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CareSource CEO earned $2.9M

Staff photo by Jim Witmer CareSource Chief Executive Pamela Morris

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By Jim DeBrosse, Staff Writer Updated 7:40 AM Monday, January 11, 2010

DAYTON — CareSource is the eighth largest Medicaid HMO in the country, and Chief Executive Pamela Morris is paid accordingly. But until its most recent nonprofit IRS filing, it was difficult to determine just how much Morris was being paid.

In 2006, no salaries were reported to the IRS because CareSource’s top executives were compensated through a for-profit arm created to expand the HMO’s business footprint into Michigan. And in 2007, CareSource reported that its top five executives earned a total of $3.2 million from its for-profit arm but did not provide individual compensation totals.

Nonprofits are required to file annually with the Internal Revenue Service. The form — called a 990 — is often the only source the public has on a tax-exempt organization’s financial information.

In its 990 for 2008, CareSource reported individual salaries of its top managers, with Morris earning a total of $2.9 million. That ranked her executive pay as the third lowest among Ohio’s seven major Medicaid plans.

Morris said all CareSource employees were paid through the for-profit arm in 2006 and 2007 because tax counselors advised against splitting pay between nonprofit and for-profit divisions. She also said information on salaries was available through the Ohio Department of Insurance.

“We have complied with all IRS regulations,” she said.

Failing to report executive salaries may have been legal, but it was a poor decision when health care costs are soaring, said Cathy Levine of the Universal Health Care Action Network of Ohio, a consumer advocacy group. “The only way we’re going to get quality, affordable health care for everyone is to have full transparency.”

Morris’ 2008 compensation included $1.5 million in bonuses and incentives and marked a 230 percent increase over her reported pay of $877,000 in 2005. In that time, CareSource grew by 134 percent from total revenues of $770 million to $1.8 billion, IRS filings show.

Ellen Leffak, chairwoman of the CareSource board, said Morris’ pay reflects the salaries of her for-profit competitors, who might have lured her away. “Our chief executive has given us outstanding service” for 24 years, Leffak said.

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