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Volume Eleven Number Four April 2009 Published Monthly Earn CEU Credit www . hcca - InfO . Org / quIz , see page 27 Meet Kathleen B. Roberts OIg issues three Corporate Compliance and reports on adverse Privacy Officer, Baptist Health events

SLIDE 1 Volume Eleven Number Four April 2009 Published Monthly

Feature Focus:

Executive compensation in troubled times— Part 2

page 30

Meet

Kathleen B. Roberts

Corporate Compliance and Privacy Officer, Baptist Health

page 14

OIg issues three reports on adverse events at hospitals

page 4

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SLIDE 2 Health Care Compliance Association • 888-580-8373 • www.hcca-info.org April 2009

By Gerald M. Griffith, JD Editor’s note: Gerald Griffjth is a partner in the Chicago offjce of Jones Day where he practices as a member of the Health Care and Tax Practice

Groups. He may be reached by telephone at 312/269-1507 or by e-mail

at ggriffjth@jonesday.com. Part 1 of this article appeared in the March 2009 issue of Compliance

Today. Part 1 addressed the efgects of signifjcant economic pressures on

executive compensation, the scope and implications of increased transparency in compensation in the nonprofjt healthcare sector, and the importance of a good governance process, including well documented executive compensation reviews. It described how having a solid process in place can help defend against IRS audits and help directors and offjcers fulfjll their fjduciary duties and promote the best interests of their organization. Appropriate comparability data Following the appropriate process for establishing executive compensation is certainly a key element of compliance, and the fjnal report

n the 2006 IRS Hospital Compliance Project (Hospital Report)

notes that nearly all nonprofjt hospitals surveyed reported that they follow the rebuttable presumption procedure.1 Yet that is only half the story. Even with the right process in place, a compensation plan can yield what some may view as excessive amounts, and thus subject the organization to intense (and expensive) scrutiny on audit and potentially lead to excise tax liability for excess benefjts for those same

executives. To complete the documentation and ensure compliance, it

is also important to focus on the amounts generated under the plan as compared to market comparables. Tie importance of that documentation is underscored by the audit selection process used by the IRS in auditing nonprofjt hospitals for executive compensation issues that afgect the top one to fjve highest paid executives. In that regard, the Hospital Report notes that 20 of the surveyed hospitals were selected for examination for potentially excessive compensation based on relatively higher levels of executive compensation for the size and type

f organization as compared to other surveyed hospitals.2

Use of for-profit comparables Current law clearly allows use of both for-profjt and nonprofjt compensation packages as comparables in the executive compensation review process.3 Use of for-profjt comparables has been criticized by some, and noted to be a possible area of Congressional concern by IRS representa- tives.4 Nevertheless, it remains a defensible practice under current law. Despite these potential concerns, the IRS has not yet gathered any empirical data on the use of for-profjt comparables. For example, the Hospital Report notes that 100% of the 478 nonprofjt hospitals that responded to the survey reported using nonprofjt comparables; but the questionnaire did not ask about use of for-profjt comparables.5 Although the arguments in favor of including for-profjt comparables generally are stronger for executives employed directly by nonprofjts (when comparables include both for-profjt and nonprofjt companies), there may be unique situations where nonprofjt positions are not truly

comparable. For example, in the high tech area, for organizations

that are developing cutting edge technology and competing with the private sector for the same talent, it may be appropriate and necessary to create a compensation package to match the stock options and

ther attractive incentive compensation plans in the private sector.6

For most hospitals, however, a for-profjt-only base of comparables is likely too narrow, unless perhaps the hospital is located in an area dominated by for-profjt hospitals or is evaluating the compensation of executives who have signifjcant responsibility for a program or division that competes primarily with for-profjt companies (e.g., technology development). Another potential basis for relying more heavily on for- profjt comparables would be an “enterprise theory” of value, looking at an entire group of related entities as a single business enterprise. Tie enterprise theory may apply to more complex health care systems that have a variety of for-profjt operations and joint ventures (e.g., man- aged care, international facilities, technology transfer, renown research facilities), where the skills and experience required of senior management are more comparable to those found in executives of substantial for-profjt enterprises. Tie IRS, however, has not addressed that theory in any published ruling to date.

feature

Executive compensation in troubled times

– Part 2

focus

This article, published in the April 2009 issue of Compliance Today, appears here with permission from the Health Care Compliance

Association. Call 888/580-8373

with reprint requests.

SLIDE 3 Health Care Compliance Association • 888-580-8373 • www.hcca-info.org April 2009

Document, document, document Compensation consultants can access and analyze nonprofjt salary data from their own databases that tends to be more current than publicly available surveys relied on by many organizations. Use of independent compensation consultants is not required to avoid a fjnding

f excessive compensation or to establish a rebuttable presumption.

Other evidence of reasonable compensation for comparable positions includes published salary surveys and bona fjde written ofgers from third parties.7 Depending on the experience of the board or committee members in reviewing compensation arrangements, however, an independent consultant’s report may be helpful in establishing the rebuttable presumption. In that regard, the regulations provide a fmex- ible standard for what constitutes adequate documentation of market value in light of the knowledge and expertise of the board or committee members who have authority to approve the arrangement. Specifjcally, the comparability data must be suffjcient, “given the knowledge and expertise of its members,” for the board or committee to determine whether the compensation arrangement in its entirety is reasonable under the standards set forth in section 53.4958–4(b)

f the regulations.8 In general, those standards look to whether the

total compensation is consistent with what would ordinarily be paid for like services by like enterprises (either taxable or tax-exempt) under like circumstances (i.e., reasonable compensation).9 For more experienced reviewing bodies and more straightforward compensation plans, published compensation surveys may be a suffjcient source of comparable data. For all hospitals responding to the questionnaire and for the 20 hospitals examined for potentially excessive compensation as part of the IRS Hospital Compliance Project, nearly all reported setting executive compensation at levels within the range of comparability data.10 Whatever comparable data is relied on, it should be documented and retained in the fjle in order to support the rebuttable presumption and to defmect challenges to the compensation package on audit.11 For excess benefjt purposes, the minimum retention period should match the limitations period for assessing excise taxes on excess benefjt

transactions. Tie limitations period starts with the fjling of Form 990

for the year in which the compensation was paid and runs for either three years (if the Form 990 discloses an excess benefjt) or six years (for excess benefjt transactions that have not been reported on a Form 990).12 Appropriate documentation should include not only documentation of the basis for the initial determination that compensation is reasonable, but also documentation of the business purposes of any expense reimbursement that is not treated as taxable income. Failure to maintain that documentation and correctly report compensation (on Forms W-2, 1099, and 990) may result in an automatic excess benefjt, regardless of whether total payments are reasonable.13 On audit, the IRS typically looks for both documentation of reasonableness and appropriate reporting of expense reimbursement.14 Compensation plan design Even when armed with adequate comparable data, an executive compensation program can still fall short of the compliance mark or fail to achieve legitimate business objectives if the plan is not properly

designed. In assessing the design, it is important to bear in mind the
verall objectives for the compensation plan.

Performance-based compensation “Results not excuses” is a familiar principle in corporate America where performance is measured on a fjnancial basis. Likewise, fjnancial success is important for nonprofjt health care providers given that for most of them, charitable donations are such a narrow part of their funding that, if they do not generate a positive margin, there is no money left for mission-related activities. To that end, a common feature of executive compensation plans is some form of incentive tied to improvement of the fjnancial condition of the company as compared to target standards. Financial performance clearly can be a part of executive compensation plan design for health care organizations, and incentive compensation for nonprofjts may be conditioned on “profjtability” in appropriate circumstances without jeopardizing tax-exempt status. For example, the IRS has approved an incentive compensation formula that covers executives (as well as physicians and non-executive stafg) based on contribution to margin vs. budgeted performance of individual health care facilities and smaller units. Tie formula includes safeguards, such as including an auditors’ review that uses a custom compensation survey of several large clinics nationally and a cap on total compensation to ensure reasonableness.15 Mission incentives Because nonprofjt health care organizations are more than merely business enterprises, there is a growing recognition that their executive compensation plans also should have broader goals. Use of mission

bjectives as part of compensation planning has been part of the

landscape in health care for decades, frequently focusing on clinical Continued on page 32

SLIDE 4 n April 2009

quality. For example, other components of one margin-focused incen-

tive compensation plan measured containment of controllable costs, effjciency, and improvements in quality of service.16 Improvements in cost and quality of health care services are two of the hallmarks of community benefjt that are central to the mission of tax-exempt hospitals.17 It is also part of compensation planning in the broader business world, as companies seek to motivate executives to further their own corporate missions. Tie total executive compensation package should embody the company’s vision, mission, objectives, goals, and strategies. More specifjcally, the pay delivery system should be aligned with goals and

bjectives. … Incentives must not only help the organization achieve

its mission and vision, they must be consistent with the culture of the

rganization.18

Mission-based incentives are also consistent with what some courts have described as a duty of obedience to mission by directors and offjcers of nonprofjt corporations.19 Although the Hospital Report does not address use of mission-based incentives, the wave of purported class actions on behalf of the uninsured earlier this decade, union corporate organizing campaigns, and the recent economic troubles have served to bring to the fore the need to also tie executive compensation, in some meaningful way, not only to margin but also to mission.20 To that end, more nonprofjt health care organizations are including (as part of the incentive or “at risk” compensation for executives) a component based on achieving various mission-related objectives, such as improving quality of care scores, expanding access to care for the indigent and Medicaid patients, and achieving other specifjc elements

f the organization’s vision or mission statement. Emphasizing such

mission incentives in an executive compensation program by tying performance in those areas to meaningful levels of incentive pay can serve to insulate executive compensation from IRS challenge and negative publicity. To achieve those objectives, however, total compensation still must be at reasonable levels based on market comparables. Transparency and other safeguards Both the rebuttable presumption procedure in the regulations and the added Form 990 questions regarding the compensation approval process reflect a consistent position from the IRS that transparency and independence in compensation decisions are often essential to avoiding excessive compensation. In order to establish the rebuttable presumption, it is necessary to disclose the terms of the compensation arrangement to the authorized body (board or committee) that approves the arrangement and for the members of that body to be free Executive compensation in troubled times – Part 2 ...continued from page 31

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SLIDE 5 Health Care Compliance Association • 888-580-8373 • www.hcca-info.org April 2009

f any conflict of interest in the matter.21 Beginning with the 2008

tax year, the Form 990 will require disclosure of key elements of the process used to determine CEO compensation, including: n committee approval and use of surveys or independent compensation consultants,22 n whether the compensation process for the CEO and other offjcers and key employees followed the rebuttable presumption procedure,23 n whether the organization has a written confmicts-of-interest policy and annual disclosure of confmicts that is monitored and enforced,24 and n whether the Form 990 is provided to the board before fjling.25 Tie fjrst three elements relate to the integrity of the compensation process, whereas the last one is a more polite way of asking about

versight of tax reporting functions (even though federal law does not

require board review of the Form 990) and whether board members are aware of compensation packages before reading about them in the local paper. Tie IRS has also clearly indicated that it intends to pay closer attention to the completeness and accuracy of the reporting of executive compensation on Form 990. In that regard, the Hospital Report notes that the IRS will be scrutinizing fjlings of the redesigned Form 990 by certain hospitals whose responses in the Hospital Compliance Project showed room for improvement in reporting compensation.26 Recent IRS guidance approving executive compensation plans also emphasizes the value of process. In one example, the IRS approved a long-term incentive compensation plan aimed at retention of executives and built on a detailed process that was a model of transparency. The plan included: n multiple procedural safeguards and review by an independent board; n each layer of management made recommendations up the ladder, with no one approving their own compensation; and n no bonuses being paid until the organization recovered its capital investment from a new technology company.27 In addition to revamping executive compensation processes, many nonprofit health care organizations have begun revamping their annual board disclosure statements to solicit the additional information needed to complete the new Form 990. Several organizations also have instituted procedures to actively monitor conflict-of-interest dis- closures to ensure that the organization’s interests are protected. Key features of effective monitoring programs include: n annual reporting, n sanctions for failure to complete the annual disclosure (potentially including termination), n solicitation of disclosure of additional confmicts of interest at each board or committee meeting, and n maintenance of a centralized database of reported fjnancial interests that can be accessed to ascertain potential confmicts in transactions pending before a board or committee. Tie Hospital Report notes that the nonprofjt hospitals surveyed generally reported adoption of written compensation policies, paying within the range of comparable data, and following confmict-of-interest principles in approving executive compensation.28 In fact, 98% of the nearly 500 hospitals surveyed by the IRS (including nearly all of the 20 hospitals examined) reported that compensation was approved in advance by individuals without a confmict of interest as to that arrangement.29 All 20 of the hospitals examined in the Hospital Compliance Project also had a written confmict-of-interest policy that they followed. Of the 17 hospitals in that group that followed the rebuttable presumption procedure, the IRS concluded it did not have suffjcient grounds to challenge and overcome the presumption of reasonableness for any of them, despite average compensation numbers that were in the range of two to three times the average of the overall group of nearly 500 hospitals (small and large).30 Clawbacks With any carrot these days, it seems there also must be a stick. With each scandal or crisis, calls go out, not only for fjxes to the problem, but also for punishment of those responsible for the failure. Compen- sation matters are no difgerent, as evidenced by the Sarbanes-Oxley Act (SOX) clawback provisions noted above. Some health care

rganizations have voluntarily adopted SOX-like clawback provisions

tied to material restatements of fjnancial positions. For the past few years, many more have included another clawback provision (at least in physician and many vendor contracts) to require repayment of any compensation deemed to be an excess benefjt. In light of the increased focus of the IRS on executive compensation matters, it may be in the best interest of organizations to include similar excess benefjt repayment clauses or “clawbacks” in executive contracts. Tie end result of adding a clawback provision should not be materi- ally difgerent for the executive, because the IRS already has leverage to force repayment by assessing the 225% excise tax on any retained excess benefjt. Adding the clawback protects the exempt organization Continued on page 34

SLIDE 6 n Health Care Compliance Association • 888-580-8373 • www.hcca-info.org April 2009

Executive compensation in troubled times – Part 2 ...continued from page 33 by giving it contractual leverage to force repayment. In that regard,

ne of the relevant factors in the regulations for avoiding loss of tax-

exempt status based on excess benefjts is whether or not the exempt

rganization took action in good faith to seek repayment of the excess

benefjt.31 In addition, overly rich executive bonuses and severance packages may be vulnerable to challenge as a misuse or waste of corporate assets, either in an action by the members or the attorney general. Similar actions have been successful of late in the for-profjt sector.32 Appropriate advance planning and documentation of reasonableness through the rebuttable presumption process should both reduce the number of potentially excessive compensation packages and improve the ability to defend against such court-assisted clawbacks for properly approved compensation packages. Perquisites In these turbulent times of increased pressure on the bottom line and increased notoriety for generous executive compensation packages,

ne good rule of thumb to live by is to avoid having your organization

featured on the front page of the local newspaper in a negative story

n executive compensation. In addition to documenting reasonable-

ness and factoring mission objectives into compensation plan design, a good way to minimize that negative publicity is by avoiding hot button perquisites in the compensation program. With that principle in mind, many nonprofjt health care organizations are moving away from perquisites and toward more of an all cash and traditional benefjts (medical and dental insurance, life insurance pension, qualifjed retirement plan) compensation program. An extra $20,000 in performance-based bonuses may get an executive to the same point economically as a modest car allowance, country club dues, and/or free spousal travel, but it is a less salacious single line item. Whether intentionally or not, the IRS has provided a list of several of these hot button perquisites in the new Form 990 (2008), Schedule J, Part I, Line 1a, which lists fjrst-class or charter travel, travel for companions, tax gross-up or indemnity, discretionary spending account (which may be more or less of a lightning rod depending on the amount and what it can be used for), personal housing allowance

r residence, paid business use of personal residence, club dues, and

personal services (e.g., maid, chaufgeur, chef). Limits on compensation Recent economic struggles have resulted in multiple federal bail-out

r stimulus initiatives. Tie recent government stimulus program,

however, also includes limits on executive compensation. Tie Administration had proposed a fmat $500,000 limit on executive compensation for companies receiving TARP funds.33 Congress opted to limit compensation for executives of fjnancial institutions receiving TARP funds to no more than the amount of compensation paid to the President of the United States, including salary, deferred compensation, retirement benefjts, bonuses, options, property, and other forms

f compensation as determined by the Secretary of the Treasury.34 In

addition, Congress enacted a variety of safeguards focused on process, incentives, and perquisites. Title VI of the American Recovery and Reinvestment Act of 2009 (ARRA) would impose strict limitations

n executive compensation and related corporate governance matters

for entities receiving TARP bail-out funds, including compensation for the top fjve highest paid executives of publicly traded companies (senior executives). Congress directed Treasury to promulgate regulations applicable to any company receiving TARP funds that would:

1. preclude incentive payments for senior executives who take “unnec-

essary and excessive risks that threaten the value of” the company;

2. provide for recovery of any compensation payments to the top 20

highest paid executives, where the payments were based on fjnancial

r other criteria that are later found to be materially inaccurate;
3. preclude “golden parachute” payments (i.e., substantial severance

package triggered by certain contingencies) to any of the top ten highest paid executives until TARP funds are repaid;

4. preclude the company from paying or incurring any bonus, reten-

tion, or incentive payment obligation to any of at least the top 25 highest paid executives until TARP funds are repaid;

5. prohibit any compensation plan that would encourage manipu-

lation of reported earning to enhance compensation (which, if narrowly interpreted, could eliminate revenue-based incentives, at least absent stringent audit requirements);

6. mandate the creation of a board compliance committee;35 and
7. adopt specifjc policies regarding expenditures for “excessive or

luxury” items such as entertainment, special events, renovations, aviation and other transportation services, and payment of more than reasonable amounts for conferences, stafg development and performance incentives.36 Congress also directed Treasury to investigate prior payments for consistency with these new requirements; seek repayment, where appropriate; and recoupment of the government’s investment in any fjnancial institution that receives TARP funds that paid bonuses in excess of $100,000.37 Tiis approach of imposing strict limits on executive compensation

SLIDE 7 Health Care Compliance Association • 888-580-8373 • www.hcca-info.org April 2009

and perquisites also may be raised as part of future state or federal aid packages for the health care industry. In that regard, the limits applicable to companies receiving TARP funds may serve as a starting point for proposals to limit compensation as a condition of govern- mental assistance in other sectors. Such an expansion may come in the form of legislation tied to community benefjt or charity care standards,

r such limitations may be imposed on health care organizations that

accept other funding under the stimulus programs, such as for electronic health records under Title XIII of the ARRA.38 Although such assistance may be welcome and necessary, organizations should analyze the collateral consequences of accepting that assistance, including the efgect on independent control of the compensation process. Limits on key compensation defenses Compensation arrangements for executives who are new to the hospital or who have been promoted to higher positions often can qualify for the “initial contract exception” to the excess benefjt rules. Under that exception, any non-discretionary, fjxed payments under a binding written contract entered into before the other party becomes a disqualifjed person are not subject to the excess benefjt rules.39 Tie fjnal report on the Hospital Compliance Project, however, suggests that the IRS may be moving toward a reconsideration of the initial contract exception in light of possible concerns about the impact that the rebuttable presumption procedure (including use of for-profjt comparables in setting compensation) and initial contract exception have on executive compensation amounts and the IRS’ ability to challenge executive compensation in the nonprofjt hospital sector. A change in either standard, however, may require express Congressional action and not merely a change in the regulations. With respect to the rebuttable presumption procedure, the legislative history of Section 4958 expressly provided for a rebuttable presumption procedure (including the use of for-profjt comparables). Although phrased as an expression of the Committee’s intent, it even went so far as to specify retroactive application

f the rebuttable presumption procedure and to instruct Treasury to issue

regulations regarding establishing reasonable compensation that incorpo- rated the rebuttable presumption procedure.40 With respect to the initial contract exception, case law in one circuit held that an initial contract did not make a fundraiser an insider for purposes of limiting compensation under rules similar to the excess benefjt rules. Tiat may make it diffjcult for the IRS to simply eliminate the initial contract exception.41 Neverthe- less, health care organizations should be on notice that IRS may be poised to pursue limiting, if not eliminating, one or both lines of defense for executive compensation packages. Conclusion By following four key steps, exempt organizations can obtain signifjcant practical protection from the pitfalls creeping into executive compensation in the nonprofjt sector. First, establish a compliant process and document that it is followed (including confmicts of interest and compensation decisions). Second, support total compensation levels through documentation of payment for comparable services in the relevant market where the organization competes for executive

talent. Tiird, tailor incentives to coincide with mission goals—

fjnancial and charitable—and avoid front page fodder from hot button

perquisites. Finally, treat the Form 990 as the organization’s fjnal exam
n its understanding of the essential principles of nonprofjt executive

compensation and emphasize the points where the organization’s practice refmects industry best practice. n 1 Hospital Report, pp. 10 & 122-140; Executive Summary, p. 3. The final report was released on February 13,

2009. A copy of the final report and an executive summary are available on the IRS website at http://www.irs.gov/

charities/charitable/article/0,,id=203109,00.html. 2 Hospital Report at pp. 140-42 & 169. 3 See, e.g., 26 C.F.R. § 53.4958-6(c)(2). See also Founding Church of Scientology v. United States, 188 Ct. Cl. 490, 412 F.2d 1197, 1200 (1969); B.H.W. Anesthesia Foundation v. Commissioner, 72 T.C. 681, 686. 4 See, e.g., D. Freda, “IRS Soon-to-be Released Hospital Study Leads to Questions About Safe Harbor’s Fate,” 17 Health Law Reporter (BNA) 1676 (Dec. 25, 2008). 5 Hospital Report at p. 138. 6 For examples of a somewhat more flexible approach to compensation in high tech ventures, see PLRs 200602039-041 (Oct. 19, 2005), PLR 200601030 (Oct. 12, 2005), PLR 200326035 (April 4, 2003), PLR 200225046 (undated). 7 26 C.F.R. § 53.4958-6(c)(2)(i). 8 26 C.F.R. § 53.4958-6(c)(2)(i). 9 26 C.F.R. § 53.4958–4(b)(1)(ii)(A). 10 Hospital Report at pp. 138 & 145. 11 See 26 C.F.R. § 53.4958-6(c)(2)(iv), Examples 1 & 3. 12 See Internal Revenue Manual 7.27.30.9; 26 U.S.C. § 6501(e)(3) & (l). 13 See 26 C.F.R. § 53.4958-4(a)(4)(ii), -(b)(1)(ii)(B)(3) & -(c)(3). 14 See Hospital Report at p. 140. 15 PLR 9112006 (Dec. 20, 1990) (targeted 3% margin with a cap on incentive compensation equal to 10% of the total base compensation of plan participants; custom survey included eighteen of the largest clinics in the country). 16 PLR 9112006. 17 See GCM 39862 (Nov. 21, 1991). 18 See B. Ellig, The Complete Guide to Executive Compensation 461, 469 (McGraw-Hill 2002) 19 See, e.g., In Manhattan Eye, Ear & Throat Hospital v. Spitzer, 715 N.Y.S.2d 575, 593 (N.Y. Sup. Ct. 1999); Summers v. Cherokee Children & Family Services, Inc., 112 S.W. 3d 486, 504 (C.A. Tenn. 2002). 20 This trend is being observed and encouraged by some compensation consultants. See, e.g., posts at the following

nline blog: http://compforce.typepad.com/compensation_force/compensation_in_nonprofits/.

21 26 C.F.R. § 53.4958-6(a)(1), -6(c)(1)(iii) & -6(c)(3)(i)(A). 22 Form 990 (2008) Schedule J, Part I, Line 3. 23 Form 990 (2008) Core Form, Part VI, Line 15. 24 Form 990 (2008) Core Form, Part VI, Line 12. 25 Form 990 (2008) Core Form, Part VI, Line 10. 26 Hospital Report, p. 123. 27 PLR 200601030 (Oct. 12, 2005). 28 Hospital Report at pp. 10, 127-29 & 138. 29 Id. 30 Hospital Report at p. 143. 31 26 C.F.R. § 1.501(c)(3)-1(f)(2)(ii)(E) & (iv), Example 3. 32 See Cox Enterprises, Inc. v. News-Journal Corporation, 2008 WL 5142417 (M.D. Fla., Dec. 5, 2008). 33 See “Remarks by the President on Executive Compensation (Feb. 4, 2009) (available online at http://www. whitehouse.gov/blog_post/new_rules/). 34 ARRA 6011-6013, labeled the “Cap Executive Officer Pay Act of 2009.” 35 ARRA, § 6002. 36 ARRA, § 6004. 37 ARRA, §§ 6006 & 6021. 38 ARRA, §§ 13101-13424 , labeled the “Health Information Technology for Economic and Clinical Health Act”

r the “HITECH Act.”

39 26 C.F.R. § 43.4958-4(a)(3). 40 House Rept. on P .L. 104-168 (July 30, 1996). 41 United Cancer Council, Inc. v. Commissioner, 165 F.3d 1173 (7th Cir. 1999).