Texas Health Hospital Mansfield

“The members of the Board of Trustees listed on Part VII of this Form 990 include the filing organization's Governing Board and members of the filing organization's Hospital Board. The Board of Trustees is primarily responsible for the overall management of the filing organization. The Hospital Board is primarily responsible for matters of the hospital including the following: - Oversight of Medical Staff (including the review and approval of Medical Staff Bylaws and approval of appointments to the Medical Staff), care of patients, quality assessment and improvement programs implemented at the hospital, and risk management functions; - Participation in the development and review of the filing organization's short and long-term plans (including strategic plans, capital plans, and annual budgets); and - Monitoring of compliance with regulatory requirements.”

“Effective January 1, 2012, Texas Health Huguley (THH), the sole member of Texas Health Hospital Mansfield (the filing organization) entered into a Management Services Agreement with Adventist Health System Sunbelt Healthcare Corporation (AHSSHC). AHSSHC is the parent organization of a system of tax-exempt hospitals and other health care provider organizations that operate 50 hospitals throughout the U.S., primarily in the Southeastern portion of the U.S. AHSSHC is exempt from federal income tax under Internal Revenue Code Section 501(c)(3). Under the Management Services Agreement (the Agreement), AHSSHC must follow the policies of the filing organization's Board of Directors. Managerial services provided by AHSSHC include oversight and day to day management of the filing organization, including the following functions: a) Personnel administration, including recruitment, hiring, training, promoting, directing and terminating personnel; b) Procurement, including the acquisition of food and beverage items, supplies, devices, furniture, and medical equipment; c) Health Information Management; d) Maintenance and Security; e) Contracting for services and consulting services; f) Financial accounting systems; g) Development of operational and capital budgets; h) Billing and collection of receivables and remittances of payables; i) Patient safety and quality systems; j) Marketing; k) Regulatory compliance; l) Administration - Policies and Procedures, including appointment of the C-Suite Personnel. The individuals who served as officers and key employees of the filing organization in the role of CEO, CFO, CMO, and CNO are listed in Part VII, Section A. These individuals were compensated by and on the payroll of AHSSHC for services rendered to the filing organization and its affiliate.”

“Texas Health Hospital Mansfield (THHM) has one member. The sole member of THHM is Texas Health Huguley, Inc. (THH). THH is a hospital exempt from federal income tax under IRC Section 501(c)(3). There are no other classes of membership in the filing organization.”

“The sole member of the filing organization is THH. Trustees of the filing organization are appointed by the two members of THH, Texas Health Resources (THR) and Adventist Health System/Sunbelt, Inc. (AHSSI). THR has the right to designate and maintain at all times three (3) trustees, and AHSSI has the right to designate and maintain at all times two (2) trustees.”

“Notwithstanding anything to the contrary contained in the Certificate of Formation or the Bylaws, the authority to undertake, or cause the filing organization to undertake, certain matters (Member Reserved Matters) is expressly and exclusively reserved to THH, the sole member. In undertaking any of the listed actions, THH shall consult with AHSSI and THR as required by THH's certificate of formation and bylaws and includes the following matters: (a) any fundamental change in the purposes of the filing organization as set forth in Article Five of the Certificate of Formation; (b) any fundamental change in the philosphy, mission, or vision of the filing organization; (c) any amendment, restatement, or repeal of the Certificate of Formation or the Bylaws; (d) any entry into or consummation of any merger, consolidation, dissolution, sale, or other transfer of all or substantially all of the assets of the filing organization or any material subsidiary or entity controlled by the filing organization, or other change in corporate form, that in case of any of the foregoing would constitute or otherwise result in a fundamental reorganization of the filing organization or any material subsidiary or entity controlled by the filing organization; (e) any admission of any additional members to the filing organization; (f) the incurrence or issuance of any debt that would require the guaranty of the member; (g) any change to the name of the filing organization; (h) the creation of affiliates or subsidiaries of the filing organization or the entry by the filing organization into any joint venture; (i) the confession of a judgment against the filing organization or any agreement to compromise or settle claims above $100,000; (j) the approval of a decision for the filing organization to file a voluntary petition for bankruptcy; (k) the discontinuation of the operations of a licensed health care facility controlled by the filing organization; (l) the approval of any capital expenditure in excess of $1,000,000; (m) the incurrence or issuance of any non-guaranteed debt in excess of $200,000; (n) the voluntary prepayment or extension of debt in excess of $200,000; (o) the renewal, extension, or termination for cause of any management services agreement related to the operations of the hospital and related facilities; and (p) the approval of any managed care contract that is materially inconsistent with managed care contracts executed by THR on behalf of its other non-wholly owned or controlled acute care health facilities. In addition to the Member Reserved Matters, certain matters are reserved exclusively for AHSSI or exclusively for THR. Both are described in the following three paragraphs. Notwithstanding anything to the contrary contained in the Certificate of Formation or Bylaws, AHSSI shall have the authority to prevent the filing organization from undertaking: i) any changes to operational policies, plans, procedures that are specifically related to the Corporation's religious affiliation with the Seventh-day Adventist Church; ii) any activities of the filing organization that are determined by AHSSI in good faith to be inconsistent with the compliance by AHSSI with the requirements of AHSSI's tax-exempt status including those activities the filing organization is required to perform under Section 501(r); and iii) any activities of the filing organization that are determined by AHSSI in good faith to be inconsistent with the compliance of Sunbelt with the requirements of covenants associated with any outstanding AHSSI indebtedness. Notwithstanding anything to the contrary contained in the Certificate of Formation or Bylaws, THR shall have the authority to prevent the filing organization from undertaking: i) any activities of the filing organization that are determined by THR in good faith to be inconsistent with the compliance by THR with the requirements of THR's tax-exempt status including those activities the filing organization is requir”

“The filing organization's current year Form 990 was reviewed by the Board Chairman, Board Finance Committee Chairman, CEO, and CFO prior to its filing with the IRS. The review conducted by the Board Chairman, Board Finance Committee Chairman, CEO, and CFO 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 Trustees 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 Trustees 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 Trustees 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 Trustees 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 Trustees (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 is not compensated by the filing organization. This individual was compensated by Adventist Health System Sunbelt Healthare Corporation (AHSSHC), an unrelated entity disclosed in our response to Form 990, Part VI, Section A, Line 3. 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 its Conflict of Interest Policy are not generally made available to the public as a whole.”

“For those Board of Trustee members and officers who devote less than full-time to the filing organization (based upon the average number of hours per week shown in column (B) on page 7 of the return) the compensation amounts shown in columns (E) and (F) on page 7 were provided in conjunction with that person's responsibilities and roles in serving in an executive leadership position within Texas Health Huguley, Inc. (sole member) and Texas Health Resources, Inc. (majority member of THH). Compensation for Penny Johnson does not reflect services provided to affiliates of AHSSHC, which are not related to the filing organization.”

“The amounts shown in Part VIII, Line 7, column (i) of the Form 990 represent an allocated share of capital gain/(loss) from a system wide, corporate administered, investment program.”

“The sole member of the filing organization is Texas Health Huguley, Inc. (THH). THH is 49% owned by Adventist Health System/Sunbelt, Inc. (AHSSI). The parent corporation and sole top-tier member of AHSSI is 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 does not issue 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 5,753,799. Management and general expenses 0. Fundraising expenses 0. Total expenses 5,753,799. Professional Fees: Program service expenses 985,715. Management and general expenses 0. Fundraising expenses 0. Total expenses 985,715. Purchased Medical Services: Program service expenses 929,925. Management and general expenses 0. Fundraising expenses 0. Total expenses 929,925. Environmental Services: Program service expenses 115,126. Management and general expenses 0. Fundraising expenses 0. Total expenses 115,126. Recruiting: Program service expenses 672,924. Management and general expenses 0. Fundraising expenses 0. Total expenses 672,924. Food Service Contracts: Program service expenses 78. Management and general expenses 0. Fundraising expenses 0. Total expenses 78. Lease Personnel Costs: Program service expenses 31,523,457. Management and general expenses 0. Fundraising expenses 0. Total expenses 31,523,457. Other Purchased Services: Program service expenses 239,691. Management and general expenses 0. Fundraising expenses 0. Total expenses 239,691. AdventHealth Management Fees: Program service expenses 0. Management and general expenses 2,519,700. Fundraising expenses 0. Total expenses 2,519,700. Billing & Collection Services: Program service expenses 0. Management and general expenses 364,785. Fundraising expenses 0. Total expenses 364,785. AdventHealth Shared Services Fees: Program service expenses 0. Management and general expenses 765,106. Fundraising expenses 0. Total expenses 765,106. Lease Personnel Costs Mgmt: Program service expenses 0. Management and general expenses 3,453,280. Fundraising expenses 0. Total expenses 3,453,280.”

“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, the sole top-tier member of Adventist Health System/Sunbelt, Inc. (AHSSI). The filing organization is 49% owned by AHSSI. The investments in the central investment pool are recorded at market value.”

“Transfer to Texas Health Huguley, Inc. -4,828,199.”