FAH reports loss
Sale of investment cited in group’s 990 filing
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.