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      <Description>PHYSICIANS HEALTH PLAN OF MID-MICHIGAN - FAMILYCARE (PHPMM-FC) IS A NON-PROFIT HEALTH MAINTENANCE ORGANIZATION (HMO). PHPMM-FC USES A PRIMARY CARE CONCEPT FOR DELIVERING HEALTH CARE IN A HEALTH DELIVERY NETWORK (HDN) STRUCTURE. IT ARRANGES FOR THE PROVISION OF COMPREHENSIVE OUTPATIENT AND INPATIENT MEDICAL AND SURGICAL SERVICES TO MEMBERS AND THEIR QUALIFIED DEPENDENTS ON THE BASIS OF A FIXED PREPAID SUM WITHOUT REGARD TO THE FREQUENCY OR EXTENT OF SERVICES FURNISHED TO ANY PARTICULAR MEMBER OR QUALIFIED DEPENDENT. PHPMM-FC CONTRACTS WITH VARIOUS HDNS WHO PROVIDE HEALTHCARE SERVICES TO MEMBERS. PHPMM-FC'S COMMITMENT IS TO DEVELOP AND DELIVER QUALITY MANAGED CARE PRODUCTS AT A REASONABLE COST FOR ITS MEMBERS. PHPMM-FC'S SUCCESS IN MANAGING HEALTHCARE IS DUE IN PART TO THE EXTENSIVE NETWORK OF PARTICIPATING PROVIDERS IN THE HDN NETWORK. THE HMO/HDN CONTRACTUAL ARRANGEMENTS ALLOW PHPMM-FC TO ARRANGE FOR HEALTHCARE TO PATIENTS COVERED BY THE STATE OF MICHIGAN'S MEDICAID BENEFIT PLAN. THIS ARRANGEMENT ALLOWS THE MEMBERS TO ACCESS A WIDE VARIETY OF INDEPENDENT PROVIDERS WITHIN EACH HDN INCLUDING PHYSICIANS, HOSPITALS, PHARMACIES, SKILLED NURSING FACILITIES, AND ALLIED HEALTH PROFESSIONALS. PHPMM-FC MEMBERS MAY ALSO RECEIVE CARE FOR SERVICES FROM A NONPARTICIPATING PROVIDER IF SUCH A REFERRAL IS RECOMMENDED BY AN HDN PARTICIPATING PHYSICIAN AND THE SERVICE REQUIRED FOR TREATMENT, AS DETERMINED BY THE HDN, IS NOT AVAILABLE WITHIN THE HDN'S NETWORK. PHPMM-FC OFFERS A VARIETY OF HEALTH CARE PROGRAMS. PHPMM-FC OFFERS CHOICES THAT PROVIDE COVERAGE WITHIN THE NETWORK OF CONTRACTED HDN'S PROVIDERS, LIMITED COVERAGE OUTSIDE OF THE PHPMM-FC NETWORK, VARIOUS LEVELS OF DEDUCTIBLES, COPAYMENTS, AND COVERAGE LIMITS, ALL OF WHICH ARE DESIGNED TO BE RESPONSIVE TO PAYOR NEEDS. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN - FAMILY CARE IS OWNED BY PHYSICIANS HEALTH PLAN OF MID-MICHIGAN. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN (PHPMM) IS OWNED BY SPARROW HEALTH SYSTEM. PHPMM CONSISTS OF A COMMERCIAL HMO CALLED PHYSICIANS HEALTH PLAN OF MID-MICHIGAN (PHPMM), A COMMERCIAL INSURANCE COMPANY (PHPMM-IC), AND A MEDICAID HEALTH PLAN THAT OPERATES THROUGH A SEPARATE CORPORATION. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN FAMILYCARE (PHPMM-FC) IS ALSO A LICENSED HMO. ALL STAFFING FUNCTIONS AND REPORTING ARE ACCOMPLISHED THROUGH THE USE OF THE SAME STAFF AS PHPMM. UNLESS SPECIFICALLY NOTED, ALL REFERENCES TO PHPMM APPLY TO PHPMM-IC, AND PHPMM-FC AND ALL REFERENCES TO PHP INCLUDE THE ENTIRE PHP AFFILIATED GROUP. PHPMM'S SERVICE AREA INCLUDES THE MICHIGAN COUNTIES OF INGHAM, EATON, CLINTON, SHIAWASSEE, GRATIOT, IONIA, MONTCALM AND ISABELLA. PHPMM-IC OFFERS PRODUCTS ACROSS MICHIGAN. THE FAMILYCARE PRODUCT IS AVAILABLE TO MEDICAID ENROLLEES IN EATON, CLINTON, INGHAM, IONIA, MONTCALM AND SHIAWASSEE COUNTIES. AS OF DECEMBER 31, 2010, THERE WERE 35,129 ENROLLEES IN PHPMM'S COMMERCIAL HMO, 12,208 IN TPA, 2,993 IN PHP-IC, AND 18,789 ENROLLEES IN FAMILYCARE. PHP CONTRACTS DIRECTLY WITH 719 PRIMARY CARE PHYSICIANS, 1269 SPECIALTY CARE PHYSICIANS, 365 ALLIED HEALTH PROFESSIONALS, AND 308 ORGANIZATIONAL PROVIDERS THAT INCLUDE 29 HOSPITALS. PHP WAS ALSO RANKED AMONG THE TOP 50 OF AMERICA'S BEST HEALTH PLANS BY U.S. NEWS AND WORLD REPORT/CONSUMER REPORTS FOR THE 5TH CONSECUTIVE YEAR. NCQA USES AN ALGORITHM COMPOSED OF HEDIS, CAHPS AND ACCREDITATION SCORING TO CREATE THESE NATIONAL RANKINGS. THE GOAL OF THE QUALITY IMPROVEMENT PROGRAM IS TO CONTINUOUSLY IMPROVE HEALTH OUTCOMES AND LEVEL OF SERVICE PROVIDED TO ENROLLEES. PHP PURSUES ITS GOALS THROUGH IMPLEMENTATION OF THE QUALITY IMPROVEMENT MODEL: -MEASUREMENT OF THE OUTCOMES OF CARE AND SERVICE, INCLUDING BEHAVIORAL HEALTH SERVICES. -ANALYSIS OF BARRIERS TO CARE AND SERVICE. -DEVELOPMENT AND IMPLEMENTATION OF INTERVENTIONS. -FORMAL EVALUATION OF THE EFFECTIVENESS OF THE INTERVENTIONS. PHP MEASURES THE QUALITY OF CARE PROVIDED TO ITS ENROLLEES THROUGH ANNUAL REVIEW OF INDICATORS SUCH AS: -DISEASE MANAGEMENT PROGRAM PARTICIPATION. -QUALITY OF CARE CONCERNS. -HEDIS MEASURES - THE HEALTH PLAN EFFECTIVENESS DATA AND INFORMATION SET (HEDIS) IS A GROUP OF NATIONALLY RECOGNIZED MEASURES OF PERFORMANCE IN A VARIETY OF CLINICAL AND NON-CLINICAL AREAS. PHPMM USES THE EFFECTIVENESS OF CARE MEASURES TO DETERMINE PROGRESS AND IMPROVEMENT IN AREAS SUCH AS: DIABETES. -ASTHMA. -DEPRESSION AND FOLLOW-UP AFTER MENTAL HEALTH ADMISSIONS. -BREAST AND CERVICAL CANCER SCREENING. -USE OF BETA-BLOCKERS AFTER HEART ATTACKS. -CHILD AND ADOLESCENT IMMUNIZATIONS. -CHOLESTEROL MANAGEMENT. -CONTROLLING HIGH BLOOD PRESSURE. -SMOKING CESSATION. -PRENATAL AND POSTPARTUM CARE. -TREATMENT OF CHILDHOOD RESPIRATORY INFECTIONS. PHP MEASURES THE QUALITY OF SERVICE PROVIDED TO ITS ENROLLEES BY THE REVIEW OF PERFORMANCE MEASURES RELATED TO: -ACCESS AND AVAILABILITY. -ENROLLEE COMPLAINTS AND APPEALS. -CUSTOMER SERVICE TELEPHONE ACCESS PERFORMANCE. -MEMBER ASSESSMENT: THE CONSUMER ASSESSMENT OF HEALTHCARE PROVIDERS AND SYSTEMS (CAHPS) SURVEY GIVES A GENERAL INDICATION OF HOW WELL THE ORGANIZATION MEETS MEMBERS' EXPECTATIONS. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN RECEIVED THE HIGHEST RATING OF "EXCELLENT" FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA). THIS STATUS IS GRANTED TO HEALTH CARE PLANS THAT HAVE DEMONSTRATED CONTINUOUS QUALITY IMPROVEMENT IN THEIR PROGRAMS WHILE MEETING OR EXCEEDING NCQA'S RIGOROUS ACCREDITATION STANDARDS. PHP FAMILY CARE RECEIVED A COMMENDABLE RATING. PHPMM AND PHPMM-FC WERE REVIEWED BY NCQA IN 2009. THE SERVICE EXCELLENCE PROGRAM HAS A MISSION OF: PROVIDING FOCUSED LEADERSHIP TO CREATE AND MAINTAIN A CULTURE OF WORLD CLASS CUSTOMER SATISFACTION. IN 2010 PHPMM WAS RANKED ABOVE THE 90TH PERCENTILE IN SATISFACTION WITH CUSTOMER SERVICE AND WAS THE HIGHEST RANKED HEALTH PLAN IN MICHIGAN. THIS WAS YEAR FOUR OF A HIGHLY STRUCTURED AND GOAL ORIENTED APPROACH TO MEMBER SATISFACTION AND EMPLOYEE ENGAGEMENT. THE PROGRAM IS A "TOP DOWN BOTTOM UP" APPROACH TO CHANGING THE CULTURE OF SERVICE. SERVICE EXCELLENCE ADVISORS ARE FRONT LINE STAFF TRAINED TO PRESENT A TWO HOUR CLASS TO ALL ASSOCIATES IN THE HEALTH PLAN. THE BOOK A COMPLAINT IS A GIFT BY JANELLE BARLOW WAS THE BASIS FOR THE 2010 TRAINING. -CAPITALIZING ON COMPLAINTS -HOW TO SAY NO AND REMAIN FRIENDS -BUILDING A CUSTOMER TOLERANCE ZONE -THE GIFT FORMULA OUR 2010 CAHPS SCORES FOR THE COMMERCIAL PRODUCT RESULTED IN A RANKING OF 1 IN MICHIGAN FOR CUSTOMER SERVICE AND 4 FOR THE OVERALL HEALTH PLAN RANKING. NATIONALLY, PHPMM'S COMMERCIAL PRODUCT WAS RANKED 40TH FOR OVERALL HEALTH PLAN RANKING. CUSTOMER SATISFACTION AND ASSOCIATE ENGAGEMENT ARE CLOSELY RELATED. WEBSTER DEFINES ENGAGEMENT AS "EMOTIONAL INVOLVEMENT OR COMMITMENT." EVERY CUSTOMER WANTS SOMEONE TO PARTNER WITH THEM, TO SHOW CONCERN AND BE COMMITTED TO THEIR ISSUE AT HAND. MAINTAINING AN ENGAGED WORKFORCE IS THE FOUNDATION FOR DELIVERING COMPASSIONATE AND EXCEPTIONAL SERVICE. PHP PARTICIPATES IN A HEALTH SYSTEM WIDE ANNUAL ASSOCIATE ENGAGEMENT SURVEY CONDUCTED BY KENEXA. THE NATIONALLY RECOGNIZED SURVEY MEASURES ELEVEN DIMENSIONS OF THE WORKFORCE AND PROVIDES REPORTS TO DEPARTMENT TEAMS. THE 2010 SURVEY REPORTED PHP ASSOCIATE ENGAGEMENT LEVEL IN THE 93RD PERCENTILE. FOLLOWING THE ANNUAL SURVEY, PHP INVITES ALL ASSOCIATES TO PARTICIPATE IN GROUP DISCUSSIONS LED BY FRONT LINE STAFF WHERE RESULTS ARE REVIEWED AND IDEAS FOR IMPROVEMENT ARE WELCOMED. TEAMS MAKE RECOMMENDATIONS, THE BEST OF WHICH ARE IMPLEMENTED. OVER THE YEARS, CHANGES HAVE OCCURRED THAT HAVE BECOME PART OF THE PHP WAY OF DOING BUSINESS. SOME OF THOSE INCLUDE: CROSS FUNCTIONAL COMMUNICATION TEAMS, MONTHLY ALL STAFF MEETING UPDATES, ENHANCED ON-LINE ACCESS TO INFORMATION, NEW APPROACHES TO TRAINING, IMPROVED REFERENCE RESOURCES AND MANY MORE. COMMITMENT AND INVOLVEMENT DESCRIBE OUR EXPECTATION FOR STAFF. MAINTAINING A HIGH LEVEL OF ASSOCIATE ENGAGEMENT IS A VERY IMPORTANT PART OF PHP'S DEDICATED EFFORT TO PROVIDE OUTSTANDING SERVICE AND TO ACHIEVE NATIONAL RANKINGS IN OVERALL CUSTOMER SATISFACTION. PROCESS IMPROVEMENTS DESIGNED TO ENSURE THAT PHP MAXIMIZED THE AUTOMATED CAPABILITIES OF ITS CLAIMS PAYMENT SYSTEM WERE THE FOCUS FOR THE INFORMATION TECHNOLOGY DEPARTMENT. AS A RESULT OF THESE EFFORTS, PHP EXPERIENCED EXCELLENT ELECTRONIC DATA INTERCHANGE (EDI) AND AUTO-ADJUDICATION RATES AS WELL AS A REDUCTION IN CLAIM TURNAROUND TIME. PHP ENDED 2010 WITH AN AUTO ADJUDICATION RATE OF 76%, AND AN EDI RATE OF 92%. DAYS RECEIPT ON HAND OF CLAIMS WAS REDUCED FROM 2.4 TO 1.96. 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        <ReportableCompFromOrganization>0</ReportableCompFromOrganization>
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        <NamePerson>MARY ANNE SESTI</NamePerson>
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        <ReportableCompFromOrganization>0</ReportableCompFromOrganization>
        <ReportableCompFromRelatedOrgs>129549</ReportableCompFromRelatedOrgs>
        <OtherCompensation>22114</OtherCompensation>
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        <ReportableCompFromRelatedOrgs>124778</ReportableCompFromRelatedOrgs>
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        <HighestCompensatedEmployee>X</HighestCompensatedEmployee>
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        <ReportableCompFromRelatedOrgs>121826</ReportableCompFromRelatedOrgs>
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        <OtherCompensation>32401</OtherCompensation>
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        <NamePerson>GARY REETZ</NamePerson>
        <Title>FORMER DIREC</Title>
        <Former>X</Former>
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        <ReportableCompFromRelatedOrgs>212575</ReportableCompFromRelatedOrgs>
        <OtherCompensation>20009</OtherCompensation>
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      <TotalCompGT150K>true</TotalCompGT150K>
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        <Description>MEDICAID PAYMENTS</Description>
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        <Securities>57833</Securities>
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        <Securities>55600</Securities>
      </LessCostOthBasisSalesExpenses>
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      <NetGainOrLossInvestments>
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        <RelatedOrExemptFunctionIncome>240359</RelatedOrExemptFunctionIncome>
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      <TotalOtherRevenue>240359</TotalOtherRevenue>
      <TotalRevenue>
        <TotalRevenueColumn>56299633</TotalRevenueColumn>
        <RelatedOrExemptFunctionIncome>55921667</RelatedOrExemptFunctionIncome>
        <ExclusionAmount>377966</ExclusionAmount>
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      <BenefitsToMembers>
        <Total>37559704</Total>
        <ProgramServices>37559704</ProgramServices>
      </BenefitsToMembers>
      <CompCurrentOfficersDirectors>
        <Total>316633</Total>
        <ManagementAndGeneral>316633</ManagementAndGeneral>
      </CompCurrentOfficersDirectors>
      <FeesForServicesManagement>
        <Total>1806122</Total>
        <ManagementAndGeneral>1806122</ManagementAndGeneral>
      </FeesForServicesManagement>
      <FeesForServicesLegal>
        <Total>30</Total>
        <ManagementAndGeneral>30</ManagementAndGeneral>
      </FeesForServicesLegal>
      <FeesForServicesAccounting>
        <Total>94701</Total>
        <ManagementAndGeneral>94701</ManagementAndGeneral>
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      <FeesForServicesInvstMgmntFees>
        <Total>18307</Total>
        <ManagementAndGeneral>18307</ManagementAndGeneral>
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        <ProgramServices>44100</ProgramServices>
        <ManagementAndGeneral>396566</ManagementAndGeneral>
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      <Advertising>
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        <ProgramServices>92736</ProgramServices>
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      <OfficeExpenses>
        <Total>63194</Total>
        <ProgramServices>7267</ProgramServices>
        <ManagementAndGeneral>55927</ManagementAndGeneral>
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      <ConferencesMeetings>
        <Total>7685</Total>
        <ManagementAndGeneral>7685</ManagementAndGeneral>
      </ConferencesMeetings>
      <Interest>
        <Total>7390</Total>
        <ManagementAndGeneral>7390</ManagementAndGeneral>
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      <OtherExpenses>
        <Description>GME EXPENSE</Description>
        <Total>14188662</Total>
        <ProgramServices>14188662</ProgramServices>
      </OtherExpenses>
      <OtherExpenses>
        <Description>ALLOCATED SALARIES AND WA</Description>
        <Total>1503695</Total>
        <ProgramServices>1503695</ProgramServices>
      </OtherExpenses>
      <OtherExpenses>
        <Description>MISCELLANEOUS</Description>
        <Total>201298</Total>
        <ProgramServices>108701</ProgramServices>
        <ManagementAndGeneral>92597</ManagementAndGeneral>
      </OtherExpenses>
      <OtherExpenses>
        <Description>MAINTENANCE CONTRACTS</Description>
        <Total>195963</Total>
        <ProgramServices>19596</ProgramServices>
        <ManagementAndGeneral>176367</ManagementAndGeneral>
      </OtherExpenses>
      <OtherExpenses>
        <Description>BANKING FEES</Description>
        <Total>56827</Total>
        <ManagementAndGeneral>56827</ManagementAndGeneral>
      </OtherExpenses>
      <TotalFunctionalExpenses>
        <Total>56553613</Total>
        <ProgramServices>53524461</ProgramServices>
        <ManagementAndGeneral>3029152</ManagementAndGeneral>
        <Fundraising>0</Fundraising>
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      <SavingsAndTempCashInvestments>
        <BOY>7257897</BOY>
        <EOY>6246351</EOY>
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      <AccountsReceivable>
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        <EOY>451785</EOY>
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      <InvestmentsPubTradedSecurities>
        <BOY>5820728</BOY>
        <EOY>6229025</EOY>
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      <TotalAssets>
        <BOY>14200136</BOY>
        <EOY>12927161</EOY>
      </TotalAssets>
      <AccountsPayableAccruedExpenses>
        <BOY>6473211</BOY>
        <EOY>5308106</EOY>
      </AccountsPayableAccruedExpenses>
      <DeferredRevenue>
        <BOY>227214</BOY>
        <EOY>3197</EOY>
      </DeferredRevenue>
      <OtherLiabilities>
        <BOY>671360</BOY>
        <EOY>974838</EOY>
      </OtherLiabilities>
      <TotalLiabilities>
        <BOY>7371785</BOY>
        <EOY>6286141</EOY>
      </TotalLiabilities>
      <FollowSFAS117>X</FollowSFAS117>
      <UnrestrictedNetAssets>
        <BOY>6828351</BOY>
        <EOY>6641020</EOY>
      </UnrestrictedNetAssets>
      <TotalNetAssetsFundBalances>
        <BOY>6828351</BOY>
        <EOY>6641020</EOY>
      </TotalNetAssetsFundBalances>
      <TotalLiabNetAssetsFundBalances>
        <BOY>14200136</BOY>
        <EOY>12927161</EOY>
      </TotalLiabNetAssetsFundBalances>
      <ReconcilationRevenueExpenses>-253980</ReconcilationRevenueExpenses>
      <ReconcilationOtherChanges>66649</ReconcilationOtherChanges>
      <MethodOfAccountingAccrual>X</MethodOfAccountingAccrual>
      <AccountantCompileOrReview>false</AccountantCompileOrReview>
      <FSAudited>true</FSAudited>
      <AuditCommittee>true</AuditCommittee>
      <FinancialStatementBoth>X</FinancialStatementBoth>
      <FederalGrantAuditRequired>false</FederalGrantAuditRequired>
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    <IRS990ScheduleD documentId="RetDoc1">
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      <DisclosedForCharitablePurposes>false</DisclosedForCharitablePurposes>
      <WrittenPolicyMonitoring>false</WrittenPolicyMonitoring>
      <Sect170hRequirementsSatisfied>false</Sect170hRequirementsSatisfied>
      <SolicitedAssetsForSale>false</SolicitedAssetsForSale>
      <AgentTrusteeEtc>false</AgentTrusteeEtc>
      <IncludedOnFS>false</IncludedOnFS>
      <CurrentYear>
        <BeginningOfYearBalance>1550687</BeginningOfYearBalance>
        <Contributions>163793</Contributions>
        <InvestmentEarningsOrLosses>65279</InvestmentEarningsOrLosses>
        <EndOfYearBalance>1779759</EndOfYearBalance>
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        <Contributions>134195</Contributions>
        <InvestmentEarningsOrLosses>109310</InvestmentEarningsOrLosses>
        <EndOfYearBalance>1550687</EndOfYearBalance>
      </CurrentYearMinus1Year>
      <PermanentEndowmentEOYBalance>1.00000</PermanentEndowmentEOYBalance>
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      <EndowmentsHeldByRelatedOrgs>true</EndowmentsHeldByRelatedOrgs>
      <AreRelatedOrgsListedScheduleR>true</AreRelatedOrgsListedScheduleR>
      <OtherLiabilities>
        <Description>RELATED PARTY PAYABLE</Description>
        <Amount>974838</Amount>
      </OtherLiabilities>
      <TotalOfAmounts>974838</TotalOfAmounts>
      <TotalRevenue>56299633</TotalRevenue>
      <TotalExpenses>56553613</TotalExpenses>
      <ExcessOrDeficitForYear>-253980</ExcessOrDeficitForYear>
      <NetUnrealizedGLOnInvestments>66649</NetUnrealizedGLOnInvestments>
      <TotalAdjustments>66649</TotalAdjustments>
      <ExcessOrDeficitPerFS>-187331</ExcessOrDeficitPerFS>
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      <NetUnrealizedGainsInvestments>66649</NetUnrealizedGainsInvestments>
      <RevenueNotRptdF990>66649</RevenueNotRptdF990>
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      <TotalExpensesPerForm990>56553613</TotalExpensesPerForm990>
      <Form990ScheduleDPartXIV>
        <Identifier>INTENDED USES FOR ENDOWMENT FUNDS</Identifier>
        <ReturnReference>SCHEDULE D, PAGE 2, PART V, LINE 4</ReturnReference>
        <Explanation>PHP OF MID-MICHIGAN FAMILY CARE DOES NOT HOLD ENDOWMENTS. THE ENDOWMENTS ARE HELD BY SPARROW FOUNDATION. SPARROW HEALTH SYSTEM IS THE SOLE MEMBER OF BOTH PHP OF MID-MICHIGAN AND SPARROW FOUNDATION. PHP OF MID-MICHIGAN IS THE SOLE MEMBER OF PHP OF MID-MICHIGAN FAMILY CARE. THE ENDOWMENTS ARE MAINTAINED TO PROVIDE A PERMANENT SOURCE OF INCOME, WITH THE STIPULATION THE PRINCIPAL IS KEPT INTACT IN PERPETUITY AND THE INCOME GENERATED FROM INVESTMENTS OF THE ENDOWMENT FUNDS CAN BE USED FOR THE PURPOSE OF ESTABLISHMENT BY THE ENDOWMENT.</Explanation>
      </Form990ScheduleDPartXIV>
      <Form990ScheduleDPartXIV>
        <Identifier>SUPPLEMENTAL FINANCIAL INFORMATION</Identifier>
        <ReturnReference>SCHEDULE D, PAGE 4, PART XIV</ReturnReference>
        <Explanation>SCHEDULE D, PART XI SEPARATE AUDITED FINANCIAL STATEMENTS WERE PREPARED FOR PHP OF MID-MICHIGAN FAMILY CARE UNDER STATUTORY ACCOUNTING PRINCIPLES AS PERMITTED BY THE MICHIGAN OFFICE OF FINANCIAL AND INSURANCE REGULATION (OFIR). THE OFIR REQUIRES THAT INSURANCE COMPANIES DOMICILED IN THE STATE OF MICHIGAN PREPARE THEIR STATUTORY-BASIS FINANCIAL STATEMENTS IN ACCORDANCE WITH THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS. THESE PRACTICES DIFFER IN SOME RESPECTS FROM U.S. GENERALLY ACCEPTED ACCOUNTING PRACTICES. CERTAIN ADJUSTMENTS ARE REQUIRED TO COMPLY WITH STATUTORY ACCOUNTING PRINCIPLES. PHP OF MID MICHIGAN FAMILY CARE WAS INCLUDED AS PART OF THE CONSOLIDATED FINANCIAL STATEMENTS OF SPARROW HEALTH SYSTEM. SPARROW HEALTH SYSTEM IS THE SOLE MEMBER OF PHP OF MID-MICHIGAN, AND PHP OF MID-MICHIGAN IS THE SOLE MEMBER OF PHP OF MID-MICHIGAN FAMILY CARE. THE SPARROW HEALTH SYSTEM FINANCIAL STATEMENTS WERE PREPARED USING THE U.S. GENERALLY ACCEPTED ACCOUNTING PRACTICES.</Explanation>
      </Form990ScheduleDPartXIV>
    </IRS990ScheduleD>
    <IRS990ScheduleJ documentId="RetDoc3">
      <CompensationCommittee>X</CompensationCommittee>
      <IndependentConsultant>X</IndependentConsultant>
      <Form990OfOtherOrganizations>X</Form990OfOtherOrganizations>
      <WrittenEmploymentContract>X</WrittenEmploymentContract>
      <CompensationSurvey>X</CompensationSurvey>
      <BoardOrCommitteeApproval>X</BoardOrCommitteeApproval>
      <SeverancePayment>false</SeverancePayment>
      <SupplementalNonqualRetirePlan>false</SupplementalNonqualRetirePlan>
      <EquityBasedCompArrangement>false</EquityBasedCompArrangement>
      <CompBasedOnRevenueOfFilingOrg>true</CompBasedOnRevenueOfFilingOrg>
      <CompBasedOnRevenueRelatedOrgs>true</CompBasedOnRevenueRelatedOrgs>
      <CompBasedNetEarningsFilingOrg>true</CompBasedNetEarningsFilingOrg>
      <CompBasedNetEarningsRelateOrgs>true</CompBasedNetEarningsRelateOrgs>
      <AnyNonFixedPayments>false</AnyNonFixedPayments>
      <InitialContractException>false</InitialContractException>
      <Form990ScheduleJPartII>
        <NamePerson>SCOTT WILKERSON</NamePerson>
        <CompBasedOnRelatedOrgs>329439</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>106745</BonusRelatedOrgs>
        <OtherCompensationRelatedOrgs>1981</OtherCompensationRelatedOrgs>
        <DeferredCompRelatedOrgs>18130</DeferredCompRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>14278</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>470573</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>DENNIS SWAN</NamePerson>
        <CompBasedOnRelatedOrgs>726090</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>307354</BonusRelatedOrgs>
        <OtherCompensationRelatedOrgs>29854</OtherCompensationRelatedOrgs>
        <DeferredCompRelatedOrgs>18130</DeferredCompRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>12341</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>1093769</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>PAULA REICHLE</NamePerson>
        <CompBasedOnRelatedOrgs>389545</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>25300</BonusRelatedOrgs>
        <OtherCompensationRelatedOrgs>608</OtherCompensationRelatedOrgs>
        <DeferredCompRelatedOrgs>13573</DeferredCompRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>10166</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>439192</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>DAVID VIS</NamePerson>
        <CompBasedOnRelatedOrgs>173566</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>46184</BonusRelatedOrgs>
        <OtherCompensationRelatedOrgs>942</OtherCompensationRelatedOrgs>
        <DeferredCompRelatedOrgs>15424</DeferredCompRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>596</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>236712</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>HOWARD BURGESS</NamePerson>
        <CompBasedOnRelatedOrgs>299358</CompBasedOnRelatedOrgs>
        <DeferredCompRelatedOrgs>18130</DeferredCompRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>12782</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>330270</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>CRAIG LESLIE</NamePerson>
        <CompBasedOnRelatedOrgs>171246</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>38000</BonusRelatedOrgs>
        <TotalCompensationRelatedOrgs>209246</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>JULIA GRIFFITH</NamePerson>
        <CompBasedOnRelatedOrgs>127563</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>19089</BonusRelatedOrgs>
        <DeferredCompRelatedOrgs>4377</DeferredCompRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>14120</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>165149</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>SANDRA WINCHELL</NamePerson>
        <CompBasedOnRelatedOrgs>119436</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>18014</BonusRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>22722</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>160172</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>MARY ANNE SESTI</NamePerson>
        <CompBasedOnRelatedOrgs>112631</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>16918</BonusRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>22114</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>151663</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>PETER GRAHAM</NamePerson>
        <CompBasedOnRelatedOrgs>268513</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>45096</BonusRelatedOrgs>
        <OtherCompensationRelatedOrgs>285</OtherCompensationRelatedOrgs>
        <DeferredCompRelatedOrgs>18130</DeferredCompRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>14271</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>346295</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartII>
        <NamePerson>GARY REETZ</NamePerson>
        <CompBasedOnRelatedOrgs>187769</CompBasedOnRelatedOrgs>
        <BonusRelatedOrgs>23086</BonusRelatedOrgs>
        <OtherCompensationRelatedOrgs>1720</OtherCompensationRelatedOrgs>
        <DeferredCompRelatedOrgs>15731</DeferredCompRelatedOrgs>
        <NontaxableBenefitsRelatedOrgs>4278</NontaxableBenefitsRelatedOrgs>
        <TotalCompensationRelatedOrgs>232584</TotalCompensationRelatedOrgs>
      </Form990ScheduleJPartII>
      <Form990ScheduleJPartIII>
        <Identifier>COMPENSATION CONTINGENT UPON REVENUES OF ORGANIZATION</Identifier>
        <ReturnReference>SCHEDULE J, PAGE 1, PART I, LINE 5A</ReturnReference>
        <Explanation>THE 2010 INCENTIVE COMPENSATION PLAN PAYMENTS WERE ACCRUED IN 2010 AND WILL BE PAID IN 2011. THE INCENTIVE COMPENSATION PLAN IS BASED, IN PART, ON THE OPERATING MARGIN OF SPARROW HEALTH SYSTEM, WHICH INCLUDES PHP OF MID-MICHIGAN FAMILY CARE AS WELL AS ITS AFFILIATED COMPANIES.</Explanation>
      </Form990ScheduleJPartIII>
      <Form990ScheduleJPartIII>
        <Identifier>COMPENSATION CONTINGENT UPON REVENUES OF RELATED ORG</Identifier>
        <ReturnReference>SCHEDULE J, PAGE 1, PART I, LINE 5B</ReturnReference>
        <Explanation>THE 2010 INCENTIVE COMPENSATION PLAN PAYMENTS WERE ACCRUED IN 2010 AND WILL BE PAID IN 2011. THE INCENTIVE COMPENSATION PLAN IS BASED, IN PART, ON THE OPERATING MARGIN OF SPARROW HEALTH SYSTEM, WHICH INCLUDES PHP OF MID-MICHIGAN FAMILY CARE AS WELL AS ITS AFFILIATED COMPANIES.</Explanation>
      </Form990ScheduleJPartIII>
      <Form990ScheduleJPartIII>
        <Identifier>COMPENSATION CONTINGENT UPON NET EARNINGS OF ORGANIZATION</Identifier>
        <ReturnReference>SCHEDULE J, PAGE 1, PART I, LINE 6A</ReturnReference>
        <Explanation>THE 2010 INCENTIVE COMPENSATION PLAN PAYMENTS WERE ACCRUED IN 2010 AND WILL BE PAID IN 2011. THE INCENTIVE COMPENSATION PLAN IS BASED, IN PART, ON THE OPERATING MARGIN OF SPARROW HEALTH SYSTEM, WHICH INCLUDES PHP OF MID-MICHIGAN FAMILY CARE AS WELL AS ITS AFFILIATED COMPANIES.</Explanation>
      </Form990ScheduleJPartIII>
      <Form990ScheduleJPartIII>
        <Identifier>COMPENSATION CONTINGENT UPON NET EARNINGS OF RELATED ORG</Identifier>
        <ReturnReference>SCHEDULE J, PAGE 1, PART I, LINE 6B</ReturnReference>
        <Explanation>THE 2010 INCENTIVE COMPENSATION PLAN PAYMENTS WERE ACCRUED IN 2010 AND WILL BE PAID IN 2011. THE INCENTIVE COMPENSATION PLAN IS BASED, IN PART, ON THE OPERATING MARGIN OF SPARROW HEALTH SYSTEM, WHICH INCLUDES PHP OF MID-MICHIGAN FAMILY CARE AS WELL AS ITS AFFILIATED COMPANIES.</Explanation>
      </Form990ScheduleJPartIII>
      <Form990ScheduleJPartIII>
        <Identifier>OTHER ADDITIONAL INFORMATION</Identifier>
        <ReturnReference>SCHEDULE J, PART III</ReturnReference>
        <Explanation>PART I, LINE 3 - COMPENSATION INFORMATION SPARROW HEALTH SYSTEM IS THE SOLE MEMBER OF PHP OF MID-MICHIGAN, AND PHP OF MID-MICHIGAN IS THE SOLE MEMBER OF PHP OF MID-MICHIGAN FAMILY CARE. SPARROW HEALTH SYSTEM IS AN INTEGRATED NON-PROFIT ORGANIZATION THAT INCLUDES A NUMBER OF NON-PROFIT ENTITIES. THE METHODS SELECTED FOR DETERMINING THE COMPENSATION OF THE CEO/EXECUTIVE DIRECTOR ARE METHODS WHICH ARE BEING USED BY ALL SPARROW HEALTH SYSTEM RELATED ENTITIES. PETER GRAHAM IS A FORMER KEY EMPLOYEE AND GARY REETZ IS A FORMER BOARD MEMBER OF PHP OF MID-MICHIGAN FAMILY CARE. THE FORMER KEY EMPLOYEE AND BOARD MEMBER ARE BEING COMPENSATED BY SPARROW HEALTH SYSTEM AND AFFILIATES FOR SERVICES PROVIDED TO SPARROW HEALTH SYSTEM AND AFFILIATES. THE FORMER KEY EMPLOYEE AND BOARD MEMBER ARE NOT BEING COMPENSATED FOR ANY PAST SERVICES PROVIDED TO PHP OF MID-MICHIGAN FAMILY CARE.</Explanation>
      </Form990ScheduleJPartIII>
    </IRS990ScheduleJ>
    <IRS990ScheduleO documentId="RetDoc4">
      <GeneralExplanation>
        <Identifier>ADDITIONAL INFORMATION</Identifier>
        <ReturnReference>FORM 990</ReturnReference>
        <Explanation>ALL LINES LEFT BLANK ARE NOT APPLICABLE TO THE ORGANIZATION.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>FIRST ACHIEVEMENT DESCRIPTION</Identifier>
        <ReturnReference>FORM 990, PAGE 2, PART III, LINE 4A</ReturnReference>
        <Explanation>ITS MEMBERS. PHPMM-FC'S SUCCESS IN MANAGING HEALTHCARE IS DUE IN PART TO THE EXTENSIVE NETWORK OF PARTICIPATING PROVIDERS IN THE HDN NETWORK. THE HMO/HDN CONTRACTUAL ARRANGEMENTS ALLOW PHPMM-FC TO ARRANGE FOR HEALTHCARE TO PATIENTS COVERED BY THE STATE OF MICHIGAN'S MEDICAID BENEFIT PLAN. THIS ARRANGEMENT ALLOWS THE MEMBERS TO ACCESS A WIDE VARIETY OF INDEPENDENT PROVIDERS WITHIN EACH HDN INCLUDING PHYSICIANS, HOSPITALS, PHARMACIES, SKILLED NURSING FACILITIES, AND ALLIED HEALTH PROFESSIONALS. PHPMM-FC MEMBERS MAY ALSO RECEIVE CARE FOR SERVICES FROM A NONPARTICIPATING PROVIDER IF SUCH A REFERRAL IS RECOMMENDED BY AN HDN PARTICIPATING PHYSICIAN AND THE SERVICE REQUIRED FOR TREATMENT, AS DETERMINED BY THE HDN, IS NOT AVAILABLE WITHIN THE HDN'S NETWORK. PHPMM-FC OFFERS A VARIETY OF HEALTH CARE PROGRAMS. PHPMM-FC OFFERS CHOICES THAT PROVIDE COVERAGE WITHIN THE NETWORK OF CONTRACTED HDN'S PROVIDERS, LIMITED COVERAGE OUTSIDE OF THE PHPMM-FC NETWORK, VARIOUS LEVELS OF DEDUCTIBLES, COPAYMENTS, AND COVERAGE LIMITS, ALL OF WHICH ARE DESIGNED TO BE RESPONSIVE TO PAYOR NEEDS. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN - FAMILY CARE IS OWNED BY PHYSICIANS HEALTH PLAN OF MID-MICHIGAN. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN (PHPMM) IS OWNED BY SPARROW HEALTH SYSTEM. PHPMM CONSISTS OF A COMMERCIAL HMO CALLED PHYSICIANS HEALTH PLAN OF MID-MICHIGAN (PHPMM), A COMMERCIAL INSURANCE COMPANY (PHPMM-IC), AND A MEDICAID HEALTH PLAN THAT OPERATES THROUGH A SEPARATE CORPORATION. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN FAMILYCARE (PHPMM-FC) IS ALSO A LICENSED HMO. ALL STAFFING FUNCTIONS AND REPORTING ARE ACCOMPLISHED THROUGH THE USE OF THE SAME STAFF AS PHPMM. UNLESS SPECIFICALLY NOTED, ALL REFERENCES TO PHPMM APPLY TO PHPMM-IC, AND PHPMM-FC AND ALL REFERENCES TO PHP INCLUDE THE ENTIRE PHP AFFILIATED GROUP. PHPMM'S SERVICE AREA INCLUDES THE MICHIGAN COUNTIES OF INGHAM, EATON, CLINTON, SHIAWASSEE, GRATIOT, IONIA, MONTCALM AND ISABELLA. PHPMM-IC OFFERS PRODUCTS ACROSS MICHIGAN. THE FAMILYCARE PRODUCT IS AVAILABLE TO MEDICAID ENROLLEES IN EATON, CLINTON, INGHAM, IONIA, MONTCALM AND SHIAWASSEE COUNTIES. AS OF DECEMBER 31, 2010, THERE WERE 35,129 ENROLLEES IN PHPMM'S COMMERCIAL HMO, 12,208 IN TPA, 2,993 IN PHP-IC, AND 18,789 ENROLLEES IN FAMILYCARE. PHP CONTRACTS DIRECTLY WITH 719 PRIMARY CARE PHYSICIANS, 1269 SPECIALTY CARE PHYSICIANS, 365 ALLIED HEALTH PROFESSIONALS, AND 308 ORGANIZATIONAL PROVIDERS THAT INCLUDE 29 HOSPITALS. PHP WAS ALSO RANKED AMONG THE TOP 50 OF AMERICA'S BEST HEALTH PLANS BY U.S. NEWS AND WORLD REPORT/CONSUMER REPORTS FOR THE 5TH CONSECUTIVE YEAR. NCQA USES AN ALGORITHM COMPOSED OF HEDIS, CAHPS AND ACCREDITATION SCORING TO CREATE THESE NATIONAL RANKINGS. THE GOAL OF THE QUALITY IMPROVEMENT PROGRAM IS TO CONTINUOUSLY IMPROVE HEALTH OUTCOMES AND LEVEL OF SERVICE PROVIDED TO ENROLLEES. PHP PURSUES ITS GOALS THROUGH IMPLEMENTATION OF THE QUALITY IMPROVEMENT MODEL: -MEASUREMENT OF THE OUTCOMES OF CARE AND SERVICE, INCLUDING BEHAVIORAL HEALTH SERVICES. -ANALYSIS OF BARRIERS TO CARE AND SERVICE. -DEVELOPMENT AND IMPLEMENTATION OF INTERVENTIONS. -FORMAL EVALUATION OF THE EFFECTIVENESS OF THE INTERVENTIONS. PHP MEASURES THE QUALITY OF CARE PROVIDED TO ITS ENROLLEES THROUGH ANNUAL REVIEW OF INDICATORS SUCH AS: -DISEASE MANAGEMENT PROGRAM PARTICIPATION. -QUALITY OF CARE CONCERNS. -HEDIS MEASURES - THE HEALTH PLAN EFFECTIVENESS DATA AND INFORMATION SET (HEDIS) IS A GROUP OF NATIONALLY RECOGNIZED MEASURES OF PERFORMANCE IN A VARIETY OF CLINICAL AND NON-CLINICAL AREAS. PHPMM USES THE EFFECTIVENESS OF CARE MEASURES TO DETERMINE PROGRESS AND IMPROVEMENT IN AREAS SUCH AS: DIABETES. -ASTHMA. -DEPRESSION AND FOLLOW-UP AFTER MENTAL HEALTH ADMISSIONS. -BREAST AND CERVICAL CANCER SCREENING. -USE OF BETA-BLOCKERS AFTER HEART ATTACKS. -CHILD AND ADOLESCENT IMMUNIZATIONS. -CHOLESTEROL MANAGEMENT. -CONTROLLING HIGH BLOOD PRESSURE. -SMOKING CESSATION. -PRENATAL AND POSTPARTUM CARE. -TREATMENT OF CHILDHOOD RESPIRATORY INFECTIONS. PHP MEASURES THE QUALITY OF SERVICE PROVIDED TO ITS ENROLLEES BY THE REVIEW OF PERFORMANCE MEASURES RELATED TO: -ACCESS AND AVAILABILITY. -ENROLLEE COMPLAINTS AND APPEALS. -CUSTOMER SERVICE TELEPHONE ACCESS PERFORMANCE. -MEMBER ASSESSMENT: THE CONSUMER ASSESSMENT OF HEALTHCARE PROVIDERS AND SYSTEMS (CAHPS) SURVEY GIVES A GENERAL INDICATION OF HOW WELL THE ORGANIZATION MEETS MEMBERS' EXPECTATIONS. PHYSICIANS HEALTH PLAN OF MID-MICHIGAN RECEIVED THE HIGHEST RATING OF "EXCELLENT" FROM THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA). THIS STATUS IS GRANTED TO HEALTH CARE PLANS THAT HAVE DEMONSTRATED CONTINUOUS QUALITY IMPROVEMENT IN THEIR PROGRAMS WHILE MEETING OR EXCEEDING NCQA'S RIGOROUS ACCREDITATION STANDARDS. PHP FAMILY CARE RECEIVED A COMMENDABLE RATING. PHPMM AND PHPMM-FC WERE REVIEWED BY NCQA IN 2009. THE SERVICE EXCELLENCE PROGRAM HAS A MISSION OF: PROVIDING FOCUSED LEADERSHIP TO CREATE AND MAINTAIN A CULTURE OF WORLD CLASS CUSTOMER SATISFACTION. IN 2010 PHPMM WAS RANKED ABOVE THE 90TH PERCENTILE IN SATISFACTION WITH CUSTOMER SERVICE AND WAS THE HIGHEST RANKED HEALTH PLAN IN MICHIGAN. THIS WAS YEAR FOUR OF A HIGHLY STRUCTURED AND GOAL ORIENTED APPROACH TO MEMBER SATISFACTION AND EMPLOYEE ENGAGEMENT. THE PROGRAM IS A "TOP DOWN BOTTOM UP" APPROACH TO CHANGING THE CULTURE OF SERVICE. SERVICE EXCELLENCE ADVISORS ARE FRONT LINE STAFF TRAINED TO PRESENT A TWO HOUR CLASS TO ALL ASSOCIATES IN THE HEALTH PLAN. THE BOOK A COMPLAINT IS A GIFT BY JANELLE BARLOW WAS THE BASIS FOR THE 2010 TRAINING. -CAPITALIZING ON COMPLAINTS -HOW TO SAY NO AND REMAIN FRIENDS -BUILDING A CUSTOMER TOLERANCE ZONE -THE GIFT FORMULA OUR 2010 CAHPS SCORES FOR THE COMMERCIAL PRODUCT RESULTED IN A RANKING OF 1 IN MICHIGAN FOR CUSTOMER SERVICE AND 4 FOR THE OVERALL HEALTH PLAN RANKING. NATIONALLY, PHPMM'S COMMERCIAL PRODUCT WAS RANKED 40TH FOR OVERALL HEALTH PLAN RANKING. CUSTOMER SATISFACTION AND ASSOCIATE ENGAGEMENT ARE CLOSELY RELATED. WEBSTER DEFINES ENGAGEMENT AS "EMOTIONAL INVOLVEMENT OR COMMITMENT." EVERY CUSTOMER WANTS SOMEONE TO PARTNER WITH THEM, TO SHOW CONCERN AND BE COMMITTED TO THEIR ISSUE AT HAND. MAINTAINING AN ENGAGED WORKFORCE IS THE FOUNDATION FOR DELIVERING COMPASSIONATE AND EXCEPTIONAL SERVICE. PHP PARTICIPATES IN A HEALTH SYSTEM WIDE ANNUAL ASSOCIATE ENGAGEMENT SURVEY CONDUCTED BY KENEXA. THE NATIONALLY RECOGNIZED SURVEY MEASURES ELEVEN DIMENSIONS OF THE WORKFORCE AND PROVIDES REPORTS TO DEPARTMENT TEAMS. THE 2010 SURVEY REPORTED PHP ASSOCIATE ENGAGEMENT LEVEL IN THE 93RD PERCENTILE. FOLLOWING THE ANNUAL SURVEY, PHP INVITES ALL ASSOCIATES TO PARTICIPATE IN GROUP DISCUSSIONS LED BY FRONT LINE STAFF WHERE RESULTS ARE REVIEWED AND IDEAS FOR IMPROVEMENT ARE WELCOMED. TEAMS MAKE RECOMMENDATIONS, THE BEST OF WHICH ARE IMPLEMENTED. OVER THE YEARS, CHANGES HAVE OCCURRED THAT HAVE BECOME PART OF THE PHP WAY OF DOING BUSINESS. SOME OF THOSE INCLUDE: CROSS FUNCTIONAL COMMUNICATION TEAMS, MONTHLY ALL STAFF MEETING UPDATES, ENHANCED ON-LINE ACCESS TO INFORMATION, NEW APPROACHES TO TRAINING, IMPROVED REFERENCE RESOURCES AND MANY MORE. COMMITMENT AND INVOLVEMENT DESCRIBE OUR EXPECTATION FOR STAFF. MAINTAINING A HIGH LEVEL OF ASSOCIATE ENGAGEMENT IS A VERY IMPORTANT PART OF PHP'S DEDICATED EFFORT TO PROVIDE OUTSTANDING SERVICE AND TO ACHIEVE NATIONAL RANKINGS IN OVERALL CUSTOMER SATISFACTION. PROCESS IMPROVEMENTS DESIGNED TO ENSURE THAT PHP MAXIMIZED THE AUTOMATED CAPABILITIES OF ITS CLAIMS PAYMENT SYSTEM WERE THE FOCUS FOR THE INFORMATION TECHNOLOGY DEPARTMENT. AS A RESULT OF THESE EFFORTS, PHP EXPERIENCED EXCELLENT ELECTRONIC DATA INTERCHANGE (EDI) AND AUTO-ADJUDICATION RATES AS WELL AS A REDUCTION IN CLAIM TURNAROUND TIME. PHP ENDED 2010 WITH AN AUTO ADJUDICATION RATE OF 76%, AND AN EDI RATE OF 92%. DAYS RECEIPT ON HAND OF CLAIMS WAS REDUCED FROM 2.4 TO 1.96. MAJOR INITIATIVES: -COMPLETED IMPLEMENTATION OF MENTAL HEALTH PARITY LEGISLATION. -DETERMINED PRODUCT DIRECTION NECESSARY TO SUPPORT HEALTH CARE REFORM LEGISLATION. -IN-SOURCED OUR ID CARD GENERATION PROCESS, RESULTING IN FEWER ERRORS AND MORE FLEXIBILITY IN CARD DESIGN. -BEGAN UPGRADE OF CORE SYSTEM AND WEB PRESENCE TO INCREASE INFORMATION SHARING AND IMPROVE CONSTITUENT EXPERIENCES. -IMPLEMENTED WRAP PRODUCTS TO SUPPORT SALES OF HIGH DEDUCTIBLE HEALTH PLANS. -IMPLEMENTED THE HIP MICHIGAN PRODUCT, A FEDERAL PROGRAM TO PROVIDE COVERAGE TO PEOPLE WHO OTHERWISE WOULD NOT QUALIFY FOR INSURANCE. PHP'S QUALITY IMPROVEMENT PROGRAM CONTINUES TO BE HIGHLY EFFECTIVE AND HAS DEMONSTRATED SIGNIFICANT RESULTS YEAR AFTER YEAR. QI STRUCTURE AND SUPPORT THE QUALITY IMPROVEMENT STRUCTURE REMAINS STRONG. ADEQUATE RESOURCES HAVE BEEN ALLOCATED TO SUPPORT THE INITIATIVES FOR THE CURRENT AND UPCOMING YEAR. THE QUALITY AND MEDICAL RESOURCE MANAGEMENT COMMITTEE RECEIVES SUPPORT FROM PHP LEADERSHIP AND FROM PHP PRACTITIONERS. OTHER PHP DEPARTMENTS AND STAFF, INCLUDING NETWORK SERVICES, CUSTOMER SERVICE, COMPLIANCE AND GOVERNMENT PROGRAMS HAVE MAINTAINED THEIR LEVEL OF COMMITMENT AND SUPPORT TO THE QUALITY PROGRAM AND ITS GOALS. IMPR</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>CLASSES OF MEMBERS OR STOCKHOLDERS</Identifier>
        <ReturnReference>FORM 990, PAGE 6, PART VI, LINE 6</ReturnReference>
        <Explanation>PHYSICIANS HEALTH PLAN OF MID-MICHIGAN (PHP OF MID-MICHIGAN) IS THE SOLE MEMBER AND HAS 100% OWNERSHIP OF PHYSICIANS HEALTH PLAN OF MID-MICHIGAN FAMILY CARE (PHP OF MID-MICHIGAN FAMILY CARE). SPARROW HEALTH SYSTEM IS THE SOLE MEMBER AND HAS 100% OWNERSHIP OF PHP OF MID-MICHIGAN.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>ELECTION OF MEMBERS AND THEIR RIGHTS</Identifier>
        <ReturnReference>FORM 990, PAGE 6, PART VI, LINE 7A</ReturnReference>
        <Explanation>PHP OF MID-MICHIGAN IS THE SOLE MEMBER OF PHP OF MID-MICHIGAN FAMILY CARE. SPARROW HEALTH SYSTEM IS THE SOLE MEMBER OF PHP OF MID-MICHIGAN. THE PHP OF MID-MICHIGAN FAMILY CARE BOARD MEMBERS ELECTED BY THE BOARD OF DIRECTORS ARE RATIFIED BY THE SPARROW HEALTH SYSTEM BOARD OF DIRECTORS.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>DECISIONS SUBJECT TO APPROVAL OF MEMBERS</Identifier>
        <ReturnReference>FORM 990, PAGE 6, PART VI, LINE 7B</ReturnReference>
        <Explanation>PHP OF MID-MICHIGAN IS THE SOLE MEMBER OF PHP OF MID-MICHIGAN FAMILY CARE. SPARROW HEALTH SYSTEM IS THE SOLE MEMBER OF PHP OF MID-MICHIGAN. THE PHP OF MID-MICHIGAN FAMILY CARE BOARD MEMBERS ELECTED BY THE BOARD OF DIRECTORS ARE RATIFIED BY THE SPARROW HEALTH SYSTEM BOARD OF DIRECTORS. DECISIONS OF THE PHP OF MID-MICHIGAN FAMILY CARE BOARD OF DIRECTORS MAY BE SUBJECT TO APPROVAL BY THE SPARROW HEALTH SYSTEM BOARD OF DIRECTORS.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>ORGANIZATION'S PROCESS USED TO REVIEW FORM 990</Identifier>
        <ReturnReference>FORM 990, PAGE 6, PART VI, LINE 11B</ReturnReference>
        <Explanation>THE FORM 990 WAS PROVIDED TO THE FINANCE COMMITTEE FOR REVIEW AND COMMENT. UPON COMPLETION OF THIS REVIEW, THE FINANCE COMMITTEE RECOMMENDED RATIFICATION OF THE FORM 990 AND COMPLETED COPIES OF THE FORM 990 WERE PROVIDED TO THE BOARD OF DIRECTORS OF PHP OF MID-MICHIGAN FAMILY CARE. BASED UPON THIS RECOMMENDATION, THE BOARD APPROVED THE FILING OF THE FORM 990.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>ENFORCEMENT OF CONFLICTS POLICY</Identifier>
        <ReturnReference>FORM 990, PAGE 6, PART VI, LINE 12C</ReturnReference>
        <Explanation>1) CORPORATE COMPLIANCE SENDS OUT CONFLICT OF INTEREST POLICY AND QUESTIONNAIRES TO ALL VOTING BOARD MEMBERS AND THE EXECUTIVE TEAM ANNUALLY. 2) ALL DISCLOSURES ARE RECEIVED AND REVIEWED BY CORPORATE COMPLIANCE. 3) ALL DISCLOSURES ARE GIVEN A RESOLUTION CODE AND PRESENTED TO THE CEO AND GOVERNANCE COMMITTEE OF THE BOARD. 4) ALL BOARD/COMMITTEE LEVEL DISCLOSURES ARE PROVIDED TO THE RESPECTIVE BOARD CHAIR AND EXECUTIVE LIAISON TO ENSURE ISSUES CAN BE ADDRESSED ON A TRANSACTIONAL LEVEL (I.E. IF A VOTE IS REQUIRED ON A TRANSACTION INVOLVING AN INTERESTED PERSON).</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>COMPENSATION PROCESS FOR TOP OFFICIAL</Identifier>
        <ReturnReference>FORM 990, PAGE 6, PART VI, LINE 15A</ReturnReference>
        <Explanation>THE PROCESS FOR DETERMINING COMPENSATION FOR THE CEO OF THE ORGANIZATION INVOLVED THE FOLLOWING: UTILIZING THE COMPENSATION COMMITTEE, INDEPENDENT CONSULTANTS, REVIEWING OTHER SIMILAR ORGANIZATIONS' 990S, COMPENSATION SURVEYS, AND FINAL APPROVAL BY THE BOARD OF DIRECTORS, AS WELL AS FINALIZING THE SALARY PACKAGE WITH A WRITTEN EMPLOYMENT CONTRACT.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>COMPENSATION PROCESS FOR OFFICERS</Identifier>
        <ReturnReference>FORM 990, PAGE 6, PART VI, LINE 15B</ReturnReference>
        <Explanation>THE PROCESS FOR DETERMINING COMPENSATION FOR OFFICERS OR KEY EMPLOYEES OF THE ORGANIZATION INVOLVED THE FOLLOWING: UTILIZING THE COMPENSATION COMMITTEE, INDEPENDENT CONSULTANTS, REVIEWING OTHER SIMILAR ORGANIZATIONS' 990S, COMPENSATION SURVEYS, AND FINAL APPROVAL BY THE BOARD OF DIRECTORS, AS WELL AS FINALIZING THE SALARY PACKAGE WITH A WRITTEN EMPLOYMENT CONTRACT.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>GOVERNING DOCUMENTS DISCLOSURE EXPLANATION</Identifier>
        <ReturnReference>FORM 990, PAGE 6, PART VI, LINE 19</ReturnReference>
        <Explanation>THE GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY AND FINANCIAL STATEMENTS ARE MADE AVAILABLE TO THE PUBLIC AS FOLLOWS: THE GOVERNING DOCUMENTS OF PHP OF MID-MICHIGAN FAMILY CARE ARE SUBMITTED TO THE OFFICE OF FINANCIAL AND INSURANCE REGULATIONS (OFIR). THOSE ARE PUBLICLY AVAILABLE TO INTERESTED PARTIES. THE CONFLICT OF INTEREST IS AVAILABLE THROUGH SPARROW HEALTH SYSTEM BY REQUEST TO THE SPARROW COMPLIANCE OFFICER.</Explanation>
      </GeneralExplanation>
      <GeneralExplanation>
        <Identifier>RELATED ORGANIZATIONS</Identifier>
        <ReturnReference>FORM 990, PAGE 7, PART VII</ReturnReference>
        <Explanation>SPARROW HEALTH SYSTEM IS AN INTEGRATED NON-PROFIT ORGANIZATION AND IS THE PARENT CORPORATION FOR HOME HEALTH CARE OF SPARROW, INC. AND OTHER RELATED ENTITIES - SEE SCHEDULE R. DENNIS SWAN IS THE PRESIDENT &amp; CHIEF OPERATING EXECUTIVE OF SPARROW HEALTH SYSTEM AND THEREBY SERVES AS THE PRINCIPAL OFFICER WITH ULTIMATE RESPONSIBILITY FOR IMPLEMENTING THE DECISIONS OF THE GOVERNING BODY OR SUPERVISING THE MANAGEMENT, ADMINISTRATION, OR OPERATION OF ENTITIES WITHIN THE SYSTEM. THE FOLLOWING OFFICERS, DIRECTORS, KEY EMPLOYEES, AND HIGHEST COMPENSATED EMPLOYEES PROVIDE SERVICES TO BOTH PHYSICIANS HEALTH NETWORK AND RELATED ORGANIZATIONS. BELOW IS THE AVERAGE NUMBER OF HOURS DEVOTED TO THE RELATED ORGANIZATIONS: SCOTT WILKERSON - 35 HOURS DENNIS SWAN - 40 HOURS PAULA REICHLE - 40 HOURS DAVID VIS - 35 HOURS HOWARD BURGESS - 35 HOURS CRAIG LESLIE - 35 HOURS JULIA GRIFFITH - 35 HOURS SANDRA WINCHELL - 35 HOURS MARY ANN SESTI - 15 HOURS KEVIN ESSENMACHER - 35 HOURS ANN HUNT-FUGATE - 35 HOURS</Explanation>
      </GeneralExplanation>
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          <AddressLine1>1215 E MICHIGAN AVE</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
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          <AddressLine1>PO BOX 30377</AddressLine1>
          <City>LANSING</City>
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          <BusinessNameLine1>SPARROW FOUNDATION</BusinessNameLine1>
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          <AddressLine1>1215 E MICHGAN AVE</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
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          <BusinessNameLine1>HOME HEALTH CARE OF SPARROW INC</BusinessNameLine1>
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          <AddressLine1>2909 E GRAND RIVER</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
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        <EIN>382543305</EIN>
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        <LegalDomicileState>MI</LegalDomicileState>
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          <BusinessNameLine1>SHS</BusinessNameLine1>
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          <BusinessNameLine1>CLINTON MEMORIAL HOSPITAL</BusinessNameLine1>
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        <AddressUS>
          <AddressLine1>805 S OAKLAND STREET</AddressLine1>
          <City>ST JOHNS</City>
          <State>MI</State>
          <ZIPCode>48879</ZIPCode>
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        <PrimaryActivities>HLTH CARE</PrimaryActivities>
        <LegalDomicileState>MI</LegalDomicileState>
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        <DirectControllingEntityName>
          <BusinessNameLine1>SHS</BusinessNameLine1>
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        <ControlledOrg>false</ControlledOrg>
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      <Form990ScheduleRPartII>
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          <BusinessNameLine1>EDWARD W SPARROW HOSPITAL</BusinessNameLine1>
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          <AddressLine1>1215 E MICHIGAN AVE</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
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        <EIN>381360584</EIN>
        <PrimaryActivities>HLTH CARE</PrimaryActivities>
        <LegalDomicileState>MI</LegalDomicileState>
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        <PublicCharityStatus>3</PublicCharityStatus>
        <DirectControllingEntityName>
          <BusinessNameLine1>SHS</BusinessNameLine1>
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        <ControlledOrg>false</ControlledOrg>
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      <Form990ScheduleRPartII>
        <NameOfDisregardedEntity>
          <BusinessNameLine1>IONIA COUNTY MEMORIAL HOSPITAL CORP</BusinessNameLine1>
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          <AddressLine1>479 LAFAYETTE STREET</AddressLine1>
          <City>IONIA</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
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        <EIN>383218134</EIN>
        <PrimaryActivities>HLTH CARE</PrimaryActivities>
        <LegalDomicileState>MI</LegalDomicileState>
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        <PublicCharityStatus>3</PublicCharityStatus>
        <DirectControllingEntityName>
          <BusinessNameLine1>SHS</BusinessNameLine1>
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        <ControlledOrg>false</ControlledOrg>
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          <BusinessNameLine1>SPARROW SPECIALTY HOSPITAL</BusinessNameLine1>
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        <AddressUS>
          <AddressLine1>1210 W SAGINAW</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48915</ZIPCode>
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        <EIN>141885340</EIN>
        <PrimaryActivities>LT ACUTE</PrimaryActivities>
        <LegalDomicileState>MI</LegalDomicileState>
        <ExemptCodeSection>501C3</ExemptCodeSection>
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        <DirectControllingEntityName>
          <BusinessNameLine1>SHS</BusinessNameLine1>
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        <ControlledOrg>false</ControlledOrg>
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          <BusinessNameLine1>LANSING MEDICAL DENTAL BUILDING</BusinessNameLine1>
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        <AddressUS>
          <AddressLine1>2909 EAST GRAND RIVER</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48909</ZIPCode>
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        <EIN>382566150</EIN>
        <PrimaryActivity>RENTAL PRO</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
        <DisproportionateAllocations>false</DisproportionateAllocations>
        <GeneralOrManagingPartner>false</GeneralOrManagingPartner>
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      <Form990ScheduleRPartIII>
        <NameOfRelatedOrg>
          <BusinessNameLine1>SPARROW REGIONAL MEDICAL SUPPLY</BusinessNameLine1>
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          <AddressLine1>1215 E MICHIGAN AVE</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
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        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
        <DisproportionateAllocations>false</DisproportionateAllocations>
        <GeneralOrManagingPartner>false</GeneralOrManagingPartner>
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      <Form990ScheduleRPartIII>
        <NameOfRelatedOrg>
          <BusinessNameLine1>LANSING MEDICAL DENTAL BUILDING</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>2909 EAST GRAND RIVER</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48909</ZIPCode>
        </AddressUS>
        <EIN>382566150</EIN>
        <PrimaryActivity>RENTAL PRO</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
        <DisproportionateAllocations>false</DisproportionateAllocations>
        <GeneralOrManagingPartner>false</GeneralOrManagingPartner>
      </Form990ScheduleRPartIII>
      <Form990ScheduleRPartIII>
        <NameOfRelatedOrg>
          <BusinessNameLine1>SPARROW REGIONAL MEDICAL SUPPLY</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>1215 E MICHIGAN AVE</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
        </AddressUS>
        <EIN>383243561</EIN>
        <PrimaryActivity>SALES/RENT</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
        <DisproportionateAllocations>false</DisproportionateAllocations>
        <GeneralOrManagingPartner>false</GeneralOrManagingPartner>
      </Form990ScheduleRPartIII>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>PHPMM INSURANCE COMPANY</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>PO BOX 30377</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48909</ZIPCode>
        </AddressUS>
        <EIN>205565219</EIN>
        <PrimaryActivity>INSURANCE</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>PHP OF MID-MICHIGAN TPA INC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>1400 E MICHIGAN AVE</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
        </AddressUS>
        <EIN>383344741</EIN>
        <PrimaryActivity>MED SVS</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>SPARROW DEVELOPMENT INC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>1215 E MICHIGAN AVE</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
        </AddressUS>
        <EIN>382595963</EIN>
        <PrimaryActivity>HEALTH SVS</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>EAST LANSING ATHLETIC CLUB</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>2900 HANNAH BLVD</AddressLine1>
          <City>EAST LANSING</City>
          <State>MI</State>
          <ZIPCode>48823</ZIPCode>
        </AddressUS>
        <EIN>382886420</EIN>
        <PrimaryActivity>HLTH CLUB</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>MAC RESTAURANT LLC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>2900 HANNAH BLVD</AddressLine1>
          <City>EAST LANSING</City>
          <State>MI</State>
          <ZIPCode>48823</ZIPCode>
        </AddressUS>
        <EIN>205120690</EIN>
        <PrimaryActivity>RESTAURANT</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>MEDICAL CENTER WEST CONDO ASSOC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>1100 W SAGINAW ST</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48915</ZIPCode>
        </AddressUS>
        <EIN>382635630</EIN>
        <PrimaryActivity>CONOD ASSO</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>CLINTON SERVICES CORPORATION</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>805 SOUTH OAKLAND</AddressLine1>
          <City>ST JOHNS</City>
          <State>MI</State>
          <ZIPCode>48879</ZIPCode>
        </AddressUS>
        <EIN>382494110</EIN>
        <PrimaryActivity>SERVICES</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>PHPMM INSURANCE COMPANY</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>PO BOX 30377</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48909</ZIPCode>
        </AddressUS>
        <EIN>205565219</EIN>
        <PrimaryActivity>INSURANCE</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>PHP OF MID-MICHIGAN TPA INC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>1400 E MICHIGAN AVE</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
        </AddressUS>
        <EIN>383344741</EIN>
        <PrimaryActivity>MED SVS</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>SPARROW DEVELOPMENT INC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>1215 E MICHIGAN AVE</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48912</ZIPCode>
        </AddressUS>
        <EIN>382595963</EIN>
        <PrimaryActivity>HEALTH SVS</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>EAST LANSING ATHLETIC CLUB</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>2900 HANNAH BLVD</AddressLine1>
          <City>EAST LANSING</City>
          <State>MI</State>
          <ZIPCode>48823</ZIPCode>
        </AddressUS>
        <EIN>382886420</EIN>
        <PrimaryActivity>HLTH CLUB</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>MAC RESTAURANT LLC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>2900 HANNAH BLVD</AddressLine1>
          <City>EAST LANSING</City>
          <State>MI</State>
          <ZIPCode>48823</ZIPCode>
        </AddressUS>
        <EIN>205120690</EIN>
        <PrimaryActivity>RESTAURANT</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>MEDICAL CENTER WEST CONDO ASSOC</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>1100 W SAGINAW ST</AddressLine1>
          <City>LANSING</City>
          <State>MI</State>
          <ZIPCode>48915</ZIPCode>
        </AddressUS>
        <EIN>382635630</EIN>
        <PrimaryActivity>CONOD ASSO</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <Form990ScheduleRPartIV>
        <NameOfRelatedOrg>
          <BusinessNameLine1>CLINTON SERVICES CORPORATION</BusinessNameLine1>
        </NameOfRelatedOrg>
        <AddressUS>
          <AddressLine1>805 SOUTH OAKLAND</AddressLine1>
          <City>ST JOHNS</City>
          <State>MI</State>
          <ZIPCode>48879</ZIPCode>
        </AddressUS>
        <EIN>382494110</EIN>
        <PrimaryActivity>SERVICES</PrimaryActivity>
        <LegalDomicileState>MI</LegalDomicileState>
        <DirectControllingEntityNA>N/A</DirectControllingEntityNA>
      </Form990ScheduleRPartIV>
      <ReceiptOfIntAnnRentsRoyalties>false</ReceiptOfIntAnnRentsRoyalties>
      <GiftGrantOrCapContrToOtherOrg>false</GiftGrantOrCapContrToOtherOrg>
      <GiftGrantOrCapContrFrOtherOrg>false</GiftGrantOrCapContrFrOtherOrg>
      <LoansOrGuaranteesToOtherOrg>false</LoansOrGuaranteesToOtherOrg>
      <LoansOrGuaranteesFromOtherOrg>false</LoansOrGuaranteesFromOtherOrg>
      <SaleOfAssetsToOtherOrg>false</SaleOfAssetsToOtherOrg>
      <PurchaseOfAssetsFromOtherOrg>false</PurchaseOfAssetsFromOtherOrg>
      <ExchangeOfAssets>false</ExchangeOfAssets>
      <RentalOfFacilitiesToOtherOrgs>false</RentalOfFacilitiesToOtherOrgs>
      <RentalOfFacilitiesFrOtherOrgs>false</RentalOfFacilitiesFrOtherOrgs>
      <PerformOfServicesForOtherOrgs>false</PerformOfServicesForOtherOrgs>
      <PerformOfServicesByOtherOrgs>true</PerformOfServicesByOtherOrgs>
      <SharingOfFacilities>false</SharingOfFacilities>
      <SharingOfPaidEmployees>false</SharingOfPaidEmployees>
      <ReimbursementPaidToOtherOrg>true</ReimbursementPaidToOtherOrg>
      <ReimbursementPaidByOtherOrg>false</ReimbursementPaidByOtherOrg>
      <OtherTransferToOtherOrg>false</OtherTransferToOtherOrg>
      <OtherTransferFromOtherOrg>false</OtherTransferFromOtherOrg>
    </IRS990ScheduleR>
  </ReturnData>
</Return>