2018-10-25T11:01:01-05:00 2017-12-31 350921680 CROWE LLP 9600 Brownsboro Road Suite 400 Louisville KY 402411122 990 2017-01-01 320016523 Priority Health Choice Inc PRIO 6167745083 1231 East Beltline NE Grand Rapids MI 49525 Mary Anne Jones SVP, Finance 2018-10-25 true Rachel Spurlock P00520729 5023263996 2017 2018-06-14 16:35:46Z Joan A Budden 1231 East Beltline NE Grand Rapids MI 49525 985367860 false X www.priorityhealth.com X 2002 MI TO IMPROVE THE HEALTH, AND THEREFORE THE LIVES, OF THE MEMBERS AND COMMUNITIES WE SERVE. 4 0 0 0 0 0 0 0 484530294 517463814 1425564 2007921 950700 0 486906558 519471735 0 0 419859650 476498872 10195605 10705861 0 0 0 46313612 19482714 476368867 506687447 10537691 12784288 132328090 125076092 76978637 56292036 55349453 68784056 TO IMPROVE THE HEALTH AND THEREFORE THE LIVES OF THE MEMBERS AND COMMUNITIES WE SERVE. false false 495165514 517463814 PRIORITY HEALTH CHOICE, INC. HAS A CONTRACT WITH THE STATE OF MICHIGAN TO OFFER HEALTH CARE COVERAGE TO MEDICAID RECIPIENTS WITHIN THE STATE OF MICHIGAN. MEDICAID MANAGED CARE HAS BEEN IN EXISTENCE SINCE THE LATE 1990'S AND HAS DEMONSTRATED SIGNIFICANT COST SAVINGS ALONG WITH BETTER HEALTH OUTCOMES FOR THEIR MEMBERS. PRIORITY HEALTH CHOICE, INC. PROVIDES MORE THAN 123,000 LOWER INCOME AND/OR DISABLED RESIDENTS IN 20 MICHIGAN COUNTIES WITH ACCESS TO QUALITY AND AFFORDABLE HEALTH CARE SERVICES. IT PROMOTES AND INCENTIVIZES OPEN ACCESS TO PROVIDERS. PRIORITY HEALTH CHOICE, INC. TOPS THE NATION'S BENCHMARK IN THE AREAS OF CHILDHOOD IMMUNIZATIONS, DIABETES CARE AND THE MANAGEMENT OF ASTHMA. IN ADDITION TO THIS RECOGNITION FROM NCQA, THE 2017 MEDICAID HEALTH PLAN CONSUMER GUIDE IDENTIFIES PRIORITY HEALTH CHOICE, INC. AS ONE OF ONLY TWO MEDICAID PLANS IN THE STATE OF MICHIGAN TO RECEIVE THE HIGHEST RANKING IN FOUR OF THE FIVE CATEGORIES AND IS TIED FOR THE HIGHEST AVERAGE RATING AMONG PLANS. (CONTINUED ON SCHEDULE O) 495165514 true false false false false false false false false false false false false false true false false true false false false false false false false false false false false true false false false false false false false false false false false false false true false true false true 1884 0 true 0 false false false false false false true false false false X 4 0 true false true false true true true true true false false true true true true true true true true false X Mary Anne Jones 6164648695 1231 East Beltline NE Grand Rapids MI 495254501 Joan A BUDDEN PRESIDENT & CEO 4.0 46.0 X X 107368 1061548 449834 Mary Anne Jones Treasurer & SVP, Finance 4.0 46.0 X X 60871 601838 206914 JAMES FORSHEE DIRECTOR - SVP, CHIEF MEDICAL OFFICER 5.0 45.0 X 44708 442025 133665 NICOLE KARSIES DIRECTOR - Part Year 1.0 0.0 X 0 0 0 MICHAEL KOZIARA Director - SVP, PROVIDER NETWORK 5.0 45.0 X 53638 530317 170568 Chelsee Stark DIRECTOR - Part Year 1.0 0 X 0 0 0 KIMBERLY L THOMAS SECRETARY 5.0 45.0 X 51036 504595 168681 CHRISTOPHER CROOK SVP, Information Services 5.0 45.0 X 26626 263253 48045 BRIAN KRUPICZEWICZ SVP, HUMAN RESOURCES 5.0 45.0 X 28576 282527 108809 MARTI LOLLI SVP, CONS/GOVT MKT & CMO 5.0 45.0 X 40356 399004 181138 WAYNE WILSON SVP, GOVERNMENT MARKETS - PART YEAR 5.0 45.0 X 42571 420896 115912 KRISCHA WINRIGHT SVP, Chief Marketing/Digital Officer - Part Year 4.0 46.0 X 19263 272155 159855 JIANHUA YU SVP, ADVANCED ANALYTICS/CHIEF ACTUARY 5.0 45.0 X 52698 521029 161894 JOHN L FOX VP, Assoc Chief Medical Officer 5.0 45.0 X 45970 454505 85256 EUGENE CRONIN VP, NEW GOVERNMENT MARKETS 5.0 45.0 X 39714 392650 76934 INES VIGIL VP, ADVANCED ANALYTICS 5.0 45.0 X 36469 360574 62435 Gregory Gadbois MD MEDICAL DIRECTOR 5.0 45.0 X 32300 319346 43360 PAMELA RIES Former VP, System Total Value 0.0 50.0 X 0 653164 269094 682164 7479426 2442394 0 true true false EXPRESS SCRIPTS 1 EXPRESS WAY ST LOUIS MO 63121 CLAIMS SERVICES 75499606 MERCY HEALTH PARTNERS PO BOX 358 MUSKEGON MI 49442 CLAIMS SERVICES 15972264 REGENTS OF THE UNIVERSITY OF MICHIGAN 5082 WOLVERINE TOWER 3003 SOUTH STATE STREET ANN ARBOR MI 481091287 CLAIMS SERVICES 15354495 METROPOLITAN HOSPITAL 5900 BYRON CENTER AVE SW WYOMING MI 49519 CLAIMS SERVICES 14635024 DELTA DENTAL 4100 OKEMOS ROAD OKEMOS MI 48864 CLAIMS SERVICES 10770264 247 0 Net Premium Income 524114 517463814 517463814 0 0 0 0 517463814 1802889 1802889 0 0 466101157 465896125 205032 0 205032 205032 0 0 0 0 0 519471735 517463814 0 2007921 476498872 476498872 631029 347066 283963 6936301 3814966 3121335 2315052 1273279 1041773 823479 452913 370566 8965 8965 8245 8245 58666 58666 3302427 1816335 1486092 0 1157993 636896 521097 715180 393349 321831 103677 57022 46655 480084 264046 216038 91343 50239 41104 25699 14134 11565 160769 88423 72346 37491 20620 16871 45541 25048 20493 Shared Services & Management Fees 7965197 4380858 3584339 Claims Tax Expense 4677017 4677017 DIFS Regulatory Fee 98663 54265 44398 Community Support & Outreach 90624 49843 40781 455133 250323 204810 0 506687447 495165514 11521933 0 29994792 17511558 11811784 10490772 0 0 0 0 0 0 0 84321317 92938073 0 0 6200197 4135689 132328090 125076092 68244828 48163586 6857023 6211160 0 1876786 1917290 76978637 56292036 X 10000 10000 12326877 12326877 43012576 56447179 55349453 68784056 132328090 125076092 X 12784288 1555427 -905112 X false true X true false X 0 231486741 341051363 452045980 484530294 517463814 2026578192 0 0 0 231486741 341051363 452045980 484530294 517463814 2026578192 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2026578192 420975 646606 681872 1276292 1802889 4828634 0 420975 646606 681872 1276292 1802889 4828634 0 0 0 0 950700 0 950700 231907716 341697969 452727852 486757286 519266703 2032357526 0.9972 0.9976 0.0024 0.0019 X Schedule A, Part III, Line 12 Other Income DESCRIPTION - INCOME FROM TRANSFERRED MEMBERSHIP, COLUMN A - , COLUMN B - , COLUMN C - , COLUMN D - 950700.0, COLUMN E - , COLUMN F - 950700.0; Due to Affiliates 1917290 1917290 Schedule D, Part X, Line 2 FIN 48 (ASC 740) Footnote PRIORITY HEALTH CHOICE, INC. CONDUCTS AN ANALYSIS ANNUALLY TO DETERMINE THE ORGANIZATION'S LIABILITY WITH RESPECT TO UNCERTAIN TAX POSITIONS. FOR THE YEAR ENDED DECEMBER 31, 2017 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. false true false false false false false false false Joan A BUDDEN PRESIDENT & CEO 69763 689746 35728 353248 1877 18554 31356 310016 9962 98500 148686 1470064 7160 70790 Mary Anne Jones Treasurer & SVP, Finance 39011 385708 18562 183524 3298 32606 11207 110801 7799 77107 79877 789746 5914 58476 JAMES FORSHEE DIRECTOR - SVP, CHIEF MEDICAL OFFICER 36632 362180 6893 68151 1183 11694 5894 58275 6383 63113 56985 563413 0 0 MICHAEL KOZIARA Director - SVP, PROVIDER NETWORK 37552 371279 14567 144023 1519 15015 9061 89590 6606 65311 69305 685218 2430 24029 KIMBERLY L THOMAS SECRETARY 34541 341513 16356 161712 139 1370 10570 104506 4924 48681 66530 657782 5288 52283 PAMELA RIES Former VP, System Total Value 0 429150 0 205286 0 18728 0 199291 0 69803 0 922258 0 27248 CHRISTOPHER CROOK SVP, Information Services 20461 202302 4593 45407 1572 15544 235 2320 4174 41316 31035 306889 0 0 BRIAN KRUPICZEWICZ SVP, HUMAN RESOURCES 20878 206412 6647 65723 1051 10392 5269 52099 4725 46716 38570 381342 0 0 MARTI LOLLI SVP, CONS/GOVT MKT & CMO 30352 300094 9794 96830 210 2080 10552 104328 6086 60172 56994 563504 0 0 WAYNE WILSON SVP, GOVERNMENT MARKETS - PART YEAR 22934 226748 13709 135538 5928 58610 6993 69139 3654 36126 53218 526161 4216 41685 KRISCHA WINRIGHT SVP, Chief Marketing/Digital Officer - Part Year 12929 182673 4021 56806 2313 32676 6854 96842 3712 52447 29829 421444 3047 43053 JIANHUA YU SVP, ADVANCED ANALYTICS/CHIEF ACTUARY 35114 347178 16145 159625 1439 14226 10239 101237 4631 45787 67568 668053 5128 50699 JOHN L FOX VP, Assoc Chief Medical Officer 32001 316387 13786 136304 183 1814 1984 19616 5847 57809 53801 531930 3446 34073 EUGENE CRONIN VP, NEW GOVERNMENT MARKETS 26163 258670 12326 121866 1225 12114 1736 17164 5331 52703 46781 462517 3792 37492 INES VIGIL VP, ADVANCED ANALYTICS 27502 271914 8863 87630 104 1030 865 8550 4870 48150 42204 417274 0 0 Gregory Gadbois MD MEDICAL DIRECTOR 25534 252453 6659 65838 107 1055 1736 17164 2247 22213 36283 358723 0 0 Schedule J, Part II, Column (F) DEFERRED COMPENSATION THE 2017 "BONUS & INCENTIVE COMPENSATION" INCLUDES CERTAIN DEFERRED COMPENSATION ARRANGEMENTS THAT WERE REPORTED IN PREVIOUS YEARS BUT PAID IN 2017. 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. Schedule J, Part I, Line 3 Arrangement used to establish the top management official's compensation SEE EXPLANATION PROVIDED ON SCHEDULE O FOR FORM 990, PART VI, LINE 15A. Schedule J, Part I, Line 4b Supplemental nonqualified retirement plan $ 77,950 Joan Budden $ 41,284 Eugene Cronin $ 37,520 John Fox $ 64,389 Mary Anne Jones $ 26,459 Michael Koziara $ 27,248 Pamela Ries $ 57,571 Kimberly Thomas $ 45,901 Wayne Wilson $ 46,100 Krischa Winright $ 55,827 Jianhu Yu 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. Form 990, Part III, Line 4a Program Service Description CHILDREN'S SPECIAL HEALTH CARE SERVICES (CSHCS) IS A SPECIALTY PROGRAM OFFERED BY THE STATE OF MICHIGAN TO PROVIDE CARE FOR CHILDREN AND SOME ADULTS WITH CHRONIC HEALTH CONDITIONS. IN ADDITION, THE CSHCS PROGRAM OFFERS SUPPORT TO THE FAMILIES AND CAREGIVERS OF THE MEMBER. CSHCS PROGRAM ELIGIBILITY IS BASED ON MORE THAN 2,700 MEDICAL DIAGNOSES. AS OF OCTOBER 1, 2012, THE MAJORITY OF THE CSHCS POPULATION TRANSITIONED INTO A MEDICAID HEALTH PLAN. IN RESPONSE TO THIS TRANSITION, PRIORITY HEALTH CHOICE, INC. IMPLEMENTED A SPECIALTY CARE MANAGEMENT PROGRAM FOR THIS UNIQUE POPULATION. A DEDICATED CARE MANAGEMENT TEAM ENSURES CSHCS MEMBERS ARE ESTABLISHED WITH A PRIMARY CARE MEDICAL HOME WHILE ALSO PROVIDING CARE COORDINATION BETWEEN THEIR PRIMARY CARE / SPECIALTY CARE PROVIDERS AND ANY ANCILLARY PROVIDERS. THIS TEAM INCLUDES CARE MANAGERS, COMMUNITY HEALTH WORKERS, FIELD SERVICE REPRESENTATIVES, AND OTHER KEY PARTNERS, INCLUDING COUNTY HEALTH DEPARTMENTS, EARLY ON, EARLY HEAD START, THE INTERMEDIATE SCHOOL DISTRICTS, SPECIALTY PROVIDERS, AND MEDICAL SUPPLIERS. THE CARE MANAGEMENT TEAM ALSO FACILITATES ACCESS FOR FAMILIES TO THE FAMILY CENTER FOR CHILDREN AND YOUTH WITH SPECIAL HEALTH CARE NEEDS, AND THE CHILDREN'S SPECIAL NEEDS FUNDS IN LANSING. AS OF DECEMBER 31, 2017, PRIORITY HEALTH CHOICE, INC. HAS NEARLY 1,900 MEMBERS ENROLLED IN THE CSHCS PROGRAM, UP FROM APPROXIMATELY 1,600 MEMBERS IN THE PRIOR YEAR. PRIORITY HEALTH CHOICE, INC. WAS AWARDED A PINNACLE AWARD BY THE MICHIGAN ASSOCIATION OF HEALTH PLANS (MAHP) IN A PRIOR YEAR FOR THE TRANSITION OF CSHCS MEMBERS INTO A MEDICAID MANAGED HEALTH PLAN. THE TRANSITION OF THIS POPULATION BEGAN WITH AN OUTREACH CALL BY FIELD SERVICE REPRESENTATIVES, WHO REVIEWED THE HEALTH PLAN BENEFITS WITH FAMILIES. THESE BENEFITS INCLUDE TRANSPORTATION, PRIMARY CARE ASSIGNMENT, USE OF URGENT CARE AND EMERGENCY ROOM SERVICES, REFERRAL PROCESS, PHARMACY, THE BEHAVIORAL HEALTH BENEFIT, AND THE ROLE OF THE LOCAL HEALTH DEPARTMENT. IN ADDITION, CARE MANAGEMENT SERVICES WERE OFFERED, WHICH THE MAJORITY OF THE CSHCS MEMBERS UTILIZED. A CARE MANAGER CONTACTED EACH MEMBER/FAMILY, COMPLETED A COMPREHENSIVE ASSESSMENT TO IDENTIFY MEMBER NEEDS, AND DEVELOPED A CARE PLAN WITH MEMBER CENTRIC GOALS. IN ADDITION, APPROPRIATE EDUCATION WAS PROVIDED REGARDING THE CURRENT DISEASE PROCESS, PREVENTATIVE HEALTH, CHRONIC DISEASE MANAGEMENT, AND THE IMPORTANCE OF THE MEDICAL HOME. THE TEAM WORKS COLLABORATIVELY TO ENSURE ALL NEEDS ARE IDENTIFIED AND ADDRESSED UTILIZING IN NETWORK/IN STATE PROVIDERS WHENEVER POSSIBLE. THIS PROCESS CONTINUES TODAY WITH ALL NEWLY ENROLLED CSHCS MEMBERS. ON SEPTEMBER 16, 2013, THE MICHIGAN GOVERNOR SIGNED INTO LAW MICHIGAN PUBLIC ACT 107 OF 2013, WHICH DIRECTED THE CREATION OF THE HEALTHY MICHIGAN PLAN. THE HEALTHY MICHIGAN PLAN RECEIVED APPROVAL FROM THE CENTERS FOR MEDICARE & MEDICAID SERVICES ON DECEMBER 30, 2013. THE STATE OF MICHIGAN BEGAN TO MAKE HEALTH CARE BENEFITS AVAILABLE THROUGH THE HEALTHY MICHIGAN PLAN EFFECTIVE APRIL 1, 2014. THE HEALTHY MICHIGAN PLAN ENCOURAGES HEALTHY BEHAVIORS AND PERSONAL RESPONSIBILITY, HELPS LOW-INCOME MICHIGAN RESIDENT'S ACCESS AFFORDABLE HEALTH COVERAGE, AND REDUCES UNCOMPENSATED CARE THAT SHIFTS COSTS ONTO BUSINESSES AND TAXPAYERS. AS OF DECEMBER 31, 2017, PRIORITY HEALTH CHOICE, INC. HAD MORE THAN 35,000 MEMBERS ENROLLED IN THE HEALTHY MICHIGAN PLAN. IN 2016, THE MAHP AWARDED PRIORITY HEALTH CHOICE, INC. WITH A PINNACLE AWARD RECOGNIZING THE INNOVATIVE MEDNOW APPROACH. PRIORITY HEALTH CHOICE, INC. PARTNERED WITH MEDNOW TO VIRTUALLY CONNECT MEDICAID RECIPIENTS AND PROVIDERS. MEDNOW PROVIDES MEDICAID RECIPIENTS WITH ACCESS TO A COMPUTER IN-HOME, REAL-TIME ACCESS TO PRIMARY CARE PROVIDERS FOR NON-LIFE-THREATENING CONDITIONS, INCLUDING VIDEO VISITS FOR THOSE WITH A WEBCAM AND A STRONG INTERNET CONNECTION. IT HAS PROVIDED EFFECTIVE HEALTH CARE SERVICES TO BENEFICIARIES AT MEASURABLE COST SAVINGS. VIDEO-ENABLED VIRTUAL VISITS USE DATA ANALYTICS TO MEASURE UTILIZATION AND SATISFACTION. IN 2017, PRIORITY HEALTH CHOICE, INC. HAD 1,695 MEDNOW ENCOUNTERS WITH THE MEDICAID POPULATION. PRIORITY HEALTH CHOICE, INC. PARTNERED WITH CARECALL TO MAKE OUTREACH CALLS TO EACH HEALTHY MICHIGAN MEMBER. DURING THAT CALL, MEMBERS ARE PROVIDED WITH BENEFIT EDUCATION AS WELL AS ASSISTANCE IN MAKING THEIR INITIAL PRIMARY CARE PROVIDER ("PCP") APPOINTMENT. DURING THAT INITIAL PCP APPOINTMENT, THE MEMBER COMPLETES A HEALTH RISK ASSESSMENT, WHICH IDENTIFIES CURRENT BEHAVIORS, A MEMBER'S READINESS TO CHANGE, KEY HEALTH METRICS, AND THE PCP ATTESTATION. ONCE COMPLETED, THE HEALTH RISK ASSESSMENT IS SENT TO PRIORITY HEALTH CHOICE, INC. WHERE THE ASSESSMENT IS REVIEWED FOR COMPLETENESS AND TRANSMITTED TO THE STATE OF MICHIGAN. SPECIFIC HEALTH INFORMATION IS SENT VIA U.S. MAIL TO THE MEMBER DEPENDING ON WHICH GOAL(S) THE MEMBER CHOOSES TO WORK ON. IN PURSUIT OF THE GOAL THAT 81% OF CONTINUOUSLY ENROLLED MEDICAID MEMBERS WILL HAVE AT LEAST ONE LEAD SCREENING TEST BY THEIR SECOND BIRTHDAY, PRIORITY HEALTH REDESIGNED THE MEDICAID LEAD SCREENING PROGRAM. AS SUCH, PRIORITY HEALTH DEVELOPED A PROGRESSIVE THREE-TOUCH MEMBER OUTREACH REMINDER/INCENTIVE, PURCHASED LAB EQUIPMENT ON BEHALF OF PROVIDER OFFICES AND PROVIDED EDUCATION TO BOTH MEMBERS AND PROVIDERS AROUND THE IMPORTANCE OF LEAD SCREENING. BASED ON 2017 DATA, THE PRIORITY HEALTH CARE EFFECTIVENESS DATA AND INFORMATION SET (HEDIS) RATE FOR LEAD SCREENING ROSE FROM 71% (2011) TO 84.54%, SURPASSING THE GOAL OF THE STATE STANDARD. THE COMMUNITY HEALTH CARE ACCESS PROGRAM (CHAP), FORMERLY KNOWN AS CHILDREN'S HEALTH CARE ACCESS PROGRAM, IS A COMMUNITY COLLABORATIVE THAT WAS INITIATED IN 2008 AND HAS SINCE EXPANDED TO SERVICE ADULT ENROLLEES. THE FOCUS OF THE COLLABORATIVE FOR THE FIRST SEVERAL YEARS WAS TO INCREASE ACCESS AND QUALITY HEALTH CARE TO MEDICAID PEDIATRIC MEMBERS. THE PRIMARY GOAL OF THE CHAP PROGRAM NOW IS TO IMPROVE HEALTH OUTCOMES AMONG CHILDREN ON MEDICAID WHILE BETTER UTILIZING EXISTING RESOURCES AND DECREASING COSTS. THIS PARTNERSHIP BETWEEN PRIORITY HEALTH CHOICE, INC., HELEN DEVOS CHILDREN'S HOSPITAL, CHERRY STREET HEALTH SERVICES, PRIVATE PEDIATRIC PRACTICES, NUMEROUS HUMAN SERVICE AGENCIES, AND PRIVATE FOUNDATIONS COVERS 15,000 CHILDREN IN KENT COUNTY. CHAP CONTRACTED WITH PCP'S, PROVIDING CARE COORDINATION AND ASSISTANCE WITH KEY HEDIS METRICS. PCP'S WERE REIMBURSED AT A HIGHER RATE IN EXCHANGE FOR THEIR WILLINGNESS TO OPEN UP ACCESS, ESPECIALLY SAME DAY ACCESS TO MEMBERS. CHAP PROVIDED SAME DAY TRANSPORTATION TO URGENT PCP APPOINTMENTS AS NEEDED. IN ADDITION, CHAP PROVIDED MEMBER/FAMILY EDUCATION REGARDING APPROPRIATE EMERGENCY ROOM AND URGENT CARE UTILIZATION. IN 2014, CHAP DEVELOPED ITS OWN IDENTITY AS HEALTH NET OF WEST MICHIGAN. AT THE SAME TIME, THE FOCUS OF INTERVENTION EXPANDED TO ADULTS AS WELL AS CHILDREN. HEALTH NET PARTNERED WITH ADULT PRIMARY CARE PRACTICES TO WORK WITH ADULT MEMBERS REGARDING EMERGENCY ROOM AND URGENT CARE USE, WHILE ALSO PROVIDING EDUCATION REGARDING SPECIFIC MEMBER INPATIENT UTILIZATION. IN ADDITION, HEALTH NET HAS PARTNERED WITH OB-GYN RESIDENCY CLINICS TO FACILITATE THE MATERNAL INFANT HEALTH PROGRAM (MIHP) ENROLLMENT FOR PREGNANT WOMEN. HEALTH NET REPORTS A 53% RETURN ON INVESTMENT; FOR EVERY $1 INVESTED IN CHAP SERVICES, $1.53 WAS SAVED IN HEALTH COSTS. PRIORITY HEALTH CHOICE, INC. WAS AWARDED A PINNACLE AWARD IN 2017 FOR ITS CENTERINGPREGNANCY PROGRAM. THE GOAL WAS TO CREATE A COLLABORATIVE MODEL OF SUPPORT FOR MEDICAID MEMBERS WHICH RESULTS IN IMPROVED HEALTH OUTCOMES FOR MOTHERS AND THEIR BABIES, ENHANCED HEALTH EXPERIENCES, AND LOWER COSTS. PRIORITY HEALTH PARTNERED WITH SPECTRUM HEALTH IN SUPPORT OF THE CENTERINGPREGNANCY PROGRAM FOR EXPECTANT MEDICAID MEMBERS AND THEIR BABIES. THROUGH THIS PARTICULAR COLLABORATION, FOCUS WAS PLACED ON MEDICAID MOTHERS AND BABIES; HOWEVER THE MODEL IS SCALABLE TO OTHER PRODUCTS AND PROVIDERS WITHIN THE PRIORITY HEALTH NETWORK. THE COLLABORATIVE TEAM'S EFFORT RESULTED IN A NEW METHOD OF ENHANCED REIMBURSEMENT TIED TO EACH MEMBER AND EACH VISIT. THE PROGRAM IS AN ADDED BENEFIT TO PRIORITY HEALTH MEDICAID MEMBERS, PROVIDES A PRIORITY HEALTH CARE MANAGER AT THE CLINIC SITE WHO WORKS CLOSELY WITH HIGH-RISK PATIENTS AND REINFORCES CENTERING EDUCATION, AND SUPPORTS AND ENCOURAGES PARTICIPATION IN THE MATERNAL INFANT HEALTH PROGRAM. THE CONSUMER ASSESSMENT OF HEALTH CARE PROVIDERS AND SYSTEMS (CAHPS) CONDUCTS AN ANNUAL SURVEY THAT ASKS CONSUMERS AND PATIENTS TO REPORT ON AND EVALUATE THEIR EXPERIENCES WITH HEALTH CARE. IN 2017, PRIORITY HEALTH CHOICE, INC. SCORED SIGNIFICANTLY HIGHER THAN THE MDHHS MEDICAID MANAGED CARE PROGRAM AVERAGE. 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 this question 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 CHOICE, INC. WERE EMPLOYED DURING THE YEAR BY SPECTRUM HEALTH SYSTEM (38-3382353) AND LEASED BACK TO PRIORITY HEALTH CHOICE, INC. SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES ARE ALLOCATED TO PRIORITY HEALTH CHOICE, INC. 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 CHOICE, INC. SPECTRUM HEALTH SYSTEM FILED ALL APPLICABLE IRS TAX FILINGS INCLUDING FORMS W-2 AND W-3 ON BEHALF OF PRIORITY HEALTH CHOICE, INC. Form 990, Part VI, Line 3 Management Services Priority Health Managed Benefits, Inc. (PHMB), an entity related through common ownership, provides contracted management services to Priority Health Choice, Inc. and its affiliates. Priority Health, a 501(c)(4), is the parent company to the organization. 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. Form 990, Part VI, Line 1b Number of voting members who are independent The board composition is determined and appointed by the shareholders as described in the organizational bylaws. In addition, an independent committee of the board (one enrollee, one family member/guardian of enrollee, and one consumer advocate) is in place to provide direction, advice, and recommendations based on representation from the community. Priority Health Choice is a subsidiary of Priority Health, a 501(c)(4), whose board composition is primarily independent and provides governance and guidance. Form 990, Part VI, Line 2 Family/business relationships amongst interested persons CERTAIN 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 4 Significant changes to organizational documents The entity's governing documents were amended to update the indemnification language to match the parent company, improve the consistency of governing provisions between the Articles of Incorporation and the Bylaws, and to allow Priority Health Choice, Inc. to have a standing council. Form 990, Part VI, Line 6 Classes of members or stockholders 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 shareholders as follows: Spectrum Health System (EIN 38-3382353), Class A Shareholder - 93.9% Munson Healthcare (EIN 38-2640544), Class B Shareholder - 5.5% McLaren Northern Michigan (EIN 38-2146751), Class B Shareholder - .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 Choice, Inc. bylaws: Article V Section 2. Number and Class of Directors. The Board of Directors will be comprised of no less than three (3) and no more than nine (9) directors. Form 990, Part VI, Line 7b Decisions requiring approval by members or stockholders From Priority Health Choice, Inc. bylaws: Section 1. Votes. Each shareholder of record as determined in accordance with Section 2 of this Article will, at every meeting of shareholders, be entitled to one (1) vote in person or by proxy for each share of capital voting stock of the corporation held by the shareholder. A vote may be cast either verbally or in writing. Unless the Articles of Incorporation or Bylaws state otherwise, all matters will be determined by the vote of the holders of a majority of the issued and outstanding stock in the corporation. Section 2. Record Date for Determination of Shareholders. For the purpose of determining shareholders entitled to notice of, and to vote at, a meeting of shareholders, or any adjourned meeting, or to express consent to or dissent from a proposal without a meeting, or for the purpose of any other action, the Board of Directors may fix in advance a date, not more than sixty (60) days nor less than twenty-one (21) days before the date of the meeting or other action, as the record date for the determination of shareholders. Section 3. Proxies. A shareholder entitled to vote at a meeting of shareholders or to express consent or dissent without a meeting may authorize other persons to act for the shareholder by proxy. No proxy will be deemed operative unless and until signed by the shareholder or the shareholder's authorized agent or representative and filed with the corporation. Unless otherwise provided in the proxy, a proxy is valid only for three (3) years from its date. Section 4. Annual Budget and Strategic Plan. The shareholders will approve the annual budget and strategic plan for the corporation. Section 5. Power to Elect President. The shareholders will select the President of the corporation who may be someone who is not a member of the Board of Directors. Section 6. Removal of Officers and Agents. Any officer or agent may be removed by the shareholders whenever, in their judgment, the business interests of the corporation will be served by the removal. Section 7. Delegation of Powers. For any reason they deem sufficient, whether occasioned by absence or otherwise, the shareholders may delegate all or any of the powers and duties of any officer to any other officer or director. Section 8. Power to Require Bonds. The shareholders may require any officer or agent to file with the corporation a satisfactory bond conditioned for faithful performance of the officer's or agent's duties. 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 SVP, Finance; SVP, General Counsel; VP, Controller) and shared with the members of the finance committee and board of directors. 4. The organization's SVP, Finance 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. 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 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 Choice, Inc. 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. For calendar 2017 (1/1/17-12/31/17), four health care executive compensation surveys, three medical group surveys, two pediatric hospital surveys and one health plan survey prepared by independent firms were the primary sources referenced to obtain market data for the review: * Integrated Health Care Strategies: 2015 Children's Hospitals Executive Compensation Survey * Integrated Health Care Strategies: 2016 Health Care Executive Compensation Survey * Mercer: 2016 Integrated Health Networks Compensation Survey, also provides data for health plans * Medical Group Management Association: 2016 Management Compensation Survey * Sullivan, Cotter and Associates: 2016 Survey of Manager and Executive Compensation in Hospitals and Health Systems * Sullivan, Cotter and Associates: 2016 Custom Survey of Manager and Executive Compensation in Children's Hospitals * Sullivan, Cotter and Associates: 2016 Physician Compensation and Productivity Survey Report * Towers Watson: 2016 Hospital and Health Care Management Compensation Report * Warren: Fall 2016 HMO Salary Survey In addition, one retirement community survey and four general industry surveys were referenced: * Rodeghero Consulting Group, Inc.: 2016 AAHA-CEMO Leadership Compensation Survey * Mercer: 2016 Executive Compensation Survey * Mercer: 2016 Information Technology Survey * Mercer: 2016 Human Resources Survey * Towers Watson: 2016 Top Management Compensation Report 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 health care and / or health insurance organizations. Spectrum Health recruits nationally for its executives. Benefits data reflect national health care / 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 CHOICE, INC. 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 - -905112; 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). SPECTRUM HEALTH SYSTEM 100 MICHIGAN AVE NE GRAND RAPIDS MI 49503 383382353 MANAGEMENT MI 501(c)(3) Type III-FI NA false PRIORITY HEALTH 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382715520 HMO MI 501(c)(4) SPECTRUM HEALTH SYSTEM false TRINITY HEALTH PLANS 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 382663747 HMO MGMT MI 501(c)(4) PRIORITY HEALTH false PRIORITY HEALTH INSURANCE COMPANY 1231 EAST BELTLINE NE GRAND RAPIDS MI 49525 201529553 INSURANCE MI NA C Corporation false false false false false false false false false false false false false true true true true false true true Priority Health M 201263 GAAP, CASH OR FMV Priority Health S 2399071 GAAP, Cash or FMV Schedule R, Part II, Column (g) SECTION 512(B)(13) CONTROLLED ENTITY TAXPAYER IS A MEMBER OF A CONSOLIDATED HEALTH SYSTEM AND HAS A COMMON PARENT ORGANIZATION, SPECTRUM HEALTH SYSTEM.