Adventist Bolingbrook Hospital

“Adventist bolingbrook hospital (the filing organization) has one member. The sole member of the filing organization is adventist midwest health. Adventist midwest health (amh) is an illinois, not-for-profit corporation that is exempt from federal income tax under internal revenue code (irc) section 501(c)(3). There are no other classes of membership in the filing organization.”

“The members of the board of directors (governing board) of the filing organization are appointed by the corporate member, amh. The corporate member is entitled to elect not less than eighteen (18) and no more than twenty three (23) voting members to the board of directors of the filing organization pursuant to the provisions of the bylaws.”

“Certain reserved powers are retained solely by the member with certain other reserved powers subject to the approval of either the university of chicago medical center, adventist health system/sunbelt, inc., or both. The reserved powers retained solely by the member are the following: - approve material changes in the category of services offered by the filing organization; - authority to require the filing organization's adherence to the system-wide naming nomenclature and service standards adopted by the member; - authority to set and enforce policies for physician compensation including commercial reasonableness and fair market value; - authority to adopt rules and regulations for the management of the filing organization as deemed proper; - appointment of an individual proposed by adventhealth to hold the office of president of the filing organization and the termination of such appointment; and - the compensation of such individual holding the office of president. The following reserved powers are retained by the member subject to approval by the university of chicago medical center: - the annual operating and capital budgets of the filing organization, all unbudgeted expenditures in excess of $1 million dollars and the financial statements of the filing organization; - the incurrence of any contractual obligation is excess of $1 million dollars; - the strategic and operating plans of the filing organization; - the selection, removal, or modification of the authority and responsibilities of accountants and auditors; - borrowings and capital leases of more than $1 million dollars; - the approval or amendment of managed care pricing, pricing strategies, and contracting parameters; and - the confession of a judgment or settlement of a claim that would exceed insurance limits. The following reserved powers are retained by the member subject to the approval by adventist health system/sunbelt, inc: - changes to religious affiliation and any changes in operation policies, plans, and procedures related to such religious affiliation of any facility owned by the filing organization; - termination of the individual holding the office of president if termination is related to that person's membership status in the seventh-day adventist church; and - changes to the mission, vision, or values of the filing organization. The following reserved powers are retained by the member subject to the approval of both the university of chicago medical center and adventist health system/sunbelt, inc.: - amendments to the articles of incorporation or bylaws - the formation of any subsidiary of the filing organization; - entering into any affiliation agreement or joint venture agreement; - any change in the name or branding of the hospital; - the addition of new members of the filing organization; - the appointment and removal of any member of the board of directors; - distributions of cash and other property to the member or otherwise; - the adoption and amendment of the quality and/or risk management plans of the hospital; - the selection of the accrediting body of the hospital; - the transfer of any property of the hospital in excess of $1 million dollars; - any sale, lease, transfer, merger or consolidation of the filing organization; - the dissolution of the filing organization; - the filing of any voluntary petition in bankruptcy; - requiring any additional capital contributions from the member; and - the appointment or removal of the chair of the board of directors and any of the other board officers.”

“The filing organization's current year form 990 was reviewed by the board chairman, board finance committee chair, ceo, cfo and members of the uchicago medicine finance leadership team prior to its filing with the irs. The review conducted by the board chairman, board finance committee chair, ceo, cfo and members of the uchicago medicine finance leadership team did not include the review of any supporting workpapers that were used in preparation of the current year form 990, but did include a review of the entire form 990 and all supporting schedules.”

“The conflict of interest policy of the filing organization applies to members of its board of directors and its principal officers (to be known as interested persons). In connection with any actual or possible conflicts of interest, any member of the board of directors of the filing organization or any principal officer of the filing organization (i.e. Interested persons) must disclose the existence of any financial interest with the filing organization and must be given the opportunity to disclose all material facts concerning the financial interest/arrangement to the board of directors of the filing organization or to any members of a committee with board delegated powers that is considering the proposed transaction or arrangement. Subsequent to any disclosure of any financial interest/arrangement and all material facts, and after any discussion with the relevant board member or principal officer, the remaining members of the board of directors or committee with board delegated powers shall discuss, analyze, and vote upon the potential financial interest/arrangement to determine if a conflict of interest exists. According to the filing organization's conflict of interest policy, an interested person may make a presentation to the board of directors (or committee with board delegated powers), but after such presentation, shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement that results in a conflict of interest. Each interested person, as defined under the filing organization's conflict of interest policy, shall annually sign a statement which affirms that such person has received a copy of the conflict of interest policy, has read and understands the policy, has agreed to comply with the policy, and understands that the filing organization is a charitable organization that must primarily engage in activities which accomplish one or more of its exempt purposes. The filing organization's conflict of interest policy also requires that periodic reviews shall be conducted to ensure that the filing organization operates in a manner consistent with its charitable purposes.”

“The filing organization's ceo, other officers and key employees are not compensated by the filing organization. Such individuals are compensated by adventist health system sunbelt healthcare corporation (ahsshc), an unrelated entity. Please see the discussion concerning the process followed by ahsshc in determining executive compensation in our response to schedule j, line 3.”

“The financial statements of the filing organization, its governing documents and conflict of interest policy are not generally made available to the public as a whole.”

“The amount shown in part viii, line 7c(i) of the form 990 represents an allocated share of capital gain/(loss) from a system wide, corporate administered, investment program operated by adventist health system sunbelt healthcare system.”

“Effective january 1, 2023, the filing organization's parent entered into a master management agreement with adventist health system sunbelt healthcare corporation (ahsshc). Ahsshc is a florida, not-for-profit corporation that is exempt from federal income tax under internal revenue code (irc) section 501(c)(3). Ahsshc has established a shared service center to centralize the accounts payable (a/p) function for all ahsshc subsidiary organizations. The filing organization has entered "0" in part v, line 1a because the filing organization no longer issues form 1099 returns, rather, all such returns are filed by and under the name and ein of ahsshc as the payor subject to the information reporting requirements of section 6041. The facts and circumstances support a position that ahsshc, as a payor on behalf of its subsidiary organizations in a shared service environment, will have sufficient management and oversight in connection with the subsidiary organizations' payments to meet the standard set forth in treas. Reg. Section 1.6041-1(e). Ahsshc will not merely be making payments at the direction of its subsidiary organizations. Accordingly, ahsshc is considered the payor subject to the information reporting requirements of section 6041.”

“Payments to healthcare professionals: program service expenses 30,468,779. Management and general expenses 0. Fundraising expenses 0. Total expenses 30,468,779. Professional fees: program service expenses 5,118,514. Management and general expenses 0. Fundraising expenses 0. Total expenses 5,118,514. Purchased medical services: program service expenses 11,446,635. Management and general expenses 0. Fundraising expenses 0. Total expenses 11,446,635. Environmental services: program service expenses 2,774,489. Management and general expenses 0. Fundraising expenses 0. Total expenses 2,774,489. Recruiting: program service expenses 7,298. Management and general expenses 0. Fundraising expenses 0. Total expenses 7,298. Food service contracts: program service expenses 3,398,368. Management and general expenses 0. Fundraising expenses 0. Total expenses 3,398,368. Miscellaneous purchased services: program service expenses 9,174,365. Management and general expenses 0. Fundraising expenses 0. Total expenses 9,174,365. Ahs management fees: program service expenses 0. Management and general expenses 751,146. Fundraising expenses 0. Total expenses 751,146. Billing & collection services: program service expenses 0. Management and general expenses 427,055. Fundraising expenses 0. Total expenses 427,055. Lease personnel costs: program service expenses 87,312,733. Management and general expenses 0. Fundraising expenses 0. Total expenses 87,312,733. Lease personnel costs mgmt: program service expenses 0. Management and general expenses 1,179,383. Fundraising expenses 0. Total expenses 1,179,383. Management fees rebates: program service expenses -4,594,224. Management and general expenses -1,683,689. Fundraising expenses 0. Total expenses -6,277,913.”

“The amounts shown on line 2 of part x of this return include the filing organization's interest in a central investment pool maintained by adventist health system sunbelt healthcare corporation, one of the filing organization's top-tier parents. The investments in the central investment pool are recorded at market value.”

“For gaap reporting, the affiliation agreement between ucmc and adventist midwest health and its parent organizations, adventist health system sunbelt healthcare corporation and adventist health system/sunbelt, inc., was accounted for as a deconsolidation under accounting standards codification (asc) 810. Please note that the attached consolidated financial statements for the university of chicago medical center (ucmc) reflect ucmc's controlling interest in the net assets and operations of the filing organization. The consolidated financial statements of adventist health system sunbelt healthcare corporation and its subsidiary organizations include its 49% interest in the filing organization to account for its 49% retained noncontrolling interest in the filing organization under the equity method of accounting. The approximate net assets included in the june 30, 2024 fund balance as shown in part xi, line 10 associated with the 49% noncontrolling interest is $(35,761,000).”