2016-10-04T10:16:02-05:00 2014-12-31 ERNST & YOUNG LLP 5 TIMES SQUARE NEW YORK NY 100366530 990 2014-01-01 133783732 Healthfirst PHSP Inc % CRAIG BARATTIN-VP/CONTROLLER HEAL 100 CHURCH ST FL 18 NEW YORK NY 100072601 JOHN BERMEL CFO 2015-08-31 CHRISTOPHER B BOGGS P00032493 2127733000 2014 2017-02-10 21:41:12Z X PATRICIA J WANG 100 CHURCH ST FL 18 NEW YORK NY 100072601 4147859743 false X WWW.HEALTHFIRSTNY.ORG X 1994 NY IMPROVE THE HEALTH & WELL-BEING OF UNDER- SERVED POPULATIONS BY PROVIDING COMPREHENSIVE PREPAID HEALTHCARE CO- VERAGE TO MEDICAID,CHILD HEALTH PLUS AND FAMILY HEALTH PLUS RECIPIENTS 5 3 0 0 0 0 0 3305343319 4145039756 1916101 2819987 0 0 3307259420 4147859743 0 0 0 0 0 0 0 0 0 3287232831 4148812838 3287232831 4148812838 20026589 -953095 789982541 1005634686 536942794 688540919 253039747 317093767 X TO IMPROVE THE HEALTH AND WELL-BEING OF UNDERSERVED POPULATIONS BY PROVIDING COMPREHENSIVE PREPAID HEALTHCARE COVERAGE TO MEDICAID, CHILD HEALTH PLUS AND FAMILY HEALTH PLUS RECIPIENTS. true false 3843705739 3907962693 MEDICAID MANAGED CARE: HEALTHFIRST PHSP, INC. (PHSP) IS A LICENSED PREPAID HEALTH SERVICES PLAN THAT PROVIDES COMPREHENSIVE PREPAID HEALTH CARE COVERAGE TO MEDICAID RECIPIENTS PURSUANT TO ARTICLE 44 OF THE NEW YORK STATE PUBLIC HEALTH LAW. PHSP HAS PARTICIPATED IN NEW YORK'S MEDICAID PROGRAM SINCE OCTOBER 1994. FOR 2014 THERE WERE 852,997 MEMBERS ENROLLED IN PHSP'S MEDICAID PLAN. PHSP'S NETWORK INCLUDES 63 REGIONAL HOSPITALS THAT PROVIDE SERVICES TO MEMBERS. 146737441 147913871 FAMILY HEALTH PLUS (FHP): HEALTHFIRST PHSP, INC. (PHSP) IS A LICENSED PREPAID HEALTH SERVICES PLAN THAT PROVIDES COMPREHENSIVE PREPAID HEALTH CARE COVERAGE TO FHP RECIPIENTS PURSUANT TO ARTICLE 44 OF THE NEW YORK STATE PUBLIC HEALTH LAW. PHSP HAS PARTICIPATED IN NEW YORK'S FHP PROGRAM SINCE 1997. FOR 2014 THERE WERE 8,226 MEMBERS ENROLLED IN PHSP'S FHP PLAN. PHSP'S NETWORK INCLUDES 61 REGIONAL HOSPITALS THAT PROVIDE SERVICES TO MEMBERS. 61140600 63070289 CHILD HEALTH PLUS (CHP) HEALTHFIRST PHSP, INC. (PHSP) IS A LICENSED PREPAID HEALTH SERVICES PLAN THAT PROVIDES COMPREHENSIVE PREPAID HEALTH CARE COVERAGE TO CHP RECIPIENTS PURSUANT TO ARTICLE 44 OF THE NEW YORK STATE PUBLIC HEALTH LAW. PHSP HAS PARTICIPATED IN NEW YORK'S CHP PROGRAM SINCE 1997. FOR 2014 THERE WERE 27,878 MEMBERS ENROLLED IN PHSP'S CHP PLAN. PHSP'S NETWORK INCLUDES 62 REGIONAL HOSPITALS THAT PROVIDE SERVICES TO MEMBERS. 24456240 26092903 4076040020 true false false false false false false false false false false false false true true false true true false false false false false false false false false false false true false false false false false false false true false false false false false true true true true false true 10781 0 true 0 false false false false false false false false false false X 5 3 false true false false true true true true true false false true true true true true true false false false NY X CRAIG BARATTIN-VPCONTROLLER 2128016000 100 CHURCH ST FL 18 NEW YORK NY 100072601 X JAY A SCHECHTMAN CHIEF MEDICAL OFFICER 1.0 40.0 X 0 695229 110211 ELIZABETH R ST CLAIR CHIEF LEGAL OFFICER 1.0 40.0 X X 0 1006265 135126 EVELYN DEL ORBE BOARD DIRECTOR-COMMUNITY REP. 1.0 0.0 X 0 0 0 STEPHEN ROSENTHAL BOARD DIRECTOR 1.0 0.0 X 0 0 0 ERIC SCALETTAR BOARD DIRECTOR 1.0 0.0 X 0 0 0 MARYBETH A TITA SVP-CORP. FINANCE 1.0 40.0 X 0 669733 131357 PATRICIA J WANG CHIEF EXECUTIVE OFFICER 1.0 40.0 X 0 1597100 341531 DANIEL P MCCARTHY PRESIDENT/COO 1.0 40.0 X 0 984361 184835 MICHAEL FEDYNA CHIEF FINANCIAL OFFICER 1.0 40.0 X 0 218056 4792 PAUL E PORTSMORE JR SVP, BUS DEV AND MBR ACQUISI 1.0 40.0 X 0 470562 68998 IAN SHAFFER EXE MED DIR BEHAV HEALTH 1.0 40.0 X 0 392065 24774 SEAN M NATARO DEPUTY GENERAL COUNSEL 1.0 40.0 X 0 382462 32924 REBECCA SCHWIETZ SVP CLINICAL SERVICES 1.0 40.0 X 0 376809 47960 THOMAS E MEIXNER VP, FINANCIAL ANALYSIS 1.0 40.0 X 0 373553 19781 ANDREA C FORINO SVP HUMAN RESOURCES TERM-9/13 1.0 0.0 X 0 346954 0 0 7513149 1102289 0 true true false CAREMARK LLC ONE CVS DRIVE WOONSOCKET RI 02895 PHARMACY 917219521 MONTEFIORE MEDICAL CENTER PO BOX 4296 CHURCH STREET STATION NEW YORK NY 10261 MEDICAL/HOSPITAL 203480005 DENTAQUEST 465 MEDFORD STREET BOSTON MA 021291454 MEDICAL/HOSPITAL 114511608 NYC HEALTH AND HOSPITAL CORP 125 WORTH STREET NEW YORK NY 10013 MEDICAL/HOSPITAL 215245192 NY PRESBYTERIAN HOPS-COLUMBIA PO BOX 6154 NEW YORK NY 10249 MEDICAL/HOSPITAL 164255613 1999 0 MEDICAID MANAGED CARE 524114 3907962693 3907962693 FAMILY HEALTH PLUS 524114 147913871 147913871 CHILD HEALTH PLUS 524114 63070289 63070289 QUALIFIED HEALTH PLAN 524114 26092903 26092903 4145039756 2819987 2819987 0 0 0 0 0 0 0 0 0 0 4147859743 4145039756 2819987 0 0 0 0 0 0 0 0 0 0 250126793 177590023 72536770 0 5990 5990 0 0 0 535222 473427 61795 6936701 6936701 873623 705360 168263 0 0 0 0 0 0 0 0 0 0 HEALTHCARE SERVICE COSTS 3890102139 3890102139 CLAIMS PROCESSING 232370 232370 4148812838 4076040020 72772818 0 0 0 75279394 131529059 0 0 194180838 386690883 0 0 0 0 0 0 0 0 0 0 0 491854393 436725461 0 0 0 0 0 0 28667916 50689283 789982541 1005634686 508849131 641190353 0 0 428799 2451866 0 0 0 0 0 0 0 0 0 0 27664864 44898700 536942794 688540919 X 253039747 317093767 0 0 0 0 253039747 317093767 789982541 1005634686 X -953095 -486828 65493943 X X false true X true true true X 0 0 0 0 0 0 1373305871 1709235704 2462763165 3305343319 4145039756 12995687815 0 0 0 1373305871 1709235704 2462763165 3305343319 4145039756 12995687815 0 0 0 12995687815 3115511 2239456 3392262 1916101 2819987 13483317 0 3115511 2239456 3392262 1916101 2819987 13483317 0 0 1376421382 1711475160 2466155427 3307259420 4147859743 13009171132 0.99896 0.99851 0.00104 0.00149 X OTHER CURRENT ASSETS 50363454 DUE FROM AFFILIATE 325829 50689283 0 DUE TO STATE OF NEW YORK 44898700 44898700 4212866858 -486828 65493943 65007115 4147859743 4147859743 4148812838 4148812838 4148812838 SCHEDULE D PART XI, LINE 2D - OTHER ADJUSTMENTS RETAINED HOSPITAL PAYMENTS: $20,697,009. The health care services agreements with certain hospitals provide that payments due to these hospitals, as health care providers to PHSP Members, attributable to a % of premium are retained by PHSP. EQUITY TRANSFER FROM AFFILIATE: $44,796,934. During 2014, Healthfirst requested and received approval from the Department of Health to transfer approximately $44.8 million of capital reserves from Neighborhood Health Providers, Inc. (NHP) to PHSP. This transfer is in conjunction with the ongoing wind-down of the NHP operations. true true false false false false false false false JAY A SCHECHTMAN CHIEF MEDICAL OFFICER 0 426680 0 163435 0 105114 0 93009 0 17344 0 805582 0 104035 ELIZABETH R ST CLAIR CHIEF LEGAL OFFICER 0 462832 0 172943 0 370490 0 123927 0 11348 0 1141540 0 366148 MARYBETH A TITA SVP-CORP. FINANCE 0 437159 0 165923 0 66651 0 114033 0 17413 0 801179 0 65350 PATRICIA J WANG CHIEF EXECUTIVE OFFICER 0 892547 0 440090 0 264463 0 330332 0 11347 0 1938779 0 260107 DANIEL P MCCARTHY PRESIDENT/COO 0 624390 0 267278 0 92693 0 168604 0 16380 0 1169345 0 88889 PAUL E PORTSMORE JR SVP, BUS DEV AND MBR ACQUISI 0 346703 0 121999 0 1860 0 68998 0 129 0 539689 0 0 IAN SHAFFER EXE MED DIR BEHAV HEALTH 0 337137 0 48401 0 6527 0 15600 0 9300 0 416965 0 0 SEAN M NATARO DEPUTY GENERAL COUNSEL 0 283041 0 98207 0 1214 0 15600 0 17413 0 415475 0 0 REBECCA SCHWIETZ SVP CLINICAL SERVICES 0 303974 0 72413 0 422 0 30636 0 17449 0 424894 0 0 THOMAS E MEIXNER VP, FINANCIAL ANALYSIS 0 301313 0 70583 0 1657 0 15600 0 4270 0 393423 0 0 MICHAEL FEDYNA CHIEF FINANCIAL OFFICER 0 216185 0 0 1871 0 0 0 4880 0 222936 0 0 ANDREA C FORINO SVP HUMAN RESOURCES TERM-9/13 0 0 31401 0 315553 0 0 0 0 0 346954 0 0 SCHEDULE J, PART 1, LINE 4A THE FOLLOWING INDIVIDUAL ENTERED INTO SEVERANCE AGREEMENTS AND/OR RECEIVED SEVERANCE PAYMENTS FROM HF MANAGEMENT SERVICES, LLC - A RELATED ORGANIZATION. ANDREA FORINO TOTAL OF SEVERANCE AGREEMENT IN 2013: $442,771 SEVERANCE PAID IN 2013: $85,148 SEVERANCE PAID IN 2014: $295,181 SEVERANCE DEFERRED: $62,442 SCHEDULE J, PART 1, LINE 4B THE FOLLOWING INDIVIDUALS PARTICIPATED IN THE NON-QUALIFIED RETIREMENT PLAN PROVIDED BY HF MANAGEMENT SERVICES, LLC - A RELATED ORGANIZATION. THE AMOUNTS BELOW REPRESENT CONTRIBUTIONS FROM THE PLAN SPONSOR FOR 2014: PATRICIA J. WANG $314,732. [Col. C] DANIEL P. McCARTHY $153,004. [Col. C] ELIZABETH R. ST CLAIR $108,327. [Col. C] JAY A. SCHECHTMAN $77,409 [Col. C] MARYBETH A. TITA $98,433. [Col. C] PAUL PORTSMORE $53,398. [Col. C] REBECCA SCHWIETZ $15,036 [Col. C]. 0 HF MANAGEMENT SERVICES LLC COMMON OFFICERS/DIRECTORS 250126793 MANAGEMENT AND ADMIN SERVICES false MANAGED HEALTH INC COMMON OFFICERS/DIRECTORS 1800000 RISK SHARING INTERCO TRANSFER false FORM 990, PART III, LINE 2 STARTING 2014, THE ORGANIZATION UNDERTOOK QUALIFIED HEALTH PLAN (QHP) TO PROVIDE COVERAGE TO INDIVIDUALS PARTICIPATING IN NEW YORK STATE OF HEALTH (NYSOH) HEALTHCARE EXCHANGE. FORM 990, PART III, LINE 4D OTHER PROGRAM SERVICES QUALIFIED HEALTH PLAN (QHP): HEALTHFIRST PHSP, INC. (PHSP) IS A LICENSED PREPAID HEALTH SERVICES PLAN THAT PROVIDES COMPREHENSIVE COMMERCIAL HEALTH INSURANCE IN THE FORM OF QUALIFIED HEALTH PLANS (QHP), WHICH ARE OFFERED THROUGH THE NEW YORK STATE OF HEALTH (NYSOH) HEALTH BENEFIT EXCHANGE. THE ORGANIZATION OFFERED COMMERCIAL HEALTH INSURANCE STARTING 2014, WHICH WAS ALSO NYSOH'S OPENING YEAR. FORM 990, PART VI, SECTION A, LINE 3 HEALTHFIRST PHSP, INC. (PHSP) CONTRACTS WITH HF MANAGEMENT SERVICES, LLC (HFMS) TO PROVIDE ALL OF ITS MANAGEMENT AND ADMINISTRATIVE SERVICES. PHSP DOES NOT MAINTAIN ITS OWN STAFF OR OFFICE SPACE; THESE ARE PROVIDED BY HFMS. HFMS CHARGES A PERCENT OF PREMIUM ON A PER MEMBER PER MONTH BASIS OR A FLAT FEE PER MEMBER PER MONTH. THE ARRANGEMENT IS APPROVED BY RESOLUTION OF THE BOARD OF DIRECTORS AND THE NY STATE DEPARTMENT OF HEALTH. ALL OFFICERS, KEY EMPLOYEES, AND HIGHEST COMPENSATED EMPLOYEES WERE PAID BY, AND WORKED FOR HFMS, A MANAGEMENT COMPANY WHICH PROVIDES MANAGEMENT SERVICES FOR MULTIPLE ENTITIES. NONE OF THE INDIVIDUALS LISTED EARNED ANY COMPENSATION FROM PHSP. RESOLUTION OF THE BOARD OF DIRECTORS AND THE NY STATE DEPARTMENT OF HEALTH. ALL OFFICERS, KEY EMPLOYEES, AND HIGHEST COMPENSATED EMPLOYEES WERE PAID BY, AND WORKED FOR HFMS, A MANAGEMENT COMPANY WHICH PROVIDES MANAGEMENT SERVICES FOR MULTIPLE ENTITIES. NONE OF THE INDIVIDUALS LISTED EARNED ANY COMPENSATION FROM PHSP. EARNED ANY COMPENSATION FROM PHSP. FORM 990, PART VI, SECTION A, LINE 6 HEALTHFIRST PHSP, INC. IS A NEW YORK STATE NOT-FOR-PROFIT MEMBERSHIP CORPORATION. HEALTHFIRST PHSP'S SOLE CORPORATE MEMBER IS HEALTHFIRST, INC. FORM 990, PART VI, SECTION A, LINE 7A HEALTHFIRST PHSP, INC. (PHSP) IS A NEW YORK STATE NOT-FOR-PROFIT MEMBERSHIP CORPORATION. HEALTHFIRST PHSP'S SOLE CORPORATE MEMBER IS HEALTHFIRST, INC. HEALTHFIRST, INC. HAS THE RIGHT TO APPOINT MEMBERS TO THE BOARD OF DIRECTORS OF PHSP. FORM 990, PART VI, SECTION A, LINE 7B THE AMENDMENT OF THE ORGANIZATION'S GOVERNING DOCUMENTS IS SUBJECT TO THE APPROVAL OF HEALTHFIRST, INC. SOME OF THE DECISIONS OF THE GOVERNING BODY, SHOULD THEY OCCUR, ARE SUBJECT TO APPROVAL BY STATE REGULATORS: * DISTRIBUTION OF THE ORGANIZATION'S NET ASSETS * CERTAIN CHANGES TO PREMIUM RATES * EXPANSION TO OTHER MANAGED CARE BUSINESSES * SPECIFIC TYPES OF CHANGES TO THE ORGANIZATION'S BENEFIT PLANS * MANAGEMENT FEE RATE CHANGES [APPROVAL IS ALSO REQUIRED FROM THE MANAGEMENT COMPANY] FORM 990, PART VI, SECTION B, LINE 11B THE 990 IS PREPARED BY THE HF MANAGEMENT SERVICES, LLC (HFMS) CORPORATE FINANCE DEPARTMENT STAFF AND THEN REVIEWED BY THE HFMS TREASURER AND VICE PRESIDENT CONTROLLER. SECONDARY REVIEWS ARE ALSO PERFORMED BY THE HFMS CHIEF LEGAL OFFICER. THE DRAFT 990 IS THEN REVIEWED BY AN INDEPENDENT ACCOUNTING FIRM. THE DRAFT 990 IS THEN PRESENTED TO THE BOARD OF DIRECTORS FOR REVIEW. THE FINAL 990 IS SUBMITTED AFTER THE BOARD OF DIRECTORS REVIEWS IT. FORM 990, PART VI, SECTION B, LINE 12C A CONFLICT OF INTEREST DISCLOSURE STATEMENT IS COMPLETED ANNUALLY BY EACH BOARD MEMBER, OFFICER AND KEY EMPLOYEE. EACH BOARD MEMBER, OFFICER AND KEY EMPLOYEE IS GIVEN A COPY OF THE DISCLOSURE STATEMENT TO COMPLETE ON AN ANNUAL BASIS. A MEMBER WHO DOES NOT COMPLETE THE STATEMENT IS NOT ALLOWED TO ATTEND BOARD MEETINGS AND MAY BE REMOVED FROM THE BOARD. AN OFFICER OR KEY EMPLOYEE WHO DOES NOT COMPLETE THE STATEMENT WILL BE DISCIPLINED, UP TO TERMINATION FROM THE POSITION. ANY DISCLOSURE OF A CONFLICT OR POTENTIAL CONFLICT IS REVIEWED BY THE CHIEF COMPLIANCE OFFICER. CONFLICTS ARE ADDRESSED BY EXAMINING THE RELATIONSHIP OF THE INDIVIDUAL TO THE ORGANIZATION AND THE NATURE OF THE DISCLOSURE. A REPORT OF ANY CONFLICTS IS PREPARED FOR DISCUSSION WITH AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF DIRECTORS OF HEALTHFIRST, INC., THE NOT FOR PROFIT CORPORATE PARENT, AS WELL AS THE FULL BOARD OF DIRECTORS OF HEALTHFIRST PHSP, INC. AS APPROPRIATE, ACTION IS TAKEN, INCLUDING BUT NOT LIMITED TO DISCLOSURE AND RECUSAL FROM DECISION MAKING, MODIFICATIONS TO BUSINESS AGREEMENTS, CHANGES IN VENDORS OR REPLACEMENT OF THE DIRECTOR, OFFICER OR KEY EMPLOYEE WITH A NON-CONFLICTED INDIVIDUAL. FORM 990, PART VI, SECTION B, LINE 15 BECAUSE THE REPORTING ORGANIZATION DID NOT COMPENSATE ANY OFFICER OR EMPLOYEE, THE REPORTING ORGANIZATION HAS RESPONDED "NO." HOWEVER, THE COMPENSATION OF THE CEO, OTHER OFFICERS AND KEY EMPLOYEES IS DETERMINED BY THE COMPENSATION COMMITTEE OF HF MANAGEMENT SERVICES, LLC, THE MANAGEMENT COMPANY THAT PROVIDES ALL SERVICES TO PHSP.(A RELATED ORGANIZATION). THE COMMITTEE CONSISTS ONLY OF INDEPENDENT DIRECTORS. THE PROCESS FOR DETERMINING COMPENSATION IS DESCRIBED IN THE COMMITTEES CHARTER. THE PROCESS INCLUDES ENGAGEMENT OF AN OUTSIDE HUMAN RESOURCES CONSULTING FIRM TO CONDUCT A COMPARABILITY ANALYSIS. THE ANALYSIS INCLUDES COMPARABLE RANGES OF EXECUTIVE COMPENSATION USING THE COMPANY'S INDUSTRY CLASSIFICATION. THE COMMITTEE MEETS PRIOR TO IMPLEMENTATION OF ANY CHANGE IN COMPENSATION. CONTEMPORANEOUS MINUTES OF EACH MEETING ARE PREPARED. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE GENERAL PUBLIC BY PROVIDING COPIES ON REQUEST FOR INSPECTION AT ITS CORPORATE OFFICES. AMENDED RETURN FORM 990, PART VII, COLUMN (F) & SCHEDULE J, PART II, COLUMNS (C) & (D) INFORMATION FROM THE SECTIONS ABOVE WAS OMITTED DURING THE ORIGINAL E-FILE TRANSMITTING PROCESS ON NOVEMBER 10, 2015. AS A RESULT, THIS RETURN HAS BEEN AMENDED TO INCLUDE THE MISSING DATA. FORM 990, PART XI, LINE 9 OTHER CHANGES IN NET ASSETS RETAINED HOSPITAL PAYMENTS: $20,697,009. EQUITY TRANSFER FROM AFFILIATE: $44,796,934. DURING 2014, HEALTHFIRST REQUESTED AND RECEIVED APPROVAL FROM THE DEPARTMENT OF HEALTH TO TRANSFER APPROXIMATELY $44.8 MILLION OF CAPITAL RESERVES FROM NHP TO PHSP. THIS TRANSFER IS IN CONJUNCTION WITH THE ONGOING WIND-DOWN OF THE NHP OPERATIONS. TOTAL OTHER CHANGES IN NET ASSETS AMOUNTING $65,493,943. FORM 990, PART XII, LINE 2C THE SELECTION OF THE INDEPENDENT AUDITOR IS ADMINISTERED BY THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF DIRECTORS OF HEALTHFIRST, INC. (A RELATED ORGANIZATION). MANAGED HEALTH INC 100 CHURCH ST FL 18 NEW YORK NY 10007 113029569 MANAGED CARE NY 501 (C)4 HEALTHFIRST true HEALTHFIRST INC 100 CHURCH ST FL 18 NEW YORK NY 10007 133714932 MANAGED CARE NY 501 (C)3 11 Type I NA false HEALTHFIRST HEALTH PLAN OF NJ INC 1 WASHINGTON ST STE 1405 NEWARK NJ 07102 510609967 MANAGED CARE NJ 501 (C)4 HF MGMT SVCS true SENIOR HEALTH PARTNERS INC 100 CHURCH STREET 18FL NEW YORK NY 10007 134103882 MGD LT CARE NY 501 (C)3 9 HF MGMT SVCS true NEIGHBORHOOD HEALTH PROVIDERS INC 100 CHURCH ST FL 18 NEW YORK NY 10007 943474115 MANAGED CARE NY 501 (C)3 9 HEALTHFIRST true HF MANAGEMENT SERVICES LLC 100 CHURCH ST FL 18 NEW YORK NY 100072601 134069806 3RD PTY ADM S NY NA false 0 HF ADMINISTRATIVE SERVICES INC 100 CHURCH ST FL 18 NEW YORK NY 100072601 133873482 3RD PTY ADM S NY HF MGMT SVCS C CORP true HEALTHFIRST INSURANCE COMPANY INC 100 CHURCH STREET 18F New York NY 100072601 464545744 INSUR. PROVIDER NY NA C CORP false false false false false false false false false false false false false true false false false false false true HF MANAGEMENT SERVICES LLC M 250126793 CONTRACTED RATE MANAGED HEALTH INC S 1800000 CONTRACT NEIGHBORHOOD HEALTH PROVIDERS INC (NHP) S 44796934 CONTRACT FORM 990, SCHEDULE R, PART V, LINE 2 METHOD OF DETERMINING AMOUNT INVOLVED ITEM (1): THE AMOUNT REPRESENTS THE EXPENSES INCURRED AND PAID OR DUE TO THE RELATED ORGANIZATION FOR SERVICES RENDERED BASED ON CONTRACTED RATES APPROVED BY RESOLUTION OF THE BOARD OF DIRECTORS AND BY STATE REGULATORS. ITEM (2): IN ACCORDANCE WITH THE ORGANIZATION'S CONTRACTUAL ARRANGEMENTS WITH HOSPITALS , RISK-SHARING POOL BALANCES IN PHSP MAY BE OFFSET BY OR MAY BE USED TO OFFSET A PERCENTAGE OF THE SAME HOSPITAL(S)RISK-SHARING POOL BALANCE IN MHI THROUGH AN INTERCOMPANY TRANSFER. THE CURRENT POLICIES PERMIT THE OFFSETTING OF ANY DEFICITS THAT MAY ACCRUE FOR A HOSPITAL, OR ITS AFFILIATE INSTITUTIONS, WITH UP TO 100% OF SURPLUSES THAT MAY ACCRUE. ITEM (3): DURING 2014, HEALTHFIRST REQUESTED AND RECEIVED APPROVAL FROM THE DEPARTMENT OF HEALTH TO TRANSFER CAPITAL RESERVES FROM NHP TO PHSP. THIS TRANSFER IS IN CONJUNCTION WITH THE ONGOING WIND-DOWN OF THE NHP OPERATIONS.