Form990
Click to see attachment
Department of the Treasury
Internal Revenue Service
Return of Organization Exempt From Income Tax
Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except black lung benefit trust or private foundation)

MediumBullet The organization may have to use a copy of this return to satisfy state reporting requirements.
OMB No. 1545-0047
2010
Open to Public Inspection
A For the calendar year, or tax year beginning 01-01-2010 and ending 12-31-2010
BCheck if applicable:
CName of organization
PRIORITY HEALTH GOVERNMENT PROGRAMS INC
 
Doing Business As
 
 
Number and street (or P.O. box if mail is not delivered to street address)
1231 East Beltline NE
 
Room/suite
City or town, state or country, and ZIP + 4
Grand Rapids, MI49525
D Employer identification number

32-0016523
E Telephone number

G Gross receipts $ 182,901,610
F Name and address of principal officer:
MARY ANNE JONES
1231 East Beltline NE
Grand Rapids,MI495254501
I
Tax-exempt status: (   ) LeftBullet (insert no.) or
J
Website:MediumBullet
WWW.PRIORITYHEALTH.COM
H(a)
Is this a group return for
affiliates?
H(b)
Are all affiliates included?
If "No," attach a list. (see instructions)
H(c)
Group exemption number MediumBullet  
K Form of organization:
 
L Year of formation: 2002
M State of legal domicile: MI
Part I
Summary
Activities & Governance 1 Briefly describe the organization’s mission or most significant activities: IMPROVING HEALTH BY PROVIDING ALL PEOPLE ACCESS TO AFFORDABLE AND EXCELLENT HEALTH CARE.
2 Check this box MediumBullet
3 Number of voting members of the governing body (Part VI, line 1a) .... 3 6
4 Number of independent voting members of the governing body (Part VI, line 1b) .... 4 2
5 Total number of individuals employed in calendar year 2010 (Part V, line 2a) ... 5 0
6 Total number of volunteers (estimate if necessary) .... 6 0
7a Total unrelated business revenue from Part VIII, column (C), line 12 .. 7a 0
b Net unrelated business taxable income from Form 990-T, line 34 .. 7b 0
Revenues; Prior Year Current Year
8 Contributions and grants (Part VIII, line 1h) ......... 0 0
9 Program service revenue (Part VIII, line 2g) ......... 172,147,008 180,644,511
10 Investment income (Part VIII, column (A), lines 3, 4, and 7d ) .... 347,909 98,946
11 Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e)   0
12 Total revenue—add lines 8 through 11 (must equal Part VIII, column (A), line 12)................... 172,494,917 180,743,457
Expenses; 13 Grants and similar amounts paid (Part IX, column (A), lines 1–3 )...   0
14 Benefits paid to or for members (Part IX, column (A), line 4) .... 141,625,878 150,238,524
15 Salaries, other compensation, employee benefits (Part IX, column (A), lines 5–10) 7,293,251 6,726,833
16a Professional fundraising fees (Part IX, column (A), line 11e)....   0
b Total fundraising expenses (Part IX, column (D), line 25) MediumBullet0    
17 Other expenses (Part IX, column (A), lines 11a–11d, 11f–24f).... 13,298,535 15,371,331
18 Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25) 162,217,664 172,336,688
19 Revenue less expenses. Subtract line 18 from line 12...... 10,277,253 8,406,769
Net Assets or Fund Balances; Beginning of Current Year End of Year
20 Total assets (Part X, line 16)............ 34,244,152 39,364,707
21 Total liabilities (Part X, line 26)............ 17,581,693 19,269,479
22 Net assets or fund balances. Subtract line 21 from line 20 ..... 16,662,459 20,095,228
Part II
Signature Block
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than officer) is based on all information of which preparer has any knowledge.
Sign Here
JumboBullet
Signature of officer Date
JumboBullet
Type or print name and title.
Paid Preparer's Use Only Preparer's
signatureBig Right Arrow 		Date
right pointing bullet image Preparer’s taxpayer identification number
(see instructions)
Firm’s name (or yours
if self-employed),
address, and ZIP + 4Big Right Arrow




 		EIN right pointing bullet image
Phone no. right pointing bullet image
May the IRS discuss this return with the preparer shown above? (see instructions) .........
For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions.
Cat. No. 11282Y
Form 990 (2010)
Form 990 (2010)
Page 2
Part III
Statement of Program Service Accomplishments
Check if Schedule O contains a response to any question in this Part III . . . . . . . . . .
1
Briefly describe the organization’s mission: IMPROVING HEALTH BY PROVIDING ALL PEOPLE ACCESS TO AFFORDABLE AND EXCELLENT HEALTH CARE.
2
Did the organization undertake any significant program services during the year which were not listed on
the prior Form 990 or 990-EZ? ....................
If “Yes,” describe these new services on Schedule O.
3
Did the organization cease conducting, or make significant changes in how it conducts, any program services? ..........................
If “Yes,” describe these changes on Schedule O.
4
Describe the exempt purpose achievements for each of the organization’s three largest program services by expenses.
Section 501(c)(3) and 501(c)(4) organizations and section 4947(a)(1) trusts are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any, for each program service reported.
4a (Code:   ) (Expenses $ 160,833,531 including grants of $   ) (Revenue $ 179,218,180 )
PRIORITY MEDICAID (SM): SEE SCHEDULE O
4b (Code:   ) (Expenses $ 1,511,576 including grants of $ 0 ) (Revenue $ 1,426,331 )
MICHILD - OFFERED BY PRIORITY HEALTH GOVERNMENT PROGRAMS: SEE SCHEDULE O
4c (Code:   ) (Expenses $   including grants of $   ) (Revenue $   )
4d Other program services. (Describe in Schedule O.)
(Expenses $   including grants of $   ) (Revenue $   )
4e Total program service expensesMediumBullet$ 162,345,107
Form 990 (2010)
Form 990 (2010)
Page 3
Part IV
Checklist of Required Schedules
Yes
No
1
Is the organization described in section 501(c)(3) or 4947(a)(1) (other than a private foundation)? If “Yes,” complete Schedule AClick to see attachment.....................
1
Yes
 
2
Is the organization required to complete Schedule B, Schedule of Contributors? ........
2
 
No
3
Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? If “Yes,” complete Schedule C, Part I..........
3
 
No
4
Section 501(c)(3) organizations. Did the organization engage in lobbying activities? If “Yes,” complete Schedule C,
Part II.........................
4
 
No
5
Is the organization a section 501(c)(4), 501(c)(5), or 501(c)(6) organization that receives membership dues, assessments, or similar amounts as defined in Revenue Procedure 98-19? If “Yes,” complete Schedule C, Part III........................
5
 
 
6
Did the organization maintain any donor advised funds or any similar funds or accounts where donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts? If “Yes,” complete
Schedule D, Part I.......................
6
 
No
7
Did the organization receive or hold a conservation easement, including easements to preserve open space,
the environment, historic land areas or historic structures? If “Yes,” complete Schedule D, Part II...
7
 
No
8
Did the organization maintain collections of works of art, historical treasures, or other similar assets? If “Yes,” complete Schedule D, Part III ....................
8
 
No
9
Did the organization report an amount in Part X, line 21; serve as a custodian for amounts not listed in Part X; or provide credit counseling, debt management, credit repair, or debt negotiation services? If “Yes,”
complete Schedule D, Part IV...................
9
 
No
10
Did the organization, directly or through a related organization, hold assets in term, permanent,or quasi-endowments? If “Yes,” complete Schedule D, Part V
10
 
No
11
If the organization’s answer to any of the following questions is ‘Yes,’ then complete Schedule D, Parts VI, VII, VIII, IX, or X as applicable:
a
Did the organization report an amount for land, buildings, and equipment in Part X, line10? If “Yes,” complete Schedule D, Part VI.
11a
 
No
b
Did the organization report an amount for investments—other securities in Part X, line 12 that is 5% or more of its total assets reported in Part X, line 16? If “Yes,” complete Schedule D, Part VII.
11b
 
No
c
Did the organization report an amount for investments—program related in Part X, line 13 that is 5% or more of its total assets reported in Part X, line 16? If “Yes,” complete Schedule D, Part VIII.
11c
 
No
d
Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in Part X, line 16? If “Yes,” complete Schedule D, Part IX.
11d
 
No
e
Did the organization report an amount for other liabilities in Part X, line 25? If “Yes,” complete Schedule D, Part X.Click to see attachment
11e
Yes
 
f
Did the organization’s separate or consolidated financial statements for the tax year include a footnote that addresses the organization’s liability for uncertain tax positions under FIN 48 (ASC 740)? If “Yes,” complete Schedule D, Part X.
11f
 
No
12a
Did the organization obtain separate, independent audited financial statements for the tax year? If “Yes,” complete Schedule D, Parts XI, XII, and XIII
12a
 
No
b
Was the organization included in consolidated, independent audited financial statements for the tax year? If “Yes,” and if the organization answered ‘No’ to line 12a, then completing Schedule D, Parts XI, XII, and XIII is optional Click to see attachment
12b
Yes
 
13
Is the organization a school described in section 170(b)(1)(A)(ii)? If “Yes,” complete Schedule E
13
 
No
14a
Did the organization maintain an office, employees, or agents outside of the United States?....
14a
 
No
b
Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business, and program service activities outside the United States? If “Yes,” complete Schedule F, Part I.........
14b
 
No
15
Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or assistance to any organization or entity located outside the U.S.? If “Yes,” complete Schedule F, Part II..
15
 
No
16
Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or assistance to individuals located outside the U.S.? If “Yes,” complete Schedule F, Part III..
16
 
No
17
Did the organization report a total of more than $15,000, of expenses for professional fundraising services on Part IX, column (A), lines 6 and 11e? If “Yes,” complete Schedule G, Part I
17
 
No
18
Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII, lines 1c and 8a? If “Yes,” complete Schedule G, Part II..........
18
 
No
19
Did the organization report more than $15,000 of gross income from gaming activities on Part VIII, line 9a? If “Yes,” complete Schedule G, Part III...................
19
 
No
Form 990 (2010)
Form 990 (2010)
Page 4
Part IV
Checklist of Required Schedules (continued)
20a
Did the organization operate one or more hospitals? If “Yes,” complete Schedule H.....
20a
 
No
b
Did the organization attach its audited financial statement to this return? Note: All Form 990 filers that operate one or more hospitals must attach audited financial statements. .....
20b
 
 
21
Did the organization report more than $5,000 of grants and other assistance to governments and organizations in the United States on Part IX, column (A), line 1? If “Yes,” complete Schedule I, Parts I and II..
21
 
No
22
Did the organization report more than $5,000 of grants and other assistance to individuals in the United States on Part IX, column (A), line 2? If “Yes,” complete Schedule I, Parts I and III.....
22
 
No
23
Did the organization answer “Yes” to Part VII, Section A, questions 3, 4, or 5, about compensation of the organization’s current and former officers, directors, trustees, key employees, and highest compensated employees? If “Yes,” complete Schedule J................ Click to see attachment
23
Yes
 
24a
Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the last day of the year, that was issued after December 31, 2002? If “Yes,” answer questions 24b–24d and complete Schedule K. If “No,” go to line 25................
24a
 
No
b
Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception?...
24b
 
 
c
Did the organization maintain an escrow account other than a refunding escrow at any time during the year
to defease any tax-exempt bonds?......................
24c
 
 
d
Did the organization act as an “on behalf of” issuer for bonds outstanding at any time during the year?...
24d
 
 
25a
Section 501(c)(3) and 501(c)(4) organizations. Did the organization engage in an excess benefit transaction with a disqualified person during the year? If “Yes,” complete Schedule L, Part I......
25a
 
No
b
Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and that the transaction has not been reported on any of the organization’s prior Forms 990 or 990-EZ? If “Yes,” complete Schedule L, Part I................
25b
 
No
26
Was a loan to or by a current or former officer, director, trustee, key employee, highly compensated employee, or disqualified person outstanding as of the end of the organization’s tax year? If “Yes,” complete Schedule L,
Part II...........................
26
 
No
27
Did the organization provide a grant or other assistance to an officer, director, trustee, key employee, substantial contributor, or a grant selection committee member, or to a person related to such an individual? If “Yes,” complete Schedule L, Part III...............
27
 
No
28
Was the organization a party to a business transaction with one of the following parties? (see Schedule L, Part IV instructions for applicable filing thresholds, conditions, and exceptions):
a
A current or former officer, director, trustee, or key employee? If “Yes,” complete Schedule L, Part IV .........................
28a
 
No
b
A family member of a current or former officer, director, trustee, or key employee? If “Yes,”
complete Schedule L, Part IV...................
28b
 
No
c
An entity of which a current or former officer, director, trustee, or key employee (or a family member thereof) was an officer, director, trustee, or owner? If “Yes,” complete Schedule L, Part IV.. Click to see attachment
28c
Yes
 
29
Did the organization receive more than $25,000 in non-cash contributions? If “Yes,” complete Schedule M
29
 
No
30
Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation contributions? If “Yes,” complete Schedule M............
30
 
No
31
Did the organization liquidate, terminate, or dissolve and cease operations? If “Yes,” complete Schedule N,
Part I...........................
31
 
No
32
Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? If “Yes,” complete Schedule N, Part II.......................
32
 
No
33
Did the organization own 100% of an entity disregarded as separate from the organization under Regulations sections 301.7701-2 and 301.7701-3? If “Yes,” complete Schedule R, Part I........ Click to see attachment
33
Yes
 
34
Was the organization related to any tax-exempt or taxable entity? If “Yes,” complete Schedule R, Parts II, III, IV, and V, line 1..................... Click to see attachment
34
Yes
 
35
Is any related organization a controlled entity within the meaning of section 512(b)(13)? .....
35
Yes
 
a
Did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of section 512(b)(13)? If “Yes,” complete Schedule R, Part V, line 2... Click to see attachment
36
Section 501(c)(3) organizations. Did the organization make any transfers to an exempt non-charitable related organization? If “Yes,” complete Schedule R, Part V, line 2........... Click to see attachment
36
Yes
 
37
Did the organization conduct more than 5% of its activities through an entity that is not a related organization and that is treated as a partnership for federal income tax purposes? If “Yes,” complete Schedule R, Part VI
37
 
No
38
Did the organization complete Schedule O and provide explanations in Schedule O for Part VI, lines 11 and 19? Note. All Form 990 filers are required to complete Schedule O. ............
38
Yes
 
Form 990 (2010)
Form 990 (2010)
Page 5
Part V
Statements Regarding Other IRS Filings and Tax Compliance
Check if Schedule O contains a response to any question in this Part V . . . . . . . . . .
Yes
No
1a
Enter the number reported in Box 3 of Form 1096. Enter -0- if not applicable. .......
1a
980
b
Enter the number of Forms W-2G included in line 1a. Enter -0- if not applicable.
1b
0
c
Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming (gambling) winnings to prize winners? ..................
1c
Yes
 
2a
Enter the number of employees reported on Form W-3, Transmittal of Wage and Tax Statements filed for the calendar year ending with or within the year covered by this return .....................
2a
0
b
If at least one is reported on line 2a, did the organization file all required federal employment tax returns?

Note. If the sum of lines 1a and 2a is greater than 250, you may be required to e-file. (see instructions)
2b
 
 
3a
Did the organization have unrelated business gross income of $1,000 or more during the year?.............................
3a
 
No
b
If “Yes,” has it filed a Form 990-T for this year? If “No,” provide an explanation in Schedule O.....
3b
 
 
4a
At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account or securities account)?.......................
4a
 
No
b
If "Yes," enter the name of the foreign country: MediumBullet
See instructions for filing requirements for Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts.
5a
Was the organization a party to a prohibited tax shelter transaction at any time during the tax year?..
5a
 
No
b
Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction?
5b
 
No
c
If “Yes” to line 5a or 5b, did the organization file Form 8886-T? ........
5c
 
 
6a
Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization solicit any contributions that were not tax deductible?..........
6a
 
No
b
If “Yes,” did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible?........................
6b
 
 
7
Organizations that may receive deductible contributions under section 170(c).
a
Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor?....................
7a
 
No
b
If “Yes,” did the organization notify the donor of the value of the goods or services provided?.....
7b
 
 
c
Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required to file Form 8282?...........................
7c
 
No
d
If “Yes,” indicate the number of Forms 8282 filed during the year ....
7d
 
e
Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract?..........................
7e
 
No
f
Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract?..
7f
 
No
g
If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required?...................
7g
 
 
h
If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098-C?...............
7h
 
 
8
Sponsoring organizations maintaining donor advised funds and section 509(a)(3) supporting organizations. Did the supporting organization, or a donor advised fund maintained by a sponsoring organization, have excess business holdings at any time during the year?................
8
 
 
9
Sponsoring organizations maintaining donor advised funds.
a
Did the organization make any taxable distributions under section 4966?.........
9a
 
 
b
Did the organization make a distribution to a donor, donor advisor, or related person?......
9b
 
 
10
Section 501(c)(7) organizations. Enter:
a
Initiation fees and capital contributions included on Part VIII, line 12 ...
10a
 
b
Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities
10b
 
11
Section 501(c)(12) organizations. Enter:
a
Gross income from members or shareholders .........
11a
 
b
Gross income from other sources (Do not net amounts due or paid to other sources against amounts due or received from them.) ........
11b
 
12a
Section 4947(a)(1) non-exempt charitable trusts. Is the organization filing Form 990 in lieu of Form 1041?
12a
 
 
b
If “Yes,” enter the amount of tax-exempt interest received or accrued during the year.
12b
 
13
Section 501(c)(29) qualified nonprofit health insurance issuers.
a
Is the organization licensed to issue qualified health plans in more than one state?
Note. All 501(c)(29) organizations must list in Schedule O each state in which they are licensed to issue qualified health plans, the amount of reserves required by each state, and the amount of reserves the organization allocated to each state.
13a
 
 
b
Enter the aggregate amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans.
13b
 
c
Enter the aggregate amount of reserves on hand.
13c
 
14a
Did the organization receive any payments for indoor tanning services during the tax year?.....
14a
 
 
b
If "Yes," has it filed a Form 720 to report these payments? If “No,” provide an explanation in Schedule O..
14b
 
 
Form 990 (2010)
Form 990 (2010)
Page 6
Part VI
Governance, Management, and Disclosure For each “Yes” response to lines 2 through 7b below, and for a “No” response to lines 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule O. See instructions.
Check if Schedule O contains a response to any question in this Part VI . . . . . . . . . .
Section A. Governing Body and Management
Yes
No
1a
Enter the number of voting members of the governing body at the end of the tax year ..............
1a
6
b
Enter the number of voting members included in line 1a, above, who are independent .................
1b
2
2
Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other officer, director, trustee, or key employee? .................
2
 
No
3
Did the organization delegate control over management duties customarily performed by or under the direct supervision of officers, directors or trustees, or key employees to a management company or other person? ..
3
 
No
4
Did the organization make any significant changes to its governing documents since the prior Form 990 was filed?
4
 
No
5
Did the organization become aware during the year of a significant diversion of the organization’s assets? .
5
 
No
6
Does the organization have members or stockholders? ................
6
Yes
 
7a
Does the organization have members, stockholders, or other persons who may elect one or more members of the governing body? .........................
7a
Yes
 
b
Are any decisions of the governing body subject to approval by members, stockholders, or other persons? ..
7b
Yes
 
8
Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following:
a
The governing body? .........................
8a
Yes
 
b
Each committee with authority to act on behalf of the governing body? ............
8b
Yes
 
9
Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the organization’s mailing address? If “Yes,” provide the names and addresses in Schedule O .....
9
 
No
Section B. Policies (This Section B requests information about policies not required by the Internal
Revenue Code.)
Yes
No
10a
Does the organization have local chapters, branches, or affiliates? ............
10a
 
No
b
If “Yes,” does the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with those of the organization? ....
10b
 
 
11a
Has the organization provided a copy of this Form 990 to all members of its governing body before filing the form?
11a
Yes
 
b
Describe in Schedule O the process, if any, used by the organization to review the Form 990. .....
12a
Does the organization have a written conflict of interest policy? If “No,” go to line 13.......
12a
Yes
 
b
Are officers, directors or trustees, and key employees required to disclose annually interests that could give rise to conflicts? ...........................
12b
Yes
 
c
Does the organization regularly and consistently monitor and enforce compliance with the policy? If “Yes,” describe in Schedule O how this is done ....................
12c
Yes
 
13
Does the organization have a written whistleblower policy? ...............
13
Yes
 
14
Does the organization have a written document retention and destruction policy? .........
14
 
No
15
Did the process for determining compensation of the following persons include a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision?
a
The organization’s CEO, Executive Director, or top management official ...........
15a
Yes
 
b
Other officers or key employees of the organization ................
15b
Yes
 
If "Yes" to line a or b, describe the process in Schedule O. (See instructions.)
16a
Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? ......................
16a
 
No
b
If “Yes,” has the organization adopted a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and taken steps to safeguard the organization’s exempt status with respect to such arrangements? ............
16b
 
 
Section C. Disclosure
17
List the States with which a copy of this Form 990 is required to be filedMediumBullet
18
Section 6104 requires an organization to make its Form 1023 (or 1024 if applicable), 990, and 990-T (501(c)(3)s only) available for public inspection. Indicate how you make these available. Check all that apply.
19
Describe in Schedule O whether (and if so, how), the organization makes its governing documents, conflict of interest policy, and financial statements available to the public.
20
State the name, physical address, and telephone number of the person who possesses the books and records of the organization: MediumBullet
Mary Anne Jones
1231 East Beltline NE
Grand Rapids,MI495254501
(616) 942-0954
Form 990 (2010)
Form 990 (2010)
Page 7
Part VII
Compensation of Officers, Directors,Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors
Check if Schedule O contains a response to any question in this Part VII . . . . . . . . . .
Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees
1a Complete this table for all persons required to be listed. Report compensation for the calendar year ending with or within the organization’s tax year.
RoundBullet List all of the organization’s current officers, directors, trustees (whether individuals or organizations), regardless of amount
of compensation, and current key employees. Enter -0- in columns (D), (E), and (F) if no compensation was paid.

RoundBullet List all of the organization’s current key employees, if any. See instructions for definition of "key employee."
RoundBullet List the organization’s five current highest compensated employees (other than an officer, director, trustee or key employee)
who received reportable compensation (Box 5 of Form W-2 and/or Box 7 of Form 1099-MISC) of more than $100,000 from the
organization and any related organizations.

RoundBullet List all of the organization’s former officers, key employees, or highest compensated employees who received more than $100,000
of reportable compensation from the organization and any related organizations.

RoundBullet List all of the organization’s former directors or trustees that received, in the capacity as a former director or trustee of the
organization, more than $10,000 of reportable compensation from the organization and any related organizations.

List persons in the following order: individual trustees or directors; institutional trustees; officers; key employees; highest
compensated employees; and former such persons.
Check this box if neither the organization nor any related organizations compensated any current or former officer, director, or trustee.
(A)
Name and Title 		(B)
Average hours per week (describe hours for related organizations in Schedule O) 		(C)
Position (check all that apply) 		(D)
Reportable compensation from the organization (W- 2/1099-MISC) 		(E)
Reportable compensation from related organizations (W- 2/1099-MISC) 		(F)
Estimated amount of other compensation from the organization and related organizations
Individual Trustee or Director; Institutional Trustee; Officer; Key Employee; Highest compensated employee; Former;
(1) ELIZABETH BAXTER
DIRECTOR
 1 X           0 0 0
(2) GREGORY A HAWKINS
TREASURER
 5 X   X       30,040 343,140 254,868
(3) JAMES F BYRNE
CHIEF MEDICAL OFFICER
 5 X           53,934 616,085 68,780
(4) JAMES S SLUBOWSKI
CIO & VP, PART-YEAR DIRECTOR
 5 X           31,769 362,892 42,701
(5) KIMBERLY K HORN
PRESIDENT & CEO
 5 X   X       75,277 859,876 136,961
(6) MICHAEL R KOZIARA
VP, PROVIDER
 5 X           29,706 339,331 140,748
(7) NICOLE BUCHANAN
DIRECTOR
 1 X           0 0 0
(8) KIMBERLY L THOMAS
SECRETARY
 5     X       14,553 166,239 27,421
(9) JUDITH HOOYENGA
SECRETARY-PART YR
 5     X       17,643 201,534 50,082
(10) DEBORAH A PHILLIPS
CHIEF ADMIN
 5       X     36,369 415,439 44,991
(11) JOAN A BUDDEN
CHIEF MARKETING OFFICER
 5       X     27,776 317,282 77,144
(12) BRUCE NIEBYLSKI
AVP MEDICAL
 5         X   26,804 306,174 44,689
(13) KIMBERLY F SUAREZ
VP MEDICAL OPERATIONS
 5         X   19,152 218,766 34,559
(14) DONALD J WHITFORD
VP SALES
 5         X   20,042 228,933 14,642
(15) JOHN L FOX
AVP MEDICAL
 5         X   23,175 264,725 47,373
(16) SEAN T MONAGHAN
CHIEF ACTUARY
 5         X   20,342 232,364 28,018
(17) MARK J ZICKEL
FORMER HC
 0           X 22,934 261,972 0
Form 990 (2010)
Form 990 (2010)
Page 8
Part VII
Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued)
(A)
Name and Title 		(B)
Average hours per week (describe hours for related organizations in Schedule O) 		(C)
Position (check all that apply) 		(D)
Reportable compensation from the organization (W- 2/1099-MISC) 		(E)
Reportable compensation from related organizations (W- 2/1099-MISC) 		(F)
Estimated amount of other compensation from the organization and related organizations
Individual Trustee or Director; Institutional Trustee; Officer; Key Employee; Highest compensated employee; Former;
(18) GUY S GAUTHIER
FORMER KEY
 0           X 16,345 186,711 0
(19) LEON D LAMOREAUX
FORMER KEY
 5           X 24,027 274,462 31,960
(20) MARC M KOLE
FORMER CFO
 0           X 1,531 17,492 0




















1b Sub-Total................MediumBullet
c Total from continuation sheets to Part VII, Section A....MediumBullet
d Total (add lines 1b and 1c)............MediumBullet 491,419 5,613,417 1,044,937
2
Total number of individuals (including but not limited to those listed above) who received more than $100,000 in reportable compensation from the organizationMediumBullet100
Yes
No
3
Did the organization list any former officer, director or trustee, key employee, or highest compensated employee on line 1a? If “Yes,” complete Schedule J for such individual .............
3
Yes
 
4
For any individual listed on line 1a, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If “Yes,” complete Schedule J for such individual...........................
4
Yes
 
5
Did any person listed on line 1a receive or accrue compensation from any unrelated organization or individual for services rendered to the organization? If “Yes,” complete Schedule J for such person .....
5
 
No
Section B. Independent Contractors
1
Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the organization.
(A)
Name and business address 		(B)
Description of services 		(C)
Compensation
SPECTRUM HEALTH HOSPITALS
100 MICHIGAN STREET NE
GRAND RAPIDS,MI49503 		CLAIMS SERVICES 32,528,389
ARGUS HEALTH SYSTEMS
1300 WASHINGTON STREET
KANSAS CITY,MO64105 		CLAIMS SERVICES 20,742,744
PRIORITY HEALTH MANAGED BENEFITS
1231 EAST BELTLINE AVENUE NE
GRAND RAPIDS,MI49525 		ADMIN/MGMT SERVICES 10,438,476
HOLLAND HOSPITAL
602 MICHIGAN AVENUE
HOLLAND,MI49423 		CLAIMS SERVICES 4,583,704
MERCY HEALTH PARTNERS
PO BOX 358
MUSKEGON,MI49442 		CLAIMS SERVICES 3,857,638
2
Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 in compensation from the organization MediumBullet108
Form 990 (2010)
Form 990 (2010)
Page 9
Part VIII
Statement of Revenue
(A)
Total revenue 		(B)
Related or
exempt
function
revenue 		(C)
Unrelated
business
revenue 		(D)
Revenue
excluded from
tax under sections
512, 513, or 514
Contributions, gifts, grants and other similar amounts 1a Federated campaigns..1a  
b Membership dues....1b  
c Fundraising events....1c  
d Related organizations...1d  
e Government grants (contributions)1e  
f All other contributions, gifts, grants, and
similar amounts not included above1f 		 
g Noncash contributions included in lines 1a-1f:$  
h Total. Add lines 1a-1f.......MediumBullet 0
Program Service Revenue Business Code
2a NET PREMIUM INCOME 524,114 180,644,511 180,644,511    
b
c
d
e
f All other program service revenue . 0 0 0 0
g Total. Add lines 2a–2f........MediumBullet 180,644,511
Other Revenue 3 Investment income (including dividends, interest
and other similar amounts).....MediumBullet 98,231     98,231
4 Income from investment of tax-exempt bond proceeds..MediumBullet 0      
5 Royalties............MediumBullet 0      
(i) Real (ii) Personal
6a Gross Rents    
b Less: rental expenses    
c Rental income or (loss) 0 0
d Net rental income or (loss).......MediumBullet 0      
(i) Securities (ii) Other
7a Gross amount from sales of assets other than inventory 2,158,868  
b Less: cost or other basis and sales expenses 2,158,153  
c Gain or (loss) 715 0
d Net gain or (loss)..........MediumBullet 715     715
8a Gross income from fundraising events (not including
$  
of contributions reported on line 1c). See Part IV, line 18 ...
a  
b Less: direct expenses ...b  
c Net income or (loss) from fundraising events..MediumBullet 0    
9a Gross income from gaming activities.
See Part IV, line 19 ...
a  
b Less: direct expenses ...b  
c Net income or (loss) from gaming activities...MediumBullet 0      
10a Gross sales of inventory, less
returns and allowances .
a  
b Less: cost of goods sold ..b  
c Net income or (loss) from sales of inventory..MediumBullet 0      
Miscellaneous Revenue Business Code
11a            
b            
c            
d All other revenue .... 0 0 0 0
e Total. Add lines 11a–11d ......MediumBullet 0
12 Total revenue. See Instructions....MediumBullet 180,743,457 180,644,511 0 98,946
Form 990 (2010)
Form 990 (2010)
Page 10
Part IX
Statement of Functional Expenses
Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A) but are not required to complete columns (B), (C), and (D).
Do not include amounts reported on lines 6b,
7b, 8b, 9b, and 10b of Part VIII. 		(A)
Total expenses 		(B)
Program service expenses 		(C)
Management and general expenses 		(D)
Fundraising expenses
1 Grants and other assistance to governments and organizations in the U.S. See Part IV, line 21 0  
2 Grants and other assistance to individuals in the U.S. See Part IV, line 22 0  
3 Grants and other assistance to governments, organizations, and individuals outside the U.S. See Part IV, lines 15 and 16 0  
4 Benefits paid to or for members 150,238,524 150,238,524
5 Compensation of current officers, directors, trustees, and key employees .... 426,582 234,620 191,962  
6 Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) .... 64,838 35,661 29,177  
7 Other salaries and wages 4,796,360 2,637,998 2,158,362  
8 Pension plan contributions (include section 401(k) and section 403(b) employer contributions) .... 191,193 105,156 86,037  
9 Other employee benefits ....... 860,451 473,248 387,203  
10 Payroll taxes ........... 387,409 213,075 174,334  
11 Fees for services (non-employees):        
a Management ...... 0      
b Legal ......... 51,651   51,651  
c Accounting ........... 34,546   34,546  
d Lobbying ........... 0      
e Professional fundraising. See Part IV, line 17.. 0  
f Investment management fees ...... 0      
g Other .......... 600,835 330,459 270,376  
12 Advertising and promotion .... 642,425 353,334 289,091  
13 Office expenses ....... 926,653 509,659 416,994  
14 Information technology ...... 407,273 224,000 183,273  
15 Royalties .. 0      
16 Occupancy ........... 439,403 241,672 197,731  
17 Travel ............ 68,038 37,421 30,617  
18 Payments of travel or entertainment expenses for any federal, state, or local public officials ...... 0      
19 Conferences, conventions, and meetings .... 42,611 23,436 19,175  
20 Interest ........... 166,636 91,650 74,986  
21 Payments to affiliates ....... 0      
22 Depreciation, depletion, and amortization ..... 847,131 465,922 381,209  
23 Insurance .............. 31,938 17,566 14,372  
24 Other expenses. Itemize expenses not covered above. (Expenses grouped together and labeled miscellaneous may not exceed 5% of total expenses shown on line 25 below.)
a TAXES 10,878,509 5,983,180 4,895,329  
b OTHER EXPENSES 144,753 79,615 65,138  
c DONATIONS AND SPONSORSHIPS 88,929 48,911 40,018  
d
e
f All other expenses 0 0 0 0
25 Total functional expenses. Add lines 1 through 24f 172,336,688 162,345,107 9,991,581 0
26 Joint costs. Check here MediumBullet if following
SOP 98-2 (ASC 958-720). Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation 		0      
Form 990 (2010)
Form 990 (2010)
Page 11
Part X Balance Sheet
(A)
Beginning of year 		(B)
End of year
Assets 1 Cash—non-interest-bearing ..........   1  
2 Savings and temporary cash investments ....... 3,815,836 2 17,934,961
3 Pledges and grants receivable, net .........   3  
4 Accounts receivable, net ......... 3,263,236 4 3,261,649
5 Receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of
Schedule L ..........   5  
6 Receivables from other disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B). Complete Part II of
Schedule L ..........   6  
7 Notes and loans receivable, net .............   7  
8 Inventories for sale or use ..............   8  
9 Prepaid expenses and deferred charges ............   9  
10a Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D 10a 0
b Less: accumulated depreciation. ..... 10b 0   10c 0
11 Investments—publicly traded securities .......... 26,905,442 11 18,056,148
12 Investments—other securities. See Part IV, line 11 ......   12 0
13 Investments—program-related. See Part IV, line 11 ..   13 0
14 Intangible assets .........   14  
15 Other assets. See Part IV, line 11 ........... 259,638 15 111,949
16 Total assets. Add lines 1 through 15 (must equal line 34)... 34,244,152 16 39,364,707
Liabilities 17 Accounts payable and accrued expenses . 15,283,195 17 16,215,002
18 Grants payable ..........   18  
19 Deferred revenue .......... 365,733 19 945,764
20 Tax-exempt bond liabilities ..........   20  
21 Escrow or custodial account liability. Complete Part IV of Schedule D..   21  
22 Payables to current and former officers, directors, trustees, key
employees, highest compensated employees, and disqualified
persons. Complete Part II of Schedule L..........   22  
23 Secured mortgages and notes payable to unrelated third parties ..   23  
24 Unsecured notes and loans payable to unrelated third parties ....   24  
25 Other liabilities. Complete Part X of Schedule D..... 1,932,765 25 2,108,713
26 Total liabilities. Add lines 17 through 25..... 17,581,693 26 19,269,479
Net Assets or Fund Balance Organizations that follow SFAS 117, check here MediumBullet and complete lines 27 through 29, and lines 33 and 34.
27 Unrestricted net assets .....   27  
28 Temporarily restricted net assets .....   28  
29 Permanently restricted net assets .....   29  
Organizations that do not follow SFAS 117, check here MediumBullet and complete lines 30 through 34.
30 Capital stock or trust principal, or current funds ..... 10,000 30 10,000
31 Paid-in or capital surplus, or land, building or equipment fund ..... 12,326,879 31 12,326,879
32 Retained earnings, endowment, accumulated income, or other funds 4,325,580 32 7,758,349
33 Total net assets or fund balances ..... 16,662,459 33 20,095,228
34 Total liabilities and net assets/fund balances ..... 34,244,152 34 39,364,707
Form 990 (2010)
Form 990 (2010)
Page 12
Part XI
Reconcilliation of Net Assets
Check if Schedule O contains a response to any question in this Part XI . . . . . . . . . .
1
Total revenue (must equal Part VIII, column (A), line 12) . . .
1
180,743,457
2
Total expenses (must equal Part IX, column (A), line 25) . . . . .
2
172,336,688
3
Revenue less expenses. Subtract line 2 from line 1 . . . .
3
8,406,769
4
Net assets or fund balances at beginning of year (must equal Part X, line 33, column (A)) . .
4
16,662,459
5
Other changes in net assets or fund balances (explain in Schedule O) . . . .
5
-4,974,000
6
Net assets or fund balances at end of year. Combine lines 3, 4, and 5 (must equal Part X, line 33, column (B)) . . . . . .
6
20,095,228
Part XII
Financial Statements and Reporting
Check if Schedule O contains a response to any question in this Part XII . . . . . . . . . .
Yes
No
1
Accounting method used to prepare the Form 990:  
If the organization changed its method of accounting from a prior year or checked "Other," explain in
Schedule O.
2a
Were the organization’s financial statements compiled or reviewed by an independent accountant?..
2a
 
No
b
Were the organization’s financial statements audited by an independent accountant?........
2b
Yes
 
c
If “Yes,” to 2a or 2b, does the organization have a committee that assumes responsibility for oversight of the audit, review, or compilation of its financial statements and selection of an independent accountant?
If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O............................
2c
Yes
 
d
If “Yes” to line 2a or 2b, check a box below to indicate whether the financial statements for the year were issued on a separate basis, consolidated basis, or both:
3a
As a result of a federal award, was the organization required to undergo an audit or audits as set forth in the Single Audit Act and OMB Circular A-133? ................
3a
 
No
b
If “Yes,” did the organization undergo the required audit or audits? If the organization did not undergo the required audit or audits, explain why in Schedule O and describe any steps taken to undergo such audits. ..
3b
 
 
Form 990 (2010)
Additional Data


Software ID: 10000128
Software Version: v2010.1.0
Form 990, Special Condition Description:
Special Condition Description
SCHEDULE A
(Form 990 or 990EZ)

Department of the Treasury
Internal Revenue Service
Public Charity Status and Public Support

Complete if the organization is a section 501(c)(3) organization or a section
4947(a)(1) nonexempt charitable trust.
right arrow Attach to Form 990 or Form 990-EZ. right arrow See separate instructions.
OMB No. 1545-0047
2010
Open to Public
Inspection
Name of the organization
PRIORITY HEALTH GOVERNMENT PROGRAMS INC
 
Employer identification number

32-0016523
Part I
Reason for Public Charity Status (All organizations must complete this part.) See instructions
The organization is not a private foundation because it is: (For lines 1 through 11, check only one box.)
1
2
3
4
5
section 170(b)(1)(A)(iv). (Complete Part II.)
6
7
8
9
receipts from activities related to its exempt functions—subject to certain exceptions, and (2) no more than 331/3% of
its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses
acquired by the organization after June 30, 1975. See section 509(a)(2). (Complete Part III.)
10
11
e
f
g
(i) a person who directly or indirectly controls, either alone or together with persons described in (ii)
Yes
No
and (iii) below, the governing body of the the supported organization? ................
11g(i)
 
 
(ii) a family member of a person described in (i) above? ......................
11g(ii)
 
 
(iii) a 35% controlled entity of a person described in (i) or (ii) above? ................
11g(iii)
 
 
h
(i)
Name of supported organization 		(ii)
EIN 		(iii)
Type of organization (described on lines 1- 9 above or IRC section (see instructions)) 		(iv)
Is the organization in col. (i) listed in your governing document? 		(v)
Did you notify the organization in col. (i) of your support? 		(vi)
Is the organization in col. (i) organized in the U.S.? 		(vii)
Amount of support?
Yes No Yes No Yes No
Total                  

For Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 11285F
Schedule A (Form 990 or 990-EZ) 2010
Schedule A (Form 990 or 990-EZ) 2010
Page 2
Part II
Support Schedule for Organizations Described in IRC 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi)
(Complete only if you checked the box on line 5, 7, or 8 of Part I or if the organization failed to qualify under Part III. If the organization fails to qualify under the tests listed below, please complete Part III.)
Section A. Public Support
Calendar year(or fiscal year beginning in) (a) 2006 (b) 2007 (c) 2008 (d) 2009 (e) 2010 (f) Total
1 Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") ....            
2 Tax revenues levied for the organization's benefit and either paid to or expended on its behalf.......            
3 The value of services or facilities furnished by a governmental unit to the organization without charge..            
4 Total. Add lines 1 through 3..            
5 The portion of total contributions by each person (other than a governmental unit or publicly supported organization) included on line 1 that exceeds 2% of the amount shown on line 11, column (f)..            
6 Public Support. Subtract line 5 from line 4.            
Section B. Total Support
Calendar year(or fiscal year beginning in) (a) 2006 (b) 2007 (c) 2008 (d) 2009 (e) 2010 (f) Total
7 Amounts from line 4..            
8 Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources..            
9 Net income from unrelated business activities, whether or not the business is regularly carried on..            
10 Other income. (Explain in Part IV.) Do not include gain or loss from the sale of capital assets..            
11 Total support (Add lines 7 through 10).            
12
12
 
13
Section C. Computation of Public Support Percentage
14
14
 
15
15
 
16a
b
17a
b
18
Schedule A (Form 990 or 990-EZ) 2010
Schedule A (Form 990 or 990-EZ) 2010
Page 3
Part III
Support Schedule for Organizations Described in IRC 509(a)(2)
(Complete only if you checked the box on line 9 of Part I or if the organization failed to qualify under Part II. If the organization fails to qualify under the tests listed below, please complete Part II.)
Section A. Public Support
Calendar year(or fiscal year beginning in) (a) 2006 (b) 2007 (c) 2008 (d) 2009 (e) 2010 (f) Total
1 Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") .           0
2 Gross receipts from admissions, merchandise sold or services performed, or facilities furnished in any activity that is related to the organization's tax-exempt purpose...... 86,329,569 112,493,025 131,436,086 172,147,008 180,644,511 683,050,199
3 Gross receipts from activities that are not an unrelated trade or business under section 513..           0
4 Tax revenues levied for the organization's benefit and either paid to or expended on its behalf...           0
5 The value of services or facilities furnished by a governmental unit to the organization without charge..           0
6 Total. Add lines 1 through 5. 86,329,569 112,493,025 131,436,086 172,147,008 180,644,511 683,050,199
7a Amounts included on lines 1, 2, and 3 received from disqualified persons...           0
b Amounts included on lines 2 and 3 received from other than disqualified persons that exceed the greater of $5,000 or 1% of the amount on line 13 for the year.           0
c Add lines 7a and 7b.. 0 0 0 0 0 0
8 Public Support (Subtract line 7c from line 6.)           683,050,199
Section B. Total Support
Calendar year (or fiscal year beginning in) (a) 2006 (b) 2007 (c) 2008 (d) 2009 (e) 2010 (f) Total
9 Amounts from line 6... 86,329,569 112,493,025 131,436,086 172,147,008 180,644,511 683,050,199
10a Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources.. 745,098 1,021,406 709,440 344,908 98,231 2,919,083
b Unrelated business taxable income (less section 511 taxes) from businesses acquired after June 30, 1975.           0
c Add lines 10a and 10b. 745,098 1,021,406 709,440 344,908 98,231 2,919,083
11 Net income from unrelated business activities not included in line 10b, whether or not the business is regularly carried on.           0
12 Other income. Do not include gain or loss from the sale of capital assets (Explain in Part IV.)           0
13 Total support (Add lines 9, 10c, 11 and 12.). 87,074,667 113,514,431 132,145,526 172,491,916 180,742,742 685,969,282
14
Section C. Computation of Public Support Percentage
15
15
99.570 %
16
16
99.439 %
Section D. Computation of Investment Income Percentage
17
17
0.430 %
18
18
0.561 %
19a
b
20
Schedule A (Form 990 or 990-EZ) 2010
Schedule A (Form 990 or 990-EZ) 2010
Page 4
Part IV
Supplemental Information. Supplemental Information. Complete this part to provide the explanation required by Part II, line 10; Part II, line 17a or 17b; or Part III, line 12. Also complete this part for any additional information. (See instructions).
Facts And Circumstances Test
 
Explanation
 
 
 
 
Schedule A (Form 990 or 990-EZ) 2010

Additional Data


Software ID: 10000128
Software Version: v2010.1.0
SCHEDULE C
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service
Political Campaign and Lobbying Activities

For Organizations Exempt From Income Tax Under section 501(c) and section 527
SchCMd Bullet Complete if the organization is described below.
SchCMd Bullet Attach to Form 990 or Form 990-EZ. SchCMd Bullet See separate instructions.
OMB No. 1545-0047
2010
Open to Public
Inspection
If the organization answered “Yes,” to Form 990, Part IV, Line 3, or Form 990-EZ, Part V, line 46 (Political Campaign Activities), then
Round Bullet Section 501(c)(3) organizations: Complete Parts I-A and B. Do not complete Part I-C.
Round Bullet Section 501(c) (other than section 501(c)(3)) organizations: Complete Parts I-A and C below. Do not complete Part I-B.
Round Bullet Section 527 organizations: Complete Part I-A only.
If the organization answered “Yes,” to Form 990, Part IV, Line 4, or Form 990-EZ, Part VI, line 47 (Lobbying Activities), then
Round Bullet Section 501(c)(3) organizations that have filed Form 5768 (election under section 501(h)) Complete Part II-A. Do not complete Part II-B.
Round Bullet Section 501(c)(3) organizations that have NOT filed Form 5768 (election under section 501(h)): Complete Part II-B. Do not complete Part II-A.
If the organization answered “Yes,” to Form 990, Part IV, Line 5 (Proxy Tax) or Form 990-EZ, Part V, line 35a (Proxy Tax), then
Round Bullet Section 501(c)(4), (5), or (6) organizations: Complete Part III.
Name of the organization
PRIORITY HEALTH GOVERNMENT PROGRAMS INC
 
Employer identification number

32-0016523
Part I-A
Complete if the organization is exempt under section 501(c) or is a section 527 organization.

1
Provide a description of the organization's direct and indirect political campaign activities on behalf of or in opposition to candidates for public office in Part IV.
2
Political expenditures ....................................SchCMd Bullet
$  
3
Volunteer hours ........................................
 

Part I-B
Complete if the organization is exempt under section 501(c)(3).
1
Enter the amount of any excise tax incurred by the organization under section 4955 .........SchCMd Bullet
$  
2
Enter the amount of any excise tax incurred by organization managers under section 4955 ......SchCMd Bullet
$  
3
If the organization incurred a section 4955 tax, did it file Form 4720 for this year? ..............
4a
Was a correction made? .........................................
b
If "Yes," describe in Part IV.
Part I-C
Complete if the organization is exempt under section 501(c) except section 501(c)(3).
1
Enter the amount directly expended by the filing organization for section 527 exempt function activities SchCMd Bullet
$  
2
Enter the amount of the filing organization's funds contributed to other organizations for section 527 exempt funtion activities ....................................SchCMd Bullet

$  
3
Total exempt function expenditures. Add lines 1 and 2. Enter here and on Form 1120-POL, line 17b..SchCMd Bullet

$ 0
4
Did the filing organization file Form 1120-POL for this year? ..........................
5
Enter the names, addresses and employer identification number (EIN) of all section 527 political organizations to which the filing
organization made payments. For each organization listed, enter the amount paid from the filing organization’s funds. Also enter the amount of political contributions received that were promptly and directly delivered to a separate political organization, such as a separate segregated fund or a political action committee (PAC). If additional space is needed, provide information in Part IV.
(a) Name (b) Address (c) EIN (d) Amount paid from filing organization's funds. If none, enter -0-. (e) Amount of political contributions received and promptly and directly delivered to a separate political organization. If none, enter -0-.










For Privacy Act and Paperwork Reduction Act Notice, see the instructions for Form 990.
Cat. No. 50084S
Schedule C (Form 990 or 990-EZ) 2010

Schedule C (Form 990 or 990-EZ) 2010
Page 2
Part II-A
Complete if the organization is exempt under section 501(c)(3) and filed Form 5768 (election under section 501(h)).
A Check
B Check
Limits on Lobbying Expenditures
(The term "expenditures" means amounts paid or incurred.) 		(a) Filing
Organization's
Totals 		(b) Affiliated Group
Totals
1a Total lobbying expenditures to influence public opinion (grass roots lobbying) ......    
b Total lobbying expenditures to influence a legislative body (direct lobbying) .......    
c Total lobbying expenditures (add lines 1a and 1b) ...................    
d Other exempt purpose expenditures ........................    
e Total exempt purpose expenditures (add lines 1c and 1d) ...............    
f Lobbying nontaxable amount. Enter the amount from the following table in both
columns.		    
  If the amount on line 1e, column (a) or (b) is:The lobbying nontaxable amount is:    
  Not over $500,00020% of the amount on line 1e.    
  Over $500,000 but not over $1,000,000$100,000 plus 15% of the excess over $500,000.    
  Over $1,000,000 but not over $1,500,000$175,000 plus 10% of the excess over $1,000,000.    
  Over $1,500,000 but not over $17,000,000$225,000 plus 5% of the excess over $1,500,000.    
  Over $17,000,000$1,000,000.    
       
g Grassroots nontaxable amount (enter 25% of line 1f) .................    
h Subtract line 1g from line 1a. If zero or less, enter -0-. ................    
i Subtract line 1f from line 1c. If zero or less, enter -0-. ................    
j If there is an amount other than zero on either line 1h or line 1i, did the organization file Form 4720 reporting
section 4911 tax for this year? ......................................

4-Year Averaging Period Under Section 501(h)
(Some organizations that made a section 501(h) election do not have to complete all of the five
columns below. See the instructions for lines 2a through 2f on page 4.)
Lobbying Expenditures During 4-Year Averaging Period
  Calendar year (or fiscal year
beginning in) 		(a) 2007 (b) 2008 (c) 2009 (d) 2010 (e) Total
             
2a Lobbying non-taxable amount          
             
b Lobbying ceiling amount
(150% of line 2a, column(e)) 		         
             
c Total lobbying expenditures          
             
d Grassroots non-taxable amount          
             
e Grassroots ceiling amount
(150% of line 2d, column (e))		          
             
f Grassroots lobbying expenditures          
Schedule C (Form 990 or 990-EZ) 2010


Schedule C (Form 990 or 990-EZ) 2010
Page 3
Part II-B
Complete if the organization is exempt under section 501(c)(3) and has NOT filed Form 5768 (election under section 501(h)).
(a)
Yes
No
(b)
Amount
1
During the year, did the filing organization attempt to influence foreign, national, state or local legislation, including any attempt to influence public opinion on a legislative matter or referendum, through the use of:
a
Volunteers? .........................................
 
 
b
Paid staff or management (include compensation in expenses reported on lines 1c through 1i)? ....
 
 
c
Media advertisements? ....................................
 
 
 
d
Mailings to members, legislators, or the public? .........................
 
 
 
e
Publications, or published or broadcast statements? .......................
 
 
 
f
Grants to other organizations for lobbying purposes? .......................
 
 
 
g
Direct contact with legislators, their staffs, government officials, or a legislative body? ........
 
 
 
h
Rallies, demonstrations, seminars, conventions, speeches, lectures, or any similar means? ......
 
 
 
i
Other activities? If "Yes," describe in Part IV ..........................
 
 
 
j
Total. lines 1c through 1i ...................................
0
2a
Did the activities in line 1 cause the organization to be not described in section 501(c)(3)? .....
 
 
b
If "Yes," enter the amount of any tax incurred under section 4912 .................
 
c
If "Yes," enter the amount of any tax incurred by organization managers under section 4912 .....
 
d
If the filing organization incurred a section 4912 tax, did it file Form 4720 for this year? .......
 
 
Part III-A
Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6).
Yes
No
1
Were substantially all (90% or more) dues received nondeductible by members? ................
1
 
 
2
Did the organization make only in-house lobbying expenditures of $2,000 or less? ................
2
 
 
3
Did the organization agree to carryover lobbying and political expenditures from the prior year? ..........
3
 
 
Part III-B
Complete if the organization is exempt under section 501(c)(4), section 501(c)(5), or section 501(c)(6) if BOTH Part III-A, lines 1 and 2 are answered “No” OR if Part III-A, line 3 is answered “Yes”.
1
Dues, assessments and similar amounts from members .....................
1
 
2
Section 162(e) non-deductible lobbying and political expenditures (do not include amounts of political
expenses for which the section 527(f) tax was paid).
a
Current year .........................................
2a
 
b
Carryover from last year ....................................
2b
 
c
Total ...........................................
2c
0
3
Aggregate amount reported in section 6033(e)(1)(A) notices of nondeductible section 162(e) dues .
3
 
4
If notices were sent and the amount on line 2c exceeds the amount on line 3, what portion of the excess does the organization agree to carryover to the reasonable estimate of nondeductible lobbying and political expenditure next year? ................................
4
 
5
Taxable amount of lobbying and political expenditures (see instructions) ..............
5
 
Part IV
Supplemental Information
Complete this part to provide the descriptions required for Part l-A, line 1; Part l-B, line 4; Part l-C, line 5; and Part ll-B, line 1i.
Also, complete this part for any additional information.
Identifier Return Reference Explanation
Schedule C (Form 990 or 990EZ) 2010

Additional Data


Software ID: 10000128
Software Version: v2010.1.0

SCHEDULE D
(Form 990)
Department of the Treasury
Internal Revenue Service
Supplemental Financial Statements
SchDMd Bullet Complete if the organization answered "Yes," to Form 990,
Part IV, line 6, 7, 8, 9, 10, 11, or 12.
SchDMd Bullet Attach to Form 990. SchDMd Bullet See separate instructions.
OMB No. 1545-0047
2010
Open to Public Inspection
Name of the organization
PRIORITY HEALTH GOVERNMENT PROGRAMS INC
 
Employer identification number

32-0016523
Part I
Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Complete if the organization answered "Yes" to Form 990, Part IV, line 6.
(a) Donor advised funds (b) Funds and other accounts
1 Total number at end of year .......    
2 Aggregate contributions to (during year) ...    
3 Aggregate grants from (during year) ...    
4 Aggregate value at end of year .......    
5
Did the organization inform all donors and donor advisors in writing that the assets held in donor advised
funds are the organization's property, subject to the organization's exclusive legal control? ............
6
Did the organization inform all grantees, donors, and donor advisors in writing that grant funds may be
used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit. ...................................
Part II
Conservation Easements. Complete if the organization answered "Yes" to Form 990, Part IV, line 7.
1
Purpose(s) of conservation easements held by the organization (check all that apply).
2
Complete lines 2a–2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year.
Held at the End of the Year
a Total number of conservation easements ....................... 2a  
b Total acreage restricted by conservation easements .................. 2b  
c Number of conservation easements on a certified historic structure included in (a) ..... 2c  
d Number of conservation easements included in (c) acquired after 8/17/06 ........ 2d  
3
Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during
the taxable year SchDMd Bullet  
4
Number of states where property subject to conservation easement is located SchDMd Bullet  
5
Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and
enforcement of the conservation easements it holds? .............................
6
Staff and volunteer hours devoted to monitoring, inspecting and enforcing conservation easements during the year SchDMd Bullet  
7
Amount of expenses incurred in monitoring, inspecting, and enforcing conservation easements during the year SchDMd Bullet $  
8
Does each conservation easement reported on line 2(d) above satisfy the requirements of section
170(h)(4)(B)(i) and 170(h)(4)(B)(ii)? ....................................
9
In Part XIV, describe how the organization reports conservation easements in its revenue and expense statement, and
balance sheet, and include, if applicable, the text of the footnote to the organization’s financial statements that describes
the organization’s accounting for conservation easements.
Part III
Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets.
Complete if the organization answered "Yes" to Form 990, Part IV, line 8.
1a
If the organization elected, as permitted under SFAS 116, not to report in its revenue statement and balance sheet works of
art, historical treasures, or other similar assets held for public exhibition, education or research in furtherance of public service,
provide, in Part XIV, the text of the footnote to its financial statements that describes these items.
b
If the organization elected, as permitted under SFAS 116, to report in its revenue statement and balance sheet works of art,
historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service,
provide the following amounts relating to these items:
(i)
Revenues included in Form 990, Part VIII, line 1 ........................SchDMd Bullet $  
(ii)
Assets included in Form 990, Part X ..............................SchDMd Bullet $  
2
If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the
following amounts required to be reported under SFAS 116 relating to these items:
a
Revenues included in Form 990, Part VIII, line 1 ..........................SchDMd Bullet $  
b
Assets included in Form 990, Part X ...............................SchDMd Bullet $  
For Privacy Act and Paperwork Reduction Act Notice, see the Intructions for Form 990
Cat. No. 52283D
Schedule D (Form 990) 2010

Schedule D (Form 990) 2010
Page 2
Part III
Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued)
3
Using the organization’s accession and other records, check any of the following that are a significant use of its collection
items (check all that apply):
a
d
b
e
 
c
4
Provide a description of the organization’s collections and explain how they further the organization’s exempt purpose in
Part XIV.
5
During the year, did the organization solicit or receive donations of art, historical treasures or other similar
assets to be sold to raise funds rather than to be maintained as part of the organization’s collection?........
Part IV
Escrow and Custodial Arrangements. Complete if the organization answered "Yes" to Form 990,
Part IV, line 9, or reported an amount on Form 990, Part X, line 21.
1a
Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not
included on Form 990, Part X? ....................................
b
If "Yes," explain the arrangement in Part XIV and complete the following table:
Amount
c Beginning balance ................................. 1c  
d Additions during the year .............................. 1d  
e Distributions during the year ............................. 1e  
f Ending balance ................................... 1f  
2a
Did the organization include an amount on Form 990, Part X, line 21? .....................
b
If “Yes,” explain the arrangement in Part XIV.
Part V
Endowment Funds. Complete if the organization answered "Yes" to Form 990, Part IV, line 10.
(a)Current Year (b)Prior Year (c)Two Years Back (d)Three Years Back (e)Four Years Back
1a Beginning of year balance ....      
b Contributions ........      
c Investment earnings or losses ...      
d Grants or scholarships .....      
e Other expenditures for facilities
and programs ........ 		     
f Administrative expenses ....      
g End of year balance ......      
2
Provide the estimated percentage of the year end balance held as:
a
Board designated or quasi-endowment: SchDMd Bullet  
b
Permanent endowment: SchDMd Bullet  
c
Term endowment: SchDMd Bullet  
3a
Are there endowment funds not in the possession of the organization that are held and administered for the
organization by:

Yes
No
(i) unrelated organizations ........................
3a(i)
 
 
(ii) related organizations ........................
3a(ii)
 
 
b
If "Yes" to 3a(ii), are the related organizations listed as required on Schedule R? .........
3b
 
 
4
Describe in Part XIV the intended uses of the organization's endowment funds.
Part VI
Investments—Land, Buildings, and Equipment. See Form 990, Part X, line 10.
Description of investment (a) Cost or other basis (investment) (b)Cost or other basis (other) (c) Accumulated depreciation (d) Book value
1a Land .................     0
b Buildings ................       0
c Leasehold improvements ............       0
d Equipment ................       0
e Other .................       0
Total. Add lines 1a-1e. (Column (d) should equal Form 990, Part X, column (B), line 10(c).)........SchDMdBullet 0
Schedule D (Form 990) 2010

Schedule D (Form 990) 2010
Page 3
Part VII
Investments—Other Securities. See Form 990, Part X, line 12.
(a) Description of security or category
(including name of security)		 (b)Book value (c) Method of valuation:
Cost or end-of-year market value
(1)Financial derivatives    
(2)Closely-held equity interests    
Other








Total. (Column (b) should equal Form 990, Part X, col.(B) line 12.)Small Bullet  
Part VIII
Investments—Program Related. See Form 990, Part X, line 13.
(a) Description of investment type (b) Book value (c) Method of valuation:
Cost or end-of-year market value








Total. (Column (b) should equal Form 990, Part X, col.(B) line 13.)Small Bullet  
Part IX
Other Assets. See Form 990, Part X, line 15.
(a) Description (b) Book value








Total. (Column (b) should equal Form 990, Part X, col.(B) line 15.)...........Small Bullet  
Part X
Other Liabilities. See Form 990, Part X, line 25.
1.(a) Description of Liability (b) Amount
Federal Income Taxes 0
DUE TO AFFILIATES 2,108,713








Total. (Column (b) should equal Form 990, Part X, col.(B) line 25.)Small Bullet 2,108,713
2. Fin 48 (ASC 740) Footnote. In Part XIV, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC740).
Schedule D (Form 990) 2010

Schedule D (Form 990) 2010
Page 4
Part XI Reconciliation of Change in Net Assets from Form 990 to Financial Statements
1 Total revenue (Form 990, Part VIII, column (A), line 12) .................... 1 180,743,457
2 Total expenses (Form 990, Part IX, column (A), line 25) ..................... 2 172,336,688
3 Excess or (deficit) for the year. Subtract line 2 from line 1 ............. 3 8,406,769
4 Net unrealized gains (losses) on investments .......................... 4  
5 Donated services and use of facilities ............................. 5  
6 Investment expenses ................................... 6  
7 Prior period adjustments .................................. 7  
8 Other (Describe in Part XIV) ................................. 8 0
9 Total adjustments (net). Add lines 4 - 8 ............................. 9 0
10 Excess or (deficit) for the year per financial statements. Combine lines 3 and 9 ......... 10 8,406,769
Part XII Reconciliation of Revenue per Audited Financial Statements With Revenue per Return
1 Total revenue, gains, and other support per audited financial statements ....... 1  
2 Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a Net unrealized gains on investments .......... 2a  
b Donated services and use of facilities ......... 2b  
c Recoveries of prior year grants ........... 2c  
d Other (Describe in Part XIV): ............ 2d 0
e Add lines 2a through 2d ..................... 2e 0
3 Subtract line 2e from line 1..................... 3 0
4 Amounts included on Form 990, Part VIII, line 12, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b . 4a  
b Other (Describe in Part XIV): ........... 4b 0
c Add lines 4a and 4b....................... 4c 0
5 Total Revenue. Add lines 3 and 4c. (This should equal Form 990, Part I, line 12.) ...... 5 0
Part XIII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return
1 Total expenses and losses per audited financial statements ............. 1  
2 Amounts included on line 1 but not on Form 990, Part IX, line 25:
a Donated services and use of facilities .......... 2a  
b Prior year adjustments .............. 2b  
c Other losses ................ 2c  
d Other (Describe in Part XIV): ............ 2d 0
e Add lines 2a through 2d...................... 2e 0
3 Subtract line 2e from line 1..................... 3 0
4 Amounts included on Form 990, Part IX, line 25, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b .. 4a  
b Other (Describe in Part XIV): ............ 4b 0
c Add lines 4a and 4b....................... 4c 0
5 Total expenses. Add lines 3 and 4c. (This should equal Form 990, Part I, line 18.) ...... 5 0
Part XIV
Supplemental Information
Complete this part to provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1a and 4; Part lV, lines 1b and 2b;
Part V, line 4; Part X; Part XI, line 8; Part XII, lines 2d and 4b; and Part XIII, lines 2d and 4b. Also complete this part to provide any additional information.
Identifier Return Reference Explanation
Schedule D (Form 990) 2010

Additional Data


Software ID: 10000128
Software Version: v2010.1.0




Schedule J
(Form 990)
Department of the Treasury
Internal Revenue Service
Compensation Information
For certain Officers, Directors, Trustees, Key Employees, and Highest
Compensated Employees
SchJMediumBullet Complete if the organization answered "Yes" to Form 990,
Part IV, question 23.
SchJMediumBullet Attach to Form 990. SchJMediumBullet See separate instructions.
OMB No. 1545-0047
2010
Open to Public Inspection
Name of the organization
PRIORITY HEALTH GOVERNMENT PROGRAMS INC
 
Employer identification number

32-0016523
Part I
Questions Regarding Compensation
Yes
No
1a
Check the appropiate box(es) if the organization provided any of the following to or for a person listed in Form
990, Part VII, Section A, line 1a. Complete Part III to provide any relevant information regarding these items.
b
If any of the boxes in line 1a are checked, did the organization follow a written policy regarding payment or reimbursement orprovision of all the expenses described above? If "No," complete Part III to explain....
1b
 
 
2
Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all
officers, directors, trustees, and the CEO/Executive Director, regarding the items checked in line 1a? ....
2
 
 
3
Indicate which, if any, of the following the organization uses to establish the compensation of the
organization's CEO/Executive Director. Check all that apply.
4
During the year, did any person listed in Form 990, Part VII, Section A, line 1a with respect to the filing organization or a related organization:
a
Receive a severance payment or change-of-control payment? ...............
4a
Yes
 
b
Participate in, or receive payment from, a supplemental nonqualified retirement plan? ........
4b
Yes
 
c
Participate in, or receive payment from, an equity-based compensation arrangement? ........
4c
 
No
If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III.
Only 501(c)(3) and 501(c)(4) organizations only must complete lines 5-9.
5
For persons listed in form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the revenues of:
a
The organization? ...........................
5a
 
No
b
Any related organization? .........................
5b
 
No
If "Yes," to line 5a or 5b, describe in Part III.
6
For persons listed in form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the net earnings of:
a
The organization? ...........................
6a
 
No
b
Any related organization? .........................
6b
 
No
If "Yes," to line 6a or 6b, describe in Part III.
7
For persons listed in Form 990, Part VII, Section A, line 1a, did the organization provide any non-fixed
payments not described in lines 5 and 6? If "Yes," describe in Part III ............
7
 
No
8
Were any amounts reported in Form 990, Part VII, paid or accured pursuant to a contract that was
subject to the initial contract exception described in Regs. section 53.4958-4(a)(3)? If "Yes," describe
in Part III .............................
8
 
No
9
If "Yes" to line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section 53.4958-6(c)? .........................
9
 
 
For Privacy Act and Paperwork Reduction Act Notice, see the Intructions for Form 990
Cat. No. 50053T
Schedule J (Form 990) 2010

Schedule J (Form 990) 2010
Page 2
Part II
Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use Schedule J-1 if additional space needed.
For each individual whose compensation must be reported in Schedule J, report compensation from the organization on row (i) and from related organizations, described in the
instructions on row (ii). Do not list any individuals that are not listed on Form 990, Part VII.

Note. The sum of columns (B)(i)-(iii) must equal the applicable column (D) or column (E) amounts on Form 990, Part VII, line 1a.
(A) Name (B) Breakdown of W-2 and/or 1099-MISC compensation (C) Retirement and other deferred compensation (D) Nontaxable
benefits		 (E) Total of columns
(B)(i)-(D) 		(F) Compensation
reported in prior
Form 990 or
Form 990-EZ
(i) Base compensation (ii) Bonus & incentive compensation (iii) Other reportable compensation
(1) GREGORY A HAWKINS (i)
(ii)		 25,114
286,875 		2,552
29,153 		2,374
27,112 		19,058
217,694 		1,458
16,658 		50,556
577,492 		0
0
(2) JAMES F BYRNE (i)
(ii)		 24,615
281,185 		20,809
237,695 		8,510
97,205 		4,311
49,247 		1,225
13,997 		59,470
679,329 		17,942
204,940
(3) JAMES S SLUBOWSKI (i)
(ii)		 21,959
250,836 		4,585
52,378 		5,225
59,678 		1,509
17,234 		1,929
22,029 		35,207
402,155 		1,197
13,667
(4) KIMBERLY K HORN (i)
(ii)		 48,234
550,969 		13,742
156,968 		13,301
151,939 		6,650
75,963 		4,375
49,973 		86,302
985,812 		4,951
56,551
(5) MICHAEL R KOZIARA (i)
(ii)		 23,895
272,952 		3,709
42,364 		2,102
24,015 		9,802
111,966 		1,528
17,452 		41,036
468,749 		0
0
(6) KIMBERLY L THOMAS (i)
(ii)		 14,024
160,192 		0
0 		529
6,047 		642
7,338 		1,565
17,876 		16,760
191,453 		0
0
(7) JUDITH HOOYENGA (i)
(ii)		 15,324
175,040 		1,773
20,258 		546
6,236 		1,232
14,075 		2,799
31,976 		21,674
247,585 		0
0
(8) DEBORAH A PHILLIPS (i)
(ii)		 19,830
226,521 		10,091
115,263 		6,448
73,655 		1,509
17,234 		2,113
24,135 		39,991
456,808 		7,163
81,819
(9) JOAN A BUDDEN (i)
(ii)		 23,035
263,127 		3,523
40,240 		1,218
13,914 		4,799
54,814 		1,411
16,120 		33,986
388,215 		0
0
(10) BRUCE NIEBYLSKI (i)
(ii)		 23,740
271,175 		2,118
24,195 		946
10,804 		1,509
17,234 		2,089
23,857 		30,402
347,265 		0
0
(11) KIMBERLY F SUAREZ (i)
(ii)		 15,904
181,658 		2,132
24,356 		1,116
12,752 		875
10,001 		1,906
21,777 		21,933
250,544 		0
0
(12) DONALD J WHITFORD (i)
(ii)		 15,108
172,571 		2,296
26,227 		2,638
30,135 		1,004
11,469 		175
1,994 		21,221
242,396 		0
0
(13) JOHN L FOX (i)
(ii)		 20,768
237,233 		1,890
21,588 		517
5,903 		1,509
17,234 		2,305
26,325 		26,989
308,283 		0
0
(14) SEAN T MONAGHAN (i)
(ii)		 18,742
214,088 		1,150
13,134 		450
5,142 		1,444
16,495 		811
9,268 		22,597
258,127 		0
0
(15) MARK J ZICKEL (i)
(ii)		 15,801
180,498 		2,415
27,585 		4,718
53,889 		0
0 		0
0 		22,934
261,972 		0
0
(16) GUY S GAUTHIER (i)
(ii)		 0
0 		16,345
186,711 		0
0 		0
0 		0
0 		16,345
186,711 		16,345
186,711
(17) LEON D LAMOREAUX (i)
(ii)		 20,432
233,396 		2,683
30,653 		912
10,413 		493
5,632 		2,080
23,755 		26,600
303,849 		0
0
(18) MARC M KOLE (i)
(ii)		 0
0 		1,531
17,492 		0
0 		0
0 		0
0 		1,531
17,492 		1,531
17,492
Schedule J (Form 990) 2010

Schedule J (Form 990) 2010
Page 3
Part III
Supplemental Information
Complete this part to provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 4c, 5a, 5b, 6a, 6b, 7, and 8. Also complete this part for any additional information.
Identifier Return Reference Explanation
Severance or change-of-control payment Schedule J, Part I, Line 4a MARK J ZICKEL - 15,802 LEON D LAMOREAUX - 4,015
Supplemental nonqualified retirement plan Schedule J, Part I, Line 4b KIMBERLY K. HORN 4,951 JAMES S. SLUBOWSKI 1,197 DEBORAH A. PHILLIPS 7,163 GUY S. GAUTHIER 16,345 JAMES F. BYRNE 17,942 MARC M. KOLE 1,531
NONQUALIFIED RETIREMENT PLAN SCHEDULE J, PART I, LINE 4B SCHEDULE J, PART I, LINE 4B IS ANSWERED "YES" BECAUSE INDIVIDUALS, WHOSE SALARY AND BENEFITS ARE ALLOCATED TO THIS ORGANIZATION, DO "PARTICIPATE IN" A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN. SOME INDIVIDUALS RECEIVED DISTRIBUTIONS DURING THE YEAR (AS REPORTED ON THIS LINE) WHEREAS OTHERS PARTICIPATED IN THE PLAN BUT DID NOT RECEIVE DISTRIBUTIONS. DISTRIBUTIONS REPORTED ON THIS LINE ARE ALSO INCLUDED IN SCHEDULE J, PART II, COLUMN F AS COMPENSATION REPORTED IN A PRIOR PERIOD.
Schedule J (Form 990) 2010

Additional Data


Software ID: 10000128
Software Version: v2010.1.0
Schedule L
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
Transactions with Interested Persons
MediumBullet Complete if the organization answered
"Yes" on Form 990, Part IV, lines 25a, 25b, 26, 27, 28a, 28b, or 28c,
or Form 990-EZ, Part V lines 38a or 40b.
MediumBullet Attach to Form 990 or Form 990-EZ. MediumBulletSee separate instructions.
OMB No. 1545-0047
2010
Open to Public Inspection
Name of the organization
PRIORITY HEALTH GOVERNMENT PROGRAMS INC
 
Employer identification number

32-0016523
Part I
Excess Benefit Transactions (section 501(c)(3) and section 501 (c)(4) organizations only).
Complete if the organization answered "Yes" on Form 990, Part IV, line 25a or 25b, or Form 990-EZ, Part V, line 40b.
1(a) Name of disqualified person (b) Description of transaction (c) Corrected?
Yes No





2
Enter the amount of tax imposed on the organization managers or disqualified persons during the year under section 4958. ......................... Bullet Image$
 
3
Enter the amount of tax, if any, on line 2, above, reimbursed by the organization ....... Bullet Image$
 

Part II
Loans to and/or From Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 26, or Form 990-EZ, Part V, line 38a.
(a) Name of interested person and purpose (b) Loan to or from the organization? (c)Original principal amount (d)Balance due (e) In default? (f) Approved by board or committee? (g)Written agreement?
To From Yes No Yes No Yes No
Total ...............Small Bullet $  
Part III
Grants or Assistance Benefitting Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 27.
(a) Name of interested person (b)Relationship between interested person and the organization (c)Amount of grant or type of assistance
For Privacy Act and Paperwork Reduction Act Notice, see the
Instructions for Form 990 or 990-EZ.
Cat. No. 50056A
Schedule L (Form 990 or 990-EZ) 2010
Schedule L (Form 990 or 990-EZ) 2010
Page 2
Part IV
Business Transactions Involving Interested Persons.
Complete if the organization answered "Yes" on Form 990, Part IV, line 28a, 28b, or 28c.
(a) Name of interested person (b) Relationship between interested person and the organization (c) Amount of transaction (d) Description of transaction (e) Sharing of organization's revenues?
Yes No
(1) PRIORITY HEALTH MANAGED BENEFITS
  		SISTER MGMT CO 10,226,060 INTERCO MGMT FEES   No
Part V
Supplemental Information
Complete this part to provide additional information for responses to questions on Schedule L (see instructions).
Identifier Return Reference Explanation
BUSINESS TRANSACTIONS WITH INTERESTED PERSONS FORM 990, PART IV, LINE 28C AND SCHEDULE L, PART IV THE MEMBERS OF THE BOARD OF DIRECTORS, OFFICERS, AND KEY EMPLOYEES OF THE TAXPAYER (ASIDE FROM MS. ELIZABETH BAXTER AND MS. NICOLE BUCHANAN) ARE ALSO MEMBERS OF THE BOARD OF DIRECTORS, OFFICERS AND KEY EMPLOYEES OF PRIORITY HEALTH MANAGED BENEFITS, INC. ("PHMB") (EIN 38-3085182); A SISTER COMPANY AND WHOLLY OWNED TAXABLE SUBSIDIARY OF THE PARENT ORGANIZATION. THE FOLLOWING MEMBERS OF THE BOARD OF DIRECTORS AND OFFICERS OF THE TAXPAYER ARE ALSO MEMBERS OF THE BOARD OF DIRECTORS AND OFFICERS OF PRIORITY HEALTH INSURANCE COMPANY. ("PHIC") (EIN 20-1529553); A SISTER COMPANY AND WHOLLY OWNED TAXABLE SUBSIDIARY OF THE PARENT ORGANIZATION: *OFFICERS: MR. GREGORY A. HAWKINS, MS. KIMBERLY L. THOMAS, AND MS. KIMBERLY K. HORN. TRANSACTIONS WITH RELATED TAXABLE ENTITIES OF PRIORITY HEALTH GOVERNMENT PROGRAMS ARE REPORTED ON SCHEDULE R, PART V.
Schedule L (Form 990 or 990-EZ) 2010

Additional Data


Software ID: 10000128
Software Version: v2010.1.0




SCHEDULE O
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ

Complete to provide information for responses to specific questions on
Form 990 or to provide any additional information.
MediumBullet Attach to Form 990 or 990-EZ.
OMB No. 1545-0047
2010
Open to Public
Inspection
Name of the organization
PRIORITY HEALTH GOVERNMENT PROGRAMS INC
 
Employer identification number

32-0016523
Identifier Return Reference Explanation
PROGRAM SERVICE DESCRIPTION FORM 990, PART III, LINE 4A PRIORITY MEDICAID (SM): PRIORITY HEALTH GOVERNMENT PROGRAMS (PHGP) WAS SELECTED BY THE STATE OF MICHIGAN AS A QUALIFIED HEALTH PLAN. IT PROVIDES MORE THAN 60,000 LOW INCOME RESIDENTS IN 12 WEST MICHIGAN COUNTIES WITH QUALITY CARE AND SERVICES. PHGP PROMOTES AND INCENTIVIZES OPEN ACCESS TO PROVIDERS. IN NOVEMBER 2010, US NEWS & WORLD REPORT MAGAZINE LISTED PRIORITY HEALTH'S MEDICAID PLAN AMONG THE NATION'S BEST, RATED 12TH IN THE NATION. IT HAS MAINTAINED "EXCELLENT" ACCREDITATION FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE FOR MORE THAN 10 YEARS. AS A RESULT OF PRIORITY HEALTH'S CONTINUED FOCUS OF PROVIDING ACCESS TO AFFORDABLE AND EXCELLENT HEALTH CARE, MEMBERS OF PRIORITY HEALTH GOVERNMENT PROGRAMS' MEDICAID PROGRAM CONTINUE TO RECEIVE CARE AT OR ABOVE THE NATIONAL AVERAGE. SPECIFICALLY, PRIORITY HEALTH SETS THE NATION'S BENCHMARK IN AREAS SUCH AS CHILDHOOD IMMUNIZATIONS, DIABETES CARE AND CHOLESTEROL SCREENINGS AND THE MANAGEMENT OF ASTHMA.
PROGRAM SERVICE DESCRIPTION FORM 990, PART III, LINE 4B MICHILD - OFFERED BY PRIORITY HEALTH GOVERNMENT PROGRAMS: PRIORITY HEALTH GOVERNMENT PROGRAMS ENROLLED MICHIGAN'S FIRST MICHILD MEMBERS MAY 1, 1998. MICHILD IS A HEALTH PLAN FOR UNINSURED CHILDREN OF MICHIGAN'S WORKING FAMILIES. PRIORITY HEALTH GOVERNMENT PROGRAMS PROVIDES MICHILD COVERAGE IN 10 MICHIGAN COUNTIES IN WEST MICHIGAN. THE CHILDREN'S HEALTHCARE ACCESS PROGRAM (CHAP) IS A COMMUNITY COLLABORATIVE BENEFITING MICHILD MEMBERS. THROUGH CHAP, PRIORITY HEALTH PAYS PEDIATRICIANS A HIGHER RATE FOR SERVICE IN EXCHANGE FOR THEIR AGREEMENT TO OPEN THEIR PRACTICES TO ADDITIONAL MEDICAID MEMBERS. PRIORITY HEALTH IS THE ONLY HEALTH PLAN INVOLVED AND IS THE PAYER FOR THE PROGRAM'S SERVICES. (ACCESS TO PRIMARY CARE IS A GREAT CHALLENGE FOR THIS POPULATION. IN FACT, THE INABILITY TO FIND A PRIMARY CARE PROVIDER (PEDIATRICIAN) ACCEPTING MICHILD MEMBERS LEADS TO A HIGH NUMBER OF MICHILD ENROLLEES ACCESSING ROUTINE CARE THROUGH AN EMERGENCY ROOM VS. IN A PRIMARY CARE SETTING.) IN THE PROGRAM'S TWO YEARS, VISITS TO THE EMERGENCY DEPARTMENT HAVE DECREASED 14% AT PARTICIPATING HEALTH CARE PROVIDERS, WHILE INPATIENT HOSPITAL ADMISSIONS ARE DOWN 12%. MORE IMPORTANTLY, THESE CHILDREN IN NEED ARE RECEIVING CONTINUITY IN THEIR CARE.
EMPLOYEES FORM 990, PART I, LINE 5 AND FORM 990, PART V, LINE 2A PRIORITY HEALTH GOVERNMENT PROGRAMS HAS NO EMPLOYEES. ALL COMPENSATION IS PAID BY PRIORITY HEALTH MANAGED BENEFITS, EIN 38-3085182. AN ALLOCATION OF AMOUNTS PAID TO PRIORITY HEALTH MANAGED BENEFITS PURSUANT TO A MANAGEMENT SERVICES CONTRACT IS REPORTED ON LINES 5-10 OF PART IX.
Classes of members or stockholders Form 990, Part VI, Section A, Line 6 THE PARENT ORGANIZATION IS PRIORITY HEALTH (EIN 38-2715520), A TAX-EXEMPT 501(C)(4) ORGANIZATION. PRIORITY HEALTH OWNS 100% OF TAXPAYER. PRIORITY HEALTH HAS THREE STOCKHOLDERS AS FOLLOWS: SPECTRUM HEALTH SYSTEM (EIN 38-3382353), CLASS A SHAREHOLDER - 93.9% MUNSON HEALTHCARE (EIN 38-1362830), CLASS B SHAREHOLDER - 5.5% NORTHERN MICHIGAN REGIONAL HEALTH SYSTEM (EIN 38-2146751), CLASS B SHAREHOLDER - .6% ALL STOCKHOLDERS ARE TAX-EXEMPT INTERNAL REVENUE CODE SECTION 501(C)(3) ORGANIZATIONS.
Members or stockholders electing members of governing body Form 990, Part VI, Section A, Line 7a ELECTION OF MEMBERS AND THEIR RIGHTS FROM PRIORITY HEALTH GOVERNMENT PROGRAMS BYLAWS: ARTICLE V SECTION 2. NUMBER AND CLASS OF DIRECTORS. THE BOARD OF DIRECTORS WILL BE COMPRISED OF SIX (6) MEMBERS AS FOLLOWS: A. ONE (1) MEMBER WILL BE THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF PRIORITY HEALTH. B. ONE (1) MEMBER WILL BE THE CHIEF FINANCIAL OFFICER OF PRIORITY HEALTH. C. ONE (1) MEMBER WILL BE THE CHIEF MEDICAL OFFICER OF PRIORITY HEALTH. D. ONE (1) MEMBER WILL BE THE CHIEF OPERATIONS OFFICER OF PRIORITY HEALTH. E. TWO (2) MEMBERS WILL BE ADULT ENROLLEE MEMBERS OF PRIORITY HEALTH GOVERNMENT PROGRAMS, INC. SECTION 3. ELECTION OF ADULT ENROLLEE MEMBERS. THE BOARD OF DIRECTORS WILL SOLICIT NAMES OF POTENTIAL CANDIDATES FROM THE MEMBERS, SHAREHOLDERS, DIRECTORS AND COMMUNITY AND WILL, AT LEAST SIXTY (60) DAYS PRIOR TO THE ANNUAL MEETING, PREPARE A LIST OF NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS AS ADULT ENROLLEE REPRESENTATIVES. AT LEAST ONE (1) MEMBER WILL BE NOMINATED FOR EACH DIRECTORSHIP TO BE FILLED AT SUCH ANNUAL MEETING. IN ADDITION, ANY GROUP OF ADULT ENROLLEES IN THE CORPORATION'S HEALTH MAINTENANCE PLAN, UPON FILING A PETITION WITH MORE THAN ONE HUNDRED (100) LEGITIMATE SIGNATURES OF CURRENT MEMBERS WITH THE SECRETARY OF THE BOARD OF DIRECTORS AT LEAST NINETY (90) DAYS PRIOR TO THE ANNUAL MEETING, MAY NOMINATE A CANDIDATE FOR ELECTION TO THE BOARD OF DIRECTORS. NOT LATER THAN FOURTEEN (14) DAYS PRIOR TO THE DATE SET BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING, THE SECRETARY WILL MAIL BALLOTS TO ALL MEMBERS OF THE CORPORATION CONTAINING THE NAMES OF ALL CANDIDATES FOR ELECTION AS ADULT ENROLLEE MEMBERS TO THE BOARD OF DIRECTORS, TOGETHER WITH INSTRUCTIONS FOR COMPLETING AND RETURNING SUCH BALLOTS TO THE CORPORATION.
Decisions requiring approval by members or stockholders Form 990, Part VI, Section A, Line 7b DECISIONS SUBJECT TO APPROVAL OF STOCKHOLDERS (NOT MEMBERS) CERTAIN DECISIONS ARE SUBJECT TO APPROVAL OF STOCKHOLDERS. FROM ORGANIZATION BYLAWS: 2.2. CLASS A SHAREHOLDER'S RESERVED POWERS. THE CLASS A SHAREHOLDER SHALL HAVE THE RESERVED POWERS SET FORTH IN THIS SECTION 2.2. THE CORPORATION'S BOARD OF DIRECTORS MAY RECOMMEND ACTION TO THE CLASS A SHAREHOLDER WITH RESPECT TO THE RESERVED POWERS SET FORTH IN THIS SECTION 2.2. THE ACTIONS LISTED BELOW MAY, NOTWITHSTANDING ANY OTHER PROVISION OF THESE BYLAWS OR THE ARTICLES, BE UNILATERALLY CAUSED AND/OR TAKEN BY THE CLASS A SHAREHOLDER, WITHIN ITS SOLE AND EXCLUSIVE POWER AND DISCRETION, AND SHALL NOT BE DEEMED AUTHORIZED UNLESS AND UNTIL APPROVED BY THE CLASS A SHAREHOLDER: 2.2.1 AMENDMENT OF THE ARTICLES OF INCORPORATION OR BYLAWS OF THE CORPORATION; 2.2.2 ELECTION AND/OR REMOVAL OF THE CLASS A SHAREHOLDER-APPOINTED MEMBERS OF THE CORPORATION'S BOARD OF DIRECTORS PURSUANT TO ARTICLE VI OF THESE BYLAWS; 2.2.3 ELECTION AND/OR REMOVAL OF THE CORPORATION'S CHAIRPERSON OF THE BOARD OF DIRECTORS; 2.2.4 HIRING, DISCHARGE, AND EVALUATION OF THE CORPORATION'S PRESIDENT FOLLOWING CONSULTATION WITH THE CORPORATION'S BOARD OF DIRECTORS PURSUANT TO SECTION 7.3; 2.2.5 ADOPTION OF THE CORPORATION'S STRATEGIC PLAN(S); 2.2.6 ADOPTION OF THE CORPORATION'S ANNUAL OPERATING AND CAPITAL BUDGETS, AND ANY AMENDMENTS TO SUCH BUDGETS; 2.2.7. ALL CAPITAL EXPENDITURES BY THE CORPORATION IN EXCESS OF THE AMOUNT (THE "AUTHORITY MATRIX AMOUNT") SET FORTH IN THE AUTHORITY MATRIX FOR CAPITAL EXPENDITURES AND LOANS TO NON-SPECTRUM HEALTH ENTITIES (THE "EXPENDITURE AUTHORITY MATRIX"), A CURRENT COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT A AND WHICH MAY BE AMENDED FROM TIME TO TIME BY SPECTRUM HEALTH SYSTEM ("SPECTRUM HEALTH"); 2.2.8 ALL BORROWINGS OR GUARANTEES OF INDEBTEDNESS BY THE CORPORATION (OR ANY ENTITY CONTROLLED BY THE CORPORATION); 2.2.9. ALL LENDING BY THE CORPORATION (OR ANY ENTITY CONTROLLED BY THE CORPORATION) TO PERSONS OTHER THAN SPECTRUM HEALTH OR AN ENTITY CONTROLLED BY SPECTRUM HEALTH IN EXCESS OF THE AUTHORITY MATRIX AMOUNT; 2.2.10 THE CORPORATION'S INVESTMENTS OF CASH AND/OR RESERVES, WHETHER ON AN INDIVIDUAL BASIS OR AS PART OF A POOLED INVESTMENT STRATEGY; 2.2.11 ANY MERGER OR CONSOLIDATION OF THE CORPORATION (OR ANY ENTITY CONTROLLED BY THE CORPORATION), OR ANY OTHER CHANGE IN OWNERSHIP PERCENTAGES, CONTROL, OR CAPITAL STRUCTURE OF THE CORPORATION (OR ANY ENTITY CONTROLLED BY THE CORPORATION); 2.2.12 THE PURCHASE OF ALL, OR A MAJORITY OF, ANOTHER CORPORATION, LIMITED LIABILITY COMPANY, PARTNERSHIP OR OTHER LEGAL ENTITY'S STOCK, MEMBERSHIP INTEREST, PARTNERSHIP INTEREST, OTHER OWNERSHIP INTEREST, OR ASSETS; 2.2.13 THE CREATION OF ANY ENTITY CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE CORPORATION; 2.2.14 THE SALE OR TRANSFER OF MORE THAN TEN PERCENT (10%) OF THE ASSETS OF THE CORPORATION (OR ANY ENTITY CONTROLLED BY THE CORPORATION) TO ANY PERSON OR ENTITY NOT CONTROLLED BY SPECTRUM HEALTH; 2.2.15 DISSOLUTION OF THE CORPORATION; 2.2.16 THE SELECTION, RETENTION, AND OVERSIGHT OF THE OUTSIDE AUDITORS FOR THE CORPORATION (OR ANY ENTITY CONTROLLED BY THE CORPORATION); AND 2.2.17 IN OTHER CASES WHEN REQUIRED BY LAW OR AS OTHERWISE PROVIDED IN THESE BYLAWS. THE CLASS A SHAREHOLDER, PRIOR TO EXERCISING ANY OF THE RESERVED POWERS SET FORTH ABOVE, SHALL NOTIFY THE CLASS B SHAREHOLDER (PROVIDED SUCH ACTION IS NOT TAKEN AT A DULY CALLED MEETING OF THE SHAREHOLDERS). 2.3 CLASS B SHAREHOLDERS' RESERVED POWERS. THE CLASS B SHAREHOLDERS SHALL HAVE THE RESERVED POWERS SET FORTH IN THIS SECTION 2.3. THE CORPORATION'S BOARD OF DIRECTORS MAY RECOMMEND ACTION TO THE CLASS B SHAREHOLDERS WITH RESPECT TO THE RESERVED POWERS SET FORTH IN THIS SECTION 2.3. THE CLASS B SHAREHOLDERS MAY, NOTWITHSTANDING ANY OTHER PROVISION OF THESE BYLAWS OR ARTICLES, ACT JOINTLY, WITHIN THEIR SOLE AND EXCLUSIVE POWERS AND DISCRETION, ELECT AND/OR REMOVE THE CLASS B SHAREHOLDER-APPOINTED MEMBERS OF THE CORPORATION'S BOARD OF DIRECTORS PURSUANT TO ARTICLE VI OF THESE BYLAWS. 2.4 COMPLIANCE WITH SPECTRUM HEALTH POLICIES. NOTWITHSTANDING ANYTHING CONTAINED IN THESE BYLAWS TO THE CONTRARY, THE CORPORATION AND ITS SUBSIDIARIES SHALL AT ALL TIMES COMPLY WITH AND IMPLEMENT SPECTRUM HEALTH POLICIES AND PROCEDURES APPROVED BY THE CHIEF EXECUTIVE OFFICER OF SPECTRUM HEALTH AS BEING SPECIFICALLY APPLICABLE TO THE CORPORATION, EXCEPT TO THE EXTENT THAT SUCH COMPLIANCE AND/OR IMPLEMENTATION WOULD (A) MATERIALLY AND NEGATIVELY IMPACT THE RIGHTS, POWERS, OR PREFERENCES OF THE CLASS B SHAREHOLDERS; OR (B) BE NONCOMPLIANT WITH APPLICABLE LAWS AND/OR REGULATIONS. 6.6 VOTING. THE VOTE OF THE MAJORITY OF MEMBERS PRESENT AT A MEETING AT WHICH A QUORUM IS PRESENT CONSTITUTES THE ACTION OF THE BOARD OF DIRECTORS. NOTWITHSTANDING ANY OTHER PROVISION OF THESE BYLAWS, WHEN THE CORPORATION ACTS ON A MATTER WHICH IS (A) RESERVED TO (REQUIRES APPROVAL OF) THE CORPORATION IN ITS CAPACITY AS A SOLE MEMBER OR SOLE SHAREHOLDER OF A WHOLLY-OWNED SUBSIDIARY OF THE CORPORATION; AND (B) ALSO LISTED AS RESERVED FOR DECISION BY THE SHAREHOLDERS IN ARTICLE V OF THE CORPORATION'S ARTICLES OF INCORPORATION ("SUBSIDIARY MATTERS"), THE APPROVAL BY THE HOLDERS OF A MAJORITY OF THE CORPORATION'S ISSUED AND OUTSTANDING SHARES OF STOCK IS AND SHALL BE REQUIRED FOR THE APPROVAL BY THE CORPORATION OF ANY AND ALL SUCH SUBSIDIARY MATTERS. ANY ACTION BY THE CORPORATION IN ITS CAPACITY AS SOLE MEMBER OR SOLE SHAREHOLDER OF A WHOLLY-OWNED SUBSIDIARY OF THE CORPORATION WHICH IS NOT A SUBSIDIARY MATTER SHALL REQUIRE APPROVAL BY THE BOARD OF DIRECTORS OF THE CORPORATION.
Review of form 990 by governing body Form 990, Part VI, Section B, Line 11b A COPY OF THE FORM 990 IS PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO FILING. THE REVIEW PROCESS FOR THIS FORM 990 IS AS FOLLOWS: 1. PREPARATION OF THE RETURN IS SUPERVISED AND REVIEWED BY THE ORGANIZATIONS CORPORATE TAX MANAGER. 2. A SECOND REVIEW IS PERFORMED BY AN EXTERNAL CPA FIRM WITH EXPERTISE IN TAX-EXEMPT RETURN PREPARATION. 3. THE RETURN IS REVIEWED BY THE ORGANIZATIONS FINANCE AND LEGAL DEPARTMENTS AND PRESENTED TO THE FINANCE AND AUDIT COMMITTEE WHO IS RESPONSIBLE FOR APPROVING THE RETURN FOR FILING AND DISTRIBUTION TO THE BOARD OF DIRECTORS. 4. THE RETURN IS SENT TO THE MEMBERS OF THE BOARD OF DIRECTORS. 5. THE ORGANIZATIONS CHIEF FINANCIAL OFFICER REVIEWS COMMENTS OR QUESTIONS RECEIVED BY MEMBERS OF THE BOARD OF DIRECTORS, IF ANY, TO ADDRESS OR TO INCORPORATE, AS APPROPRIATE, INTO THE RETURN PRIOR TO FILING.
Conflict of interest policy Form 990, Part VI, Section B, Line 12c MONITORING OF CONFLICTS OF INTEREST (BOARD): 1. THE SECRETARY OF THE BOARD OR OTHER DESIGNATED INDIVIDUAL IS RESPONSIBLE FOR OBTAINING FROM ALL DIRECTORS A COMPLETED ANNUAL DISCLOSURE STATEMENT. IN ADDITION, THE SECRETARY WILL OBTAIN AN ANNUAL DISCLOSURE STATEMENT FROM EACH NEW DIRECTOR AT THE TIME HE/SHE IS FIRST ELECTED OR APPOINTED TO THE BOARD OF DIRECTORS. 2. THE SECRETARY WILL COMPILE A LIST OF POTENTIAL AND ACTUAL CONFLICTS (THE "CONFLICT LIST") FORM THE ANNUAL DISCLOSURE STATEMENTS AND DISTRIBUTE THE LIST TO THE CHAIR OF THE BOARD AND THE PRESIDENT. 3. IN ADDITION TO COMPLETING THE ANNUAL DISCLOSURE STATEMENT, DIRECTORS MUST DISCLOSE ACTUAL AND POTENTIAL CONFLICTS AS THEY ARISE DUE TO CHANGED CIRCUMSTANCES. SUCH DISCLOSURES MAY BE MADE TO THE CHAIR OF THE BOARD, THE PRESIDENT OR THE SECRETARY. DISCLOSURES MADE IN THIS WAY SHALL BE GIVEN TO THE SECRETARY TO ADD TO THE CONFLICT LIST. 4. PRIOR TO EACH BOARD MEETING, THE CHAIR OF THE BOARD, THE PRESIDENT AND THE SECRETARY WILL REVIEW THE AGENDA TO DETERMINE IF ANY AGENDA ITEMS WOULD GIVE RISE TO A CONFLICT BASED ON THE CONFLICT LIST. IF AN ACTUAL OR POTENTIAL CONFLICT IS DETERMINED TO EXIST, THE CHAIR OF THE BOARD OR THE PRESIDENT WILL CONTACT THE DIRECTOR PRIOR TO THE MEETING TO ALERT THE DIRECTOR TO THE CONFLICT SITUATION. IF THE AGENDA ITEM IS FOR DISCUSSION ONLY, THE CHAIR OF THE BOARD AND THE DIRECTOR MAY DETERMINE THAT THE DIRECTOR MAY PARTICIPATE IN THE DISCUSSION AFTER DISCLOSING THE CONFLICT TO THE OTHER DIRECTORS. IF THE AGENDA ITEM REQUIRES A VOTE, THE DIRECTOR MUST EXCUSE HIM/HERSELF FROM THE MEETING PRIOR TO THE VOTE. 5. CONFLICTS THAT ARE DISCLOSED DURING BOARD MEETINGS SHALL BE RECORDED IN THE MINUTES OF THE MEETING, INCLUDING WHETHER OR NOT THE DIRECTOR PARTICIPATED IN ANY DISCUSSION ON THE TOPIC AND THE FACT THAT THE DIRECTOR LEFT THE MEETING PRIOR TO A VOTE. MONITORING OF CONFLICTS OF INTEREST (EMPLOYEES): ALL EMPLOYEES ARE REQUIRED TO DISCLOSE CONFLICTS OF INTEREST ANNUALLY. THE COMPLIANCE DEPARTMENT STAFF REVIEWS ALL DISCLOSURES AND GATHERS ADDITIONAL INFORMATION AS APPROPRIATE. THE COMPLIANCE DEPARTMENT STAFF DETERMINES IF ANY CONFLICTS ARE SIGNIFICANT AND ADDRESSES THEM WITH THE EMPLOYEE AND/OR THE HUMAN RESOURCES DEPARTMENT TO ELIMINATE ANY SIGNIFICANT CONFLICTS. A SUBCOMMITTEE OF THE COMPLIANCE COMMITTEE REVIEWS THE ACTIVITIES OF THE COMPLIANCE DEPARTMENT STAFF IN DETERMINING CONFLICTS TO DETERMINE IF THEY HAVE BEEN HANDLED APPROPRIATELY.
Process used to establish compensation of top management official Form 990, Part VI, Section B, Line 15a PRIORITY HEALTH HAS ALIGNED ITS EXECUTIVE COMPENSATION PROGRAM TO SUPPORT THE REQUIREMENTS OF INTERMEDIATE SANCTIONS REGULATIONS. THE PRINCIPAL PURPOSE OF THESE REGULATIONS IS TO ENSURE THAT THE COMPENSATION PAID TO SENIOR EXECUTIVES AND OTHER INSIDERS AT TAX-EXEMPT ORGANIZATIONS IS REASONABLE. COVERED POSITIONS INCLUDE ANY KEY EXECUTIVE WHO AT ANY TIME IN THE PAST FIVE YEARS WAS IN A POSITION TO EXERCISE SUBSTANTIAL INFLUENCE OVER THE AFFAIRS OF THE ORGANIZATION. THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS RETAINS AN INDEPENDENT THIRD PARTY CONSULTANT TO PROVIDE COMPENSATION ANALYSIS AND ADVICE AND TO REVIEW THE COMPETITIVENESS AND REASONABLENESS OF THE TOTAL COMPENSATION AND BENEFITS PROVIDED TO EXECUTIVES. THE CONSULTANT USES TWO COMMERCIALLY AVAILABLE HEALTH PLAN EXECUTIVE COMPENSATION SURVEYS. IN 2010, BASED ON FY 2009 PERFORMANCE, THE INDEPENDENT CONSULTANT NOTED THAT IN THEIR OPINION WHEN THE TOTAL BENEFIT PACKAGE IS COMBINED WITH CASH COMPENSATION, PRIORITY HEALTH EXECUTIVE COMPENSATION IS REASONABLE WITH AN INTERMEDIATE SANCTIONS PERSPECTIVE.
Process used to establish compensation of other officers/key employees Form 990, Part VI, Section B, Line 15b SEE EXPLANATION PROVIDED FOR FORM 990, PART VI, LINE 15A.
Public Disclosure Form 990, Part VI, Section C, Line 19 THE ORGANIZATION'S ARTICLES OF INCORPORATION, BYLAWS AND FINANCIAL STATEMENTS ARE ON FILE WITH THE STATE OF MICHIGAN AND AVAILABLE TO THE PUBLIC THROUGH THE STATE. IN ADDITION, THE OVERALL SYSTEM CONSOLIDATED FINANCIAL STATEMENTS ARE PROVIDED AT WWW.SPECTRUM-HEALTH.ORG IN THE SECTION TITLED "ABOUT US". THE ORGANIZATION'S CONFLICT OF INTEREST POLICY IS MADE AVAILABLE UPON REQUEST.
DOCUMENT RETENTION POLICY CORE FORM, PART VI, LINE 14 A DOCUMENT RETENTION POLICY HAS BEEN ADOPTED BY SENIOR MANAGEMENT IN 2008 AND WAS THEREFORE IN EFFECT DURING THE TAX YEAR. THE SPECTRUM HEALTH SYSTEM BOARD OF DIRECTORS ADOPTED A DOCUMENT RETENTION POLICY ON JUNE 28, 2011, WHICH IS APPLICABLE TO PRIORITY HEALTH GOVERNMENT PROGRAMS, INC. PURSUANT TO PRIORITY HEALTH'S BYLAWS.
MANAGEMENT SERVICES FORM 990, PART VI, LINE 3 PRIORITY HEALTH MANAGED BENEFITS, INC. (PHMB), AN ENTITY RELATED THROUGH COMMON OWNERSHIP, PROVIDES CONTRACTED MANAGEMENT SERVICES TO PRIORITY HEALTH GOVERNMENT PROGRAMS AND ITS AFFILIATES. PRIORITY HEALTH, A 501(C)(4), IS THE PARENT COMPANY TO THE TAXPAYER. PRIORITY HEALTH'S GOVERNING BODY RETAINS CONTROL OF THE ACTIVITIES OF PHMB AS THE GOVERNING BODIES OF PRIORITY HEALTH AND PHMB ARE COMPRISED OF THE SAME DIRECTORS AND OFFICERS.
Average hours worked per week for related organization Form 990, Part VII, Section A, Column B GREGORY A. HAWKINS - 45 JAMES F BYRNE - 45 JAMES S SLUBOWSKI - 45 KIMBERLY K. HORN - 45 MICHAEL R KOZIARA - 45 KIMBERLY L. THOMAS - 45 JUDITH HOOYENGA - 45 DEBORAH A PHILLIPS - 45 JOAN A. BUDDEN - 45 BRUCE NIEBYLSKI - 45 KIMBERLY F SUAREZ - 45 DONALD J. WHITFORD - 45 JOHN L FOX - 45 SEAN T. MONAGHAN - 45 LEON D LAMOREAUX - 45
FORMER OFFICERS/DIRECTORS FORM 990, PART IX, LINE 6 MR. MARC KOLE SERVED AS INTERIM CFO IN A PRIOR YEAR. MR. GUY GAUTHIER ALSO SERVED AS DIRECTOR IN A PRIOR YEAR AND AN EMPLOYEE. THE COMPENSATION REPORTED ON THIS LINE WAS FOR THEIR SERVICES AS EMPLOYEES OF THE ORGANIZATION, IN A LESSER CAPACITY OTHER THAN CFO OR DIRECTOR, NOT AS A FORMER OFFICER OR DIRECTOR.
Other changes in net assets or fund balances Form 990, Part XI, Line 5 DIVIDEND PAID TO PARENT - -5000000; CHANGE IN NONADMITTED ASSETS - 26000;
AUDITED FINANCIAL STATEMENTS FORM 990, PART IV, LINE 12 AND PART XII, LINE 2B, 2C AND 2D THE ORGANIZATION'S FINANCIAL STATEMENTS ARE AUDITED ANNUALLY BY AN INDEPENDENT ACCOUNTING FIRM, BOTH ON A CONSOLIDATED GAAP BASIS AND ON A STAND ALONE BASIS. THE STAND ALONE FINANCIAL STATEMENTS ARE PREPARED IN ACCORDANCE WITH SAP (STATUTORY ACCOUNTING PRINCIPLES), AS REQUIRED BY REGULATORY AUTHORITIES. THE FIGURES IN THIS TAX RETURN RECONCILE TO THE FINANCIAL STATEMENTS PREPARED UNDER STATUTORY ACCOUNTING PRINCIPLES AS SUBMITTED TO THE STATE OF MICHIGAN.
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2010

Additional Data


Software ID: 10000128
Software Version: v2010.1.0
SCHEDULE R
(Form 990)
Department of the Treasury
Internal Revenue Service
Related Organizations and Unrelated Partnerships
MediumBulletComplete if the organization answered "Yes" to Form 990, Part IV, line 33, 34, 35, 36, or 37.
MediumBulletAttach to Form 990. MediumBullet See separate instructions.

OMB No. 1545-0047
2010
Open to Public Inspection
Name of the organization
PRIORITY HEALTH GOVERNMENT PROGRAMS INC
 
Employer identification number

32-0016523
Part I
Identification of Disregarded Entities (Complete if the organization answered "Yes" on Form 990, Part IV, line 33.)
(a)
Name, address, and EIN of disregarded entity


(b)
Primary activity


 		(c)
Legal domicile (state
or foreign country)

 		(d)
Total income
(e)
End-of-year assets


 		(f)
Direct controlling
entity







(1) PHMB PROPERTIES LLC
1231 EAST BELTLINE NE
GRAND RAPIDS,MI49525
38-2715520 		PROP. MGMT MI 179,821 29,996,933 PH
 
(2) MMPC REAL ESTATE LLC
4100 LAKE DR SE STE 300
GRAND RAPIDS,MI49525
38-2851295 		DORMANT MI 0 0 MMPC
 
(3) SPECTRUM HEALTH INNOVATIONS LLC
100 MICHIGAN AVE NE
GRAND RAPIDS,MI49503
27-2868213 		IP DEVELOP MI 0 0 SHS
 






Part II
Identification of Related Tax-Exempt Organizations (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related tax-exempt organizations during the tax year.)
(a)
Name, address, and EIN of related organization


(b)
Primary activity


 		(c)
Legal domicile (state
or foreign country)

 		(d)
Exempt Code section
(e)
Public charity status
(if section 501(c)(3))

 		(f)
Direct controlling
entity

 		(g)
Section 512(b)(13) controlled organization
Yes No
(1) SPECTRUM HEALTH SYSTEM

100 MICHIGAN AVE NE

GRAND RAPIDS,MI49503
38-3382353 		MANAGEMENT MI 501(C)(3) 11 - Type III - FI NA
 
 
 
(2) SPECTRUM HEALTH HOSPITALS

100 MICHIGAN AVE NE

GRAND RAPIDS,MI49503
38-1360529 		HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM
 
 
 
(3) SPECTRUM HEALTH PRIMARY CARE PTNRS

100 MICHIGAN AVE NE

GRAND RAPIDS,MI49503
38-1358164 		HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM
 
 
 
(4) WEST MICHIGAN REGIONAL LABORATORY

1726 KNOLLCREST CIRCLE SE

GRAND RAPIDS,MI49546
38-3414862 		TEACH/RSCH MI 501(C)(3) 9 SPECTRUM HEALTH HOSPITALS
 
 
 
(5) SPECTRUM HEALTH FOUNDATION

100 MICHIGAN AVE NE

GRAND RAPIDS,MI49503
38-2752328 		PHILANTHRO MI 501(C)(3) 7 SPECTRUM HEALTH SYSTEM
 
 
 
(6) SPECTRUM HEALTH CONTINUING CARE

750 FULLER AVE NE

GRAND RAPIDS,MI49503
38-3242232 		REHAB/CARE MI 501(C)(3) 11 - Type I SPECTRUM HEALTH SYSTEM
 
 
 
(7) SH CONTINUING CARE CENTER

750 FULLER AVE NE

GRAND RAPIDS,MI49503
38-2415333 		REHAB/NRS MI 501(C)(3) 9 SPECTRUM HEALTH CONTINUING CARE
 
 
 
(8) SH KENT COMMUNITY CAMPUS

750 FULLER AVE NE

GRAND RAPIDS,MI49503
38-3472677 		HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH CONTINUING CARE
 
 
 
(9) SPECTRUM HEALTH WORTH SERVICES

750 FULLER AVE NE

GRAND RAPIDS,MI49503
38-2786617 		HEALTHCARE MI 501(C)(3) 9 SPECTRUM HEALTH CONTINUING CARE
 
 
 
(10) VISITING NURSE SERVICES OF WEST MI

750 FULLER AVE NE

GRAND RAPIDS,MI49503
38-1359195 		HEALTHCARE MI 501(C)(3) 9 SPECTRUM HEALTH CONTINUING CARE
 
 
 
(11) PRIORITY HEALTH

1231 EAST BELTLINE NE

GRAND RAPIDS,MI49525
38-2715520 		HMO MI 501(C)(4) N/A SPECTRUM HEALTH SYSTEM
 
 
 
(12) TRINITY HEALTH PLANS

1231 EAST BELTLINE NE

GRAND RAPIDS,MI49525
38-2663747 		HMO MGMT MI 501(C)(4) N/A PRIORITY HEALTH
 
 
 
(13) PH GOVERNMENT PROGRAMS INC

1231 EAST BELTLINE NE

GRAND RAPIDS,MI49525
32-0016523 		HMO MI 501(C)(3) 9 PRIORITY HEALTH
 
 
 
(14) SPECTRUM HEALTH UNITED

615 S BOWER

GREENVILLE,MI48838
38-1358412 		HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM
 
 
 
(15) SH UNITED MEMORIAL FOUNDATION

615 S BOWER

GREENVILLE,MI48838
38-2990574 		PHILANTHRO MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED
 
 
 
(16) AMBULATORY UNITED

407 S NELSON

GREENVILLE,MI48838
38-3170488 		HEALTHCARE MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED
 
 
 
(17) UNITED LIFESTYLES

615 S BOWER

GREENVILLE,MI48838
38-3589727 		WELLNESS MI 501(C)(3) 11 - Type I SPECTRUM HEALTH UNITED
 
 
 
(18) SPECTRUM HEALTH KELSEY

615 S BOWER

GREENVILLE,MI48838
38-1297435 		HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH UNITED
 
 
 
(19) REED CITY HOSPITAL CORPORATION

300 N PATTERSON RD

REED CITY,MI49677
38-2770076 		HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM
 
 
 
(20) WEST MICHIGAN IMAGING CENTER

PO BOX 1009

JENISON,MI49428
38-2730326 		HEALTHCARE MI 501(C)(3) 9 SPECTRUM HEALTH HOSPITALS
 
 
 
(21) NEWAYGO COUNTY GENERAL HOSPITAL ASSOCIATION

212 S SULLIVAN AVENUE

FREMONT,MI49412
38-1359517 		HEALTHCARE MI 501(C)(3) 3 SPECTRUM HEALTH SYSTEM
 
 
 
(22) MMPC FOUNDATION

4100 LAKE DR SE STE 300

GRAND RAPIDS,MI49546
20-1099059 		PHILANTHRO MI 501(C)(3) N/A MICHIGAN MEDICAL PATIENT CARE
 
 
 
(23) KENT COMMUNITY HEALTH FOUNDATION

750 FULLER AVE NE

GRAND RAPIDS,MI49503
38-3607110 		PHILANTHRO MI 501(C)(3) 11 - Type III - FI SPECTRUM HEALTH KENT COMMUNITY CAMPUS
 
 
 
For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 50135Y
Schedule R (Form 990) 2010
Schedule R (Form 990) 2010
Page 2
Part III
Identification of Related Organizations Taxable as a Partnership (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a partnership during the tax year.)
(a)
Name, address, and EIN of
related organization



 		(b)
Primary activity




 		(c)
Legal
domicile
(state or foreign
country)


 		(d)
Direct controlling
entity



 		(e)
Predominant income(related, unrelated, excluded from tax under sections 512-514)

(f)
Share of total income




 		(g)
Share of end-of-year
assets



 		(h)
Disproprtionate allocations?




 		(i)
Code V—UBI
amount in box 20 of
Schedule K-1
(Form 1065)
 		(j)
General or
managing
partner?



 		(k)
Percentage
ownership
Yes No Yes No












Part IV
Identification of Related Organizations Taxable as a Corporation or Trust (Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a corporation or trust during the tax year.)
(a)
Name, address, and EIN of related organization



 		(b)
Primary activity



 		(c)
Legal domicile
(state or
foreign
country)
 		(d)
Direct controlling
entity


 		(e)
Type of entity
(C corp, S corp,
or trust)

 		(f)
Share of total income



 		(g)
Share of
end-of-year
assets

 		(h)
Percentage
ownership
(1) HELEN DEVOS WOMEN'S AND CHILDREN'S HEALTH PAVILION ASSOCIATION
1840 WEALTHY ST SE
GRAND RAPIDS,MI49506
38-3264184 		MGMT MI SPECTRUM HEALH HOSPITALS
  		C CORPORATION 700,608 488,530 86.96 %
(2) PARTNERSHIP FOR CHILDREN'S HEALTH
1840 WEALTHY ST SE
GRAND RAPIDS,MI49506
38-3364676 		MGED CARE MI SPECTRUM HEALH HOSPITALS
  		C CORPORATION 0 0 100 %
(3) THE FRED AND LENA MEIJER HEART CENTER CONDOMINIUM ASSOCIATION
100 MICHIGAN ST NE
GRAND RAPIDS,MI49503
83-0464302 		MGMT MI SPECTRUM HEALH HOSPITALS
  		C CORPORATION 2,406,843 1,061,603 98.27 %
(4) HDVC - CHC
100 MICHIGAN ST NE
GRAND RAPIDS,MI49503
38-3417270 		MED. SVCS MI SPECTRUM HEALH HOSPITALS
  		C CORPORATION 0 0 100 %
(5) CAMPUS TOWNE CENTER CONDO ASSC
4868 LAKE MICHIGAN DRIVE
ALLENDALE,MI49401
38-2910067 		MGMT MI SPECTRUM HEALH HOSPITALS
  		C CORPORATION 27,768 33,040 75 %
(6) PRIORITY HEALTH INSURANCE COMPANY
1231 EAST BELTLINE NE
GRAND RAPIDS,MI49525
20-1529553 		INSURANCE MI PRIORITY HEALTH
  		C CORPORATION 217,156,804 65,878,919 100 %
(7) PRIORITY HEALTH MANAGED BENEFITS
1231 EAST BELTLINE NE
GRAND RAPIDS,MI49525
38-3085182 		ADMIN MI SPECTRUM HEALTH SYSTEM
  		C CORPORATION 129,333,600 29,767,225 100 %
(8) MONTCALM PRIMARY CARE PHYSICIANS
615 S BOWER
GREENVILLE,MI48838
20-2544762 		MED. SVCS MI SPECTRUM HEALTH UNITED
  		C CORPORATION 0 0 100 %
(9) BLODGETT ASSURANCE COMPANY
100 MICHIGAN AVE NE
GRAND RAPIDS,MI49503
 INSURANCE CJ SPECTRUM HEALTH SYSTEM
  		C CORPORATION 0 0 100 %
(10) MICHIGAN MEDICAL PATIENT CARE
4100 LAKE DR SE STE 300
GRAND RAPIDS,MI49546
38-2851295 		MEDICAL MI SPECTRUM HEALTH SYSTEM
  		C CORPORATION     100 %
(11) WEST MICHIGAN HEART
2900 BRADFORD STREET NE
GRAND RAPIDS,MI49525
38-2125186 		PHYSICIANS MI SPECTRUM HEALTH SYSTEM
  		C CORPORATION     100 %
(12) MHEALTH INNOVATIONS INC
425 NORTH MAIN STREET
ANN ARBOR,MI48104
61-1613614 		PROD DEVL MI SPECTRUM HEALTH INNOVATIONS LLC
  		C CORPORATION     99 %
Schedule R (Form 990) 2010
Schedule R (Form 990) 2010
Page 3
Part V
Transactions With Related Organizations (Complete if the organization answered "Yes" on Form 990, Part IV, line 34, 35, 35A, or 36.)
Note. Complete line 1 if any entity is listed in Parts II, III or IV.
Yes
No
1 During the tax year, did the orgranization engage in any of the following transactions with one or more related organizations listed in Parts II-IV?
a Receipt of (i) interest (ii) annuities (iii) royalties (iv) rent from a controlled entity . . . . . . . . . . . . . . . . . . . . . . .
1a
 
No
b Gift, grant, or capital contribution to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1b
 
No
c Gift, grant, or capital contribution from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1c
 
No
d Loans or loan guarantees to or for other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1d
 
No
e Loans or loan guarantees by other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1e
 
No
f Sale of assets to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1f
 
No
g Purchase of assets from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1g
 
No
h Exchange of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1h
 
No
i Lease of facilities, equipment, or other assets to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1i
 
No
j Lease of facilities, equipment, or other assets from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . .
1j
 
No
k Performance of services or membership or fundraising solicitations for other organization(s) . . . . . . . . . . . . . . . . . . . . . .
1k
 
No
l Performance of services or membership or fundraising solicitations by other organization(s) . . . . . . . . . . . . . . . . . . . . . .
1l
Yes
 
m Sharing of facilities, equipment, mailing lists, or other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1m
 
No
n Sharing of paid employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1n
 
No
o Reimbursement paid to other organization for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1o
Yes
 
p Reimbursement paid by other organization for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1p
 
No
q Other transfer of cash or property to other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1q
Yes
 
r Other transfer of cash or property from other organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1r
 
No
2
If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds.
(a)
Name of other organization 		(b)
Transaction
type(a-r) 		(c)
Amount involved 		(d)
Method of determining amount involved
(1) AMBULATORY UNITED

 L 152,354 GAAP, CASH, OR FMV
(2) HOLLAND COMMUNITY HEALTH CENTER

 L 155,220 GAAP, CASH, OR FMV
(3) MICHIGAN MEDICAL PATIENT CARE

 L 2,515,592 GAAP, CASH, OR FMV
(4) PRIORITY HEALTH MANAGED BENEFITS INC

 L 10,226,060 GAAP, CASH, OR FMV
(5) SPECTRUM HEALTH INFUSION PHARMACY SERVICE

 L 106,734 GAAP, CASH, OR FMV
(6) SPECTRUM HEALTH HOSPITALS

 L 28,691,769 GAAP, CASH, OR FMV
(7) SPECTRUM HEALTH KELSEY

 L 207,620 GAAP, CASH, OR FMV
(8) SPECTRUM HEALTH MEDICAL GROUP

 L 1,193,737 GAAP, CASH, OR FMV
(9) SPECTRUM HEALTH REED CITY CAMPUS

 L 607,943 GAAP, CASH, OR FMV
(10) SPECTRUM HEALTH-KENT COMMUNITY CAMPUS

 L 110,896 GAAP, CASH, OR FMV
(11) SPECTRUM HEALTH UNITED

 L 1,080,349 GAAP, CASH, OR FMV
(12) VISITING NURSES SERVICES OF WESTERN MICHIGAN

 L 163,584 GAAP, CASH, OR FMV
(13) WEST MICHIGAN HEART PC

 L 214,364 GAAP, CASH, OR FMV
(14) PRIORITY HEALTH MANAGED BENEFITS INC

 O 10,226,060 GAAP, CASH, OR FMV
(15) SPECTRUM HEALTH CONTINUING CARE CENTER

 L 28,416 GAAP, CASH, OR FMV
(16) SPECTRUM HEALTH GERBER MEMORIAL

 L 27,952 GAAP, CASH, OR FMV
(17) UNITED LIFESTYLES

 L 393 GAAP, CASH, OR FMV
Schedule R (Form 990) 2010
Schedule R (Form 990) 2010
Page 4
Part VI
Unrelated Organizations Taxable as a Partnership (Complete if the organization answered "Yes" on Form 990, Part IV, line 37.)
Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships.
(a)
Name, address, and EIN of entity 		(b)
Primary activity 		(c)
Legal domicile
(state or foreign
country) 		(d)
Are all
partners
section
501(c)(3)
organizations? 		(e)
Share of
end-of-year
assets 		(f)
Disproprtionate allocations? 		(g)
Code V—UBI
amount in box
20 of Schedule K-1
(Form 1065) 		(h)
General or
managing
partner?
Yes No Yes No Yes No






























Schedule R (Form 990) 2010
Schedule R (Form 990) 2010
Page 5
Part VII
Supplemental Information
Complete this part to provide additional information for responses to questions on Schedule R (see instructions).
Identifier Return Reference Explanation
PART II, COLUMN (G), SECTION 512(B)(13) CONTROLLED ENTITY? SCHEDULE R TAXPAYER IS A MEMBER OF A CONSOLIDATED HEALTH SYSTEM AND HAS A COMMON PARENT ORGANIZATION, SPECTRUM HEALTH SYSTEM. FOR ENTITIES THAT ARE PART OF A CONSOLIDATED HEALTH SYSTEM (WITH COMMON CONTROL) THE ATTRIBUTION RULES OF IRC SECTION 318 APPLY; MEANING THAT ALL ORGANIZATIONS ARE DEEMED TO HAVE CONTROL OF THE ORGANIZATIONS OWNED BY THE CONTROLLING ORGANIZATION. AS SUCH, IN ANSWERING THIS QUESTION AND FOR REPORTING IN SCH. R, EACH RELATED ORGANIZATION WITHIN THE HEALTH SYSTEM IS CONSIDERED AND THE TRANSACTIONS DISCLOSED MAY BE BETWEEN DIRECTLY CONTROLLED SUBSIDIARIES OR BROTHER-SISTER ENTITIES (INDIRECTLY CONTROLLED) WITHIN THE HEALTH SYSTEM.
DISREGARDED ENTITIES FORM 990, PART IV, LINE 33 AND SCHEDULE R THE ORGANIZATION DOES NOT OWN A WHOLLY OWNED DISREGARDED ENTITY. HOWEVER, THE PARENT ORGANIZATION, AND OTHER AFFILIATED ORGANIZATIONS, OWN DISREGARDED ENTITIES. THE ORGANIZATION IS REPORTING INDIRECT CONTROL FOLLOWING THE CONSTRUCTIVE OWNERSHIP RULES UNDER SECTION 318 OF THE INTERNAL REVENUE CODE. OTHER ENTITIES REPORTED ON SCHEDULE R ARE REPORTED BASED ON THE SAME APPLICATION OF THE CONSTRUCTIVE OWNERSHIP RULES OF SECTION 318.
Additional Data


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