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Site/Location Policy Number Policy Title Originated by Approved by Release Information Supersedes

Systemwide 90.018.001 Code of Business Conduct Corporate Compliance Department President & CEO & Internal Audit Committee Non-Release OR Release Only with Approval Code of Business Conduct Internal Audit 90.05.04

Revised Date 06/01/2008 Reviewed Date 06/01/2008 Origination Date 01/01/1998

Policy: Code of Business Conduct I.

POLICY Integrity is one of the most important assets a company can possess. Ethical conduct enables Advocate Health Care Network to maintain a high level of integrity. Because the integrity of Advocate Health Care (Advocate) is dependent upon the quality and performance of its workforce, the Advocate Health Care Board of Directors has adopted a Code of Business Conduct and Conflict of Interest Policy for the Company. The Code of Business Conduct is intended to promote sound business ethics and provide guidance to all officers, managers, associates, volunteers, physicians and Board, Governing Council and committee members by setting standards of conduct expected throughout Advocate Health Care and its subsidiaries.

II.

CODE OF BUSINESS CONDUCT A.

Observance of the Law Advocate Health Care and its affiliates strive at all times to comply with the law. Advocate associates are required to comply with all federal, state, and local laws and regulations applicable to their respective activities and responsibilities. Because of the complexity of laws and regulations applicable to the healthcare industry, it may not be clear to an associate whether a particular contract, transaction, action, or arrangement is in compliance with the law. If an associate has a question with respect to his or her activities, he or she must contact a member of the Legal Services Department. Four areas of the law which are of particular significance to Advocate as a not-for-profit integrated delivery system are: (i) tax-exemption principles; (ii) Medicare/Medicaid fraud and abuse laws; (iii) Stark anti-referral legislation; and (iv) Medicare/Medicaid coding and billing requirements. Since these laws affect many of the transactions, contracts, actions, and arrangements entered into by Advocate, associates should have a general understanding of their terms.

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Tax-exemption Principles As a tax-exempt organization, the revenues of Advocate and its tax-exempt affiliates are not subject to taxation. This is because such revenues are used for charitable purposes. Generally, transactions and contracts entered into by Advocate should further its mission of providing quality medical care. The primary purpose of these arrangements must be to benefit the community Advocate serves rather than any private individual or entity. Advocate associates may not use tax-exempt funds to unjustly enrich individuals who exert influence over or enter into arrangements with the Advocate system. Consequently, all arrangements entered into by Advocate with directors, officers, employees, independent contractors, physicians, and their families or business entities must be at fair market value terms. This means that Advocate may not pay more than fair market value for products and services received and may not provide products and services for less than fair market value consideration. Notwithstanding the foregoing, under certain circumstances, Advocate may provide products or services for less than fair market consideration if there is a documented charitable benefit to the community that equals or exceeds the difference between fair market consideration and the consideration actually received. An associate who violates the tax-exemption principles jeopardizes Advocate’s tax-exempt status and may cause Advocate, the associate, and the individual or entity entering into the arrangement with Advocate to be liable for substantial penalties and fines.

2.

Medicare/Medicaid Fraud and Abuse Laws As a healthcare organization that receives Medicare and Medicaid reimbursement, Advocate may not offer or pay consideration to individuals or entities to induce them to refer to the Advocate system (for hospital, lab, home health or other healthcare or ancillary services). Further, such individuals and entities may not accept consideration in return for referrals. This is because the Medicare and Medicaid programs ultimately reimburse Advocate for part of the consideration paid to the referral source. Any transaction between Advocate and an individual or entity in a position to refer to the Advocate system must be carefully structured to ensure that it is at fair market terms. Advocate may not pay more than fair market value for products and services received and may not provide products and services for less than fair market value consideration, except for the charitable benefits noted in II.A.1. Transactions between Advocate and potential referral sources which are not at fair market rates subject Advocate and the referral sources to criminal and civil fines and penalties as well as possible exclusion from the Medicare/Medicaid programs.

3.

Stark Anti-Referral Legislation Physicians who have an investment interest in or compensation arrangement with a lab or facility may order unnecessary lab tests or other healthcare services for their patients to increase the profitability of the lab or facility. An increase in lab or facility profitability would increase the value of the physicians’ investment and/or ensure the continuation of the compensation arrangement. To discourage the practice of ordering unnecessary lab tests and other healthcare services, the federal government enacted the Stark anti-referral legislation. The legislation provides that unless certain requirements are met, a physician may not refer patients for certain lab and other healthcare services if that physician has an investment interest in or a compensation arrangement with the entity providing the

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services. Substantially all physicians affiliated with Advocate have an investment interest in or a compensation arrangement with an Advocate entity. Advocate associates must, therefore, be careful to structure any contract, transaction, or arrangement with a physician who may refer patients to the Advocate system for lab or other healthcare services in a manner that satisfies the Stark legislation. Failure to comply with the Stark legislation subjects Advocate and the physician to substantial fines and penalties as well as possible exclusion from the Medicare/Medicaid programs. 4.

Medicare and Medicaid Coding and Billing Requirements Advocate Health Care and its subsidiaries require accurate coding and billing of healthcare services to Medicare, Medicaid, other third party payors, and patients. Associates directly or indirectly involved in the coding and/or billing process, whether in admitting/registration, medical records, billing, finance, ancillary/revenue departments, or healthcare delivery are responsible for accurately performing their assigned duties. These assigned duties must be in compliance with applicable legal and regulatory requirements and Advocate’s policies and procedures. The Office of Inspector General, which is responsible for policing and enforcing compliance with all laws and regulations related to federally funded programs including Medicare and Medicaid, has taken a position of zero tolerance with respect to fraud and abuse. The Department of Justice has also taken the position that inaccurate coding and billing constitutes submission of false claims under the False Claims Act. Penalties for violation of the False Claims Act include fines of $5,000 to $10,000 per false claim submitted plus an amount equal to three times the overpayment and subjects the violator to exclusion from the Medicare/Medicaid programs.

5.

Compliance Guidelines In order to comply with the complex laws and regulations set forth above, and to define how Advocate conducts business, Advocate has enacted Compliance Guidelines that must be followed by associates. These guidelines cover contracts, transactions, actions, and arrangements between Advocate and physicians, officers, directors, associates (their families and corporations), third party vendors, and the Medicare/Medicaid programs. The contracts, transactions, actions, and arrangements that are listed include, among others, billing and coding requirements, medical directorships, employment agreements, leases, loan guarantees, practice acquisitions, vendor contracts, income guarantees, independent contractor relationships, recruitment arrangements, management service arrangements, investment in physician owned organizations, transactions with insiders, information systems arrangements, and other compensation arrangements. Any Advocate associate entering into contracts, transactions, actions, or arrangements on Advocate’s behalf, or involved in any way with the billing and coding process, must reference the Compliance Guidelines on a regular basis to ensure that his or her activities meet the business standards established by Advocate. The Compliance Guidelines may be obtained from any member of the Legal Services Department.

6.

Reporting Requirements If an Advocate associate believes that any contract, transaction, action, or arrangement entered into by him or her or any other Advocate associate may not comply with the laws set forth above, this Code of Business Conduct, the Conflict of Interest Policy, the Compliance Guidelines, any other law or regulation, or general business ethics, he or she must report the issue to his or her supervisor, a member of the Legal Services

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Department, or the Vice President and Chief Compliance Officer. The supervisor, attorney, or Vice President and Chief Compliance Officer will review the issue with the associate to determine if the contract, transaction, action, or arrangement is problematic and to develop the best course of action, if necessary, to bring the contract, transaction, action, or arrangement into compliance. If the associate or his or her supervisor is not certain, after analysis and discussion, that such issue is in compliance or can otherwise be corrected, they must contact the Vice President and Chief Compliance Officer or a member of the Legal Services Department for resolution. If an associate desires to report an issue on an anonymous basis, he or she should call the Advocate Business Conduct Information Hot Line at (630) 9905568 or Tie Line 52-5568. All requests for anonymity or confidentiality when reporting an issue on the information line or to a supervisor, the Compliance Officer, or a member of the Legal Services Department shall be respected. B.

Communications, Commitments, Honesty, Confidentiality and Disclosure 1. Advocate Health Care and its subsidiaries require candor and honesty from individuals in the performance of their responsibilities in speaking with our lawyers and internal and external auditors and prohibits actions to limit the scope of the auditor’s work or restrict their access. Candor and honesty serve to protect Advocate Health Care's reputation for integrity. 2. Compliance with any and all pertinent governmental disclosure regulations and accepted accounting rules is a minimum standard for Advocate Health Care. All transactions of Advocate Health Care must be recorded, and books of accounts, budget proposals, projects, evaluations, etc., must truly reflect the transactions they record. All associates, volunteers, physicians and the Board of Directors are required to comply with Advocate Health Care policies and procedures. Associates must also comply with the rules contained in the applicable associate handbook.

C.

Gifts or Other Items of Value 1. Associates, including management, may not accept gifts, favors, services, entertainment or other items of value (including the opportunity to purchase initial public offering [IPO] stock from companies with which Advocate does or may do business) when the value of what is offered exceeds $250. For purposes of this policy, gifts, favors, services, entertainment or other items of value less than $250 may be accepted without disclosure. The offer or acceptance of any benefit greater than $250 must be reported immediately to one's supervisor and the Vice President and Chief Compliance Officer at the Support Center. Also, two or more gifts from the same source (individual or corporate) in any twelve-month period that exceed a total of $250 must be reported immediately upon surpassing the $250 threshold. (All Advocate Health Care sponsored activities and events are excluded from this reporting requirement.) In the case of a proposed outing or event (including sporting events) that clearly serves a legitimate business purpose, the associate may attend, even if the value exceeds $250. In these cases, the person(s) who extended the invitation must accompany the associate to the proposed outing or event. The associate shall submit promptly (within 60 days) a written report of attendance at all such events to the associate’s supervisor and the Vice President and Chief Compliance Officer at the Support Center. All Advocate Health Care sponsored activities and events are excluded from this reporting requirement. Under the Advocate Health Care Guidelines for Vendor Relations, associates who work in particular areas (e.g., Supply Chain Management) or engage in sensitive activities

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(e.g. purchasing) may be subject to more stringent restrictions on the receipt of gifts, favors, services, etc., or attendance at outings or events, in addition to any limitations imposed by the Code of Business Conduct Policy. 2. Site visits to vendor headquarters or showcase sites in order to gain firsthand knowledge about a vendor and its products and services are an acceptable business practice. The President/Chief Executive of the affected site or the appropriate system Vice President must be fully informed about the visit, its purpose, and intended benefit to Advocate, and must approve the visit in advance. Operating units scheduling site visits shall arrange for appropriate system contracting representatives to attend or be closely associated with any project. Vendors may not pay for Advocate associates’ travel or lodging expenses, except modest business meals associated with such site visits.

D.

E.

3.

Similarly, the offer or giving of money, services or other items of value with the expectation of influencing the judgment or decision-making process of any purchaser, supplier, customer, government official or other person by an Advocate Health Care or subsidiary associate is absolutely prohibited. The offer or giving of any such benefit or the demand or request for any such benefit must be reported immediately to one's supervisor and the Vice President, and Chief Compliance Officer.

4.

Individuals who are a member of a Board, Governing Council or Committee and officers, directors or managers must follow the Financial Approval Policy.

5.

Excluded from this provision are gifts or donations made to Advocate Health Care for its charitable activities. All officially sponsored Advocate Health Care fund-raising activities, therefore, are excluded.

Sexual and Non-Sexual Harassment 1.

Advocate Health Care will not tolerate harassing conduct that affects any condition of employment, that interferes with an individual's work performance or that creates an intimidating, hostile or offensive work environment. Such harassment is illegal. Harassment consists of unwelcome conduct, whether verbal, nonverbal, physical or visual, that is based upon a person's protected status such as sex, age, color, race, ancestry, religion, national origin, physical or mental disability, marital status, veteran status, citizen status or other protected group status.

2.

It is the responsibility of each associate and his/her supervisor to maintain a work environment that is free of harassment. Associates who feel they are the target of harassment should promptly report the incident to either their location's Human Resources Department or to the Office of Workforce Diversity/HR Employee Relations at the Support Center.

Proper Use of Computer Systems 1.

Computer systems and the information they contain, control, transmit or process are essential for Advocate Health Care's daily operations. They help provide products and services to customers, maintain vital records, collect revenues and process information necessary for internal operations and development. Associates are responsible for ensuring that computer systems and information the systems contain are adequately safeguarded against damage, alteration, theft, fraudulent manipulation and unauthorized access or disclosure. Though the data processed and stored in a computer may appear to be intangible, it still must be protected as a Company asset and properly identified and safeguarded according to its proprietary and/or critical nature.

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F.

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2.

Passwords and other procedures used to access or transmit computerized data must be selected, controlled and safeguarded to ensure that Company data is adequately protected. Ultimately, each associate is responsible for the security of information accessed or modified under his or her password or access procedure. Also, as a user or manager of corporate data or computer resources, each associate must strictly adhere to the specific security measures and controls that have been established.

3.

Along with the responsibility for safeguarding the information in Company databases, associates are responsible for obeying laws regarding the reproduction of copyrighted software and using licensed computer software only as permitted by the specific license. Any personal or other non-business use of a Company data communication system or computer system (mainframe, micro or mini computer) that is not expressly sanctioned by supervision is forbidden. Violations or suspected violations of computer security measures or controls should be reported to the Manager of Network Security and Regulatory Compliance, Information Systems Department, Lutheran General Hospital.

Patient Information Confidentiality Statement For Associates and Physicians As a condition to being granted access to patient information, associates and physicians are required to understand and agree to the following:

G.

1.

Associates and physicians who receive a unique user access code and a personal password for access to an Advocate Health Care computerized patient information system must understand and agree that both the code and password are for their own personal use and are not to be disclosed to or used by anyone else, without the advance written consent of the System's Administrator.

2.

All information contained in an Advocate Health Care computerized patient information system constitutes private confidential medical information. Associates and physicians may access only the data necessary for the proper performance of their job responsibilities. Any and all information that is accessed, retrieved or transcribed from an Advocate Health Care computerized patient information system must be kept confidential and must not be disclosed to anyone else without the appropriate expressed written authorization to release patient information.

3.

Each associate and physician is personally liable for any disclosure of patient information or user codes or passwords. Such inappropriate disclosure is subject to disciplinary action up to and including termination.

Maintaining the Integrity of Accounting Records and Financial Statements Management is responsible for establishing and maintaining adequate internal controls and procedures for financial reporting. Advocate Health Care and its subsidiaries are required to maintain books, records and accounts that conform to generally accepted accounting principles (GAAP) and to adequately support financial statement reserves, allowances and estimates. Financial statements and other financial information must fairly present in all material respects, the financial condition, results of operations, and cash flows of the Company. Advocate maintains a process of disclosure controls and procedures to provide full, fair, timely and understandable disclosure and to prevent material misstatements or omissions in its financial statements. To ensure compliance with laws and regulations, no undisclosed or unrecorded funds or assets will be established or maintained for any purpose, nor will any payments be made to unidentified or secret bank accounts. No false or contrived entries or statements may be made for any purpose in the books and records of the Company. All reimbursed expenditures for

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travel, meals and entertainment must be fully documented and recorded. H.

Protection of Assets Company assets, including physical assets and confidential or proprietary information, are not to be used for personal gain. Any borrowing from the organization is discouraged and must be disclosed.

I.

Proprietary Information Advocate Health Care’s proprietary information shall be disclosed solely on a need-to-know basis to prevent unfair competitive advantage and/or other detrimental consequences to Advocate Health Care. All associates are ethically obligated to protect confidential and proprietary business information.

J.

Government and Politics 1.

In order to sustain our country's democratic system of government, Advocate Health Care associates must all be free to participate in political activity as dictated by their consciences. All Advocate Health Care and subsidiary associates are encouraged to participate in public matters of their choice. Further, it is recognized that associates' participation in political processes or in community organizations can be public service of a high order.

2.

Partisan political activity is clearly a matter for individual effort. Advocate Health Care will not attempt to influence such activity. Advocate Health Care and its subsidiaries will not contribute money, goods or services to political parties and candidates except in strict compliance with the law. 3. Where our experience can be helpful, Advocate Health Care may publicly offer recommendations concerning legislation or regulations being considered. Further, it may selectively analyze and take public positions on issues that are related to operations when its experience can add to the understanding of such issues.

4.

K.

Advocate Health Care has many contacts and dealings with governmental bodies and officials. All such contacts and transactions will be strictly proper. Any attempt to influence the decision-making processes of governmental bodies or officials by the improper offer of any benefit is absolutely prohibited. Similarly, any request or demand by any governmental representative of any improper benefit is to be refused and immediately reported to one's supervisor, and the Vice President and Chief Compliance Officer.

Compliance with Code of Business Conduct 1.

Most reports of Code violations usually arise through misunderstanding and lack of communication. Prompt airing of misunderstandings eliminates bad feelings and enables the removal of stumbling blocks to effective operations. This is of such importance to Advocate Health Care and its associates that a person who is involved in events which are or appear to be in violation of the Code of Business Conduct or who gains direct knowledge that a subordinate, co-worker or supervisor is involved in events which are or appear to be in violation of the Code shall report such events to the Vice President and Chief Compliance Officer. 2. All disclosures, interviews, reports, statements, memoranda, or other data regarding code violations shall be strictly confidential and shall be used only to determine if the Code of Business Conduct and/or the law has been violated and as

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needed for appropriate legal action. It shall be the Board of Directors' policy that an individual who discloses activities of another which are, or appear to be, violations of the Code of Business Conduct shall be protected from retribution or harassment of any kind including, but not limited to, discharge or suspension from employment. III.

IV.

CONFLICT OF INTEREST DISCLOSURE STATEMENTS A.

The Code of Business Conduct and Conflict of Interest policies are distributed annually with a Conflict of Interest and Code of Business Disclosure Statement to the Board of Directors, Governing Councils and their committees, Principal Officers, Management at the Director level and above, selected associates and volunteers, and medical staff members having administrative responsibilities. Each person included in the mailing is required to return a Conflict of Interest Disclosure Statement to the Corporate Compliance Department affirming a knowledge and understanding of the Code of Business Conduct and will promptly report any relationships, transactions or events which are, or appear to be, violations of the Code. These Disclosure Statements, along with any reports filed above, will be reviewed by the Vice President and Chief Compliance Officer.

B.

Any failure to return a Disclosure Statement will be investigated by the Corporate Compliance Department. If the individual who fails to return the Compliance Statement is an associate, he or she will be subjected to discipline that may lead to suspension or termination. If the individual is a medical staff member with administrative responsibilities, the physician will be subject to removal of all administrative responsibilities. If the individual is a volunteer or a member of a Governing Council or Board of Directors or one of their committees, he or she will be subject to removal from his or her position.

C.

Any alleged violation will be investigated by the Corporate Compliance Department. If it is determined that a violation has occurred, an associate will be subject to discipline commensurate with the violation which may lead to suspension or termination. A medical staff member with administrative responsibilities who violates the Code shall be subject to removal from such responsibilities. If the individual is a volunteer or a member of a Governing Council or Board of Directors or one of their committees, the individual will be subject to removal from his or her position.

CROSS REFERENCES System Policy #90.002.022 Confidentiality Policy for Business Information System Policy #90.003.001 Financial Approval System Policy #90.005.003 Fraud Investigations System Policy #90.018.002 Conflict of Interest System Policies #90.011.001 through #90.011.008 All Information System Policies System Policy #90.013.015 General and Sexual Harassment

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