Covenant Health System

“Classes of members or stockholders st. Joseph health system and lubbock methodist hospital system are the corporate members of covenant health system.”

“Classes of persons and the nature of their rights covenant health system has a tiered governance in which the corporate members reserve the right to appoint trustees to the covenant health system board. All trustee appointments that come from the covenant health system board as nominations must be approved by the st. Joseph health system, as the corporate member, and the st. Joseph health ministry, as the organizational sponsor. The st. Joseph health system member approves 50% of the board nominations, plus the voting ceo. The lubbock methodist health system approves the other 50% of board nominations.”

“Classes of persons, decisions requiring approval & type of voting rights the reserved rights in our tiered governance structure contemplate approval by the st. Joseph health system member of financing, budgets, unbudgeted expenditures of defined amounts, strategic plan, appointment of auditors, creation or investment in a legally recognized entity, joint ventures, purposes, sale or disposition of real property, merger or sale of substantially all assets, appointment and removal of trustees, adoption or amendment of articles or bylaws. The corporate member, st. Joseph health system member, reserves the right to approve the purposes, sale or disposition of real property, merger or sale of substantially all assets, appointment and removal of trustees, adoption or amendment of articles or bylaws.”

“Process to review form 990 the form 990 was prepared based on information received from various departments of the organization including the finance team, human resources, payroll, compliance and the general counsel's office. The organization engaged an outside accounting firm to prepare the return. The return has been reviewed by an officer of the organization. A full copy of the form 990 was provided to all board members prior to filing with the irs. The audit committee of the parent organization is provided an annual update on the tax reporting process and key disclosures.”

“Process to monitor transactions for conflicts of interest providence takes the issue of conflicts of interest, and independent unconflicted decision-making, very seriously. Providence has a comprehensive conflict of interest policy and interest disclosure policy, and carefully and thoroughly administers these policies. Board members, sponsors, senior leaders and key employees are required to disclose any actual or potential conflict of interest in accordance with the providence conflict of interest policy, and so that the individual satisfies his or her fiduciary obligations to the organization. Disclosures are made annually, as well as any time an actual or potential conflict of interest arises. Providence chief legal officer and/or the providence chief risk officer, review all disclosures. Where appropriate, the ceo and/or the board chair will review conflict of interest situations that involve senior leadership or a board member other than the chair. Providence chief legal officer and/or chief risk officer review matters where conflict is difficult or cannot be readily resolved and present recommendations to the appropriate board committee or the ceo, for discussion and resolution. When appropriate, the individual with the real/potential conflict that is being reviewed may participate in the discussion but is excused from the meeting, and from any final discussion and vote, when a decision is being made on whether a conflict exists, or when the action giving rise to the conflict of interest is decided. Where appropriate, the chief risk officer or chief legal officer will provide plan to manage conflicts and avoid participation by the conflicted individual in the matter giving rise to the conflict of interest. Auditing and monitoring of this process is done regularly. All documentation of conflict of interest disclosures is retained in accordance with organization retention policy.”

“Process for determining compensation the organization's chief executive officer/president/executive director is paid by its tax exempt member, st. Joseph health system, is disclosed as a person paid by a related organization. It is providence's intention to make financial information accessible and transparent. Although the filing of form 990 provides insight into how providence achieves its mission, delivers its programs and stewards its finances, deciphering the information directly from form 990 can be challenging. The following paragraphs provide further information about the process we use to determine compensation for top management, officers and key employees. Providence has a single fiduciary board, with responsibility for financial oversight associated with fulfillment of the providence mission, developing system policies, protecting the assets entrusted to the organization and overseeing the strategic and operational affairs of providence's legal entities. Providence also maintains a network of community entity boards with responsibility for quality of care oversight, community relations, advocacy and community needs assessments. Providence has a consistent compensation philosophy for all of its senior executives, including all officers. Salaries for senior executives are reviewed at least annually by the executive compensation committee, which is a committee of the providence board consisting only of outside, independent directors. The committee makes sure, at each of its meetings, that no member of the committee has a conflict of interest as to any executive whose compensation is reviewed by the committee. The executive compensation committee retains an independent consultant each year to review salaries of those in the most significant leadership roles in the organization. Part of the consultant's role is to review an extensive array of compensation surveys of large, not-for-profit health care systems in the united states. Providence is one of the larger health systems in the country, and as such, the board benchmarks executive compensation against other large, not-for-profit health systems that are substantially similar to providence in size and complexity (such as having a similar amount of annual net revenue). Additionally, because providence often looks to general industry for leaders in certain functional areas, providence also takes into consideration general industry market data in these special situations. Base salaries for providence executives are generally targeted to the "median" level of the market data (where half the salaries in the data are lower and half the salaries in the data are higher), as identified by the independent consultant and reviewed with the executive compensation committee. The president/ceo utilizes the market information provided by the consultant along with formal performance evaluations, to determine salary recommendations for other senior executives. This process includes a rigorous analysis of those recommendations with the executive compensation committee as a part of the review and approval process. Total compensation is tied closely to performance of the organization and the individual. Performance incentives allow executives to earn additional compensation if they help lead providence in achieving specific organizational goals for furthering providence's operating commitments and strategic objectives. The board of directors conducts a thorough review process to ensure performance incentives are aligned with appropriate market practices. The board's process for setting, reviewing and approving executive compensation fully complies with irs standards (to assure that all compensation is considered reasonable) and reflects best governance practices in the industry. The process was last completed in 2020.”

“Governing documents, conflict of interest policy & financial statements the organization makes its governing documents, conflict of interest policy, and financial statements available to the public upon request. The providence community benefit reports, financial reports, and philanthropy reports are also available on the providence internet site.”

“Covenant health system transferred the operations of its acute care hospital, covenant medical center, to a newly formed tax-exempt subsidiary, covenant medical center (ein: 82-2913146). All of the services that were provided by this acute care hospital while operated by covenant health system are still provided to the community in the same manner, however, the services are now provided directly by covenant medical center and have been reported on its form 990.”

“St. Joseph health system pays all vendors for covenant health system from its shared services. St. Joseph health system issues form 1099-misc under its tax id number and complies with backup withholding rules for reportable payments to vendors.”

“Individuals listed as officers and key employees of the organization that are paid by a related organization are common law employees of the related organization. It is the intention of providence and the filing organization to make information accessible and transparent, reporting those employees of a related organization who have officer and key employee responsibilities to the filing organization. The related organization common law employees are included in the related organizations section 4960 tax analysis and reporting.”

“Agency & contract labor: program service expenses 161,843. Management and general expenses 180,445. Fundraising expenses 0. Total expenses 342,288. Billing & collections: program service expenses 19,559. Management and general expenses 0. Fundraising expenses 0. Total expenses 19,559. General consulting fees: program service expenses 1,399,143. Management and general expenses 6,892,923. Fundraising expenses 0. Total expenses 8,292,066. Medical director & med physician fees: program service expenses 265,051. Management and general expenses 0. Fundraising expenses 0. Total expenses 265,051. Repairs & maintenance: program service expenses 3,851,867. Management and general expenses 1,844,319. Fundraising expenses 0. Total expenses 5,696,186.”

“Net asset transfers between related tax-exempt organizations -472,348,073. Change in equity related to investments -41,084,219. K-1 income from jv -1,409,716.”