Corewell Health

“The members of the board of directors of priority health are also members of the board of directors for priority health managed benefits, inc. ("phmb") (ein 38-3085182), a sister company and wholly owned subsidiary of spectrum health system, the parent organization. Phmb is a taxable organization that provides support services to priority health. Pursuant to the definitions in the instructions to this tax return, board members are not considered independent if they serve on the board of taxable organizations doing business with the organization (even though there is common ownership). As such, the organization reports zero independent board members. However, it should be noted that there are twelve members of the board of directors that would meet the independence definition if not for the phmb board member conflict.”

“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”

“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.”

“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.”

“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"); 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 c”

“The review process for this form 990 is as follows: 1. Preparation of the return is supervised and reviewed by the organization's corporate tax manager. 2. A second review is performed by an external cpa firm with expertise in tax-exempt return preparation. 3. The return is reviewed by the organization's finance and legal departments and presented to the finance and audit committee who is responsible for approving the return for filing and distribution to the board of directors. 4. The return is sent to the members of the board of directors. 5. The organization's chief financial officer reviews comments or questions received by members of the board of directors, if any, to address or to incorporate, as appropriate, into the return prior to filing.”

“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 organization's legal 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 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”

“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 was based on the following independent surveys of health care executives at comparable health systems, health plans, and medical groups: * american medical group association: 2012 medical group compensation & financial survey * integrated healthcare strategies: 2012 health care executive compensation survey * mercer human resources consulting: 2012 executive compensation survey * mercer human resources consulting: 2012 integrated health networks compensation survey * medical group management association: 2012 management compensation survey * sullivan, cotter and associates: 2012 survey of manager and executive compensation in hospitals and health systems * sullivan, cotter and associates: 2012 physician compensation and productivity survey report * towers watson: 2012/2013 hospital and healthcare management compensation report * towers watson: 2012/2013 top management compensation report * warren: 2012 compensation survey compensation adjustments are approved by executive committee members, consistent with the spectrum health compensation philosophy described below. Minutes of committee discussions and decisions are prepared to memorialize executive committee decisions based upon the above data. Cash compensation data relied upon by the executive committee is national and reflects the compensation paid to executives in comparable jobs in comparably-sized healthcare organizations. Spectrum health recruits nationally for its executives. Benefits data reflect national healthcare market practices. Geographic pay differential and cost of living data 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).”

“See explanation provided for form 990, part vi, line 15a.”

“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").”

“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 continually reviewed 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. 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.”

“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.”

“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 health care to its members. Priority health has built a long history of offering michigan employees 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 pursues initiatives that will improve patient outcomes while helping to reduce the overall cost to the member. In 2013, in addition to programs that were implemented in prior years, priority health lowered health costs across all lines of business by over $13 million through new managed care initiatives that influence physician practices, promote appropriate health care utilization and increase quality which extends beyond priority health's members. 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 health care 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 health care 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 46% of the membership base. Priority health provided community-rated affordable health insurance to 83,000 members who are individuals and small groups in 2013. Priority health also provides capital support for its wholly owned subsidiary, priority health choice, inc., which provides access to excellent health care to over 75,000 medicaid members. The michigan department of insurance and financial services announced the state would permit insurers to decide whether they would continue offering policies that are not compliant with the affordable care act (aca), which became permissible when the federal government delayed the required shift to aca-approved insurance coverage. Priority health continued to offer all of its pre-aca plans for 2014, while major competitors shut down plans. The decision to extend the 2013 pre-aca plans for coverage through 2014 is consistent with the company'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 t”

“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. Priority health shares risk with providers and employers by offering over $30 million of incentives and other risk sharing arrangements. This promotes lower overall health care costs and improved quality to the community. It has paid $200 million in support of primary care over and above standard payment since the program launched in 1996. 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 health care more affordable and enhancing the patient experience. It is the largest patient-centered medical homes project in the nation with 38 physician/physician hospital organizations representing nearly 400 primary care practices and 1,800 primary care physicians. Within the spectrum health system, individuals and teams are recognized for quality in action through the annual awards program called synergy awards. The oncology medical home team was nominated for the 2013 greatest improvement synergy award and won the award for this category. 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. 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. Priority health partnered with the national kidney foundation of michigan to offer a free diabetes prevention program across the state of michigan. This program is led by a certified lifestyle coach who teaches participants about nutrition and stress reduction. The coach works one-one-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 10th percentile performance. Additionally, through nationally recognized models, the cost (and prevalence) of common diabetes complications for priority health members with diabetes is significantly below national and michigan rates. 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 heal”

“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. 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 240,000 people across michigan. As a result of priority health's work with the community and dedication to offering plans that deliver high quality, its medicare advantage plans have received the highest star rating in michigan by the centers for medicare and medicaid services (cms). Of the 46 quality and improvements metrics used to determine our overall quality rating of 4.5, approximately 54% 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. Priority health enrolled 42.1% of the individuals who purchased a mapd plan from october 15 - december 7, 2013 during the 2014 medicare annual enrollment period (aep). Priority health's medicare advantage enrollment includes about 81,000 medicare advantage members, or just over 26% of the total market, making priority health the leader in michigan. After adding 8 counties to the service area, medicare advantage is now offered in 58 counties in michigan's lower peninsula. Priority health's network has more than 23,000 providers and a member retention rate of 97%. In 2012, priority health launched home based primary care (hbpc) as a pilot with our affiliate, spectrum health medical group (shmg). In 2013, priority health engaged just over 130 high cost members into this program and is eager to expand this program. 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. In kent, ottawa, and allegan counties, there are over 1,100 priority health patients utilizing spectrum health services with 5 or more chronic conditions. Based on data from priority health, these patients generate over $44.5m in health care cost each year, or about $40,000 per patient. The pilot study has demonstrated that the hbpc model has saved approximately 36% of this cost for the initial control group of patients. Priority health had gross savings of approximately $430,000 during 2013 and decreased days spent in acute care, emergency room visits and specialist's visits by more than 40%. Priority health was a 2013 pinnacle award recipient in the care management for medicare populations for its home based primary care initiative. Priority health implemented a robust medication therapy management (mtm) program in 2011 in partnership with a vendor solution. 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, health care providers, and the health care 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 pharmacist will work with patient”

“Wellness for more than 20 years, prevention and wellness have been the foundation of priority health's approach to health care. 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 marks the second consecutive year that priority health has earned michigan's only accreditation for wellness by the ncqa. 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 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 2013, over 220 hours of wellness classes and health fairs were provided to the community to promote healthy living. Specifically, priority health sponsors programs within the community such as bike clinics, cycling teams which also put on clinics in schools and provides free helmets to children, walks and various other school or community events to promote healthier living. Priority health also sponsors or produces community education programs, health fairs, walks/runs/triathlons, and newsletters. This includes the gran fondo, a cycling event to actively engage the community while accelerating skin awareness, prevention and research. The inaugural ride on saturday, june 29, 2013 drew 1,500 cyclists from 15 states from as far away as oregon and canada. The effort generated $138,000 in support of the msu college of human medicine mission, with 100% of every dollar raised benefiting skin awareness, prevention and research. Riders pedaled anywhere from 12 miles to 80 miles across the rolling scenic terrain of west michigan. In addition to the gran fondo, priority health sponsored the arts in motion run/walk benefitting michigan youth arts and new non-profit partner 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. The 5th annual priority health arts in motion 5k/10k attracted 450 runners and walkers. Priority health also sponsored shape michigan, a program focused on reducing the growing obesity rate among michigan residents. Shape michigan encourages employers to drive participation in their workplace wellness programs by rewarding employees for good behavior that improves their health. Priority health estimates that employers over the last 3 years that used its healthbychoice wellness-based plan saved $2.7 million from medical claims that were avoided and lower absenteeism rates. Of people enrolled in healthbychoice, 38 percent reduced their body mass index, 50 percent reduced their blood pressure and nearly half quit smoking. Priority health participates in partnership with maranda, a west michigan news celebrity, 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. 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 offers a free healthy lifestyle program for overweight children and their families through the fit kids 360 program. Fit kids 360 is for children age 5 to 16 who have a body mass index (bmi) at or above the 85 percentile (the medical definition of overweight). It combines education about nutrition, behavioral health and physical activity with opportunities for exercise and other activities. Priority healt”

“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.”

“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.”

“Net unrealized gain (loss) on subsidiaries - 14380926; change in nonadmitted assets - 8475445;”

“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.”