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The following items requested apply to ________ Hospital (the Corporation). Review By Target Completion Date/Status

Item/Description

Comments

1.

Corporate Matters

$ $

$ $

Minutes of the meetings of the governing board (and key $ committees) and/or advisory board (and key committees) of the Corporation for the last three (3) years. Organization chart (management and corporate structure).

$ $

$ $

$ $

Schedule of names under which the Corporation does $ business. 2. Financial Matters

$ $

$ $

Internal audit reports for current year and preceding three $ (3) years. Auditors letters to management of the Corporation for the past three (3) years and any written responses by management.

Schedule of accounts and/or notes receivable and payable $ owed to or by any related entity to or by any director, officer, employee or their relatives. UCC, tax and judgment lien searches. 3. Licenses, Accreditation and Health Planning Licenses, Permits: Copies of all licenses, permits and certifications, and relat-

$ $ $ $

$ $ $ $

$ $ $ $

$ $

Item/Description

Review By

Target Completion Date/Status

Comments

ed correspondence and agreements with governmental and regulatory agencies. Identify all waivers which may have been granted.

Copies of licensure survey reports (e.g., State of $ ___________ licensing report; Medicare/Medicaid certification reports; Fire Marshals survey) for last three (3) years and all correspondence and Plans of Correction regarding same. All documents related to any pending or threatened challenge, audit, or recertification relating to the Corporations licensure status (i.e., notices of deficiencies or administrative complaints or actions). Accreditations:

$ $

$ $

$ $

Latest JCAHO accreditation survey report and the Corpo- $ rations response to noted deficiencies, or to conditional accreditation, if any. Copy of Statement of Construction, if applicable. Copies of recent correspondence with JCAHO. Schedule of all accreditations currently held by the Corporation and the accreditations previously held within the past three (3) years. All documents related to any pending or threatened challenge, audit, or recertification relating to the Corporations accreditation status (i.e., notices of deficiencies or administrative complaints or actions). Health Planning: Planning permits, Certificates of Need/Exemption and letters of nonreviewability for the last three (3) years.

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

$ $

Item/Description

Review By

Target Completion Date/Status

Comments

Pending Certificate of Need/Exemption Applications, if any. All reports of the relevant state agency related to on-site visits and all correspondence related thereto. Material Contracts and Commitments All existing and proposed contracts, leases and agreements. Any agreements between the Corporation and any management company whereby such company operates any part of the Corporations facilities. All agreements with directors, officers and other employees (including employment agreements).

4.

$ $

$ $

$ $

Schedule of all managed care and other all third party $ payor agreements, including annual net revenue contribution. Third party reimbursement survey reports, correspondence and plans of correction, and audit reports for the last three (3) years. All joint venture, partnership, affiliates and similar agreements (regardless of size and form of entity), including those with physicians or other potential referral sources.

Brief description of each financial commitment, including $ guarantees of another partys obligations. Copies of material software licenses, maintenance agreements or development agreements. To the extent not provided pursuant to other sections

Item/Description

Review By

Target Completion Date/Status

Comments

a) b) c) d)

hereof, provide: Material supply agreements. Deeds, agreements and options to purchase land. Material leases and subleases. Material agreements or other arrangements with insiders or related organizations.

e) Material service and maintenance agreements. $ f) Material installment sale agreements. g) Secrecy, confidentiality or non-compete agreements. h) All loan agreements and other debt instruments, security agreements, guarantees and sale and leaseback agreements, notes receivable and notes payable. i) Material guarantees. j) Physician employment or service agreements. k) Consulting agreements. l) Affiliation and educational services agreements. m) Material joint or group purchase agreements, including basis for all discounts. n) All patient or customer referral agreements. o) Material product/equipment licenses or leases. p) All material agreements with cooperatives, or shared service or joint merchandising arrangements which help the Corporation operate its facilities. q) All joint venture agreements between the Corporation and any other entity or person including physicians and physician groups. Personal Property Fixed asset register or depreciation schedule. Current inventory schedules (including valuation, turnover, and obsolescence) List of items comprising significant other asset balances.

5.

$ $ $

$ $ $

$ $ $

$ $

$ $

Item/Description

Review By

Target Completion Date/Status

Comments

All debts, liabilities and obligations that arise out of the $ ownership of the Purchased Assets (as defined in the Asset Purchase Agreement between Corporation and ____________________) All telephone numbers, facsimile numbers and e-mail addresses of the Corporation. 6. Labor & Employment A schedule of employees as of ____________, 20__, including name, position, salary or wage, and full-time equivalency. All current job descriptions, including minimum qualifications required for each job category. Schedule of all employee terminations within last twelve (12) months including name, age, race, sex, position, date of termination, reason for termination.

$ $

$ $

$ $

Copies of all personnel policies, employee handbooks and $ employee manuals. Copies or descriptions of plans, policies or practices $ describing the following benefits to the extent this information is not contained in employee handbooks, personnel manuals or policy statements provided pursuant to other requests contained in this checklist: a) Vacation plan; b) Occupational and non-occupational disability benefits; c) Holidays observed and holiday pay practices; d) Paid funeral or bereavement leave; e) Jury duty; f) Work clothing; g) Personal days, paid rest periods and/or lunch periods;

$
h) i) j) k) l)

Item/Description

Review By

Target Completion Date/Status

Comments

Overtime pay; Shift differentials; Sick pay; Severance pay; Leaves of absence for family, medical, personal and other reasons; m) Drug and alcohol testing of employees and applicants.

Employee communication materials, including: a) Most recent summary plan descriptions (SPDs) and any prior versions; b) Summaries of material modifications (SMMs); c) Memos to employees regarding benefit plans; d) Sign-up forms; e) Election forms (e.g., investments, benefit payments); f) Distribution consent forms and notices; g) COBRA forms and disclosures; h) Retirement plan distribution explanations; i) Loan forms, disclosures and policies; j) Withdrawal request forms; k) Individual account statements (samples); l) Section 402(f) notice (concerning rollover distributions eligible for rollover treatment); m) Other tax disclosure.

All current employment agreements (including letters to $ new hires outlining the terms and conditions of employment), excluding physician employment agreements. Significant contractual arrangements under which employ- $ ees of an outside contractor are to perform services on the premises on an ongoing basis. Agreements and policies with directors, officers and senior $ management employees (except employed physicians) including confidentiality and non-competition. Any standard agreements which employees have been re-

Item/Description

Review By

Target Completion Date/Status

Comments

quired to sign regarding such matters as confidentiality, conflicts of interest, non-competition, etc.

All material grievances filed by employees in the past $ year, as well as copies of any arbitration decisions received in the past year. All grievance settlements since January 1999 with current $ disposition. All EEO-1 reports and/or National Labor Relations Board $ (NLRB) charges filed during the past three (3) years. A listing and description of all employment claims or $ charges filed by or on behalf of an employee within the last 12 months, including any litigation currently pending before any state or federal court or before any governmental agency, including, but not limited to, the NLRB, the Equal Employment Opportunity Commission (EEOC), the U.S. Department of Labor (DOL), U.S. Department of Health and Human Services (DHHS), the Occupational Safety and Health Administration (OSHA) and the Office of Federal Contract Compliance Program (OFCCP). A listing of any labor organizations which represent employees, and copies of any collective bargaining agreements involving those employees. A listing of all labor organizations which have sought to represent employees during the past twelve (12) months, including an indication as to the steps each organization has taken to organize the employees, the dates on which those steps were taken, the groups of employees involved, and whether the union filed a representation petition with the NLRB. A description of any strike by the employees of the Corporation during the past three (3) years.

Item/Description

Review By

Target Completion Date/Status

Comments

7.

Employee Benefits

$ $

$ $

For each tax-qualified retirement plan, or other form $ of retirement plan, that is sponsored by the Corporation or to which contributions are made by the Corporation, including: a) Profit sharing plan(s); b) 401(k)/profit-sharing plan; c) 401(k)-only plan; d) Money-purchase pension plan(s); e) Defined benefit pension plan(s); f) Multiemployer (union) pension plan; g) Multiple employer pension plan; h) Any other type of tax-qualified retirement plan. Please provide the following: $ i) Each written description of its terms, including plan document, handbook, employee manual, policy and correspondence; ii) Each insurance agreement (health or pension related); iii) Each amendment to documents listed in items (i) and (ii) immediately above; iv) Each determination letter issued by the IRS relating to tax-qualified retirement plans identified in item (i) above; v) As to any vacation, salary continuation, personal days or other paid time-off program, the total dollar amount accrued under each such program to date. For each employee welfare benefit plan (Welfare $ Plan) that is sponsored by the Corporation or to which contributions are made by the Corporation, including: a) Medical, surgical, hospital or other healthcare plan/insurance program; b) Dental, vision or hearing benefits program; c) STD, sick leave or other form of salary continuation plan/insurance program relating to injury or illness

$ $

Item/Description

Review By

Target Completion Date/Status

Comments

d) LTD plan or insurance program; e) Group term or whole life insurance plans, including business travel, accident coverage and accidental death and dismemberment coverage; f) Prepaid legal services plan; g) Unemployment benefits plan; h) Plan for providing benefits in form of apprenticeship or training program, educational benefits, day care center or scholarship funds; i) Educational assistance or tuition reduction program; j) Vacation, personal days and other paid time-off programs; k) Cafeteria plan, including flexible spending accounts; l) Union-sponsored welfare plans; m) Any other type of fringe benefit program.

Please provide the following: $ i) Each written description of its terms, including plan document, handbook, employee manual, policy and correspondence; ii) Each insurance agreement (health or pension related); iii) Each amendment to documents listed in items (i) and (ii) immediately above; iv) Each determination letter issued by the IRS relating to tax-qualified retirement plans identified in item (i) above; v) As to any vacation, salary continuation, personal days or other paid time-off program, the total dollar amount accrued under each such program to date. For each other type of employee benefit arrangement, $ whether involving one (1) or more employees, including: a) Severance pay plan or arrangement; b) Supplemental retirement plan; c) Excess benefit plan; d) Golden parachute arrangement; e) Stock option plan; f) Any other written or unwritten special arrange-

Item/Description

Review By

Target Completion Date/Status

Comments

ments for senior management.

Please provide the following: $ i) Each written description of its terms, including plan document, handbook, employee manual, policy and correspondence; ii) Each insurance agreement (health or pension related); iii) Each amendment to documents listed in items (i) and (ii) immediately above; iv) Each determination letter issued by the IRS relating to tax-qualified retirement plans identified in item (i) above; v) As to any vacation, salary continuation, personal days or other paid time-off program, the total dollar amount accrued under each such program to date. A description of any oral or written agreement that cur- $ rently extend, or that in the past have extended, postretirement medical benefits coverage to one (1) or more employees. Provide the most recent estimate of the present value of the total cost of such coverage. Insurance Claims and Risk Management

8.

$ $

$ $

Any reports submitted to other Occupational Safety and $ Health Administration, including any reports relating to occupational injuries or deaths. All workers compensation and unemployment insurance $ arrangements. Workers compensation claims for the last three (3) years. Auditors inquiry letters to legal counsel and replies thereto relating to the Corporation or their operations for the last three (3) years.

$ $

$ $

$ $

$ $

Item/Description

Review By

Target Completion Date/Status

Comments

9.

Environmental Compliance Actions or correspondence by regulatory authorities pursuant to notices of violation, consent decrees and administrative orders for last three (3) years.

$ $

$ $

$ $

Documents evidencing actions by governmental authori- $ ties pursuant to environmental regulatory provisions, including: consent decrees, administrative orders, complaints, notices of violation or notices of noncompliance. All correspondence to and from any federal, state or local environmental agency concerning such enforcement actions and compliance with environmental laws. Copies of all internal reports relating to compliance with $ environmental protection laws, including environmental audits, surveys and reports concerning facilities now or formally owned or operated. Air Pollution Permits issued by any federal, state or local $ agency for air emissions, if applicable. Water Pollution Permits issued by any federal, state or $ local agency for waste water discharge. Solid and Hazardous Wastes Notifications of hazardous $ waste activity, waste manifests and any permits for solid and hazardous wastes. Infectious Medical Wastes Permits issued by any federal, $ state or local agency for the treatment, storage or disposal of infectious wastes. Any 104(e) requests or PRP notices issued regarding facilities under Superfund or the Comprehensive Environmental Response Compensation Liability Act (CERCLA). Documentation related to all underground storage tanks.

$ $

Item/Description

Review By

Target Completion Date/Status

Comments

Documentation regarding any known PCBs on owned $ premises. All material safety data sheets obtained and reported in $ connection with the requirements of OSHA and any state regulatory agency. All educational materials distributed to employees and training schedules established in compliance with the OSHA Hazard Communication Standard.

Policies related to the collection and disposal of solid, $ hazardous and infectious wastes, including evaluation of the following: a) Incinerators on site, if any; b) Storage on site, if any; c) Transport and disposal arrangements with outside firms; and d) Controls and pretreatment. Agreements and certificates of insurance from any disposal contractors and disposal sites.

Licenses, policies and procedures related to radioactive $ materials. List of radioactive materials used, and review other elements and compounds used in or resulting from activities. Ethelyne oxide emissions standards and any information on violations thereof. Medical Staff And Physician Matters

10.

$ $

$ $

Schedule of all medical staff and allied health professional $ members by specialty, privileges, category of medical staff, age, admissions/year, licensure status, other hospital affiliations, board certifications, etc.

$ $

Item/Description

Review By

Target Completion Date/Status

Comments

Credentialing records (for medical staff and allied health $ professionals) for the past three (3) years and a description of the credentialing process. Current medical staff bylaws, rules and regulations.

$ $

$ $

$ $

All employment or independent contractor arrangements $ with physicians or physician groups, whether written or oral, including physician incentive arrangements or agreements, physician arrangements involving loans, guarantees or similar non-salary benefits. Agreements for any kind of professional non-physician service, such as laboratories, x-ray technicians, respiratory therapy, etc. Schedule of existing and proposed joint venture, PHO, PO and IPA, MSO or other IDS-type agreements. Include a list of the directors and officers of each organization.

Schedule of any known pending or threatened actions $ against members of the medical staff. Minutes of meetings of the Medical Staff for the last two (2) years.

Description of all Medical Staff disputes currently in re- $ view or hearing status or closed in the last twelve (12) months. All recruitment agreements, referral arrangements or other $ agreements with individual physicians or physician groups. If the Corporation has made any interest-free or below market rate loans or guaranteed any loans to members of the medical staff, provide detailed information.

$ $

Item/Description

Review By

Target Completion Date/Status

Comments

Provide detailed information for each professional of- $ fice building on the following: a. Whether space is limited to members of the Corporations medical staff or whether space is also available for private physicians or professionals. b. Are all members of the medical staff entitled to space on a first-come first-serve basis? c. How rent is determined and charged. Please give detailed information about use of the Corpora- $ tions facilities by physicians. Please provide details about and any agreements documenting financial and contractual arrangements between the Corporation and any physicians or physician groups. Compliance Matters Pending or threatened audits, claims, investigations, government inquiries, or administrative proceedings (including the OIG) and evaluation of potential liability.

11.

$ $

$ $

$ $

Status of regulatory compliance (DHHS, DOL, OIG, FTC, $ FDA, OFCCP, OSHA, EPA, EEOC, ATF, NRC, etc.). Schedule of all investigations being conducted by any government agency. If the Corporation, any member of the medical staff or any $ employee has been accused or convicted of Medicare or Medicaid fraud, provide a description of such accusations and/or convictions. Questionable payments and investment arrangements, especially to or with physicians and/or for less than fair market value.