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TIN:
SCHEDULE O
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
(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 990-EZ or to provide any additional information.
Attach to Form 990 or 990-EZ.
Information about Schedule O (Form 990 or 990-EZ) and its instructions is atwww.irs.gov/form990.
OMB No. 1545-0047
2015
Open to Public
Inspection
Inspection
Name of the organization
Priority Health
Employer identification number
38-2715520
38-2715520
| Return Reference | Explanation |
|---|---|
| Form 990, Part III, Line 4a PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH HMO | PRIORITY HEALTH IS AN INTEGRAL PART OF THE SPECTRUM HEALTH SYSTEM, AN INTEGRATED HEALTH SYSTEM SERVING COMMUNITIES THROUGHOUT MICHIGAN. PRIORITY HEALTH'S MISSION, LED BY ITS COMMUNITY BOARD, STRIVES TO RETURN VALUE TO THE COMMUNITIES SERVED BEYOND THE PROVISION OF HEALTHCARE TO ITS MEMBERS. PRIORITY HEALTH HAS BUILT A LONG HISTORY OF OFFERING MICHIGAN EMPLOYERS AND INDIVIDUALS PROGRESSIVE PRODUCTS AND INNOVATIVE PROGRAMS INTENDED TO KEEP COSTS DOWN AND MEMBERS HEALTHY. ITS BROAD PORTFOLIO OF PRODUCTS AND SERVICES INCLUDES TRADITIONAL MEDICAL PLANS AS WELL AS HSA'S, HRA'S AND OTHER CONSUMER-DRIVEN PRODUCTS. PRIORITY HEALTH CURRENTLY HAS AN "EXCELLENT" ACCREDITATION FOR ITS HMO PRODUCTS FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA), AN INDEPENDENT MANAGED CARE ACCREDITING BODY. THIS IS THE HIGHEST RATING A HEALTH PLAN CAN EARN. PRIORITY HEALTH HAS EARNED AN "EXCELLENT" RATING EVERY YEAR SINCE 1998. SPECTRUM HEALTH IS A NOT-FOR-PROFIT HEALTH SYSTEM, BASED IN WEST MICHIGAN, OFFERING A FULL CONTINUUM OF CARE THROUGH THE SPECTRUM HEALTH HOSPITAL GROUP, WHICH IS COMPRISED OF 12 HOSPITALS; 178 AMBULATORY AND SERVICE SITES; 3,400 PHYSICIANS AND ADVANCED PRACTICE PROVIDERS, WHICH INCLUDE 1,400 MEMBERS OF THE SPECTRUM HEALTH MEDICAL GROUP; AND PRIORITY HEALTH, A HEALTH PLAN WITH MORE THAN 725,000 MEMBERS. SPECTRUM HEALTH IS WEST MICHIGAN'S LARGEST EMPLOYER, WITH 24,500 EMPLOYEES. THE ORGANIZATION PROVIDED $283 MILLION IN COMMUNITY BENEFIT DURING ITS 2015 FISCAL YEAR. SPECTRUM HEALTH WAS NAMED ONE OF THE NATION'S 15 TOP HEALTH SYSTEMS, AND IN THE TOP FIVE AMONG THE LARGEST HEALTH SYSTEMS, BY TRUVEN HEALTH ANALYTICS FOR 2016. THIS IS THE FIFTH TIME THE ORGANIZATION HAS RECEIVED THIS RECOGNITION. THE AFFORDABLE CARE ACT (ACA) ADDED NEW REQUIREMENTS THAT HOSPITAL ORGANIZATIONS MUST SATISFY IN ORDER TO BE DESCRIBED IN SECTION 501(C)(3). ONE OF THE REQUIREMENTS UNDER THIS ACT IS TO CONDUCT A COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA) AND ADOPT AN IMPLEMENTATION STRATEGY AT LEAST ONCE EVERY THREE YEARS. SPECTRUM HEALTH COMPLETED SEVERAL IMPLEMENTATION PLANS IDENTIFYING THE COMMUNITY HEALTH NEEDS AND IMPLEMENTATION PLAN GOALS FOR EACH SPECTRUM HEALTH HOSPITAL. ONE NEED IDENTIFIED IN THE CHNA'S IS ACCESS TO HEALTHCARE, WHICH INCLUDES IMPROVING ACCESS TO AFFORDABLE HEALTHCARE FOR ALL COMMUNITY MEMBERS. IN ADDITION, ALL COMMUNITY MEMBERS SHOULD HAVE ACCESS TO PREVENTIVE CARE AND MEDICAL HOME CARE, INCLUDING THE UNINSURED AND LOW-INCOME WORKING INDIVIDUALS. SPECTRUM HEALTH WORKS CLOSELY WITH PRIORITY HEALTH TO ACHIEVE THE IDENTIFIED NEEDS AND GOALS. IN 2015, PRIORITY HEALTH DEMONSTRATED 85% OF TIMELY ACCESS TO ROUTINE AND URGENT CARE IN ALL PRODUCTS WHILE MAINTAINING 90% AVAILABILITY OF PHYSICIANS (PCPS WITHIN 16 MILES OF EACH MEMBER IN RURAL AREAS, 8 MILES IN URBAN SETTINGS). |
| Form 990, Part III, Line 4a PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH HMO (CONTINUED) | PRIORITY HEALTH PURSUES INITIATIVES THAT WILL IMPROVE PATIENT OUTCOMES WHILE HELPING TO REDUCE THE OVERALL COST TO THE MEMBER. IN 2015 PRIORITY HEALTH LOWERED HEALTH COSTS ACROSS ALL LINES OF BUSINESS BY OVER $52 MILLION THROUGH NEW MANAGED CARE INITIATIVES THAT INFLUENCE PHYSICIAN PRACTICES, PROMOTE APPROPRIATE HEALTHCARE UTILIZATION AND INCREASE QUALITY WHICH EXTENDS BEYOND PRIORITY HEALTH'S MEMBERS. IN ADDITION TO THE MANAGED CARE SAVINGS ABOVE, PRIORITY HEALTH PURSUES INITIATIVES TO PREVENT INDIVIDUALS FROM OBTAINING CHRONIC DISEASE, AS WELL AS INITIATIVES TO BETTER MANAGE INDIVIDUALS WITH CHRONIC DISEASE. IN 2015 PRIORITY HEALTH ENROLLED OVER 10,000 MEMBERS IN CHRONIC DISEASE MANAGEMENT PROGRAMS WITH AN ESTIMATED SAVINGS OF OVER $11 MILLION. PEER AND UTILIZATION REVIEW ASSURES THAT SERVICES ARE RENDERED IN A COST EFFICIENT AND PROFESSIONAL MANNER. EVIDENCE-BASED MEDICINE IMPROVES QUALITY AND LOWERS COST. PRIORITY HEALTH MEASURES EACH ACCOUNTABLE CARE NETWORK'S USE OF RATES FOR PREFERENCE SENSITIVE CONDITIONS AND DISTRIBUTES THIS BENCHMARK DATA UN-BLINDED TO HIGHLIGHT OUTLIERS IN STANDARDS OF CARE. WE CALL THIS VARIATION TO CHALLENGE TREATMENT APPROACH AND ENGAGEMENT OF PATIENTS IN ALTERNATIVE TREATMENTS. CONSUMER DECISION MAKING TOOLS HAVE ALSO BEEN DEVELOPED TO PROVIDE PATIENTS WITH ALTERNATIVES TO TREATMENT WITH RELATED EVIDENCE BASED OUTCOMES. PHARMACEUTICAL FORMULARY ASSESSMENTS GUIDE PHYSICIAN PRESCRIPTION ORDERING BEHAVIORS TOWARD THE LOWEST COST DRUGS THAT ARE PROVEN EFFECTIVE. QUALITY AND INCENTIVE PROGRAMS DESIGNED TO MONITOR AND REDUCE HIGH COST HEALTHCARE AREAS SUCH AS EMERGENCY ROOM VISITS, HIGH DIAGNOSTIC IMAGING, AND UNNECESSARY ADMISSIONS HAVE BEEN IMPLEMENTED ACROSS THE STATE OF MICHIGAN. OTHER EXAMPLES OF INITIATIVES INCLUDE IMPLEMENTATION OF ELECTRONIC MEDICAL RECORDS, WHICH BENEFIT NON-PRIORITY HEALTH PATIENTS. PRIORITY HEALTH DEVELOPS AND PUBLISHES PREVENTIVE HEALTHCARE GUIDELINES AVAILABLE TO THE GENERAL PUBLIC ON ITS WEBSITE. IN ADDITION, PRIORITY HEALTH USES COMMUNITY RATING WHICH MINIMIZES THE ECONOMIC IMPACT OF SEVERE ILLNESS ON A GIVEN INDIVIDUAL OR GROUP. PRIORITY HEALTH SERVES WHAT THE IRS HAS DEFINED AS THE "MOST IN NEED" POPULATION OF INDIVIDUALS, SMALL GROUPS AND ELDERLY, MAKING UP 65% OF THE MEMBERSHIP BASE. PRIORITY HEALTH PROVIDED COMMUNITY-RATED AFFORDABLE HEALTH INSURANCE TO OVER 120,000 MEMBERS WHO ARE INDIVIDUALS AND SMALL GROUPS IN 2015. PRIORITY HEALTH ALSO PROVIDES CAPITAL SUPPORT FOR ITS WHOLLY OWNED SUBSIDIARY, PRIORITY HEALTH CHOICE, INC., WHICH PROVIDES ACCESS TO EXCELLENT HEALTHCARE TO OVER 115,000 MEDICAID MEMBERS. |
| Form 990, Part III, Line 4a PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH HMO (CONTINUED) | IN 2013, THE MICHIGAN DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES (DIFS) ADOPTED THE OBAMA ADMINISTRATION'S EXTENSION OF THE TRANSITIONAL "AS IS" POLICY. THIS DECISION ALLOWS INSURERS TO DECIDE WHETHER THEY WOULD CONTINUE OFFERING POLICIES THAT ARE NOT COMPLIANT WITH THE ACA, WHICH BECAME PERMISSIBLE WHEN THE FEDERAL GOVERNMENT DELAYED THE REQUIRED SHIFT TO ACA-APPROVED INSURANCE COVERAGE. PRIORITY HEALTH CONTINUES TO OFFER AN EXTENSION OF ITS PRE-ACA INDIVIDUAL AND GROUP HEALTH PLANS TO SUBSCRIBERS THROUGH 2016, WHILE MAJOR COMPETITORS HAVE SHUT DOWN PLANS. THE DECISION TO EXTEND THE 2013 PRE-ACA PLANS FOR COVERAGE THROUGH 2016 IS CONSISTENT WITH PRIORITY HEALTH'S COMMITMENT TO PROVIDE INDIVIDUALS WITH FLEXIBILITY AND CHOICE. IN ADDITION, PRIORITY HEALTH REINSTATED POLICIES IT ALREADY HAD CANCELLED TO COMPLY WITH THE ACA REQUIREMENTS. THE REINSTATEMENT OF PREVIOUSLY CANCELLED POLICIES GAVE EMPLOYERS AND INDIVIDUALS PEACE OF MIND AND TIME TO ASSESS THEIR OPTIONS BEFORE BEING REQUIRED TO CHANGE PLANS UNDER THE ACA. PRIORITY ALSO BEGAN ENROLLING MEMBERS THROUGH THE FEDERALLY-FACILITATED HEALTH INSURANCE MARKETPLACE (HEALTHCARE.GOV) IN 2013 DURING THE 2014 OPEN ENROLLMENT PERIOD. |
| Form 990, Part III, Line 4a PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH HMO (CONTINUED) | AS A REQUIREMENT OF THE ACA, EACH STATE SELECTS AN ESSENTIAL HEALTH BENEFITS "BENCHMARK PLAN" THAT SERVES AS A REFERENCE FOR ALL OTHER HEALTH PLANS TO FOLLOW (INDIVIDUAL AND SMALL BUSINESS), WHEN DESIGNING THE SCOPE AND LIMITATIONS SURROUNDING COVERED SERVICES. A BENCHMARK PLAN IS CHOSEN BY EACH STATE EVERY FIVE YEARS. PRIORITY HEALTH WAS SELECTED AS THE STATE'S BENCHMARK PLAN IN 2012 AND IS THE ONLY HEALTH PLAN IN MICHIGAN TO EVER EARN THIS DESIGNATION. STARTING IN 2017, THE MICHIGAN DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES (DIFS) HAS RECOMMENDED THE PRIORITY HEALTH HMO PLAN TO CONTINUE TO SERVE AS THE ESSENTIAL HEALTH BENEFITS BENCHMARK FOR THE STATE. THE RECOMMENDATION UNDERSCORES PRIORITY HEALTH'S ABILITY TO DELIVER INCREDIBLE VALUE AND CREATE INNOVATIVE SOLUTIONS THAT IMPACT HEALTHCARE COSTS WHILE MAXIMIZING CUSTOMER EXPERIENCE. PRIORITY HEALTH'S HMO PLAN WAS SELECTED BECAUSE DIFS BELIEVES IT ACHIEVES THE BEST BALANCE BETWEEN COMPREHENSIVENESS AND COST-EFFECTIVENESS FOR MICHIGAN CONSUMERS. PRIORITY HEALTH PUBLISHED TWO E-BOOKS, ONE FOR CONSUMERS AND ONE FOR EMPLOYERS, ON HEALTHCARE REFORM WHICH ARE FREE AND AVAILABLE TO THE PUBLIC ON PRIORITY HEALTH'S WEBSITE. THE GOAL OF THE CONSUMER'S GUIDE TO THE ACA IS TO CLARIFY HOW HEALTHCARE REFORM WILL AFFECT INDIVIDUALS IN MICHIGAN. THE GOAL OF THE GUIDE FOR EMPLOYERS IS TO PROVIDE SUMMARIES AND EXAMPLES AS AN EDUCATIONAL TOOL TO ASSIST EMPLOYERS' QUESTIONS REGARDING HEALTHCARE REFORM. PRIORITY HEALTH HAS A LONG HISTORY OF PROVIDING ITS MEMBERS WITH ACCESS TO CARE MANAGEMENT PROGRAMS FOCUSED ON IMPROVING OUTCOMES, LOWERING COST AND IMPROVING QUALITY OF LIFE. CHRONIC DISEASE, WITH INSIDIOUS PROGRESSION AND MORBID COMPLICATIONS, IS A MASSIVE CLINICAL AND FINANCIAL MANAGEMENT CHALLENGE. PRIORITY HEALTH PROVIDES A 1:1 APPROACH IN WORKING WITH MEMBERS WITH SEVERE AND CHRONIC CONDITIONS. THROUGH INDIVIDUALIZED CARE, SERVICES ARE COORDINATED AND OFFER EARLY INTERVENTION, IMPROVE ACCESS, REDUCE DUPLICATION, IMPROVE OUTCOMES AND REDUCE RESOURCE UTILIZATION. MEMBERS RECEIVE THE RIGHT CARE, AT THE RIGHT COST, IN THE RIGHT PLACE, FOR THE RIGHT LENGTH OF TIME. AS A PROACTIVE APPROACH, PRIORITY HEALTH OFFERS A FREE CHRONIC DISEASE AND HEALTHY LIFESTYLE MOBILE MANAGEMENT APPLICATION TO MEMBERS. CHRONIC DISEASES INCLUDING ASTHMA, DIABETES, COPD AND HEART FAILURE CAN BE MANAGED BY THIS APPLICATION. THE APPLICATION TRACKS MEDICATION ADMINISTRATION AND PROVIDES MEDICATION REMINDERS, AS WELL AS MEMBER'S CURRENT HEALTH STATUS, AND OTHER CLINICAL INDICATORS SUCH AS WEIGHT, BLOOD PRESSURE, EXERCISE AND DIET. USERS HAVE THE ABILITY TO TRACK/MANAGE A PLETHORA OF METRICS: FROM WEIGHT AND WATER INTAKE, TO MEDICATION ADMINISTRATION AND SLEEP HOURS, AND EVERYTHING IN BETWEEN. USERS ALSO HAVE THE OPTION TO SHARE THEIR ACCOUNT WITH FAMILY OR OTHER CARE GIVERS TO ENABLE TELEHEALTH FEATURES FOR REMOTE MANAGEMENT OF THEIR CHRONIC CONDITIONS. |
| Form 990, Part III, Line 4a PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH HMO (CONTINUED) | THE MICHIGAN ASSOCIATION OF HEALTH PLANS (MAHP), AN INDUSTRY VOICE FOR THE STATE'S HEALTHCARE PLANS, RECOGNIZES BEST PRACTICES IN HEALTH PLANS BY SPONSORING THE PINNACLE AWARDS. DURING 2015, 11 MICHIGAN HEALTH PLANS FROM ACROSS THE STATE SUBMITTED 36 GROUND-BREAKING PROGRAMS TO BE CONSIDERED FOR MAHP'S ANNUAL PINNACLE AWARDS, SHOWING ENTREPRENEURIAL SPIRIT AND AN INTEREST IN SERVING THEIR MEMBERS AS THEY SEEK TO INCREASE EFFICIENCY AND IMPROVE PATIENT HEALTHCARE TO LOWER COSTS AND INCREASE SERVICE TO MICHIGAN CITIZENS. PRIORITY HEALTH RECEIVED 3 PINNACLE AWARDS, LEADING THE NUMBER OF AWARD WINNERS. PRIORITY HEALTH WAS A RECIPIENT TO A 2014 PINNACLE AWARD IN THE CHRONIC DISEASE MANAGEMENT CATEGORY FOR INTEGRATED HEALTH COACHING FOR THE COMMERCIAL POPULATION. PRIORITY HEALTH IMPLEMENTED AN INTEGRATED HEALTH COACHING MODEL IN 2012, WITH COACHES MAXIMIZING SERVICES WITHIN THE ORGANIZATION INCLUDING MEDICAL, BEHAVIORAL HEALTH AND CASE MANAGEMENT SERVICES. THEN IN 2015, PRIORITY HEALTH RECEIVED ANOTHER PINNACLE AWARD FOR HEALTH COACHING IN THE BUSINESS OPERATIONAL PERFORMANCE CATEGORY. PRIORITY HEALTH'S COACHING PROGRAM UTILIZES HEALTH ASSESSMENT AND LAB DATA TO IDENTIFY HIGH RISK MEMBERS WHO CAN BENEFIT FROM INTERVENTION. THE PROGRAM STRIVES TO CREATE MEMBER SELF-AWARENESS AND AN INTRINSIC DRIVE TO IMPROVE MODIFIABLE RISK FACTORS LIKE BMI, ACTIVITY, NUTRITION, STRESS AND TOBACCO CESSATION. OUR INTEGRATED APPROACH ENABLES COACHES TO QUICKLY TRIAGE MEMBERS TO CARE MANAGEMENT, BEHAVIORAL HEALTH AND PHARMACY. THERE IS GROWING EVIDENCE THAT CONSUMER ENGAGEMENT AND SELF-CARE ARE LINKED TO IMPROVING HEALTH OUTCOMES THROUGH PATIENT-CENTERED INTERVENTIONS LIKE HEALTH COACHING. IN ADDITION, PRIORITY HEALTH RECEIVED A 2015 PINNACLE AWARD IN THE COMMERCIAL CHRONIC DISEASE MANAGEMENT CATEGORY FOR SHARED CARE MANAGEMENT. PRIORITY HEALTH IS COMMITTED TO IMPROVING THE HEALTH AND LIVES OF ITS MEMBERS AND HAS LONG-VALUED AN INTEGRATED CARE MANAGEMENT APPROACH TO ADDRESS BOTH THE MEDICAL AND BEHAVIORAL HEALTH NEEDS OF MEMBERS. IN THE FALL OF 2013, PRIORITY HEALTH'S BEHAVIORAL HEALTH TEAM DEVELOPED A PROPOSAL FOR A SHARED CASE MANAGEMENT AND COORDINATION PROGRAM BETWEEN PRIORITY HEALTH AND NETWORK 180, WHICH IS THE COMMUNITY MENTAL HEALTH SERVICES PROGRAM (CMHSP) FOR ALL MEDICAID BENEFICIARIES REQUIRING SPECIALTY BEHAVIORAL HEALTH SERVICES IN KENT COUNTY, MICHIGAN. THROUGH THE PARTNERSHIP, BENEFITS TO RESIDENTS OF KENT COUNTY WERE MAXIMIZED. |
| Form 990, Part III, Line 4a PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH HMO (CONTINUED) | FOR MORE THAN 20 YEARS, PRIORITY HEALTH HAS BEEN A LEADER IN PATIENT-CENTERED CARE AND HAS A PROVEN RECORD OF WORKING WITH PHYSICIANS TO IMPROVE HEALTH OUTCOMES. THROUGH ITS PARTNERS IN PERFORMANCE PROGRAM, PRIORITY HEALTH ENCOURAGES AND REWARDS THE QUALITY CARE OF PRIMARY CARE PHYSICIANS. THE PHYSICIANS AND PRACTICES SELECTED FOR THE PRIORITY HEALTH QUALITY AWARDS HAVE ACHIEVED THE HIGHEST OVERALL SCORES FOR ENSURING PATIENTS RECEIVE PREVENTIVE CARE, CONTROL CHRONIC DISEASE AND HAVE A GOOD EXPERIENCE. EACH AWARD RECIPIENT IS SELECTED BY ANALYZING THE RESULTS OF THE PRIORITY HEALTH PRIMARY CARE PROVIDER INCENTIVE PROGRAM, A PROGRAM THAT TRACKS CLINICAL QUALITY MEASURES AGAINST NATIONAL STANDARDS AND EVIDENCE-BASED MEDICINE. MORE THAN 240 HEALTHCARE PRACTICES WERE AWARDED STATEWIDE IN 2015. BASED ON PERFORMANCE, PRIORITY HEALTH HAS AWARDED PRACTICES WITH $198 MILLION IN SUPPORT OF PRIMARY CARE, OVER AND ABOVE STANDARD PAYMENT FOR SERVICES. PRIORITY HEALTH PAID PHYSICIANS $28.5 MILLION IN 2016, BASED ON THEIR PERFORMANCE IN 2015. THE PROGRAM'S SUCCESS IS CLEARLY DEMONSTRATED BY THE NUMBER OF PRIORITY HEALTH MEMBERS WHO RECEIVE PREVENTIVE SCREENINGS. IN THE LAST YEAR, MORE THAN 72% OF PRIORITY HEALTH MEMBERS RECEIVED ROUTINE COLORECTAL CANCER SCREENING EXAMS COMPARED TO A NATIONAL AVERAGE OF 64%. ADDITIONALLY, 89% OF MEMBERS RECEIVED CHILDHOOD IMMUNIZATIONS COMPARED TO THE NATIONAL AVERAGE OF 78%. PRIORITY HEALTH SHARES RISK WITH PROVIDERS AND EMPLOYERS BY OFFERING OVER $31 MILLION OF INCENTIVES AND OTHER RISK SHARING ARRANGEMENTS. THIS PROMOTES LOWER OVERALL HEALTHCARE COSTS AND IMPROVED QUALITY TO THE COMMUNITY. PRIORITY HEALTH HAS BEEN A STRONG ADVOCATE FOR PATIENT-CENTERED CARE BY SUPPORTING THE NATIONAL MODEL FOR CHANGING REIMBURSEMENT WHICH INCLUDES PAYMENT FOR SERVICES, PAYMENT FOR PERFORMANCE BASED ON QUALITY AND EFFICIENCY, AND INFRASTRUCTURE SUPPORT THROUGH A FIXED PAYMENT PER PATIENT. IN 2013, PRIORITY HEALTH JOINED THE MICHIGAN PRIMARY CARE TRANSFORMATION (MIPCT) PROJECT. MIPCT IS A THREE-YEAR PROJECT AIMED AT IMPROVING HEALTH IN THE STATE, MAKING HEALTHCARE MORE AFFORDABLE AND ENHANCING THE PATIENT EXPERIENCE. THE PROJECT DEMONSTRATION PERIOD WAS EXTENDED FOR AN ADDITIONAL TWO YEARS (UNTIL DECEMBER 31, 2016) UPON THE CONSENT OF CMS AND ALL OTHER PARTICIPATING PAYERS. IT IS THE LARGEST PATIENT-CENTERED MEDICAL HOMES PROJECT IN THE NATION, REACHING OVER 1.2 MILLION PATIENTS SERVED BY 1,900 PROVIDERS IN 350 PRIMARY CARE PRACTICES AND 37 PHYSICIAN ORGANIZATIONS. THE PROGRAM IS EVALUATED BY THE RESEARCH TRIANGLE INSTITUTE, CMS' NATIONAL EVALUATOR FOR THE DEMONSTRATION. THE FIRST YEAR EVALUATION CONCLUDED THAT MIPCT PROGRAM SAVINGS FOR MEDICARE IN MICHIGAN WERE ESTIMATED AT ABOUT $148 PER FULL-YEAR ELIGIBLE MEDICARE BENEFICIARY. |
| Form 990, Part III, Line 4a PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH HMO (CONTINUED) | PRIORITY HEALTH IDENTIFIES ALL MEMBERS WITH NEWLY DIAGNOSED DIABETES AND CONTACTS THEM WITH INFORMATION ABOUT PRIORITY HEALTH PROGRAMS AND BENEFITS AVAILABLE TO THEM. ADDITIONALLY, AT LEAST ANNUALLY, ALL MEMBERS WITH DIABETES ARE NOTIFIED OF DIABETES SPECIFIC SERVICES THAT REQUIRE AND INFORM THEM TO FOLLOW UP WITH THEIR PRIMARY CARE PROVIDER TO OBTAIN THOSE SERVICES. IN JANUARY 2013, PRIORITY HEALTH PARTNERED WITH THE NATIONAL KIDNEY FOUNDATION OF MICHIGAN TO OFFER A FREE DIABETES PREVENTION PROGRAM (DPP) ACROSS THE STATE OF MICHIGAN. DPP IS AN EVIDENCE BASED LIFESTYLE CHANGE PROGRAM WHERE ADULTS LEARN HOW TO REDUCE THEIR RISK FOR TYPE-2 DIABETES. THIS PROGRAM IS LED BY A CERTIFIED LIFESTYLE COACH WHO TEACHES PARTICIPANTS ABOUT NUTRITION AND STRESS REDUCTION. THE COACH WORKS ONE-ON-ONE WITH PARTICIPANTS TO OVERCOME OBSTACLES BY TRACKING FOOD INTAKE AND PHYSICAL ACTIVITY. FOR THOSE PREVIOUSLY DIAGNOSED WITH DIABETES, PRIORITY HEALTH OFFERS A DIABETES PROGRAM ASSISTING MEMBERS WITH MANAGING DIABETES BY PROVIDING INFORMATION AND TIPS FROM THE HEALTH MANAGEMENT TEAM. THROUGH THE INCENTIVE PROGRAM, PRIMARY CARE PHYSICIANS ARE GIVEN FINANCIAL REWARDS TO MEET NATIONAL 90TH PERCENTILE TARGETS FOR PROVIDING SERVICES AND ACHIEVING BEST OUTCOMES. PRIORITY HEALTH'S RATES FOR MULTIPLE DIABETES MEASURES ARE CONSISTENTLY AT, OR NEAR, THE NATIONAL TOP 10 PERCENTILE PERFORMANCE. PRIORITY HEALTH CREATED A STATEWIDE INITIATIVE, PRIORITYPREVENTS, TO DECREASE THE DEVELOPMENT OF TYPE-2 DIABETES FOR MEMBERS AND THE COMMUNITIES SERVED. THROUGH A MULTI-PRONGED COMMUNICATIONS CAMPAIGN PRIORITY HEALTH INCREASED THE AWARENESS OF PREDIABETES TO MEMBERS, PROVIDER NETWORKS, AND COMMUNITIES ACROSS MICHIGAN. THROUGH MULTIPLE COMMUNICATION TACTICS, PRIORITY HEALTH SUCCESSFULLY ENGAGED MEMBER PARTICIPATION AND PROVIDER REFERRALS INTO DPP, AS WELL AS PROVIDED MULTI-LINGUAL OPTIONS FOR DIABETES PREVENTION EDUCATION. THE PROGRAM IS CREDITED WITH A 58-70% DECREASE IN THE RISK OF TYPE 2 DIABETES DEVELOPMENT RATES BY HELPING THOSE AT RISK ADOPT AND MAINTAIN LIFESTYLE CHANGES. PRIORITY HEALTH HAS ENROLLED 605 MEMBERS IN DPP THROUGH 2015, WHILE 84% OF THOSE COMPLETED AT LEAST HALF OF THE PROGRAM (9 OF 16 WEEKS) AND HAVE CHARTED A TOTAL OF OVER 9,000 POUNDS LOST WITH AN AVERAGE OF 150 MINUTES OF WEEKLY ACTIVITY. PRIORITY HEALTH ENCOURAGES MEMBERS TO UNDERSTAND THE COST OF CARE WHEN MAKING HEALTHCARE DECISIONS. WITH THE LAUNCH OF HEALTHCARE BLUE BOOK IN AUGUST 2013, PRIORITY HEALTH BECAME THE FIRST MICHIGAN-BASED HEALTH PLAN TO PROVIDE ONLINE INFORMATION ABOUT CONTRACTED HEALTHCARE FEES ALONG WITH QUALITY INFORMATION TO ENGAGE MEMBERS THROUGH "COMPARISON SHOPPING." THROUGH THE PARTNERSHIP WITH HEALTHCARE BLUEBOOK, PRIORITY HEALTH MEMBERS CAN COMPARE PRICES CHARGED BY CARE PROVIDERS ACROSS THE STATE. A KEY FEATURE OF THE HEALTHCARE BLUEBOOK IS THAT IT DISPLAYS THE "FAIR PRICE" FOR EACH PROCEDURE. MEMBERS CAN ALSO REVIEW QUALITY RANKINGS AND CONSUMER REVIEW OF HOSPITALS AND PHYSICIANS THROUGH HEALTHGRADES TO RECEIVE A COMPLETE PICTURE OF THE SERVICE THEY ARE BUYING.THE HEALTHCARE BLUEBOOK WILL PROMOTE ENGAGEMENT BY PROVIDING MEMBERS WITH INFORMATION THAT EQUIPS THEM TO MAKE MORE INFORMED DECISIONS ABOUT THEIR HEALTHCARE WHICH ALLOWS THEM TO FIND THE BEST VALUE. |
| Form 990, Part III, Line 4b PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH MEDICARE | PRIORITY HEALTH BEGAN OFFERING MEDICARE ADVANTAGE PLANS IN JULY 2005 AND MEDICARE ADVANTAGE PLANS WITH PRESCRIPTION DRUG COVERAGE IN JANUARY 2006. PRIORITY HEALTH'S MEDICARE PROGRAM HAS ONE OF THE LOWEST READMISSION RATES IN THE COUNTRY. ITS MEDICARE ADVANTAGE PLANS VARY IN PRICE BASED ON WHERE INDIVIDUALS LIVE AND WHAT BENEFITS THEY NEED. MORE THAN 110,000 MICHIGANDERS HAVE CHOSEN A PRIORITY HEALTH MEDICARE ADVANTAGE OR MEDIGAP PLAN. PRIORITY HEALTH STRIVES TO WORK WITH THE COMMUNITY AND MAKE MEDICARE SIMPLE TO UNDERSTAND. THAT IS WHY IT WROTE AND PUBLISHED "MEDICARE ADVANTAGE FOR DUMMIES." IT WAS WRITTEN BY A PRIORITY HEALTH EMPLOYEE, IN COOPERATION WITH WILEY PUBLISHING, OWNERS OF THE DUMMIES SERIES. THE BOOK HAS BEEN DISTRIBUTED FREE TO OVER 255,000 PEOPLE ACROSS MICHIGAN AND IS NOW AVAILABLE ELECTRONICALLY AS AN E-BOOK. AS A RESULT OF PRIORITY HEALTH'S WORK WITH THE COMMUNITY AND DEDICATION TO OFFERING PLANS THAT DELIVER HIGH QUALITY, ITS MEDICARE HMO-POS ADVANTAGE PLANS HAVE RECEIVED THE HIGHEST ACCREDITATION STATUS OF "EXCELLENT," WHILE FOUR OF ITS 2015 MEDICARE ADVANTAGE PLANS WITH PRESCRIPTION DRUG COVERAGE WERE AWARDED 4.5 OUT OF 5 STARS BY THE CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS). THE MEDICARE STAR RATINGS INDICATE HOW WELL A HEALTH PLAN PERFORMS OVERALL; THE BETTER THE STAR RATING, THE BETTER THE CARE IS DELIVERED. OF THE 38 QUALITY AND IMPROVEMENTS METRICS USED TO DETERMINE OUR OVERALL QUALITY RATING OF 4.5, APPROXIMATELY 45% OF THE METRICS WERE 5 STAR. PRIORITY HEALTH IS ABLE TO PROVIDE ITS MEMBERS HIGH QUALITY MEDICARE ADVANTAGE PLANS WHILE REMAINING AMONG THE LOWEST COST (RISK AND BENEFIT ADJUSTED) PLANS IN THE COUNTRY. |
| Form 990, Part III, Line 4b PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH MEDICARE (CONTINUED) | DURING THE 2015 MEDICARE ANNUAL ENROLLMENT PERIOD (AEP), PRIORITY HEALTH ENROLLED 52% OF THE INDIVIDUALS WHO PURCHASED A MAPD PLAN IN MICHIGAN FROM OCTOBER 15 - DECEMBER 7, 2014. PRIORITY HEALTH'S MEDICARE ADVANTAGE ENROLLMENT INCLUDES ABOUT 94,000 INDIVIDUAL ADVANTAGE MEMBERS, OR JUST OVER 30% OF THE TOTAL INDIVIDUAL MEDICARE ADVANTAGE MARKET, MAKING PRIORITY HEALTH THE LEADER IN MICHIGAN. MEDICARE ADVANTAGE IS OFFERED IN ALL 68 COUNTIES IN MICHIGAN'S LOWER PENINSULA. PRIORITY HEALTH'S NETWORK HAS MORE THAN 33,000 PROVIDERS. IN 2012, PRIORITY HEALTH LAUNCHED HOME BASED PRIMARY CARE (HBPC) AS A PILOT WITH OUR AFFILIATE, SPECTRUM HEALTH MEDICAL GROUP (SHMG). HBPC BRINGS THE CARE TEAM INTO THE HOME OF PATIENTS THAT ARE AT THE FAR END OF THE POPULATION HEALTH CONTINUUM, THE ADVANCED CHRONICALLY ILL, WHOSE MULTIPLE MEDICAL CONDITIONS ARE COMPLICATED BY FUNCTIONAL AND/OR COGNITIVE LIMITATIONS THAT MAKE IT DIFFICULT FOR THEM TO ADEQUATELY ACCESS THE TRADITIONAL AMBULATORY PHYSICIAN OFFICE. IN ADDITION TO PRIORITY HEALTH CHANGING HOW THE PATIENT ACCESSES THEIR CARE, THERE IS NOW A TEAM BASED MODEL OF CARE TO MEET ALL THE NEEDS OF THE PATIENT. THE 2013 PILOT PROJECT RESULTED IN A 47% DECREASE IN EMERGENCY DEPARTMENT VISITS AND INPATIENT ADMISSIONS FOR 90 AT-RISK PATIENTS, WHILE ALSO RESULTING IN SIGNIFICANT IMPROVEMENTS IN THEIR HEALTH. MOST OF THE PATIENTS IN THE PROGRAM ARE MEMBERS OF PRIORITY HEALTH'S MEDICARE ADVANTAGE PROGRAM, ALTHOUGH SOME ARE COVERED BY MEDICAID OR PRIVATE INSURANCE. IN 2015, PRIORITY HEALTH BEGAN TO SCALE THIS PROGRAM TO REACH MORE PATIENTS AND ENROLLED MORE THAN 500 PATIENTS WITH ADVANCED ILLNESS. IN 2015, HBPC INITIATIVE REDUCED ACUTE CARE EVENTS BY 64%. THE ONCOLOGY MEDICAL HOME INITIATIVE IS A JOINTLY DEVELOPED PROGRAM BETWEEN ONCOLOGY PRACTICES AND PRIORITY HEALTH THAT APPLIES THE PRINCIPLES OF THE PATIENT-CENTERED MEDICAL HOME TO ONCOLOGY. THE TEAMS WORKED TOGETHER TO DEVELOP A NOVEL AND READILY REPLICABLE MODEL TO FAIRLY COMPENSATE ONCOLOGISTS FOR COGNITIVE AND SUPPORT SERVICES WHILE REMOVING DEPENDENCE ON CHEMOTHERAPY DRUG MARGINS FOR FINANCIAL SOLVENCY. FURTHER, IT DEVELOPED TRANSFORMATIVE CARE PROCESSES TO SELECT SINGLE PREFERRED REGIMENS FOR TREATING COMMON CANCERS, IMPLEMENT EFFECTIVE ADVANCE CARE PLANNING, AND ENHANCE ACCESS AND CARE COORDINATION. TRUE NORTH METRICS IMPACTED INCLUDE SAFETY AND QUALITY, PATIENT EXPERIENCE, FINANCIAL STEWARDSHIP AND TALENT DEVELOPMENT. |
| Form 990, Part III, Line 4b PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH MEDICARE (CONTINUED) | PRIORITY HEALTH IMPLEMENTED A ROBUST MEDICATION THERAPY MANAGEMENT (MTM) PROGRAM IN PARTNERSHIP WITH A VENDOR SOLUTION. THE MTM PROGRAM OFFERS PRIORITY HEALTH MEDICARE MEMBERS THE OPPORTUNITY TO MEET ONE-ON-ONE WITH PHARMACISTS TO REVIEW ALL OF THEIR MEDICATIONS INCLUDING PRESCRIPTIONS, OVER-THE-COUNTER DRUGS, AND HERBAL AND VITAMIN SUPPLEMENTS. IN THE FIRST YEAR, 61% OF THE MORE THAN 16,000 MEMBERS WHO TOOK ADVANTAGE OF THE PROGRAM WERE ABLE TO IDENTIFY A COST SAVINGS. IN 2015, PRIORITY HEALTH EXPANDED THE PROGRAM TO COMMERCIAL AND MEDICAID MEMBERS. MORE THAN 22,000 MEDICARE MEMBERS AND 10,000 COMMERCIAL MEMBERS RECEIVED COMPREHENSIVE MEDICATION REVIEWS WITH RETAIL PHARMACISTS, REDUCING THE RISK OF ADVERSE EFFECTS FROM MEDICATIONS. THIS HAS BEEN SUCCESSFUL TO RETURN POSITIVE DIRECT DRUG SAVINGS AS WELL AS INDIRECT COST AVOIDANCE. COMPLEX MEDICATION REGIMENS CREATE SIGNIFICANT CHALLENGES FOR PATIENTS LIVING WITH CHRONIC ILLNESS, THEIR CAREGIVERS, HEALTHCARE PROVIDERS, AND THE HEALTHCARE SYSTEM AS A WHOLE. THE IMPACT OF MEDICATION-RELATED PROBLEMS CAN BE MINIMIZED THROUGH A STRUCTURED MTM PROGRAM THAT USES PHARMACISTS WORKING COLLABORATIVELY WITH THE PATIENT AND THE PATIENT'S HEALTHCARE PROVIDERS. RETAIL AND OFFICE-BASED PHARMACISTS WILL WORK WITH PATIENTS AND PROVIDERS TO ADDRESS DRUG RELATED PROBLEMS AND COMPLETE COMPREHENSIVE MEDICATION REVIEWS. IN 2015, PRIORITY HEALTH ENGAGED OVER 35,000 MEDICARE MEMBERS IN THE PROGRAM, RESULTING IN $0.59 SAVED IN DIRECT DRUG PRODUCT COST FOR EVERY $1 INVESTED IN MTM ($1,659,600 INVESTED; $983,700 SAVED). THE MEDICARE MTM PROGRAM HAD 76% MEMBER ACCEPTANCE AND 70% PRESCRIBER ACCEPTANCE IN 2015. IN ADDITION TO THE MEDICARE POPULATION, PRIORITY HEALTH ENGAGED OVER 17,000 COMMERCIAL MEMBERS IN THE PROGRAM, RESULTING IN $0.35 SAVED IN DIRECT DRUG PRODUCT COST FOR EVERY $1 INVESTED IN MTM ($762,000 INVESTED; $267,000 SAVED). THE COMMERCIAL MTM PROGRAM HAD 64% MEMBER ACCEPTANCE AND 75% PRESCRIBER ACCEPTANCE IN 2015. |
| Form 990, Part III, Line 4b PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH MEDICARE (CONTINUED) | PRIORITY HEALTH HAS A LARGE SKILLED NURSING FACILITY (SNF) NETWORK THAT CARES FOR ITS MEDICARE MEMBERS. THE AVERAGE LENGTH OF STAY FOR A PRIORITY HEALTH MEDICARE MEMBER IS APPROXIMATELY 22 DAYS, TWO DAYS LONGER THAN IS COVERED BY PRIORITY HEALTH AND 7 DAYS LONGER THAN THE BENCHMARK. THROUGH THE USE OF THIS VENDOR SOLUTION IN CONJUNCTION WITH SKILLED NURSES, WE ARE TARGETING A REDUCTION OF 4 DAYS IN THE AVERAGE LENGTH OF STAY AS WELL AS A REDUCTION IN RE-ADMISSIONS THROUGH BETTER DISCHARGE PLANNING. PRIORITY HEALTH PARTNERED WITH FIVE LOCAL NONPROFIT SNF'S AND A LOCAL AMBULANCE COMPANY TO ACHIEVE LARGE REDUCTIONS IN COST OF CARE FOR ABOUT 300 OF ITS COMPLEX CHRONICALLY ILL MEDICARE MEMBERS, RESULTING IN MORE THAN 40% REDUCTION IN ACUTE INPATIENT HOSPITALIZATIONS, A 50% DROP IN EMERGENCY ROOM (ER) VISITS AND A 30% DROP IN PMPM COSTS. PRIORITY HEALTH IMPLEMENTED A NEW CLINICAL QUALITY INITIATIVE BY PARTNERING WITH A COMPANY CALLED NAVIHEALTH TO ENHANCE THE QUALITY OF POST-ACUTE-CARE (PAC) SERVICES. THE RESEARCH AND DEVELOPMENT OF THIS POST ACUTE MODEL OF CARE BEGAN IN 2013, AND WAS IMPLEMENTED IN 2014. THIS INITIATIVE FOCUSES ON WHAT IS BEST FOR THE PATIENT, AND THE HOLISTIC MANAGEMENT OF PATIENT CARE THROUGH DISCHARGE PLANNERS, REHABILITATION THERAPISTS, SOCIAL WORKERS AND PRIORITY HEALTHCARE MANAGERS. DATA-DRIVEN INFORMATION WILL HELP PATIENTS AND THEIR FAMILIES UNDERSTAND WHAT TO EXPECT AT DISCHARGE AND THROUGHOUT THE REHABILITATION PERIOD. THE BENEFITS OF THIS INITIATIVE INCLUDE LOWER HOSPITAL ADMISSION RATES, OPTIMAL DISCHARGE SETTING EARLIER IN THE HOSPITAL STAY, EASIER MANAGEMENT OF PATIENT/FAMILY EXPECTATIONS, AND IDENTIFYING THE HIGHEST QUALITY PROVIDERS IN THE COMMUNITY. THIS DATA-DRIVEN APPROACH TO REHABILITATION HAS SUCCESSFULLY PROVEN TO IMPROVE EFFICIENCY AND QUALITY OF CARE FOR MEDICARE PATIENTS. PRIORITY HEALTH HAS SEEN HOSPITAL READMISSION RATES DECREASE, LENGTH OF HOSPITAL STAYS REDUCED, AND ACCESS TO POST-SURGICAL SERVICES IMPROVED. NAVIHEALTH'S BENCHMARKING DATA SHOWED THAT PRIORITY HEALTH HAD A LOW LEVEL OF PAC UTILIZATION OF 975 SNF DAYS PER 1,000 MEMBERS PRIOR TO THE IMPLEMENTATION OF THIS PROGRAM. THE INITIATIVE HAS LED TO A FURTHER 15% DECREASE IN SNF DAYS PER 1,000 BENEFICIARIES. OVERALL, PRIORITY HAS REPORTED A 13% REDUCTION IN ITS PMPM COSTS IN ITS MEDICARE ADVANTAGE PROGRAM. MOREOVER, PRIORITY HEALTH HAS DIRECTED PATIENTS TO HIGH-PERFORMING PAC FACILITIES, WHILE HOLDING LOWER PERFORMERS ACCOUNTABLE. DURING 2015, PRIORITY HEALTH ENROLLED OVER 3,700 MEMBERS INTO THIS PAC PROGRAM, RESULTING IN AN ESTIMATED NET SAVINGS OF $3.4 MILLION DUE TO PAC INITIATIVES. |
| Form 990, Part III, Line 4c PROGRAM SERVICE DESCRIPTION - WELLNESS | FOR MORE THAN 20 YEARS, PREVENTION AND WELLNESS HAVE BEEN THE FOUNDATION OF PRIORITY HEALTH'S APPROACH TO HEALTHCARE. PRIORITY HEALTH HAS BECOME THE ONLY HEALTH PLAN IN MICHIGAN TO RECEIVE WELLNESS ACCREDITATION FROM THE NCQA AND IS ONE OF EIGHT HEALTH PLANS NATIONWIDE. THIS ACCREDITATION CERTIFIES PRIORITY HEALTH AS AN INDUSTRY LEADER IN KEEPING MEMBERS HEALTHY BY PREVENTING ILLNESS, MANAGING CHRONIC CONDITIONS AND ULTIMATELY REDUCING COSTS. PRIORITY HEALTH IS ONE OF FIVE NCQA WELLNESS AND HEALTH PROMOTION (WHP) ACCREDITED HEALTH PLANS IN THE U.S. ALSO ACCREDITED WITH PERFORMANCE REPORTING NATIONWIDE. WHP ACCREDITATION IDENTIFIES FULL-SERVICE WELLNESS PROVIDERS THAT MEET THE NATION'S HIGHEST STANDARDS FOR VALUE AND QUALITY BY EVALUATING THE IMPLEMENTATION OF WELLNESS PROGRAMS, THE PARTICIPANTS DEVELOPMENT OF SKILLS TO MAKE HEALTHY CHOICES THROUGH COACHING SERVICES, AND THE SAFEGUARDING OF INDIVIDUAL HEALTH INFORMATION. PRIORITY HEALTH PROVIDES WELLNESS PROGRAMS WITHIN ITS STANDARD HEALTH PLANS, OFFERS STAND-ALONE WELLNESS PROGRAMS TO EMPLOYER GROUPS, PARTICIPATES IN, AND SPONSORS WELLNESS PROGRAMS FOR THE COMMUNITY AT LARGE TO IMPROVE THE HEALTH OF ALL PEOPLE, NOT JUST MEMBERS. IN 2015, OVER 195 HOURS OF WELLNESS CLASSES AND HEALTH FAIRS WERE PROVIDED TO THE COMMUNITY TO PROMOTE HEALTHY LIVING. IN ADDITION, PRIORITY HEALTH INVESTED $20,000 IN 2015 TO PROACTIVELY REACH OUT TO THE COMMUNITY THROUGH A SOCIAL MEDIA CAMPAIGN WITH MESSAGES OF HEALTH AND WELLNESS TO ENCOURAGE PARTICIPATION IN RACES AND PROMOTE HEALTHY LIVING. |
| Form 990, Part III, Line 4c PROGRAM SERVICE DESCRIPTION - WELLNESS (CONTINUED) | SPECIFICALLY, PRIORITY HEALTH SPONSORS PROGRAMS WITHIN THE COMMUNITY. IN RECENT YEARS THIS HAS INCLUDED SPONSORING COMMUNITY EDUCATION PROGRAMS, HEALTH FAIRS, WALKS/RUNS/TRIATHLONS, AND NEWSLETTERS. DURING 2015, PRIORITY HEALTH CONTRIBUTED $120,000 BY OFFERING DISCOUNT CODES TO PROMOTE WELLNESS AND SPONSOR WALKS/RUNS ACROSS THE STATE. THIS INCLUDES THE GRAN FONDO, A CYCLING EVENT TO ACTIVELY ENGAGE THE COMMUNITY WHILE ACCELERATING SKIN CANCER AWARENESS, PREVENTION AND RESEARCH. THE THIRD ANNUAL RIDE ON SATURDAY, JUNE 27, 2015 DREW MORE THAN 1,800 CYCLISTS AND GENERATED NEARLY $200,000 IN SUPPORT OF THE MSU COLLEGE OF HUMAN MEDICINE MISSION, WITH 100% OF EVERY DOLLAR RAISED BENEFITING SKIN CANCER AWARENESS, PREVENTION AND RESEARCH. RIDERS PEDALED ANYWHERE FROM 12 MILES TO 80 MILES ACROSS THE ROLLING SCENIC TERRAIN OF WEST MICHIGAN. PRIORITY HEALTH HAD MORE THAN 200 EMPLOYEES PARTICIPATE IN THE EVENT, LOGGING MORE THAN 4,000 MILES AND RAISING MORE THAN $12,000 IN SUPPORT OF HEALTHY LIVING AND CANCER RESEARCH. IN ADDITION TO THE GRAN FONDO, PRIORITY HEALTH SPONSORED THE MOVE TO THE BEATS RUN/WALK BENEFITING THE LIFETIME FOUNDATION, AUTISM ALLIANCE OF MICHIGAN & ROCK CF, A NONPROFIT DEDICATED TO INCREASING THE QUALITY OF LIFE FOR PEOPLE WITH CYSTIC FIBROSIS. THIS RACE IS PART OF THE LONGSTANDING ARTS, BEATS & EATS FESTIVAL AND HIGHLIGHTS THE IMPORTANCE OF HEALTHY LIVING WITHIN THE COMMUNITY. IN 2015, OVER 380,000 VISITORS ATTENDED THE FESTIVAL AND OVER $250,000 WAS RAISED FOR LOCAL CHARITIES. THE 2015 ANNUAL PRIORITY HEALTH MOVE TO THE BEATS 5K/10K ATTRACTED 620 RUNNERS/WALKERS AND THE PRIORITY HEALTH ZUMBATHON CELEBRATION HAD 1,612 PEOPLE PARTICIPATE IN A HUGE ZUMBA CLASS-STYLE EVENT AT THE FESTIVAL. PRIORITY HEALTH ALSO SUPPORTED GIRLS ON THE RUN, A TRANSFORMATIONAL POSITIVE YOUTH DEVELOPMENT PROGRAM ROOTED IN PHYSICAL ACTIVITY FOR GIRLS IN 3RD-8TH GRADE. THE PROGRAM CULMINATES WITH THE GIRLS BEING PHYSICALLY AND EMOTIONALLY PREPARED TO COMPLETE A CELEBRATORY 5K RUNNING EVENT. THE GOAL OF THE PROGRAM IS TO UNLEASH CONFIDENCE THROUGH ACCOMPLISHMENT WHILE ESTABLISHING A LIFETIME APPRECIATION OF HEALTH AND FITNESS. IN 2015, PRIORITY HEALTH CONTRIBUTED $5,000 TO BENEFIT THE GIRLS ON THE RUN PROGRAM. |
| Form 990, Part III, Line 4c PROGRAM SERVICE DESCRIPTION - WELLNESS (CONTINUED) | IN ADDITION TO THE ZUMBATHON AND 5K/10K RACES, PRIORITY HEALTH ALSO SPONSORS HEALTHY OPTIONS AT THE ARTS, BEATS AND EATS FESTIVAL. PARTICIPATING RESTAURANTS ARE ENCOURAGED TO PREPARE, PRESENT, AND IDENTIFY HEALTHY FOOD ITEMS IN THE FOLLOWING CATEGORIES: LOW CARB, VEGAN, LOW FAT, GLUTEN FREE OR SUGAR FREE. EACH PARTICIPATING RESTAURANT DISPLAYS A SIGN THAT INDICATES WHICH HEALTHY OPTIONS THEY ARE FEATURING, MAKING IT EASY FOR THOSE WHO WANT TO MAKE GOOD FOOD CHOICES, AS WELL AS THOSE NEEDING SPECIAL ACCOMMODATIONS DUE TO FOOD SENSITIVITIES AND SPECIAL DIETS. IN 2015, PRIORITY HEALTH LAUNCHED THE SILVER EXPLORERS PROGRAM, AN EIGHT-WEEK WALKING/EDUCATIONAL SERIES AT THE JOHN BALL ZOO (GRAND RAPIDS) THAT IS AVAILABLE FOR FREE TO ALL PRIORITY HEALTH MEMBERS AGE 62 AND OVER. PARTICIPANTS GET AN INSIDE LOOK AT THE ZOO AND THE ANIMALS. EACH SESSION IS AN HOUR LONG AND STARTS WITH A LEARNING PORTION TAUGHT BY A JOHN BALL ZOO EXPERT. THE PRESENTATION IS THEN FOLLOWED BY A WALKING TOUR OF THE ZOO AND GROUNDS. AT THE END OF THE EVENT, PARTICIPANTS ARE INVITED TO ENJOY THE ZOO FOR THE REST OF THE DAY. PRIORITY HEALTH IS INVESTED IN ENRICHING THE HEALTH AND WELLNESS OF MEMBERS AND THE SURROUNDING COMMUNITIES BY PROVIDING HEALTHY ACTIVITIES. THE BENEFIT OF THE PRIORITY HEALTH SILVER EXPLORERS IS TWO-FOLD. IT ALLOWS PRIORITY HEALTH TO PARTNER WITH GREAT COMMUNITY RESOURCES LIKE THE JOHN BALL ZOO, BUT ALSO PRESENTS THE OPPORTUNITY TO BE ACTIVE WHILE HAVING A GREAT TIME. IN 2015, PRIORITY HEALTH SPONSORED $5,000 TO SUPPORT THIS PROGRAM AND REACHED OVER 80 PARTICIPANTS. PRIORITY HEALTH PARTICIPATES IN PARTNERSHIP WITH MARANDA, A WEST MICHIGAN NEWS PERSONALITY, DIRECTING MESSAGES TO CHILDREN ON HEALTH AND OTHER POSITIVE MESSAGING. MARANDA PRESENTS A TV SERIES CALLED "WHERE YOU LIVE" AND BRINGS IN EXPERTS TO TALK TO KIDS ABOUT HEALTHY LIVING. THIS PARTNERSHIP ALSO SPONSORS EVENTS THROUGHOUT WEST MICHIGAN REACHING OUT TO KIDS IN AT-RISK COMMUNITIES. IN 2015, OVER $50,000 WAS CONTRIBUTED TO BENEFIT MARANDA PARK PARTIES, WHICH PROVIDE FREE HEALTH AND FITNESS ACTIVITIES FOR CHILDREN AT INNER CITY PUBLIC PARKS. PRIORITY HEALTH PARTICIPATES IN PARTNERSHIP WITH THE WXYZ COMMUNITY ACTION TEAM, AN EAST MICHIGAN NEWS CHANNEL, TO SUPPORT THE COMMUNITY IN EAST MICHIGAN. THE PARTNERSHIP SUPPORTS THE WXYZ TREE LIGHTING CEREMONY AND VARIOUS NON-PROFIT PROJECTS INCLUDING HABITAT FOR HUMANITY. IT ALSO ENABLES PRIORITY HEALTH TO CREATE PUBLIC SERVICE ANNOUNCEMENTS THAT AIR THROUGHOUT THE YEAR. IN 2015, PRIORITY HEALTH SPONSORED $190,000 TO SUPPORT THE EFFORTS OF THE PARTNERSHIP WITH THE WXYZ COMMUNITY ACTION TEAM. |
| Form 990, Part III, Line 4c PROGRAM SERVICE DESCRIPTION - WELLNESS (CONTINUED) | PRIORITY HEALTH CONDUCTS FREE WELLNESS CLASSES THROUGHOUT THE STATE. THE BROADER COMMUNITY IS WELCOME TO ATTEND CLASSES THAT EDUCATE THE COMMUNITY IN TOPICS SUCH AS NUTRITION, FITNESS AND PREVENTION. PRIORITY HEALTH PARTNERS WITH FIT KIDS 360 TO OFFER A FREE HEALTHY LIFESTYLE PROGRAM FOR OVERWEIGHT CHILDREN AND THEIR FAMILIES. FIT KIDS 360 IS A SEVEN-WEEK HEALTHY LIFESTYLE PROGRAM FOR CHILDREN AGE 5 TO 17 WHO HAVE A BODY MASS INDEX (BMI) AT OR ABOVE THE 85%ILE (THE MEDICAL DEFINITION OF OVERWEIGHT). IT COMBINES EDUCATION ABOUT NUTRITION, BEHAVIORAL HEALTH AND PHYSICAL ACTIVITY WITH OPPORTUNITIES FOR EXERCISE AND OTHER ACTIVITIES. IN 2015, A TOTAL OF 35 OVERWEIGHT OR OBESE PATIENTS AGED 5-17 YEARS OLD ENROLLED IN A FIT KIDS 360 CLASS SPONSORED BY PRIORITY HEALTH, WHO DONATED OVER 60 HOURS AND $7,600 TO THE CAUSE. A FOLLOW-UP EVALUATION COMPLETED BY PROGRAM PARTICIPANTS REPORTED A 79% RETENTION RATE. PRIORITY HEALTH SUPPORTS HEALTH AND SOCIAL WELFARE ACTIVITIES VIA WELL THOUGHT OUT CONTRIBUTIONS OF OVER $230,000 ANNUALLY TO ORGANIZATIONS IN ORDER TO IMPROVE HEALTH SERVICES AND CONDITIONS IN NEIGHBORHOODS, WORKPLACES AND SCHOOLS THROUGHOUT THE COMMUNITIES IT SERVES. THINK HEALTH, A NEW DIGITAL MAGAZINE, WAS RELEASED BY PRIORITY HEALTH IN 2014 TO SUPPORT CONSUMERS AND BUSINESS OWNERS AS THEY MAKE HEALTHCARE DECISIONS. THINK HEALTH FEATURES PRIORITY HEALTH EXPERTS AS WELL AS OTHER THOUGHT LEADERS AND THIRD PARTY ORGANIZATIONS ACROSS THE HEALTH INSURANCE, HEALTHCARE TECHNOLOGY AND FITNESS INDUSTRIES. THE SITE ALSO HIGHLIGHTS PERSONAL STORIES FROM INDIVIDUALS LOOKING TO IMPROVE THEIR HEALTH AND INSPIRE OTHERS, AS WELL AS INSIDER TIPS ON HOW TO GET INVOLVED IN ACTIVITY-RELATED EVENTS ACROSS MICHIGAN. |
| Form 990, Part III, Line 4a PROGRAM SERVICE DESCRIPTION - PRIORITY HEALTH HMO (CONTINUED) | IN 2015, PRIORITY HEALTH LAUNCHED A COST ESTIMATOR TOOL FOR ITS MEMBERS TO CALCULATE THEIR ANTICIPATED COSTS TO FIND THE MOST-AFFORDABLE SERVICES. THE NEW ONLINE COST ESTIMATOR TOOL DISPLAYS PRIORITY HEALTH SPECIFIC FEES FOR MORE THAN 300 COMMON HEALTH SERVICES, INCLUDING X-RAYS, SURGERIES, LAB WORK AND IMAGING TESTS. THE TOOL USES CONTRACT CHARGES TO CALCULATE MEMBERS' ESTIMATED OUT-OF-POCKET COSTS BASED ON THEIR POLICY'S BENEFITS AND DEDUCTIBLES. THE COST ESTIMATOR EVEN RECOMMENDS LOWER-COST DOCTOR/FACILITY OPTIONS TO HELP ENSURE YOU GET THE HIGHEST-QUALITY CARE AT THE BEST PRICE. WHILE THE HEALTHCARE BLUEBOOK STARTED THE PUSH TOWARD COST TRANSPARENCY BY ENABLING CONSUMERS TO ACCESS AND COMPARE MARKET DATA, THE COST CALCULATOR SEEKS TO CHANGE THE CONVERSATION BETWEEN PATIENTS AND DOCTORS ABOUT THE COST OF CARE. THESE TOOLS SUPPORTS PRIORITY HEALTH'S CONTINUED MARKET LEADERSHIP IN TRANSPARENCY AND LOWERS THE COST OF CARE TO THE COMMUNITY. ANOTHER PROGRAM INTRODUCED IN 2015 IS PRIORITY REWARDS, AN INCENTIVE PROGRAM THAT REWARDS PEOPLE UP TO $200 FOR CHOOSING A FAIR-PRICED MEDICAL PROCEDURE THROUGH THE COMPANY'S COST ESTIMATING TOOL. PRIORITY REWARDS COMBINES THE POWER OF THE COST ESTIMATOR WITH FINANCIAL INCENTIVES FOR CONSUMERS WHO USE THE TOOL. WITH PRIORITY REWARDS, MEMBERS MAY EARN CASH REWARDS FOR SELECTING A PROCEDURE AND FACILITY COMBINATION OFFERED AT OR BELOW THE FAIR MARKET PRICE DETERMINED BY HEALTHCARE BLUEBOOK. ONCE THE PROCEDURE HAS BEEN COMPLETED, PRIORITY HEALTH WILL REWARD MEMBERS IN THE FORM OF A VISA GIFT CARD RANGING FROM $50-200. THE PRIORITY HEALTH THIRD PARTY LIABILITY (TPL) TEAM HAS CONSISTENTLY IMPROVED OUTCOMES BY INCREASING SAVINGS THROUGH AUDIT, ANALYSIS, AND STANDARDIZATION OF WORK WHILE CONCURRENTLY IMPROVING BOTH MEMBER AND PROVIDER SATISFACTION. OVER THE PAST TWO YEARS THIS PROGRAM HAS IMPROVED ITS PER-MEMBER PER-MONTH (PMPM) SAVINGS BY 54 PERCENT. BY PURSUING THE NEEDS OF ITS CUSTOMERS AT ALL TIMES AND DRIVING CONTINUOUS IMPROVEMENT IN ALL AREAS OF THE DEPARTMENT, THE TPL TEAM HAS BEEN ABLE TO SUSTAIN IMPROVEMENT YEAR OVER YEAR. DURING 2015, PRIORITY HEALTH RECOGNIZED TPL SAVINGS OF OVER $40 MILLION REPRESENTING $5.24 PMPM SAVINGS. |
| Form 990, Part IV, Line 12a Audited Financial Statements | The organization's financial statements are audited annually by an independent accounting firm. The "No" response to these questions relates to the fact that the GAAP basis financial statements were 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 Form 990 reconcile to the financial statements prepared under statutory accounting principles as submitted to the State of Michigan and the National Association of Insurance Commissioners (NAIC). |
| Form 990, Part V, Line 2a NUMBER OF EMPLOYEES REPORTED ON FORM W-3 | ALL EMPLOYEES OF PRIORITY HEALTH WERE EMPLOYED DURING THE YEAR BY SPECTRUM HEALTH SYSTEM (38-3382353) AND LEASED BACK TO PRIORITY HEALTH. SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES ARE ALLOCATED TO PRIORITY HEALTH VIA A MANAGEMENT FEE. THE SALARIES AND WAGES REPORTED IN PART IX STATEMENT OF FUNCTIONAL EXPENSES REFLECTS THE PORTION OF SALARIES AND WAGES ALLOCATED TO PRIORITY HEALTH. SPECTRUM HEALTH SYSTEM FILED ALL APPLICABLE IRS TAX FILINGS INCLUDING FORMS W-2 AND W-3 ON BEHALF OF PRIORITY HEALTH. |
| Form 990, Part VI, Line 12c CONFLICT OF INTEREST POLICY (CONTINUED) | MANAGEMENT 1. Upon acceptance of an employment offer, each member of management completes a conflict of interest disclosure questionnaire. A copy of the member of management's disclosure questionnaire is sent to the Organizational Integrity Department. A copy of the member of management's disclosure is reviewed by the organization's COI coordinator and escalated to the COI Committee if necessary. 2. Annually, each member of management completes an annual conflict of interest disclosure questionnaire electronically. The disclosure questionnaire is reviewed by the legal, organizational integrity, internal audit, and human resources departments. 3. There is an ongoing requirement that members of management complete another disclosure questionnaire at any point during his/her employment when a new potential conflict of interest arises. If a member of management completes a disclosure questionnaire as a result of a new potential conflict of interest, that disclosure questionnaire is submitted to the legal, organizational integrity, internal audit, and human resources departments. 4. The legal, organizational integrity, internal audit, and human resources departments, in consultation with executive management, determine how any reported conflicts should be managed. Management of a conflict may take a variety of different forms from implementation of a management plan to requiring that the member of management cease the activity creating the conflict or, in extreme cases, leave the organization's employment. Management is determined on an individual basis based upon the facts and circumstances surrounding the disclosure. The purpose of conflict management is to provide transparency within the organization and to ensure that the organization's employees are always acting in the best interest of the organization. |
| Form 990, Part VI, Line 7b DECISIONS REQUIRING APPROVAL BY MEMBERS OR STOCKHOLDERS (CONTINUED) | 2.2.8 All borrowings or guarantees of indebtedness by the corporation (or any entity controlled by the corporation), including any operating lease in an amount greater than one million dollars ($1,000,000.00) during the initial lease term, not including renewals and/or extensions; 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, Board of Directors or any designated committee). 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 the 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, or his/her designee 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. |
| Form 990, Part VI, Line 1a Delegate broad authority to a committee | Committees - The Chair of the Board of Directors may establish such standing or special committees from time to time as he or she will deem appropriate to conduct the activities of the corporation, and will define the powers and responsibilities of such committees. Persons who are not members of the Board of Directors will be eligible to serve on committees other than the Executive Committee. The members and chair of all committees will be appointed by the Chair of the Board of Directors for a one (1) year term or until their successors are duly elected, but will be subject to removal at any time by the Chair of the Board of Directors. A committee will have the specific powers and responsibilities as determined by the Board of Directors excluding those powers and responsibilities retained by the shareholders or Board of Directors pursuant to the Articles of Incorporation or Bylaws of the corporation. Executive Committee - The Chair of the Board of Directors may appoint an Executive Committee consisting of the Chair of the Board of Directors, the Vice Chair, and such additional directors as the Chair of the Board of Directors may determine from time to time. The Executive Committee may exercise all powers and authority of the Board of Directors in managing the corporation between meetings of the Board of Directors (within the limits prescribed by the Articles of Incorporation or Bylaws of the corporation or by law) or may have such specific powers and responsibilities as determined by the Chair of the Board of Directors. |
| Form 990, Part VI, Line 2 Family/business relationships amongst interested persons | MEMBERS OF THE BOARD OF DIRECTORS AND OFFICERS OF THE ORGANIZATION ALSO SERVE ON THE BOARD OF DIRECTORS AND/OR AS OFFICERS OF RELATED TAXABLE ENTITIES - Business relationship |
| Form 990, Part VI, Line 6 Classes of members or stockholders | The Organization has three shareholders 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 - 0.6% All Shareholders are tax-exempt Internal Revenue Code Section 501(c)(3) organizations. |
| Form 990, Part VI, Line 7a Members or stockholders electing members of governing body | Election of Members and Their Rights From Priority Health bylaws: 6.2 Number and Class of Directors. The Board of Directors will be composed of not less than fifteen (15) and not more than twenty-one (21) members, which will be divided into the following classes: 6.2.1 One-third (1/3) of the directors will be adult enrollees as specified under MCL Section 500.3511(1) and elected pursuant to Section 6.3 below. At least one (1) of such adult enrollee directors will be from the corporation's Northern service area that is also served by Munson Healthcare or Healthshare, Inc. (together, "Northern Shareholders"). 6.2.2 Two (2) of the directors will be appointed jointly by the Northern Shareholders. Of such directors, one (1) will be a physician. 6.2.3 The remainder of the directors (not less than eight (8)) will be appointed by Spectrum Health. 6.3 Election of Adult Enrollee Members. The Governance Committee or similarly delegated committee of the Board of Directors will solicit names of potential candidates from the members, shareholders, directors and community. The Committee will submit to the Board of Directors 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 election date for the Board of Directors, may nominate a candidate for election to the Board of Directors. Eligible members will be given the opportunity to vote on the candidates for election to the Board of Directors. No more than two (2) persons employed by or affiliated with any one (1) employer or other group may be nominated. 6.4 Term. The adult enrollee members will be divided into three (3) classes, which will be as evenly divided as possible. The terms of office of the classes will expire in three (3) successive years, with one (1) class expiring each year. Each elected director will be elected for a term of three (3) years (except for the directors elected immediately after adoption of this Section 6.4 who will serve the terms designated by the Board of Directors). The directors appointed by the Northern Shareholders and Spectrum Health will serve one (1) year terms or until such time as their successor is appointed. 6.5 Vacancies. Any vacancy in a Board of Director position designated by the Northern Shareholders or Spectrum Health will be filled by the Northern Shareholders or Spectrum Health, respectively. Any vacancy in a position for an adult enrollee will be filled by the remaining adult enrollees on the Board of Directors. Each person appointed to fill a vacancy will complete the unexpired portion of the original term of the director being replaced. |
| Form 990, Part VI, Line 7b Decisions requiring approval by members or stockholders | Decisions Subject to Approval of shareholders (Not Members) Certain decisions are subject to approval of shareholders. From Priority Health 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 as provided in Section 13.1 of these Bylaws; 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 that 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"); |
| Form 990, Part VI, Line 11b Review of form 990 by governing body | 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 (Including the chief financial officer, chief legal officer and corporate controller) and shared with the members of the finance committee and board of directors. 4. 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. |
| Form 990, Part VI, Line 12c Conflict of interest policy | BOARD OF DIRECTORS 1. Conflicts of interest must be disclosed, BOTH VIA AN ANNUAL ELECTRONIC DISCLOSURE PROCESS as well as verbally at a board meeting prior to discussion of any agenda item with regard to which a board member has a conflict. 2. A person having a financial interest in a proposed transaction or arrangement may make a presentation at a meeting of the Board of Directors or committee considering that transaction or arrangement, but after that presentation he or she shall leave the meeting during discussion and voting on that proposed transaction or arrangement. The person having the financial interest shall not be counted in determining whether a quorum is present. 3. The chairperson of the Board of Directors or committee shall, if appropriate, appoint a disinterested person or committee (including outside advisors) to investigate alternatives to the proposed transaction or arrangement, and to advise whether the proposed transaction or arrangement is in the organization's best interest. 4. The Board of Directors or committee shall exercise due diligence to determine whether the organization can, with reasonable efforts, obtain a more advantageous transaction or arrangement that would not give rise to a conflict of interest. 5. If a more advantageous transaction or arrangement is not reasonably attainable under circumstances that would not give rise to a conflict of interest, the Board of Directors or committee shall determine by a majority vote of the disinterested directors and members whether the proposed transaction or arrangement is in the organization's best interest and for its own benefit and whether the transaction is fair and reasonable to the organization, and shall make its decision as to whether to enter into the transaction or arrangement in conformity with such determination. 6. The minutes of the meetings of the Board of Directors and all of the organization's committees shall set forth: a)The names of the persons who disclosed a financial interest in a proposed transaction or arrangement involving the organization or any of its subsidiaries and the nature of the financial interest; and b)The names of the persons who were present for discussions and votes relating to such transaction or arrangement, including any discussion of alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with that matter. The votes of individual members need not be recorded unless otherwise directed by the Board of Directors or committee. 7. There is an ongoing requirement that members of the board of directors complete another disclosure questionnaire at any point during his/her tenure on the board of directors when a new potential conflict of interest arises. If a member of the board of directors completes a disclosure questionnaire as a result of a new potential conflict of interest, that disclosure questionnaire is submitted to the legal, organizational integrity, internal audit, and human resources departments for review. |
| Form 990, Part VI, Line 15a Process to establish compensation of top management official | The Spectrum Health System Board of Directors (through its Executive Committee) uses the following process for determining compensation of the top management official, other officers, and key employees 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, for calendar 2015 (1/1/15-12/31/15), was based on the following independent surveys of health care executives at comparable health systems, health plans, and medical groups: * American Medical Group Association: 2014 Medical Group Compensation & Financial Survey * Chief Executive of Multi-site organizations: 2014 Leading Age-CEMO Leadership Compensation Survey * Integrated Healthcare Strategies: 2014 Children's Hospitals Executive Compensation Survey * Integrated Healthcare Strategies: 2014 Health Care Executive Compensation Survey * Mercer Human Resources Consulting: 2014 Benchmark Database Executive Survey * Mercer Human Resources Consulting: 2014 Integrated Health Networks Compensation Survey * Medical Group Management Association: 2014 Management Compensation Survey * Sullivan, Cotter and Associates: 2014 Survey of Manager and Executive Compensation in Hospitals and Health Systems * Sullivan, Cotter and Associates: 2014 Survey of Manager and Executive Compensation in Children's Hospitals * Sullivan, Cotter and Associates: 2014 Physician Compensation and Productivity Survey Report * Towers Watson: 2014 Health Care Executive and Management Compensation Survey Report * Towers Watson: 2014 General Industry Top Management Compensation Survey Report * Warren: Fall 2014 The HMO Salary Survey In addition to the above data sources, the Executive Committee approved the creation of a custom peer group of high performing integrated health systems to ensure robust data and a relevant comparator universe. The peer group organizations are approved by the Executive Committee and consist of double A bond rated and / or Truven top quintile organizations. Data for the peer group organizations is compiled by the independent executive compensation firm. 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 and / or health insurance organizations. Spectrum Health recruits nationally for its executives. Benefits data reflect national healthcare / health insurance market practices. Geographic pay differential and cost of living data indicates 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). |
| Form 990, Part VI, Line 15b Process to establish compensation of other employees | See explanation provided for Form 990, Part VI, Line 15a. |
| Form 990, Part VI, Line 19 Required documents available to the public | The organization's Articles of Incorporation and Statutory Financial Statements are on file with the State of Michigan and available to the public on the State's website. The organization's bylaws and internal policies are generally not made available to the public. The overall system consolidated financial statements are provided at www.spectrumhealth.org in the section titled "about us." Financial performance is discussed at an annual public meeting held and posted to www.spectrumhealth.org annually (under the section titled "about us"). |
| Form 990, Part VII, Section A, Line 2 Individuals Compensated more than $100,000 | There are no individuals reported due to the integration with Spectrum Health System. Refer to the disclosure for Form 990, Part V, Line 2a for further detail. |
| Form 990, Part VII, Section A COMPENSATION OF DIRECTORS | BASED ON EXTERNAL OPINION BY SULLIVAN COTTER AND ASSOCIATES, INC., PRIORITY HEALTH COMPENSATES BOARD MEMBERS IN A MANNER THAT IS REASONABLE IN RELATION TO MARKET DATA. BOARD OF DIRECTORS COMPENSATION IS REVIEWED ANNUALLY BY INTERNAL STAFF TO CONFIRM COMPENSATION FALLS WITHIN REASONABLE LIMITS. ANY COMPENSATION AMOUNT IS TREATED AS TAXABLE TO THE BOARD MEMBER AND IS REPORTED AND PROVIDED TO THEM ON FORM 1099, AS REQUIRED ACCORDING TO THE REPORTING THRESHOLDS. CERTAIN BOARD MEMBERS ARE EMPLOYED BY A RELATED ORGANIZATION. COMPENSATION REPORTED IN PART VII, SECTION A, COLUMN E IS FOR SERVICES PERFORMED FOR THE RELATED ORGANIZATION, NOT THE FILING ORGANIZATION. |
| Form 990, Part XI, Line 9 Other changes in net assets or fund balances | Change in nonadmitted assets - -20846517; Net unrealized gain(loss) on subsidiaries - 257154; Change in surplus notes - -6000000; |
| Form 990, Part XII, Line 2b Audited Financial Statements | 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 Form 990 reconcile to the financial statements prepared under statutory accounting principles as submitted to the State of Michigan and the National Association of Insurance Commissioners (NAIC). |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2015
Additional Data
| Software ID: | 15000238 |
| Software Version: | 2015v2.1 |