Physicians Organization At Childrens Hospital Inc

THE ORGANIZATION WAS FORMED TO PROMOTE HEALTH BY COORDINATING THE PRACTICE OF (SEE SCHEDULE O) PEDIATRIC MEDICINE AND RELATED HEALTH CARE SERVICES PROVIDED BY ITS AFFILIATED MEMBER FOUNDATIONS. THE ORGANIZATION SUPPORTS THE FOUNDATIONS BY ASSISTING IN MANAGED CARE AND RISK BASED CONTRACTS, QUALITY MANAGEMENT, PATIENT SAFETY, AND OTHER ADMINISTRATIVE SERVICES THAT ENHANCE THE FOUNDATIONS' OPERATIONS.

THE PHYSICIANS ORGANIZATION AT CHILDREN'S HOSPITAL, INC. (THE ORGANIZATION) SPONSORS HEALTH, DENTAL, LIFE, AND DISABILITY BENEFIT PLANS FOR THE MEMBER FOUNDATIONS. THE HEALTH AND DENTAL PLANS ARE SELF-FUNDED WITH INTERNAL PREMIUMS BASED UPON THE EXPECTED UTILIZATION OF THE PLAN MEMBERS. ANY SURPLUS OR DEFICIT GENERATED AT THE PLAN YEAR-END IS APPLIED TO THE CALCULATION WHEN DETERMINING THE SUBSEQUENT YEAR'S PREMIUMS. LIFE AND DISABILITY REVENUE IS DIRECTLY OFFSET BY PREMIUMS PAID TO THE INSURANCE CARRIERS.

THE ORGANIZATION PROVIDES PROFESSIONAL SERVICES TO CERTAIN MEMBER FOUNDATIONS TO ASSIST THEM IN ACCOUNTING, CONSULTING, STRATEGIC MANAGEMENT, QUALITY PROGRAMS, PATIENT BILLING, PATIENT SAFETY, COORDINATED CARE COST CONTAINMENT, AND OTHER ADMINISTRATIVE SERVICES. ANNUAL MEMBERSHIP DUES RECEIVED FROM MEMBER FOUNDATIONS SUPPORT THE ADMINISTRATIVE ACTIVITIES OF THE MEMBERS BY ARRANGING FOR THE DELIVERY OF HEALTHCARE SERVICES WITH INSURERS, MANAGED CARE PLANS, AND HEALTH MAINTENANCE ORGANIZATIONS.

THE ORGANIZATION HAS ENTERED INTO LEASES AT SATELLITE LOCATIONS FOR CLINICAL AND GENERAL OFFICE SPACE. MEMBER FOUNDATIONS REIMBURSE THE ORGANIZATION FOR USE OF THESE FACILITIES AT COST. IN ADDITION, THE ORGANIZATION PROVIDES MANAGEMENT SERVICES TO THE HOSPITAL AND FOUNDATIONS. THE HOSPITAL OR FOUNDATION REIMBURSES THE ORGANIZATION FOR SALARY AND FRINGE SUPPORT OF EMPLOYEES.