Form 990 for tax year 2023

Revenue

Part VIII, the statement of revenue.

• 1e · Government grants (contributions)

  $5,070,999

• 1f · All other contributions, gifts and grants

  $5,000

• 2a · Program service revenue: NET PATIENT SERVICE REVENUE

  total $1,096,174,435 · related or exempt $1,096,174,435 · excluded $0

• 2b · Program service revenue: OTHER HEALTHCARE RELATED REVENUE

  total $23,478,104 · related or exempt $23,478,104 · excluded $0

• 2c · Program service revenue: AUXILIARY REVENUE

  total $215,739 · related or exempt $215,739 · excluded $0

• 3 · Investment income

  total $5,315,182 · unrelated business $0 · excluded $5,315,182

• 4 · Income from investment of tax-exempt bond proceeds

  total $0

• 5 · Royalties

  total $0

• 6a · Gross rents

  real property $1,543,713

• 6c · Rental income or loss

  real property $1,543,713 · personal property $0

• 6d · Net rental income or loss

  total $1,543,713 · excluded $1,543,713

• 7a · Gross sales of assets other than inventory

  securities $1,593,114 · other assets -$20,604

• 7c · Gain or loss

  securities $1,593,114 · other assets -$20,604

• 7d · Net gain or loss

  total $1,572,510 · excluded $1,572,510

• 8a · Fundraising events: gross income

  $0

• 8b · Fundraising events: direct expenses

  $0

• 8c · Net income from fundraising events

  total $0

• 9a · Gaming: gross income

  $0

• 9b · Gaming: direct expenses

  $0

• 9c · Net income from gaming

  total $0

• 10a · Gross sales of inventory

  $0

• 10b · Cost of goods sold

  $0

• 10c · Net income from sales of inventory

  total $0

• 11a · Other revenue: CAFE/DIETARY

  total $904,241 · excluded $904,241

• 11e · Other revenue, total

  $904,241

Functional expenses

Part IX, the statement of functional expenses.

• 1 · Grants to domestic organizations and governments

  total $1,754,807 · program services $1,754,807

• 2 · Grants to domestic individuals

  total $0

• 3 · Grants to foreign organizations and individuals

  total $0

• 4 · Benefits paid to or for members

  total $0

• 5 · Compensation of officers, directors and key employees

  total $16,100,670 · program services $13,041,543 · management and general $3,059,127

• 6 · Compensation of disqualified persons

  total $0

• 7 · Other salaries and wages

  total $552,918,314 · program services $447,863,834 · management and general $105,054,480

• 8 · Pension plan contributions

  total $1,007,525 · program services $816,095 · management and general $191,430

• 9 · Other employee benefits

  total $34,965,914 · program services $28,322,390 · management and general $6,643,524

• 10 · Payroll taxes

  total $37,949,283 · program services $30,738,919 · management and general $7,210,364

• 11a · Fees: management

  total $0

• 11b · Fees: legal

  total $3,434,597 · program services $2,782,024 · management and general $652,573

• 11c · Fees: accounting

  total $529,092 · program services $428,565 · management and general $100,527

• 11d · Fees: lobbying

  total $261,903 · program services $212,141 · management and general $49,762

• 11e · Fees: professional fundraising services

  total $0

• 11f · Fees: investment management

  total $1,615,148 · program services $1,308,270 · management and general $306,878

• 11g · Fees: other

  total $112,788,605 · program services $91,358,769 · management and general $21,429,836 · fundraising $0

• 12 · Advertising and promotion

  total $4,977,063 · program services $4,031,421 · management and general $945,642

• 13 · Office expenses

  total $21,960,223 · program services $17,787,781 · management and general $4,172,442

• 14 · Information technology

  total $14,726,012 · program services $11,928,070 · management and general $2,797,942

• 15 · Royalties

  total $0

• 16 · Occupancy

  total $28,748,936 · program services $23,286,638 · management and general $5,462,298

• 17 · Travel

  total $0

• 18 · Travel or entertainment for public officials

  total $0

• 19 · Conferences, conventions and meetings

  total $760,200 · program services $615,762 · management and general $144,438

• 20 · Interest

  total $30,677,542 · program services $24,848,809 · management and general $5,828,733

• 21 · Payments to affiliates

  total $0

• 22 · Depreciation, depletion and amortization

  total $45,426,202 · program services $36,795,224 · management and general $8,630,978

• 23 · Insurance

  total $10,599,047 · program services $8,585,228 · management and general $2,013,819

• 24a · Other expenses: MEDICAL SUPPLIES

  total $171,266,662 · program services $138,725,996 · management and general $32,540,666

• 24b · Other expenses: CO. OPTION ASSESSMENT PROG.

  total $21,263,902 · program services $17,223,761 · management and general $4,040,141

• 24c · Other expenses: REPAIRS AND MAINTENANCE

  total $13,584,221 · program services $11,003,219 · management and general $2,581,002

• 24d · Other expenses: DUES & SUBSCRIPTIONS

  total $3,498,487 · program services $2,833,774 · management and general $664,713

• 24e · All other expenses

  total $10,046,052 · program services $8,137,303 · management and general $1,908,749

Balance sheet

Part X, book values.

• 1 · Cash, non-interest-bearing

  beginning of year $0 · end of year $0

• 2 · Savings and temporary cash investments

  beginning of year $58,955,319 · end of year $47,682,387

• 3 · Pledges and grants receivable

  beginning of year $0 · end of year $0

• 4 · Accounts receivable

  beginning of year $138,783,719 · end of year $188,295,469

• 5 · Loans and receivables from officers and key people

  beginning of year $0 · end of year $0

• 6 · Loans and receivables from disqualified persons

  beginning of year $0 · end of year $0

• 7 · Other notes and loans receivable

  beginning of year $0 · end of year $0

• 8 · Inventories for sale or use

  beginning of year $14,664,057 · end of year $15,529,218

• 9 · Prepaid expenses and deferred charges

  beginning of year $58,547,125 · end of year $73,771,424

• 10a · Land, buildings and equipment: cost or other basis

  $1,258,045,581

• 10b · Land, buildings and equipment: accumulated depreciation

  $775,102,569

• 10c · Land, buildings and equipment, net

  beginning of year $487,597,342 · end of year $482,943,012

• 11 · Investments: publicly traded securities

  beginning of year $0 · end of year $0

• 12 · Investments: other securities

  beginning of year $0 · end of year $0

• 13 · Investments: program-related

  beginning of year $197,679,494 · end of year $167,163,015

• 14 · Intangible assets

  beginning of year $0 · end of year $0

• 15 · Other assets

  beginning of year $140,708,096 · end of year $123,861,413

• 17 · Accounts payable and accrued expenses

  beginning of year $204,606,130 · end of year $217,794,235

• 18 · Grants payable

  beginning of year $0 · end of year $0

• 19 · Deferred revenue

  beginning of year $0 · end of year $0

• 20 · Tax-exempt bond liabilities

  beginning of year $0 · end of year $0

• 21 · Escrow or custodial account liability

  beginning of year $0 · end of year $0

• 22 · Loans and payables to officers and key people

  beginning of year $0 · end of year $0

• 23 · Secured mortgages and notes payable

  beginning of year $592,270,479 · end of year $601,486,820

• 24 · Unsecured notes and loans payable

  beginning of year $0 · end of year $0

• 25 · Other liabilities

  beginning of year $139,995,103 · end of year $123,062,821

• 27 · Net assets without donor restrictions

  beginning of year $160,063,440 · end of year $156,902,062

• 28 · Net assets with donor restrictions

  beginning of year $0 · end of year $0

The filer's explanations (Part III)

SCHEDULE J, PART I; QUESTION 3

THE ORGANIZATION'S BOARD OF DIRECTORS HAS A BOARD COMPENSATION COMMITTEE ("COMMITTEE"). THE COMMITTEE HAS ADOPTED A WRITTEN EXECUTIVE COMPENSATION PHILOSOPHY WHICH IT FOLLOWS WHEN IT REVIEWS AND APPROVES OF THE COMPENSATION AND BENEFITS OF ALL OF THE ORGANIZATION'S SENIOR MANAGEMENT AND OTHERS, INCLUDING THE CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND OTHER OFFICERS OF THE ORGANIZATION, PHYSICIANS, AND ANY OTHER DISQUALIFIED PERSONS. IT ALSO REVIEWS AND APPROVES EMPLOYMENT AGREEMENTS FOR THE COVERED EMPLOYEES AND DISQUALIFIED PERSONS. THE COMMITTEE REVIEWS THE "TOTAL COMPENSATION" OF THE INDIVIDUALS WHICH IS INTENDED TO INCLUDE BOTH CURRENT AND DEFERRED COMPENSATION AND ALL EMPLOYEE BENEFITS, BOTH QUALIFIED AND NON-QUALIFIED. THE COMMITTEE'S REVIEW IS DONE ON AT LEAST AN ANNUAL BASIS AND ENSURES THAT THE "TOTAL COMPENSATION" OF EACH SUCH INDIVIDUAL IS REASONABLE. THE ACTIONS TAKEN BY THE COMMITTEE ARE INTENDED FOR THE ORGANIZATION TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS FOR PURPOSES OF INTERNAL REVENUE CODE SECTION 4958 WITH RESPECT TO THE TOTAL COMPENSATION OF THE SENIOR MANAGEMENT TEAM. REBUTTAL PRESUMPTION REQUIREMENTS HAVE GUIDED THE ACTIVITIES OF THE COMMITTEE IN ALL OF ITS REVIEWS, DELIBERATIONS AND APPROVAL OF EXECUTIVE COMPENSATION ACTIONS FOR ALL OF THE COVERED EMPLOYEES AND DISQUALIFIED PERSONS. THE THREE FACTORS WHICH MUST BE SATISFIED IN ORDER TO RECEIVE THE REBUTTABLE PRESUMPTION OF REASONABLENESS ARE THE FOLLOWING: 1. THE COMPENSATION ARRANGEMENT IS APPROVED IN ADVANCE BY AN "AUTHORIZED BODY" OF THE APPLICABLE TAX-EXEMPT ORGANIZATION WHICH IS COMPOSED ENTIRELY OF INDIVIDUALS WHO DO NOT HAVE A "CONFLICT OF INTEREST" WITH RESPECT TO THE COMPENSATION ARRANGEMENT; 2. THE AUTHORIZED BODY OBTAINED AND RELIED UPON "APPROPRIATE DATA AS TO COMPARABILITY" PRIOR TO MAKING ITS DETERMINATION; AND 3. THE AUTHORIZED BODY "ADEQUATELY DOCUMENTED THE BASIS FOR ITS DETERMINATION" CONCURRENTLY WITH MAKING THAT DETERMINATION. THE COMMITTEE IS COMPRISED OF MEMBERS OF THE BOARD OF DIRECTORS EACH OF WHOM IS INDEPENDENT AND ARE FREE FROM ANY CONFLICTS OF INTEREST. THE COMMITTEE RELIED UPON COMPARABILITY MARKET DATA PROVIDED BY ITS INDEPENDENT COMPENSATION CONSULTANT FROM COMPARABLE HEALTHCARE AND HOSPITAL PEERS BASED ON TAX-EXEMPT STATUS, REVENUE, LOCATION, SERVICES, AND OTHER FACTORS TO ENSURE THE EXECUTIVES' COMPENSATION IS REPRESENTATIVE OF THE EXECUTIVE TALENT MARKET AND COMPARED TO WHAT IS "ORDINARILY PAID FOR LIKE SERVICES BY LIKE ENTERPRISES UNDER LIKE CIRCUMSTANCES" AS REFERENCED UNDER IRS REGULATIONS. CONTEMPORANEOUS MINUTES ARE COMPILED AND APPROVED FOR ALL COMMITTEE DELIBERATIONS. THESE ARE SUPPORTED BY THE WRITTEN DOCUMENTATION OF ALL PEER AND MARKET COMPENSATION STUDIES, AS WELL AS DETAILED PERFORMANCE JUSTIFICATION USED AS THE BASIS FOR AWARDS UNDER THE ORGANIZATION'S INCENTIVE PROGRAMS. RECOGNIZING THE NEED TO CONSIDER RETIREMENT PLANNING FOR ITS SENIOR MANAGEMENT AS A MEANS TO AID IN THEIR RETENTION, THE COMMITTEE MAINTAINS A FORM OF LONG-TERM NON-QUALIFIED DEFERRED COMPENSATION (REFERRED TO AS THE "PERFORMANCE-BASED CAPITAL ACCUMULATION PLAN", OR "PBCAP"), WHICH IS PART OF THE CAPITAL HEALTH SYSTEM NON-QUALIFIED 457(F) DEFERRED COMPENSATION PLAN. PBCAP PROVIDES THE ORGANIZATION WITH AN ADDITIONAL TOOL TO ASSIST IN THE RECRUITMENT AND RETENTION OF SENIOR MANAGEMENT WITHIN THE HIGHLY COMPETITIVE HEALTHCARE LABOR MARKET. PBCAP PROVIDES SENIOR MANAGEMENT WITH THE OPPORTUNITY TO QUALIFY FOR ANNUAL DEFERRED CONTRIBUTIONS, BASED ON ACHIEVING SPECIFIED PERFORMANCE TARGETS AND MEETING ESTABLISHED CIRCUIT BREAKERS, TO BE PAID AT A FUTURE PRE-DETERMINED DATE CONTINGENT UPON CONTINUED SERVICE WITH THE ORGANIZATION. THE COMPENSATION AND BENEFITS OF CERTAIN OTHER INDIVIDUALS CONTAINED IN THIS FORM 990 ARE REVIEWED ANNUALLY BY THE PRESIDENT/CHIEF EXECUTIVE OFFICER WITH ASSISTANCE FROM ORGANIZATION'S HUMAN RESOURCES DEPARTMENT AND INDEPENDENT COMPENSATION CONSULTANTS IN CONJUNCTION WITH THE INDIVIDUAL'S JOB PERFORMANCE DURING THE YEAR, AND IS BASED UPON OTHER OBJECTIVE FACTORS DESIGNED TO ENSURE THAT REASONABLE AND FAIR MARKET VALUE COMPENSATION IS PAID BY THE ORGANIZATION. OTHER OBJECTIVE FACTORS INCLUDE MARKET SURVEY DATA FOR COMPARABLE POSITIONS, INDIVIDUAL GOALS AND OBJECTIVES, PERSONNEL REVIEWS, EVALUATIONS, SELF-EVALUATIONS AND PERFORMANCE FEEDBACK MEETINGS.

SCHEDULE J, PART I; QUESTION 4A

The following individual received severance during calendar year 2023 which was included in her 2023 Form W-2, Box 5, as taxable Medicare wages: Gina P. Mumolie, $135,738.

SCHEDULE J, PART I; QUESTION 4B

THE ORGANIZATION MAINTAINS THE CAPITAL HEALTH SYSTEM NON-QUALIFIED 457(F) DEFERRED COMPENSATION PLAN (THE "457(F) PLAN"), WHICH IS A NONQUALIFIED DEFERRED COMPENSATION PLAN THAT SATISFIES THE REQUIREMENTS OF SECTION 457(F) OF THE INTERNAL REVENUE CODE. THE FOLLOWING INDIVIDUALS PARTICIPATED IN THE 457(F) PLAN AND ACCRUED ADDITIONAL DEFERRED COMPENSATION IN 2023 THAT IS SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE - SHANE F. FLEMING, CPA, $182,244; ARLENE WALSH, $109,810; EUGENE J. MCMAHON, M.D., $86,791; SUZANNE B. BORGOS, $88,685; STEPHEN A. MILLER, JD, $89,072; AUDRA FARISH, $71,496; RAVIKANTH KOGANTI, $64,701; DEBORAH VISCONTI, $61,212 AND DEBORAH MICAN, $62,745. THESE INDIVIDUALS MAY NEVER ACTUALLY RECEIVE THESE UNVESTED AMOUNTS. ACCORDINGLY, THESE UNVESTED AMOUNTS HAVE NOT BEEN INCLUDED IN SCHEDULE J, PART II, COLUMN (C) AND WERE NOT REPORTED ON EACH INDIVIDUAL'S 2023 FORM W-2, BOX 5 AS TAXABLE MEDICARE WAGES.

SCHEDULE J, PART I; QUESTION 7

CERTAIN INDIVIDUALS LISTED IN PART VII, SECTION A, LINE 1A RECEIVED INCENTIVE AWARDS DURING CALENDAR YEAR 2023, WHICH INCENTIVE AWARDS ARE REFLECTED IN SCHEDULE J, PART II, COLUMN B(II) AND WERE REPORTED ON EACH SUCH INDIVIDUAL'S 2023 FORM W-2, BOX 5, AS TAXABLE MEDICARE WAGES. THESE INCENTIVE AWARDS WERE PAID UNDER THE CAPITAL HEALTH INCENTIVE COMPENSATION PLAN ("ICP"), APPROVED BY THE BOARD COMPENSATION COMMITTEE, AND BASED ON ACHIEVEMENT OF PRE-ESTABLISHED SYSTEM-WIDE PERFORMANCE CRITERIA AND METRICS, AS WELL AS MEETING OR EXCEEDING SPECIFIC PERFORMANCE ON "CIRCUIT BREAKERS." THE ICP PROVIDES ELIGIBLE EXECUTIVES WITH THE OPPORTUNITY TO EARN PERFORMANCE BASED COMPENSATION AND IS AN INTEGRAL COMPONENT OF THE ORGANIZATION'S EXECUTIVE COMPENSATION PACKAGE. THE BOARD COMPENSATION COMMITTEE USES THE ICP AS A MECHANISM TO REWARD PERFORMANCE AGAINST ESTABLISHED KEY PERFORMANCE REQUIREMENTS. THE GOALS COVER FINANCIAL AND OPERATIONAL METRICS AND ARE DEFINED EACH YEAR, BASED ON THE DESIRED CONCENTRATION REQUIRED BY THE BOARD COMPENSATION COMMITTEE. THE BOARD COMPENSATION COMMITTEE UNDERTAKES A MID-YEAR REVIEW OF PERFORMANCE TOWARDS ACHIEVEMENT OF EACH GOAL, WHICH ALLOWS THE BOARD COMPENSATION COMMITTEE TO MONITOR HOW KEY PROJECTS ARE BEING HANDLED AND TO MAKE ADJUSTMENTS, IF NECESSARY. PLEASE REFER TO SCHEDULE J, PART II, COLUMN B(II) FOR THIS INFORMATION BY PERSON AND BY AMOUNT.

Disregarded entities

Part I: entities that legally are the filer and file no return of their own.

• POPULATION HEALTH MGMT SERVICES LLC

  HEALTH SVCS. · NJ · income $4,085,610 · assets $984,151

  Directly controlled by CH SYSTEM

• CAPITAL HEALTH MEDICAL GROUP LLC

  HEALTH SVCS. · NJ · income $0 · assets $0

  Directly controlled by CH SYSTEM

• CAPITAL HEALTH ACCOUNTABLE CARE ORG LLC

  HEALTH SVCS. · NJ · income $0 · assets $0

  Directly controlled by CH SYSTEM

Related corporations and trusts

Part IV: related organizations taxable as a corporation or trust.

• BELLEVUE AVENUE MANAGEMENT INC

  C CORP. · MANAGEMENT · NJ

  Directly controlled by NA

• CAPITAL REGION INSURANCE COMPANY

  FOREIGN CORP. · FINANCIAL VEHICLE · CJ · 100% owned · share of income $4,418,356 · share of assets $41,590,117 · controlled entity

  Directly controlled by CH SYSTEM

• MERCER HOLDING CORPORATION

  C CORP. · HOLDING CO. · NJ · 100% owned · share of income $2,954,520 · share of assets $14,830,133 · controlled entity

  Directly controlled by CH SYSTEM

• CAPITAL HEALTH SYSTEM CONDOMINIUM ASSOC

  C CORP. · CONDO ASSOCIATION · NJ · 100% owned · share of income $242,946 · share of assets $32,561 · controlled entity

  Directly controlled by CH SYSTEM