Mass General Brigham
Incorporated and Affiliates
Consolidated Financial Statements
September 30, 2023 and 2022
Mass General Brigham Incorporated and Affiliates
Index
September 30, 2023 and 2022
Page(s)
Report of Independent Auditors ........................................................................................................... 1–2
Consolidated Financial Statements
Consolidated Balance Sheets ...................................................................................................................... 3
Consolidated Statements of Operations ...................................................................................................... 4
Consolidated Statements of Changes in Net Assets ................................................................................... 5
Consolidated Statements of Cash Flows ..................................................................................................... 6
Notes to Consolidated Financial Statements ......................................................................................... 7–46
PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Suite 500, Boston, MA 02210
T: (617) 530 5000, www.pwc.com/us
Report of Independent Auditors
To the Board of Directors of
Mass General Brigham Incorporated
Opinion
We have audited the accompanying consolidated financial statements of Mass General Brigham
Incorporated (the Company) and its affiliates, which comprise the consolidated balance sheets as of
September 30, 2023 and 2022, and the related consolidated statements of operations, of changes in net
assets and of cash flows for the years then ended, including the related notes (collectively referred to as
the “consolidated financial statements”).
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of the Company and its affiliates as of September 30, 2023 and 2022, and the results
of its operations, changes in its net assets and its cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with the auditing standards generally accepted in the United States
of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’
Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are
required to be independent of the Company and its affiliates and to meet our other ethical responsibilities
in accordance with the relevant ethical requirements relating to our audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in the United States of America,
and for the design, implementation, and maintenance of internal control relevant to the preparation and
fair presentation of consolidated financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the Company and its
affiliates’ ability to continue as a going concern for one year after the date the consolidated financial
statements are issued.
2
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will
always detect a material misstatement when it exists. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud many involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with US GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the consolidated financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company and its affiliates’ internal control. Accordingly, no such opinion is
expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
consolidated financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the Company and its affiliates’ ability to continue as a going concern for
a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
Boston, Massachusetts
December 8, 2023
Mass General Brigham Incorporated and Affiliates
Consolidated Balance Sheets
September 30, 2023 and 2022
The accompanying notes are an integral part of these financial statements.
3
(in thousands of dollars) 2023 2022
Assets
Current assets
Cash and equivalents 279,459$ 193,919$
Investments 3,397,634 2,390,217
Current portion of investments limited as to use 3,505,987 4,144,531
Patient accounts receivable, net 1,638,306 1,438,412
Research grants receivable, net 228,117 215,462
Other current assets 946,875 722,486
Total current assets 9,996,378 9,105,027
Investments limited as to use, less current portion 5,440,702 4,961,378
Long-term investments 2,713,547 2,582,271
Property and equipment, net 6,777,363 6,442,260
Right-of-use operating lease assets 1,024,336 1,135,787
Other assets 2,722,977 1,981,608
Total assets 28,675,303$ 26,208,331$
Liabilities and Net Assets
Current liabilities
Current portion of long-term obligations 481,130$ 519,354$
Accounts payable and accrued expenses 1,305,876 1,183,843
Accrued medical claims and related expenses 192,435 119,237
Accrued employee compensation and benefits 1,150,128 1,203,729
Current portion of operating lease obligations 207,671 206,350
Unexpended funds on research grants 377,730 355,934
Total current liabilities 3,714,970 3,588,447
Accrued professional liability 576,038 570,862
Accrued employee benefits 718,087 633,894
Interest rate swaps liability 67,075 156,705
Accrued other 331,166 274,931
Operating lease obligations, less current portion 696,740 801,038
Long-term obligations, less current portion 5,469,626 5,557,177
Total liabilities 11,573,702 11,583,054
Commitments and contingencies
Net assets
Without donor restrictions 13,362,445 11,577,802
With donor restrictions 3,739,156 3,047,475
Total net assets 17,101,601 14,625,277
Total liabilities and net assets 28,675,303$ 26,208,331$
Mass General Brigham Incorporated and Affiliates
Consolidated Statements of Operations
Years Ended September 30, 2023 and 2022
The accompanying notes are an integral part of these financial statements.
4
(in thousands of dollars) 2023 2022
Operating revenues
Net patient service revenue 12,792,586$ 11,869,451$
Premium revenue 1,518,556 930,753
Direct academic and research revenue 2,066,518 1,937,738
Indirect academic and research revenue 641,492 569,624
Other revenue 1,807,885 1,402,801
Total operating revenues 18,827,037 16,710,367
Operating expenses
Employee compensation and benefit expenses 9,659,280 9,144,470
Supplies and other expenses 4,976,156 4,402,993
Medical claims and related expenses 1,086,589 722,212
Direct academic and research expenses 2,066,518 1,937,738
Depreciation and amortization expenses 774,563 769,783
Interest expense 168,765 164,833
Total operating expenses 18,731,871 17,142,029
Income (loss) from operations 95,166 (431,662)
Nonoperating gains (loss)
Income (loss) from investments 962,128 (2,271,500)
Change in fair value of interest rate swaps 130,393 330,530
Other nonoperating expenses (115,822) (109,971)
Net academic and research gifts (expenses) (68,062) 23,976
Nonservice related pension income 233,827 201,000
Total nonoperating gains (loss), net 1,142,464 (1,825,965)
Excess (deficit) of revenues over expenses 1,237,630 (2,257,627)
Other changes in net assets
Funds utilized for property and equipment 54,110 44,340
Change in funded status of defined benefit plans 476,211 965,424
Other changes in net assets 16,692 19,337
Increase (decrease) in net assets without donor restrictions 1,784,643$ (1,228,526)$
Mass General Brigham Incorporated and Affiliates
Consolidated Statements of Changes in Net Assets
Years Ended September 30, 2023 and 2022
The accompanying notes are an integral part of these financial statements.
5
Without Donor With Donor
(in thousands of dollars) Restrictions Restrictions Total
Net assets at September 30, 2021 12,806,328$ 3,369,175$ 16,175,503$
Increases (decreases)
Loss from operations (431,662) - (431,662)
Loss from investments (2,271,500) (517,571) (2,789,071)
Change in fair value of interest rate swaps 330,530 - 330,530
Other nonoperating (expenses) income (109,971) 218,180 108,209
Academic and research gifts, net of expenses 23,976 - 23,976
Nonservice related pension income 201,000 - 201,000
Funds utilized for property and equipment 44,340 (14,136) 30,204
Change in funded status of defined benefit plans 965,424 - 965,424
Other changes in net assets 19,337 (8,173) 11,164
Change in net assets (1,228,526) (321,700) (1,550,226)
Net assets at September 30, 2022 11,577,802 3,047,475 14,625,277
Increases (decreases)
Income from operations 95,166 - 95,166
Income from investments 962,128 127,629 1,089,757
Change in fair value of interest rate swaps 130,393 - 130,393
Other nonoperating (expenses) income (115,822) 589,157 473,335
Net academic and research gifts (expenses) (68,062) - (68,062)
Nonservice related pension income 233,827 - 233,827
Funds utilized for property and equipment 54,110 (28,088) 26,022
Change in funded status of defined benefit plans 476,211 - 476,211
Other changes in net assets 16,692 2,983 19,675
Change in net assets 1,784,643 691,681 2,476,324
Net assets at September 30, 2023 13,362,445$ 3,739,156$ 17,101,601$
Mass General Brigham Incorporated and Affiliates
Consolidated Statements of Cash Flows
Years Ended September 30, 2023 and 2022
The accompanying notes are an integral part of these financial statements.
6
(in thousands of dollars) 2023 2022
Cash flows from operating activities
Change in net assets 2,476,324$ (1,550,226)$
Adjustments to reconcile change in net assets to net cash
provided by (used in) operating activities
Change in funded status of defined benefit plans (476,211) (965,424)
Change in fair value of interest rate swaps (130,393) (330,530)
Depreciation and amortization 774,563 769,783
Amortization of bond discount, premium and issuance costs (10,646) (11,923)
Gain on disposal of property (13,086) (222)
Change in right-of-use operating lease assets 174,612 165,958
Net realized and unrealized change in investments (1,266,094) 2,580,370
Restricted contributions and investment income (239,437) (220,648)
Increases (decreases) in cash resulting from a change in
Patient accounts receivable (199,894) (106,008)
Other assets (466,316) 6,492
Accounts payable and other accrued expenses 241,617 (202,328)
Accrued medical claims and related expenses 73,198 31,948
Operating lease obligations (166,138) (169,438)
Settlements with third-party payers (13,271) (45,553)
Medicare accelerated payments - (724,469)
Net cash provided by (used in) operating activities 758,828 (772,218)
Cash flows from investing activities
Purchases of property and equipment (1,098,913) (863,717)
Proceeds from sale of property 14,696 436
Purchase of investments (2,273,363) (2,281,901)
Proceeds from sales of investments 2,550,984 3,809,183
Net cash (used for) provided by investing activities (806,596) 664,001
Cash flows from financing activities
Borrowings under taxable commercial paper 169,885 -
Repayments of borrowings under taxable commercial paper (50,015) -
Payments on long-term obligations (106,306) (104,771)
Proceeds from long-term obligations 100,230 59,235
Deposits into refunding trusts (219,923) (50,235)
Restricted contributions and investment income 239,437 220,648
Net cash provided by financing activities 133,308 124,877
Net increase in cash and equivalents 85,540 16,660
Cash and equivalents
Beginning of year 193,919 177,259
279,459$ 193,919$
Noncash purchases of property and equipment in accounts
payable and accrued expenses 129,552$ 119,196$
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
7
1. Organization and Community Benefit Commitments
Mass General Brigham Incorporated (the Company) is the parent organization and sole corporate
member of numerous organizations whose financial condition and operations are described in
these consolidated financial statements. The terms Mass General Brigham, We, Our or Us as
used herein, unless otherwise stated or indicated by context, refer collectively to the Company and
its affiliated organizations.
Mass General Brigham operates academic medical centers, community acute care hospitals,
inpatient and outpatient mental health services facilities, urgent care centers, facilities that provide
rehabilitation medicine and long-term care services, physician organizations, home health services,
nursing homes and a graduate level program for health professions. Our mission is to provide
world class health care services to the local communities in which we operate as well as to patients
across the United States and the world. In addition, we are a nonuniversity-based nonprofit private
medical research enterprise and a principal teaching affiliate of the medical and dental schools of
Harvard University. Our licensed, not-for-profit managed care organization (Mass General Brigham
Health Plan, Inc.) and licensed, for-profit insurance company (Mass General Brigham Health
Insurance Company) (collectively referred to as MGB Health Plan) provide health insurance
products and administrative services to the Massachusetts Medicaid program (MassHealth),
ConnectorCare (a state subsidized program for adults who meet income and immigration
guidelines) and commercial populations.
Community Health
Through our community health programs we work with community residents and community-based
organizations to make measurable, sustainable improvements in the health status of underserved
populations with focus on the leading causes of death and premature mortality. In addition, we
support and implement initiatives that address social risk factors that contribute to health inequities.
Our hospitals and licensed health centers partner with the community to help low-income,
vulnerable families overcome barriers to accessing care.
Charity Care
We provide charity care to all emergent patients regardless of their ability to pay. The cost of and
reimbursement for providing that care, as reflected in the consolidated statements of operations, is
summarized below.
State Programs
Massachusetts
Acute care hospitals in The Commonwealth of Massachusetts (the Commonwealth or
Massachusetts) are partially reimbursed for charity care services through the statewide Health
Safety Net Trust Fund (HSN). A portion of the funding for the HSN is paid by an assessment on
acute care hospitals’ charges for private sector payers. The statewide assessment was $165,313
and $165,308 in 2023 and 2022, respectively, and the assessment expense on our acute care
hospitals was $57,819 and $61,696 in 2023 and 2022, respectively.
Acute care hospitals are reimbursed for charity care based on claims for eligible patients and
services that are submitted to and adjudicated by the HSN. Payments are based on Medicare
rates and payment policies. The Commonwealth reported HSN was under-funded by
approximately $115,828 and $68,030 as of September 30, 2023 and 2022, respectively. This
shortfall is allocated to acute care hospitals based on their share of total statewide patient care
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
8
costs. We have estimated our share being approximately $48,547 and $27,938 as of
September 30, 2023 and 2022, respectively. Each hospital’s share of the overall state shortfall
cannot exceed its total charity care reimbursement. Hospitals with a high proportion of charity care
and government funding receive more favorable reimbursement, including limiting their shortfall
allocation to no more than 15% of their payments for charity care. In aggregate, our acute care
hospitals received charity care funding covering 41% and 53% of the estimated cost of charity care
provided in 2023 and 2022, respectively.
The Commonwealth levies an additional assessment on Massachusetts acute care hospitals that is
redistributed back to hospitals based on provisions within the 1115 MassHealth Demonstration. A
new five-year waiver period began effective October 1, 2022. The value of both the assessment
and the redistribution are higher than the prior waiver period. The total assessment was $709,602
and $257,500 in 2023 and 2022, respectively, and our assessment expense was $197,473 and
$95,527 in 2023 and 2022, respectively. The total amount redistributed to hospitals was
$1,387,500 and $265,000 in 2023 and 2022, respectively, of which we recognized $188,084 and
$55,338 in 2023 and 2022, respectively.
There is an assessment for our post-acute hospitals which totaled $5,756 and $6,045 in 2023 and
2022, respectively.
New Hampshire
The State of New Hampshire (New Hampshire) imposes a Medicaid Enhancement Tax (MET) on
hospital net patient service revenue. For both of New Hampshire’s fiscal years ended June 30,
2023 and 2022, the MET imposed was 5.4%. We incurred $25,724 and $27,046 of MET in 2023
and 2022, respectively.
New Hampshire acute care hospitals receive disproportionate share payments based on a portion
of their charity care relative to other acute care hospitals. We received $14,992 and $14,634 in
2023 and 2022, respectively.
Medicaid
Medicaid is a health insurance program jointly funded by the states and the federal government.
Each state administers its own program and sets rules for eligibility, benefits and provider
payments within broad federal guidelines and in some cases, including the Commonwealth and
New Hampshire, within a Waiver Agreement between each state and the federal government. The
program provides health care coverage to low-income adults and children. Eligibility is determined
by a variety of factors which include income relative to the federal poverty line, age, immigrant
status and assets.
Medicaid payments to our providers do not cover the full cost of services provided to Medicaid
patients. In aggregate, reimbursement from Medicaid covered approximately 70% and 61% of the
estimated cost of services provided in 2023 and 2022, respectively.
On April 1, 2023, Mass General Brigham Health Plan, Inc. entered into an Accountable Care
Organization (ACO) contract with the Executive Office of Health and Human Services of the
Commonwealth (EOHHS) covering over 150,000 MassHealth members whose providers
participate in the Mass General Brigham ACO.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
9
Federal Program
Medicare
Medicare is a federally sponsored health insurance program for people age 65 or older, under
age 65 with certain disabilities and any age with End-Stage Renal Disease. Medicare’s payments
historically have not kept pace with increases in the cost of care provided at many hospitals.
Compounding this shortfall in payments is the continued shift of care from higher paying inpatient
services to lower paying outpatient services.
Consequently, Medicare payments to our providers do not cover the full cost of services provided.
In aggregate, reimbursement from Medicare covered approximately 68% and 69% of the estimated
cost of services provided in 2023 and 2022, respectively.
Mass General Brigham Health Plan, Inc. has been authorized by the Centers for Medicare &
Medicaid Services to offer Medicare Advantage products to its eligible members effective
January 1, 2023.
Summary
For charity care, Medicaid and Medicare, the estimated cost of services provided is either obtained
directly from a costing system or based on an entity specific ratio of cost to gross charges. In the
latter case, cost is derived by applying this ratio to gross charges associated with providing care to
charity care, Medicaid and Medicare patients. The following summarizes, by program, the cost of
services provided, net reimbursement and cost of services in excess of reimbursement for each
year:
2023 2022
Cost of services provided
Charity care 113,167$ 103,420$
Medicaid 1,777,454 1,700,493
Medicare 5,585,749 5,057,826
7,476,370$ 6,861,739$
Net reimbursement
Charity care 38,035$ 44,683$
Medicaid 1,250,916 1,029,883
Medicare 3,790,457 3,502,359
5,079,408$ 4,576,925$
Cost of services in excess of reimbursement
Charity care 75,132$ 58,737$
Medicaid 526,538 670,610
Medicare 1,795,292 1,555,467
2,396,962$ 2,284,814$
Years Ended September 30,
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
10
In addition to charity care and inadequate funding from the Medicaid and Medicare programs, there
are significant losses related to self-pay patients who fail to make payment for services rendered or
insured patients who fail to remit co-payments and deductibles as required under the applicable
health insurance arrangement. The estimated cost of providing these services was approximately
$82,938 and $73,165 for 2023 and 2022, respectively.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying consolidated financial statements have been prepared on the accrual basis of
accounting and include the accounts of the Company and its affiliates. Interaffiliate accounts and
transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates. Significant
estimates are made in the areas of patient accounts receivable, research grants receivable,
investments, receivables and accrual for settlements with third-party payers, accrued medical
claims and related expenses, accrued employee compensation and benefits, accrued professional
liability, interest rate swaps liability and accrued other.
Income Taxes
The Company and substantially all of its affiliates are tax-exempt organizations under
Sections 501(c)(3) or 501(c)(4) of the Internal Revenue Code (IRC) or are disregarded entities for
tax purposes and therefore are exempt from federal and state income tax except on unrelated
business taxable income. No provision for income taxes related to these tax-exempt entities has
been made as the effect of any unrelated business income tax is not material to the accompanying
consolidated financial statements.
Fair Value of Financial Instruments
The fair value of financial instruments approximates the carrying amount reported in the
consolidated balance sheets for cash and equivalents, investments and investments limited as to
use, patient accounts receivable, research grants receivable, accounts payable and accrued
expenses and interest rate swaps liability.
Cash and Equivalents
Cash and equivalents represent cash, registered money market funds and highly liquid debt
instruments with a maturity at the date of purchase of three months or less. Our cash and
equivalents are maintained with several national banks, and cash deposits typically exceed federal
insurance limits. Our policy is to monitor these banks’ financial strength on an ongoing basis, and
no losses have been experienced to date.
Investments
Investments in equity securities with readily determinable fair values, debt securities and alternative
investments are measured at fair value. Alternative investments, consisting of various hedge
funds, private equity funds, private debt funds, other private partnerships and restricted securities
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
11
of public companies that are not traded on a national securities exchange, are valued based on
amounts reported by the fund manager and evaluated by management. Investments in securities
sold short or traded on a national securities exchange are valued based on quoted market prices.
Income (loss) from investments (including realized gains and losses, unrealized change in value of
investments, interest, dividends and endowment income distributions) is included in excess (deficit)
of revenues over expenses unless the income or loss is restricted by donor or law. Income (loss)
from investments is reported net of investment-related expenses.
Each year as part of our endowment spending policy, we establish a fixed distribution rate for
spending. Distributions will come from either income and/or net accumulated appreciation.
Effective July 1, 2023 we changed the endowment spending policy and adopted the Tobin
Distribution Rule. The Tobin Distribution rule sets the annual distribution through a quantitative
formula that has a stability term (a percentage of the prior year’s spending, adjusted for inflation)
and a market term (a percentage of the long-term sustainable rate of distribution times the market
value of the endowment).
Investments Limited as to Use
Investments limited as to use primarily include assets whose use is contractually limited by external
parties as well as assets set aside by the boards (or management) for identified purposes and over
which the boards (or management) retain control such that the boards (or management) may, at
their discretion, subsequently use such assets for other purposes. Certain investments
corresponding to deferred compensation are accounted for such that all income and appreciation
(depreciation) is recorded as a direct addition (reduction) to the asset and corresponding liability.
Derivative Instruments
Derivatives are recognized on the balance sheets at fair value with changes in the fair value
recorded in excess (deficit) of revenues over expenses.
Patient Accounts Receivable
The payments received for healthcare services rendered from federal and state agencies (under
the Medicare and Medicaid programs), managed care payers, commercial insurance companies
and patients are subject to explicit and implicit discounts. These discounts are based on
contractual agreements, discount policies and management’s assessment of historical experiences
and are reflected in the period of service.
Research Grants Receivable
Mass General Brigham receives direct and pass through research funding from the National
Institutes for Health and other federal agencies, industry, corporate, foundation, nonprofits and
other sponsors. Research grants receivable include amounts due from these sponsors of
externally funded research. These amounts have been billed or are billable to the sponsor, or in
limited circumstances, represent accelerated spending in anticipation of future funding. Research
grants receivable are recognized at net realizable value.
As of September 30, 2023, and 2022, we have approximately $4,408,631 and $4,239,039,
respectively, of conditional research grants for future research to be performed. The timing and
amounts of funds received under such grants are subject to continued government funding and
may change over time.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
12
Other Current Assets
Other current assets include prepaid expenses, inventory, nonpatient receivables, current portion
of receivable for settlements with third-party payers, current portion of pledges receivable and
premiums receivable. Inventory (primarily supplies and pharmaceuticals) is accounted for on a
first-in, first-out method basis and is recorded at the lower of average weighted cost or net
realizable value.
Property and Equipment
Property and equipment is reported on the basis of cost less accumulated depreciation. Donated
items are recorded at fair value at the date of contribution. All research grants received for capital
are recorded in the year of expenditure as a change in net assets without donor restrictions.
Property and equipment is reviewed for impairment whenever events or changes in circumstances
indicate that its carrying amount may not be recoverable. Depreciation of property and equipment
is calculated by use of the straight-line method at rates intended to depreciate the cost of assets
over their estimated useful lives, which generally range from three to fifty years. Interest costs
incurred on borrowed funds during the period of construction of capital assets are capitalized, net
of any interest earned, as a component of the cost of acquiring those assets.
Asset Retirement Obligations
Asset retirement obligations, reported in accrued other, are legal obligations associated with the
retirement of long-lived assets. These liabilities are initially recorded at fair value and the related
asset retirement costs are capitalized by increasing the carrying amount of the related assets by
the same amount as the liability. Asset retirement costs are subsequently depreciated over the
useful lives of the related assets. Any changes to the liability due either to the passage of time,
better information or the settlement of an obligation are reflected in the current period.
Other Assets
Other assets consist of long-term receivables, intangible assets, malpractice insurance receivables,
receivable for settlements with third-party payers, investments in healthcare related limited
partnerships and long-term pledges and contributions receivable. The carrying value of other
assets is evaluated for impairment if the facts and circumstances suggest that the carrying value
may not be recoverable.
Compensated Absences
In accordance with formal policies concerning vacation and other compensated absences, accruals
of $422,745 and $404,123 were recorded as of September 30, 2023 and 2022, respectively.
Unexpended Funds on Research Grants
Research grants received in advance of corresponding grant expenditures are accounted for as a
direct addition to investments limited as to use and unexpended funds on research grants.
Self-Insurance Reserves
We are generally self-insured for employee healthcare, disability, workers’ compensation and
certain other employee benefits. These costs are accounted for on an accrual basis to include
estimates of future payments for claims incurred prior to year-end and are included in accrued
employee compensation and benefits and long-term accrued employee benefits.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
13
Net Assets
Net assets with donor restrictions include (a) the historical dollar amounts of contributions and the
income and gains on such contributions which are required by donors to be retained and
(b) contributions and the income and gains on these contributions which can be expended but for
which restrictions have not yet been met. Such restrictions include purpose restrictions where
donors have specified the purpose for which the net assets are to be spent, or time restrictions
imposed by donors or implied by the nature of the contribution (capital projects, pledges to be paid
in the future and life income funds) or by interpretations of law (gains available for appropriation but
not appropriated in the current period). All remaining net assets are considered to be without donor
restrictions.
Realized gains and losses are classified as net assets without donor restrictions unless they are
restricted by the donor or law. Realized gains and net unrealized appreciation on contributions with
donor restrictions are classified as net assets with donor restrictions until appropriated for spending
in accordance with policies established by Mass General Brigham and applicable provisions of the
Uniform Prudent Management of Institutional Funds Acts (UPMIFA). Net losses on donor
endowment funds with donor restrictions are classified as a reduction to net assets with donor
restrictions.
Contributed Securities
Our policy is to sell securities contributed by donors upon receipt, unless prevented from doing so
by donor request. For the years ended September 30, 2023 and 2022, contributed securities of
$58,257 and $54,254, respectively, were received and liquidated. Donors restricted $25,545 and
$27,628 of the proceeds received from the sale of these contributed securities for long-term
purpose for the years ended September 30, 2023 and 2022, respectively.
Statement of Operations
Activities deemed by management to be ongoing, major and central to the provision of healthcare
services, teaching, research activities and health insurance are reported as operating revenues
and expenses. Other activities are deemed to be nonoperating and include contributions without
donor restrictions (net of fundraising expenses), external community benefit program support, net
change in unexpended academic and research contributions, change in fair value of interest rate
swaps, substantially all income (loss) from investments, interest on advanced borrowings and
nonservice related pension income. Academic and research contributions largely consist of donor
contributions (and the related investment income including realized gains and losses) designated to
support the clinical, teaching or research efforts of a physician or department as directed by the
donor. These contributions are reported as being without donor restrictions, net of related support
expenses, when donor restrictions are of a general nature that are inherent in the normal activities
of the organization.
The consolidated statements of operations include excess (deficit) of revenues over expenses.
Changes in net assets without donor restrictions, which are excluded from excess (deficit) of
revenues over expenses, include contributions of long-lived assets (including assets acquired using
contributions which by donor restriction were to be used for acquisition of such assets) and change
in funded status of defined benefit plans.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
14
Revenues
To determine the appropriate revenue recognition policy, we first assess whether the transaction is
an exchange or nonexchange transaction in accordance with accounting guidance. In general, an
exchange transaction consists of an exchange of goods and/or services for commensurate value.
Transactions that consist of transferring goods and/or services without receiving commensurate
value in return are considered nonexchange transactions.
For exchange transactions, revenue is recognized as goods and/or services are provided and is
based on the amount expected to be received in exchange for those goods and/or services.
Revenue recognized as exchange transactions include net patient service revenue, premium
revenue and other revenue.
Nonexchange transactions include contributions and grants for which the service provider does not
receive commensurate value in return for the funding.
Contributions
Contributions are generally reported as other nonoperating gains in the consolidated statements of
operations. Unconditional promises to give cash and other assets are reported at fair value at the
date the promise is received. Conditional promises to give are recognized when the conditions are
substantially met and totaled $371,648 and $263,420 as of September 30, 2023 and 2022,
respectively. Contributions are reported as support with donor restrictions if they are received with
donor stipulations that limit the use of the donated assets. Contributions with donor restrictions
whose restrictions are met within the same year as received are reported as contributions without
donor restrictions in the consolidated statements of operations.
Contributions of long-lived assets with explicit restrictions that specify use of assets and
contributions of cash or other assets that must be used to acquire long-lived assets are reported as
additions to net assets with donor restrictions if the assets are not placed in service during the year.
Grants
Grants and contracts normally provide for the recovery of direct and indirect costs, subject to audit.
Revenue associated with direct and indirect costs is recognized as direct costs are incurred. The
recovery of indirect costs is based on predetermined rates for U.S. Government grants and
contracts and negotiated rates for other grants and contracts.
Medical Claims and Related Expenses
MGB Health Plan contracts with various hospitals, community health centers, primary care and
specialty physician practices and other health care providers for the delivery of services to its
members and compensates these providers on a capitated, fee-for-service, per diem or
diagnosis-related group basis.
The cost of contracted health care services is accrued in the period in which services are provided
and include certain estimated amounts. The estimated liability for medical claims and related
expenses is actuarially determined based on analysis of historical claims-paid experience, modified
for changes in enrollment, inflation and benefit coverage. The liability for medical claims and
related expenses represents the anticipated cost of claims incurred but unpaid at the balance sheet
date. Estimates for claims expense may be more or less than the amounts ultimately paid when
claims are settled. Such changes in estimates are reflected in the current period in the
consolidated statements of operations.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
15
In the normal course of business, overpayments are recouped through reductions in future
payments made to hospitals and other providers. Such overpayments are the result of, among
other things, coordination of benefits and provider claim audits. For the years ended
September 30, 2023 and 2022, we recorded a reduction in medical claims expense of $53,299 and
$37,915, respectively, for such overpayments. As of September 30, 2023 and 2022, respectively,
approximately $2,346 and $1,812 are recorded as receivables related to such overpayments.
Reinsurance
Reinsurance premiums are reported as reductions of premium revenue in medical claims and
related expenses and reinsurance recoveries are reported as reductions in medical claims and
related expenses.
Settlements
MGB Health Plan contracts with certain providers at negotiated rates based on historical and
anticipated experience. These methods of reimbursement result in settlements based on actual
versus anticipated experience which could result in payments due from (to) these providers.
Settlements receivable of $3,647 and $4,047 were recorded in other current assets as of
September 30, 2023 and 2022, respectively. Settlements payable of $4,633 and $1,834 were
recorded in accrued medical claims and related expenses as of September 30, 2023 and 2022,
respectively. The settlements are intended to include both reported and unreported incurred claims
as of September 30, 2023 and 2022.
In 2014, the Affordable Care Act introduced new settlements related to a risk adjustment program,
a risk corridor program and a reinsurance program designed to mitigate the transitional impact on
insurers for new members. The risk corridor program and reinsurance program ended on
December 31, 2016 in accordance with the provision of the Affordable Care Act. Our estimated net
receivable due from the federal government for the risk adjustment program was $73,299 and
$73,868 as of September 30, 2023 and 2022, respectively. Similar to the federal program, EOHHS
has a risk corridor program, and our estimated net payable due to EOHHS was $95,619 and
$72,462 as of September 30, 2023 and 2022, respectively.
Premium Deficiency Reserves
Premium deficiency reserves are assessed and recognized on a product line basis based upon
expected premium revenue, medical expense and administrative expense levels, and remaining
contractual obligations using historical experience. As of September 30, 2023 and 2022, a
premium deficiency reserve of $24,071 and $21,120, respectively, is included in accrued medical
claims and related expenses in the accompanying consolidated financial statements.
Claims Adjustment Expenses
Claims adjustment expenses (CAE) are those costs expected to be incurred in connection with the
adjustment and recording of health claims. We have recorded an estimate of unpaid CAE
associated with incurred but unpaid claims, which is included in medical claims and related
expenses in the accompanying consolidated statements of operations. Management believes the
amount of the liability for unpaid CAE as of September 30, 2023, is adequate to cover the cost for
the adjustment and recording of unpaid claims; however, actual expenses may differ from those
established estimates. Adjustments to the estimates for unpaid CAE are reflected in operating
results in the period in which the change in estimate is identified.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
16
3. Pandemic
On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic
resulting in an extraordinary impact to Mass General Brigham. During certain periods since 2020,
the COVID-19 pandemic has continued to impact patient activity and operating expenses. In
response to COVID-19, various types of economic support were enacted by federal, state and local
authorities to mitigate the financial impact, with the most significant impacts to Mass General
Brigham in fiscal 2023 and 2022 summarized below.
Deferred Payment of Employer Payroll Taxes
The Coronavirus Aid Relief and Economic Security (CARES) Act allowed for deferred payments of
only the employer share of payroll taxes through December 31, 2020 and required payment of 50%
of these deferred taxes by December 31, 2022 and 50% by December 31, 2021. We made
repayments of $121,604 and $117,862, during 2023 and 2022, respectively. As of September 30,
2023, all amounts have been repaid.
Provider Relief Funds (PRF)
During 2020 and 2021, we received PRF that were used to prevent, prepare for and respond to
COVID-19. Based on our interpretation of available information as of September 30, 2023 and
2022, we have deferred $86,487 of PRF we received.
Federal Emergency Management Agency (FEMA)
During 2023, we submitted applications to FEMA for the reimbursement of COVID-19 expenses
and recognized grant revenue totaling $99,372 as other operating revenue in the consolidated
statement of operations. As of September 30, 2023 we have deferred $35,092 of FEMA payments
received.
4. Operating Revenues
Net Patient Service Revenue
Mass General Brigham’s providers maintain agreements with The Centers for Medicare and
Medicaid Services under the Medicare program, the Commonwealth under the Medicaid program
and various managed care payers that govern payment for services rendered to patients covered
by these agreements. The agreements generally provide for per case or per diem rates or
payments based on discounted charges for inpatient care and discounted charges or fee schedules
for outpatient care. Certain contracts also provide for payments that are contingent upon meeting
agreed upon quality and efficiency measures.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
17
We recognize net patient service revenue for services provided to patients who have third-party
payer coverage based on contractual rates for the services rendered. For uninsured patients that
do not qualify for charity care, we recognize revenue based on our standard rates (subject to
discounts) for services provided. Based on our historical experience, a significant portion of
uninsured patients are unable or fail to pay for the services provided. Consequently, we have
provided implicit discounts to uninsured patients. These discounts represent the difference
between amounts billed to patients and amounts expected to be collected based on historical
experience. The following summarizes net patient service revenue, net of contractual adjustments
and discounts by significant payer:
Net patient service revenue (net of
contractual adjustments and discounts)
Medicare 2,822,694$ 22.1 % 2,677,395$ 22.6 %
Medicare managed care 967,763 7.6 % 824,964 7.0 %
Medicaid 689,718 5.4 % 730,116 6.2 %
Medicaid managed care 561,198 4.4 % 299,767 2.5 %
Massachusetts managed care organizations 4,569,756 35.7 % 4,306,308 36.3 %
Other commercial 2,729,703 21.3 % 2,493,749 21.0 %
All others 451,754 3.5 % 537,152 4.4 %
Total all payers 12,792,586$ 100.0 % 11,869,451$ 100.0 %
Years Ended September 30,
2023
2022
Net patient service revenue includes estimated retroactive revenue adjustments due to future
audits, reviews and investigations. Retroactive adjustments are considered in the recognition of
revenue on an estimated basis in the period the related services are rendered, and such amounts
are adjusted in future periods as adjustments become known or as years are no longer subject to
such audits, reviews and investigations. Contracts, laws and regulations governing the Medicare,
Medicaid and charity care programs and managed care payer arrangements are complex and
subject to interpretation. As a result, there is at least a reasonable possibility that recorded
estimates will change by a material amount in the near term. A portion of the accrual for
settlements with third-party payers has been classified as long-term because such amounts, by
their nature or by virtue of regulation or legislation, will not be paid within one year.
Third-party payers (accrual) receivable consists of the following:
Balance Sheet Classification
2023 2022
Current portion
Receivable for settlements with third-party payers Other current assets 159,813$ 136,498$
Accrual for settlements with third-party payers Accounts payable and accrued expenses (59,584) (72,765)
100,229 63,733
Long-term portion
Receivable for settlements with third-party payers Other assets 6,700 26,567
Accrual for settlements with third-party payers Accrued other (28,526) (25,168)
(21,826) 1,399
Third-party payers receivable (accrual) 78,403$ 65,132$
September 30,
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
18
We recognize changes in third-party payer settlements and other estimates in the year of the
change in estimate. For the years ended September 30, 2023 and 2022, adjustments to prior year
estimates resulted in an increase to net patient service revenue of $47,842 and $13,177,
respectively. Subsequent changes to estimated discounts are generally recorded as adjustments
to net patient service revenue in the period of change.
We provide either full or partial charity care to patients who cannot afford to pay for their medical
services based on income and family size. Charity care is generally available to qualifying patients
for medically necessary services. We report certain bad debts related to emergency services as
charity care. As there is no expectation of collection, there is no net patient service revenue
recorded related to charity care.
Premium Revenue
Premiums are due monthly and are recorded as earned during the period in which members are
eligible to receive services. Premiums received prior to the first day of the coverage period are
recorded as unearned premiums in accounts payable and accrued expenses.
Academic and Research Revenue
Academic and research revenue is recognized as either an exchange or nonexchange transaction,
depending on the contract type. The following table sets forth total academic and research
revenue received by funding source:
National Institute of Health and other
federal agencies 1,155,306$ 42.7 % 1,046,056$ 41.7 %
Federal subcontracts 260,323 9.6 % 252,503 10.1 %
Industry/corporate 224,821 8.3 % 221,240 8.8 %
Foundations/nonprofits and other sponsors 771,579 28.5 % 697,349 27.8 %
Total research revenue 2,412,029 2,217,148
Academic revenue 295,981 10.9 % 290,214 11.6 %
Total academic and research revenue 2,708,010$ 100.0 % 2,507,362$ 100.0 %
Years Ended September 30,
2023
2022
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
19
Other Revenue
Other revenue includes all other operating revenue sources, the most significant being the
following:
2023 2022
Specialty and retail pharmacy operations 928,501$ 652,109$
Contract revenue 132,070 111,081
FEMA funding 99,372 -
Parking and office rentals 77,249 71,087
Tuition 62,482 64,885
Outsourced services 58,801 57,082
Blood factor sales 53,308 40,499
Cafeteria sales 36,198 30,644
Contract administrative fees 27,397 32,065
ACO administration fees 24,926 47,135
Consulting services 14,248 14,997
International contracts 10,498 13,415
Intellectual property and royalties 14,916 3,793
Investment income 13,560 12,802
Other 254,359 251,207
Total other revenue 1,807,885$ 1,402,801$
Years Ended September 30,
5. Liquidity and Availability
Cash and investments are managed centrally under policies developed by the Investment
Committee and reviewed by the Finance Committee of the Company’s Board of Directors.
Wherever possible, funds are commingled and are assigned to one of three investment pools
(the Money Market Pool, the Aggregate Bond Pool and the Long-Term Pool, collectively, the Pools)
which have been structured to provide a range of investment objectives, risk profiles and rates of
return appropriate for our assets. Funds are allocated among the Pools based on expected
liquidity needs as determined by multi-year financial plans, restrictions and management judgment.
The tiered time horizon structure of the Pools is designed to meet anticipated and contingent
liquidity needs. The following tables set forth the periods within which funds are available to meet
liquidity needs and based on redemption provisions with investment managers, the specific Pools
from which such funds would be drawn as of:
Investment Pool Same Day 1 Week 1 Month 3 Months 1 Year > 1 Year Total
Money market 167,997$ -$ -$ -$ -$ -$ 167,997$
Aggregate bond 327,089 2,985 - - - - 330,074
Long-term 364,584 533,078 2,205,916 3,264,619 1,176,742 5,905,179 13,450,118
Total 859,670$ 536,063$ 2,205,916$ 3,264,619$ 1,176,742$ 5,905,179$ 13,948,189$
Cumulative total 859,670$ 1,395,733$ 3,601,649$ 6,866,268$ 8,043,010$ 13,948,189$
September 30, 2023
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
20
Investment Pool Same Day 1 Week 1 Month 3 Months 1 Year > 1 Year Total
Money market 362,668$ -$ -$ -$ -$ -$ 362,668$
Aggregate bond 443,584 177,438 - - - - 621,022
Long-term 146,618 1,013,946 1,464,776 2,870,543 907,734 5,803,923 12,207,540
Total 952,870$ 1,191,384$ 1,464,776$ 2,870,543$ 907,734$ 5,803,923$ 13,191,230$
Cumulative total 952,870$ 2,144,254$ 3,609,030$ 6,479,573$ 7,387,307$ 13,191,230$
September 30, 2022
As of September 30, 2023 and 2022, we had cash and equivalents not included in the Pools of
$228,351 and $129,750, respectively. As of September 30, 2023 and 2022, we had net patient
accounts receivable of $1,638,306 and $1,438,412, respectively, that would be available for
general expenditures within one year of the balance sheet dates.
6. Investments and Investments Limited as to Use
Investments are either invested in the Pools or separately managed. Substantially all affiliates
participate in the Pools. Their respective ownership interests are tracked and updated monthly and
are accounted for using the fair value method. Income (including realized gains and losses) from
the Pools is allocated to each participant on a monthly basis based on its proportionate interest in
the Pools.
Oversight of the management of the investable assets, including the Pools and pension assets, is
provided by the Investment Committee of the Company’s Board of Directors which seeks to
achieve incremental returns by manager selection and asset allocation (increasing/decreasing
allocations within allowable ranges based on current and projected valuations). The Committee is
supported by a professional staff, an outside investment consultant and a pension actuarial
consultant.
We utilize a target allocation policy and balance projected returns, correlation and volatility of
various asset classes within the overall risk tolerance. Asset allocations are managed based on
relative valuations among and within asset classes and the perceived ability of managers to
outperform passive benchmarks. Exposure by asset class is the sum of allocation to those
mangers whose mandates most closely fit the listed asset classes. Asset allocation can and will
deviate from target exposures and is regularly monitored for rebalancing.
The Pools invest in a variety of assets which include private partnerships whose assets include
equity, fixed income and other investments. The Pools have unfunded commitments as follows:
2023 2022
Private equity 1,702,731$ 1,732,382$
Private energy 109,042 136,032
Private real estate 49,481 77,402
Timber and agriculture 1,498 1,935
Private alternatives and hedge funds 200,062 345,844
2,062,814$ 2,293,595$
September 30,
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
21
The unfunded commitments will be drawn down by the various general partners over the next
several years. The maximum annual drawdown is expected to be 3% to 5% of investments and
investments limited as to use.
Short-term Investments in Investment Pools
Within the Aggregate Bond Pool and the Long-Term Pool, there are assets that meet the definition
of short-term investments. These short-term investments are considered part of the Aggregate
Bond Pool and the Long-Term Pool and are not included in cash equivalents on the consolidated
balance sheets. Accordingly, transactions within the Aggregate Bond Pool and the Long-Term
Pool that result in the purchase of investments or result in proceeds from the sales of investments
are excluded from the statement of cash flows purchases of investments and proceeds from the
sales of investments. Within the Aggregate Bond Pool, purchases of investments and proceeds
from the sales of investments not included in the statement of cash flows were $100,124 and
$340,979 for the year ended September 30, 2023, and $159,146 and $1,536,389 for the year
ended September 30, 2022, respectively. Within the Long-Term Pool, purchases of investments
and proceeds from the sales of investments not included in the statement of cash flows were
$1,250,769 and $1,326,573 for the year ended September 30, 2023, and $1,888,457 and
$1,346,607 for the year ended September 30, 2022, respectively.
Investments limited as to use consist of the following:
Current Long-Term Current Long-Term
Portion Portion Portion Portion
Internally designated funds
Reserved for capital expenditures 1,257,712$ -$ 1,406,275$ -$
Unexpended academic and research gifts - 4,363,810 - 3,989,979
Deferred compensation - 614,318 - 511,439
Other 1,868,784 419,512 2,364,066 420,895
3,126,496 5,397,640 3,770,341 4,922,313
Externally limited funds
Unexpended funds on research 377,730 - 355,934 -
Contributions held for others 1,531 - 1,405 -
Professional liability trust fund - 43,062 - 39,065
Held by trustees under debt and other
agreements 230 - 16,851 -
379,491 43,062 374,190 39,065
3,505,987$ 5,440,702$ 4,144,531$ 4,961,378$
September 30, 2023
September 30, 2022
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
22
Investment activity included in excess (deficit) of revenues over expenses consists of the following:
2023 2022
Investment income included in operations and reported in
other revenue 13,560$ 12,802$
Investment income included in nonoperating gains
and reported in
Income from investments
Investment income and realized gains on investments 42,213 121,756
Unrealized change in investments 919,915 (2,393,256)
Academic and research gifts, net of expenses 172,738 219,505
Total investment activity included in excess
(deficit) of revenues over expenses 1,148,426$ (2,039,193)$
Years Ended September 30,
7. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date (also referred to as
exit price). Therefore, a fair value measurement should be determined based on the assumptions
that market participants would use in pricing the asset or liability. In determining fair value, the use
of various valuation approaches, including market, income and cost approaches, is permitted.
Fair Value Hierarchy
A fair value hierarchy has been established based on whether the inputs to valuation techniques
are observable or unobservable. Observable inputs reflect market data obtained from independent
sources, while unobservable inputs reflect the reporting entity’s assumptions about the inputs
market participants would use. The fair value hierarchy requires the reporting entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value. In addition, for hierarchy classification purposes, the reporting entity should not look through
the form of an investment to the nature of the underlying securities held by an investee.
The hierarchy is described below
Level 1 Valuations using quoted prices in active markets for identical assets or liabilities.
Valuations of these products do not require a significant degree of judgment. Level 1
assets and liabilities primarily include debt and equity securities that are traded in an
active exchange market.
Level 2 Valuations using observable inputs other than Level 1 prices such as quoted prices in
active markets for similar assets or liabilities; quoted prices for identical or similar
assets or liabilities in markets that are not active; broker or dealer quotations; or other
inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities. Level 2 assets and liabilities
primarily include debt securities with quoted prices that are traded less frequently than
exchange-traded instruments as well as debt securities and derivative contracts
whose value is determined using a pricing model with inputs that are observable in the
market or can be derived principally from or corroborated by observable market data.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
23
Level 3 Valuations using unobservable inputs that are supported by little or no market activity
and are significant to the fair value of the assets or liabilities. Level 3 includes assets
and liabilities whose value is determined using pricing models, discounted cash flow
methodologies, or similar techniques reflecting the reporting entity’s assumptions
about the assumptions market participants would use as well as those requiring
significant management judgment.
Valuation Techniques
Pooled investments, separately invested short-term investments and debt and equity securities are
classified within Level 1 or Level 2 of the fair value hierarchy as they are valued using quoted
market prices, broker or dealer quotations, or other observable pricing sources. Certain types of
investments are classified within Level 3 of the fair value hierarchy because they have little or no
market activity and therefore have little or no observable inputs with which to measure fair value.
The valuation of interest rate swaps is determined using widely accepted valuation techniques,
including discounted cash flow analysis on the expected cash flows of each derivative. This
analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses
observable market-based inputs, including interest rate curves and implied volatilities.
The following tables summarize financial assets and liabilities measured at fair value on a recurring
basis as of:
Quoted Prices Significant Investments
in Active Other Significant Valued
Markets for Observable Unobservable Using NAV as
Identical Items
Inputs Inputs a Practical
(Level 1) (Level 2) (Level 3) Expedient Total
Assets
Pooled investments
Short-term investments 324,630$ -$ -$ -$ 324,630$
Separately managed investments 850,001 197,971 - - 1,047,972
Mutual funds 2,985 - - - 2,985
Private partnerships, commingled
funds and other - - - 12,572,601 12,572,601
1,177,616 197,971 - 12,572,601 13,948,188
Separately invested
Short-term investments 52,846 - - - 52,846
Equities 25,033 - - - 25,033
Mutual funds 649,706 64,637 - - 714,343
Private partnerships, commingled
funds and other - - - 187,458 187,458
Beneficial interests in
perpetual assets - - 51,876 - 51,876
727,585 64,637 51,876 187,458 1,031,556
1,905,201$ 262,608$ 51,876$ 12,760,059$ 14,979,744$
Interest rate swaps
Assets 55,987$ 55,987$
Liabilities (67,075) (67,075)
Net interest rate swaps (11,088)$ (11,088)$
September 30, 2023
Fair Value Measurements Using
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
24
Quoted Prices Significant Investments
in Active Other Significant Valued
Markets for Observable Unobservable Using NAV as
Identical Items
Inputs Inputs a Practical
(Level 1) (Level 2) (Level 3) Expedient Total
Assets
Pooled investments
Short-term investments 269,086$ -$ -$ -$ 269,086$
Separately managed investments 755,478 486,044 - - 1,241,522
Mutual funds 177,438 - - - 177,438
Private partnerships, commingled
funds and other - - - 11,503,184 11,503,184
1,202,002 486,044 - 11,503,184 13,191,230
Separately invested
Short-term investments 55,670 - - - 55,670
Equities 30,340 - - - 30,340
Mutual funds 632,093 69,015 - - 701,108
Beneficial interests in
perpetual assets - - 51,752 - 51,752
718,103 69,015 51,752 - 838,870
1,920,105$ 555,059$ 51,752$ 11,503,184$ 14,030,100$
Interest rate swaps
Assets 15,224$ 15,224$
Liabilities (156,705) (156,705)
Net interest rate swaps (141,481)$ (141,481)$
September 30, 2022
Fair Value Measurements Using
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
25
8. Pledges and Contributions Receivable
Pledges receivable represent unconditional promises to give and are net of allowances for
uncollectible amounts. Pledges are recorded at the present value of their estimated future cash
flows. Pledges collectible within one year are classified as other current assets, net of allowances,
and total $255,239 and $113,916 as of September 30, 2023 and 2022, respectively. Pledges
collectable in one year or greater are classified as other assets. Estimated cash flows due after
one year are discounted using published treasury bond and note yields that are commensurate
with estimated collection risks. The blended discount rate was 4.8% and 4.2% for 2023 and 2022,
respectively. Pledges are expected to be collected as follows:
2023 2022
Amounts due
Within one year 277,559$ 136,491$
In one to five years 400,728 169,846
In more than five years 118,502 68,247
Total pledges receivable 796,789 374,584
Less: Unamortized discount 69,667 29,837
727,122 344,747
Less: Allowance for uncollectibles 33,682 28,351
Net pledges receivable 693,440 316,396
Contributions receivable from trusts 49,497 53,481
742,937$ 369,877$
September 30,
9. Property and Equipment
Property and equipment consists of the following:
2023 2022
Land and land improvements 353,988$ 372,508$
Buildings and building improvements 9,655,999 9,282,374
Equipment 2,981,003 2,903,484
Construction in progress 1,042,827 702,930
Finance right-of-use lease assets 102,843 92,781
14,136,660 13,354,077
Less: Accumulated depreciation 7,359,297 6,911,817
Property and equipment, net 6,777,363$ 6,442,260$
September 30,
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
26
Depreciation expense for the years ended September 30, 2023 and 2022 was $772,556 and
$767,158, respectively. Interest costs, net of interest earned, aggregating $2,720 and $417 were
capitalized in 2023 and 2022, respectively.
For the years ended September 30, 2023 and 2022, fully depreciated assets with an original cost of
$325,076 and $268,623, respectively, were written off.
10. Levels of Capital and Surplus
Risk-based capital (RBC) is a methodology adopted by the National Association of Insurance
Commissioners for determining the minimum level of capital and surplus deemed necessary for an
insurer based upon the types of assets held and business written. The Company has guaranteed
to the Massachusetts Division of Insurance (DOI) (the RBC Guaranty) to maintain MGB Health
Plan’s capital and surplus at a specified minimum level, measured quarterly in accordance with an
RBC methodology permitted by DOl. The RBC Guaranty may be enforced by the DOI.
The Company provided capital to MGB Health Plan of $75,000 and $11,000 in 2023 and 2022,
respectively. Mass General Brigham Health Plan, Inc.’s current contract with EOHHS requires it to
maintain a minimum net worth and/or financial insolvency insurance in an amount equal to the
Minimum Net Worth calculation as defined in Massachusetts General Law 176G, Section 25. At
December 31, 2022 and 2021 (Mass General Brigham Health Plan, Inc.’s statutory year end), the
minimum net worth requirement, as determined in accordance with EOHHS guidelines, was
$50,357 and $47,718, respectively. Mass General Brigham Health Plan, Inc.’s GAAP net worth
was $124,286 and $158,853 at December 31, 2022 and 2021, respectively, and thus exceeded the
EOHHS requirements by $73,929 and $111,135, respectively.
11. Accrued Medical Claims and Related Expenses
Accrued medical claims and related expenses include estimates of expected trends in claims
severity, frequency, and other factors, which could vary as the claims are ultimately settled and are
based principally upon historical experience. For the years ended September 30, 2023 and 2022,
changes in estimates resulted in a decrease of accrued medical claims and related expense of
$38,421 and $14,564, respectively. Decreases of this nature occur as the result of claim
settlements and recoveries during the current year and as additional information is received
regarding individual claims, causing changes from the original estimates of the cost of these
claims. Ongoing analysis of the recent loss development trends is also taken into account in
evaluating the overall adequacy of the reserves.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
27
Changes in accrued medical claims and related expenses are as follows:
2023 2022
Balance at beginning of year 119,237$ 87,289$
Less:
Premium deficiency reserve (21,120) -
Accrual for claims adjustment expenses (1,608) (1,602)
Accrued medical payables - other (16,818) (17,281)
Plus: Settlements payable, net 91,230 61,687
Net balance at beginning of year 170,921 130,093
Incurred related to
Current year 1,125,010 736,776
Prior years (38,421) (14,564)
Total incurred 1,086,589 722,212
Paid related to
Current year 928,975 591,660
Prior years 47,016 89,724
Total paid 975,991 681,384
Net balance at end of year 281,519 170,921
Plus:
Premium deficiency reserve 24,071 21,120
Accrual for claims adjustment expenses 2,962 1,608
Accrued medical payables - other 19,646 16,818
Less: Settlements payable, net (135,763) (91,230)
Balance at end of year 192,435$ 119,237$
Medical claims and related expenses in the accompanying consolidated statements of operations
include other nonclaims related costs. These nonclaims related expenses were for directly
delivered services and medical cost risk sharing and incentives.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
28
12. Long-Term Obligations
Mass General Brigham’s long-term obligations consist of the following:
Final
Maturity 2023 2022
Massachusetts Health and Educational Facilities Authority Revenue Bonds
Series 1997 P*, variable interest rate of 4.03% and 2.38% 2027 120,000$ 150,000$
Series 2005 F*, variable interest rate of 3.99% and 2.48% 2040 224,250 226,150
Series 2007 G*, variable interest rate of 4.00% and 2.10% 2042 75,000 75,000
Series 2008 H*, variable interest rate of 3.43% and 1.64%
2042 156,780 159,785
Massachusetts Development Finance Agency (Agency) Revenue Bonds
Series 2011 K*, variable interest rate of 3.90% and 2.54% 2046 100,000 100,000
Series 2014 M*, average fixed interest rate of 4.10% 2026 9,335 16,835
Series 2014 N*, variable interest rate of 4.94% and 2.60% 2044 124,250 126,150
Series 2015 O*, average fixed interest rate of 4.37% 2045 169,830 176,930
Series 2016 Q*, average fixed interest rate of 4.81% 2047 394,920 406,260
Series 2016 R*, variable interest rate of n/a and 2.29% n/a - 100,000
Series 2017 S*, average fixed interest rate of 4.59%,
variable interest rate of n/a and 2.96% 2047 740,480 823,485
Series 2019 T*, variable interest rate of 4.54% and 3.01% 2049 123,250 138,250
Series 2020 A*, average fixed interest rate of 4.82% 2050 276,530 286,325
Series 2022 B*, variable interest rate of 4.74% and n/a 2052 100,230 -
New Hampshire Health and Education Facilities Authority Revenue Bonds
Series 2017, average fixed interest rate of 5.00% 2041 87,830 90,390
MGB Taxable Debt
Series 2007 Bonds, fixed interest rate of 6.26% 2037 100,000 100,000
2012 Senior Notes, fixed interest rate of 4.11% 2052 400,000 400,000
2014 Senior Notes, fixed interest rate of 4.73% 2044 150,000 150,000
Series 2015 Bonds, fixed interest rate of 4.12% 2055 300,000 300,000
2016 Senior Notes, fixed interest rate of 3.89% 2046 225,000 225,000
Series 2017 Bonds, fixed interest rate of 3.77% 2048 303,644 303,644
2018 Senior Notes, fixed interest rate of 4.60% 2049 400,000 400,000
Series 2020 Bonds, average fixed interest rate of 3.29% 2060 1,017,135 1,017,135
Series B-1 Commercial Paper Notes, variable interest rate of 5.40% and 2.65%
2023 119,870 50,230
Other obligations 2,452 14,341
Total long-term obligations, par value 5,720,786 5,835,910
Net unamortized bond premiums 252,112 264,135
Deferred financing costs (22,142) (23,514)
Total long-term obligations, net 5,950,756 6,076,531
Less:
Current portion 481,130 519,354
5,469,626$ 5,557,177$
* Denotes series is issued in multiple subseries
Variable interest rates are presented at September 30, 2023 and 2022, respectively
September 30,
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
29
Scheduled maturities of long-term obligations (including the impact of net unamortized bond
premiums and deferred financing costs) during the next five years and thereafter and other
amounts classified as current liabilities, are as follows:
Bonds Bonds
Supported by Supported by
Scheduled Self Bank
Maturities Liquidity Facilities Total
2024 230,705$ 222,925$ 27,500$ 481,130$
2025 121,446 - - 121,446
2026 93,686 - - 93,686
2027 86,148 - - 86,148
2028 91,996 - - 91,996
Thereafter 5,076,350 - - 5,076,350
5,700,331$ 222,925$ 27,500$ 5,950,756$
The scheduled maturities represent annual payments as required under debt repayment
schedules. The current portion of long-term obligations includes the payments scheduled to be
made in 2024, bonds supported by self-liquidity that can be tendered prior to September 30, 2024,
and bonds supported by bank facilities with financial institutions (standby bond purchase
agreements or letters of credit) that expire prior to September 30, 2024 or have potential principal
amortization under bank facilities’ term out provisions due during 2024. The bonds supported by
self-liquidity provide the bondholder with an option to tender the bonds to the Company.
Accordingly, these bonds are classified as a current liability. The bonds supported by bank
facilities provide the bondholder with an option to tender the bonds to the liquidity provider.
Generally accepted accounting principles require bonds backed by bank facilities expiring within
one year of the balance sheet date as well as potential principal amortization under bank facilities’
term out provisions due within one year of the balance sheet date to be classified as a current
liability.
If bonds supported by bank facilities cannot be remarketed, the repayment terms of those bank
facilities would result in repayments of $57,500 in 2024, $126,417 in 2025, $81,417 in 2026 and
$28,917 in 2027. If the bonds supported by self-liquidity cannot be remarketed, the bonds would
be tendered to the Company on their respective earliest tender dates, which differ from scheduled
maturity dates, and would result in payments of $222,925 in 2024, $61,935 in 2025, $80,000 in
2026, $0 in 2027, $0 in 2028 and $239,515 thereafter.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
30
Scheduled payments of long-term debt (excluding the impact of net unamortized bond premiums
and deferred financing costs) for each of the next five years, assuming bonds backed by bank
facilities are remarketed and the standby purchase agreements are renewed and bonds supported
by self-liquidity are remarketed, are as follows:
2024 110,835$
2025 124,751
2026 93,686
2027 101,148
2028 99,032
Thereafter 5,191,334
5,720,786$
Interest expense paid during the years ended September 30, 2023 and 2022 was $244,096 and
$237,384, respectively.
In October 2022, we issued $100,230 of Mass General Brigham Series 2022 B Revenue Bonds.
The bond proceeds were used to refund Partners HealthCare System Series 2016 R-1 Revenue
Bonds ($50,000) and Taxable Commercial Paper Notes ($50,230) that refinanced, on an interim
basis, Partners HealthCare System Series 2017 S-5 Revenue Bonds.
Mass General Brigham bonds are general obligations of the Company supported by guarantees
from Brigham, Inc., The Brigham and Women’s Hospital, Inc., The Massachusetts General Hospital
and The General Hospital Corporation (the General) which may be suspended under certain
conditions.
Our debt agreements contain certain covenants, including a minimum debt service coverage ratio
and limitations on additional indebtedness and asset transfers.
Lines of Credit
The Company maintains two lines of credit aggregating $375,000 that provide access to same day
funds. Advances under the lines of credit bear a variable rate of interest based on the Bloomberg
Short-Term Bank Yield Index rate (BSBY) for the $250,000 line of credit and the Secured Overnight
Financing Rate (SOFR) for the $125,000 line of credit. As of September 30, 2023 and 2022, there
were no amounts outstanding under the lines of credit. The lines of credit expire in July 2025.
Taxable Commercial Paper
The Company maintains a $500,000 Taxable Commercial Paper (CP) program. As of
September 30, 2023 and 2022, there was $119,870 and $50,230, respectively, outstanding under
the CP program.
13. Derivatives
Interest Rate Swaps
We utilize swap contracts to lock-in long-term synthetic fixed rates and manage fluctuations in cash
flows resulting from interest rate risk on certain of our variable rate bonds. These bonds expose us
to variability in interest payments due to changes in interest rates. Management believes that it is
prudent to limit this variability. To meet this objective and to take advantage of low interest rates,
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
31
we have entered into various swap contracts involving the exchange of fixed rate payments by us
for variable rate payments from several counterparties. These variable rate payments are currently
based on a percentage of SOFR (based on compound average of daily SOFR in arrears) plus a
spread.
By using swap contracts to manage the risk of changes in interest rates, we expose ourselves to
credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms
of the swap contracts. When the fair value of a swap contract is positive, the counterparty has a
liability to us, which creates credit risk. We minimize our credit risk by entering into swap contracts
with several counterparties and requiring the counterparty to post collateral for our benefit based on
the credit rating of the counterparty and the fair value of the swap contract. Conversely, when the
fair value of a swap contract is negative, we have a liability to the counterparty and, therefore, we
do not have credit risk. Under certain circumstances, we may be required to post collateral for the
benefit of the counterparty. Market risk is the adverse effect on the value of a financial instrument
that results from a change in interest rates. The market risk associated with interest rate changes
is managed by establishing and monitoring parameters that limit the types and degree of market
risk that we may undertake.
The following is a summary of the outstanding positions under our swap contracts as of
September 30, 2023:
Notional
Effective Date Amount Maturity Rate Paid Rate Received
5/1/03 144,229$ 7/1/45 3.36% 67% 1M SOFR + 0.0767%
10/15/03 9,480 1/1/31 3.85% 70% 1M SOFR + 0.08014%
7/1/05 150,000 7/1/50 3.09% 67% 1M SOFR + 0.0767%
7/1/05 8,300 7/1/25 5.11% 67% 6M SOFR + 0.28693%
7/1/07 50,000 7/1/52 3.00% 67% 1M SOFR + 0.0767%
7/1/07 100,000 7/1/52 2.95% 67% 1M SOFR + 0.083%
7/1/09 100,000 7/1/50 3.58% 67% 1M SOFR + 0.0767%
7/1/11 100,000 7/1/50 3.66% 67% 1M SOFR + 0.0767%
7/1/13 100,000 7/1/48 3.80% 67% 1M SOFR + 0.0767%
7/1/15 50,000 7/1/50 3.80% 67% 1M SOFR + 0.0767%
4/1/16 100,000 7/1/52 3.76% 67% 1M SOFR + 0.0767%
7/1/17 50,000 7/1/52 3.74% 67% 1M SOFR + 0.083%
7/1/19 50,000 7/1/49 1.85% 67% 1M SOFR + 0.0767%
7/1/21 50,000 7/1/51 1.84% 67% 1M SOFR + 0.0767%
7/1/23 50,000 7/1/53 1.80% 67% 1M SOFR + 0.0767%
7/1/24 100,000 7/1/54 1.81% 67% 1M SOFR + 0.0767%
7/1/25 50,000 7/1/55 1.77% 67% 1M SOFR + 0.083%
7/1/26 100,000 7/1/56 1.78% 67% 1M SOFR + 0.0767%
7/1/27 50,000 7/1/57 1.80% 67% 1M SOFR + 0.0767%
7/1/27 50,000 7/1/57 1.77% 67% 1M SOFR + 0.083%
1,462,009$
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
32
Our swap contracts contain provisions that require collateral to be posted if the fair value of the
swap exceeds certain thresholds. The collateral thresholds reflect the current credit ratings issued
by major credit rating agencies on our and the counterparty’s debt. Declines in our or the
counterparty’s credit ratings would result in lower collateral thresholds and, consequently, the
potential for additional collateral postings by us or the counterparty. As of September 30, 2023, we
held collateral of $7,350 and as of September 30, 2022, we have posted collateral $16,397. We
have established procedures to ensure that liquidity and securities are available to meet collateral
posting requirements.
Upon the occurrence of certain events of default or termination events identified in the swap
contracts, either the Company or the counterparty could terminate the contracts in accordance with
their respective terms. Termination results in the payment of a termination amount by one party
that attempts to compensate the other party for its economic losses. If interest rates at the time of
termination are lower than those specified in the swap contract, we would make a payment to the
counterparty. Conversely, if interest rates at such time are higher, the counterparty would make a
payment to us.
14. Leases
We lease property and equipment under both finance and operating lease agreements. We
recognize leases with a term greater than twelve months on the balance sheets.
Some lease agreements require us to pay variable costs including property taxes, insurance,
maintenance and repairs. Variable costs are excluded from the right-of-use asset and liability.
Lease and nonlease components of agreements are not separated. Some leases contain rental
escalation clauses and renewal options that are included in lease payment calculations when
appropriate. The estimated incremental borrowing rate is used to discount the lease payment
amounts.
The components of lease expense consist of the following:
Academic and
Supplies and Research
Other Gifts, Net
Expenses of Expenses
Total
Operating lease expense 225,101$ 3,357$ 228,458$
Short-term lease expense 14,026 1,001 15,027
Variable lease expense 87,866 1,252 89,118
Finance lease expense
Amortization of leased assets 14,874 167 15,041
Interest on lease liabilities 3,650 22 3,672
Total lease expense 345,517$ 5,799$ 351,316$
Year Ended September 30, 2023
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
33
Academic and
Supplies and Research
Other Gifts, Net
Expenses of Expenses
Total
Operating lease expense 216,064$ 7,639$ 223,703$
Short-term lease expense 12,964 183 13,147
Variable lease expense 77,112 2,545 79,657
Finance lease expense
Amortization of leased assets 13,012 204 13,216
Interest on lease liabilities 3,871 36 3,907
Total lease expense 323,023$ 10,607$ 333,630$
Year Ended September 30, 2022
Lease related assets and liabilities are as follows:
Balance Sheet Classification 2023 2022
Operating lease assets Right-of-use operating lease assets 1,024,336$ 1,135,787$
Finance lease assets Property and equipment, net 68,194 72,401
Total lease assets 1,092,530$ 1,208,188$
Current operating lease liability Current portion of operating lease obligations 207,671$ 206,350$
Current finance lease liability Accounts payable and accrued expenses 16,939 15,864
Noncurrent operating lease liability Operating lease obligation, less current portion 696,740 801,038
Noncurrent finance lease liability Accrued other 73,318 77,274
Total lease liabilities 994,668$ 1,100,526$
September 30,
Supplemental cash flow and other information related to leases are as follows:
2023 2022
Cash paid for amounts included in the measurement
of lease liabilities
Operating cash flow for operating leases 222,040$ 216,762$
Operating cash flow for finance leases 3,630 3,556
Financing cash flows for finance leases 13,461 9,744
Weighted-average remaining term (years)
Operating leases 7.0 7.4
Finance leases 16.0 15.9
Weighted-average discount rate
Operating leases 4.05 % 4.00 %
Finance leases 4.05 % 4.00 %
Years Ended September 30,
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
34
Commitments related to noncancelable operating and finance leases for each of the next five years
and thereafter are as follows:
Operating Finance
Leases Leases
2024 207,671$ 16,939$
2025 190,206 14,041
2026 174,964 8,882
2027 141,599 5,178
2028 114,645 3,552
Thereafter 245,691 98,158
Total minimum future payments 1,074,776 146,750
Less: Amount representing interest (170,365) (56,493)
Present value of minimum future payments 904,411 90,257
Less: Current portion (207,671) (16,939)
Long-term lease obligations 696,740$ 73,318$
We are also a lessor and sublessor of real estate under operating leases. Lease income for the
years ended September 30, 2023 and 2022 was $16,425 and $15,604, respectively, and is
included in other revenue in the consolidated statements of operations. Some of these leases
include expenses such as utilities and maintenance costs in rent charges, however, this variable
lease income is not considered material. We do not separate lease and nonlease components by
class of underlying asset for all asset classes. The underlying real estate assets are included in
property and equipment, net in the consolidated balance sheets.
The future undiscounted cash flows to be received from these leases for each of the next five years
and thereafter is as follows:
2024 4,265$
2025 3,795
2026 2,787
2027 2,840
2028 2,483
Thereafter 159,350
175,520$
15. Construction Projects
The Ragon Institute of Massachusetts General Hospital, Massachusetts Institute of Technology
and Harvard University (collectively, the Ragon Institute) is constructing a new research facility at
Kendall Square in Cambridge, Massachusetts. This new 318,000 square foot building (including
120 spaces of sub-level parking) is being built to meet both the current and future needs of the
Ragon Institute, facilitating the important work that lies ahead in harnessing the power of the
human immune systems to prevent and cure disease. It will include three floors of state-of-the-art
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
35
laboratories supporting 60-open lab modules and 60-support lab modules, a vivarium, a
translational research clinic and administrative space (including colloquium and case study seminar
rooms). Accumulated costs incurred related to this project were approximately $265,953 and
$93,530 for 2023 and 2022, respectively, with approximately $84,368 in outstanding commitments
at September 30, 2023. The total cost of the project is expected to be approximately $412,000 with
occupancy scheduled in June of 2024. The General, an affiliate of the Company, serves as the
administrative home of Ragon Institute, and therefore the construction costs are carried on the
books of the General.
The General is constructing a new clinical building, the Phillip and Susan Ragon Building, that will
occupy approximately one million square feet and will contain 482 private medical/surgical and
intensive care unit beds, exam and infusion bays associated with a relocated and expanded
outpatient oncology service, hybrid and conventional cardiovascular operating rooms, and
associated imaging modalities as well as below-grade parking. As of September 30, 2023,
accumulated costs incurred related to the new clinical building are approximately $352,504 with
approximately $736,052 in outstanding construction project contracts. The total cost of the project
is expected to be approximately $3,311,000 with occupancy scheduled for 2027 for Phase 1 and
2030 for Phase 2.
The Brigham and Women’s Faulkner Hospital, Inc. is constructing a five-story inpatient addition
and a 941 space garage that will replace a garage that is at its end-of-life use. The inpatient
addition will include 78 new beds and will expand patient care for observation, imaging and
endoscopy services. As of September 30, 2023, accumulated cost incurred related to the
construction are approximately $82,617 with approximately $160,458 in outstanding construction
project contracts. The total cost of the project is expected to be approximately $294,000 with
occupancy scheduled for December 2024 for the garage and June 2025 for the inpatient addition.
16. Pension and Postretirement Healthcare Benefit Plans
Substantially all Mass General Brigham employees are covered under noncontributory defined
benefit pension plans and various defined contribution pension plans. In addition, certain affiliates
provide subsidized healthcare benefits for retired employees on a self-insured basis, with the
benefit obligation being partially funded. These retiree healthcare benefits are administered
through a third-party administrator and are accounted for on the accrual basis, which includes an
estimate of future payments for claims incurred.
Total (income) expense for Mass General Brigham plans consists of the following:
2023 2022
Defined benefit plans 106,708$ 304,026$
Defined contribution plans 181,814 184,227
Postretirement healthcare benefit plans 422 (4,038)
288,944$ 484,215$
Years Ended September 30,
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
36
Information regarding benefit obligations, plan assets, funded status, expected cash flows and net
periodic benefit cost is as follows:
Benefit Obligations
2023 2022 2023 2022
Change in benefit obligations
Benefit obligations at beginning of year 7,391,402$ 9,945,227$ 202,696$ 237,224$
Service cost 338,035 503,193 2,922 4,250
Interest cost 435,026 322,521 11,295 6,541
Plan amendments loss 7,928 - - -
Actuarial gain (384,256) (2,970,410) (5,882) (47,457)
Benefits paid (343,062) (397,884) (9,065) (8,731)
Expenses paid (11,494) (11,347) (1,115) (683)
Employee contributions 97 102 12,192 11,552
Benefit obligations at end of year 7,433,676$ 7,391,402$ 213,043$ 202,696$
Defined Benefit
Postretirement
Pension Plans
Healthcare Benefit Plans
The estimated actuarial gain in the change in benefit obligation for 2023 and 2022 is due primarily
to the change in discount rate, respectively.
The accumulated benefit obligation for all defined benefit pension plans at the end of 2023 and
2022 was $7,140,057 and $7,096,333, respectively.
2023 2022 2023 2022
Weighted-average assumptions used to
determine end of year benefit obligation
Discount rate 6.22% 5.76% 6.07% - 6.10% 5.71% - 5.72%
Rate of compensation increase 3.00% - 5.00% 3.00% - 5.00% N/A N/A
Postretirement healthcare cost trend
rate for next year N/A N/A 6.75% 7.00%
Rate to which the cost trend rate is to decline N/A N/A 5.00% 5.00%
Year that rate reaches the ultimate trend rate N/A N/A 2031 2031
Defined Benefit
Postretirement Healthcare
Pension Plans
Benefit Plans
Plan Assets
2023 2022 2023 2022
Change in plan assets
Fair value of plan assets at beginning of year 8,570,585$ 10,163,079$ 151,424$ 171,053$
Actual return on plan assets 752,199 (1,491,419) 21,950 (24,489)
Employer contributions 106,995 308,054 2,704 2,585
Employee contributions 97 102 12,192 11,552
Benefits paid (343,062) (397,884) (9,065) (8,594)
Expenses paid (11,494) (11,347) (1,115) (683)
Fair value of plan assets at end of year 9,075,320$ 8,570,585$ 178,090$ 151,424$
Defined Benefit
Postretirement
Pension Plans
Healthcare Benefit Plans
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
37
The assets of the defined benefit pension plans are aggregated in a single master trust (Master
Trust) and managed as one asset pool. The investment objective for the Master Trust is to achieve
the highest reasonable total return after considering (i) plan liabilities, (ii) funding status and
projected cash flows, (iii) projected market returns, valuations and correlations for various asset
classes and (iv) ability and willingness to incur market risk.
Within the Master Trust, assets are allocated to managers with investment mandates that may
range from a single sub-asset class to very broad mandates; with restrictions that range from
long-only to unconstrained; and with management structures ranging from separately managed
funds to mutual/commingled funds to private partnerships. Less market sensitive managers
employ long/short equity and diversified strategies. Investment risks (concentration, correlation,
valuation, liquidity, leverage, mandate compliance, etc.) are monitored at the manager level as well
as the pool level.
The following table presents the capital allocations and reported exposures by manager mandate
within the Master Trust. Some managers, particularly less market sensitive managers, invest
capital among multiple asset classes. The Long-Term Policy Benchmark is 70% Morgan Stanley
Capital International All Country World Index and 30% Barclays Global Aggregate Bond.
Reported Reported
Dollars Exposures Dollars Exposures
Global equity 1,171,312$ 12.9 % 1,132,182$ 13.2 %
Traditional U.S. equity 1,124,628 12.4 % 929,068 10.8 %
Traditional foreign developed equity 313,409 3.4 % 310,468 3.6 %
Traditional emerging markets equity 449,983 5.0 % 560,912 6.5 %
Private equity 2,313,451 25.4 % 2,158,992 25.2 %
Real assets 558,524 6.2 % 609,123 7.1 %
Less Market Sensitive managers 2,783,007 30.7 % 2,564,880 29.9 %
Fixed income managers 361,006 4.0 % 304,960 3.7 %
9,075,320$ 100.0 % 8,570,585$ 100.0 %
September 30, 2023
September 30, 2022
The postretirement healthcare benefit plans’ assets are invested in commingled funds with the
objective of achieving returns to satisfy plan obligations and with a level of volatility commensurate
with our overall financial profile.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
38
The following tables summarize plan assets measured at fair value on a recurring basis (using the
fair value hierarchy defined in Note 7) as of:
Quoted Prices Significant Investments
in Active Other Valued
Markets for Observable Using NAV as
Identical Items
Inputs a Practical
(Level 1) (Level 2) Expedient Total
Defined benefit pension plans
Short-term investments 175,053$ -$ -$ 175,053$
Separately managed investments 370,293 155,452 - 525,745
Private partnerships
and commingled funds - - 8,374,522 8,374,522
545,346 155,452 8,374,522 9,075,320
Postretirement healthcare benefit plans
Commingled funds 49,615 - 128,475 178,090
Total plan assets 594,961$ 155,452$ 8,502,997$ 9,253,410$
September 30, 2023
Fair Value Measurements Using
Quoted Prices Significant Investments
in Active Other Valued
Markets for Observable Using NAV as
Identical Items
Inputs a Practical
(Level 1) (Level 2) Expedient Total
Defined benefit pension plans
Short-term investments 143,631$ -$ -$ 143,631$
Separately managed investments 336,538 144,062 - 480,600
Private partnerships
and commingled funds - - 7,946,354 7,946,354
480,169 144,062 7,946,354 8,570,585
Postretirement healthcare benefit plans
Commingled funds 42,540 - 108,884 151,424
Total plan assets 522,709$ 144,062$ 8,055,238$ 8,722,009$
September 30, 2022
Fair Value Measurements Using
In evaluating the Level at which private partnerships have been classified within the fair value
hierarchy, management has assessed factors including but not limited to price transparency, the
ability to redeem these investments at net asset value at the measurement date and the existence
or absence of certain restrictions at the measurement date. Investments in private partnerships
generally have limited redemption options for investors and, subsequent to final closing, may or
may not permit subscriptions by new or existing investors. These entities may also have the ability
to impose gates, lockups and other restrictions on an investor’s ability to readily redeem out of their
investment interest in the fund. As of September 30, 2023 and 2022, we have excluded all assets
from the fair value hierarchy for which fair value is measured using net asset value per share as a
practical expedient.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
39
Funded Status
The funded status of the plans recognized in the balance sheet and the amounts recognized in net
assets without donor restrictions is as follows:
2023 2022 2023 2022
End of year
Fair value of plan assets at measurement date 9,075,320$ 8,570,585$ 178,090$ 151,424$
Benefit obligations at measurement date (7,433,676) (7,391,402) (213,043) (202,696)
Funded status 1,641,644$ 1,179,183$ (34,953)$ (51,272)$
Amounts recognized in the balance sheet
consist of
Noncurrent asset 1,663,197$ 1,202,435$ 319$ 408$
Current liabilities (1,620) (1,705) (1,248) (1,470)
Long-term liabilities (19,933) (21,547) (34,024) (50,210)
1,641,644$ 1,179,183$ (34,953)$ (51,272)$
Amounts not yet recognized in net periodic
benefit cost and included in net assets
without donor restrictions consist of
Actuarial net loss (gain) (615,642)$ (117,642)$ (9,901)$ 7,199$
Prior service credit (60,127) (95,953) - (3,064)
(675,769)$ (213,595)$ (9,901)$ 4,135$
Amounts recognized in net assets without
donor restrictions consist of
Current year actuarial loss (498,000)$ (871,080)$ (19,070)$ (12,960)$
Amortization of actuarial loss (gain) - (114,122) 1,969 (470)
Current year prior service cost 7,928 - - -
Amortization of prior service credit 27,899 27,899 3,064 5,289
(462,173)$ (957,303)$ (14,037)$ (8,141)$
Defined Benefit
Postretirement
Pension Plans
Healthcare Benefit Plans
As of September 30, 2023 and 2022, the projected benefit obligation, accumulated benefit
obligation and fair value of plan assets for pension plans with an accumulated benefit obligation in
excess of plan assets were as follows:
2023 2022
Accumulated benefit obligation in excess of,
or below plan assets
Projected benefit obligation 7,433,676$ 7,391,402$
Accumulated benefit obligation 7,140,057 7,096,333
Fair value of plan assets 9,075,320 8,570,585
September 30,
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
40
Expected Cash Flows
Information about the expected cash flows for the defined benefit and postretirement healthcare
benefit plans is as follows:
Defined Postretirement
Benefit Healthcare
Pension Benefit
Plans Plans
Expected employer contributions
2024 98,969$ 4,660$
Medicare
Subsidy
Expected benefit payments (receipts)
2024 368,734 17,906 (15)
2025 400,822 17,943 (13)
2026 426,239 18,138 (11)
2027 449,475 18,391 (9)
2028 477,562 18,576 (7)
2029-2032 2,757,116 90,319 (21)
Net Periodic Benefit Cost
2023 2022 2023 2022
Service cost 338,035$ 503,193$ 2,922$ 4,250$
Interest cost 435,026 322,521 11,295 6,541
Expected return on plan assets (638,454) (607,911) (8,762) (10,010)
Amortization of
Prior service credit (27,899) (27,899) (3,064) (5,289)
Actuarial net loss (gain) - 114,122 (1,969) 470
Nonservice related pension income (231,327) (199,167) (2,500) (8,288)
Net periodic benefit cost 106,708$ 304,026$ 422$ (4,038)$
Defined Benefit
Postretirement
Pension Plans
Healthcare Benefit Plans
2023 2022 2023 2022
Weighted-average assumptions used
to determine net periodic pension and
postretirement cost
Discount rate 5.76 % 3.15 % 5.71% - 5.72% 2.75% - 3.00%
Expected return on plan assets 7.00 % 7.00 % 6.00 % 6.00 %
Rate of compensation increase 3.00% - 5.00% 3.00% - 5.00% N/A N/A
Healthcare cost trend rate for this year N/A N/A 7.00 % 6.25 %
Rate to which the cost trend rate is to decline N/A N/A 5.00 % 5.00 %
Year that rate reaches the ultimate trend rate N/A N/A 2031 2027
Defined Benefit
Postretirement Healthcare
Pension Plans
Benefit Plans
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
41
We use a long-term return assumption which is validated annually by obtaining long-term asset
return, volatility and correlation projections for relevant asset class indexes; modifying volatility and
correlations to reflect the actual historical experience of the active managers; calculating the
expected return using benchmark weights and indexes; and comparing the return assumption to
the sum of the expected return and the historical outperformance of the actual return versus the
benchmark. We regularly monitor the active risk of the Master Trust by a statistical regression of
the return series of the actual portfolio to that of the policy benchmark.
17. Professional Liability Insurance
We insure substantially all of our professional and general liability risk on a claims-made basis in
cooperation with other healthcare organizations in the Greater Boston area through a captive
insurance company, Controlled Risk Insurance Company Ltd. (CRICO). The Company owns 11%
of CRICO. The policies cover claims made during their respective terms, but not those
occurrences for which claims may be made after expiration of the policy. Management intends to
renew its coverage on a claims-made basis and has no reason to believe that it will be prevented
from such renewal. During 2022, CRICO announced and paid a dividend to member
organizations. As a result, we recorded dividend income of $58,453 in other nonoperating
(expenses) income.
We follow the accounting policy of establishing reserves to cover the ultimate costs of medical
malpractice claims, which include costs associated with litigating or settling claims. The liability
also includes an estimated tail liability, established to cover all malpractice claims incurred but not
reported to the insurance company as of the end of the year. The total malpractice liability of
$576,038 and $570,862 as of September 30, 2023 and 2022, respectively, is presented as an
accrued professional liability in the consolidated balance sheets. These reserves have been
recorded on a discounted basis using an interest rate of 6.04% and 5.6% as of September 30,
2023 and 2022, respectively.
We also recognize an insurance receivable from CRICO at the same time that it recognizes the
liability, measured on the same basis as the liability, subject to the need for a valuation allowance
for uncollectible amounts. The insurance receivable of $441,834 and $432,704 as of
September 30, 2023 and 2022, respectively, is reported as a component of other assets in the
consolidated balance sheets.
Management is not aware of any claims against us or factors affecting CRICO that would cause the
expense for professional liability risks to vary materially from the amount provided.
18. Concentration of Credit Risk
Financial instruments that potentially subject us to concentration of credit risk consist of patient
accounts receivable, research grants receivable, pledges receivable, premiums receivable, certain
investments and interest rate swaps.
Mass General Brigham provider organizations receive a significant portion of payments for services
rendered from a limited number of government and commercial third-party payers, including
Medicare, Medicaid, Blue Cross and Blue Shield of Massachusetts, Harvard Pilgrim Health Care
and Tufts Health Plan. Research funding is provided through many government and private
sponsors. MGB Health Plan receives a portion of premium revenue from the Commonwealth.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
42
Pledges receivable are due from multiple donors. We assess the credit risk for pledges based on
history and the financial wherewithal of donors, most of which are individuals or organizations well
known to us.
Investments, which include government and agency securities, stocks and corporate bonds, private
partnerships and other investments, are not concentrated in any corporation or industry or with any
single counterparty. Alternative investments are less liquid than other investments. The reported
values of the alternative investments may differ significantly from the values that would have been
used had a ready market for those securities existed. These instruments may contain elements of
both credit and market risk. Such risks include, but are not limited to, limited liquidity, absence of
oversight, dependence upon key individuals, emphasis on speculative investments and
nondisclosure of portfolio composition.
We minimize our credit risk exposure under interest rate swap agreements by utilizing several
counterparties and requiring the counterparties to post collateral for our benefit when the fair value
of the swap is positive. We minimize our counterparty risk by contracting with nine counterparties,
none of which accounts for more than 20% of the aggregate notional amount of the swap contracts.
19. Net Assets
Net assets with donor restrictions are available for the following purposes:
2023 2022
Net assets with donor restrictions
Charity care 193,671$ 183,758$
Buildings and equipment 851,037 470,888
Clinical care, research and academic 2,694,448 2,392,829
3,739,156$ 3,047,475$
September 30,
Endowment
Our endowment consists of numerous individual funds established for a variety of purposes and
includes both endowment funds with donor restrictions and funds designated by boards to function
as endowment. We have interpreted UPMIFA as requiring the preservation of the value of the
original contribution of the endowment funds with donor restrictions absent explicit donor
stipulations to the contrary. As a result of this interpretation, we classify net assets with donor
restrictions, the original value of all contributions with donor stipulations to maintain in perpetuity,
accumulated gains required to be maintained in perpetuity by explicit donor stipulation or
accumulated gains which have been appropriated for expenditure in a manner consistent with the
standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, we consider several
factors in making a determination to appropriate or accumulate endowment funds with donor
restrictions. These factors include: the duration and preservation of the fund; the purposes of the
organization and the endowment fund with donor restrictions; general economic conditions; the
possible effect of inflation and deflation; the expected total return from income and the appreciation
of investments; other resources of the organization; and the investment policies of the organization.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
43
Endowment Funds with Deficits
From time to time, the value of assets associated with individual endowment funds with donor
restrictions may fall below the value of the initial and subsequent donor contribution amounts.
These deficits generally result from unfavorable market fluctuations that occurred after the
investment of new contributions with donor restrictions or subsequent endowment additions.
When such endowment deficits exist, they are classified as a reduction to net assets with donor
restrictions.
The following presents the endowment net asset composition by type of fund as of September 30,
2023 and 2022 and the changes in endowment assets for the years ended September 30, 2023
and 2022:
Without Donor With Donor
Restrictions Restrictions Total
Endowment net asset
composition by type of fund
as of September 30, 2023
Endowment funds with donor restrictions -$ 2,441,991$ 2,441,991$
Endowment funds with board designations 1,368,005 - 1,368,005
Total funds 1,368,005$ 2,441,991$ 3,809,996$
Without Donor With Donor
Restrictions Restrictions Total
Changes in endowment net assets
Endowment net assets at
September 30, 2022 1,285,916$ 2,167,346$ 3,453,262$
Investment return
Investment loss (296) (498) (794)
Net realized and unrealized
appreciation 129,862 216,938 346,800
Total investment return 129,566 216,440 346,006
Contributions 9,396 151,356 160,752
Appropriation of endowment assets
for expenditure (59,336) (101,597) (160,933)
Other changes 2,463 8,446 10,909
Total changes 82,089 274,645 356,734
Endowment net assets at
September 30, 2023 1,368,005$ 2,441,991$ 3,809,996$
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
44
Without Donor With Donor
Restrictions Restrictions Total
Endowment net asset
composition by type of fund
as of September 30, 2022
Endowment funds with donor restrictions -$ 2,167,346$ 2,167,346$
Endowment funds with board designations 1,285,916 - 1,285,916
Total funds 1,285,916$ 2,167,346$ 3,453,262$
Without Donor With Donor
Restrictions Restrictions Total
Changes in endowment net assets
Endowment net assets at
September 30, 2021 1,582,262$ 2,543,776$ 4,126,038$
Investment return
Investment income 902 1,484 2,386
Net realized and unrealized
appreciation (262,195) (428,389) (690,584)
Total investment return (261,293) (426,905) (688,198)
Contributions 7,855 141,343 149,198
Appropriation of endowment assets
for expenditure (54,754) (90,550) (145,304)
Other changes 11,846 (318) 11,528
Total changes (296,346) (376,430) (672,776)
Endowment net assets at
September 30, 2022 1,285,916$ 2,167,346$ 3,453,262$
20. Functional Expenses
Expenses by functional classification are allocated based on management’s judgement, the nature
of the expense and historical experience. Such classifications and allocations are as follows:
Year Ended
Healthcare Research and General and
September 30,
Services Academic Insurance
Administrative 2023
Operating expenses
Employee compensation and benefit expense 8,296,219$ -$ 72,326$ 1,290,735$ 9,659,280$
Supplies and other expenses 4,644,283 - 80,980 250,893 4,976,156
Medical claims and related expenses - - 1,086,589 - 1,086,589
Direct academic and research expenses - 2,066,518 - - 2,066,518
Depreciation and amortization expenses 687,592 - - 86,971 774,563
Interest expense 104,199 - - 64,566 168,765
Total operating expenses 13,732,293$ 2,066,518$ 1,239,895$ 1,693,165$ 18,731,871$
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
45
Direct academic and research expenses include $1,228,043 of employee compensation and
benefit expense and $838,475 of supplies and other expenses for the year ended September 30,
2023.
Year Ended
Healthcare Research and General and
September 30,
Services Academic Insurance
Administrative 2023
Nonoperating expenses
Employee compensation
and benefit expense -$ -$ -$ 78,209$ 78,209$
Supplies and other expenses - - - 37,363 37,363
Interest expense - - - 63,720 63,720
Pension related interest costs 341,062 49,229 - 56,030 446,321
Total nonoperating expenses 341,062$ 49,229$ -$ 235,322$ 625,613$
Year Ended
Healthcare Research and General and
September 30,
Services Academic Insurance
Administrative 2022
Operating expenses
Employee compensation and benefit expense 7,766,887$ -$ 60,507$ 1,317,076$ 9,144,470$
Supplies and other expenses 4,274,806 - 66,741 61,446 4,402,993
Medical claims and related expenses - - 722,212 - 722,212
Direct academic and research expenses - 1,937,738 - - 1,937,738
Depreciation and amortization expenses 662,229 - - 107,554 769,783
Interest expense 103,964 - - 60,869 164,833
Total operating expenses 12,807,886$ 1,937,738$ 849,460$ 1,546,945$ 17,142,029$
Direct academic and research expenses include $1,147,460 of employee compensation and
benefit expense and $790,278 of supplies and other expenses for the year ended September 30,
2022.
Year Ended
Healthcare Research and General and
September 30,
Services Academic Insurance
Administrative 2022
Nonoperating expenses
Employee compensation
and benefit expense -$ -$ -$ 76,262$ 76,262$
Supplies and other expenses - - - 44,607 44,607
Interest expense - - - 63,599 63,599
Pension related interest cost 239,690 37,184 - 52,188 329,062
Total nonoperating expenses 239,690$ 37,184$ -$ 236,656$ 513,530$
21. Contingencies
We are subject to complaints, claims and litigation which arise in the normal course of business.
In addition, we are subject to reviews and investigations by various federal and state government
agencies to assure compliance with applicable laws, some of which are subject to different
interpretations. Governmental review of compliance by healthcare organizations has increased.
Mass General Brigham Incorporated and Affiliates
Notes to Consolidated Financial Statements
September 30, 2023 and 2022
(in thousands of dollars)
46
22. Subsequent Events
We have assessed the impact of subsequent events through December 8, 2023, the date the
audited financial statements were issued. During this period, there were no subsequent events
that require adjustment to the audited financial statements. On November 2, 2023, the Centers for
Medicare & Medicaid Services (CMS) published a final rule to remedy underpayments associated
with 340B-acquired pharmaceuticals in 2018-2022. CMS will be making a one-time payment to
impacted hospitals in 2024 and has estimated Mass General Brigham’s payment to be $97,500.
Other than this contract, there were no other events that require disclosure in the notes to the
audited financials.