Banner Medical Group

“BMG's SOLE MEMBER IS BH, AN ARIZONA NON-PROFIT CORPORATION, WHICH IS ALSO EXEMPT FROM TAX AS AN ENTITY DESCRIBED UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE.”

“The board of directors of bh, the sole member, elects the board of directors of bmg. Any director may be removed by bh at any time, with or without cause.”

“Bh, the sole member, shall have and exercise the powers hereafter described: (a) appoint or remove the president, the chief financial officer and other executive employees of the corporation; (b) evaluate the performance of, and establish the compensation of, the president; (c) review and approve the compensation of the chief financial officer and other executive employees of the corporation; (d) appoint or remove all members of the board of directors of the corporation, which shall be done by vote of the board of directors of the member; (e) review and approve mission statements and strategic plans; (f) approve the establishment of all new corporate or partnership entities created or joined by the corporation; (g) review and approve operating and capital budgets of the corporation; (h) approve all unbudgeted expenditures over thresholds and signature authority as established by policy of the member; (i) approve the purchase or sale of any asset over thresholds and signature authority as established by policy of the voting member, or the merger or consolidation of the corporation with or into any other entity; (j) approve major contracts of a nature and size as determined by policy and signature authority of the member; (k) approve all debt and guaranties of the corporation of types and limits over thresholds and signature authority as established by policy of the member; (l) approve the information technology infrastructure of the corporation; (m) approval of the compensation philosophy, models and methodology for practicing clinical physicians employed by the corporation; (n) approval of the patient financial assistance policies applicable to services provided by the practicing clinical physicians and other health professionals employed by the corporation; and (o) approval of any action, or the prohibition of any action, in each as is reasonably necessary to preserve the status of the member and of the corporation as organizations described in section 501(c)(3) of the code.”

“BH's Tax Department (BH Tax) is RESPONSIBLE FOR OVERSEEING THE PROCESSES FOR PREPARING THE FORM 990. BH Tax TAKES THE LEAD ROLE IN THE PROCESS AND IS CHARGED WITH THE DUTY TO COLLECT THE FINANCIAL AND OTHER INFORMATION NEEDED TO COMPLETE THE FORM 990. THIS INCLUDES COORDINATING WITH OTHER BH DEPARTMENTS, SUCH AS THE LEGAL, PAYROLL, GOVERNMENT RELATIONS, LICENSING, COMMUNITY BENEFIT, COMPENSATION AND BENEFITS, ACCOUNTS PAYABLE, RISK MANAGEMENT, CERTIFICATION, CREDENTIALING, FINANCIAL SERVICES, AND TREASURY DEPARTMENTS IN ORDER TO ENSURE THAT THE EXPERTISE OF EACH DEPARTMENT IS UTILIZED IN THE INFORMATION-GATHERING PROCESS. ONCE THE INFORMATION IS GATHERED, IT IS ORGANIZED AND ASSEMBLED INTO AN ORGANIZER THAT WILL BE USED BY Banner Tax and an OUTSIDE ACCOUNTING FIRM TO PREPARE THE FORM 990. The accounting firm has expertise in non-profit hospital systems and has specific knowledge of BH's operations and return complexity. A FIRST DRAFT OF THE FORM 990 IS PREPARED by BH Tax and READIED FOR REVIEW. THE REVIEW PROCESS BEGINS WITH AN INITIAL REVIEW DONE BY BH Tax. DURING THIS REVIEW, A LIST OF QUESTIONS, ISSUES AND ADDITIONAL TASKS IS COMPILED. THIS LIST IS THEN DISSEMINATED TO THE APPROPRIATE BH DEPARTMENTS FOR FURTHER ACTION. ONCE ALL QUESTIONS, ISSUES AND TASKS HAVE BEEN COMPLETED, A SECOND REVIEW BY BH Tax and the accounting firm is DONE. AGAIN, IF APPLICABLE, A LIST OF QUESTIONS, ISSUES AND ADDITIONAL TASKS IS COMPILED. THIS LIST IS THEN DISSEMINATED TO THE APPROPRIATE BH DEPARTMENTS FOR FURTHER ACTION. ONCE THIS SECOND REVIEW PROCESS IS COMPLETED, A FINAL DRAFT OF THE FORM 990 IS PRESENTED TO certain BMG officers. CHANGES TO THE FORM 990 ARE MADE IF NECESSARY. THE FINAL VERSION OF THE FORM 990 IS SIGNED BY a BMG OFFICER and the return is made available to the governing body.”

“BMG HAS ADOPTED THE BH's CONFLICT OF INTEREST POLICY. THIS POLICY REQUIRES THE INTERNAL ASSURANCE DEPARTMENT OF BH TO PROVIDE EACH PARTY WITH A DISCLOSURE QUESTIONNAIRE. THE INTERNAL ASSURANCE DEPARTMENT PREPARES A SUMMARY FOR THE TAX DEPARTMENT. THIS SUMMARY IS ALSO PRESENTED TO THE AUDIT COMMITTEE. THE TAX DEPARTMENT PREPARES THE FORM 990 DISCLOSURE. THIS DISCLOSURE IS PRESENTED TO THE LEGAL DEPARTMENT FOR REVIEW. PURSUANT TO BH'S CONFLICT OF INTEREST POLICY, ALL BOARD MEMBERS, OFFICERS AND THE DIRECTOR OF INTERNAL AUDIT SERVICES MUST DISCLOSE THE EXISTENCE OF ANY FINANCIAL ITEREST THAT MAY GIVE RISE TO A CONFLICT OF INTEREST.”

“Part vi, line 15a was answered "no" in accordance with form 990 instructions because the filing entity does not determine compensation. The compensation of the banner medical group ceo is determined by the banner health executive vice-president/chief medical officer and is subject to oversight by the banner health board of directors compensation committee in the same manner as such oversight is exercised over other vice presidents and higher executives of banner health. The compensation of other officers of banner medical group is established by the banner medical group ceo, if they are employees of banner medical group, or by banner health, if they are employees of banner health, in each case within compensation ranges set by the banner health compensation and benefits department based on market data. Banner health's process to determine the compensation of banner medical group is as follows: banner health utilizes a compensation committee comprised of independent directors that exercise oversight over all aspects of the compensation paid to or for the benefit of the president and ceo and all other senior of banner health and any of its affiliates, including the banner medical group ceo, and all other persons who constitute "disqualified persons" with respect to banner health under code section 4958. The committee: - assesses annually the performance of the ceo - exercises oversight over all aspects of compensation for the ceo - reviews and determines the executive total compensation philosophy of banner health - establishes the permissible ranges of compensation for senior executives and disqualified persons - reviews and approves the design of the components of compensation for senior executives and any other disqualified persons and monitors compliance of banner health with the philosophy and design components of executive compensation - receives the ceo's report concerning the overall performance and development assessment of the senior executives - acts for the board in the engagement and direct oversight of external independent compensation consultants engaged to provide advice and information with respect to the reasonableness and competitiveness of the compensation paid to the ceo, senior executives and any other disqualified persons, which consultant reports directly to the committee. In addition, the committee has adopted the following best practices with respect to its executive compensation oversight function: - reviews all incentive plans, benefit plans and programs that apply to employees and physicians - approves ceo's recommendations as to the compensation of senior executives - uses tally sheets summarizing all components of the ceo's and senior executives' compensation, including a three-year earnings history and the cost of all compensation (including specifically deferred compensation) at the time that any action is taken with respect to the ceo's or senior executives' compensation in order to ensure that the committee is fully informed of the complete compensation package before taking any such action - reviews the annual form 990 disclosures relating to executive compensation to ensure the disclosures accurately reconcile to the compensation packages approved by the committee. The compensation committee retains an external independent compensation consulting firm to assist the committee. The committee engages a nationally recognized compensation consulting firm with substantial healthcare experience. This firm reviewed and opined as to the reasonableness of the total compensation package of the ceo, senior executive management, and other executive management identified by the committee as potential disqualified persons. The committee annually reviews the relationship between banner health and each consultant to ensure the consultant's independence. In connection with each such evaluation, the committee requests a written certification from each consultant that: - includes an independence attestation affi”

“The organization's governing documents, audited financial statements, conflict of interest policy, and tax returns are available upon request. Copies are maintained at each administrative office and in the legal and tax departments.”

“Compensation amounts of the five highest paid independent contractors include all payments made to the independent contractors and may include goods/materials because breakdown was not available.”

“Intercompany transfers - xxx-xx-xxxx; other - banner cancer specialists contribution - 678356;”