Banner Medical Group

“THE BYLAWS OF BANNER MEDICAL GROUP WERE AMENDED ON JUNE 10, 2017. THE FOLLOWING CHANGES WERE MADE: 1) THE NUMBER OF MEMBERS OF THE BOARD OF DIRECTOR WAS CHANGED FROM FIFTEEN TO THREE TO FIVE. 2) THE BOARD OF DIRECTORS ARE NO LONGER TO CONSIST OF THE FOLLOWING: a. A MAJORITY WHO ARE PHYSICIANS EMPLOYED BY BMG OR AN AFFILIATE WHOSE DUTIES INCLUDE THE PROVISION OF CLINICAL SERVICES (CLINICAL PHYSICIANS) b. THE CHIEF EXECUTIVE OFFICER OF BMG (EX OFFICIO MEMBER) c. THE CHIEF MEDICAL OFFICER OF BMG (EX OFFICIO MEMBER) d. THE CHIEF OPERATING OFFICER OF BMG (EX OFFICIO MEMBER) e. THE EXECUTIVE VICE PRESIDENT OF THE MEMBER, BANNER HEALTH (EX OFFICIO MEMBER) f. THE CHIEF MEDICAL OFFICER OF BANNER HEALTH (EX OFFICIO MEMBER) g. AN ADDITIONAL THREE CLINICAL PHYSICIANS WHO ARE ALSO MEMBERS OF: i. THE PROFESSIONAL DEVELOPMENT COUNCIL ii. THE CLINICAL PRACTICE COUNCIL iii. THE OPERATIONS COUNCIL h. ONE MEMBER WHO IS A REGIONAL CHIEF MEDICAL OFFICER OF ONE OF BANNER HEALTHS REGIONS i. FIVE ADDITIONAL CLINICAL PHYSICIANS j. ONE MEMBER WHO IS AN ADVANCED PRACTICE NURSE OR PHYSICIAN ASSISTANT EMPLOYED BY BMG OR ITS AFFILIATE 3) THE BOARD WILL NOW CONSIST OF THREE TO FIVE PERSONS WHO ARE EMPLOYED BY BMG, THE MEMBER OR AN AFFILIATE OF THE MEMBER. THERE ARE NO OTHER REQUIREMENTS. 4) THE TERM OF A BOARD MEMBER IS CHANGED FROM ONE YEAR TO AN INDEFINITE PERIOD OF TIME PROVIDED THE BOARD MEMBER REMAINS QUALIFIED. 5) BOARD MEMBERS MAY ONLY RESIGN BY GIVEN WRITTEN NOTICE TO BANNER HEALTH. 6) THE STANDING COMMITTEES OF BMG ARE DISSOLVED. 7) THE EXECUTIVE COMMITTEE IS DISSOLVED. 8) MEMBERSHIP REQUIREMENTS TO BE A MEMBER IN THE PHYSICIAN COMPENSATION SUBCOMMITTEE WILL NO LONGER INCLUDE THE REQUIREMENT THAT "AT LEAST THREE PERSONS NONE OF WHOM SHALL BE CLINICAL PHYSICIANS OR OTHER PERSONS WHOSE COMPENSATION IS SUBJECT TO THE OVERSIGHT OF THE PHYSICIAN COMPENSATION SUBCOMMITTEE OR INDIVIDUALS RELATED TO SUCH PHYSICIANS OR OTHER PERSONS THROUGH EITHER FAMILY OF BUSINESS RELATIONSHIPS" MUST BE ON THE COMMITTEE. 9) THE CLINICAL QUALITY COMMITTEE IS DISSOLVED. 10) THE FINANCE COMMITTEE IS DISSOLVED 11) THE STRATEGY COMMITTEE IS DISSOLVED. 12) THE OFFICERS OF THE CORPORATION WILL NO LONGER INCLUDE: a. CHAIRMAN OF THE BOARD b. CHIEF MEDICAL OFFICER”

“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. 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 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.”

“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.”

“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 president and 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 executives of banner health and any of its affiliates, including the banner medical group president and 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 president and ceo - exercises oversight over all aspects of compensation for the president and ceo - 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 president and ceo - 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 president and ceo's report concerning the overall performance and development assessment of the senior executives, including banner medical group president and ceo - 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 president and 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; and approves the banner health president and 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 president and 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 president and 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”

“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. Form 990, part vii, section a, line 1a certain individuals were reported as key employees in prior years who did not meet the responsibility test required to be considered a key employee. As such, these individuals are not being reported as key employees. Additionally, these individuals are not being reported as former key employees because they have never met the definition of a "key employee" as per the form 990 instructions.”

“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.”

“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 $ 35,046,996”