized leadership and commitment to the communities we serve. C. Sentara healthcare and optima health, in partnership with the local initiatives support corporation (lisc), the nation's largest community development organization, announced a $100 million investment to address social determinants of health in underserved communities across the commonwealth of virginia. This investment, which is part of our corporate social responsibility program, builds upon sentara's commitment to create healthier communities and improve the quality of life for virginians most in need. Sentara will contribute $50m to advance these goals in partnership with lisc, who has committed to assembling an additional $50m from public and private sources to complement sentara's investment. D. Sentara hired its first chief diversity officer to focus on the important work of diversity in our workforce, to deepen our understanding on caring for our diverse patient population and to develop strong relationships with diverse community populations. Additionally, we hired our first director of health equity. The health equity division was created with the goal to identify and remove barriers so people can receive the care they need. The team identifies health disparities and researches possible causes. This includes chronic health issues such as hypertension, diabetes, and the high rates of cancer deaths in minority communities. E. In response to the tragedy that took place at the virginia beach municipal center in may 2019, sentara collaborated with the city of virginia be”

“H. Community health initiatives sentara and optima health have long been committed to providing health and prevention services to the communities we serve through many channels including the sentara healthcare community health and prevention organization within sentara. Below are some key highlights of the efforts in our communities in 2019: i. Health improvement events were offered to churches, employer groups, community health centers and other community locations. Ii. Sentara continued to offer programs such as eating for life, walkabout with healthy edge, health habits, healthy you, meditation, tai chi and yoga. Sentara hosts a number of community events raising awareness around key health awareness months. One good example is the focus on colon cancer prevention: don't sit on colon cancer. Through the sentara cancer network, sentara hosted a 5k at sentara princess anne hospital in virginia beach. Through sentara heart, we promoted the "28 (+1) days of heart" in february 2019 in support of heart health awareness. Online promotions, radio ads, videos, screenings and more were conducted to raise awareness of heart disease throughout the communities we serve in virginia and north carolina. Iii. Growth in sentara healthcare sentara has reached out to other industry leaders and joined forces to extend quality healthcare and services to more people. In recent years, we have grown in virginia and in other states - north carolina and ohio - by seeking partnerships with successful hospitals and health systems that share our dedication to excellence, value, quality and customer focus. Our growth in 2019 included the following: a. Sentara announced the intent to purchase 80% of virginia premier, an insurance company affiliated with vcu health in richmond, virginia. Optima health and virginia premier will continue as two separate companies and retain their respective names and brands in the marketplace. The two plans will serve more than 800,000 members. B. Optima health continued as one of 6 managed care organizations that collectively served over 400,000 eligible virginians who qualified for medicaid expansion. C. Sentara developed newly designed retail and ambulatory services. Sentara was proud to introduce two sites of care where primary care and physical therapy are co-located with a seamless customer experience. Additionally, sentara introduced physical therapy with virtual care at one site in north carolina. D. Sentara expanded its velocity urgent care centers across virginia. Across sites, 193,372 patient visits took place representing a 22% growth over 2018. Iv. New initiatives a. Sentara launched the new sentara "app" in september 2019 following the introduction of the new optima app in late 2018. By end of 2019, more than 47,000 consumers had activated their accounts in either the sentara or optima app. Our aim is to continuously improve the virtual experience, enable voice of the customer drive change to the experience, and allow for a more frictionless experience. B. The voice of the customer model was heavily utilized to understand more from sentara and optima customers. The model is an operational design that enables sentara to integrate the voice of the customer into all facets of business decision-making and product development both in the brick and mortar world and in the world of virtual care. C. A nutrition as medicine conference was held in november 2019. This day-long conference featured national experts speaking on the benefits of a plant-based lifestyle and how it can be used to treat, reverse, or prevent widespread chronic disease such as heart disease, diabetes, and obesity. D. A "beyond cancer" conference survivorship event took place in june 2019. The event was sponsored by the sentara cancer network and offered support for those affected by cancer from current cancer patients to caregivers, to survivors in remission. V. Offering new procedures and technologies a. Clinical breakthroughs and advancements: se”

“B. Research: research is another way sentara is always improving. Here are a few examples of our work within the research realm: i. Heart: the sentara cardiovascular research institute was established in 2005 to advance the understanding and treatment of cardiovascular disease, which is the nation's number-one killer. Uniquely qualified registered nurse research coordinators and cardiologists collaborate with local institutions, government agencies and biomedical companies to perform clinical research trials. Ultimately, the work of scri enables clinicians to improve clinical care delivery, patient outcomes and the overall health of our community. Our services cover all types of cardiovascular research such as medical devices, heart failure, electrophysiology, cardiac surgery, cardiac interventional procedures and medical management of cad risk factors such as diabetes and lipid management, among others. Research nurses educate and follow research participants through the entire trial process. They coordinate all aspects of the patient's experience and advocate for them, helping them feel cared for while at their most vulnerable. Our program currently has research nurses who are highly autonomous and self-directed. Collectively, they coordinate more than 80 clinical trials. Many of the trials we participate in are nationally and internationally recognized. They have been designed to identify new, improved treatment methods and protocols, while at the same time eliminate therapies and approaches to clinical care that are not as effective or may have been shown to be harmful. Ii. Cancer: the sentara cancer network continues to expand its research capabilities in conjunction with virginia oncology associates, eastern virginia medical school, and other national and local organizations in order to change the future of cancer. For today's patients, physicians in the sentara network can provide access to numerous clinical trials, both local and national. Promising clinical trials are being conducted all over the country for patients with cancer, and some of these are being conducted within the sentara cancer network. Some people think that clinical research is intended as a last resort, but many of these trials are looking at promising new first-line treatments. In addition, many studies are not focused on increased treatments, but adjustments in treatments and options for less invasive options. In addition to clinical trials that are administered as part of cancer treatment for patients now, the sentara cancer network also participates in research that could lead to more and better options for prevention, diagnosis and treatment in the future. Examples of other research include finding ways to improve quality of life for our patients, comparing common characteristics for a specific type of cancer, and improving processes and technology. Vii. Building for tomorrow and strengthening our communities a. Sentara healthcare committed to increasing its minimum wage for all sentara and optima health employees with a plan to reach a $15 per hour minimum wage by january 2022. This significant increase applies to all positions in the communities sentara serves across virginia and north carolina and is more than double the federally mandated minimum wage of $7.25 per hour. B. Sentara careplex hospital, hampton, virginia, added neurosurgery services. With the addition of these services, patients on the peninsula will be able to receive surgical treatment for brain and spine disorders, including neurooncology and neurotrauma. C. Sentara martha jefferson hospital's philips cancer center, charlottesville, virginia, was granted a three year accreditation with commendation by the commission on cancer (coc), a quality program of the american college of surgeons (acs). Also, sentara martha jefferson has received an 'a' in the fall 2019 leapfrog hospital safety grade, a national recognition for patient safety. D. The sentara rmh hahn cancer center, harr”

“L. Sentara princess anne hospital again hosted the "don't sit on colon cancer 5k" to provide colon cancer awareness and education. Runners throughout the region come out to participate in this race and for the excellent cause. M. Sentara halifax regional hospital, south boston, virginia, began offering medical stabilization services to help people overcome withdrawal symptoms from drug and alcohol addictions. Adults are medically supervised for inpatient stabilization that lasts about three days. Upon discharge, patients are referred to community based treatment programs to continue with their treatment and to prevent relapse. N. Sentara williamsburg regional medical center, williamsburg, virginia, participated in the heartsafe alliance, which is a public-private partnership working to improve sudden cardiac arrest survival in the greater williamsburg community. The launch of the program included free, community-wide cpr and aed training. Moreover, later in 2019, the heartsafe alliance officially launched the pulsepoint app, which is an app designed to reduce the number of deaths from sudden cardiac arrest by identifying aed locations in the community for use by the public. Viii. Quality and patient safety distinctions a. Award-winning care-as always, sentara is proud and humbled by the various awards and recognitions the system received over the course of the year. Our mission is to improve health every day. To receive an award is simply an added acknowledgement of our mission driven work. Here are a few of the 2019 awards and recognitions: i. Sentara norfolk general hospital earned a top 50 national ranking from u.s. News & world report: ear, nose & throat (ent). This extraordinary ranking, 43rd in the nation, is due to the great partnership and collaboration with eastern virginia medical school (evms) and the sentara cancer network. Ii. Nursing magnet status: sentara virginia beach general hospital is the ninth sentara hospital to achieve magnet designation. Only 8% of u.s. Hospitals have such a designation. Ix. Optima health a. Growth optima health continues to see growth in the commercial employer market and with our franchise partnership with ohio healthy. Additionally, optima health continued delivering an excellent digital experience through upgrading its digital "app and adding features making it more customer centric. Optima continued its medicare advantage network expansion by adding new providers and facilities. And, optima health is now available in the markets of northern virginia and halifax with both medicare advantage and medicaid plans. Conclusion: sentara healthcare is committed to our mission - we improve health every day. We provide quality care through expert providers, using cutting-edge technology, deploying medical breakthroughs, and providing excellent customer service all with a constant focus on innovation. And, we are committed to supporting the communities we serve through our corporate social responsibility program, serving diversity and exploring health equities, volunteerism, grants, sponsorships, and supporting initiatives that lift our communities. We look forward to another year of community success, growth and innovation in 2020.”

“Sentara enterprises provides a wide range of services for recovering, disabled or chronically ill persons in need of skilled nursing, private duty nursing, rehabilitation services (i.e., physical therapy, occupational therapy and speech therapy), infusion services, or companion services. Sentara home care services also offers specialty programs in mental health, high-risk obstetrical care, high-risk newborn care, asthma, diabetes and pediatrics. Sentara enterprises also operates medical transport, a ground ambulance and wheelchair transport service. Medical transport has 51 ambulances and provided 36,250 basic, advanced life support transports during 2019. All services are provided to the community regardless of race, creed, sex, national origin, handicap, age or ability to pay. The cost of uncompensated care provided by sentara enterprises to the community during 2019 was over $3.9million.”

“Sentara healthcare, a virginia nonstock corporation and the 501(c)(3) tax exempt parent of the sentara health system, maintains an agency relationship with the organization and issues all 1099s on its behalf. The number reported is a best estimate of the 1099s attributable to the organization. The exact number cannot be determined; as some of the 1099s issued by the agent are attributable to more than one entity, and there is no reporting mechanism to determine 1099's attributable solely to the organization..”

“The organization's board of directors is elected annually by sentara healthcare, a virginia nonstock corporation and the 501(c)(3) tax exempt parent of the sentara health system. The governing board of sentara healthcare is a community-based board comprised of 17 voting members, 16 of which are considered independent, as defined in the form 990 instructions.”

“Book reclass of intercompany accts to equity -461,909. Partnership income tax > book -11,639. Prior period adjustment 10,000.”