Form990
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
2012
Open to Public Inspection
A For the 2012 calendar year, or tax year beginning 01-01-2012 , 2012, and ending 12-31-2012
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 $ 193,563,130
F Name and address of principal officer:
MICHAEL P FREED
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 2011 (Part V, line 2a) ...... 5 0
6 Total number of volunteers (estimate if necessary) ............. 6 2
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) ......... 188,233,144 192,615,762
10 Investment income (Part VIII, column (A), lines 3, 4, and 7d ) .... 83,155 136,005
11 Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e) 0 0
12 Total revenue—add lines 8 through 11 (must equal Part VIII, column (A), line 12)................... 188,316,299 192,751,767
Expenses; 13 Grants and similar amounts paid (Part IX, column (A), lines 1–3 )... 0 0
14 Benefits paid to or for members (Part IX, column (A), line 4)..... 160,229,060 171,879,666
15 Salaries, other compensation, employee benefits (Part IX, column (A), lines 5–10) 6,376,421 6,519,538
16a Professional fundraising fees (Part IX, column (A), line 11e)..... 0 0
b Total fundraising expenses (Part IX, column (D), line 25) MediumBullet0    
17 Other expenses (Part IX, column (A), lines 11a–11d, 11f–24e).... 16,133,545 10,320,973
18 Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25) 182,739,026 188,720,177
19 Revenue less expenses. Subtract line 18 from line 12....... 5,577,273 4,031,590
Net Assets or Fund Balances; Beginning of Current Year End of Year
20 Total assets (Part X, line 16)............. 46,467,953 52,049,948
21 Total liabilities (Part X, line 26)............. 20,795,452 22,345,857
22 Net assets or fund balances. Subtract line 21 from line 20..... 25,672,501 29,704,091
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 Use Only
Print/Type preparer's name
 
Preparer's signature
Date
PTIN
Firm's name MediumBullet

Firm's EIN MediumBullet
Firm's address MediumBullet



Phone no.
May the IRS discuss this return with the preparer shown above? (see instructions) ............
For Paperwork Reduction Act Notice, see the separate instructions.
Cat. No. 11282Y
Form 990 (2012)
Form 990 (2012)
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 organization’s program service accomplishments for each of its three largest program services, as measured by expenses. Section 501(c)(3) and 501(c)(4) organizations 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 $ 179,609,530 including grants of $   ) (Revenue $ 190,747,143 )
PRIORITY MEDICAID (SM): PRIORITY HEALTH GOVERNMENT PROGRAMS (PHGP) WAS SELECTED BY THE STATE OF MICHIGAN AS A QUALIFIED HEALTH PLAN. IT PROVIDES MORE THAN 69,000 LOW INCOME RESIDENTS IN 16 WEST MICHIGAN COUNTIES WITH QUALITY CARE AND SERVICES. PHGP PROMOTES AND INCENTIVIZES OPEN ACCESS TO PROVIDERS. IT HAS MAINTAINED "EXCELLENT" ACCREDITATION FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA) FOR MORE THAN 10 YEARS. AS OF JUNE 2012, THE NCQA RANKED PHGP AS THE 7TH BEST PLAN IN THE NATION. THIS RANKING IS BASED ON CLINICAL PERFORMANCE, MEMBER SATISFACTION AND NCQA ACCREDITATION. 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. CHILDREN'S SPECIAL HEALTH CARE SERVICES (CSHCS) IS A PROGRAM OFFERED BY THE STATE OF MICHIGAN TO PROVIDE CARE FOR THE CHILDREN AND SOME ADULTS WITH CHRONIC HEALTH PROBLEMS, AS WELL AS SUPPORT THE NEEDS OF THEIR CAREGIVERS AND FAMILY MEMBERS. AS OF OCTOBER 1, 2012 CSHCS BENEFICIARIES WERE REQUIRED TO ENROLL IN A MEDICAID HEALTH PLAN. A DEDICATED TEAM WILL FACILITATE AND COORDINATE THE CARE OF THESE PATIENTS AND THEIR FAMILIES. THIS TEAM INCLUDES FIELD SERVICE REPRESENTATIVE, CASE MANAGERS, AND KEY PARTNERS SUCH AS COUNTY HEALTH DEPARTMENTS, THE FAMILY CENTER FOR CHILDREN AND YOUTH WITH SPECIAL HEALTH CARE NEEDS, AND THE CHILDREN'S SPECIAL NEEDS FUNDS.
4b (Code:   ) (Expenses $ 1,507,730 including grants of $   ) (Revenue $ 1,868,619 )
MICHILD - OFFERED BY PRIORITY HEALTH GOVERNMENT PROGRAMS (PHGP): PHGP ENROLLED MICHIGAN'S FIRST MICHILD MEMBERS MAY 1, 1998. MICHILD IS A HEALTH PLAN FOR UNINSURED CHILDREN OF MICHIGAN'S WORKING FAMILIES. MICHILD COVERAGE IS PROVIDED IN 8 COUNTIES IN WEST MICHIGAN. THE CHILDREN'S HEALTHCARE ACCESS PROGRAM (CHAP) IS A COMMUNITY COLLABORATIVE BENEFITING ALL PHGP MEDICAID CHILDREN INCLUDING, MICHILD MEMBERS. THROUGH CHAP, PHGP PAYS PEDIATRICIANS A HIGHER RATE FOR SERVICE IN EXCHANGE FOR THEIR AGREEMENT TO OPEN THEIR PRACTICES TO ADDITIONAL MEDICAID MEMBERS. CHAP IS IN ITS FIFTH YEAR OF SERVING KENT COUNTY. IN LATE 2012, AN INDEPENDENT EVALUATION BY SRA INTERNATIONAL OF THIS PROJECT (WHICH IS SUPPORTED BY MAJOR IN-KIND EFFORTS, MEDICAL LEADERSHIP AND PARTICIPATION OF THE HELEN DEVOS CHILDREN'S HOSPITAL GENERAL PEDIATRIC UNIT AND PRIORITY HEALTH) CONCLUDED THAT THE MODEL WORKED. THE PROGRAM RESULTED IN A 35% DECREASE IN EMERGENCY DEPARTMENT USE AND A 46% DECREASE IN AVOIDABLE HOSPITALIZATIONS FOR CLIENTS AFTER ONE YEAR IN THE PROGRAM. A SOCIAL COST-BENEFIT ANALYSIS ALSO SHOWED AN AVERAGE ANNUAL COST BENEFIT OF $1.16 FOR EVERY $1 SPENT ON CHAP. ADDITIONALLY, THE PROJECT RESULTED IN 1,445 NEW PRIMARY CARE PRACTICE OPENINGS FOR CHILDREN ON MEDICAID AND INCREASED HOURS OF SERVICE. PHGP 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 ACCEPTING MICHILD MEMBERS LEADS TO A HIGH NUMBER OF MICHILD ENROLLEES ACCESSING ROUTINE CARE THROUGH AN EMERGENCY ROOM VS. IN A PRIMARY CARE SETTING.)
4c (Code:   ) (Expenses $   including grants of $   ) (Revenue $   )
4d Other program services (Describe in Schedule O.)
(Expenses $   including grants of $   ) (Revenue $   )
4e Total program service expensesMediumBullet181,117,260
Form 990 (2012)
Form 990 (2012)
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 (see instructions)? ...
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, or have a section 501(h) election in effect during the tax year? 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 for which 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 for escrow or custodial account liability; 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 temporarily restricted endowments, permanent endowments, 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, line 10?
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 XClick 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 and XII .................
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 and XII 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, investment, and program service activities outside the United States, or aggregate foreign investments valued at $100,000 or more? If “Yes,” complete Schedule F, Parts I and IV.........
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 United States? If “Yes,” complete Schedule F, Parts II and IV
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 United States? If “Yes,” complete Schedule F, Parts III and IV...
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 (see instructions)....
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
20a
Did the organization operate one or more hospital facilities? If “Yes,” complete Schedule H....
20a
 
No
b
If “Yes” to line 20a, did the organization attach a copy of its audited financial statements to this return?
20b
 
 
Form 990 (2012)
Form 990 (2012)
Page 4
Part IV
Checklist of Required Schedules (continued)
21
Did the organization report more than $5,000 of grants and other assistance to any government or organization 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, line 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 lines 24b through 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, highest 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 employee thereof, a grant selection committee member, or to a 35% controlled entity or family member of any of these persons? 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 direct or indirect 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........
33
 
No
34
Was the organization related to any tax-exempt or taxable entity? If “Yes,” complete Schedule R, Part II, III, or IV, and Part V, line 1........................ Click to see attachment
34
Yes
 
35a
Did the organization have a controlled entity within the meaning of section 512(b)(13)?
35a
 
No
b
If ‘Yes’ to line 35a, 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...
35b
 
No
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 11b and 19? Note. All Form 990 filers are required to complete Schedule O. ............
38
Yes
 
Form 990 (2012)
Form 990 (2012)
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
1,207
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, securities account, or other financial 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 as charitable contributions?...
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. See the instructions for additional information the organization must report on Schedule O.
13a
 
 
b
Enter the 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 amount of reserves on hand ............
13c
 
14a
Did the organization receive any payments for indoor tanning services during the tax year?.....
14a
 
No
b
If "Yes," has it filed a Form 720 to report these payments? If “No,” provide an explanation in Schedule O..
14b
 
 
Form 990 (2012)
Form 990 (2012)
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
If there are material differences in voting rights among members of the governing body, or if the governing body delegated broad authority to an executive committee or similar committee, explain in Schedule O.
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
Did the organization have members or stockholders? ................
6
Yes
 
7a
Did the organization have members, stockholders, or other persons who had the power to elect or appoint one or more members of the governing body? ....................
7a
Yes
 
b
Are any governance decisions of the organization reserved to (or subject to approval by) members, stockholders, or persons other than the governing body? ...................
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
Did the organization have local chapters, branches, or affiliates? ............
10a
 
No
b
If “Yes,” did the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with the organization's exempt purposes?
10b
 
 
11a
Has the organization provided a complete 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 this Form 990. .....
12a
Did the organization have a written conflict of interest policy? If “No,” go to line 13.......
12a
Yes
 
b
Were officers, directors, or trustees, and key employees required to disclose annually interests that could give rise to conflicts? ..........................
12b
Yes
 
c
Did the organization regularly and consistently monitor and enforce compliance with the policy? If “Yes,” describe in Schedule O how this was done.......................
12c
Yes
 
13
Did the organization have a written whistleblower policy? ...............
13
Yes
 
14
Did the organization have a written document retention and destruction policy? .........
14
Yes
 
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 15a or 15b, 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,” did the organization follow a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and take 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 made these available. Check all that apply.
19
Describe in Schedule O whether (and if so, how), the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year.
20
State the name, physical address, and telephone number of the person who possesses the books and records of the organization:
MediumBulletMary Anne Jones1231 East Beltline NEGrand RapidsMI495254501 (616) 464-8695
Form 990 (2012)
Form 990 (2012)
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. 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 organization compensated any current officer, director, or trustee.
(A)
Name and Title 		(B)
Average hours per week (list any hours for related organizations below dotted line) 		(C)
Position (do not check more than one box, unless person is both an officer and a director/trustee) 		(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) KIMBERLY K HORN........................................................................
PRESIDENT & CEO - PY
 5.00
.......................45.00 		X   X       104,749 1,310,162 20,444
(2) MARY ANNE JONES........................................................................
TREASURER & CFO
 5.00
.......................45.00 		X   X       20,228 253,000 72,862
(3) MICHAEL P FREED........................................................................
PRESIDENT & CEO
 5.00
.......................45.00 		X   X       0 1,071,348 286,125
(4) STEVEN A FLACK........................................................................
TREASURER & CFO - PY
 5.00
.......................45.00 		X   X       40,185 502,615 13,974
(5) ELIZABETH BAXTER........................................................................
DIRECTOR
 1.00
.......................0 		X           0 0 0
(6) JAMES F BYRNE........................................................................
CHIEF MEDICAL OFFICER
 5.00
.......................45.00 		X           40,776 510,012 56,845
(7) MICHAEL KOZIARA........................................................................
CHIEF OPERATING OFFICER
 5.00
.......................45.00 		X           43,820 548,083 45,805
(8) NICOLE BUCHANAN........................................................................
DIRECTOR
 1.00
.......................0 		X           0 0 0
(9) KIMBERLY L THOMAS........................................................................
SECRETARY
 5.00
.......................45.00 		    X       24,388 305,034 54,393
(10) DEBORAH A PHILLIPS........................................................................
CHIEF ADMIN OFFICER
 5.00
.......................45.00 		      X     36,141 452,041 35,741
(11) JOAN A BUDDEN........................................................................
CHIEF MARKETING OFFICER
 5.00
.......................45.00 		      X     33,123 414,285 113,535
(12) KRISCHA WINRIGHT........................................................................
VP INFORMATION SERVICES
 5.00
.......................45.00 		      X     23,539 294,417 70,076
(13) PAMELA RIES........................................................................
VP, SYSTEM TOTAL VALUE
 2.00
.......................48.00 		      X     0 250,329 67,956
(14) BURTON VANDERLAAN........................................................................
MEDICAL DIRECTOR
 5.00
.......................45.00 		        X   21,913 274,075 15,674
(15) JAY LABINE........................................................................
MEDICAL DIRECTOR
 5.00
.......................45.00 		        X   21,878 273,639 24,405
(16) JIANHU YU........................................................................
VP & CHIEF ACTUARY
 5.00
.......................45.00 		        X   24,787 310,026 60,877
(17) JOHN L FOX........................................................................
AVP MEDICAL
 5.00
.......................45.00 		        X   24,879 311,172 48,686
Form 990 (2012)
Form 990 (2012)
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 (list any hours for related organizations below dotted line) 		(C)
Position (do not check more than one box, unless person is both an officer and a director/trustee) 		(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) KIMBERLY SUAREZ........................................................................
VP, MEDICAL OPERATIONS
 5.00
.......................45.00 		        X   21,369 267,269 50,818
(19) JUDITH HOOYENGA........................................................................
FORMER SECRETARY
 5.00
.......................45.00 		          X 10,598 132,551 17,365






















1b Sub-Total................MediumBullet
c Total from continuation sheets to Part VII, Section A....MediumBullet
d Total (add lines 1b and 1c)............MediumBullet 492,371 7,480,058 1,055,582
2
Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organizationMediumBullet  
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. Report compensation for the calendar year ending with or within the organization’s tax year.
(A)
Name and business address 		(B)
Description of services 		(C)
Compensation
ARGUS HEALTH SYSTEMS1300 WASHINGTON STREETKANSAS CITYMO64105 CLAIMS SERVICES 21,621,731
MERCY HEALTH PARTNERSPO BOX 358MUSKEGONMI49442 CLAIMS SERVICES 4,085,425
HOLLAND HOSPITAL602 MICHIGAN AVENUEHOLLANDMI49423 CLAIMS SERVICES 3,779,331
METROPOLITAN HOSPITAL1919 BOSTON ST SEGRAND RAPIDSMI49506 CLAIMS SERVICES 2,737,799
MECOSTA COUNTY MEDICAL CENTER605 OAK STBIG RAPIDSMI49307 CLAIMS SERVICES 2,024,338
2
Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 of compensation from the organization MediumBullet86
Form 990 (2012)
Form 990 (2012)
Page 9
Part VIII
Statement of Revenue
Check if Schedule O contains a response to any question in this Part VIII ..............
(A)
Total revenue 		(B)
Related or
exempt
function
revenue 		(C)
Unrelated
business
revenue 		(D)
Revenue
excluded from
tax under sections
512, 513, or 514
Contributions, Gifts, Grants and Other Similar Amounts 1a Federated campaigns..1a  
b Membership dues....1b  
c Fundraising events....1c  
d Related organizations...1d  
e Government grants (contributions)1e  
f All other contributions, gifts, grants, and
similar amounts not included above1f 		 
g Noncash contributions included in lines
1a-1f:$ 		 
h Total. Add lines 1a-1f.......MediumBullet 0
Program Service Revenue Business Code
2a NET PREMIUM INCOME 524114 192,615,762 192,615,762    
b     0      
c     0      
d     0      
e     0      
f All other program service revenue . 0 0 0 0
g Total. Add lines 2a–2f........MediumBullet 192,615,762
Other Revenue 3 Investment income (including dividends, interest, and other similar amounts).......MediumBullet 135,907     135,907
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 811,461  
b Less: cost or other basis and sales expenses 811,363  
c Gain or (loss) 98 0
d Net gain or (loss)..........MediumBullet 98     98
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     0      
b     0      
c     0      
d All other revenue .... 0 0 0 0
e Total. Add lines 11a–11d ...... MediumBullet 0
12 Total revenue. See Instructions......MediumBullet 192,751,767 192,615,762 0 136,005
Form 990 (2012)
Form 990 (2012)
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).Check if Schedule O contains a response to any question in this Part IX ...............
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 United States. See Part IV, line 21 0  
2 Grants and other assistance to individuals in the United States. See Part IV, line 22 0  
3 Grants and other assistance to governments, organizations, and individuals outside the United States. See Part IV, lines 15 and 16 0  
4 Benefits paid to or for members 171,879,666 171,879,666
5 Compensation of current officers, directors, trustees, and key employees .... 402,755 221,515 181,240  
6 Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) .... 0      
7 Other salaries and wages 4,707,227 2,588,975 2,118,252  
8 Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) .... 289,361 159,148 130,213  
9 Other employee benefits ....... 747,034 410,870 336,164  
10 Payroll taxes ........... 373,161 205,239 167,922  
11 Fees for services (non-employees):        
a Management ...... 0      
b Legal ......... 17,058   17,058  
c Accounting ........... 27,827   27,827  
d Lobbying ........... 0      
e Professional fundraising services. See Part IV, line 17 0  
f Investment management fees ...... 21,147 11,631 9,516  
g Other (If line 11g amount exceeds 10% of line 25, column (A) amount, list line 11g expenses on Schedule O) ........ 757,851 416,818 341,033 0
12 Advertising and promotion .... 612,599 336,929 275,670  
13 Office expenses ....... 289,590 159,273 130,317  
14 Information technology ...... 778,241 428,033 350,208  
15 Royalties .. 0      
16 Occupancy ........... 385,472 212,010 173,462  
17 Travel ............ 53,150 29,232 23,918  
18 Payments of travel or entertainment expenses for any federal, state, or local public officials ...... 0      
19 Conferences, conventions, and meetings .... 34,852 19,169 15,683  
20 Interest ........... 12,981 7,140 5,841  
21 Payments to affiliates ....... 0      
22 Depreciation, depletion, and amortization ..... 1,017,080 559,394 457,686  
23 Insurance .............. 25,379 13,958 11,421  
24 Other expenses. Itemize expenses not covered above (List miscellaneous expenses in line 24e. If line 24e amount exceeds 10% of line 25, column (A) amount, list line 24e expenses on Schedule O.)
a SHARED SERVICES & MANAGEMENT FEES 1,469,311 808,121 661,190  
b COMMUNITY SUPPORT & SPONSORSHIPS 93,958 51,677 42,281  
c USE TAX EXPENSE 2,831,853 1,557,519 1,274,334  
d CLAIMS TAX EXPENSE 1,727,031 949,867 777,164  
e All other expenses 165,593 91,076 74,517 0
25 Total functional expenses. Add lines 1 through 24e 188,720,177 181,117,260 7,602,917 0
26 Joint costs. Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation. Check here MediumBullet if following SOP 98-2 (ASC 958-720). 0      
Form 990 (2012)
Form 990 (2012)
Page 11
Part X Balance Sheet Check if Schedule O contains a response to any question in this Part X ...............
(A)
Beginning of year 		(B)
End of year
Assets 1 Cash—non-interest-bearing .............   1  
2 Savings and temporary cash investments ......... 22,059,122 2 12,101,626
3 Pledges and grants receivable, net ...........   3  
4 Accounts receivable, net ............. 1,333,449 4 2,901,953
5 Loans and other receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of
Schedule L ..................
  5 0
6 Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing employers and sponsoring organizations of section 501(c)(9) voluntary employees' beneficiary organizations (see instructions) Complete Part II of Schedule L
  6 0
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 0 10c 0
11 Investments—publicly traded securities .......... 22,864,019 11 36,818,816
12 Investments—other securities. See Part IV, line 11 ..... 0 12 0
13 Investments—program-related. See Part IV, line 11 ..... 0 13 0
14 Intangible assets ...............   14  
15 Other assets. See Part IV, line 11 ........... 211,363 15 227,553
16 Total assets. Add lines 1 through 15 (must equal line 34)...... 46,467,953 16 52,049,948
Liabilities 17 Accounts payable and accrued expenses ......... 18,598,293 17 19,533,497
18 Grants payable .................   18  
19 Deferred revenue ................ 278,714 19 1,394,063
20 Tax-exempt bond liabilities .............   20  
21 Escrow or custodial account liability. Complete Part IV of Schedule D..   21  
22 Loans and other payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified
persons. Complete Part II of Schedule L..........   22 0
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 (including federal income tax, payables to related third parties, and other liabilities not included on lines 17-24). Complete Part X of Schedule D.................... 1,918,445 25 1,418,297
26 Total liabilities. Add lines 17 through 25......... 20,795,452 26 22,345,857
Net Assets or Fund Balance Organizations that follow SFAS 117 (ASC 958), 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 (ASC 958), 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 13,335,622 32 17,367,212
33 Total net assets or fund balances ........... 25,672,501 33 29,704,091
34 Total liabilities and net assets/fund balances ........ 46,467,953 34 52,049,948
Form 990 (2012)
Form 990 (2012)
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
192,751,767
2
Total expenses (must equal Part IX, column (A), line 25) ............
2
188,720,177
3
Revenue less expenses. Subtract line 2 from line 1 ..............
3
4,031,590
4
Net assets or fund balances at beginning of year (must equal Part X, line 33, column (A)) ..
4
25,672,501
5
Net unrealized gains (losses) on investments ...............
5
 
6
Donated services and use of facilities .................
6
 
7
Investment expenses .....................
7
 
8
Prior period adjustments .....................
8
 
9
Other changes in net assets or fund balances (explain in Schedule O) ........
9
0
10
Net assets or fund balances at end of year. Combine lines 3 through 9 (must equal Part X, line 33, column (B))
10
29,704,091
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
If ‘Yes,’ check a box below to indicate whether the financial statements for the year were compiled or reviewed on a separate basis, consolidated basis, or both:
b
Were the organization’s financial statements audited by an independent accountant?
2b
Yes
 
If ‘Yes,’ check a box below to indicate whether the financial statements for the year were audited on a separate basis, consolidated basis, or both:
c
If “Yes,” to line 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?
2c
Yes
 
If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O.
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 (2012)
Form 990, Special Condition Description:
Special Condition Description
Additional Data


Software ID: 12000266
Software Version: v2012.1.0
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
2012
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 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
Provide the following information about the supported organization(s).
(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 monetary support
Yes No Yes No Yes No
Total                  

For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990EZ.
Cat. No. 11285F
Schedule A (Form 990 or 990-EZ) 2012
Schedule A (Form 990 or 990-EZ) 2012
Page 2
Part II
Support Schedule for Organizations Described in Sections 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) right arrow (a) 2008 (b) 2009 (c) 2010 (d) 2011 (e) 2012 (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) right arrow (a) 2008 (b) 2009 (c) 2010 (d) 2011 (e) 2012 (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. Do not include gain or loss from the sale of capital assets (Explain in Part IV.)..            
11 Total support (Add lines 7 through 10).            
12
12
 
13
First five years. If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a 501(c)(3) organization, check this box and stop here........................................right arrow
Section C. Computation of Public Support Percentage
14
14
 
15
15
 
16a
b
17a
b
18
Private foundation. If the organization did not check a box on line 13, 16a, 16b, 17a, or 17b, check this box and see
instructions ..................................................... right arrow
Schedule A (Form 990 or 990-EZ) 2012
Schedule A (Form 990 or 990-EZ) 2012
Page 3
Part III
Support Schedule for Organizations Described in Section 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) right arrow (a) 2008 (b) 2009 (c) 2010 (d) 2011 (e) 2012 (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...... 131,436,086 172,147,008 180,644,511 188,233,144 192,615,762 865,076,511
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. 131,436,086 172,147,008 180,644,511 188,233,144 192,615,762 865,076,511
7a Amounts included on lines 1, 2, and 3 received from disqualified persons... 0 0 0 0 0 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 0 0 0 0 0
c Add lines 7a and 7b.. 0 0 0 0 0 0
8 Public support (Subtract line 7c from line 6.)           865,076,511
Section B. Total Support
Calendar year (or fiscal year beginning in) right arrow (a) 2008 (b) 2009 (c) 2010 (d) 2011 (e) 2012 (f) Total
9 Amounts from line 6... 131,436,086 172,147,008 180,644,511 188,233,144 192,615,762 865,076,511
10a Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources.. 709,440 344,908 98,231 83,100 135,907 1,371,586
b Unrelated business taxable income (less section 511 taxes) from businesses acquired after June 30, 1975.           0
c Add lines 10a and 10b. 709,440 344,908 98,231 83,100 135,907 1,371,586
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 0 0 0   0
13 Total support. (Add lines 9, 10c, 11, and 12.).. 132,145,526 172,491,916 180,742,742 188,316,244 192,751,669 866,448,097
14
Section C. Computation of Public Support Percentage
15
15
99.840 %
16
16
99.710 %
Section D. Computation of Investment Income Percentage
17
17
0.160 %
18
18
0.290 %
19a
b
20
Schedule A (Form 990 or 990-EZ) 2012
Schedule A (Form 990 or 990-EZ) 2012
Page 4
Part IV
Supplemental Information. Complete this part to provide the explanations required by Part II, line 10; Part II, line 17a or 17b; and 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) 2012

Additional Data


Software ID: 12000266
Software Version: v2012.1.0
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, 11a, 11b, 11c, 11d, 11e, 11f, 12a, or 12b
SchDMd Bullet Attach to Form 990. SchDMd Bullet See separate instructions.
OMB No. 1545-0047
2012
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 can 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 through 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, and not on a historic structure listed in the National Register .................... 2d  
3
Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during
the tax 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 section 170(h)(4)(B)(ii)? .......................................
9
In Part XIII, 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 (ASC 958), 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 XIII, the text of the footnote to its financial statements that describes these items.
b
If the organization elected, as permitted under SFAS 116 (ASC 958), 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 (ASC 958) 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 Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 52283D
Schedule D (Form 990) 2012

Schedule D (Form 990) 2012
Page 2
Part III
Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued)
3
Using the organization’s acquisition, 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 XIII.
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 XIII 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 XIII. Check here if the explanation has been provided in Part XIII ........
Part V
Endowment Funds. Complete if the organization answered "Yes" to Form 990, Part IV, line 10.
(a)Current year (b)Prior year b (c)Two years back (d)Three years back (e)Four years back
1a Beginning of year balance ....          
b Contributions ........          
c Net investment earnings, gains, and 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 current year end balance (line 1g, column (a)) held as:
a
Board designated or quasi-endowment SchDMd Bullet  
b
Permanent endowment SchDMd Bullet  
c
Temporarily restricted endowment SchDMd Bullet  
The percentages in lines 2a, 2b, and 2c should equal 100%.
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 XIII the intended uses of the organization's endowment funds.
Part VI
Land, Buildings, and Equipment. See Form 990, Part X, line 10.
Description of property (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 through 1e. (Column (d) must equal Form 990, Part X, column (B), line 10(c).).......SchDMdBullet 0
Schedule D (Form 990) 2012

Schedule D (Form 990) 2012
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) must 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) must 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) must 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) Book value
Federal income taxes 0
DUE TO AFFILIATES 1,418,297








Total. (Column (b) must equal Form 990, Part X, col.(B) line 25.)Small Bullet 1,418,297
2. Fin 48 (ASC 740) Footnote. In Part XIII, 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 (ASC 740). Check here if the text of the footnote has been provided in Part XIII .....................................................
Schedule D (Form 990) 2012

Schedule D (Form 990) 2012
Page 4
Part XI 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 XIII.) ............ 2d  
e Add lines 2a through 2d ..................... 2e  
3 Subtract line 2e from line 1..................... 3  
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 XIII.) ........... 4b  
c Add lines 4a and 4b....................... 4c  
5 Total revenue. Add lines 3 and 4c. (This must equal Form 990, Part I, line 12.) ...... 5  
Part XII 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 XIII.) ............ 2d  
e Add lines 2a through 2d...................... 2e  
3 Subtract line 2e from line 1..................... 3  
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 XIII.) ............ 4b  
c Add lines 4a and 4b....................... 4c  
5 Total expenses. Add lines 3 and 4c. (This must equal Form 990, Part I, line 18.) ...... 5  
Part XIII
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, line 2; Part XI, lines 2d and 4b; and Part XII, lines 2d and 4b. Also complete this part to provide any additional information.
Identifier Return Reference Explanation
FIN 48 (ASC 740) FOOTNOTE SCHEDULE D, PART X, LINE 2 PRIORITY HEALTH CONDUCTS AN ANALYSIS ANNUALLY TO DETERMINE THE ORGANIZATION'S LIABILITY WITH RESPECT TO UNCERTAIN TAX POSITIONS. FOR THE YEAR ENDED DECEMBER 31, 2012 IT WAS DETERMINED THAT THERE WERE NO MATERIAL UNCERTAIN TAX POSITIONS TO DISCLOSE. AS SUCH, THERE WAS NO FOOTNOTE ADDED TO THE AUDITED FINANCIAL STATEMENTS.
Schedule D (Form 990) 2012

Additional Data


Software ID: 12000266
Software Version: v2012.1.0




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
2012
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 or provision of all of 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 filing organization used to establish the compensation of the
organization's CEO/Executive Director. Check all that apply. Do not check any boxes for methods
used by a related organization to establish compensation of the CEO/Executive Director, but explain in Part III.
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 Regulations 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 Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 50053T
Schedule J (Form 990) 2012

Schedule J (Form 990) 2012
Page 2
Part II
Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is 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) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual.
(A) Name and Title (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 as deferred
in prior Form 990
(i) Base compensation (ii) Bonus & incentive compensation (iii) Other reportable compensation
(1)BURTON VANDERLAANMEDICAL DIRECTOR (i)
(ii)		 20,181
252,421 		1,224
15,314 		507
6,340 		925
11,575 		235
2,939 		23,073
288,589 		0
0
(2)DEBORAH A PHILLIPSCHIEF ADMIN OFFICER (i)
(ii)		 20,195
252,595 		6,327
79,130 		9,619
120,316 		1,154
14,432 		1,492
18,662 		38,787
485,136 		1,304
16,307
(3)JAMES F BYRNECHIEF MEDICAL OFFICER (i)
(ii)		 21,915
274,100 		16,087
201,212 		2,774
34,700 		2,621
32,782 		1,587
19,855 		44,985
562,649 		9,674
121,001
(4)JAY LABINEMEDICAL DIRECTOR (i)
(ii)		 19,515
244,087 		1,868
23,362 		495
6,190 		1,416
17,713 		391
4,885 		23,685
296,237 		0
0
(5)JIANHU YUVP & CHIEF ACTUARY (i)
(ii)		 20,164
252,202 		4,525
56,602 		98
1,223 		3,500
43,776 		1,007
12,594 		29,294
366,396 		0
0
(6)JOAN A BUDDENCHIEF MARKETING OFFICER (i)
(ii)		 25,270
316,069 		5,882
73,572 		1,970
24,645 		7,113
88,962 		1,293
16,167 		41,528
519,414 		50
623
(7)JOHN L FOXAVP MEDICAL (i)
(ii)		 21,329
266,770 		3,062
38,294 		488
6,108 		1,442
18,040 		2,162
27,041 		28,483
356,254 		0
0
(8)JUDITH HOOYENGAFORMER SECRETARY (i)
(ii)		 5,363
67,075 		4,966
62,119 		268
3,357 		810
10,126 		476
5,953 		11,883
148,631 		4,133
51,688
(9)KIMBERLY K HORNPRESIDENT & CEO - PY (i)
(ii)		 47,708
596,716 		43,067
538,665 		13,974
174,780 		1,176
14,703 		338
4,227 		106,263
1,329,093 		26,287
328,783
(10)KIMBERLY L THOMASSECRETARY (i)
(ii)		 20,087
251,244 		3,619
45,265 		682
8,525 		2,165
27,080 		1,862
23,287 		28,415
355,400 		0
0
(11)KIMBERLY SUAREZVP, MEDICAL OPERATIONS (i)
(ii)		 10,796
135,031 		9,513
118,979 		1,060
13,259 		2,090
26,137 		1,672
20,919 		25,131
314,324 		5,726
71,614
(12)KRISCHA WINRIGHTVP INFORMATION SERVICES (i)
(ii)		 18,935
236,835 		4,142
51,813 		461
5,769 		3,530
44,153 		1,658
20,735 		28,727
359,305 		0
0
(13)MARY ANNE JONESTREASURER & CFO (i)
(ii)		 17,783
222,419 		1,999
25,002 		446
5,579 		3,577
44,740 		1,817
22,728 		25,622
320,468 		0
0
(14)MICHAEL KOZIARACHIEF OPERATING OFFICER (i)
(ii)		 25,661
320,957 		11,477
143,547 		6,682
83,579 		2,709
33,888 		682
8,527 		47,211
590,498 		5,605
70,109
(15)MICHAEL P FREEDPRESIDENT & CEO (i)
(ii)		 0
648,141 		0
404,990 		0
18,217 		0
114,938 		0
171,187 		0
1,357,472 		0
247,656
(16)PAMELA RIESVP, SYSTEM TOTAL VALUE (i)
(ii)		 0
193,956 		0
54,445 		0
1,928 		0
33,094 		0
34,862 		0
318,285 		0
14,697
(17)STEVEN A FLACKTREASURER & CFO - PY (i)
(ii)		 26,127
326,791 		11,779
147,324 		2,279
28,500 		776
9,710 		258
3,229 		41,219
515,554 		3,691
46,162
Schedule J (Form 990) 2012

Schedule J (Form 990) 2012
Page 3
Part III
Supplemental Information
Complete this part to provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II.
Also complete this part for any additional information.
Identifier Return Reference Explanation
Arrangement used to establish the top management official's compensation Schedule J, Part I, Line 3 THE SPECTRUM HEALTH SYSTEM BOARD OF DIRECTORS (THROUGH ITS EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS FOR DETERMINING COMPENSATION OF THE TOP MANAGEMENT OFFICIAL AT PRIORITY HEALTH. LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS (PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED TO THE EXECUTIVE COMMITTEE IN ADVANCE OF MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS: * SULLIVAN, COTTER AND ASSOCIATES, INC.: 2011 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * INTEGRATED HEALTHCARE STRATEGIES: 2011 HEALTHCARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2011 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * TOWERS WATSON DATA SERVICES: 2011/2012 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT THESE SOURCES ARE CONSISTENT WITH THOSE USED IN LAST YEAR'S ANALYSIS. COMPENSATION ADJUSTMENTS ARE APPROVED BY EXECUTIVE COMMITTEE MEMBERS, CONSISTENT WITH THE SPECTRUM HEALTH COMPENSATION PHILOSOPHY DESCRIBED BELOW. MINUTES OF COMMITTEE DISCUSSIONS AND DECISIONS ARE PREPARED TO MEMORIALIZE EXECUTIVE COMMITTEE DECISIONS BASED UPON THE ABOVE DATA. CASH COMPENSATION DATA RELIED UPON BY THE EXECUTIVE COMMITTEE IS NATIONAL AND REFLECTS THE COMPENSATION PAID TO EXECUTIVES IN COMPARABLE JOBS IN COMPARABLY-SIZED HEALTHCARE ORGANIZATIONS. SPECTRUM HEALTH RECRUITS NATIONALLY FOR ITS EXECUTIVES. BENEFITS DATA REFLECT NATIONAL HEALTHCARE MARKET PRACTICES. GEOGRAPHIC PAY DIFFERENTIAL AND COST OF LIVING DATA INDICATE CONSISTENCY WITH NATIONAL DATA. THIS PROCESS IS INTENDED TO ASSIST SPECTRUM HEALTH IN QUALIFYING FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS (INTERMEDIATE SANCTIONS REGULATIONS) AND COMPLYING WITH THE POTENTIAL SPECTRUM HEALTH EXCESS BENEFIT TRANSACTION POLICY FOR THOSE INDIVIDUALS IN THE GROUP WHO ARE DISQUALIFIED PERSONS. THE OPINION SUBMITTED FROM THE THIRD PARTY INDEPENDENT CONSULTING FIRM IS IN ACCORDANCE WITH THE PROVISIONS OF TREASURY REGULATIONS SECTION 53.4958-6(C)(2) AND IS ALSO INTENDED TO SATISFY THE PROFESSIONAL ADVICE REQUIREMENT OF TREASURY REGULATIONS SECTION 53.4958-1(D)(4)(III).
Severance or change-of-control payment Schedule J, Part I, Line 4a $161,539 STEVEN FLACK $457,717 KIMBERLY HORN
Supplemental nonqualified retirement plan Schedule J, Part I, Line 4b $ 673 JOAN BUDDEN $130,675 JAMES BYRNE $ 49,853 STEVEN FLACK $247,656 MICHAEL FREED $ 55,820 JUDITH HOOYENGA $355,070 KIMBERLY HORN $ 75,714 MICHAEL KOZIARA $ 17,610 DEBORAH PHILLIPS $ 14,697 PAMELA RIES $ 77,340 KIMBERLY SUAREZ 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 YEAR. THE NONQUALIFIED RETIREMENT PLANS ARE AN INDUSTRY STANDARD AND ARE SUBJECT TO THE FUNDING REQUIREMENTS OF NONQUALIFIED DEFERRED COMPENSATION PLANS UNDER ERISA AND FEDERAL TAX REGULATIONS.
DEFERRED COMPENSATION SCHEDULE J, PART II, COLUMN (F) THE 2012 "BONUS & INCENTIVE COMPENSATION" INCLUDES A LONG-TERM INCENTIVE PROGRAM AND CERTAIN DEFERRED COMPENSATION ARRANGEMENTS THAT WERE REPORTED IN PREVIOUS YEARS BUT PAID IN 2012. THIS RESULTS IN A CERTAIN AMOUNT OF WAGES BEING REPORTED IN THE FORM 990 TWICE. AMOUNTS REPORTED IN PART II COLUMN F REPRESENT COMPENSATION THAT WAS ALSO REPORTED IN A PREVIOUS YEAR'S FORM 990 WHILE ALSO BEING REPORTED IN THE CURRENT FORM 990 AS TOTAL COMPENSATION. THIS INCLUDES CERTAIN PAYMENTS IN 2012 OF A LONG-TERM INCENTIVE BONUS PLAN FOR CERTAIN KEY EXECUTIVES THAT HAS A THREE YEAR MEASUREMENT PERIOD ENDING JUNE 30, 2012.
Schedule J (Form 990) 2012

Additional Data


Software ID: 12000266
Software Version: v2012.1.0
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, line 38a or 40b.
MediumBullet Attach to Form 990 or Form 990-EZ. MediumBullet See separate instructions.
OMB No. 1545-0047
2012
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) Relationship between disqualified person and organization (c) Description of transaction (d) Corrected?
Yes No





2
Enter the amount of tax incurred by 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-EZ, Part V, line 38a, or Form 990, Part IV, line 26; or if the organization reported an amount on Form 990, Part X, line 5, 6, or 22
(a) Name of interested person (b) Relationship with organization (c) Purpose of loan (d) Loan to or from the organization? (e)Original principal amount (f)Balance due (g) In default? (h) Approved by board or committee? (i)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 assistance (d) Type of assistance (e) Purpose of assistance
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 50056A
Schedule L (Form 990 or 990-EZ) 2012
Schedule L (Form 990 or 990-EZ) 2012
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 11,129,015 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 SCHEDULE L, PART IV CERTAIN MEMBERS OF THE BOARD OF DIRECTORS, OFFICERS, AND KEY EMPLOYEES OF THE ORGANIZATION (ASIDE FROM MS. ELIZABETH BAXTER AND MS. NICOLE BUCHANAN) ARE ALSO OFFICERS AND/OR KEY EMPLOYEES OF PRIORITY HEALTH MANAGED BENEFITS, INC. ("PHMB") (EIN 38-3085182); AN AFFILIATED ORGANIZATION. THE FOLLOWING MEMBERS OF THE BOARD OF DIRECTORS AND OFFICERS OF THE ORGANIZATION 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 SUBISIDARY OF THE PARENT ORGANIZATION: DIRECTORS-PHIC: FULL YEAR - MS. JOAN BUDDEN, MR. MICHAEL KOZIARA, AND MR. MICHAEL FREED. PART YEAR - MS. KIMBERLY HORN. OFFICERS-PHIC: FULL YEAR - MS. KIMBERLY L. THOMAS, MR. MICHAEL FREED, MS. MARY ANNE JONES; PART YEAR - MS. KIMBERLY HORN, MR. STEVEN A. FLACK.
Schedule L (Form 990 or 990-EZ) 2012

Additional Data


Software ID: 12000266
Software Version: v2012.1.0




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
2012
Open to Public
Inspection
Name of the organization
PRIORITY HEALTH GOVERNMENT PROGRAMS INC
 
Employer identification number

32-0016523
Identifier Return Reference Explanation
AUDITED FINANCIAL STATEMENTS FORM 990, PART IV, LINE 12A 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.
NUMBER OF EMPLOYEES REPORTED ON FORM W-3 FORM 990, PART V, LINE 2A ALL EMPLOYEES OF PRIORITY HEALTH GOVERNMENT PROGRAMS WERE EMPLOYED DURING THE YEAR BY PRIORITY HEALTH MANAGED BENEFITS (38-3085182) AND/OR SPECTRUM HEALTH SYSTEM (38-3382353) AND LEASED BACK TO PRIORITY HEALTH GOVERNMENT PROGRAMS. SALARIES AND WAGES ARE ALLOCATED TO PRIORITY HEALTH GOVERNMENT PROGRAMS VIA A MANAGEMENT FEE. THE SALARIES AND WAGES REPORTED IN PART IX STATEMENT OF FUNCTIONAL EXPENSES REFLECT THE PORTION OF SALARIES AND WAGES ALLOCATED TO PRIORITY HEALTH GOVERNMENT PROGRAMS. PRIORITY HEALTH MANAGED BENEFITS AND/OR SPECTRUM HEALTH SYSTEM FILED ALL APPLICABLE IRS TAX FILINGS INCLUDING FORMS W-2 AND W-3 ON BEHALF OF PRIORITY HEALTH GOVERNMENT PROGRAMS.
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.
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 CONTROLS 100% OF THE ORGANIZATION. 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 THE REVIEW PROCESS FOR THIS FORM 990 IS AS FOLLOWS: 1. PREPARATION OF THE RETURN IS SUPERVISED AND REVIEWED BY THE ORGANIZATION'S 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 ORGANIZATION'S 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 ORGANIZATION'S 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 THE SPECTRUM HEALTH SYSTEM BOARD OF DIRECTORS (THROUGH ITS EXECUTIVE COMMITTEE) USES THE FOLLOWING PROCESS ANNUALLY FOR DETERMINING COMPENSATION OF THE TOP MANAGEMENT OFFICIAL AT PRIORITY HEALTH. LABOR MARKET DATA REFLECTING COMPARABLE ORGANIZATIONS AND JOBS (PREPARED BY INDEPENDENT FIRMS) ARE RELIED UPON. COMPETITIVE ASSESSMENT REPORTS ARE PROVIDED TO THE EXECUTIVE COMMITTEE IN ADVANCE OF MEETINGS. THE COMPETITIVE ASSESSMENT REPORT IS PREPARED BY A NATIONALLY KNOWN INDEPENDENT EXECUTIVE COMPENSATION FIRM AND WAS BASED ON THE FOLLOWING INDEPENDENT SURVEYS OF HEALTH CARE EXECUTIVES AT COMPARABLE HEALTH SYSTEMS: * SULLIVAN, COTTER AND ASSOCIATES, INC.: 2011 SURVEY OF MANAGER AND EXECUTIVE COMPENSATION IN HOSPITALS AND HEALTH SYSTEMS * INTEGRATED HEALTHCARE STRATEGIES: 2011 HEALTHCARE EXECUTIVE COMPENSATION SURVEY * MERCER HUMAN RESOURCES CONSULTING: 2011 INTEGRATED HEALTH NETWORKS COMPENSATION SURVEY * TOWERS WATSON DATA SERVICES: 2011/2012 HOSPITAL AND HEALTHCARE MANAGEMENT COMPENSATION REPORT THESE SOURCES ARE CONSISTENT WITH THOSE USED IN LAST YEAR'S ANALYSIS. COMPENSATION ADJUSTMENTS ARE APPROVED BY EXECUTIVE COMMITTEE MEMBERS, CONSISTENT WITH THE SPECTRUM HEALTH COMPENSATION PHILOSOPHY DESCRIBED BELOW. MINUTES OF COMMITTEE DISCUSSIONS AND DECISIONS ARE PREPARED TO MEMORIALIZE EXECUTIVE COMMITTEE DECISIONS BASED UPON THE ABOVE DATA. CASH COMPENSATION DATA RELIED UPON BY THE EXECUTIVE COMMITTEE IS NATIONAL AND REFLECTS THE COMPENSATION PAID TO EXECUTIVES IN COMPARABLE JOBS IN COMPARABLY-SIZED HEALTHCARE ORGANIZATIONS. SPECTRUM HEALTH RECRUITS NATIONALLY FOR ITS EXECUTIVES. BENEFITS DATA REFLECT NATIONAL HEALTHCARE MARKET PRACTICES. GEOGRAPHIC PAY DIFFERENTIAL AND COST OF LIVING DATA INDICATE CONSISTENCY WITH NATIONAL DATA. THIS PROCESS IS INTENDED TO ASSIST SPECTRUM HEALTH IN QUALIFYING FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS (INTERMEDIATE SANCTIONS REGULATIONS) AND COMPLYING WITH THE POTENTIAL SPECTRUM HEALTH EXCESS BENEFIT TRANSACTION POLICY FOR THOSE INDIVIDUALS IN THE GROUP WHO ARE DISQUALIFIED PERSONS. THE OPINION SUBMITTED FROM THE THIRD PARTY INDEPENDENT CONSULTING FIRM IS IN ACCORDANCE WITH THE PROVISIONS OF TREASURY REGULATIONS SECTION 53.4958-6(C)(2) AND IS ALSO INTENDED TO SATISFY THE PROFESSIONAL ADVICE REQUIREMENT OF TREASURY REGULATIONS SECTION 53.4958-1(D)(4)(III).
Process used to establish compensation of other officers/key employees Form 990, Part VI, Section B, Line 15b 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 2012, BASED ON FY 2011 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.
Governing documents, conflict of interest policy and financial statements available to the public 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.
COMPENSATION FORM 990, PART IX, LINE 6 MS. JUDITH HOOYENGA SERVED AS SECRETARY IN A PRIOR YEAR AND AS AN EMPLOYEE. THE COMPENSATION REPORTED ON THIS LINE WAS FOR HER SERVICES AS AN EMPLOYEE OF THE ORGANIZATION, IN A LESSER CAPACITY OTHER THAN OFFICER, NOT AS A FORMER OFFICER.
AUDITED FINANCIAL STATEMENTS FORM 990, PART XII, LINE 2B THE ORGANIZATION'S FINANCIAL STATEMENTS ARE AUDITED ANNUALLY BY AN INDEPENDENT ACCOUNTING FIRM. THE ORGANIZATION ISSUED GAAP BASIS FINANCIAL STATEMENTS WHICH ARE PREPARED ON A CONSOLIDATED BASIS AND NOT ON A STAND ALONE BASIS. THE ORGANIZATION IS AUDITED ANNUALLY ON A STAND ALONE BASIS AND ISSUED FINANCIAL STATEMENTS ON A STAND ALONE BASIS WHICH 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) 2012

Additional Data


Software ID: 12000266
Software Version: v2012.1.0
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
2012
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" to Form 990, Part IV, line 33.)
(a)
Name, address, and EIN (if applicable) 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










Part II
Identification of Related Tax-Exempt Organizations (Complete if the organization answered "Yes" to 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 entity?
Yes No
(1) SPECTRUM HEALTH SYSTEM

100 MICHIGAN AVE NE

GRAND RAPIDS,MI49503
 MANAGEMENT MI 501(C)(3) Type III - FI NA
 
 
No
(2) PRIORITY HEALTH

1231 EAST BELTLINE NE

GRAND RAPIDS,MI49525
 HMO MI 501(C)(4) N/A SPECTRUM HEALTH SYSTEM
 
 
No
(3) TRINITY HEALTH PLANS

1231 EAST BELTLINE NE

GRAND RAPIDS,MI49525
 HMO MGMT MI 501(C)(4) N/A PRIORITY HEALTH
 
 
No








For Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 50135Y
Schedule R (Form 990) 2012
Schedule R (Form 990) 2012
Page 2
Part III
Identification of Related Organizations Taxable as a Partnership (Complete if the organization answered "Yes" to 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" to 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
 		(i)
Section 512(b)(13) controlled entity?
Yes No
(1) PRIORITY HEALTH INSURANCE COMPANY

1231 EAST BELTLINE NE
GRAND RAPIDS,MI49525
20-1529553 		INSURANCE MI PRIORITY HEALTH
  		C CORPORATION 224,396,419 74,826,281 100 %   No












Schedule R (Form 990) 2012
Schedule R (Form 990) 2012
Page 3
Part V
Transactions With Related Organizations (Complete if the organization answered "Yes" to Form 990, Part IV, line 34, 35b, or 36.)
Note. Complete line 1 if any entity is listed in Parts II, III, or IV of this schedule.
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 or (iv) rent from a controlled entity . . . . . . . . . . . . . . . . . . . . . . .
1a
 
No
b Gift, grant, or capital contribution to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1b
 
No
c Gift, grant, or capital contribution from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1c
 
No
d Loans or loan guarantees to or for related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1d
 
No
e Loans or loan guarantees by related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1e
 
No
f Dividends from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1f
 
No
g Sale of assets to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1g
 
No
h Purchase of assets from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1h
 
No
i Exchange of assets with related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1i
 
No
j Lease of facilities, equipment, or other assets to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1j
 
No
k Lease of facilities, equipment, or other assets from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . .
1k
 
No
l Performance of services or membership or fundraising solicitations for related organization(s) . . . . . . . . . . . . . . . . . . . .
1l
 
No
m Performance of services or membership or fundraising solicitations by related organization(s) . . . . . . . . . . . . . . . . . . . .
1m
 
No
n Sharing of facilities, equipment, mailing lists, or other assets with related organization(s) . . . . . . . . . . . . . . . . . . . . .
1n
 
No
o Sharing of paid employees with related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1o
 
No
p Reimbursement paid to related organization(s) for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1p
 
No
q Reimbursement paid by related organization(s) for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1q
 
No
r Other transfer of cash or property to related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1r
 
No
s Other transfer of cash or property from related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1s
 
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-s) 		(c)
Amount involved 		(d)
Method of determining amount involved





Schedule R (Form 990) 2012
Schedule R (Form 990) 2012
Page 4
Part VI
Unrelated Organizations Taxable as a Partnership (Complete if the organization answered "Yes" to 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)
Predominant income (related, unrelated, excluded from tax under section 512-514)

(e)
Are all partners
section
501(c)(3)
organizations? 		(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 Yes No






























Schedule R (Form 990) 2012
Schedule R (Form 990) 2012
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
SECTION 512(B)(13) CONTROLLED ENTITY? PART II, COLUMN (G) TAXPAYER IS A MEMBER OF A CONSOLIDATED HEALTH SYSTEM AND HAS A COMMON PARENT ORGANIZATION, SPECTRUM HEALTH SYSTEM.

Additional Data


Software ID: 12000266
Software Version: v2012.1.0