2011-11-11T11:16:06-06:00 2010-12-31 DELOITTE TAX LLP 655 WEST BROADWAY SUITE 700 SAN DIEGO CA 921018590 990 2010-01-01 731729007 SCAN HEALTH PLAN ARIZONA SCAN 5629895100 3800 KILROY AIRPORT WAY NO 100 LONG BEACH CA 908065616 DAVID J SCHMIDT 5629895100 2011-11-10 1 DIANA J MCCUTCHEN 6192326500 2010 2016-03-07 17:11:31Z ELIZABETH RUSSELL 3800 KILROY AIRPORT WAY NO 100 LONG BEACH CA 908065616 58085586 0 X WWW.SCANHEALTHPLAN.COM/ARIZONA/MEDICARE/ X 2006 AZ TO SERVE AND TO IMPROVE THE LIVES OF THE FRAIL, ELDERLY AND DISABLED RESIDENTS OF ARIZONA. 7 2 167 0 0 0 0 0 29621602 57916933 113011 168653 0 0 29734613 58085586 0 0 0 0 1181894 2026901 0 0 0 35265228 112927247 36447122 114954148 -6712509 -56868562 30130639 39787805 12954781 59440555 17175858 -19652750 X TO SERVE AND IMPROVE THE LIVES OF THE FRAIL, ELDERLY AND DISABLED RESIDENTS OF ARIZONA BY PROVIDING MEDICAL AND PHARMACY SERVICES, COORDINATED CARE, SOCIAL SERVICES AND OTHER SERVICES TO A GERIATRIC AND DISABLED POPULATION THAT IS UNDERSERVED AND AT RISK. 0 0 106119965 57916933 THE ARIZONA COMPANIES, SCAN HEALTH PLAN ARIZONA, A MEDICARE ADVANTAGE CONTRACTOR, AND SCAN LONG TERM CARE, A PROGRAM CONTRACTOR TO THE ARIZONA LONG TERM CARE SYSTEM (ALTCS) COMPONENT OF THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM (AHCCCS), THE STATE MEDICAID PROGRAM, ARE NON-PROFIT MANAGED CARE ORGANIZATIONS THAT WERE CREATED TO SERVE THE HEALTH CARE AND INDEPENDENCE NEEDS OF THE SENIOR AND PHYSICALLY DISABLED CITIZENS OF MARICOPA COUNTY, ARIZONA. THE SHARED MISSION OF THE ARIZONA COMPANIES IS TO FIND INNOVATIVE WAYS TO ENHANCE THE BENEFICIARIES' ABILITY TO MANAGE THEIR HEALTH AND EXERT CONTROL OVER WHERE AND HOW THEY LIVE. WE WILL ACHIEVE THAT MISSION BY DEVELOPING PARTNERSHIPS THAT ALLOW US TO DELIVER THE RIGHT HEALTH CARE, IN THE RIGHT SETTING, AND AT THE RIGHT COST WHILE MAXIMIZING THE MEMBERS' ABILITY TO REMAIN AS INDEPENDENT AS POSSIBLE. OUR GOAL IS TO BECOME THE LEADING GERIATRIC AND PHYSICALLY DISABLED HEALTH MANAGEMENT ENTERPRISE IN MARICOPA COUNTY.SCAN LONG TERM CARE WAS SELECTED AS AN ALTCS PROGRAM CONTRACTOR IN MAY, 2006 AND BEGAN PROGRAM OPERATIONS ON OCTOBER 1, 2006. THE PLAN IS RESPONSIBLE FOR ARRANGING, MANAGING AND MONITORING THE FULL RANGE OF HEALTH CARE SERVICES (PHYSICIAN, HOSPITAL, LAB, RADIOLOGY, DURABLE MEDICAL EQUIPMENT, ETC.), NOT OTHERWISE COVERED BY MEDICARE, HOME CARE SERVICES AND RESIDENTIAL CARE SERVICES REQUIRED BY THE ALTCS BENEFICIARIES ENROLLED IN SCAN. THE ALTCS PROGRAM IS DESIGN TO SERVE THE NEEDS OF LOW INCOME ARIZONA CITIZENS AGE 65 OR OLDER, BLIND OR DISABLED AND IN NEED OF LONG TERM CARE SERVICES. SCAN LONG TERM CARE BEGAN THE PROGRAM WITH 164 ENROLLEES AND CURRENTLY SERVES MORE THAN 2,910 ALTCS BENEFICIARIES IN MARICOPA COUNTY. THE ALTCS PROGRAM IS PRINCIPALLY BUILT ON A FOUNDATION OF DIRECT CASE MANAGEMENT SERVICE COORDINATION FOR EACH ENROLLEE. SCAN LONG TERM CARE CURRENTLY HAS A TEAM OF MORE THAN FIFTY CASE MANAGERS SERVING THE ALTCS ENROLLEES.SCAN HEALTH PLAN ARIZONA BEGAN PROGRAM OPERATIONS AS A MEDICARE ADVANTAGE CONTRACTOR EFFECTIVE JANUARY 1, 2007. IT IS RESPONSIBLE FOR ARRANGING AND MONITORING THE FULL RANGE OF MEDICARE HEALTH SERVICES FOR PLAN ENROLLEES. THE PLAN BEGAN OFFERING A MEDICARE ADVANTAGE SPECIAL NEEDS PLAN (SNP) FOR BENEFICIARIES WHO ARE DUALLY ELIGIBLE AND ENROLLED IN BOTH THE MEDICARE AND ALTCS PROGRAMS. BEGINNING JANUARY 1, 2009, THE PLAN EXPANDED ITS MEDICARE ADVANTAGE PARTICIPATION TO OTHER MEDICARE BENEFICIARY POPULATIONS, THROUGH A MAPD PLAN.IN JANUARY 2008 THE ARIZONA COMPANIES LAUNCHED THE SCAN CONNECTIONS COMMUNITY RESOURCE CENTER DESIGNED TO LINK SCAN MEMBERS, THEIR CAREGIVERS AND OTHERS IN THE MARICOPA COUNTY COMMUNITIES WITH KNOWLEDGEABLE STAFF WHO CAN ASSIST IN NAVIGATING A COMPLEX HEALTH CARE SYSTEM. THE RESOURCE CENTER STAFF BUILD BRIDGES INTO OTHER COMMUNITY ORGANIZATIONS, GOVERNMENTAL AGENCIES AND HEALTH ADVOCACY GROUPS TO PROVIDE TO THE COMMUNITY HEALTH EDUCATION AND SUPPORT SERVICES FOCUSED ON GERIATRIC, CHRONIC ILLNESS AND PHYSICALLY DISABLED CHALLENGES. SERVICES AND RESOURCES ARE PROVIDED AT THE SCAN CONNECTIONS RESOURCE CENTER IN SCAN'S OFFICE AND AT REMOTE COMMUNITY SITES.SCAN HEALTH PLAN ARIZONA HAS GROWN FROM NO MEMBERSHIP AT DECEMBER 31, 2006 AND CURRENTLY SERVES MORE THAN 8,461 ENROLLEES. THE ADDITION OF THE SCAN CLASSIC AND SCAN CONNECTIONS PROGRAMS ALLOW SCAN PERSONNEL, ESPECIALLY THE CASE MANAGEMENT TEAM, TO MORE EFFECTIVELY COORDINATE THE NEEDED HEALTH CARE SERVICES REQUIRED BY SCAN MEMBERS. FROM THE START OF OPERATIONS, THE ARIZONA COMPANIES HAVE DEVOTED NEARLY 100% OF ITS REVENUE TO THE DIRECT PROVISION OF HEALTH CARE, HOME AND COMMUNITY BASED SERVICES AND LONG TERM CARE RESIDENTIAL SERVICES. THIS REPRESENTS MORE THAN $498 MILLION OF DIRECT CARE SERVICES FOR THESE MEDICARE AND MEDICAID ENROLLEES. OF THE TOTAL AMOUNT PAID FOR MEDICAL AND RESIDENTIAL SERVICES, APPROXIMATELY 40.6% WERE DIRECTED TO LONG TERM CARE RESIDENTIAL SERVICE PROVIDERS, 24.0% WERE DIRECTED TO HOME AND COMMUNITY BASED SERVICE PROVIDERS, AND 32.6% WERE DIRECTED TO MEDICAL SERVICE PROVIDERS AND THE REMAINING 2.8% WERE DIRECTED TO CASE MANAGEMENT COORDINATION SERVICES. 106119965 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 1 1872 0 167 1 0 0 0 0 0 0 0 0 0 0 X 7 2 0 0 0 0 1 1 0 1 1 0 0 1 1 1 1 1 1 1 1 0 AZ X RAJEEV NARULA 5629895100 3800 KILROY AIRPORT WAY LONG BEACH CA 90806 X DOUGLAS JAQUES 0.40 X X 0 400281 74806 DAVID SCHMIDT 0.40 X 0 3052208 32940 TIMOTHY SCHWAB MD 0.40 X 0 828269 20761 HENRY W OSOWSKI 0.40 X 0 413288 39822 LINDA STRIKE 0.60 X 0 112156 0 DENNIS EDER 0.40 X 0 539644 80366 LEONARD KIRSCHNER 0.40 X 0 27000 0 RYAN TRIMBLE 0.40 X 0 163786 876 THOMAS LESCAULT 40.00 X 382686 0 46210 RAJEEV NARULA 5.00 X 0 301295 22805 ELIZABETH RUSSELL 5.00 X 0 419996 68191 MARC LATO 40.00 X 275966 0 34441 MAUREEN MCGURRIN 40.00 X 229461 0 22596 REBECCA LEARNER 40.00 X 0 303947 47280 JOEY ZEPEDA 40.00 X 149332 0 29974 RICHARD PEITZMEIER 40.00 X 141472 0 8142 TINA GRAHAM 40.00 X 170145 0 12128 1349062 6561870 541338 10 0 1 0 EXPRESS SCRIPTS INC 21653 NETWORK PLACE CHICAGO IL 606731216 MEDICAL SERVICES 16090237 SCOTTSDALE HEALTHCARE HOSPITALS PO BOX 29682 PHOENIX AZ 850389682 MEDICAL SERVICES 3210088 BANNER BAYWOOD MEDICAL CENTER PO BOX 2978 PHOENIX AZ 85062 MEDICAL SERVICES 3161607 BANNER BOSWELL MED CTR P O BOX 29693 PHOENIX AZ 850389693 MEDICAL SERVICES 3155416 BANNER GOOD SAM MEDICAL PO BOX 2978 PHOENIX AZ 850722978 MEDICAL SERVICES 3064574 118 MEDICARE PREMIUM 900099 88242416 88242416 PREMIUM DEFICIENCY RES 900099 -30325483 -30325483 57916933 168653 168653 58085586 57916933 0 168653 219872 219872 1448798 507636 941162 105672 19391 86281 137522 46651 90871 115037 38021 77016 3568004 346645 3221359 36423 36423 76400 76400 14737 14737 1480637 119654 1360983 2423529 5738 2417791 53034 3608 49426 2963 2963 87326 87326 62996 3368 59628 5884 391 5493 42196 18594 23602 MED SVCS FOR ELDERLY 104994482 104994482 0 0 OFFICE EQUIPMENT 19559 2859 16700 TELECOMMUNICATIONS 17987 3940 14047 0 EMPLOYEE RECOGNITION 14799 194 14605 0 LICENSE & PERMITS 13993 8743 5250 12298 50 12248 114954148 106119965 8834183 0 15528138 24996948 18597 14253 1415457 1307583 121853 62594 1893599 1193434 650989 700165 11093135 11113886 1302470 1592376 30130639 39787805 12569757 59042786 195974 105152 189050 292617 12954781 59440555 X 17175858 -19652750 17175858 -19652750 30130639 39787805 X -56868562 20039954 X 0 1 1 X 0 883637 534353 349284 1009962 659081 350881 700165 INVESTMENT IN SCAN LONG TERM CARE 9500000 C OTHER RESTRICTED INVESTEMENTS 1613886 F 11113886 DEFERRED COMPENSATION 292617 292617 58085586 114954148 -56868562 39954 20000000 20039954 -36828608 88451023 39954 30325483 30365437 58085586 0 58085586 145279631 30325483 30325483 114954148 0 114954148 PART XI, LINE 8 - OTHER ADJUSTMENTS: CAPITAL CONTRIBUTION FROM RELATED TAX-EXEMPT ORGANIZATION 20,000,000. PART XII, LINE 2D - OTHER ADJUSTMENTS: PREMIUM DEFICIENCY RESERVE - NETTED WITH REVENUE 30,325,483. PART XIII, LINE 2D - OTHER ADJUSTMENTS: PREMIUM DEFICIENCY RESERVE 30,325,483. PART X, FIN 48 FOOTNOTE TO FINANCIAL STATEMENTS: FIN 48 (ASC 740) WAS ADOPTED BY THE ORGANIZATION DURING THE YEAR ENDED DECEMBER 31, 2009. THERE HAS BEEN NO LIABILITY FOR UNCERTAIN TAX POSITIONS RECORDED ON THE FINANCIAL STATEMENTS FOR THE CURRENT YEAR. X X X X X X 1 1 1 0 0 0 0 0 0 DOUGLAS JAQUES 0 281461 0 100810 0 18010 0 40540 0 34266 0 475087 0 0 DAVID SCHMIDT 0 662524 0 285732 0 2103952 0 17150 0 15790 0 3085148 0 121631 TIMOTHY SCHWAB MD 0 358125 0 185365 0 284779 0 17150 0 3611 0 849030 0 262798 HENRY W OSOWSKI 0 267542 0 100441 0 45305 0 17150 0 22672 0 453110 0 24821 DENNIS EDER 0 358891 0 160682 0 20071 0 53792 0 26574 0 620010 0 0 RYAN TRIMBLE 0 89634 0 0 0 74152 0 0 0 876 0 164662 0 0 THOMAS LESCAULT 297806 0 64681 0 20199 0 32334 0 13876 0 428896 0 0 0 RAJEEV NARULA 0 233664 0 51977 0 15654 0 17150 0 5655 0 324100 0 0 ELIZABETH RUSSELL 0 289006 0 111459 0 19531 0 41900 0 26291 0 488187 0 0 MARC LATO 209057 0 50507 0 16402 0 17150 0 17291 0 310407 0 0 0 MAUREEN MCGURRIN 175681 0 41303 0 12477 0 15272 0 7324 0 252057 0 0 0 REBECCA LEARNER 0 211933 0 74781 0 17233 0 30056 0 17224 0 351227 0 0 JOEY ZEPEDA 114982 0 26740 0 7610 0 10361 0 19613 0 179306 0 0 0 TINA GRAHAM 131089 0 30711 0 8345 0 11326 0 802 0 182273 0 0 0 PART I, LINES 4A-C PART I, LINE 4A: DURING 2010, THE EMPLOYMENT RELATIONSHIP OF DAVID SCHMIDT, CEO, WITH SCAN HEALTH PLAN AND SCAN GROUP WAS ENDED. IN CONNECTION WITH THE TERMINATION OF MR. SCHMIDT'S EMPLOYMENT, SCAN HEALTH PLAN NEGOTIATED AND PAID SEVERANCE TO MR. SCHMIDT THAT WAS IN ACCORDANCE WITH THE TERMS OF HIS THEN EXISTING EMPLOYMENT AGREEMENT. PART I, LINE 4B: THE COMPANY PROVIDES A SUPPLEMENTAL NON-QUALIFIED RETIREMENT PLAN TO ONLY SENIOR EXECUTIVES OF THE COMPANY. SENIOR V.P. AND OFFICERS ARE ELIGIBLE TO PARTICIPATE IN THE SECTION 457(F) PLAN. THE FOLLOWING INDIVIDUALS PARTICIPATED IN THE COMPANY'S SECTION 457(F) DURING THE YEAR 2010: DAVID SCHMIDT, DENNIS EDER, TIMOTHY SCHWAB, DOUGLAS JAQUES, HENRY OSOWSKI, AND THOMAS LESCAULT. COMPENSATION PURSUANT TO THE TERMS AND CONDITIONS OF THE SECTION 457(F) PLAN, A PARTICIPANT BECOMES 100% VESTED IN THE EMPLOYER CONTRIBUTION UPON THE OCCURRENCE OF ANY OF THE FOLLOWING WHILE THE PARTICIPANT IS AN EMPLOYEE: (I) THE PARTICIPANT HAS TEN YEARS OF CONTINUOUS EMPLOYMENT, COUNTING ONLY SERVICE AFTER DECEMBER 31, 2005; (II) THE PARTICIPANT REACHES THE AGE OF 62 AND HAS FIVE YEARS OF CONTINUOUS EMPLOYMENT; (III) THE PARTICIPANT'S INVOLUNTARY TERMINATION; (IV) THE PARTICIPANT'S DISABILITY; OR (V) THE PARTICIPANT'S DEATH. THE FOLLOWING INDIVIDUALS RECEIVED PAYMENTS OUT OF THE SECTION 457(F) PLAN DURING THE YEAR: (1) TIMOTHY SCHWAB, $262,798, (2) DAVID SCHMIDT, $121,631, AND (3) HENRY OSOWSKI $24,821. PART I, LINE 4C: THE FOLLOWING INDIVIDUALS PARTICIPATED IN SCAN HEALTH PLAN'S KEYSOP PLAN DURING THE TAXABLE YEAR: TIMOTHY SCHWAB AND REBECCA LEARNER. THE PLAN IS NOW FROZEN AND NO EMPLOYEES ARE BEING NEWLY ADDED AS PARTICIPANTS. FORM 990, PART VI, SECTION A, LINE 6 THE SOLE MEMBER OF THE ORGANIZATION IS SCAN GROUP, A CALIFORNIA NONPROFIT CORPORATION. FORM 990, PART VI, SECTION A, LINE 7A THE SOLE MEMBER HAS THE POWER TO APPOINT THE MEMBERS OF THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 IS PREPARED BY DELOITTE TAX LLP, WORKING IN CONJUNCTION WITH SCAN'S FINANCE DEPARTMENT. SCAN HEALTH PLAN'S ACCOUNTING MANAGER HAS DIRECT RESPONSIBILITY FOR THIS EFFORT, SUBJECT TO SUPERVISION BY THE SCAN HEALTH PLAN ARIZONA'S CHIEF FINANCIAL OFFICER. AFTER AN INITIAL DRAFT OF THE FORM 990 IS PREPARED, IT IS CIRCULATED FOR REVIEW AND COMMENT BY RELEVANT MEMBERS OF THE EXECUTIVE TEAM WHO HAVE RESPONSIBILITY AND/OR KNOWLEDGE ABOUT THE VARIOUS MATTERS DISCLOSED AND/OR DESCRIBED IN THE FORM. THE GENERAL COUNSEL, IN PARTICULAR, REVIEWS THE FORM 990 AND ENSURES ACCURACY OF DESCRIPTIONS AND THAT DISCLOSURE IS COMPLETE. THE DRAFT FORM 990 IS REVIEWED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF SCAN GROUP, AND IS SHARED WITH ALL MEMBERS OF THE BOARD OF DIRECTORS AFTER IT IS READY FOR FILING BUT BEFORE IT IS FILED. FORM 990, PART VI, SECTION B, LINE 12C SCAN HEALTH PLAN ARIZONA REGULARLY AND CONSISTENTLY MONITORS AND ENFORCES COMPLIANCE WITH ITS CONFLICT OF INTEREST POLICY THROUGH ANNUAL CIRCULATION OF A CONFLICT OF INTEREST QUESTIONNAIRE WHICH IS REQUIRED TO BE ANSWERED BY ALL MEMBERS OF THE BOARD OF DIRECTORS, OFFICERS AND MEMBERS OF EXECUTIVE MANAGEMENT. IN ADDITION, THERE IS REGULAR EDUCATION AND ENFORCEMENT THROUGH OVERSIGHT OF SUCH POLICY AND THE SCAN HEALTH PLAN ARIZONA GIFT AND BUSINESS COURTESIES POLICY WITH RESPECT TO EACH DEPARTMENT BY MEMBERS OF THE SENIOR EXECUTIVE TEAM WITH RESPONSIBILITY FOR SUCH DEPARTMENT. THE LEGAL DEPARTMENT OF SCAN GROUP REVIEWS ALL CONTRACTUAL RELATIONSHIPS ENTERED INTO BY THE ORGANIZATION AND THE GENERAL COUNSEL OF SCAN GROUP IS RESPONSIBLE FOR MONITORING CONFLICTS OF INTEREST THROUGH THE ANNUAL CIRCULATION AND REVIEW OF THE CONFLICT OF INTEREST QUESTIONNAIRE. ACCORDINGLY, THE LEGAL DEPARTMENT OF SCAN GROUP THROUGH THE GENERAL COUNSEL IS IN A POSITION TO MONITOR AND ENFORCE COMPLIANCE WITH THE POLICY ON AN ONGOING BASIS. FORM 990, PART VI, SECTION B, LINE 15 15A: THE PROCESS FOR DETERMINING THE COMPENSATION OF THE PRESIDENT OF SCAN HEALTH PLAN ARIZONA IS CONDUCTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF SCAN HEALTH PLAN ARIZONA, ALL OF THE VOTING MEMBERS OF WHICH ARE INDEPENDENT PERSONS. IN DETERMINING THE PRESIDENT'S COMPENSATION, THE COMPENSATION COMMITTEE WORKS WITH AND RELIES UPON THE COUNSEL AND EXPERTISE OF ERNST & YOUNG, A CONSULTANT WITH WELL ESTABLISHED EXPERIENCE AND EXPERTISE IN THE AREA OF NONPROFIT ORGANIZATION EXECUTIVE COMPENSATION AND COMPLIANCE WITH THE INTERMEDIATE SANCTIONS REQUIREMENTS APPLICABLE TO SUCH COMPENSATION. ERNST & YOUNG PROVIDES AN "EXECUTIVE COMPENSATION REPORT" TO THE COMPENSATION COMMITTEE EACH YEAR WHICH FURNISHES THE BASIS FOR THE ESTABLISHMENT OF THE PRESIDENT'S COMPENSATION PACKAGE DURING THE FOLLOWING YEAR. THE ERNST & YOUNG EXECUTIVE COMPENSATION REPORT IS BASED ON A REVIEW OF THE EXECUTIVE COMPENSATION PRACTICES OF A VARIETY OF ORGANIZATIONS THAT ARE CONSIDERED COMPARABLE TO SCAN HEALTH PLAN ARIZONA BASED ON VARIOUS METRICS. THE COMPENSATION COMMITTEE DELIBERATES ON THE ISSUE OF THE PRESIDENT'S COMPENSATION PACKAGE IN LIGHT OF THE ERNST & YOUNG EXECUTIVE COMPENSATION REPORT AND QUESTIONS ARE ASKED OF, AND ANSWERED BY ERNST & YOUNG, REGARDING SUCH REPORT AND OTHER MATTERS RELEVANT TO SUCH PACKAGE. BASED ON SUCH DELIBERATIONS, THE COMPENSATION COMMITTEE MAKES A RECOMMENDATION TO THE BOARD OF DIRECTORS OF SCAN HEALTH PLAN ARIZONA REGARDING THE COMPENSATION PACKAGE FOR THE FOLLOWING YEAR. THE COMPENSATION COMMITTEE OF SCAN HEALTH PLAN ARIZONA DELIBERATES ON AND THEN VOTES ON SUCH RECOMMENDATION; THE PRESIDENT IS RECUSED FOR THE ENTIRETY OF SUCH DELIBERATIONS AND VOTE. THE MINUTES OF THE COMPENSATION FOR THESE MEETINGS ARE PREPARED SUBSTANTIALLY CONTEMPORANEOUSLY AND SUBSTANTIATE SUCH DELIBERATIONS AND DECISIONS. 15B: THE PROCESS FOR DETERMINING THE COMPENSATION OF OFFICERS OR OTHER KEY EMPLOYEES OF SCAN HEALTH PLAN ARIZONA IS CONDUCTED BY THE HUMAN RESOURCES DEPARTMENT AND PRESIDENT. IN DETERMINING SUCH EMPLOYEE'S COMPENSATION, THE HUMAN RESOURCES DEPARTMENT WORKS WITH AND RELIES UPON THE COUNSEL AND EXPERTISE OF ERNST & YOUNG, A CONSULTANT WITH WELL ESTABLISHED EXPERIENCE AND EXPERTISE IN THE AREA OF NONPROFIT ORGANIZATION EXECUTIVE COMPENSATION AND COMPLIANCE WITH THE INTERMEDIATE SANCTIONS REQUIREMENTS APPLICABLE TO SUCH COMPENSATION. ERNST & YOUNG PROVIDES AN "EXECUTIVE COMPENSATION REPORT" TO THE HUMAN RESOURCES DEPARTMENT EACH YEAR WHICH FURNISHES THE BASIS FOR THE ESTABLISHMENT OF SUCH EMPLOYEES' COMPENSATION PACKAGE DURING THE FOLLOWING YEAR. THE ERNST & YOUNG EXECUTIVE COMPENSATION REPORT IS BASED ON A REVIEW OF THE EXECUTIVE COMPENSATION PRACTICES OF A VARIETY OF ORGANIZATIONS THAT ARE CONSIDERED COMPARABLE TO SCAN HEALTH PLAN ARIZONA BASED ON VARIOUS METRICS. FORM 990, PART VI, SECTION C, LINE 19 SCAN HEALTH PLAN ARIZONA'S GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT MADE AVAILABLE TO THE PUBLIC. SCAN HEALTH PLAN ARIZONA'S AUDITED FINANCIAL STATEMENTS ARE PUBLICLY AVAILABLE FROM THE ARIZONA DEPARTMENT OF INSURANCE FOR A NOMINAL FEE. FORM 990, PART VII: RYAN TRIMBLE SERVED AS A BOARD MEMBER BETWEEN JANUARY 1, 2010 AND NOVEMBER 6, 2010. HE WAS COMPENSATED $74,152 AND RECEIVED A FORM 1099 REPORTING HIS COMPENSATION FROM SERVICES AS A BOARD MEMBER. ON NOVEMBER 7, 2010 HE ASSUMED THE ROLE OF INTERIM CEO OF SCAN HEALTH PLAN AND SCAN GROUP AND WAS COMPENSATED $89,634 AS AN EMPLOYEE OF THE ORGANIZATION AND RECEIVED A FORM W-2 FROM SCAN HEALTH PLAN FOR HIS SERVICES AS SUCH. AVG HOURS DEVOTED TO RELATED ORGANIZATION(S) WHEN RELATED COMP IS REPORTED: PART VII, SECTION A, COLUMN D REPORTS COMPENSATION PAID BY SCAN HEALTH PLAN ARIZONA FOR SERVICES PROVIDED TO SCAN HEALTH PLAN ARIZONA AND AFFILIATES. COLUMN B INCLUDES TOTAL HOURS FOR SCAN HEALTH PLAN ARIZONA ONLY. BELOW IS A BREAKDOWN OF HOURS SPENT PER AFFILIATE. THE FOLLOWING OFFICERS, KEY EMPLOYEES, AND BOARD MEMBERS OF SCAN HEALTH PLAN ARIZONA ALSO DEVOTE THE FOLLOWING TIME TO SCAN HEALTH PLAN: LINDA STRIKE - 0.8 HOURS PER WEEK DAVID SCHMIDT - 40.0 HOURS PER WEEK DENNIS EDER - 40.0 HOURS PER WEEK DOUGLAS JAQUES - 40.0 HOURS PER WEEK TIMOTHY SCHWAB - 40.0 HOURS PER WEEK RAJEEV NARULA - 40.0 HOURS PER WEEK HENRY W. OSOWSKI - 40.0 HOURS PER WEEK RYAN TRIMBLE - 40.0 HOURS PER WEEK REBECCA LEARNER - 40.0 HOURS PER WEEK ELIZABETH RUSSELL - 40.0 HOURS PER WEEK THE FOLLOWING OFFICERS, KEY EMPLOYEES, AND BOARD MEMBERS OF SCAN HEALTH PLAN ARIZONA ALSO DEVOTE THE FOLLOWING TIME TO SCAN GROUP: DAVID SCHMIDT - 40.0 HOURS PER WEEK DENNIS EDER - 40.0 HOURS PER WEEK HENRY W. OSOWSKI - 40.0 HOURS PER WEEK LINDA STRIKE - 7.1 HOURS PER WEEK TIMOTHY SCHWAB - 40.0 HOURS PER WEEK DOUGLAS JAQUES - 40.0 HOURS PER WEEK RYAN TRIMBLE - 40.0 HOURS PER WEEK REBECCA LEARNER - 40.0 HOURS PER WEEK ELIZABETH RUSSELL - 40.0 HOURS PER WEEK SCAN HEALTH PLAN AND SCAN GROUP ARE OPERATED JOINTLY. THEREFORE, THE FOLLOWING INDIVIDUALS REPORTED ABOVE SPEND AN AVERAGE OF 40 HOURS PER WEEK BETWEEN THE TWO ORGANIZATIONS, AND THEREFORE ARE REPORTED AS WORKING 40 HOURS PER WEEK FOR EACH: DAVID SCHMIDT DENNIS EDER RAJEEV NARULA DOUGLAS JAQUES HENRY W. OSOWSKI TIMOTHY SCHWAB RYAN TRIMBLE REBECCA LEARNER ELIZABETH RUSSELL THE FOLLOWING OFFICERS, KEY EMPLOYEES, AND BOARD MEMBERS OF SCAN HEALTH PLAN ARIZONA ALSO DEVOTE THE FOLLOWING TIME TO SCAN FOUNDATION: DAVID SCHMIDT - 1.5 HOURS PER WEEK DENNIS EDER - 2.0 HOURS PER WEEK DOUGLAS JAQUES - 2.0 HOURS PER WEEK LINDA STRIKE - 2.0 HOURS PER WEEK RYAN TRIMBLE - 1.5 HOURS PER WEEK THE FOLLOWING OFFICERS, KEY EMPLOYEES, AND BOARD MEMBERS OF SCAN HEALTH PLAN ARIZONA ALSO DEVOTE THE FOLLOWING TIME TO SCAN LONG TERM CARE: TIMOTHY SCHWAB - 0.4 HOURS PER WEEK DAVID SCHMIDT - 0.4 HOURS PER WEEK DENNIS EDER - 0.4 HOURS PER WEEK DOUGLAS JAQUES - 0.4 HOURS PER WEEK LINDA STRIKE - 0.6 HOURS PER WEEK HENRY W. OSOWSKI - 0.4 HOURS PER WEEK LEONARD KIRSCHNER - 0.4 HOURS PER WEEK RYAN TRIMBLE - 0.4 HOURS PER WEEK RAJEEV NARULA - 5.0 HOURS PER WEEK ELIZABETH RUSSELL - 5.0 HOURS PER WEEK THE 40 HOURS PER WEEK DISCLOSED IN COLUMN B FOR THOMAS LESCAULT, MARC LATO, MAUREEN MCGURRIN, TINA GRAHAM, JOEY ZEPEDA, AND RICHARD PEITZMEIER ARE SPLIT BETWEEN SCAN HEALTH PLAN ARIZONA AND SCAN LONG TERM CARE. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED GAINS ON INVESTMENTS: 39,954. CAPITAL CONTRIBUTION FROM RELATED TAX-EXEMPT ORGANIZATION 20,000,000. TOTAL TO FORM 990, PART XI, LINE 5: 20,039,954. SCAN HEALTH PLAN 3800 KILROY AIRPORT WAY LONG BEACH CA 90806 953858259 MEDICARE ADVANTAGE CA 501 (C)(3) LINE 9 SCAN GROUP 0 THE SCAN FOUNDATION 3800 KILROY AIRPORT WAY LONG BEACH CA 90806 450552845 GRANT MAKING CA 501 (C)(3) LINE 11, TYPE II SCAN GROUP 0 SCAN LONG TERM CARE 3800 KILROY AIRPORT WAY LONG BEACH CA 90806 204607594 MEDICAID MGMT. CARE AZ 501 (C)(4) SCAN HEALTH PLAN ARIZONA 1 SCAN GROUP 3800 KILROY AIRPORT WAY LONG BEACH CA 90806 953826037 ADMIN. SUPPORT CA 501 (C)(3) LINE 11, TYPE II N/A 0 0 0 1 0 0 0 0 0 0 0 0 0 1 1 1 1 0 0 SCAN LONG TERM CARE P 989405 SEE PART VII SCAN HEALTH PLAN O 1666318 SEE PART VII SCAN GROUP O 1910375 SEE PART VII SCAN LONG TERM CARE N 9475689 SEE PART VII SCAN GROUP C 20000000 CAPITAL CONTRIBUTION - CASH SCAN LONG TERM CARE M 325000 SEE PART VII SCHEDULE R, PART VII THE PERCENTAGE OF ALLOCATION TO AFFILIATED COMPANIES IS DETERMINED BASED ON ESTIMATED PERCENTAGE OF TIME WORKED, PERCENTAGE OF HEADCOUNTS, AND THE PERCENTAGE OF SCAN MEMBERSHIP, AS APPROPRIATE BASED ON THE NATURE OF THE EXPENSE.