Essentia Health Surgery Centers

“Member of organization: essentia health is the sole member of essentia health surgery centers. Essentia health may elect one or more members of the governing body as described in schedule o, part vi, line 7a. Essentia health also has reserved powers with respect to essentia health surgery centers as described in schedule o, part vi, line 7b.”

“Member with right to elect governing body: essentia health has the power to appoint and remove essentia health surgery centers' governing body.”

“Member with right to approve governing body decision: essentia health shall have the following reserved powers, for the purposes of serving as the parent organization of an integrated health care network that includes all entities that are owned or controlled, directly or indirectly, by essentia health (collectively, the "system"): (a) strategic and business plans. Authority to create, approve and amend the corporation's strategic and business plans. (b) mission. Authority to create, approve and amend the corporation's mission, purpose, and vision statements. (c) debt. Approval of the incurrence of debt and the creation of all mortgages, liens, security interests, or other encumbrances on the corporation's assets in excess of the single or annual aggregate dollar limits prescribed in writing by the member's board of directors, and the authority to cause the corporation to participate in system borrowing. (d) governing instruments. Authority to cause, and to approve, all amendments to the corporation's articles of incorporation and bylaws. (e) appointment and removal of directors. Authority to appoint and remove all directors on the corporation's board of directors, with or without cause. (f) mergers and acquisitions. Authority to cause, and to approve, all mergers, consolidations, and dissolutions of the corporation. (g) affiliations and joint ventures. Authority to cause, and to approve, all affiliations, joint ventures, and other alliances with third parties by the corporation. (h) transfer of assets within the system. Authority to transfer the corporation's assets, including cash, between and among entities within the system; provided, however, that the member shall not have authority to require the corporation to transfer assets (i) that would cause it to be in default of its covenants or obligations under any bond or other financing documents, (ii) from the catholic entities to the secular entities or from the secular entities to the catholic entities in a manner or to an extent that would cause the catholic entities to be in violation of the ethical and religious directives for catholic health care services ("erds"), in the judgment of the local ordinary, or (iii) such that money generated by services at secular facilities within the system by procedures that are contrary to the erds would be used at the catholic entities or money generated by the catholic entities would be used in the providing of services contrary to the erds at secular facilities within the system. (i) transfer of assets outside the system. Authority to cause, and to approve, the sale, lease or other transfer of the corporation's assets to parties outside of the system when the asset's value exceeds the single or aggregate limits prescribed in writing by the member's board of directors. (j) services. Authority to cause, and to approve, the offering or discontinuance of services and service locations by the corporation. (k) budgets. Approval of the corporation's capital and operating budgets. (l) professional services. Selection of the corporation's general legal counsel and external auditors. (m) corporate acquisitions. Authority to cause, and to approve, all corporate acquisitions by the corporation. (n) marketing. The corporation's participation in system-wide marketing and promotional activities. (o) compliance plans. Authority to create, approve and amend the corporation's compliance, safety and risk management plans. (p) quality plan. Authority to create, approve and amend the corporation's quality plan. (q) non-budgeted purchases. Approval of non-budgeted capital purchases and leases in excess of the single or annual aggregate dollar limits prescribed in writing by the member's board of directors. (r) human resources. Authority to create, approve and amend the corporation's human resource policies and procedures. (s) system compensation. Authority, on behalf of the corporation, to develop and implement compensation strategies, policies, and proc”

“Committees: there are no committees with authority to act on behalf of the governing body.”

“Form 990 review process: the 2023 form 990, including all schedules, was reviewed by management and the governing body prior to filing with the internal revenue service. The finance leader reviewed the form and schedules and any questions were discussed. Each current director of the governing body received a final copy of the 2023 form 990.”

“Monitoring and enforcing conflict of interest policy: essentia health's comprehensive conflict of interest program prevents, detects, and resolves actual conflicts of interests or the actual or potential appearance of such. Fiduciaries, defined as an essentia health board member/trustee, officer, board committee member, senior management employee, or any others considered to be in a position of influence, are covered under essentia health's conflict of interest program. Upon initial appointment, each fiduciary must complete an initial conflict of interest statement and disclosure questionnaire. At the conclusion of each calendar year, each fiduciary must complete an annual conflict of interest statement and disclosure questionnaire. As needed, a fiduciary will update his/her most recently completed questionnaire each time the fiduciary becomes aware of a financial interest, a potential conflict, or change to any information that the fiduciary previously reported. Essentia health's chief compliance officer will collect the questionnaires and evaluate the disclosures. If a fiduciary has a potential conflict of interest, the chief compliance officer or designee may request additional information from the fiduciary, the management team, and others. During the evaluation process, the chief compliance officer may also consult with essentia health's board and audit committee chairs, senior management, legal department, or appropriate representatives from essentia health. The chief compliance officer reports to the essentia health audit committee and the essentia health board of directors any actual or potential conflicts of interest disclosed by the fiduciary, along with recommended actions. The essentia health board of directors (or designee) will then determine whether to approve the situation or to implement special controls to manage the potential conflict of interest. The chief compliance officer will then officially notify the fiduciary in writing of the board's decision. The decision of whether or not the disclosure constitutes a conflict will be at the essentia health board of director's (or designee) sole discretion, and its concern must be the welfare of essentia health and its affiliate(s) and the advancement of its purposes. When the essentia health board of directors (or designee) considers a fiduciary's disclosure as a conflict of interest, special controls will be identified to manage, eliminate or reduce the likelihood and/or appearance of a conflict arising. Controls may include, but are not limited to: a. If the conflict involves an on-going matter or relationship, the fiduciary must not participate in board, board committee, or management discussions related to the conflict and must recuse themselves and if appropriate, withdraw, from any board meeting or portion thereof where the matter is being discussed and during the vote on the potential conflict of interest. The fiduciary may answer questions at the board's or the board committee's request. B. If the conflict involves a specific transaction or decision, the fiduciary will fully disclose their interest and all related material facts. The board or committee of the board will determine whether the contemplated transaction may be authorized as just, fair, and reasonable to essentia health or its affiliate(s). If the board determines a conflict does not exist, the fiduciary may proceed with the transaction; however, they will not be eligible to vote on related issues should they arise. If the board determines a conflict does exist, the fiduciary will be notified of the decision regarding whether the contemplated transaction will be authorized as just, fair, and reasonable. Form 990, part vi, line 12 policy applies to disregarded entities: essentia health surgery centers-duluth, llc, essentia health surgery centers-minnesota, llc and essentia health surgery centers-north dakota, llc. Form 990, part vi, line 13 policy applies to disregarded entities: essentia health”

“Process for determining compensation: the independent executive compensation committee of essentia health's board of directors is authorized to fulfill the board's responsibilities regarding executive compensation consistent with essentia's mission, values and tax-exempt status, and the executive compensation committee's charter. The executive compensation committee meets at least twice annually to carry out its responsibilities, which include, but are not limited to, establishing, reviewing and modifying, as appropriate, reasonable compensation and benefits for designated essentia executives who are officers or key employees of essentia or any of its affiliates which may be paid by related organizations. The executive compensation committee engages qualified independent compensation advisors to provide objective and impartial comparative data and to express opinions on total compensation reasonableness. The executive compensation committee may request its independent advisors to: monitor comparability data and marketplace trends; make appropriate recommendations regarding salary ranges; and periodically review the market competitiveness of essentia executive compensation packages. Prior to establishing or adjusting executive compensation, the executive compensation committee will obtain and rely upon appropriate data as to comparability of the proposed compensation or adjustments. The executive compensation committee will adequately document the basis for its determination concurrently with making those determinations. The executive compensation committee minutes will include: the terms of the approved compensation and the date approved; the executive compensation committee members present during the review, discussion and approval of the proposed compensation and those who voted on the proposed compensation; identification of the comparability data obtained and relied upon by the executive compensation committee and how the data was obtained; any actions by a member of the executive compensation committee having a conflict of interest; and documentation of the basis for the determination. This process was last undertaken in 2024 for essentia health surgery centers' president and in 2023 for its vice president of finance.”

“Availability of governing documents, conflict of interest policy, & financial statements to the public: governing documents, conflict of interest policy, and financial statements are made available to the public upon request for the same period of disclosure as set forth in section 6104(d).”

“1099 reporting: vendor payments and form 1099s were processed through essentia health on behalf of the legal entities comprising essentia health.”

“Affiliate revenue and expense allocation: essentia health duluth, essentia health st. Mary's medical center, and the duluth clinic, ltd. Allocate certain revenues and expenses directly to essentia health duluth, essentia health st. Mary's medical center, the duluth clinic, ltd., essentia health sandstone, essentia health st. Mary's hospital-superior, essentia health northern pines, essentia health polinsky medical rehabilitation center, essentia health deer river, essentia health virginia, essentia health surgery centers, essentia health moose lake, essentia health st. Joseph's medical center, and essentia health brainerd specialty clinic, all related organizations. Net affiliate revenue and expense allocations of $604,875 include the following types of revenue and expenses: patient revenue; nonpatient revenue; amortization and depreciation; professional fees; purchased services; repairs and maintenance; salaries, wages, and related benefits; supplies; utilities; insurance; agency fees; provider and other taxes; and other expenses.”