FAH re­ports loss

Sale of in­vest­ment cited in group’s 990 fil­ing

Modern Healthcare - - The Week In Healthcare - Vince Gal­loro

The Fed­er­a­tion of Amer­i­can Hos­pi­tals posted a loss in 2009, giv­ing it a loss for the sec­ond year in a row, ac­cord­ing to its an­nual tax fil­ing sub­mit­ted re­cently to the In­ter­nal Rev­enue Ser­vice.

A $435,405 loss on the sale of a long-held but un­der­per­form­ing in­vest­ment fund pre­vented the fed­er­a­tion from re­turn­ing to pos­i­tive ter­ri­tory, said Jeff Mick­los, ex­ec­u­tive vice pres­i­dent and gen­eral coun­sel. Other in­vest­ments, ac­cord­ing to the Form 990 tax fil­ing, brought in­come of more than $234,000 to the fed­er­a­tion, the trade and lob­by­ing group for in­vestorowned hos­pi­tals.

Chip Kahn, pres­i­dent of the fed­er­a­tion, re­ceived $2,178,944 in to­tal com­pen­sa­tion in 2009, down 6.7% from $2,334,770 in 2008. In 2009, Kahn re­ceived $900,000 in base com­pen­sa­tion, $315,000 in bonus and in­cen­tive com­pen­sa­tion, $748,999 in other re­portable com­pen­sa­tion, $185,249 in re­tire­ment and other de­ferred com­pen­sa­tion and other non­tax­able ben­e­fits of $29,696, ac­cord­ing to the fil­ing.

Kahn re­ceived a $1.1 mil­lion re­ten­tion bonus in 2008 (May 25, 2009, p. 14). He is now work­ing un­der a new em­ploy­ment con­tract that has re­ten­tion bonuses in it, and so the fed­er­a­tion is ac­cru­ing $500,000 to­ward that fu­ture bonus in 2009, Mick­los said. Un­like past years, Kahn was paid his 2009 per­for­mance bonus in 2009, so his 2009 com­pen­sa­tion ac­tu­ally in­cludes per­for­mance bonuses for both 2008 and 2009, Mick­los said. The re­ten­tion bonus ac­crual and the 2008 bonus, of about $200,000, made up most of the other re­portable com­pen­sa­tion, Mick­los said.

The tax fil­ing also re­vealed that the fed­er­a­tion re­ceived $89,500 in set­tle­ment in­come. The set­tle­ment was with au­di­tors who failed to catch the em­bez­zle­ment of more than $377,000 by the fed­er­a­tion’s for­mer con­troller, Mick­los said. Two em­ploy­ees even­tu­ally pleaded guilty to charges re­lated to the mat­ter (Jan. 15, 2007, p. 4). Net of ex­penses, the fed­er­a­tion re­cov­ered about 85% of that amount, be­tween in­surance pay­ments, the set­tle­ment with au­di­tors and resti­tu­tion paid by the for­mer con­troller, Mick­los said.

De­spite a new pres­i­den­tial ad­min­is­tra­tion and the work done last year on health­care re­form, lob­by­ing ex­penses for the fed­er­a­tion were $1,029,325 in 2009, up 7.2% com­pared with $960,315 in 2008. Much of the fed­er­a­tion’s re­search out­lin­ing the fed­er­a­tion’s po­si­tion on health­care re­form was done in 2007 and 2008, such as the devel­op­ment of its Health Cov­er­age Pass­port pro­posal, Mick­los said.

More­over, much of the fed­er­a­tion’s heavy lift­ing on re­form was wrapped up in the wider hos­pi­tal in­dus­try agree­ment with the White House and the Se­nate Fi­nance Com­mit­tee in July 2009, he said.

The fed­er­a­tion’s an­nual con­ven­tion in Washington brought in $1,350,981 in rev­enue, ac­cord­ing to the tax fil­ing. Ex­penses were $974,436, Mick­los said, or a gain of $376,545.

Kahn is work­ing un­der a new em­ploy­ment con­tract.

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