Ochsner Clinic Foundation

“When the organization evaluates its participation in a joint venture, the transactions are handled carefully to ensure that the organization's tax-exempt status is intact with regard to the arrangement. The operations of the joint venture are carefully reviewed by management and legal counsel, and the transaction is not entered into unless it is a reflection of the organization's tax-exempt purpose. A clause is inserted into the joint venture agreement that the operations of the joint venture must be performed in a manner that will not jeopardize the organization's tax-exempt status.”

“Ochsner Clinic Foundation, as part of Ochsner Health System, is required to follow all policies and procedures adopted by Ochsner Health System including the written Conflict of Interest Policy and the written Whistleblower Protecttion Policy. All affiliates are subject to the same System-Wide requirements.”

“The Articles of Incorporation provide that no action of the Board may be resolved unless a majority of independent Directors present approve the matter. Thus, even in situations where there is not an absolute majority of independent Directors in Office, those independent Directors in Office control Ochsner Clinic Foundation's activities.”

“Dr. Quinlan and Mr. Suquet - Business relationship”

“Ochsner Clinic Foundation is a wholly-owned subsidiary of Ochsner Health System, a related 501(c)(3) organization. Ochsner Health System is the sole member of Ochsner Clinic Foundation. Ochsner Clinic Foundation has no capital stock and only one class of membership.”

“The Community Directors shall be nominated exclusively by the nominating committee of the board of directors of the Member, Ochsner Health System, EIN 20-5296918. The nominating committee shall also nominate two of the eight Senior Physician directors of the Board. The Senior Physician class has the right to nominate and elect six of the eight physician directors of the Board.”

“The following actions require the majority approval of total members of the Senior Physician class, regardless of the number of Senior Physician class members actually voting: 1) amendments to the Articles which affect the rights of Sr. Physicians; 2) any change in the total number of Directors, Community Directors, or Sr. Physician Directors; 3) the status of the CEO as a member of the Board; and 4) changes to the supermajority requirements, which call for approval by two-third of the entire Board for certain actions to be considered approved.”

“One or more members of senior management review the return. The return is also reviewed by Ernst & Young US, LLP, the company's tax advisors. The Audit and Oversight Committee, which is comprised of independent directors, is then provided the return prior to the filing date and given the opportunity to review and discuss the return with management/staff. The meeting to review the 2015 return was held on October 31, 2016. A copy of the return is then provided to each member of the Board of Directors electronically and comments are solicited from the entire Board.”

“Officers, directors, trustees, and key employees of Ochsner Health System and its subsidiaries are required to complete a conflict of interest disclosure form annually, or within 40 days of becoming an employee, or if a current employee has a change in business circumstances not previously disclosed. The Conflict of Interest Program Administrator reviews disclosures and determines whether action is necessary or if the disclosure needs to be reviewed by the Conflict of Interest Steering Committee. Ochsner Health System requires annual certification that the relationships disclosed during a preceding calendar year are complete and accurate. In addition, employees that do not fall within the scope of the Conflict of Interest Disclosure policy annually complete Conflict of Interest training in compliance with the Conflict of Interest policy. The Conflict of Interest Steering Committee will make mitigation recommendations, including, but not limited to, divestiture and termination of employment.”

“All CEO and officer compensation and benefits arrangements, including salary and bonus incentive plans, are reviewed and approved by the Executive and Senior Physician Compensation Committee of the Ochsner Clinic Foundation Board of Directors (Compensation Committee). No substantive change to the compensation or benefits packages is made until Committee approval is granted in accordance with Intermediate Sanctions guidelines. The Compensation Committee is without conflicts of interest and uses an independent external consultant. Appropriate data is applied to determine the comparability of fair market value pay and all actions are appropriately documented. In order to meet the requirements of the IRS Intermediate Sanctions regulations, the Compensation Committee identified the "disqualified individuals" that are in a position to exercise substantial influence over the company's operations. These individuals are the members of the Executive Officers Committee (EOC), Regional Medical Directors, physician board members and Section Heads for key departments. For disqualified individuals, the compensation review also includes the cost of benefits such as the company portion of medical and dental benefits, malpractice insurance, payments for 401K matching and pension.”

“Compensation for other non-physician key employees is reviewed by senior executives who take market value research into consideration when determining compensation levels. A different review process is used for Physicians. Annually, the Physician Compensation department reviews the compensation of each employed physician. This review includes a comparison of physician salaries against national survey data for their specialty. The Physician Compensation department compiles the compensation data for each physician including base salary, stipends, on-call pay, etc. Each physician's compensation as well as the total work Relative Value Units (RVUs) are compared to the survey data. This review is performed to ensure their pay is comparable to the work performed.”

“Financial statements for Ochsner Clinic Foundation are made available to the public quarterly via www.dacbond.com. All governing documents, conflict of interest policy, and financial statements are available upon written request to the Corporate Integrity Department.”

“DIRECTORS - AVERAGE HOURS PER WEEK DEVOTED TO POSITION The amount of time shown for those Directors listed as "Board Member Sr Phys" as "average hours per week devoted to position" on the Form 990 for Ochsner Clinic Foundation (EIN 72-0502505) consists primarily of their role as a Senior Physician of Ochsner Clinic Foundation. Additional time spent on boards, committees and through fulfilling other responsibilities as a member of one or more Boards of the varied Ochsner organizations is shown as a nominal amount for Ochsner Health System and/or Ochsner Community Hospitals. As a Senior Physician Director of an integrated health system, these individuals devote time to board activities of all 501(c)(3) members of the system to varying degrees including Ochsner Health System, Ochsner Clinic Foundation and Ochsner Community Hospitals. Those directors listed as "Board Member Sr Phys" on the Form 990 for Ochsner Clinic Foundation (EIN 72-0502505) are compensated entirely due to their role as a Senior Physician of a member of the integrated health system. The amount of time shown for those Directors listed as "Community Directors" for "average hours per week devoted to position" includes time spent on boards, on committees and through fulfilling other responsibilities as a member of the Board of varied Ochsner organizations. As a Community Director of an integrated health system, each Community Director devotes time to all 501(c)(3) members of the system to varying degrees including Ochsner Health System, Ochsner Clinic Foundation and Ochsner Community Hospitals.”

“COMPENSATION OF OFFICERS AND AVERAGE HOURS PER WEEK DEVOTED TO POSITION Compensation and average hours worked for Bobby Brannon, EVP, & Treasurer, include all compensation related to the Ochsner Health System, which includes Ochsner Health System (OHS, EIN 20-5296918), Ochsner Clinic Foundation (OCF, EIN 72-0502505) and Ochsner Community Hospitals (OCH, EIN 20-5297040), all related 501(c)(3) organizations. Other members of the Ochsner network are charged a portion of these amounts. The amount of time shown for each of the remaining officers as "average hours per week devoted to position" on this form of the organization that pays the officers directly consists primarily of role as an officer of the integrated health system. Additional time spent on boards, committees and through fulfilling other responsibilities as an officer of the integrated health system is shown as a nominal amount on the forms of the related organizations, but in reality the time is more evenly distributed across all entities.”

“KEY EMPLOYEE COMPENSATION FROM INTEGRATED HEALTH SYSTEM Dr. Joseph Bisordi, Dr. Robert Hart, Dr. Dawn Puente, and Mr. Robert Wolterman are employed and compensated by Ochsner Health System, EIN 20-5296918, 501(c)(3), a related organization. In their duties as leaders of the integrated health system, they all spend a substantial amount of their time on duties pertaining to Ochsner Clinic Foundation, and in all other respects meet the requirements of Key Employees of Ochsner Clinic Foundation. The amount of time shown for each key employee as "average hours per week devoted to position" on this form of the organization that pays the key employees directly consists primarily of role as a key employee of the integrated health system. Additional time spent on boards, committees and through fulfilling other responsibilities as a key employee of the Ochsner organizations is shown as a nominal amount on the forms of the related organizations, but in reality the time is more evenly distributed across all entities.”

“Community directors are volunteers and are not paid a stipend or other compensation for their service to ochsner as board members. The compensation of community directors that is reported for 2015 consists of ochsner's payments (either directly or as reimbursement) of expenses incurred for meeting or travel expenses for the board. Those directors listed as "board member sr phys" on the form 990 for ochsner clinic foundation (ein 72-0502505) are compensated entirely due to their role as a senior physician of a member of the integrated health system.”

“Equity Income from Home Health Joint Venture - Total Revenue: 309386, Related or Exempt Function Revenue: 33314, Unrelated Business Revenue: 276072, Revenue Excluded from Tax Under Sections 512, 513, or 514: ; Parking Garage - Total Revenue: 21267, Related or Exempt Function Revenue: , Unrelated Business Revenue: , Revenue Excluded from Tax Under Sections 512, 513, or 514: 21267;”

“(Expenses $ 13,070,458 including grants of $ 0)(Revenue $ 13,598,949) Elmwood Fitness Center: Designed to meet the health and fitness goals of its members, Elmwood Fitness Center ("the fitness center") provides fitness services to patients, employees, and other members of the community, including seniors and children. The fitness center serves the community as a valuable resource in the prevention of disease. The fitness center is integrated with Ochsner's patient care services through its medical fitness referral program and it's physical and occupational therapy services. The fitness center also provides outreach to the community, including educational programs, community nutrition outreach, and a youth obesity program.”

“(Expenses $ 5,155,225 including grants of $ 0)(Revenue $ 2,121,694) Rent-Physical plant: Ochsner Clinic Foundation rents its physical plant to related 501(c)(3) organizations. The majority of the rental is to Brent House Corporation, a wholly-owned subsidiary and exempt 501(c)(3) organization. Brent House fully reimburses Ochsner for expenses related to the Hotel.”

“(Expenses $ 1,259,120 including grants of $ 0)(Revenue $ 21,267) Ochsner maintains a free parking garage for employees and patients. Revenue is attributable to the optional valet parking service, which is offered for the convenience of Ochsner's patients.”

“(Expenses $ 0 including grants of $ 0)(Revenue $ 309,386) Program Related Investments: Equity Income from Joint Venture providing patient care.”

“An inadvertent omission was discovered with regards to the filing of Form W-2G and withholding payment associated with a single raffle prize awarded to an individual in 2015. The Organization is currently working to correct the omission.”

“Grants/Contributions/Fundraising included in Restricted Net Assets - -1471834; Net Assets released for Operations - 992330; Unrestricted Impairments Recovery - -4907096; Pension-related changes other than net periodic pension costs - -7906149; Other Change in Net Assets related to EIN # 46-4381058 - -481064; Other Change in Net Assets related to EIN # 47-1267935 - 105429; Other Change in Net Assets related to EIN # 47-2642764 - -2252939; Loss on early extinguishment of debt - -10694014; Restricted net assets released from restrictions - -5125000; Investment Changes included in Restricted Net Assets - 3605002; Other Changes in Net Assets or Fund Balances - -130630;”

“The process regarding the committee responsible for the audit, review, or compilation of the organization's financial statements and selection of an independent accountant has not changed from the prior year.”

“OCHSNER MEDICAL CENTER Ochsner Health Center Ochsner St. Anne General Hospital Ochsner Medical Center - Baton Rouge Elmwood Fitness Center (a Service of Ochsner) Ochsner Alton Ochsner Medical Foundation Ochsner Outpatient Surgery Suite”