Cook Children'S Physician Network

“VARIOUS TRUSTEES & OFFICERS EMPLOYED OR SERVING BOARDS WITHIN THE SYSTEM - Business relationship”

“Cook children's health care system, a texas non-profit corporation, is the sole member of the organization.”

“As the sole member of the organization, cook children's health care system has the absolute right to appoint or approve membership on the board of directors of the organization.”

“As the sole member of the organization, cook children's health care system has the exclusive and reserved power to do any of the following: a. Approve the annual operating and capital budgets of the organization and the long-range financial and strategic plans for the corporation; b. Approve deviations from annual operating and capital budgets in excess of such limits as established by the member; c. Approve the purchase or acquisition of any property, real, personal, or mixed, by the organization in excess of such limits as established by the member; d. Approve the sale, gift or other disposition of all or substantially all of the property of the organization; e. Approve the mortgage or other encumbrance of any property, real, personal, or mixed, of the organization in excess of such limits as established by the member; f. Approve the acquisition, liquidation, merger, winding up, termination, or consolidation of the organization; g. Approve the creation of, or investment in, any subsidiary entity, joint venture, accountable care organization or similar entities; h. Approve the adoption, amendment or repeal of the certificate of formation of the organization and these bylaws; i. Approve incurring debt which would exceed such limits established by the member; j. Approve the settlement of claims and litigation of the organization; and k. Subsequent to the organizing and incorporating physician's selection of the initial board of directors, approve the appointment or election of directors in accordance with section 3.2 of the organization's bylaws.”

“The organization engages an outside independent accounting firm to assist in the preparation of the form 990 and related filings. All information provided to the outside accounting firm is gathered by key company employees and executives. Once the form 990 is prepared, it is reviewed by company finance, legal and compliance staff and then provided to the board of trustees for review and comment. In addition, it is provided to the cook children's health care system audit committee for review and comment. Subsequent to the board and audit committee review, the form 990 is filed with the internal revenue service and made available to the public for review.”

“Every year the legal department of the cook children's health care system (system) sends out a form 990 questionnaire/conflict of interest disclosure statement to officers, directors, trustees and key employees of all system companies, as well as certain other employees, including physicians, who are determined to be employed in positions that might be subject to the system's conflict of interest policy. The responses are reviewed by the legal, finance, and compliance departments. Follow up and/or corrective action is taken as needed with respect to responses that indicate the existence of actual or potential conflicts of interest. A summary of the responses to the questionnaires and follow-up information is provided to the system audit committee for review and follow-up. Further, the audit committee of cook children's health care system is responsible for monitoring the implementation and enforcement of the conflict of interest policy that is applicable to all affiliated companies of the cook children's health care system. The audit committee is also responsible for oversight of the compliance department of cook children's health care system. The compliance department maintains a hotline to receive reports of inappropriate activities including activities that might constitute a conflict of interest. Internal audit and compliance also conduct random audits of corporate activities such as expense reimbursements and accounts payable to determine if any inappropriate payments are being made to individuals, some of which could be evidence of a conflict of interest. Any corrective action related to conflicts of interest would be reported to the audit committee for review, approval, and modification, as necessary, with further reporting to the system board of trustees as appropriate.”

“Cook children's health care system has established a compensation committee with oversight of the ceo. The compensation committee approves compensation arrangements in advance, which includes a review and approval by independent committee members, using comparable market data relating to compensation, which is provided by sullivan cotter and associates, inc. , which is an independent, nationally recognized compensation consultant. The compensation committee documents the basis for its determinations following contemporaneous substantiation of the compensation committee's deliberations and decisions. The compensation committee requires the compensation consultant to update market data periodically, usually every two years, with interim reviews being conducted as needed.”

“Cook children's health care system has established a compensation committee with oversight of the compensation of the other officers and key employees of the organization. The compensation committee approves compensation arrangements in advance, which includes a review and approval by independent committee members, using comparable market data relating to compensation, which is provided by sullivan cotter and associates, inc. For executive compensation and physician compensation, which is an independent, nationally recognized compensation consultant. The compensation committee documents the basis for its determinations following contemporaneous substantiation of the compensation committee's deliberations and decisions. The compensation committee requires the compensation consultant to update market data periodically, usually every two years, with interim reviews being conducted as needed. With regard to physician compensation, the compensation committee also retains the law firm of mcdermott, will & emery of chicago, illinois, to issue a reasonableness opinion covering the physician compensation plan for cook children's physician network.”

“The organization does not make its governing documents or conflict of interest policy available to the public, except to the extent they are on file with the texas secretary of state. The conflict of interest policy is posted on the organization's internal website and available to all employees and board members of cook children's health care system entities. Consolidated financial statements are reported electronically for all cook children's health care system entities via the electronic municipal market access ("emma") web site.”