Banner Medical Group

“Bmg's executive committee consists of at least three members of the board of directors, including the chairman. The executive committee meets as needed between scheduled board meetings and has the duty and delegated responsibility to take action as required on behalf of, and in place of, the board. All such actions must be reported to the board at the next regularly scheduled board meeting. Form 990, part vi, line 4 the board of directors of banner health, the sole member, approved changes to the bylaws of banner medical group on june 7, 2014. The changes affected the composition of the board of directors but did not modify the scope of authority of the banner medical group's board of directors. Article iii, board of directors, sections 1-4 were changed as follows: as originally adopted: section 1. Number. The board of directors shall consist of not less than three (3) or more than fifteen (15) persons. The board of directors of the member shall determine, from time to time, the number of directors of the corporation within that range. Section 2. Election and term of office. The board of directors of the member shall elect the board of directors. A majority of the members of the board of directors shall be physicians who are employed by the corporation or an affiliate of the corporation whose duties include the provision of clinical services ("clinical physicians"). A director shall serve for a one year term so long as his qualification under these bylaws shall exist, or unless he sooner resigns or is removed. The removal, resignation or death of any board member shall not affect the transaction of board activities. Any such vacancy shall be filled by the member pursuant to section 4 of this article. Section 3. Resignation and removal. Any director of the corporation may resign at any time, either by oral tender of resignation at any meeting of the board of directors or by giving written notice thereof to the chairman of the board, the president, or the secretary of the corporation, or to the chairman of the board, president, or secretary of the member. Such resignation shall take effect upon the date of receipt or at any later date specified in the notice of resignation. The acceptance of such resignation shall not be necessary to make it effective. A director may be removed by the member at any time, with or without cause. Section 4. Vacancies. Any vacancy occurring in the board of directors and any directorship to be filled by reason of an increase in the number of directors shall be filled by the board of directors of the member. A director elected to fill a vacancy occurring in the board of directors shall be elected for the unexpired term of his predecessor in office, unless he or she sooner resigns or is removed. As amended on june 7, 2014: section 1. Number. The board of directors shall consist of fifteen (15) persons. Section 2. Election and term of office. The board of directors shall consist of the following individuals, a majority of whom shall be physicians who are employed by the corporation or an affiliate of the corporation whose duties include the provision of clinical services ("clinical physicians"): (a) the chief executive officer, chief medical officer, and the chief operating officer of the corporation and the executive vice president and chief medical officer of the member shall each be an ex officio, voting member of the board and shall be counted for purposes of determining a quorum; (b) three members of the board shall be clinical physicians who are also members of one of the following councils of the corporation: professional development council, clinical practice council, and operations council; (c) one member of the board shall be a regional chief medical officer of one of the member's regions; (d) in addition to the members of the board described in (b), five members of the board shall be clinical physicians; (e) one member of the board shall be an advanced practice nurse or physician assistant em”

“Banner medical group's (bmg) sole member is banner health (bh), an arizona non-profit corporation, which is also exempt under section 501(c)(3).”

“The board of directors of banner health, the sole member, elects the board of directors of banner medical group. A majority of the members of the board of directors are required to be physicians who are employed by banner medical group or an affiliate of banner medical group for the primary purpose of providing clinic services. Any director may be removed by banner health at any time, with or without cause.”

“Banner health, the sole member, shall have and exercise the powers hereafter described: (a) appoint or remove the president, the chief financial officer, the chief medical 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, the chief medical 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 clinical physicians employed by the corporation; (n) approval of the patient financial assistance policies applicable to services provided by the 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.”

“The 990 is reviewed by banner health's legal department, tax department, internal audit department and certain banner medical group officers. A meeting is held with the tax preparer and a line-by-line review is done prior to the filing of the return. The form 990 will be made available to the governing body at the next regularly scheduled board meeting after filing.”

“Banner medical group has adopted the banner health conflict of interest policy. This policy requires the internal audit department of banner health to provide each party with a disclosure questionnaire. The internal audit 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 banner health's conflict of interest policy, all board members, officers and the director of audit services must disclose the existence of any financial interest that may give rise to a conflict of interest.”

“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 that exercises oversight over all aspects of the compensation paid to or for the benefit of the ceo and all other senior executives of banner health and any of its affiliates, including banner medical group ceo, and all other persons who constitute "disqualified persons" with respect to banner health under code section 4958. The committee annually reviews and determines the executive total compensation philosophy of banner health; establishes the permissible ranges of compensation for senior executives and disqualified persons, including the banner medical group ceo; reviews and approves the design of the components of compensation for senior executives and any other disqualified persons; monitors compliance of banner health and affiliates with the philosophy and design components of executive compensation; receives the banner health ceo's report concerning the overall performance and development assessment of the senior executives, including the banner medical group ceo; acts for the board in the appointment, establishment of compensation 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; and performs such other duties and delegated responsibilities as the board may assign to the committee from time to time. In addition, the committee has adopted the following best practices with respect to its executive compensation oversight function: receives the report of the vice president, total compensation, regarding all material incentive plans, benefit plans and programs that apply to employees and physicians generally; approves the banner health ceo's recommendations as to the compensation of senior executives. The compensation committee may retain external independent compensation consultants to the extent the committee deems necessary or appropriate to carry out its responsibilities. If so engaged, the committee has responsibility for approving the fees and the terms of engagement for the consultants, as well as termination of such engagement. Typically, the committee has engaged a consultant annually to review and opine as to the reasonableness of the ceo's compensation package and has engaged a consultant approximately once every three years to review and opine as to the reasonableness of senior executive and other executive management compensation, including that of the banner medical group ceo. The committee periodically 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 affirming that the consultant has conducted its own internal assessment and, based on such assessment and its internal controls, concluded that it has performed its services for the committee in an independent manner and is independent as defined in the intermediate sanction regulations under code”

“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.”

“Banner medical group (bmg) was formed for the purposes of enabling the banner health (bh) system to provide integrated and coordinated care and population health management, thereby furthering banner's exempt purposes by enabling it to provide higher quality, more efficient (and less duplicative) and less expensive healthcare for the communities it serves. By consolidating physician employment within a single entity, bmg is able to coordinate and integrate with bh in order to improve transparency and accountability in the physician operations and to align the physician operations more fully and consistently with the exempt purposes and operations of bh. This allows the bh system to respond to changes in the community healthcare system encouraged by the patient protection and affordable care act of 2010. Bmg activities are primarily funded through professional revenue earned through the activities of the employed physicians and support from bh. Bmg's employed physicians provides the following services: a. Most of the physicians are housed in banner health clinics located throughout the service area of bh's acute care hospitals. These physicians include primary care providers and specialists who meet the healthcare needs of the area by providing high-quality healthcare in a convenient and patient-friendly environment. A number of these physicians will eventually be grouped into larger banner health centers which will provide a variety of primary and specialist physician services and ancillary services such as clinical laboratory, imaging, physical therapy, ambulatory surgery, and other services found in multi-specialty physician clinic sites. B. Another group of bmg's physicians are working, and will continue to work, primarily in bh's acute care hospitals to provide specialty procedure-based care, such as cardiology, gastroenterology, urology, radiology, cardiovascular surgery, bariatric surgery, orthopedic surgery and general surgery. This group of physicians also includes hospitalists, who provide 24/7 care for patients admitted to bh's acute care hospitals, and intensivists, who provide care for patients admitted to bh's intensive care units, including intensivists who are employed in bh's e-icu, a remote icu monitoring system that enables highly trained and experienced intensivists housed in remote monitoring centers to observe and monitor icu patients on a 24/7 basis, including patients admitted to icus in bh's smaller, rural hospitals. C. Another component of bmg's physicians are allied health providers who provide occupational health services in bh's occupational health clinics. These clinics provide traditional workers compensation, employee health evaluations and similar services, both for bh's substantial workforce and for employers in the communities served by bh's hospitals.”

“Intercompany tranfers $62,080,830 ------------ all other changes in net assets $62,080,830”