Membership MeetingMay 12, 2011

50% Northern Colorado IPAObtained 50% ownership during merger with UPNC .

50% Poudre Valley Health System

PVHS purchased 50% of the assets of UPNC in 2003 and 50% of projected future earnings for total of $550,000.

Appraisal to determine FMV of UMA; PVHS proposed an immediate sale back to individual

physicians wanting to have shares in UMA . IPA and non-IPA members.

PVHS suggested retaining the current Board structure of UMA( 5 physicians, 2 PVHS administrators)

2 week “window” for purchase option or PVHS stated they would withdraw from UMA and create a similar competing organization.

UMA is essentially a TPA (Third Party Administrator) for the following self-insured employers)

Poudre Valley Health SystemPoudre School DistrictColumbine Health Systems

Appraisal might be required due to the PVHS 501c(3) status with some negotiable items.

UMA with current contracts is profitable. Annual profit split between PVHS and NCIPA of approx. $220,000/ year.

UMA has few assets but significant ongoing financial obligations

9.1 Withdrawal of a Member. If a Member shall withdraw from the Company for any reason whatsoever, the remaining Member(s) shall be entitled at their sole discretion to either purchase the Withdrawing Member's Membership Interest, at an amount equal to the Withdrawing Member's capital account balance as of the date of withdrawal subject to the provisions of Section 9.5 of this Agreement or shall proceed to dissolve the Company as outlined in ARTICLE 11.

Current value of the PVHS capital account is $690,000

Current value of the NCIPA capital account is

$143,000

IPA would be obligated to pay PVHS $690,000

Cash within 90 days

or

25% within 90 days plus 4 annual installments with prime interest on remaining balance

Current revenue sources to UMA would rapidly dissipate if PVHS withdraws.

Self-insured plans would almost certainly shift to the new entity formed by PVHS.

UMA CEO has stated that UMA would rapidly become insolvent without PVHS as a partner.

Financial obligations would persist for rent and software leases.

PVHS has given the IPA Board a definitive demand; PVHS appears committed to expanding the role and

scope of UMA; PVHS has committed to maintaining 50% physician

ownership and retention of basic governance structure of UMA;

All physicians should retain access to UMA ownership if desired;

If NCIPA declines purchase offer, PVHS will start a competing entity and UMA would then be financially unstable; IPA obligated to pay PVHS 690k and incur financial liabilities.

IPA may need to reinvent itself and undergo changes in focus and leadership.

IPA Board’s consensus recommendation from a meeting on May 9th include:

Decision to sell UMA should go to a full membership vote by ballot.

IPA Board feels that the sale of UMA is necessary from a business standpoint.

Proceeds from sale to be distributed to current IPA Associate Members

PVHS has agreed to work with a small committee of private practice representatives, with equal representation of small and large groups to work on the structure and transition to the new UMA.

Current suggested large committee members:3. Mike Bergerson, OCR4. Nancy Timmons, Front Range Brain and Spine5. Jim Sprowell, AFM6. Robin Langowski, Center for GI7. Dr. Cloyd8. Dr. Towbin9. Dr. Conlon

Agree to move forward with the small group of practice representatives and PVHS to finalize the proposed sale terms;

Sale price; Methodology for payout/repurchase with consideration

of tax consequences; Legal and governance structure;